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					International Gas Union (IGU)
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World LNG Report
            2011


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                           IGU World LNG Report -- 2011
                            IGU World LNG Report 2011                                Page 1
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1. Message from the President of International Gas Union
1. MESSAGE FROM THE PRESIDENT OF INTERNATIONAL GAS UNION ................................................................................
2. STATE OF THE LNG INDUSTRY AT THE END OF 2011.......................................................................................................
  Dear IGU members
3. LNG IMPORTS, EXPORTS AND PRICES.............................................................................................................................
    am indeed honoured to present to you the second IGU World LNG Report for 2011.
  I3.1. OVERVIEW .............................................................................................................................................................................
   3.2. LNG TRADE VOLUMES .............................................................................................................................................................
  Last year, the world experienced some very interesting events, which led to some very
   3.3. LNG EXPORTS BY COUNTRY ......................................................................................................................................................
  intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
   3.4. LNG IMPORTS BY COUNTRY .................................................................................................................................................... 1
  LNG market was Tpoised to experience a glut situation in 2011 with Qatar producing at its
   3.5. LNG INTERREGIONAL RADE ................................................................................................................................................... 1
  maximum capacity of 77 MTPA whilst the United States, which used to be a significant
   3.6. LNG SPOT MARKET ............................................................................................................................................................... 1
   3.7. LNG P of OVERVIEW ........................................................................................................................................................ 1
  importerRICINGLNG, continuing to turn away more cargoes and increasingly rely on domestic
4.unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
   LIQUEFACTION PLANTS ............................................................................................................................................... 2
  lessOLNG because several economies were experiencing sluggish growth. However, Mother
   4.1. VERVIEW ........................................................................................................................................................................... 2
  Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”! 2
   4.2. GLOBAL LIQUEFACTION CAPACITY .............................................................................................................................................
   4.3. tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
  TheLIQUEFACTION CAPACITY BY COUNTRY....................................................................................................................................... 2
   4.4. LIQUEFACTION CAPACITY BY REGION ......................................................................................................................................... 2
        the LNG industry. The consequence which caused the Japanese municipalities/local
  for LIQUEFACTION PROCESSES ...................................................................................................................................................... 2
   4.5.
  authoritiesLto temporarily shutdown all the 54 nuclear powered power plants which led to the
   4.6. FLOATING IQUEFACTION ........................................................................................................................................................ 2
  country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
5. SPECIAL REPORT: EMERGING LNG MARKETS ................................................................................................................
  jumped by almost 12% to about 79 MT.
   5.1. INTRODUCTION .....................................................................................................................................................................
   5.2. GAS RESERVES AND PRODUCTION LOCATED D for FROM MARKETS............................................................................................. 3
  Meanwhile, the growing concernISTANT the environment and a move seen to avert any serious
  impact from another oil price hike, coupled with the need to enhance energy security, had led
   5.3. INSUFFICIENT GAS PRODUCTION............................................................................................................................................... 3
   5.4. ENERGY SECURITY.................................................................................................................................................................. 3
  to several countries to enter the league of LNG importers, as well as increase their
   5.5. POTENTIAL GROWTH.............................................................................................................................................................. 3
  consumption of LNG.
   5.6. IMPACT OF TECHNOLOGICAL DEVELOPMENTS.............................................................................................................................. 3
  The large incremental demand across the globe practically mopped up all the increased
6. LNG RECEIVING TERMINALS ........................................................................................................................................ 3
  cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
   6.1.
        surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% 3
  not OVERVIEW ...........................................................................................................................................................................of
   6.2. RECEIVING TERMINAL CAPACITY GLOBALLY................................................................................................................................. 3
   6.3. world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
  the RECEIVING TERMINALS BY COUNTRY ......................................................................................................................................... 3
   6.4. R market led to its prices shooting up to between $16 and $17/mmBtu towards the end 3
  LNG ECEIVING TERMINALS BY REGION ............................................................................................................................................of
  2011.
   6.5. RECEIVING TERMINAL LNG STORAGE CAPACITY ..........................................................................................................................
   6.6. RECEIVING TERMINAL MAXIMUM BERTHING CAPACITY AND GAS SEND-OUT CAPACITY .......................................................................
   6.7. REGASIFICATION the growth in the world’s LNG trade, tanker charter rates, which were sluggish
  In tandem withTERMINAL TECHNOLOGY .................................................................................................................................. 4
  in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
7. LNG CARRIERS ............................................................................................................................................................. 4
  concern in the latter part of 2011. This is further exacerbated by the need for more of the
   7.1. OVERVIEW ...........................................................................................................................................................................
  conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.4
   7.2. VESSEL TYPES ....................................................................................................................................................................... 4
  7.3. the CAPACITY side, 2011 saw a large number of new LNG project sanctions, mostly 4
  On VESSEL supply AND AGE ..................................................................................................................................................... in
  7.4. CHARTER But as these projects start moving forward, the industry was also beginning to get a
  Australia. MARKET ................................................................................................................................................................. 4
  7.5. NEWBUILD the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
  glimpse of ORDERS ............................................................................................................................................................... 4
  IMPACT OF UNCONVENTIONAL exporters as recent discoveries reflect the regions’ export potential.
8.position as possible LNGGAS ON THE LNG INDUSTRY ........................................................................................ 4
  North America started to move forward more aggressively, aided by several Sales Purchase
  8.1. INTRODUCTION ..................................................................................................................................................................... 4
  8.2. US SHALE GAS BOOM AND IMPACT Sabine GAS D LNG project.
  Agreements signed by the ON US LNGPassEMAND ..................................................................................................... 4
   8.3. IMPLICATIONS OF US SHALE GAS BOOM ON LNG TRADE FLOWS AND PRICES ................................................................................... 4
   8.4. GROWTH IN UNCONVENTIONAL GAS PRODUCTION OUTSIDE NORTH AMERICA ................................................................................... 5
9. THE LNG INDUSTRY IN THE YEARS AHEAD .................................................................................................................... 5
                           IGU World LNG Report - 2011
                           IGU World LNG Report - 2011                           Page 2
                                                                                 Page 4
                                                                                      3

1. Message OF RECENTLY COMMISSIONED LIQUEFACTION PLANTS ...................................................................... 5
APPENDIX I: TABLE from the President of International Gas Union
APPENDIX II: TABLE OF LIQUEFACTION PLANTS UNDER CONSTRUCTION .......................................................................... 5
  Dear IGU members
APPENDIX III: TABLE OF LIQUEFACTION PLANTS WHICH HAVE COMPLETED FEED ............................................................. 5
  I am indeed honoured to COMMISSIONED LNG RECEIVING IGU World LNG Report for 2011.
APPENDIX IV: TABLE OF RECENTLY present to you the second TERMINALS............................................................. 5
  Last year, the LNG RECEIVING TERMINALS UNDER CONSTRUCTION ................................................................... 5
APPENDIX V: TABLE OFworld experienced some very interesting events, which led to some very
  intriguing outcomes. After experiencing a very ..................................................................................... 5
APPENDIX VI: TABLE OF EMERGING MARKET IMPORT CAPACITYstrong growth in demand of 22% in 2010, the
  LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
SOURCES.........................................................................................................................................................................
  maximum capacity of 77 MTPA whilst the United States, which used to be a significant
ACKNOWLEDGEMENT ..................................................................................................................................................... 6
  importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
  unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
  less LNG because several economies were experiencing sluggish growth. However, Mother
  Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
   The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
   for the LNG industry. The consequence which caused the Japanese municipalities/local
   authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
   country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
   jumped by almost 12% to about 79 MT.
   Meanwhile, the growing concern for the environment and a move seen to avert any serious
   impact from another oil price hike, coupled with the need to enhance energy security, had led
   to several countries to enter the league of LNG importers, as well as increase their
   consumption of LNG.
   The large incremental demand across the globe practically mopped up all the increased
   cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
   not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
   the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
   LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
   2011.
  In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
  in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
  concern in the latter part of 2011. This is further exacerbated by the need for more of the
  conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
This publication is produced under the auspices of the INTERNATIONAL GAS UNION (IGU) which
  On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
holds the copyright.
  Australia. But as these projects start moving forward, the industry was also beginning to get a
  glimpse of the new be reproduced in whole or in part without the written permission of the IGU.
This publication may notfrontiers. Eastern Africa and the Eastern Mediterranean buttressed their
  position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
  North America started to move forward more aggressively, aided by several Sales Purchase
However, irrespective of the above, established journals and periodicals shall be permitted to reproduce
  Agreements or part of the Sabine Pass LNG project.
this publication,signed by it, abbreviated or edited form, provided that credit is given to IGU.

This document contains strictly technical information to be distributed during the 25th World Gas
Conference in Kuala Lumpur, Malaysia, and has no commercial intent.
              IGU World LNG Report - 2011
              IGU World LNG Report - 2011   Page 3
                                            Page 4
                                                 4

1. Message from the President of International Gas Union
1. Message from the President of International Gas Union

 Dear IGU members
 Dear IGU members
             members
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 I am indeed honoured to present to you the second IGU World
 Last year, the world experienced some very interesting events, which led to some very
 Last Reportthe 2011. experienced some very interesting events, which led to some very
 LNG year, for world
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 LNG year, the was poised to experience a interesting events,2011 with Qatar producing at its
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
 Last market world experienced some very glut situation in
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
 maximumto some very intriguing outcomes. After experiencing which used to be a significant
 which led capacity of 77 MTPA whilst the United States,
 importer of LNG, continuing to turn 22% in 2010, the LNG increasingly rely on domestic
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 a very strong growth in demand of away more cargoes and
 unconventional gasto experience a glut situation Moreover, Europe was expected to consume
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
 market was poised to meet its energy needs. in 2011 with
 less LNG because several economies were 77 MTPA whilst
 less LNG because several economies were experiencing sluggish growth. However, Mother
 Qatar producing at its maximum capacity of experiencing sluggish growth. However, Mother
 Nature again proved us wrong, to beas the saying importer of works in mysterious ways”!
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 the United States, which used and a significant goes “nature
 LNG, continuing to turn away more cargoes and
 The tragic earthquake which hit Japan in March increasingly be considered a “game changer”
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
                                                       2011 could
 rely on domestic unconventional gas to which caused the Japanese municipalities/local
 for the LNG industry. The consequence meet its energy
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 needs. Moreover, Europe was expected to nuclear powered power plants which led to the
 authorities to temporarily shutdown all the 54 consume less
 authorities to temporarily shutdown all experiencing sluggish
 LNG because                           were the 54 nuclear powered power plants which led to the
 country havingseveral economies fill its energy vacuum. As a result, Japan’s demand for LNG
 country having to rely on LNG to again energy us wrong, As a result, Japan’s demand for LNG
                   to rely on LNG to fill its proved vacuum. and
 growth. However, Mother
 jumped by almost 12% to Nature79 MT.
 jumped by almost 12% to about 79 MT.
 as the saying goes “natureabout in mysterious ways”!
                               works
                                                                       Datuk (Dr) Abdul Rahim Hashim
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hit Japan in March 2011 could be considered a “game changer” for
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 The tragic earthquake which hike, coupled with the need to enhance energy security, had led
 to several countries to enter the league of LNG importers, as well as increase their
 to several countries to enter the which caused the importers, municipalities/local authorities
 the LNG industry. The consequence league of LNG Japanese as well as increase their
 consumption of LNG. all the 54 nuclear powered power plants which led to the country having
 to temporarily shutdown
 consumption of LNG.
 to rely on                                                                         jumped by almost
 The largeLNG to fill its energy vacuum. As a result, Japan’s demand for LNGall the increased
 The large incremental demand across the globe practically mopped up all the increased
              incremental demand across the globe practically mopped up
 12% to
 cargoesabout 79 MT. Qatar, as well as those turned away by the United States. It is therefore
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
           churned by
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 not surprising that the world’s LNGthe environment and a move seen to avert62 MT, or 26% of
 Meanwhile, total LNG concern for spot trade increased by 32% to reach unexpected tight
 the world’s the growingtrade, and with 25 countries actively involved. The any serious impact
 from market oil LNG trade, and with the betweenactively involved. The had led to several
 the world’s totalprice hike, coupled with25 countriesenhance energy security, unexpected tight
 LNG another led to its prices shooting up to need to $16 and $17/mmBtu towards the end of
 LNG marketenterto itsleague of LNG importers, as well$16increase their consumptionthe LNG.of
 countries to led the prices shooting up to between as and $17/mmBtu towards of end
 2011.
 2011.
 In tandemincremental demand across theLNG trade, tanker charter up all the increased cargoes
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 The large with the growth in the world’s globe practically mopped rates, which were sluggish
 in 2009 by Qatar, asalso as those turned away by the and vessel availability became surprising
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 churned and 2010, well experienced a sharp rise, United States. It is therefore not a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 concernworld’s LNG spot trade increased by further reach 62 MT, or 26% of the world’s total LNG
 that the in the latter part of 2011. This is 32% to exacerbated by the need for more of the
 conventional sizedcountries actively the Qmax/Qflex to serve more widespread LNG to its prices
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 trade, and with 25 ships instead of involved. The unexpected tight LNG market led markets.
 shooting up to
 On the supplybetween $16 and $17/mmBtu towards the end of 2011.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
                    side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 Australia. But as these projects start moving forward, the industry rates, which were sluggish a
 In tandem with the growth in the world’s LNG trade, tanker charter was also beginning to get in
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 2009 and 2010, also experienced a sharp rise, and vessel availability became a major concern in
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 position as possible LNG exporters as recent discoveries reflect more of the conventional sized
 the latter part of 2011. This is further exacerbated by the need for the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 North instead ofstarted to move forward more widespread LNG markets.
 ships America the Qmax/Qflex to serve               aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
 Agreements signed by the Sabine Pass LNG project.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in Australia.
 But as these projects start moving forward, the industry was also beginning to get a glimpse of the
 new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their position as possible
 LNG exporters as recent discoveries reflect the regions’ export potential. North America started
 to move forward more aggressively, aided by several Sales Purchase Agreements signed by the
 Sabine Pass LNG project.
              IGU World LNG Report - 2011   Page 4


