World National Oil Companies Congress – 24 June 2010 – London
Dynamics of the LNG markets
Philip OLIVIER
President of GDF ...
2
This presentation is not intended to provide the basis for any evaluation of GDF SUEZ or of any
of its subsidiaries. Alt...
3
Global LNG production - pre-crisis
London - 24 June 2010
4
London - 24 June 2010
Global LNG production - post-crisis
5
First ever significant decrease in world natural gas
consumption in 2009
Pre recession
forecast
• Pre recession 
forecas...
6
Pipeline gas and LNG consumption – crisis and
recovery : 2010-2015 Focus
• 2009 assumed gas  
overcapacity : 
~ 100 BCM
...
Natural gas worldwide supply overcapacity
in 2009
7
2009 gas
consumption
decrease
Additional LNG
capacity
2009/2008
supply...
(BCM)
Asian  natural 
gas demand 
decrease
Additional 
LNG 
contracted 
to Asia  
Natural gas 
oversupply 
in Asia
LNG red...
2009 Natural gas oversupply – Europe
2009  European 
natural gas 
demand 
decrease
Additional 
redirected LNG  
to Europe
...
2009 Natural gas oversupply – North America
2009  North  
American natural  
gas demand 
decrease
Additional LNG  
to Nort...
11
NBP and Henry Hub comparison
In a LNG surplus 
context:
• Market 
anticipates short 
term NBP/HH 
convergence, then 
sl...
12
European case example: UK LNG needs
• Reduction of UK 
domestic gas 
production: 31 BCM 
from 2005 to 2009
• UK LNG imp...
13
Global LNG production and demand
• Strong sensitivity to pace 
of recovery creates huge 
uncertainties on  total gas 
d...
London - 24 June 2010
14
Changing supply/demand balance in Asia
• Asian demand 
growth: +5%/year 
in 2010‐2020
• Many buye...
London - 24 June 2010
15
Flexible & uncommitted volumes available
for the Atlantic Basin
• About 35 MTPA 
available for th...
REDISCOVERING ENERGY
16
London - 24 June 2010
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Philip olivier's presentation slides from the 2010 World National Oil Companies Congress

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Philip olivier's presentation slides from the 2010 World National Oil Companies Congress that took place in June in London.

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Philip olivier's presentation slides from the 2010 World National Oil Companies Congress

