Opportunities for LNG Bunkering in

Western Australia

September 2017

Captain Walter P. Purio Chief Executive Officer

LNG Marine Fuel Institute

Marine Advisor to Woodside Energy

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WHY LNG?

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LNG Marine Fuel Institute in Australia

● The LNG Marine Fuel Institute (LNG MFI) is the only independent

not for profit organisation headquartered in the Southern Hemisphere

and Asia Pacific region established to advocate for the use of LNG as

a marine fuel.

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Scenario for LNG bunker demand in Australia

1 Assumes Y0 bunker fuel demand from WA Iron Ore and QLD/NSW Coal is 328PJ and LNG fuel cost of A$9.1 (real terms)

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5% Conversion Asia Pac HFO to LNG fuel excluding Australia by 2025

Convert to LNG – equivalent to 100PJ

100PJ is 27.8 billion kwh

$6.8 Billion USD at current USD/AUD exchange rate

THE GREEN CORRIDOR

Estimate 130PJ of Australian LNG Bunker demand by 2040

Convert to LNG – equivalent to 130PJ

130PJ is 36.1 billion kwh

$7.5 Billion USD at current USD/AUD exchange rate

7 SOURCE: Team analysis

Stakeholders

Government Upstream Shipping/Bunkering

● WA, Qld, NSW Govs

● Department of Environment and Energy

● Department of Infrastructure and Regional

Development - (Transport)

● Australian regulators

● WA Ports

● Woodside Petroleum

● Shell Australia

● ConocoPhillips

● Other upstream players

● BP Australia

● Caltex Australia

● Vopak

● EVOL LNG

● Wartsila

Mining Services Foreign Governments/NGOS

● BHP

● Rio Tinto

● FMG

● Australian banks

● DNV GL

● United Nations Framework

Convention on Climate Change

(IMO)

● MPA Singapore

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Security of Supply for Australia

● Australia has more than 22,656 billion

cubic metres (BM3) of gas resources,

enough to power a city of 1 million

people for 16,000 years.

● 2016 Australia’s combined domestic and

export gas production totalled 90.6

BM3, the equivalent of approximately

$200 billion (USD).

● Global LNG export capacity is forecast to increase

by 45% between 2015 and 2021, with 90% of this

increase originating from Australia and the US.

● Gas production in Australia is projected to

almost double between 2015 and 2021, from close

to 80 BM3 in 2015 to an estimated 153 BM3 in 2021.

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Balance of Payments Surplus - Australia

● Natural gas production (domestic and export)

48% higher 2014-15 to 2015-16

● Energy exports - 39% of the value of

Australia’s total commodity exports

2014-15, ~$52 billion (USD)

LNG Export Markets

● 2014-15 LNG was the

second largest

energy export earner

~$13.5 billion

SOURCE: APPEA; Dept Industry, Innovation and Science

● In 2015-16, exported 51.1 BM3 of natural gas

~$13.06 billion

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Job Creation from the LNG Industry

● Jobs in remote Australia can be created on

the back of these recently completed

projects

● So far 103,000 FTE jobs across the

Australian economy

● 3 operating LNG projects

○ North West Shelf Venture

○ Pluto

○ Gorgon

● 4 new LNG projects under construction

and commissioning

○ Wheatstone

○ Prelude

○ Darwin LNG

○ Icthys

Australian LNG Projects

● Gorgon project generated

approximately 7,000 jobs during

construction

● Long term source of revenue and

employment for Australian

industry

SOURCE: APPEA

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Establishing a strong LNG

bunkering industry around

Australia has the potential to

resurrect a domestic shipping

fleet for coastal trading

utilising LNG as a primary fuel

source.

Future Opportunities

Captain Walter P. Purio Chief Executive Officer

LNG Marine Fuel Institute

Marine Advisor to Woodside Energy

www.LNG-MFI.org

walter@lng-mfi.org

facebook @lngmarinefuelinstitute Linkedin @LNG Marine Fuel Institute twitter @lngmfi