   Message LNG the President of International Gas Union
1.As Australia’sfrom projects move forward, the industry is already turning to the next wave. And
 within this change came also Shell’s Final Investment Decision (FID) on Prelude LNG, aiming
 to become the world’s largest floating liquefaction (FLNG) project. Interestingly, work on the
 Dear IGU members
 PETRONAS FLNG project for offshore Sarawak, is also underway after obtaining FID.
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 Moving forward, demand for LNG for the next 5 interesting events, which led to some very
 Last year, the world experienced some veryyears is expected to remain strong as evidenced
 by several countries After experiencing a very strong growth in demand of 22% in 2010, and
 intriguing outcomes.advancing plans to begin to import LNG. In Latin America, Southeast Asiathe
 the Middle East, poised are emerging quickly, as floating regasification terminals allow them
 LNG market wasimportersto experience a glut situation in 2011 with Qatar producing at its
 to shorten capacity of 77 to receive cargoes. It is States, obvious now that a significant
 maximum the time requiredMTPA whilst the Unitedbecomingwhich used to bethere are more
 countries looking continuing to turn away more cargoes and will have major on domestic
 importer of LNG,to import LNG than to export it, and this changeincreasingly relyimplications for
 the LNG market. The meet its energy needs. to limit the use of was expected to consume
 unconventional gas todesire of several countriesMoreover, Europe nuclear power further bolster
 the LNG because several economies
 lessdemand potential for natural gas. were experiencing sluggish growth. However, Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 The LNG business remains an immensely exciting industry and one whose complexities and
 surprises will surely grow. The hit Japan in March industry are be considered a economic growth
 The tragic earthquake which fundamentals of the 2011 could strong – driven by“game changer”
 and concern industry. The consequence which caused the Japanese and meeting this will
 for the LNGfor the environment. There is a massive demand challenge aheadmunicipalities/local
 require that the industry deploys large capital outlay on powered power plants which led to the
 authorities to temporarily shutdown all the 54 nuclear E&P, liquefaction, shipping, regasification
 and distribution. It is also LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 country having to rely onan industry that will become increasingly complicated and interwoven as
 jumped by almost 12% to about 79 MT. prices and flows globally.
 developments between the basins affect
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 Finally, I would like to thank PFC Energy for with the this report. I also energy security, had led
 impact from another oil price hike, coupledpreparing need to enhance wish to thank PETRONAS
 for several countries to enter the this report. My sincere appreciation also to members their
 to again sponsoring the publication of league of LNG importers, as well as increase of the
 IGU Task Force who
 consumption of LNG.had been entrusted to oversee the publication of this report, as well as their
 respective organisations.
 The large incremental demand across the globe practically mopped up all the increased
 This IGU World LNG Report 2011 as those second and by the United States. It is under the
 cargoes churned by Qatar, as wellwill be theturned away final report to be published therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 Malaysian Presidency.
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 Thank you.
 2011.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                      IGU World LNG Report - 2011     Page 6
                      IGU World LNG Report - 2011     Page 5
                                                           4
                      IGU World LNG Report - 2011     Page 6
      1. State of the LNG Industry at theInternational Gas Union
      2. Message from the President of End of 2011
         State of the LNG
      2.Dear IGU members Industry at the End of 2011
         During 2011:
         I am indeed honoured to present to you the second IGU World LNG Report for 2011.
         During 2011:
               The world’s LNG trade in 2011 grew by 8%, or 17.7 MT, to reach a new high of 241.5 MT,
                year, the world experienced some very from Japan (by 8.2 which led to the severe
         Last primarily due to the sharp increase in demandinteresting events, MT) arising fromsome very
         intriguing outcomes. trade which hit the by 8%, March MT,
               The of 241.5LNG After experiencingcountry inor 17.7 2011,toin well as theof high of 241.5 MT,
 ach a new high world’s and tsunami in 2011 grew a very strong growthasreach a new 22% in 2010, the
               earthquake MT,                                                 demand tragedy which struck
               primarily was poised power plant.in demandsituation in (bythe United Kingdom (by 4.4at its
                 from the severe sharp increase
                               the                                           8.2 MT) arising from the MT),
 2 MT) arisingmarket due to nuclearto experienceIncreasedfrom Japan 2011 with Qatar producingsevere
         LNG the Fukushima                           a glut demand from
               earthquake struck and China (by the country in than 2011, as well as decline from Spain, and
               India (by 3.4 MT) 77 which whilst the United States, which used tragedy significant
well as the tragedy which and tsunami MTPA hit 3.3 MT), more Marchoffset the 3.4 MT the to be awhich struck
         maximum capacity of
               the MT 4.4 nuclear power plant. which continues to increase consumption (by domestic
               2.6 (by for continuing States, Increased cargoes and increasingly rely of 4.4 MT),
  Unitedimporter Fukushimathe United to turn away more demand from the United Kingdomon domestic
           Kingdomof LNG,MT),
               India (by 3.4 and
 4 MT decline from Spain,MT) and China (by 3.3 MT), more than offset the 3.4 MT decline from Spain, and
               unconventional to
         unconventional gasgas.meet its energy needs. Moreover, Europe was expected to consume
               2.6 of for the
se consumption MT domestic United States, which continues to increase consumption of domestic
               The because several economies 32%, or 15 MT, to reach 62 MT – just However, Mother
         less LNGLNG spot market grew by almostwere experiencing sluggish growth. over a quarter of the
               unconventional gas.
               LNG trade, with us wrong, and as the saying goes “nature works in mysterious ways”!
         Nature again proved a majority of transactions coming from the Atlantic Basin. By comparison, the
               The quarter of the    grew by of LNG trade in 2006.
  MT – just over a LNG spot market only 16%almost 32%, or 15 MT, to reach 62 MT – just over a quarter of the
               spot market made
         The tragictrade, with a up
               LNG earthquake which hit Japan in March 2011 could be considered a “game changer”
 tic Basin. By comparison, the majority of transactions coming from the Atlantic Basin. By comparison, the
               spotthe supply side, The consequence whichincreased by only 2.9%, or municipalities/local
                                    only liquefaction capacity caused the Japanese 7.8 MTPA, to reach
         for the LNG industry.upglobal16% of LNG trade in 2006.
               On market made
               278.7 to temporarily one liquefaction train coming powered the 7.8 MTPA which led to the
         authorities MTPA, with onlyshutdown all the 54 nuclearonstream, power plants Qatargas IV. The
               On having to rely on LNGthto fill its energy vacuum. commercial 2.9%, or 7.8 and wasto reach
               project was the world’s 96 liquefaction train to enter As a only operations, MTPA, Qatar’s
y 2.9%, country the supply side, global liquefaction capacity increased by result, Japan’s demand for LNG
          or 7.8 MTPA, to reach
         jumped by almost The under itsth current plan. No new country joined 7.8 MTPA LNG exporters in
               last development to one th liquefaction
  e 7.8 MTPA 278.7 MTPA, with only about 79 MT. train coming onstream, thethe club of Qatargas IV. The
                Qatargas IV. 12%
               project wasPeru world’s 96 liquefaction train to enter commercial operations, and was Qatar’s
                 and was the became the 18th LNG exporter in 2010.
al operations,2011 sinceQatar’s
         Meanwhile, the growing concern for the environment and a movethe club ofavert any serious
   the club of last development under its current plan. No new country joined seen to LNG exporters in
                LNG exporters in
               2011 since Peru oil price hike,th LNG exporter in liquefaction capacity – took final investment
               A slew another became the 18thcoupled with in need
         impact from of projects – representing 26.8 MTPAthe2010. to enhance energy security, had led
               decision (FID) in to enter the league of LNG importers, as well as increase their
         to several countries 2011, including Donggi-Senoro LNG, Australia Pacific LNG T1, GLNG T1-2,
               A slew of projects – representing 26.8 MTPA in floating liquefaction – took project to reach
 pacity – took final investment T1-2 and Prelude LNG (the firstliquefaction capacity (FLNG) final investment
               Wheatstone LNG
         consumption of LNG.
               FID). GLNG T1-2,2011, including Donggi-Senoro LNG, Australia Pacific LNG T1, GLNG T1-2,
                 T1, Except in
  Pacific LNGdecision (FID)for Indonesia’s Donggi-Senoro, the other projects are located in Australia. Another
         The Wheatstone reach T1-2two train, 8.4 MTPA (the firstLNG T1, reached FID(FLNG) project to reach
                large incremental demand across the Ichthys practically mopped in January 2012.
action (FLNG) project to LNG the and Prelude LNG globe floating liquefaction up all the increased
               Australian project,
               FID). Except by Qatar, as Donggi-Senoro, the other projects are located in Australia. Another
         cargoes churned for Indonesia’swell as those turned away by the United States. It is therefore
e located in Australia. Another
         not surprising that thethe two train, 8.4 came onstream in T1, reached FID in January 2012. in of
               15 2012.
ed FID in Januarynew regasification terminals spot trade increased 2011, including new facilities 26%the
               Australian project, world’s LNG MTPA Ichthys LNG by 32% to reach 62 MT, or
               Netherlands, Norway, Sweden and Thailand, marking involved. The unexpected tight
         the world’s total LNG trade, and with 25 countries activelythose countries’ first regasification
               capacity.led the prices shootingcame onstream $16now $17/mmBtu to facilities in
                                                                    in
 cluding new15 new regasification terminals capacity, 27 countries 2011, including new import LNG. the
                  facilities in
                 market WithNorway, Sweden                                       the ability
         LNG Netherlands, to these nations’ newand Thailand, markingandhave countries’towards the end of
                                its
   countries’ first regasification
                                                    up to between         those               first regasification
         2011. importregasification capacity new capacity, 27 countries now have the ability to import LNG.
               Global LNG.
               capacity. With these nations’ stands at 608 MTPA – a 64% increase over capacity in 2006.
e the ability to
                Global regasification the global LNG fleet consisted of 360 vessels over which were sluggish
          In tandem with the growth in the world’s LNG trade, tanker charter rates,capacity in and
                 At the end of
 se over capacity in 2006. 2011, capacity stands at 608 MTPA – a 64% increase - more than one2006.a half
                 times the fleet size at experienced a sharp rise, charter rates doubled in became average
          in 2009 and 2010, also end of 2006. Short-term, spot and vessel availability 2011 to an a major
          concernone the latter part global LNG exceeded $130,000 for newer, more than one and a
                At $78,000/day, and by of 2011. hadfleet consisted of 360 vessels -more efficient vessels. half
 ls - more than the end of 2011, theQ1 2012, This is further exacerbated by the need for more of the
                 of in and a half
                times an fleet ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 doubled in 2011 tothe sizedsize at end of 2006. Short-term, spot charter rates doubled in 2011 to an average
          conventional average
                 Unconventional gas production had exceeded $130,000 for newer, rise, efficient vessels.
                of $78,000/day, and by Q1 2012, in the United States continued to more leaving LNG volumes
er, more efficient vessels.
                 previously side, 2011 saw          large number elsewhere. project sanctions, mostly in
          On the supply destined for the USamarket redirectedof new LNGThe widening disparity in prices
                Unconventional gasprojects start moving forward, the industryto rise, the beginning volumes
                                        production in thearound the world – especially in leaving LNG to get a
            leaving LNG Henry Hub and elsewhere United States continued was also Asia Pacific – led
 to rise,Australia. But volumes
                 between as these
          glimpse of the new frontiers. US liquefaction plants Eastern The widening
                disparitycompanies for the Eastern Africa and thein the US Gulf of Mexico. buttressed101.3
he widening previously destined to propose market redirected elsewhere. Mediterraneandisparity in prices
                 several in prices                                                               To date, their
                between Henry Hub and elsewhere around the there.   world   especially in the Asia Pacific – led
  ally in position as of liquefaction capacity hasas recent discoveries–reflect the regions’ export potential.
           the Asia Pacific – led
                 MTPA possible LNG exporters been proposed
                several companies to propose liquefaction
                                                               aggressively, aided of Mexico. To date, 101.3
 lf of Mexico. America started to move forward more plants in the US Gulfby several Sales Purchase
          North To date, 101.3
        Key: MTPA of liquefaction capacity has been proposed there.
        Agreements signed by the Sabine Pass LNG project.
      MT    = million tonnes                       MTPA = million tonnes per annum       cm = cubic metres
      Key: = thousand cubic metres
      mcm                                          mmcm = million cubic metres           bcm = billion cubic metres
um    mmBtu = cubic tonnes
      MTcm = millionmetres thermal units
              million British                      MTPA = million cubic feet annum
                                                   tcf    trillion tonnes per            cm = cubic metresmetres
                                                                                         tcm trillion cubic
        bcm = thousand cubic metres
      mcm = billion cubic metres                   mmcm = million cubic metres           bcm = billion cubic metres
        tcm trillion British thermal
      mmBtu = million cubic metres units           tcf  = trillion cubic feet            tcm = trillion cubic metres
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011    Page 6
                                              Page 4
                                                   7


