LNG Market Prospects

1st November, 2017

Mr Jae Sung Choi

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I. Introduction of Clarksons Platou Korea

II. LNG Trade Overview (Exports & Imports)

III. LNG Value Chain

IV. LNG Carrier Market Overview

Fleet Development vs Export Capacity Growth

V. FSRU Market Overview

VI. South Korean Shipbuilders Position in LNG Market

CONTENTS

2

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I. Introduction of Clarksons Platou PLC

Broking

¾ Time / Spot Chartering¾ Cargo Chartering¾ Sale & Purchase¾ Newbuilding¾ Demolition¾ Finance

- Provide services in 17 sectors- Dry Cargo, Tankers, LNG, LPG,

Offshore, Container, PCTC etc.

165 YEARS

1,398EMPLOYEESWORLDWIDE

49OFFICES

21COUNTRIES

9 Established by Horace Anderton Clarkson in 1852 (165 years of history)

9 Listed at London Stock Exchange (CKN.L) in 1986

9 Member of FTSE 250

Financial

¾ Provide finance and debt solutionsto help clients manage risk, fundtransactions / Freight &Commodity Future broking

- Clarksons Platou Futures- Clarksons Platou Asset Finance- Clarksons Platou Securities- Clarksons Platou Project Finance

Support

¾ Provide supports with 24/7attendance at wide range ofstrategically located ports

- Clarksons Port Services- Freight forwarding & Logistics- Gibb Tools & Supplies

Research

¾ Provide intelligence on globalshipping

- Offshore and Energy- Shipping and Trade- Valuations

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9 Current Position of Korean Shipping & Shipbuilding Industry

� The current atmosphere of Korean shipping and shipbuilding is under the stage of restructure and consolidation.

� The Korean government is continuously showing their strong intention to consolidate and centralize the key functions andresources through establishing government organizations (ex Korea Shipping Partners, Korea Maritime Corporation)

I. Introduction of Clarkons Platou Korea

9 Objectives of Clarksons Platou Korea

9 Clarkson Platou Korea aim to be each client’s (shipping companies & shipyards) advisory role for establish mid-long term planssupported by Clarkson Platou’s intelligence and global network.

9 Clarksons Platou Korea will be able to provide services as follow:

- Market Research (provide excellent market intelligence, database, research products to meet up each client’s needs)- Sale and Purchase (Advice vessel replacement strategy against volatile market through second hand transactions for each client’s needs)

Newbuildings (Interlink communication role between government banks and shipbuilders and advice restructure plan)- Project finance (interlink communication role between private senior banks, equity funds, government financial institutions and each clients)

9 Clarksons Platou Korea will focus on restructuring and debt advisory service- Provide precise assessment of each financial institutions and shipowner’s assets (fair market value) against ship mortgage and provide thestrategic guideline against the volatile market

� Clarksons Platou Korea’s local presence will strengthen the relationships with shipowners, shipbuilders and financial institutions and we will closely configure each client’s demands and provide appropriate advices to help them for right decision.

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II. LNG Trade Overview (Global Monthly LNG trade)

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II. LNG Trade Overview (Exports–Jan/Aug 2017)

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II. LNG Trade Overview (Imports – 1st Half 2017)

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II. LNG Trade Overview (Trade Patterns)

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III. LNG Value Chain (Up-Mid-Down Stream)

Liquefaction Capacity

= Supply

Re-gasification Capacity

= Demand Source: Exmar IR

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IV. LNG Shipping Market Overview - Fleet Development (Supply)

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IV. LNG Shipping Market Overview - Exports Capacity Growth to 2020 (Demand)

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IV. LNG Shipping Market Overview- Exports Capacity Growths to 2020 (Demand)

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IV. LNG Shipping Market Overview - Utilization Rate

� LNG fleet utilization is expected to startimproving through 2017 as the tonnage demandgrowth is expected to exceed the supplygrowth.

� From 2017 the shipping demand growth willalso be driven by an increase in averagedistance with the ramp up of US exporters.

� If global liquefaction capacity will produce at~88%, the LNG trade will reach ~400mt by2021, resulting in a > 85% fleet utilization from2018.

� Short Term: Increasingly dynamic short-term/prompt shipping market

� Mid Term: Shift in market balance – the growthrate of LNG production will exceed the growthof the fleet during this time frame

� Long Term: Expected to grow at 5-6% perannum through 2025, adding over ~140 mpta ofnew LNG demand to the current ~270 mtpa

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IV. LNG Shipping Market Overview - Increased activity in spot chartering

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IV. LNG Shipping Market Overview - Spot Fixtures by Vessel Propulsion Type

� The nature of new spot trades, servicing larger parcels in conjunction with the structure of available fleet havetransformed the spot shipping market to TFDE market, with ST competing in more niche trades.

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V. FSRU Market Overview (Floating Storage Regasification Unit)

9 A fairly new trend in LNG market.

9 There are 24 units in operation and 13 units on order.

9 Approximately 40 FSRUs will be operational by 2020.

Source: Clarksons Research Source: Clarksons Research

� Greater flexibilityA temporarily solution while theonshore terminal is being built.Can be redeployed at a differentlocation, once construction isfinished.

� Lower costApproximately 50–60% of a newonshore terminal.

� Faster project schedulingCan be delivered in a shortertime than onshore terminal.

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VI. South Korean Shipbuilders’ Position in LNG market

Source: Clarksons Research Source: Clarksons Research

9 South Korea has been the dominant builder country within LNG sector since the early 2000s.

9 LNGC orderbook is split between South Korea (68%), Japan (21%), and China (10%) as of 1st, Apr.

9 South Koreans also enjoy a competitive advantage of top-level LNG technology in FSRU market.

South Koreans’ competitive edge

� Proven track recordWorld leading LNG carrier construction and delivery experience

� High productivityShorter construction period with relatively lower cost

� LNG technologyHighly developed technology in a wide range of technical fields led to a large portfolio of LNG relevant patents.

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