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LNG and the New Map of Global GasMarch 2014

Over 260 mt of liquefaction capacity in the United States has begun the federal filing process for LNG exports with the DOE and/or for plant construction with the FERC. To date, the 18 mt Sabine Pass LNG is the only project with all the necessary approvals in place, and is under construction. In addition to Sabine Pass LNG, the DOE has approved an additional 45 mt of export capacity to non-FTA countries. However, FERC has not granted any additional approvals for site construction and operation (as of February 2014). IHS expects LNG export capacity in the United States to reach almost 50 mt by 2020, making it the third largest LNG producer after Australia and Qatar.

Significant changes are on the horizon with the startup of LNG production from a wave of new projects, with over 125 mt of capacity under construction. Australia will likely surpass Qatar as the largest LNG producer by the end of 2017.

The inventory for planned global liquefaction projects has also reached a historic high. With almost 700 mt of planned capacity the inventory almost doubled from just four years ago. Most of the new planned projects are in North America, a result of the enormous success of the unconventional gas revolution there. Potential LNG export plays have also emerged in Mozambique and Tanzania. Russia, not a new natural gas or LNG player by any means, is re-energizing its push into the LNG market thanks to new limited LNG export liberalization.

U.S. Liquefaction

Global Liquefaction Comparison

An unprecedented surge in potential LNG supply projects is leading the global LNG business away from its previous rigid supply model.

The international LNG business is moving away from its traditional inflexible supply model that has been the cornerstone of its development. LNG business models continue to evolve as new demand centers materialize, supply competition intensifies and conventional pricing terms are challenged. As with any commodity industry, there are challenges. Future LNG demand hinges on several factors, including nuclear power in Japan, stagnant European gas demand, and the develop-ment of new demand centers, particularly in Asia. At the same time, potential LNG supply availability is unprecedented in the LNG industry’s history, with Australia, East Africa, Russia, and North America competing for markets against each other and

global shale gas developments. These effects are combining to put the oil-indexation in the pricing of LNG under pressure with the emergence of hub-based supply contracts.

The IHS Global LNG team provides strategic and commercial advice to address the challenges facing the LNG industry. Ongoing analysis of and insights into the global LNG markets are provided through IHS’s strategy and value-chain focused LNG subscription services, and bespoke consulting assignments.

Existing

Under Construction

0

50

100

150

200

250

300

350

400

450

Globalcapacity

GrantedDOE’s FTA

exportapproval

GrantedDOE’s

non-FTAexport

approval

Filed forFERC’sbuilding/operatingapproval*

Fullyapproved**

Mill

ion

Met

ric

To

ns P

er Y

ear

Floating

Green�eld

Brown�eld

United States

Applied

Pre-Filed

Global

Allannounced

projects

Status current as of February 2014* Does not include projects that have only begun the FERC pre-filing process.** Received DOE FTA and non-FTA export authorizaIon as well as FERC approval.

IHS ENERGY

Global LNG Trade — 2013 (million metric tons)

*Re-exports — negative indicates total re-exports out of a market and positive indicates total volumes imported from re-export markets.

Qatar Malaysia Australia Indonesia Nigeria Trinidad Algeria Russia Oman Yemen Brunei Abu Dhabi Peru Norway Equatorial Guinea Egypt Angola Re-Exports* TOTAL

IMPORTS

Japan 16.1 15 17.9 6.3 3.8 0.3 0.4 8.6 4 0.5 5.1 5.4 0.7 0.2 2.2 0.6 0.1 0.4 87.7Korea 13.3 4.3 0.7 5.6 2.8 0.5 0.1 1.8 4.5 3.6 1.1 0.5 0.1 0.1 0.6 0.1 0.1 39.9China 6.8 2.7 3.6 2.4 0.4 0.1 0.1 1.1 0.4 0.4 0.1 0.1 18.1India 11.2 0.9 0.1 0.6 0.1 0.1 0.3 0.1 13.4

Taiwan 6.4 2.9 0.1 2 0.6 0.1 0.1 0.1 0.1 0.4 0.1 0.1 13Spain 2.7 2.5 1.7 2 0.1 1.1 1 0.1 -1.7 9.5

United Kingdom 6.5 0.2 0.2 0.7 0.1 7.5Mexico 1.2 0.3 1.2 0.3 0.5 1.9 0.3 0.4 6France 1.3 0.9 0.1 3.8 0.1 0.1 -0.5 5.8

Argentina 0.6 0.4 2.5 0.1 0.1 1.2 4.9Brazil 0.2 0.9 2 0.1 0.3 0.1 0.8 4.4

Turkey 0.3 0.9 2.7 0.1 0.2 0.1 0.1 4.4Italy 2.8 0.2 3

Chile 0.1 2.4 0.2 2.7Caribbean 0.1 2.2 2.3

United States 0.2 0.1 1.4 0.3 0.1 2.1Kuwait 1.4 0.1 0.2 1.7

Thailand 1 0.3 0.1 0.1 0.1 1.6Portugal 0.2 1 0.1 0.2 0.1 1.6Malaysia 0.1 0.3 0.3 0.1 0.6 0.1 0.1 1.6

Indonesia 1.5 1.5Dubai 1.1 0.1 0.1 1.3

Belgium 2.1 -1.1 1Singapore 0.1 0.3 0.6 1

Canada 0.6 0.2 0.8Netherlands 0.4 0.1 0.3 -0.2 0.6

Israel 0.2 0.1 0.2 0.5Greece 0.5 0.5

Sweden 0.1 0.1TOTAL EXPORTS 76.7 24.9 22.4 18.3 17.4 14.6 10.6 10.5 8.6 7.1 7 5.4 4.8 3.9 3.2 2.7 0.3 238.5

*Re-exports — negative indicates total re-exports out of a market and positive indicates total volumes imported from re-export markets.

0 20 40 60 80 100 120 140 160Venezuela

BrazilIsrael

CameroonIraq

LibyaCyprus

TanzaniaMozambique

CanadaColombia

Equatorial GuineaNorway

PeruAngola

Abu DhabiPapua New Guinea

YemenBrunei

IranOmanEgypt

TrinidadUSA

NigeriaRussiaAlgeria

IndonesiaMalaysia

QatarAustralia

Existing

Under Construction

Planned

2014

N.B. An "inventory" of projects, not an outlook.Proposed projects have varying degrees of likelihood.

2010255mt

74mt

366mt

695mt

20142010

288mt

128mt

685mt

1,101mt

Existing

Under Construction

Planned

Total

> 260 MMTY

Million Metric Tons Per Year

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Source: Esri, DigitalGlobe, GeoEye, i-cubed, USDA, USGS, AEX, Getmapping, Aerogrid, IGN, IGP, swisstopo, and the GIS User

East Mediterranean Middle East

Regional Liquefaction Capacities

150 MMTY

50 MMTY

* Volumes are proportional to circle area

ExistingUnderConstructionPlanned

LiquefactionFacilities

2013 LNG Imports

Less than 2

2 - 5

5 - 10

10 - 25

Greater than 25

* in MMTY East Africa

GasPipelines

Operating

Planned

UnderConstruction

Gas

Condensate

Oil

Fields

Gulf of Mexico

West Australia (Carnarvon) Northern Australia East AustraliaEast Africa

Middle East

3

3 3

60

4.4

1.4

30.8

44.9

36.3

19.55

70.9

60.4

15.5

405.5

18

0.5

7.9 50.8

11.74.7

101.1

10.8

16.5

9.69

18.1

15.8

24.7

61.8

LEGEND