3. Message from the President of International Gas Union
1. LNG Imports, Exports and Prices

  Dear IGU members
LNG trade grew stronger than anticipated in 2011. Since 2006, five new countries started LNG
  I am indeed honoured to present to importing LNG. At the same Report for 2011.
exports and ten new markets began you the second IGU World LNGtime, the price differential
between oil-linked, spot and Henry Hub prices for LNG has created new opportunities and
  Last year, the industry.
challenges for the world experienced some very interesting events, which led to some very
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
Demand for LNG reached new heights in 2011, primarily due to sharp increase in demand from Japan in
  LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
the wake of that country’s March 2011 natural catastrophe and the ensuing nuclear disaster at the
  maximum capacity of 77 MTPA whilst the United States, which used to be by increased
Fukushima nuclear power plant. Strong demand in the UK, China and India, augmented a significant
  importer of emerging new markets, further tightened the world’s LNG market. Though the
volumes from LNG, continuing to turn away more cargoes and increasingly rely on domestic
  unconventional boom meet its energy needs. Moreover, Europe was for an industry that had
unconventional gasgas to in the United States was thought to prove detrimental expected to consume
  less LNG because several economies were experiencing demand growth. and high oil prices
spent the previous decade building liquefaction capacity, growing sluggish elsewhere However, Mother
  Nature again proved record highs.
saw LNG prices reachingus wrong, and as the saying goes “nature works in mysterious ways”!
 TheOVERVIEW
 3.1. tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 The world LNG trade grew by consequence new high of 241.5 MT. The LNG trade has not only
 for the LNG industry. The 8% in 2011 to a which caused the Japanese municipalities/local
 grown in volume, but in geographic reach the 54 In 2006, only 13 power exported LNG: Algeria,
 authorities to temporarily shutdown all as well. nuclear poweredcountriesplants which led to the
 Australia, Brunei, rely on LNG to Libya, Malaysia, Nigeria, Oman, Qatar, Trinidad & Tobago, the
 country having toEgypt, Indonesia,fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped by almost 12% to about 79 MT.
 United Arab Emirates and the United States.
                                                                a move seen than the 20.4 MTPA
 Meanwhile, the growing concern for the environment and2011, much lessto avert any serious
 Global liquefaction capacity however rose by only 7.8 MTPA in
 added from another oil price hike, coupled with the need to enhance energy security, had led
 impactin 2010. Since 2006, another five countries brought liquefaction capacity onstream: Equatorial
 Guinea, Norway, Peru, to enter Yemen. Angola is expected to join this list as increase their
 to several countries Russia andthe league of LNG importers, as well of exporters in 2012
 with the start of LNG.
 consumption of its Angola LNG T1 development. Further, another five countries have re-exported
 LNG large incremental demand across the globe practically mopped
 The during this period: Belgium, Brazil, Mexico, Spain and the United States. up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 Perhaps even more remarkable is the number and geographic reach of countries that have started
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 importing LNG during this period. Argentina, Brazil, Canada, Chile, China, Kuwait, Mexico, and the
              total LNG trade, and with 25 countries actively involved. The unexpected tight
 the world’s Emirates have begun importing LNG since 2006, joining the existing 15 importers which
 United Arab
 include Belgium, to Dominican Republic, France, Greece, India, Italy, Japan, Portugal, Puerto Rico,
 LNG market ledthe its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.
 the Republic of Korea (Korea), Spain, Taiwan, Turkey, the United Kingdom and the United States.
 Many of these countries were the world’s LNG trade, tanker charter rates, which ago and the
 In tandem with the growth innot considered to be potential LNG importers a decadewere–sluggish
 United States, which was experienced         sharp rise, and vessel availability became a seen
 in 2009 and 2010, also then expectedato be the largest LNG import market by now, hasmajor
 imports slow to a trickle. These changes reflect the dynamic nature of the market.
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
                       ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 conventional sized interregional trade, there is still no “global” gas market. Value continues to be set
 In spite of increased
 by the factors side, as location, large structure and timing – project sanctions, balances.
 Onmicro supply – such2011 saw acontractnumber of new LNG more than the global mostly in
 Prices even vary within markets, with multiple sources of supply contracted at distinct price levels.
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 This is not expected to change in the near term, and the given the long-term nature of many existing
 glimpse of the new frontiers. Eastern Africaespecially Eastern Mediterranean buttressed their
 contracts.
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                   IGU World LNG Report - 2011 І Page 7
                                                      4
                                                      8


    Message from the
1.3.2. LNG TRADE VOLUMES President of International Gas Union
 FIGURE 1: LNG TRADE VOLUMES, 1980-2011
 Dear IGU members
      250                                                                                                                      30
 I am indeed         Volume to present
                   honouredof LNG Trade to              you the second IGU World LNG Report for 2011.
                      No. of LNG Exporting Countries (right axis)                                                              25
     200
 Last year, the world experienced some very interesting events, which led to some very
                 No. of LNG Importing Countries (right axis)
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the




                                                                                                                                    No. of Countries
                                                                                      20
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
     150
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant 15
 MT




 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
     100
                                                                                      10
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
       LNG because several economies were experiencing sluggish growth. However, Mother
 less 50                                                                              5
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
        0                                                                                                     0
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
            1980

                   1982

                          1984

                                 1986

                                          1988

                                                 1990




                                                                                            2002

                                                                                                   2004

                                                                                                          2006

                                                                                                                 2008

                                                                                                                        2010
                                                         1992




                                                                       1996

                                                                              1998

                                                                                     2000
                                                                1994


 for the LNG industry. The consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 Sources: Cedigaz, Waterborne LNG Reports, US Energy Information Agency (EIA), US Department of Energy (DOE), PFC
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 Energy
 jumped by almost 12% to about 79 MT.
 From 2006 to 2011, the volume of LNG traded grew from 159.1 MT to 241.5 MT reflecting growth of
 about 52%. the growing this incremental environment and a move seen historically been LNG
 Meanwhile, Some 66% of concern for the LNG came from countries that had to avert any serious
 exporters (largely from price hike, in supplies from Qatar) with the remainder originating from
 impact from another oil the growth coupled with the need to enhance energy security, had led
 countries that had previously not exported LNG. of majority of the growth well as – 82% – their
 to several countries to enter the league TheLNG importers, as in demandincrease came
 from existing of LNG.
 consumptionLNG importers, dominated by the increase of volumes into Japan and higher imports to
 the large incremental and China.
 TheUnited Kingdom, India demand across the globe practically mopped up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 3.3. surprising that the world’s
 not LNG EXPORTS BY COUNTRY LNG spot trade increased by 32% to reach 62 MT, or 26% of
 By world’s total LNG trade, and with exporting their gas resources as The In addition, five
 the the end of 2011, 18 countries were 25 countries actively involved. LNG. unexpected tight
 countries, namelyto its prices shooting up to between the United States, were re-exporting LNG
 LNG market led Belgium, Brazil, Mexico, Spain and $16 and $17/mmBtu towards the end of
 previously imported from another source.
 2011.
 Qatar is by far the largest LNG the world’s 2011, the country supplied 75.5 MT of LNG to the market
 In tandem with the growth in exporter. In LNG trade, tanker charter rates, which were sluggish
 – 2009 and 2010, also global supply. sharp rise, and Indonesia as the second largest LNG
 in nearly one third (31%) ofexperienced a Malaysia overtook vessel availability became a major
 exporter in the as the MLNG Dua debottleneck saw exacerbated full production and Indonesia’s
 concern in 2011 latter part of 2011. This is further its first year of by the need for more of the
 Arun and Bontang ships instead of below capacity. Together with Australia, these three Pacific
 conventional sizedfacilities produced the Qmax/Qflex to serve more widespread LNG markets.
 Basin exporters accounted for about 27% of the world’s LNG supply.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start
 TABLE 1: LNG EXPORTS BY COUNTRY, 2011 moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
     Exporter             MT
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
     Qatar                75.5
 North America started to move forward more aggressively, aided by several Sales Purchase
     Malaysia             25.0
 Agreements signed by the Sabine Pass LNG project.
     Indonesia            21.4
       Australia                   19.2
       Nigeria                     18.7
       Trinidad                    13.9
       Algeria                     12.6
       Russia                      10.5
                               Qatar is by far the largest LNG exporter. In 2011, the country supplied 75.5
                               – nearly one third (31%) of global supply. Malaysia overtook Indonesia as
                               exporter in 2011 as the MLNG Dua debottleneck saw its first year of full pr
                               Arun 2011 Page 4
               IGU World LNG Report - and Bontang8facilities produced below capacity. Together with Aust
                               Basin exporters accounted for about 27% of the world’s LNG supply.

