01_01-Anthony-Barker-BG-Singapore-Presentation - Emergence of a New LNG Market

8/12/2019 01_01-Anthony-Barker-BG-Singapore-Presentation - Emergence of a New LNG Market

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By: ,

By: ,

17thINTERNATIONAL CONFERENCE & EXHIBITION

ON LIQUEFIED NATURAL GAS (LNG 17)

Singapore:Emergence of a new LNG market

By: Dr. Anthony Barker, BG Group

16 April 2013

17thINTERNATIONAL CONFERENCE EXHIBITION ONLIQUEFIED NATURAL GAS (LNG 17)


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Legal notice

The following presentation contains forward-looking statements concerning BG Group plcsstrategy, operations, financial performance or condition, outlook, growth opportunities orcircumstances in the countries, sectors or markets in which BG Group plc operates. By theirnature, forward-looking statements involve uncertainty because they depend on futurecircumstances, and relate to events, not all of which can be controlled or predicted. Althoughthe Company believes that the expectations reflected in such forward-looking statements arereasonable, no assurance can be given that such expectations will prove to have been

correct. Actual results could differ materially from the guidance given in this presentation for anumber of reasons. For a detailed analysis of the factors that may affect our business,financial performance or results of operations, we urge you to look at the Principal risks anduncertainties included in the BG Group plc Annual Report & Accounts 2011. Nothing in thispresentation should be construed as a profit forecast and no part of this presentationconstitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Groupplc or any other entity, and must not be relied upon in any way in connection with anyinvestment decision. BG Group plc undertakes no obligation to update any forward-lookingstatements.

No representation or warranty, express or implied, is or will be made in relation to theaccuracy or completeness of the information in this presentation and no responsibility orliability is or will be accepted by BG Group plc or any of its respective subsidiaries, affiliatesand associated companies (or by any of their respective officers, employees or agents) inrelation to it.


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Singapores challenges

Source: Wood Mackenzie, November 2012 & EMA Singapore Energy Statistics Report 2012

75.7%

20.3%

4.0%

2011 gas demand

Power

Industry

Other

84.1%

15.9%

2011 gas supply

Indonesia

Malaysia

78.0%

18.4%

3.6%

2011 fuel mix forelectricity generation

Natural Gas

Petroleum Products

Others

Power

Industry

Other

Indonesia

Malaysia

Natural gas

Petroleum products

Others


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Consolidating demand

Marketing multiple gas sales

contracts

Inventory management and

24/7 commercial operations Market development

Sources: BG Group estimates 2012,Schlumberger Business Consulting, 2009

Singapore LNG demand

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013 2014 2015 2016

mtpa


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Meeting Singapores challenges

Source: BG Group, 2012

Aggregator

(BG Group)

Terminal owner

(Singapore LNG)

Energy Market

Authority of

Singapore

Gas buyersLNG supplier

(BG Group)


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BG Groups LNG marketing

Henry Hub

mtpa

Singapore

Source: BG Group Strategy Presentation, February 2012


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Global assets, supply and markets

* Exclusive right to supplyPotential liquefaction

Existing long term supply source Liquefaction under construction

Equity position

Existing import capacity

Long term customer

UK

USA

Nigeria

EgyptTrinidad

& Tobago

EG

Chile

Singapore*

AustraliaTanzania

Canada

China

Japan

Brazil

India


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Pipeline gas moratorium

Vesting contracts

SLNG step-in and

underwriting

Policy and regulatory support

EMA initiatives and policies

0

5001,0001,5002,0002,5003,000

3,5004,000

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

MW

Incremental gas generationcapacity

Source: Tri-Zen Consulting, BG Group estimates, May 2012


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Long-term sales

3 mtpa exclusive franchise

to supply Singapore

Approx 2.6 mtpa

contracted with 1020year supply periods

10 gas buyers and ~15

GSAs

Long-term sales projection

Source: BG Group, November 2012

1.61.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

Q12010

Q42010

Q32011

Q22012

Q12013

Q42013

Q32014

Q22015

mtpa


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Singapore franchise state of play

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

Remaining Sales (3mtpa Franchise Forecast)Contracted Long-term Sales

mtpa


Contracted long-term sales

Remaining sales (3 mtpa franchise forecast)


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Long-term sales

BG Group has contracted at

three long-term price tranches

Singapores power market

is now well supplied withlong-term volumes

Buying interest seen from

2018 onwards

Replacement of expiring pipelinegas import contracts

Demand growth driven byindustry

0.0

2.0

4.06.0

8.0

10.0

12.0

201

3

201

5

201

7

201

9

202

1

202

3

202

5

mtpa

Incremental demand

Sumatra pipeline gas replacement

Natuna pipeline gas replacement

Malaysia pipeline gas replacement

BG Group franchise


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Short-term supply security

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013 2014 2015

mtpa

Source: BG Group, December 2012

Available volumes for short-term sales

BG Group committed volumes

Potential for short-term sales


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Short-term sales

79%

21%

2013 volumes Through 2012, BG Group worked

closely with the regulator (EMA) to

develop:

Standardised master short-term GSAs

Stand alone short-term GSAs

Short-term interest driven by:

Ramp up and commissioningrequirements

Operational concerns

Commercial opportunities to accessspot LNG

Pipeline gas displacement

Power market opportunities

Long-term sales

Short-term sales


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0

0.020.04

0.06

0.08

0.1

0.120.14

0.16

0.18

0.2

GSA1 GSA2 GSA3 GSA4 GSA5 Cargoes

mt

Consolidating demand

Aggregator's short-term and spot GSAs

1carg

o

2cargoes

3c

argoes


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Market development


Singapore

LNG

inventory

Term

LNGFuel oil &

oil products

Indonesia

piped gas

Malaysia

piped gas

Spot LNG

Electricity

procurement

100

150

200

250

300

2005

2006

2007

2008

2009

2010

2011

2012

2005=100

Relative pricing of

fuel oil & Brent

BrentFuel oil


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Singapore market overview

-

2

4

68

10

12

14

16

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

mtpa

Sources: BG Group estimates, November 2012 & EMA procurement framework consultation paper, March 2012

Aggregator franchiselong-term contracted supply

Long-term supply opportunities (EMA consultation paper)

Aggregator franchise3 mtpa

Short-term supply opportunities

Gas demand (EMA consultation paper)Terminal max throughputfacilities under construction


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Pipeline gas displacement

LNG is competitive against

pipeline gas in Singapore

Spot LNG prices regularly

support short-termdisplacement of pipeline gas

with LNG

Pipeline gas prices

SpotLNG

pr

ices

Pipeline gas

displacement


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Market development LNG reloads

Physical reload capability

enables break bulk

trans-shipment

Demand side interest in LNGreloads for various regional

markets

Early stage assessment of

LNG bunkering under way

SLNG full development

Source: EMA.gov.sg


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Conclusions

Close cooperation among

BG Group, SLNG and EMA

Aggregator model tailor made

to meet Singapores gasmarket challenges. It could be

adapted to introduce LNG to

new markets

BG Group is committed toongoing development of

Singapore gas market


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01_01-Anthony-Barker-BG-Singapore-Presentation - Emergence of a New LNG Market