ENERGY POLICY &ENERGY POLICY & LNG SUPPLY AND DEMAND … · 2008 2010 2011 0 8 Japan South Korea Taiwan-20 Year 2009 CPC CORPORATION, TAIWAN 14 Source; The LNG Industry, 2011 & 2011,

ENERGY POLICY &ENERGY POLICY &ENERGY POLICY &ENERGY POLICY &LNG SUPPLY AND DEMAND LNG SUPPLY AND DEMAND

in TAIWANin TAIWAN

LNG Producer Consumer ConferenceLNG Producer Consumer ConferenceLNG Producer Consumer ConferenceLNG Producer Consumer ConferenceTokyo, Japan Tokyo, Japan

19 September 19 September 20122012

Sheng-Chung LINSheng-Chung LINChairmanChairman

CPC Corporation, TaiwanCPC Corporation, Taiwan

CPC CORPORATION, TAIWAN

pp

LNG Producer - Consumer Conference 2012

OutlineOutline

Ⅰ Introduction of CPC

Taiwan’s Energy PolicyⅡ

LNG Supply and Demand in TaiwanIII

VI M k t E t tiVI Market Expectations



CPC Corporation, Taiwan: Leading energy company in TaiwanLeading energy company in Taiwan

CPC, established in 1946, is an integrated oil & gas company.Ranking 337th in the world and 3rd in Taiwan on the Fortune 500 list.

Exploration & Production

Natural Gas

21 fields in 7 countries

F l M k ti

2 LNG re-gasification terminals

Fuels MarketingLPGLubricants

Refinery & Petrochemicals

Filling-Station (market share:77%) CPC-owned: 639 franchise: 1,382

3 refineries (capacity:720,000 barrels/d) 1 petrochemical plant (ethylene:850,000 ton/y)

CPC CORPORATION, TAIWAN 3


Taiwan’s Taiwan’s Energy Energy Policy Policy gygy yy



Energy Overview in Taiwan In last decade: Primary Energy grew 24%

Natural Gas increased 109% In 2011: Crude & Coal shared 79.3% of Primary Energy Supply

Natural Gas 11.6% & Nuclear 8.7% respectively 99.33% of total energy supply imported

8.7% 0.5%

140,000

160,000 gy y

Primary Energy Supply

45 3%6.9%

11.6% 10.1%0.3%

80 000

100,000

120,000

others

49.5% 45.3%

40 000

60,000

80,000 NuclearNatural GasCrude & Petrol Products

33.2% 34 %

0

20,000

40,000 Crude & Petrol ProductsCoal Products

103 KLOE


2002 201110 KLOE

5


Energy & GDP Growth RateIn last decade(2002-2011): Energy Intensity: 20% decreased LNG Consumption: 125% increased Real GDP : 47% increased

2012 Estimated GDP growth rate is 1.66%

200%220%240%

Year 2002 =100%

LNG ConsumptionDomestic energy consumption +125%

140%160%180%200%

Real GDPEnergy Intensity

LNG grows rapidly

125%

47%

80%100%120%140% rapidly

in last decade

+47%

20%60%80%

2002 2005 2008 2011Source: Directorate General of Budget, Accounting and Statistics, ROC

-20%


Sou ce: ecto ate Ge e a o udget, ccou t g a d Stat st cs, OC* Energy intensity, defined as Domestic energy consumption divided by Real GDP.


New Energy Policy in TaiwanNew Energy Policy in Taiwangy ygy y4-Stage Objectives:

Build a friendly l b

Gradually transform into

l f

Ensure nuclear

Steadily reduce nuclear energy dependence

low-carbon green energyenvironment

a nuclear-free homeland

Ensure nuclear energy safety Increase natural gas &

renewable energy utilization for eco-f i dl

Completed the i f 4th

Phase out 1st ~3rd

nuclear power plants (5 1GW)

friendly.

construction of 4th

nuclear power plant (2.7GW) in 2016.

(5.1GW) .



LNGLNG Supply and DemandSupply and DemandⅠ

LNG LNG Supply and DemandSupply and Demandin Taiwanin TaiwanⅠ in Taiwanin Taiwan



LNG/NG FacilitiesCPC owns and operates 2 receiving terminals.