                       TABLE 1: LNG EXPORTS BY COUNTRY, Union
1. Message from the President of International Gas 2011
                                      Exporter               MT
 Dear IGU members                  Qatar                 75.5
                                                         25.0
 I am indeed honoured to present Malaysia the second IGU World LNG Report for 2011.
                                   to you
                                   Indonesia             21.4
 Last year, the world experienced some very interesting events, which led to some very
                                   Australia             19.2
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                                   Nigeria               18.7
                                   - 2011 І Page 9
                                       IGU
              IGU World LNG Report Trinidad World LNG Report - 2011 І Page 9
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
                                                         13.9
                                             IGU World LNG Report - 2011 І Page 9
 maximum capacity of 77 MTPAAlgeria the United 12.6
                                     whilst              States, which used to be a significant
       Oman               7.9 Oman Russia           7.9  10.5
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
      Brunei            6.8 Brunei Oman        6.8   7.9
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
      Yemen             6.7 Yemen Brunei       6.7   6.8
      LNG                   economies
 less Egypt because several Egypt Yemen were experiencing sluggish growth. However, Mother
                        6.4                    6.4   6.7
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
      UAE               5.9 UAE Egypt          5.9   6.4
                                      UAE
 The Equatorial Guinea
      tragic earthquake which hit Japan in March4.0
                           4.0 Equatorial Guinea
                                                       20115.9
                                                            could be considered a “game changer”
      Peru                 3.8 Peru Equatorial Guinea 3.8  4.0
 for the LNG industry. The consequence which caused the Japanese municipalities/local
      Norway               2.9 NorwayPeru             2.9  3.8
                            shutdown all the 54 nuclear2.9
 authorities to temporarily0.3 US
      US                              Norway          0.3
                                                            powered power plants which led to the
                            LNG to fill
 country having to rely on0.1 Libya US its energy vacuum. As a result, Japan’s demand for LNG
      Libya                                           0.1  0.3
                                     79 MT.
 jumped by almost 12% to about Exports
      Total Exports       241.5Total  Libya          241.5 0.1
 Meanwhile, the LNG Reports, US DOE,for Exports
                           Sources: Waterborne LNG Reports, US241.5 PFC Energy
 Sources: Waterborne growing concern Totalthe environment and a move seen to avert any
                                         PFC Energy            DOE,           serious
                                 Sources: Waterborne LNG Reports, US DOE, PFC Energy
                                                                              had led
 impact from another oil price hike, coupled with the need to enhance energy security,
 to several countries to enter the league of LNG importers, as well as increase their
 consumption of LNG. COUNTRY 2011
 FIGURE 2: LNG EXPORTS BYFIGURE 2: , LNG EXPORTS BY COUNTRY, 2011
                               FIGURE 2: LNG EXPORTS BY COUNTRY, 2011
 The large incremental demand across the globe practically mopped up all the increased
                                Trinidad,                Trinidad,
                        Qatar,
 cargoes churned byNigeria, as well as those turned away by the United States. It is therefore
                                   6%
                                                Nigeria,
                                                            6% Trinidad,
 not surprising that the world’s LNGAustralia, 5% increased by 6% 5% reach 62 MT, or 26% of
              Australia, 8%             spot trade Nigeria,
                                        Algeria, 8%                32%
                                                                 Algeria, to
                                            25 countries                Algeria, 5%
 the world’s total LNG trade, and with8% Australia, 8%actively involved. The unexpected tight
                8%
                                             Russia,
 LNG market led to its prices shooting up to 8% 4%                   Russia, 4%
                                                 between $16 and $17/mmBtu towards the end of
        Indonesia,               Indonesia,                                  Russia, 4%
 2011.     9%                       9% Indonesia,
                                              Oman, 3%                 Oman, 3%
                                          9%                            Oman, 3%
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
                                              Brunei, 3%          Brunei, 3%
       Malaysia,              Malaysia,
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
         10%                    10%Malaysia, Yemen, 3%                   Brunei, 3%
                                                                  Yemen, 3%
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
                                        10%                              Yemen, 3%
                                             Egypt, 3%           Egypt, 3%
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
                                                      UAE, 2%                   UAE, 2%
                                                                                Egypt, 3%
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
                                                    Equatorial                       UAE, 2%
                                                                             Equatorial
                                                                                     beginning
 Australia. But as these projects start moving forward, the industry was alsoEquatorial to get a
             Qatar, 31%                Qatar, 31% Guinea, 2%                 Guinea, 2%
                                                     31% 2%                  Peru, 2%
                                              Qatar,Peru,the Eastern Mediterranean buttressed their
 glimpse of the new frontiers. Eastern Africa and                                   Guinea, 2%
                                     Libya,      Norway, 1%    Libya,      Norway, 1%
                                                                                    Peru, 2%
                                                                         the regions’ export
 position as possible LNG exporters as recent discoveries reflectUS, 0.1% Norway, 1% potential.
                                     0.03% US, 0.1%            0.03% Libya,
 North Waterborne LNG Reports, US DOE, PFC Energy aggressively, aided by several Sales Purchase
                         Sources: Waterborne more
 Sources:America started to move forward LNG Reports, US DOE, PFC Energy
                                                                      0.03% US, 0.1%
                                                    project.
 Agreements signed by the Sabine Pass LNG LNG Reports, US DOE, PFC Energy
                                Sources: Waterborne

                             Qatar reached its planned MTPA, ensuring that 77 MTPA, ensuring as country’s
 Qatar reached its planned nameplate capacity of 77nameplate capacity of country’s dominancethatthe
                             world’s largest LNG exporter. Though Australia has plans to eventually build co
                                   Qatar reached its planned nameplate capacity liquefaction ensuring that
 world’s largest LNG exporter. Though Australia has plans to eventually build of 77 MTPA,capacity to lique
                                   world’s capacity, it remained Though Australia has
 eclipse Qatari capacity, it eclipse Qatari largest LNG exporter.LNG producer in 2011. plans to eventually bui
                             remained the world’s fourth largest the world’s fourth largest LNG producer in 2011
                                   eclipse Qatari capacity, it remained the world’s fourth largest LNG producer in
                           IGU World LNG Report - 2011 І Page 9
                           IGU World LNG Report - 2011 Page 4 10

    Message EXPORTS BY President of International Gas Union
1.FIGURE 3: LNG from the COUNTRY IN 2006 AND 2011
            80                                                                                                                                                                          250%
 Dear IGU members
    70                                                                                                                                                                                  200%




                                                                                                                                                                                               % Growth in Exports
     60
 I am indeed honoured to present to you the second IGU World LNG Report for 2011. 150%
            50
 Last year, the world experienced some very interesting events, which led to some very
                                                                                   100%
  MT




      40
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                                                                                   50%
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
      30
                                                                                   0%
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
      20
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
      10                                                                           -50%
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
       0                                                                           -100%
 less LNG because several economies were experiencing sluggish growth. However, Mother




                                                                                                                              Egypt
                           Malaysia




                                                                                   Algeria
                                                                        Trinidad




                                                                                                                                      UAE




                                                                                                                                                                         US
                                                                                                                      Yemen




                                                                                                                                                                Norway




                                                                                                                                                                                Libya
                                      Indonesia




                                                              Nigeria




                                                                                                                                            Equatorial
                                                                                             Russia

                                                                                                      Oman
                                                  Australia




                                                                                                             Brunei
                   Qatar




                                                                                                                                                         Peru
                                                                                                                                             Guinea
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The2011
                        2006                % Growth in Exports, 2006 vs. Japanese municipalities/local
                                    consequence which caused the2011 (right axis)
 authorities to temporarily shutdown all the 54
 Sources: Waterborne LNG Reports, US DOE, PFC Energy nuclear powered power plants which led to the
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 Beyond by dramatic rise in about 79 MT.
 jumped the almost 12% to LNG exports from Qatar in the last decade, it is also important to note the
 increased diversity in exporters – and growth from other existing players. The graph below indicates
 how each country’s share of LNG for the environment and a as new players have entered the
 Meanwhile, the growing concern global exports has developed move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 market.
 to several countries to enter the league of LNG importers, as well as increase their
 FIGURE 4: SHARE OF GLOBAL LNG EXPORTS BY COUNTRY, 1991-2011
 consumption of LNG.
            100%                                                                                                                                                         Peru
 The large incremental demand across the globe practically mopped up all the increased
                                                                           Yemen
     90%
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
                                                                           Russia
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
     80%                                                                   Norway
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
                                                                           Equatorial Guinea
     70%                                                                   Egypt
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
                                                                           Oman
 2011.
     60%                                                                       Nigeria
  % Share




 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
      50%
                                                                               Trinidad
                                                                               Qatar
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the needLibya more of the
      40%                                                                       for
                                                                               US
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
      30%                                                                      UAE
                                                                               Australia
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
      20%                                                                      Brunei
 Australia. But as these projects start moving forward, the industry was also beginning to get a
                                                                               Malaysia
                                                                                buttressed their
 glimpse of the new frontiers. Eastern Africa and the Eastern MediterraneanAlgeria
      10%
                                                                                export
 position as possible LNG exporters as recent discoveries reflect the regions’Indonesiapotential.
       0%
                 started to 1997 1999 more aggressively, aided by 2011
 North America1993 1995 move forward2001 2003 2005 2007 2009 several Sales Purchase
         1991
 Agreements signed by the Sabine Pass LNG project.
 Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy

 Regionally, Middle Eastern exporters outpaced Asia-Pacific exporters in total volumes exported in
 2006 and have continued to supply more volumes to the market in the intervening years. This trend is
 likely to reverse in the coming decade as new Australian projects come onstream, the moratorium on
 new gas export projects in Qatar remains in effect and prospects for growth in LNG exports elsewhere
                 IGU World LNG Report - 2011 Page 104
                 IGU World LNG Report - 2011 І Page 11

     the Middle from the President of International Gas Union
1.in MessageEast and North Africa are limited. The Middle East and North Africa region faces several
 issues which impact development from country to country; these include rising domestic demand,
 regulatory or energy policy clarity, economic and political stability, sanctions (in the case of Iran), and
 Dear IGU members
 reserves which are more difficult to recover.
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 FIGURE 5: LNG EXPORTS BY REGION, 1991-2011
       year, the world experienced some very interesting events, which led to some very
 Last 300
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                 S. America
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
                N. America
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
      250
                MENA
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                gas to
 unconventional Europe meet its energy needs. Moreover, Europe was expected to consume
      200
 less LNG because several economies were experiencing sluggish growth. However, Mother
                Asia-Pacif ic
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                Af rica
    MT




