Natural gas and bio methane as fuel for transport t. yamamoto

1. © OECD/IEA 2013© OECD/IEA 2014
Development of global LNG
market and recent trend
Takuro Yamamoto
LNG Analyst
International Energy Agency
Riga, 23 June 2015

2. © OECD/IEA 2014
LNG is the only method to deliver gas
from continent to continent
(Source: GIIGNL)

3. © OECD/IEA 2014
Number of LNG importing countries have
tripled only in 15 years
Number of LNG importing countries, 2000 - 2014
Pakistan, Egypt and Jordan have already joined LNG importer’s club this year.

4. © OECD/IEA 2014
The transition to more flexible market is
under way
Spot and short-term LNG trade volumes and share, 2000 - 2014
Traditionally LNG was traded under inflexible long-term contracts, although
we see more diversified trades these days.

5. © OECD/IEA 2014
Destination free
Spot contracts
Re-exports
FLNG & FSRU
Henry Hub indexedOil indexed
Long term contracts
Destination clause
LNG fuels
Small scale LNG
Take or Pay
Short term contracts
As market grows, more opportunities and
options as well as competitions
Joint tender
Panama Canal
Development of technology and infrastructure also helps expand the market.
Unconventional gas

6. © OECD/IEA 2014
LNG market faced many events only in a
decade
LNG import volumes by region, 2005 - 2014 (bcm)
Global LNG trade increased by 70% in past decade, with many countries and
regions becoming LNG importer.

7. © OECD/IEA 2014
The US shale gas revolution is the biggest
game changer
LNG import volumes vs shale gas production in the US, 2007 - 2014 (bcm)
LNG imports to the United States are shrinking yearly, only receiving 1.6 bcm in
2014 against 200 bcm of receiving capacity.

8. © OECD/IEA 2014
Low utilization rate with roughly 20% in
Europe. Last resort?
LNG import volumes vs import capacity in OECD Europe , 2010 - 2014 (bcm)
In spite of LNG import capacity increases, LNG import volumes are following a
downward trend in Europe every year.

9. © OECD/IEA 2014
Nuclear accident has drove Japan to
become more powerful LNG importer
Power generation by fuel in Japan, 2005 - 2013 (TWh)
Japanese LNG import volumes increased by 25% after the nuclear accident to
cover the loss of nuclear power.

10. © OECD/IEA 2014
Asian LNG demand has seen a slowdown
LNG import volumes in major Asian countries, 2010 - 2014 (bcm)
Total import volumes of Japan and Korea have been stabilized, along with
slower growth in Chinese demand.

11. © OECD/IEA 2014
Second wave of additional LNG supply is
coming soon
Additional LNG capacity , 2005 - 2015 (bcm)
After three years with few new projects, second wave of large LNG additional
capacities are coming from this year.

12. © OECD/IEA 2014
Australia is expected to become the
world’s largest LNG exporter
Top largest LNG exporters in 2020 (bcm)
17 new projects with total export capacity of 175 bcm are under construction as
of today, with Australia and the United States accounting for roughly 80% of
total.

13. © OECD/IEA 2014
Will Asian and European prices converge?
Global gas price development in key regions, Apr 2009 - Feb 2015
Asian spot prices continued to slide in February and reached parity with European
prices for the first time in four years.

14. © OECD/IEA 2014
Transport sector is the fastest
growing sector in gas market
Global gas demand by sector, 2014 – 2020 (bcm)
Global gas demand is forecast to increase at an average annual rate of 2% by
2020, with transport sector being the fastest growing end-user segment.

15. © OECD/IEA 2014
Concluding remarks
• With 50 years of history, LNG industry is expanding globally and
transforming to more flexible market.
• LNG will increasingly play an important role in meeting the global
energy needs in terms of environmental measure.
• 2014 was a turning point in the global LNG market after three
years of tightness.
• With ample supplies coming from Australia and the United States,
along with weaker Asian demand, LNG will be more accessible in
next five years.
• Transport sector is the fastest growing end-user segment by 2020.

16. © OECD/IEA 2013© OECD/IEA 2014
Thank you very much for
your attention.