LNG North American Summit 2008

Houston, TexasJune 19, 2008

James M. Kendell

Energy Information AdministrationJames.kendell@eia.doe.gov

U.S. Natural Gas Storage and The Global LNG Market

Natural Gas Consumption, 2000–2008 (Billion cubic feet per day)

Source: International Energy Agency, Monthly Gas Data Service

0

20

40

60

80

100

120

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

OECD North America

OECD Europe

OECD Asia

World Underground Working Storage Capacity, 2006

(Trillion cubic feet)

0.1

4.5 2.74.0

Sources: Cedigaz, Underground Gas Storage in the World, June 2006; Energy Information Administration, Office of Energy Markets and End Use

17% of Annual Gas Consumption

1%

16%14%

Working Gas in U.S. Underground Storage, 2003-2008

0

500

1000

1500

2000

2500

3000

3500

4000J

an

-20

03

Ju

n-2

00

3

No

v-2

00

3

Ap

r-2

00

4

Se

p-2

00

4

Fe

b-2

00

5

Ju

l-2

00

5

De

c-2

00

5

Ma

y-2

00

6

Oc

t-2

00

6

Ma

r-2

00

7

Au

g-2

00

7

Ja

n-2

00

8

Bill

ion

Cu

bic

Fe

et

-60

-40

-20

0

20

40

60

Pe

rce

nt

Change in Working Gas from Same Month Previous Year (%) Working Gas (Bcf)

Source: Energy Information Administration, Office of Oil and Gas, Natural Gas Monthly April 2008.

U.S. Natural Gas Production and Imports, 2003-2008

1300

1400

1500

1600

1700

1800

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Bil

lio

n C

ub

ic F

ee

t

300

320

340

360

380

400

420

440

Ja

n-0

3

Ju

l-0

3

Ja

n-0

4

Ju

l-0

4

Ja

n-0

5

Ju

l-0

5

Ja

n-0

6

Ju

l-0

6

Ja

n-0

7

Ju

l-0

7

Ja

n-0

8

Bill

ion

Cu

bic

Fe

et

Source: Energy Information Administration, Office of Oil and Gas, Natural Gas Monthly April 2008.

Production Imports

Source: Energy Information Administration, Office of Oil and Gas, Natural Gas Monthly April 2008.

U.S. LNG Imports by Season, 2000-2008

(Billion cubic feet per day)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Mar

-May

Jun

-Au

g

Sep

t-N

ov

Dec

-Feb

Mar

-May

Jun

-Au

g

Sep

t-N

ov

Dec

-Feb

Mar

-May

Jun

-Au

g

Sep

t-N

ov

Dec

-Feb

Mar

-May

Jun

-Au

g

Sep

t-N

ov

Dec

-Feb

Mar

-May

Jun

-Au

gS

ept-

No

v

Dec

-Feb

Mar

-May

Jun

-Au

g

Sep

t-N

ov

Dec

-Feb

Mar

-May

Jun

-Au

g

Sep

t-N

ov

Dec

-Feb

Mar

-May

Jun

-Au

gS

ept-

No

v

Dec

-Feb

2000 2001 2002 2003 2004 2005 2006 2007

U.S. LNG Imports and U.S./U.K. Price Differentials, 2005-2008

0

20

40

60

80

100

12011

/15/

2005

1/15

/200

6

3/15

/200

6

5/15

/200

6

7/15

/200

6

9/15

/200

6

11/1

5/20

06

1/15

/200

7

3/15

/200

7

5/15

/200

7

7/15

/200

7

9/15

/200

7

11/1

5/20

07

1/15

/200

8

Bill

ion

Cu

bic

Fee

t p

er M

on

th

-$6-$4-$2$0$2$4$6$8$10$12

Do

llars

per

MM

Btu

Note: Import volumes for December 2007 and January 2008 are estimates.

Source: Import data: DOE Office of Fossil Energy; Price data: EIA, derived as National Balancing Point spot price minus Henry Hub spot price.

U.S. LNG Imports

U.S./U.K. Price Differentials

Note: MMcf/d = million cubic feet per daySource: Energy Information Administration, GasTran Gas Transportation Information System, Natural Gas Pipeline Projects Database.