         150
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
       100
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped by almost 12% to about 79 MT.
          50
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
        0
                           enter 1997 league of 2001 importers,2005 well as increase 2011
 to several countries to1995
         1991   1993
                                  the     1999
                                                   LNG 2003        as    2007   2009
                                                                                         their
 consumption of LNG.
 Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
 The large incremental demand across the globe practically mopped up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 3.4. LNG IMPORTS BY COUNTRY
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 Japan and total LNG trade, and with 25 countries actively involved. of LNG supplied tight
 the world’sKorea are the world’s dominant LNG importers, consuming 48% The unexpectedto the
 market in 2011. to its prices shooting up to higher than 2010 $17/mmBtu towards the end of
 LNG market ledThis figure was marginally 1% between $16 andvolumes due to higher demand for
 Japan
 2011. due to the Fukushima disaster that saw the country’s nuclear power fleet being replaced with
 gas-fired power. A second important and growing feature of global LNG imports was the emergence
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 of smaller LNG importers. While individually minor, the twelve markets that each imported less than
 in MT of LNG collectively experienced a sharp rise, and of total availability became a
 3.02009 and 2010, also accounted for 18.1 MT, or about 7% vessel demand during the year. major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized BY COUNTRY, 2011
 TABLE 2: LNG IMPORTSships instead of the Qmax/Qflex to serve more widespread LNG markets.
      Importer               MT
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
                                                                            Courtesy: Vopak, The Netherlands
     Japan                78.8
 Australia. But as these projects start moving forward, the industry was also beginning to get a
     Korea                35.8
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
     UK                   18.6
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
     Spain                17.1
 North America started to move forward more aggressively, aided by several Sales Purchase
     China                12.8
 Agreements signed by the Sabine Pass LNG project.
     India                12.7
      Taiwan                 12.2
      France                 10.7
      Italy                   6.4
      US                      5.9
      Turkey                  4.6
      Belgium                 4.5
              50                                       Japan and Korea are the world’s dominant LNG impo
                                                       market in 2011. This figure was marginally 1% higher
                                                       Japan due to the Fukushima disaster that saw the co
                   IGU World LNG Report - 2011 І Page 12
              0                                        gas-fired power. A second important and growing fea
               1991     1993     1995     1997    1999 of smaller LNG importers. While individually minor, th
                                                           2001    2003    2005      2007    2009     2011
                                Report - 2011 Page 11
        ArgentinaIGU World LNG3.2                   4
        Mexico                 2.9                     3.0 MT of LNG collectively accounted for 18.1 MT, or a
      Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
        Chile                     2.8
                                                            TABLE Gas IMPORTS
1. Message from the President of International2: LNGUnion BY COUNTRY, 2011
        Canada                    2.4
      3.4. LNG IMPORTS BY COUNTRY
        Kuwait                    2.4                             Importer              MT
      Japan members
 Dear IGU and Korea are the world’s dominant LNG importers, consuming 48% of LNG supplied to the
        Portugal                  2.2                            Japan                 78.8
                                                                                        due
      market in 2011. This figure was marginally 1% higher than 2010 volumes 35.8 to higher demand for
        UAE                       1.2                            Korea
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
      Japan due to the Fukushima disaster that saw the country’s nuclear power fleet being replaced with
        Greece                    1.0                            UK                    18.6
      gas-firedthepower. A experienced some very interesting global LNG imports to the emergence
 Last year,Rep. world second important and growing feature of events, which led was some very
        Dom.                      0.7                            Spain                 17.1
                                  0.7 While individually minor, the twelve markets thatof
        Thailand LNG importers.experiencing a very strong growth in demand 12.822% in 2010, the
      of smaller
 intriguing outcomes. After                                      China                    each imported less than
        Brazil                    0.6                            India                 12.7
                                                    18.1 MT, or about 7% of total demand producing at
      3.0 MT of LNG collectively accounted for a glut situation in 2011 with Qatarduring the year. its
 LNG market was poised to experience
        Netherlands               0.6                            Taiwan                12.2
 maximum capacity of 770.5                                        States,                to
                                    MTPA whilst the United France which used10.7 be a significant
        Puerto Rico IWorld LNGCOUNTRY- 2011 І Page 12
      TABLE 2: LNG IGU MPORTS BY Report ,
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
         Total Imports           241.5                           Italy                  6.4
            Importer                 MT
   Sources: Waterborne LNG Reports, its energy Energy
 unconventional gas to meet US DOE, PFC needs. Moreover, Europe was expected to consume
                                                                 US                     5.9
       Argentina                3.2 78.8                                    IGU World LNG However, Mother
 less Mexico because several economies were experiencing sluggish growth. Report - 2011 І Page 12
       LNG  Japan
                                2.9 35.8
                                                                 Turkey                 4.6
            Korea
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
       ChileUK                  2.8 18.6
                                                                 Belgium                4.5
                                                                 Argentina              3.2
                                2.4 17.1
 The CanadaLNG IMPORTS BY COUNTRY,Japan in March 2011 could be considered a “game changer”
   FIGURE 6: earthquake which hit 2011
       tragic
            Spain
                                                                 Mexico                 2.9
       Kuwait                   2.4 12.8
 for the China industry. TheFrance, 4%Italy, 3%which caused the Japanese2.8
            LNG       India, 5% 2.2    consequence               Chile                    municipalities/local
       Portugal
            India                   12.7
                              Taiwan,
 authorities to temporarily1.2 5%
       UAE Taiwan
        China, 5%
                                                   US, 2%
                                  shutdown all the 54 nuclear powered power plants which led to the
                                                                 Canada                 2.4
                                    12.2               Turkey, 2%
            having               LNG                     vacuum. As
 country France to rely on1.0 10.7to fill its energy Belgium,Kuwait a result, Japan’s demand for LNG
       Greece                                                      2%
                                                                                        2.4
 jumped Italyalmost 12% to about 79 MT.                          Portugal               2.2
       Dom.by Rep.              0.7 6.4                   Argentina, 1%
                                                                 UAE                    1.2
       Thailand
            US                  0.7 5.9
 Meanwhile, the growing concern for the environmentGreece a1%       and
                                                                 Mexico, move seen to avert any serious
                                                                                        1.0
       Brazil
            Spain, 7%
            Turkey              0.6 4.6
 impact from another oil price hike, coupled with the need to enhance energy security, had led
       Netherlands              0.6 4.5
                                                                 Dom. Rep.              0.7
            Belgium                                                Chile, 1%
 to several countries to 0.5
       Puerto Rico                enter the league of LNGThailand                          as
                                                                    importers, as well0.7 increase their
         UK, Imports LNG. 241.5
 consumption  8% of                                              Brazil                 0.6
       Total                                                     Canada, 1%
 Sources: Waterborne LNG Reports, US DOE, PFC Energy             Netherlands            0.6
 The large incremental demand across the globe practically mopped up all the increased
                                             Others              Puerto Rico
                                                                  Kuwait, 1%            0.5
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
                                                                  Total Imports        241.5
          Korea, 15%                                             Portugal,
 not surprising that the world’s LNG spot trade increased by 1% LNG reach 62 MT, PFC Energy
                                                            Sources: Waterborne to Reports, US DOE, or 26% of
                                                                            32%
 the world’s total LNG COUNTRY, 2011
 FIGURE 6: LNG IMPORTS BY trade, and with 25 countries actively involved. The unexpected tight
                                                                       Other Small
                                    France, 4%Italy, to
 LNG market led to its prices shooting up3% between $16 and $17/mmBtu towards the end of
                     India, 5%                                      Importers, 2.2%
 2011.                       Japan, 5%
                             Taiwan, 33%           US, 2%       FIGURE 6: LNG IMPORTS BY COUNTRY, 2011
       China, 5%                                         Turkey, 2%
                                                                                                  France, 4%Italy, 3%
                                                             trade, 2%
 In tandem with the growth in the world’s LNGBelgium, tanker charter rates, which were sluggish
                                                                                   India, 5%
                                                             Argentina, 1%                 Taiwan, 5%           US, 2%
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
                                                                      China, 5%                                      Turkey, 2
                                                                    Mexico, 1%
   *”Small Importers” latter imports the United Arab Emirates (Dubai), Greece, the Dominican Republic, more Brazil,
 concern in the includes part ofto2011. This is further exacerbated by the need for Thailand,of the Belgiu
         Spain, 7%
   the Netherlands and Puerto Rico. Each of these countries imported less than
 conventional sized ships instead of the Qmax/Qflex to serve1% of global LNG volumes in 2011.
                                                                               more widespread LNG markets. Argen
                                                                      Chile, 1%
   Sources: Waterborne LNG Reports, US DOE, PFC Energy
      UK, supply side, 2011 saw a large number of new LNG project sanctions, mostly in
  On the 8%                                                 Spain, 7%
                                                       Canada, 1%
  Australia. But as these projects start moving forward, the industry was also beginning to get a
  glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
                                         Others         Kuwait, 1%
                                                         UK, 8%
               possible LNG exporters as recent discoveries reflect the regions’ export potential.
  position as 15%
        Korea,                                         Portugal, 1%
  North America started to move forward more aggressively, aided by several SalesOthersPurchase
  Agreements signed by the Sabine Pass LNG project.     Other Small
                                                                       Korea, 15%
                                                                   Importers, 2.2%
                           Japan, 33%


                                                                                            Japan, 33%
 *”Small Importers” includes imports to the United Arab Emirates (Dubai), Greece, the Dominican Republic, Thailand, Brazil,
 the Netherlands and Puerto Rico. Each of these countries imported less than 1% of global LNG volumes in 2011.

 Sources: Waterborne LNG Reports, US DOE, PFC Energy              *”Small Importers” includes imports to the United Arab Emirates (Du
                                                                  the Netherlands and Puerto Rico. Each of these countries imported
                       IGU World LNG Report - 2011 І Page 12
                       IGU World LNG Report - 2011 Page 4 13

    Message MPORTS BY OUNTRY IN 2006 AND 2011
1.FIGURE 7: LNG Ifrom theCPresident of International Gas Union
       90                                                                                                                                                                                                                                       200%
 Dear IGU members                                                                                                                                         2006
    80                                                                                                                                                                                                                                          175%
 I am indeed honoured to present to you the second IGU World LNG Report for 2011. 150%
     70                                                  2011




                                                                                                                                                                                                                                                       % Growth in Exports
                                                           events, in Exports, to  125%
 Last year, the world experienced some very interesting % Growth which led2006 some very
      60
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                                                           vs. 2011 (right axis)   100%
      50
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
                                                                                   75%
  MT




 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
      40
                                                                                   50%
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
      30
                                                                                   25%
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
      20
 less LNG because several economies were experiencing sluggish growth. However,0%   Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
      10                                                                           -25%
      0                                                                               -50%
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
                                 Spain
            Japan




                                                                                                                                                          Portugal
                                                 India




                                                                                                                                                                                    Dom. Rep.
                                                                                                 Belgium
                                                                                                           Argentina
                                                                  France
                    Korea
                            UK




                                                                                   US




                                                                                                                                                                           Greece
                                                                           Italy




                                                                                                                                                                                                           Brazil
                                                                                                                       Mexico
                                                                                                                                Chile




                                                                                                                                                                     UAE
                                                                                                                                        Canada
                                         China


                                                         Taiwan




                                                                                                                                                 Kuwait




                                                                                                                                                                                                                    Netherlands
                                                                                                                                                                                                                                  Puerto Rico
                                                                                        Turkey




                                                                                                                                                                                                Thailand
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped by almost 12% to about 79 MT.
 Sources: Waterborne LNG Reports, US DOE, PFC Energy
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 Though some LNG importers saw import volumes the substantially from 2006 to 2011, the United
 impact from another oil price hike, coupled with growneed to enhance energy security, had led
 States, Spain and France enter the league of LNG over that as well as increase their
 to several countries toall saw declining import volumes importers,period. Slackening demand for
 LNG imports of LNG.
 consumption was largely a function of energy needs being met from other sources. In Europe,
 Spanish demand fell because of the country’s increased reliance on renewable energy and
                                    across the marginal 3% decline reflects up all the increased
 The large incremental demandin France,the globe practically mopped rather flat LNG imports
 domestically produced coal, whilst
 over the churned the United States, as those turned away by the United States. low therefore
 cargoes period. In by Qatar, as well rising unconventional gas supply kept gas prices It is and made
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 LNG unattractive.
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 In developed led emerging markets, gas is to between fuel of choice to supply electricity, end of
 LNG market and to its prices shooting up increasingly a$16 and $17/mmBtu towards the provide
 2011. and cooling, and support economic growth. During the last five years, 10 new countries
 heating
 started to import LNG, namely:                                              Argentina, Brazil, Canada, Chile, China, Kuwait, Mexico, the
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 Netherlands, Thailand, and the United Arab Emirates. Notably, three of the eight countries are
           South America experienced a sharp rise, and vessel availability became a major
 in 2009inand 2010, alsoand two in the Middle East – two regions that had not previously imported
 located
 LNG and were latter part to be potential LNG markets even six by the need the end of the
 concern in thenot expectedof 2011. This is further exacerbated years ago. By for moreof 2012
 another two countries are instead to join the list of countries heretofore not ever expected to import
 conventional sized shipsexpected of the Qmax/Qflex to serve more widespread LNG markets.
 LNG: Indonesia side, 2011 Both          the LNG exporting countries project sanctions, mostly in
 On the supply and Malaysia. saw aoflarge number of new LNGseek to use LNG to bring gas to
 otherwise distant potential demand centres. Three additional markets that do not currently import
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 LNG are also building regasification capacity to satisfy growing demand in the face of uncertain piped
                                  Eastern Africa and the Eastern Mediterranean buttressed their
 glimpse of the new frontiers.expect to bring their terminals onstream by 2013; and Poland expects
 supplies: Singapore and Israel
 to bring as possible LNG exporters
 positionits terminal onstream in 2014. as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                          IGU World LNG Report - 2011
                          IGU World LNG Report - 2011            Page 13
                                                                 Page 4
                                                                      14

    Message from the LNG IMPORTS of OUNTRY, 1990-2011
1.FIGURE 8: SHARE OF GLOBAL President BY CInternational Gas Union
               100%                                                                 Netherlands
                                                                                    Thailand
     Dear IGU members
          90%                                                                       UAE
                                                                                    Chile
           indeed honoured to present to you the second IGU World LNG Report forBrazil
     I am80%                                                                          2011.
                                                                                    Kuwait
     Last year, the world experienced some very interesting events, which ledCanada    to some very
          70%                                                                       Argentina
     intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                                                                                    Mexico
     LNG60% market was poised to experience a glut situation in 2011 with Qatar producing at its
                                                                                    China
     % Share




     maximum capacity of 77 MTPA whilst the United States, which used to be a significant
                                                                                    UK
          50%                                                                       India
     importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                                                                                    Dom. Rep.
                                                                                    Puerto consume
     unconventional gas to meet its energy needs. Moreover, Europe was expected toRico
          40%
                                                                                    Portugal
     less LNG because several economies were experiencing sluggish growth. However, Mother
                                                                                    Greece
          30%
     Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                                                                                    Turkey
          20%                                                                       Italy
     The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
                                                                                    US
                                                                                    Taiwan
     for the LNG industry. The consequence which caused the Japanese municipalities/local
          10%                                                                       Korea
     authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
                                                                                    Belgium
           0%                                                                       Spain
     country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
                                                                                    France
               by almost 1995 1997 1999
     jumped 1991 1993 12% to about 79 MT.2001 2003 2005 2007 2009 2011 Japan
     Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
     Meanwhile, the growing concern for the environment and a move seen to avert any serious
     impact from another oil price hike, coupled with the need to enhance energy security, had led
     3.5. LNG INTERREGIONAL T enter
     to several countries to RADE the league of LNG importers, as well as increase their
     consumption 63% –
     The majority –of LNG. of the world’s LNG is consumed in the Asia-Pacific region. Asian countries
     consumed 153 MT of LNG in 2011, with 91% of supplies primarily coming from within the region or
     from the Middle East (providing 54% of the supplies) and North Africa (providing increased
     The large incremental demand acrossAsia’s globe practically mopped up all the 37% of the
     cargoes churned Though as well as those turned away by by United States. It is thirds of
     region’s supplies). by Qatar,Qatari volumes dominate this trade the supplying roughly twotherefore
     volumes sent from the world’s LNG spot all of the LNG producers in reach 62 East and North
     not surprising thatthe region to Asia, nearlytrade increased by 32% to the Middle MT, or 26% of
     Africa sent LNG to Asia trade, lending a 25 countries to trade involved. two unexpected tight
     the world’s total LNG in 2011, and with diverse picture actively between the The regions.
     LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
     TABLE 3: LNG TRADE BETWEEN REGIONS, 2011, MT
     2011.
               Importing Region
                                   the world’s LNG trade, America S. America
     In tandem with1 the growth in Asia-Pacific Middle East N. tanker charter rates, which were sluggish
                         Europe                                                        Total
      Exporting Region
     in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
      Africa                           8.5
     concern in the latter11.2 of 2011. This is0.7
                           part                                 0.9
                                                     further exacerbated 1.3 the need for more of the
                                                                           by          22.6
      Asia-Pacific          -         82.5          0.6         0.7         -          83.8
     conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
      Europe                        1.5             1.1            0.1             0.3             0.2               3.2
     On the supply side,48.4
      MENA                                                   new
                             2011 saw a large number of 6.8 LNG 1.6
                                        55.9     2.0                   project sanctions, mostly in
                                                                                 114.7
                                         start               the
     Australia. But as these projects 1.0 moving forward, -1.2 industry was also beginning to get a
      North America        0.3                    -                   0.3          0.3
     glimpse of the new frontiers. Eastern Africa
      South America        4.3          4.0                  Eastern Mediterranean buttressed their
                                                 0.3 and the 4.4      3.9         16.9
                                                                       the
     position as possible LNG exporters as recent discoveries reflect 7.3 regions’ export potential.
      Total                65.7        153.0     3.6        11.8                 241.5
     North Waterborne LNG Reports, EIA, forward more
     Sources:America started to moveDOE, PFC Energy aggressively, aided by several Sales Purchase
     Agreements signed by the Sabine Pass LNG project.