TatanTatanStationStation

TunghsiaoTunghsiao

Taichung LNG Taichung LNG Receiving TerminalReceiving Terminal

TunghsiaoTunghsiaoStationStation

Figure “8” loop of G T i iGas Transmission Network

Tank storage: 480,000 KLCapacity of unloading: 4.5 mtpa

YungYung--An LNG An LNG Receiving Receiving TerminalTerminalgg

Tank storage: 690,000 KLCapacity of unloading: 9 mtpa


Capacity of unloading: 9 mtpa

9


LNG Supply:Historical imported volumeHistorical imported volume

98% Natural gas imported. 6th largest LNG importing country in the world. Rising demand of LNG results from the growth of electricity and

industry.

10 912.0

12

15 Unit: MTPA

140%

150% LNG growth rateElectricity growth rate

Y2007=100%+45%

8.3 9.1 8.8 10.9

9

12

130%

140% Electricity growth rateGDP growth rate

+17%

3

6 110%

120% +17%

+4%

-

3

2007 2008 2009 2010 201190%

100%

2007 2008 2009 2010 2011


2007 2008 2009 2010 2011

10


LNG Demand:Main customers & electricity mix

82 % gas for power generation (Taipower & IPPs) in 2011 29 % electricity from gas-fired generators (15GW)

Main customers & electricity mix

29 % electricity from gas-fired generators (15GW) LNG as main substitute for nuclear when existing plants

decommissioned

TaipowerGas Customers Mix Electricity Mix

p60%Industrial

7%2.6%

4.3%Renewable Energy

Cogeneration

Residential19 0%

3.3%

1.4%

Nuclear

Oil

Hydro Power

IPPs22%

11%

29 1%29 1%

40.3%

19.0%

Gas

Coal

Nuclear


29.1%29.1%Gas

11


LNG Procurement Strategy

• Purchase from reliable & stable sources• Purchase from reliable & stable sources at reasonable price

• Major volume from long-term contractsSecurity

• Allocation to worldwide supply sourcesDi it • Interest in new supply sources from

USA, Canada and AustraliaDiversity

• Portfolio of pricing index, Oil-linked & US Gas-linkedCompetitiveness

• Participation in upstreamCompetitiveness



CCConsumers ExpectationsConsumers Expectations



Main LNG Consumers Three major LNG importing countries, Japan, South Korea and

Taiwan (JKT), account for 53% global LNG trade in 2011.

2010 2011 % changeJapan South Korea Taiwan

Taiwan (JKT), account for 53% global LNG trade in 2011. JKT increase LNG import by 9.9% in 2011.

70.8779.09

11.6

11

12

80

100

20

30

10

11

60

Gro

wth

(%)

ty (1

06 T

)

10

chan

ge

32.64

11.18

35.55

12.28.929.12 9

20

40

G

Dem

and

Q'

-10

0

y-o-

y %

2008 2010 2011

80Japan South Korea Taiwan

-20

Year

2009


Source; The LNG Industry, 2011 & 2011, GIIGNL


Consumers ExpectationsConsumers ExpectationsppMore Supply & More Flexibility = More CompetitionMore Supply

To meet increasing global demand, it requires more investment on LNG supply chain and unconventional production technology.

Government policy to encourage LNG export and import, including application of LNG as fuel for marine tankers and land vehiclesand land vehicles.

Fair treatment to all importing countries and eliminate free-trade obstacles.

More Flexibility

Diverse gas price indexation, oil-linked and gas-linked, to allocate risk of pricing fluctuation.y

More flexibility on destination to invigorate market.



ConclusionConclusion

• LNG/NG plays a critical role in the global energy market as theLNG demand steadily increases• LNG/NG plays a critical role in the global energy market as the

primary alternative for crude and nuclear.• Taiwan’ s new energy policy promotes LNG utilization.

• Qatar & Australia are major supply countries for its abundant natural source and stable environment

More LNG supply is expected

natural source and stable environment.• Asian market is looking forward to US and Canada LNG without

trade restriction.

• For above purpose, support for and investment in LNG supply chain are continually required from government and LNG

Prepare for the coming Golden Age of Gas

chain are continually required from government and LNG industry.

• LNG market is drastically changing; all players need more communication and cooperation.


communication and cooperation.

16


Thank You for Your Attention


Documents

ENERGY POLICY &ENERGY POLICY & LNG SUPPLY AND DEMAND … · 2008 2010 2011 0 8 Japan South Korea Taiwan-20 Year 2009 CPC CORPORATION, TAIWAN 14 Source; The LNG Industry, 2011 & 2011,