  1. 1. World National Oil Companies Congress – 24 June 2010 – London Dynamics of the LNG markets Philip OLIVIER President of GDF SUEZ LNG
  2. 2. 2 This presentation is not intended to provide the basis for any evaluation of GDF SUEZ or of any of its subsidiaries. Although GDF SUEZ uses reasonable care to include in this presentation information which it believes is up-to-date and accurate, GDF SUEZ makes no representation or warranty as to the adequacy, accuracy, completeness or correctness of such information nor does it warrant or represent that the presentation shall be complete in every respect. GDF SUEZ shall have no liability resulting from the use of the information provided in this presentation nor shall it have any liability for the absence of any specific information herein. The information may be changed by GDF SUEZ at any time without prior notice. Nothing herein may be considered as being an offer to purchase or subscribe securities. The name and logo of GDF SUEZ, as well as the name and logo of affiliated companies, that appear in this presentation are trademarks and trade names protected by national and international laws. The copyright on this presentation belongs to GDF SUEZ. London - 24 June 2010
  3. 3. 3 Global LNG production - pre-crisis London - 24 June 2010
  4. 4. 4 London - 24 June 2010 Global LNG production - post-crisis
  5. 5. 5 First ever significant decrease in world natural gas consumption in 2009 Pre recession forecast • Pre recession  forecast : 2.6% p/a • 3‐4 year delay to  recover to 2008  global gas demand  level • Pipeline gas to  recover in  2014/2015 London - 24 June 2010
  6. 6. 6 Pipeline gas and LNG consumption – crisis and recovery : 2010-2015 Focus • 2009 assumed gas   overcapacity :  ~ 100 BCM • +1,6% yoy gas  demand growth  expected in 2010‐ 2015 • As LNG has to  flow and find a  home, world gas  recovery may first  absorb LNG, and  then pipeline gas 100 BCM (BCM) CERA – GDF SUEZ analysis London - 24 June 2010
  7. 7. Natural gas worldwide supply overcapacity in 2009 7 2009 gas consumption decrease Additional LNG capacity 2009/2008 supply overcapacity 50 10 12 12 Europe N & S America Asia 72 30 102 Hypothesis : 2008 supply/demand balanced year, no storage effect taken into account (BCM) • 2009 assumed gas   overcapacity of 100  BCM originates mostly  from European  consumption decrease  and additional LNG  capacity coming on‐ stream. Source: GDF SUEZ London - 24 June 2010
  8. 8. (BCM) Asian  natural  gas demand  decrease Additional  LNG  contracted  to Asia   Natural gas  oversupply  in Asia LNG redirected  to NA, SA and  ME LNG  redirected to  Europe Source: GDF SUEZ 12 13 UK 10 In 2009 :  • An additional 25 BCM  is forced from the  Pacific Basin to the  Atlantic Basin    8 10  NA 25 14 11 London - 24 June 2010 8 2009 Natural gas oversupply - Asia
  9. 9. 2009 Natural gas oversupply – Europe 2009  European  natural gas  demand  decrease Additional  redirected LNG   to Europe (BCM) In 2009 :  Significant impact of the  crisis on the European  natural gas market, and  especially on the  European LNG market Oversupply absorbed by  pipeline reduction,  domestic production  decrease and storage  9 50 11 63 Natural gas  oversupply to Europe Source: GDF SUEZ Additional  contracted LNG   to Europe 2 London - 24 June 2010 9
  10. 10. 2009 Natural gas oversupply – North America 2009  North   American natural   gas demand  decrease Additional LNG   to North America(BCM) In 2009 :  Minor impact of the crisis  on the North American  natural gas market (20  BCM oversupply vs 770  BCM of natural gas  market, i.e. 2.6%). Oversupply assumed  mostly  absorbed by  storage  10 Natural gas  oversupply to North America 10 10 20 Source: GDF SUEZ London - 24 June 2010 10
  11. 11. 11 NBP and Henry Hub comparison In a LNG surplus  context: • Market  anticipates short  term NBP/HH  convergence, then  slow divergence • HH becoming  price floor for NBP Forward curves 2010‐2015 London - 24 June 2010 11
  12. 12. 12 European case example: UK LNG needs • Reduction of UK  domestic gas  production: 31 BCM  from 2005 to 2009 • UK LNG imports in  2009: 11 BCM (incl. 6 BCM from  Qatar) • UK LNG needs to  accelerate as  production decline  expected to continue Source  : GDF SUEZ London - 24 June 2010 12
  13. 13. 13 Global LNG production and demand • Strong sensitivity to pace  of recovery creates huge  uncertainties on  total gas  demand • Current surplus assumed  absorbed by pipelines   • New LNG capacities might  be required in 2014 but  some of the potential  liquefaction projects will  be further postponed • In the short term, a long  market, but in the  medium/long term, a  potential tighter market  and a need for new  capacities   100 BCM gas bubble London - 24 June 2010 13
  14. 14. London - 24 June 2010 14 Changing supply/demand balance in Asia • Asian demand  growth: +5%/year  in 2010‐2020 • Many buyers still  waiting before  contracting new LT  supply • In the short‐term:  Asia will not be THE  destination for  flexible LNG
  15. 15. London - 24 June 2010 15 Flexible & uncommitted volumes available for the Atlantic Basin • About 35 MTPA  available for the  Atlantic Basin (incl. Middle East)  between 2013 and 2015
  16. 16. REDISCOVERING ENERGY 16 London - 24 June 2010

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