1
    Export volumes for North America and Europe include re-exported cargoes, which are subtracted from the region’s imports.
                             IGU World LNG Report - 2011 Page 14
                                                              4
                           IGU World LNG Report - 2011 Page 15

TABLE 4: LNG T from the BETWEEN COUNTRIES, 2010, MT
1. MessageRADE VOLUMESPresident of International Gas Union
               Argentina



    Importer




                                                                                             Dom Rep




                                                                                                                                                                                                   Portugal
                            Belgium




                                                    Canada
  Dear IGU members




                                                                                                                       Greece




                                                                                                                                                                                                                               Taiwan
                                                                                                                                                                                    Mexico
                                                                                                           France




                                                                                                                                                                                                                                              Turkey
                                                                                                                                                                     Kuwait
                                                                                                                                                  Japan

                                                                                                                                                           Korea
                                                                               China




                                                                                                                                                                                                                  Spain
                                        Brazil




                                                                                                                                                                                                                                                                               Total
                                                                  Chile




                                                                                                                                 India




                                                                                                                                                                                                                                                          UAE
                                                                                                                                          Italy




                                                                                                                                                                                                                                                                        US*
 Exporter




                                                                                                                                                                                                                                                                 UK
  I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 Algeria                                                       0.18                                        4.68 0.71                      1.20 0.06                                                               3.54                      2.78                 0.95          14.1
  Last
 Australia year, the world experienced some 0.06
                                    3.89             very interesting events, which led to some very
                                                              13.35 0.98 0.06           0.83              19.2
  intriguing outcomes. After experiencing a very strong growth in demand of 0.07 in 2010, the
 Belgium              0.06                                    0.06 0.07 0.07       0.06      22%           0.4
  LNG
 Brunei market was poised to experience a glut situation in 2011 with Qatar producing at its
                                                               5.93 0.72                                   6.7
  maximum capacity of 77
 Egypt           0.13                     0.46 0.06 0.06 0.44 0.43 0.80 0.21 which used to be a 0.12 1.46 7.1
                               0.36 MTPA whilst the United States, 0.12            2.10 0.13 0.19 significant
  importer of LNG,
 Eq. Guinea                                    0.06 0.12 0.06 cargoes and increasingly rely on domestic
                      0.02continuing to turn away more 0.54 1.44 0.19
                               1.17 0.07                                                0.39               4.1
 Indonesia
  unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
                                    1.94                      12.75 5.57      1.38      1.97              23.6
 Libya                                                                             0.25                    0.2
  less LNG because several economies were experiencing sluggish growth. However, Mother
 Malaysia                           1.19                      13.89 5.02 0.13           2.96              23.2
  Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 Nigeria                   0.06 0.62                                           0.21                        2.82                  0.25             0.58 0.88 0.06 1.76 2.06 5.71 0.81 1.08                                                                        0.31 0.86 18.1
  The
 Norway tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
                           0.06                    0.06                                                    0.33
                                                                                                           0.70 0.54 3.5                  0.12            0.13                                                    1.33 0.05 0.12

  for
 Oman the LNG industry.                                         caused
                                 The consequence which2.86 4.65 0.71the Japanese municipalities/local
                                                                                      0.12 0.38                       8.7
 Peru
  authorities to temporarily shutdown all the 54 nuclear powered
                0.08 0.12 0.12                                    0.07      0.18 power plants which led 0.34 the
                                                                                      0.49                       to   1.4
 Qatar     0.18 4.51 0.38 0.18 0.12 1.27 1.77 0.03 8.05 4.56 7.91 7.58      0.72 0.06 4.20 2.88 1.46 0.12 10.57 0.94 57.5
  country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 Russia                             0.38                     6.29 3.39 0.07                0.51                      10.6
  jumped by almost 12% to about 79 MT.
 Trinidad      1.10 0.06 0.68 1.18 0.37 0.05 0.59 0.24 0.06 0.48 0.24 0.11 0.66 0.29                                                                                                             0.13 2.50 0.37 0.18                                             1.29 4.45 15.0
  Meanwhile,
 UAE                growing concern for the environment0.19 0.18 move seen0.33 avert any serious
              the 0.04                               5.10   and a           to                    5.8
                                                                        energy security, had led
  impact from another oil price hike, coupled with the need to enhance0.09
 US                0.06                              0.63 0.26                        0.14        1.2

  to several countries to enter the league of LNG1.88 0.14 0.13 as0.13
 Yemen                    0.06 0.48   0.07   0.28    0.12   importers,   well as increase their
                                                                                      0.20 0.80 4.3
 Re-exports  -0.39 LNG.
  consumption of                                                                           -0.60 -1.0
 Total         1.28 4.51 1.98 1.54 2.26 9.47 0.59 10.35 0.92 9.30 6.63 70.61 34.28 2.09 4.29 2.25 20.52 11.63 5.87 0.12 14.28 8.79 223.6
  The large incremental demand across the globe practically mopped up all the increased*Includes Puerto Rico
  cargoes churned by Qatar, DOE, PFC Energy
Sources: Waterborne LNG Reports, USas well as those turned away by the United States. It is therefore
  not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
TABLE 5: LNG TRADE VOLUMES BETWEEN COUNTRIES, 2011, MT
  the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
                                                                  Courtesy: Photographic Services Shell International Ltd.
                                                                                                                                                                              Netherlands




    Importer
  LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
               Argentina




                                                                                   Dom Rep




                                                                                                                                                                                                                                   Thailand
                                                                                                                                                                                             Portugal
                           Belgium




  2011.
                                                 Canada




                                                                                                              Greece




                                                                                                                                                                                                                      Taiwan
                                                                                                                                                                   Mexico
                                                                                                 France




                                                                                                                                                                                                                                                 Turkey
                                                                                                                                                          Kuwait
                                                                                                                                          Japan

                                                                                                                                                  Korea
                                                                          China




                                                                                                                                                                                                          Spain
                                      Brazil




                                                                                                                                                                                                                                                                               Total
                                                             Chile




                                                                                                                         India




                                                                                                                                                                                                                                                           UAE




 Exporter
                                                                                                                                  Italy




                                                                                                                                                                                                                                                                        US*
                                                                                                                                                                                                                                                                  UK



  In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 Algeria   - 0.06 -       -   -
  in 2009 and 2010, - also experienced a sharp rise, and -vessel availability became a major
                                 - 4.23 0.72 0.18 1.16 0.06 -      -    0.06 0.06 2.94 -   - 2.96 - 0.18 - 12.6
                                                       13.6
  concern in the latter part3.71 2011. This is -further exacerbated -by -the need for0.06 - of the
 Australia -   -   -  -   -   of - - - 0.04             9
                                                            1.16 0.19 -   -           0.34 -   -  more - 19.2
  conventional- sized ships instead of the Qmax/Qflex to -serve0.06 - widespread -LNG markets.
 Belgium   -       -  -   -   -  -   -    -    -    - 0.19 0.06       -  more 0.20 - -            -   -  - 0.5
 Brazil        0.04          -          -          -          -            -           -               -        -          -       -        -      -      0.06       -           -             -              -           -             -          -        -      -     -     0.1
  On the supply -side, 2011 saw -a large number0.70 new LNG - project sanctions, mostly 6.8
 Brunei       -  -    -     -    -  -      -    -    - 6.15
                                                                of - - -         -    -    -  - - -    -
                                                                                                           in
                      - 0.06 0.21 - 0.65 0.06 0.51 0.38 0.67 0.50 the   - 0.06 1.73 also 0.26 - 0.06 0.73
  Australia. But as these projects start moving forward,0.05 -industry was0.44 - beginning to get6.4
 Egypt      0.06 -  -                                                                                       a
  glimpse - - -           0.91 0.13 Eastern Africa and 0.78 Eastern Mediterranean buttressed - their
 Eq. Guinea of the new- frontiers. -    -  -    -    - 1.56 the -     - -   -    - 0.57 -     - - -       4.0
  position as possible- LNG2.40 - - as recent 9.26 7.57 - 0.19 - - the- regions’ export potential.
 Indonesia    -  -  -       -   exporters - - - discoveries reflect                 1.95 0.07 - - -    -  21.4
  North America started to move
 Libya        -  -  - -     -    -  - forward -
                                        -  -    more aggressively, aided
                                                     -    -    -   -  - -   - by several Sales Purchase
                                                                               0.06 -      -  - - -    -  0.1

  Agreements -signed - by -the Sabine Pass LNG project.0.32 - - - - 3.40 - - 0.06 - - 25.0
 Malaysia     -     -          1.72 -   -  - 0.13 -
                                                        15.4
                                                         5
                                                             3.91

 Mexico           -          -          -          -      0.06             -           -               -        -          -       -        -      -        -        -           -             -              -           -             -          -        -      -     -     0.1
 Nigeria       0.30 0.06 0.05                      -          -       0.67             -        2.66 0.06 1.00                     -      1.90 1.13 0.59 0.86 0.05 1.91 4.74 0.67 0.12 0.92 0.06 0.88 0.05 18.7
 Norway           -          -          -          -          -            -      0.06 0.39                             0.06 0.12 0.18 0.30                 -        -        0.06 0.06 0.93 0.12                                       -          -        -    0.26 0.31     2.9
 Oman             -          -          -          -          -            -           -               -        -       0.13       -      3.98 3.55         -        -           -             -         0.13 0.13                      -          -        -      -     -     7.9
 Peru             -          -          -          -          -       0.15             -               -        -          -       -      0.34 0.74         -      0.49          -             -         1.43 0.06 0.22                            -        -      -    0.34   3.8
 UAE                                    0.04                                                                                  5.10 0.19 0.18                                                   0.33                                           5.8
 US                                     0.06                                                                                  0.63 0.26                                             0.09                                    0.14              1.2
 Yemen                                                     0.06 0.48                     0.07                0.28             0.12 1.88 0.14 0.13                                   0.13                                    0.20 0.80         4.3
 Re-exports                  -0.39                                                                                                                                                                                                 -0.60 -1.0
 Total           1.28 4.51 1.98 1.54 2.26 9.47 0.59 10.35 0.92 9.30 6.63 70.61 34.28 2.09 4.29 2.25 20.52 11.63 5.87 0.12 14.28 8.79 223.6
                               IGU World LNG Report - 2011                                                Page 15
                                                                                                               4                                                                                   *Includes Puerto Rico
Sources: Waterborne LNG Reports, US DOE, PFC Energy

TABLE 5: LNG T from the BETWEEN COUNTRIES, 2011, MT
1. MessageRADE VOLUMESPresident of International Gas Union




                                                                                                                                                        Netherlands
      Importer
  Dear IGU members
                 Argentina




                                                                         Dom Rep




                                                                                                                                                                                                  Thailand
                                                                                                                                                                      Portugal
                             Belgium



                                                Canada




                                                                                            Greece




                                                                                                                                                                                         Taiwan
                                                                                                                                               Mexico
                                                                                   France




                                                                                                                                                                                                             Turkey
                                                                                                                                      Kuwait
                                                                                                                      Japan

                                                                                                                              Korea
                                                                 China




                                                                                                                                                                                 Spain
                                       Brazil




                                                                                                                                                                                                                                               Total
                                                         Chile




                                                                                                     India




                                                                                                                                                                                                                      UAE
 Exporter
  I am indeed honoured to present to you the second IGU World LNG Report for 2011.