Major Natural Gas Pipeline Corridor Expansions, 2005-2009

U.S./U.K. Price Differentials, 2005-2008

Source: Energy Information Administration – History: derived as the National Balancing Point spot price minus the Henry Hub spot price; June 2008 – June 2009: IPE forward price minus NYMEX price for future delivery at the Henry Hub.

-6

-4

-2

0

2

4

6

8

10

12

11

/1/2

00

5

1/1

/20

06

3/1

/20

06

5/1

/20

06

7/1

/20

06

9/1

/20

06

11

/1/2

00

6

1/1

/20

07

3/1

/20

07

5/1

/20

07

7/1

/20

07

9/1

/20

07

11

/1/2

00

7

1/1

/20

08

3/1

/20

08

5/1

/20

08

7/1

/20

08

9/1

/20

08

11

/1/2

00

8

1/1

/20

09

3/1

/20

09

5/1

/20

09

Do

lla

rs p

er

Mil

lio

n B

tu History

Differences in Forward Prices, +/- 1

Standard Deviation

Future

Natural Gas Spot Price at the Henry Hub and Volatility, 2000-2008

0

2

4

6

8

10

12

14

16

1/1

5/2

00

0

1/1

5/2

00

1

1/1

5/2

00

2

1/1

5/2

00

3

1/1

5/2

00

4

1/1

5/2

00

5

1/1

5/2

00

6

1/1

5/2

00

7

1/1

5/2

00

8

Do

llars

pe

r M

illio

n B

tu

0

20

40

60

80

100

120

Vo

lati

lity

(P

erc

en

t)

Source: Derived by Energy Information Administration, Office of Oil and Gas.

Source: Wood Mackenzie's Global LNG Online Service, Wood MacKenzie, Ltd; Shell Oil, as presented at the Energy Information Administration’s 2008 Conference, Washington D.C., April 6-7, (Proceedings available at http://www.iea.doe.gov/eia_conference_2008.html).

0

50

100

150

200

250

300

350

400

450

500

2005 2006 2007 2008 2009 2010 2011 2012

Mill

ion

Tons

per

Yea

r

Pacific Basin Middle East Atlantic Basin

Today 2012

LNG Importers 17 29

LNG Exporters 15 18

Importers, Exporters, and World Liquefaction Capacity, 2005-2012

Source: Andrew Flower LNG Associates, as presented at the Energy Information Administration’s 2008 Conference, Washington D.C., April 6-7, (Proceedings available at http://www.iea.doe.gov/eia_conference_2008.html).

0

5

10

15

20

25

30

35

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mill

ion

To

ns

per

Yea

rWorld LNG Short-term Trades,

1992-2007

3,400

3,600

3,800

4,000

4,200

4,400

4,600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Bil

lio

n c

ub

ic f

eet

20.5

21

21.5

22

22.5

23

23.5

24

Tri

llio

n c

ub

ic f

eet

Working Gas Capacity Total Consumption

History Potential

Source: Capacity: Energy Information Administration, GasTran Gas Transportation Information System, Natural Gas Pipeline Projects Database.Consumption: Short-Term Energy Outlook, May 2008

Underground U.S. Natural Gas Storage Working Gas Capacity and

Consumption, 2000-2009

U.S. LNG Imports, 2005–2009

Source: Energy Information Administration. History derived from Office of Fossil Energy data; Forecast: Short-Term Energy Outlook, June 2008

(Billion cubic feet per Month)

0

20

40

60

80

100

120

Nov

-05

Jan

-06

Mar

-06

May

-06

Jul-

06

Sep

-06

Nov

-06

Jan

-07

Mar

-07

May

-07

Jul-

07

Sep

-07

Nov

-07

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

Nov

-08

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

Nov

-09

2007 = 771 Bcf2008 = 531 Bcf2009 = 850 Bcf

History Forecast

James M. Kendell

Energy Information Administration

James.Kendell@eia.doe.gov

Recurring Publications:

Annual Energy Outlook 2008, April 2008 (early release)

Short-Term Energy Outlook, monthly

International Energy Outlook 2007, May 2007

Special Reports:

U.S. Natural Gas Imports and Exports: Issues and Trends 2006, February 2008

U.S. Underground Natural Gas Storage Developments: 1998-2005, October 2006

Estimate of Maximum Underground Working Gas Storage Capacity in the United States: 2007 Update, October 2007