                                                                                                              Italy




                                                                                                                                                                                                                                    US*
                                                                                                                                                                                                                             UK
  Last
 Algeria       - the -
           year, 0.06 world experienced 0.72 0.18 1.16 0.06interesting 0.06 0.06 2.94 - - led to - some - very
                           -    -    -  - 4.23 some very         -    -  - events, which        2.96   0.18   12.6
                                                          13.6
  intriguing- outcomes. After experiencing a very9 strong growth in -demand of 22%0.06 2010, the
 Australia         -  -    -    - 3.71 -    -    - 0.04 -      1.16 0.19 -   -       - 0.34 -     -  in - - 19.2
  LNG
 Belgium market - was poised to experience - a glut situation in 0.06 - with Qatar producing at its
               -      -    -    -    -  -   -    -      - 0.19 0.06 -    - 2011 0.20 -        -   -  -   -  - 0.5
  maximum
 Brazil      0.04 capacity - of -77 - MTPA- whilst - the United 0.06 -
                   -  -                 -        -      -   -    -   States, - which - used to be a significant
                                                                                 -       -    -   -  -   -  - 0.1

  importer -of LNG, continuing to turn - away more 0.70 - - and increasingly rely on domestic
 Brunei            -  -    -    -    -  -   -        -  - 6.15 cargoes       -   -   -   -    -   -  -   -  - 6.8
                              0.06 0.21 - 0.65 0.06 needs. Moreover,         - 0.06 was expected        consume
  unconventional gas- to meet its energy 0.51 0.38 0.67 0.50 0.05 - Europe 1.73 0.44 - 0.26 -to 0.06 0.73 6.4
 Egypt       0.06 -   -
 Eq. Guinea    -   -  -    - 0.91 0.13 -    -    -   -  - 1.56 0.78 -    -   -   -   - 0.57 -     -  -   -  - 4.0
  less LNG because several economies were experiencing sluggish growth. However, Mother
 Indonesia     -   -  -    -    - 2.40 -    -    -   -  - 9.26 7.57 - 0.19 -     -   - 1.95 0.07 -   -   -  - 21.4
  Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 Libya              -          -         -        -       -       -        -         -        -       -        -       -       -        -        -          -           -        0.06      -        -          -       -      -      -         0.1
  The tragic
 Malaysia  -   earthquake which hit Japan 0.13March 2011 could be considered- a “game changer”
                  -    -  -   - 1.72 -   -    - in     -               -    -    -    - 3.40         - 0.06 -       -
                                                                                                                      15.4
                                                                                                                        25.0
                                                                                                                           3.91 0.32
                                                                                                                       5
  for the LNG- industry. The consequence - which - caused the Japanese -municipalities/local
 Mexico      -         -  - 0.06 -    -  -    -   -        -      -    -    -    -    -    -         -    -    -    -   0.1
                                 shutdown all the - nuclear powered power plants which led to 18.7
  authorities to temporarily 0.67 - 2.66 0.06 1.00 54 1.90 1.13 0.59 0.86 0.05 1.91 4.74 0.67 0.12 0.92 0.06 0.88 0.05 the
 Nigeria   0.30 0.06 0.05 -   -
  country having to rely on LNG to0.39 its energy 0.18 0.30 - As a result, Japan’s demand for LNG
 Norway      -    -    -  -   -   - 0.06 fill   0.06 0.12 vacuum.      - 0.06 0.06 0.93 0.12 -       -    - 0.26 0.31 2.9
             - almost 12% -to about 2011 І Page 3.98
  jumped by IGU World LNG Report -79 MT.0.13 - 16 3.55 - - - - 0.13 0.13 - - - - - 7.9
 Oman             -    -  -       -   -  -    -
 Peru               -          -         -        -       -      0.15      -         -        -       -        -      0.34 0.74         -      0.49         -           -        1.43 0.06 0.22                -       -      -    0.34        3.8
  Meanwhile, the growing concern for the environment and a move seen to avert any serious
                                                       11.5                                         16.1
 Qatar
               another 0.45 2.31 - 2.38 0.12 9.70 with 7.85 1.12 1.31 enhance 4.00 0.25 security, 1.79 75.5
  impact from4.59 0.29 1.57oil price hike, coupled4.48 8 the need to 0.27 0.12 3.52 energy 0.43 0.78 5 had led
          0.43

  to several countries to 0.24 - the -league- of LNG - importers,- as well0.06 - increase - their
 Russia     -  -    -    -    -  enter -        -      7.18 2.82   -   -         - 0.18   as      -  -      10.5
          0.15 - of LNG. -
  consumption
 Spain              -    -        -  -   -   -  - 0.17 0.11 - 0.06 -   -    -    - 0.05 -    -    -  -   -  0.5
 Trinidad        2.22 0.06 0.18 0.86 0.94 0.35 0.66 0.30                                      -      0.42 0.12 0.38 1.63                -        -      0.06            -        1.87 0.05          -          -      0.22 0.42 3.20 13.9
  The
 UAE    large incremental - demand across the globe- practically mopped up- all- the increased
              -    -    -  -         -  -   -  - 0.12 - 5.63       0.04 -    - -    - 0.06            -    -    -   5.9
  cargoes churned by- Qatar, as- well as those- turned away -by the -United - States. It - is0.13 - 1.5
 US           -    - 0.19     0.06 0.13     -  - 0.33    0.36 0.18 -         -    0.12      -    -        therefore
  not
 Yemensurprising that the world’s- LNG spot trade increased by -32% to reach- 62- MT, or 26% 6.7
              - 0.21 -     - 0.31 0.75    0.13 - 0.13 - 0.13 2.94 - 0.13       -    - 0.14            - 0.54 1.24 of
                  total LNG - - -
  the world’s -0.52 -0.09 - trade, and- with 25 countries actively -involved. - The unexpected tight
 Re-exports   -                                -   -  -    -    -    - -0.06   - -0.55      -    -    -    - -1.18 -2.4

  LNG       3.19 4.45 0.62 its prices shooting 12.7 6.43 78.9 35.8 $16 and 2.21 17.1 12.2 0.72 4.58 1.18 18.6 6.48 of
 Total market led to2.42 2.80 12.8 0.72 10.7 0.95up to between 2.42 2.92 0.56$17/mmBtu towards the end241.5
  2011.                                                                                         *Includes Puerto Rico
Sources: Waterborne LNG Reports, US DOE, PFC Energy
  In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
  in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
3.6. LNG SPOT MARKET 2
  concern in the latter part of 2011. This is further exacerbated by the need for more of the
The structure of the LNG trade is evolving. Traditionally, LNG has been delivered under long-term
  conventional sized ships instead of the Qmax/Qflex to serve traded on a spot basis. markets.
arrangements between buyers and sellers and was only marginally more widespread LNG But since
  On the spot LNG trading has grown steadily, with of new LNG project sanctions, mostly
the 1990s, supply side, 2011 saw a large number more rapid growth during the last five years.in
  Australia. But as these projects start moving forward, of industry was also 2006, spot trades
Prior to 2004-2005, the spot trade accounted for about 10% thetotal LNG traded; by beginning to get a
  glimpse for 16% of the LNG traded (26 Africa by the this was more than 25% of global trade,
accounted of the new frontiers. EasternMT) andand 2011,Eastern Mediterranean buttressed their
or 62 MT.
  position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
  North VOLUME started to TRADE forward more aggressively, 1995-2011
FIGURE 9:AmericaOF SPOT LNG move AND SHARE OF TOTAL LNG TRADE, aided by several Sales Purchase
  Agreements signed by the Sabine Pass LNG project.
    70                                                                                 30%

        60                       Spot LNG
                                                                                                                                                                                                                              25%
                                 % of Total LNG Trade (right axis)
        50
                                                                                                                                                                                                                              20%
                                                                                                                                                                                                                                         % Share




        40
MT




                                                                                                                                                                                                                              15%
        30
                                                                                                                                                                                                                              10%
        20
    The structure of the LNG trade is evolving. Traditionally, LNG has been delivered under long-term
    arrangements between buyers and sellers and was only marginally traded on a spot basis. But since
    the 1990s, spot LNG trading has grown steadily, with more rapid growth during the last five years.
    Prior to 2004-2005, the spot trade accounted for about 10% of total LNG traded; by 2006, spot trades
                   16% of the LNG traded (26 Page 16
    accounted forIGU World LNG Report - 2011 MT) and by 2011, this was more than 25% of global trade,
                                                      4
    or 62 MT.
    Message from POT President S International TRADE, 1995-2011
1.FIGURE 9: VOLUME OF StheLNG TRADE ANDofHARE OF TOTAL LNG Gas Union
         70                                                                                                                           30%
    Dear IGU members
                Spot LNG
         60                                                                                                                           25%
    I am indeed honoured to present to you the second IGU World LNG Report for 2011.
                  % of Total LNG Trade (right axis)
         50
                                                                                       20%
    Last year, the world experienced some very interesting events, which led to some very




                                                                                                                                            % Share
         40
    intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
    MT




                                                                                       15%
    LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
         30
    maximum capacity of 77 MTPA whilst the United States, which used to be a significant
                                                                                       10%
         20
    importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
    unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
         10                                                                            5%
    less LNG because several economies were experiencing sluggish growth. However, Mother
          0                                                                            0%
    Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
               1995

                      1996

                             1997

                                    1998

                                           1999

                                                  2000

                                                         2001

                                                                2002

                                                                       2003

                                                                              2004

                                                                                     2005

                                                                                            2006

                                                                                                   2007

                                                                                                          2008

                                                                                                                 2009

                                                                                                                        2010

                                                                                                                               2011
    The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
    for the LNG industry. The consequence which caused the Japanese municipalities/local
    Sources: Cedigaz, Waterborne LNG Reports, US DOE, PFC Energy
    authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
    In 2006, nine countries on LNG to spot energy vacuum. 13 a result, were spot cargo importers.
    country having to rely were active fill itsLNG exporters and As countries Japan’s demand for LNG
    These numbers rose to to about respectively, by the end of 2011. The appetite to buy LNG on a
    jumped by almost 12%21 and 25,79 MT.
    spot basis has increased significantly as the list of spot buyers has nearly doubled with a variety of
    Meanwhile, the growing concern for the environment and a move seen to avert any serious
    countries looking to import spot cargoes as changes in nuclear policies around the world and the
    seasonality of demand for gas hike, additional supplies. While enhance energy security, had led
    impact from another oil pricerequirecoupled with the need to the list of spot sellers has increased,
    this has occurred at a much slower the
    to several countries to enter pace.league of LNG importers, as well as increase their
    consumption of LNG.
2   The large incremental demand across the globe practically mopped up all the increased
 Spot and short-term trade (hereafter referred to as spot) is defined as any transaction that is not supported by a contract with a duration of
  cargoes churned by figures also include cargoes that are over and away by the United States. a is therefore
more than four years. Spot trade Qatar, as well as those turned above contracted volumes. For example, if It company has a
5 MTPA long-term contract with a supplier, but in a given year imports 6 MTPA from that supplier, the excess 1 MTPA is considered spot.
    not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
    the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
    LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
    2011.
    In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
    in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
    concern in the latter part of 2011. This is further exacerbated by the need for more of the
    conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
    On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
    Australia. But as these projects start moving forward, the industry was also beginning to get a
    glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
    position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
    North America started to move forward more aggressively, aided by several Sales Purchase
    Agreements signed by the Sabine Pass LNG project.




                                                                                                                   Courtesy: Vopak, The Netherlands
                                  IGU World LNG Report - 2011 І Page 17
                                  IGU World LNG Report - 2011 Page 4 17

    Message from the President AND EXPORTERS AND Gas Union
1.FIGURE 10: NUMBER SPOT CARGOES TRADEDof InternationalIMPORTERS OF SPOT LNG, 1995-2011
              1,200                                                                                                                                  30
                                           No. of Spot Cargoes Traded
 Dear IGU members
              1,000                        No. of Countries Importing Spot LNG (right axis)                                                          25
                                            the second axis)
 I am indeed honoured to present to youSpot LNG (right IGU World LNG Report for 2011.
                 No. of Countries Exporting




                                                                                                                                                          No. of Countries
                   800                                                                                                                               20
  No. of Cargoes




 Last year, the world experienced some very interesting events, which led to some very
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
       600                                                                            15
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
       400                                                                            10
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
       200
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume5
 less LNG because several economies were experiencing sluggish growth. However, Mother
         0                                                                            0
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                           1995

                                    1996

                                            1997

                                                   1998

                                                          1999

                                                                 2000

                                                                        2001

                                                                               2002

                                                                                      2003

                                                                                             2004

                                                                                                    2005

                                                                                                           2006

                                                                                                                  2007

                                                                                                                         2008

                                                                                                                                2009

                                                                                                                                       2010

                                                                                                                                              2011
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The DOE, PFC Energy
 Sources: Waterborne LNG Reports, US consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 3.7. LNG PRICING OVERVIEW
 jumped by almost 12% to about 79 MT.
 Although gas is an increasingly global commodity, there is still no “global” gas market. Value is set by
 Meanwhile, than macro concern In the environment contract structure and timing are more
 micro rather the growing factors. for particular, location,and a move seen to avert any serious
 impact from another oil price hike, coupled with the In fact, enhance widely diverge across led
 influential in determining value than the global balances. need togas prices energy security, hadand
 to several countries to importing league of LNG supply contracts, each increase their
 even within markets. Gas enter themarkets with multipleimporters, as well assource at distinct
 consumption of LNG.
 price levels, which are determined by the pricing formula governing each contract. In a given year, the
 prices paid in a typical importing market will vary according to the market’s collection of supply
 The large incremental demand across the globe practically mopped up all the increased
 contracts.
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that SPOT CARGOES TRADED AND EXPORTERS AND by 32% to reach 62 MT, or 26% of
 FIGURE 11: NUMBER OFthe world’s LNG spot trade increasedIMPORTERS OF SPOT LNG, 1995-2011
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
      18
                US (Henry Hub)
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
      16        UK (NBP)
 2011.
       14                           Japan
                the growth in the
 In tandem with German Oil-Linked world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
       12
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
             $/mmBtu




       10
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
        8
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
        6
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
        4
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North 2America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                       0




 Sources: Bloomberg, EIA, German Federal Office of Economics and Export Control (BAFA), Japanese Ministry of Finance,
 PFC Energy
              IGU World LNG Report - 2011
              IGU World LNG Report - 2011     Page 18
                                              Page 4
                                                   18

   Message from the President of four main categories:
1.Gas pricing systems can be organised into International Gas Union
 Hub-based systems. Supply and demand set prices at liquid hubs. In North America, the most
 Dear IGU members
 important price marker is Henry Hub (Louisiana), with a spot and futures market trading on the New
 I am Mercantile Exchange (NYMEX). In the second IGU World LNG Report National
 York indeed honoured to present to youEurope, the most important hub is the for 2011. Balancing
 Point (NBP) in the United Kingdom, which is a virtual trading point for the Intercontinental Exchange
 Last It contains both a spot and a some market, although events, which led to some few
 (ICE). year, the world experienced futures very interesting prices fall sharply after the firstvery
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 months of future delivery.
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
 Oil-linked systems. Most of the gas traded in United States, which used to belong-term LNG
 maximum capacity of 77 MTPA whilst the Europe and Asia, and specifically a significant
 contracts, falls in this category. Gas contract formulas vary in a number of ways based on the
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 following factors: Indexation, Slope/Coefficients of the indexation, presence of S-curves, Lag and
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
 Averaging Mechanisms.
 less LNG because several economies were experiencing sluggish growth. However, Mother
 Regulated systems. In many parts ofas the saying goes “nature works in mysteriousgovernment
 Nature again proved us wrong, and the world, prices are regulated. In this case the ways”!
 sets wellhead, transportation and end-user prices.
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 Subsidised systems. In most countries in the Middle East and NorthJapanese municipalities/local
 for the LNG industry. The consequence which caused the Africa, gas prices barely suffice
 authorities to temporarily shutdown all the 54 nuclear powered power plants Africa, gas prices
 to cover production costs. In Latin America, the former Soviet Union and in much of which led to the
 country having to rely on LNG oil or costs.
 are similarly set with no linkage toto fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped by for LNG rose substantially around the world over the last two years as the market shifted
 Spot prices almost 12% to about 79 MT.
 Meanwhile, the growing concern for the environment and Global seen to Crisis to serious
 from having a demand problem during the initial period of the a moveEconomic avert anyhaving a
 supply problem. The earthquake/tsunami-induced nuclear outages in Japan starting in March 2011
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 contributed significant tightness there. Factors in various markets have created alternate views on the
 to several countries to enter the league of LNG importers, as well as increase their
 market balance, depending on geography, alternately between a global tightening in demand and
 consumption of LNG.
 loosening in some markets. The Fukushima nuclear power plant disaster accelerated an existing
 The large incremental demand expected due to the structural growth in power the increased
 tightening trend in Asia, which was across the globe practically mopped up all generation and
 cargoes churned by Qatar, as
 changes in environmental policy. well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 Oil-linked prices – whether in Asia or Europe – moved much higher in 2011 in line with the increase in
 the world’s total a relative convergence 25 countries actively involved. The unexpected and
 oil. In early 2011, LNG trade, and with emerged between Japan, the European oil-linked pricetight
 LNG However, this its prices shooting up by the third and and $17/mmBtu the year. NBP was
 NBP. market led to convergence dissipated to between $16 fourth quarters of towards the end of
 2011.
 relatively flat in 2011, averaging $9/mmBtu. This strength came despite a 14% drop in demand (which
 In tandem depressed prices), an world’s LNG trade, in supply and a 3.2% which were sluggish
 should havewith the growth in theeven higher 21% droptanker charter rates, increase in net imports
 in 2009 and 2010, also experienced a In other words, vessel availability became pulls on
 (with LNG growing but pipeline gas falling). sharp rise, andthere were many contradictory a major
 concern as a result, the price 2011. This is further exacerbated by the need for more of the
 NBP and, in the latter part of ended up relatively stable.
 conventional sized ships instead of the Qmax/Qflex to and the hub-based markets morphed over
 What used to be a strict split between the oil-linked marketsserve more widespread LNG markets.
 On the supply side, into “Henry large number of new As project sanctions, mostly in
 the last months of 20102011a saw a Hub and the rest” reality. LNGNBP stayed firm in 2011 around
 Australia. But as these projects start moving forward, to industry production of unconventional
 the $9/mmBtu level, Henry Hub continued to weaken duethe increased was also beginning to get a
 gas in North America.
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011     Page 19
                                               Page 4
                                                    19

1. Message from
Looking Ahead:        the President of International Gas Union

   How tight will the
 Dear IGU members LNG market get over the next five years? The demand shock from Japan,
    the continued and sustained growth in LNG demand from emerging market, and the very modest
    growth in supply before 2014, all ensure that tightness in the LNG market 2011.
 I am indeed honoured to present to you the second IGU World LNG Report foris unlikely to be
    alleviated before 2014 or 2015. But how tight will the market get and what are the pricing
 Last year, theofworld experienced some very interesting events, which led to some very
    implications this tightness?
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
     Can the value poised to experience a of situation in 2011 with Qatar producing at its
 LNG market was chain sustain this periodgluthigh demand? Charter rates for modern vessels
     are reaching record 77 and the ability to United States, increasingly to be In such price
 maximum capacity of highsMTPA whilst thesecure tonnage is which used limited. a significant
     environment, the arbitrage window between Europe and Asia is shrinking and companies’ ability to
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
     ensure the logistics for delivery of LNG cargoes Moreover, Europe was the investments in new
 unconventional gas to meet its energy needs. is diminishing? When will expected to consume
     vessel
 less LNG capacity alleviate this pressure and how much of a correction will the market see? Mother
            because several economies were experiencing sluggish growth. However,
     Could the spot market actually as the over the next five years? The rapid growth in LNG
 Nature again proved us wrong, and shrink saying goes “nature works in mysterious ways”!
     consumption and a period of sustained high 2011 have prompted companies with flexible
 The tragic earthquake which hit Japan in March prices could be considered a “game changer”
      the LNG secure several consequence which caused the at attractive rates. As a result,
 for supplies to industry. Theshort, medium and long-term contractsJapanese municipalities/local
     the volume of gas that are available at the spot market may shrink. What implications will this
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
     development have for pricing and for supply security?
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
     What is the ability to about emerging markets? The past five years have seen a dramatic
 jumped by almost 12%to pay in 79 MT.
    transformation in the LNG market as new countries began to import LNG. avert prices have
 Meanwhile, the growing concern for the environment and a move seen toYet, asany serious
    continued to rise, the price attractiveness of LNG is slowly diminishing. Will this price spike impact
    demand in emerging price hike, coupled with the need to enhance energy security, had the
 impact from another oilmarkets? What is the market for $15 or $18/mmBtu gas in Latin America, led
    several countries to enter the league of LNG which emerging markets will opt to stop
 to Middle East and Southeast Asia? Is there a price at importers, as well as increase their
 consumption of LNG.
    importing?
 The large incremental demand across the globe practically mopped up all the increased
     Will supply grow in tandem with the projected increase in demand? With Qatar already
     reaching maximum production capacity, all hope is now on by 6 projects that have It is therefore
 cargoes churned by Qatar, as well as those turned away the the United States. obtained FID to
      surprising that time. With LNG spot trade increased by 32% to overrun, MT, or 26% of
 not be completed on the world’s a few projects in Australia now facing costreach 62 labour shortage,
      world’s total issues, can and projects be completed on involved. The unexpected tight
 the and regulation LNG trade, these with 25 countries activelyschedule? What options do buyers
     have in the face its prices shooting up to
 LNG market led toof such industry scenario? between $16 and $17/mmBtu towards the end of
 2011.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
               IGU World LNG Report - 2011      Page 20
                                                     4


1. Message from the President of International Gas Union
4. Liquefaction Plants

  Dear IGU members
Now that Qatar has achieved its targeted 77 MTPA of liquefaction capacity, growth in
  I am indeed honoured to present shift to Australia.
liquefaction capacity is expected to to you the second IGU World LNG Report for 2011.
Qatar drove liquefaction capacity growth in recent years, reaching its target of 77 MTPA in February
   Last year, the world experienced some very interesting events, which led to some very
2011. Yet with the moratorium on new export projects from Qatar and little movement elsewhere, the
   intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
Middle East has very little opportunity for growing liquefaction capacity. Conversely, Australia’s
   LNG market was poised grow significantly over the next in 2011 with projects currently at its
liquefaction capacity is set to to experience a glut situation decade. Of the Qatar producing under
   maximum capacity of 77 MTPA whilst the United States, which used to be a significant
construction, 73% – representing 61 MTPA of capacity – are in Australia. This growth has been driven
   importer of LNG, continuing by coal bed methane (CBM) to LNG projects.
by both conventional reserves andto turn away more cargoes and increasingly rely on domestic
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
 less LNG because several economies were experiencing sluggish growth. However, Mother
 4.1. OVERVIEW
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 At the end of 2011, global liquefaction capacity stood at 278.7 MTPA from 96 trains in 18 countries.
 Two tragic earthquake which hit expected onstream in could be considered a LNG in Australia
 The more liquefaction projects are Japan in March 20112012: the 4.3 MTPA Pluto“game changer”
 and the LNG industry. LNG T1 in Angola. The Angolan project, which is municipalities/local
 for the 5.2 MTPA Angola The consequence which caused the Japanesethe country’s first, will
 bring the number of countries with liquefaction capacity powered power plants which led to the
 authorities to temporarily shutdown all the 54 nuclearto 19. Five countries have commissioned
 greenfield LNG to rely since 2006: its energy vacuum. As a Peru, Russia demand for LNG
 country having projectson LNG to fill Equatorial Guinea, Norway,result, Japan’sand Yemen; whilst
 another six countries have expanded existing liquefaction capacity, namely: Australia, Indonesia,
 jumped by almost 12% to about 79 MT.
 Malaysia, Nigeria, Oman and Qatar. Though net liquefaction capacity continues to grow, several
 plants have the decommissioned for the environment and a move seen to avert any serious
 Meanwhile, beengrowing concern or discussed decommissioning in recent years, though this has
 only a from another on global liquefaction capacity: need to enhance energy security, had led
 impactmarginal impactoil price hike, coupled with thethe Arun LNG in Indonesia, and Arzew/Skikda
 LNG project in Algeria. Meanwhile, although LNG importers, as well as increase their
 to several countries to enter the league of ConocoPhillips and Marathon are considering
 consumption of LNG. LNG in Alaska, the project remains onstream and, as ConocoPhillips bought
 decommissioning Kenai
 Marathon’s stake, could seek to extend its export license after it expires in 2013.
 The large incremental demand across the globe practically mopped up all the increased
  TABLE 6: churned by Qatar, as STATUS 2011, turned
 cargoes LIQUEFACTION CAPACITY BYwell as, thoseMTPA away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
                                       Atlantic-
     Country
                                    with 25 countries East      Pacific  Global Total
 the world’s total LNG trade, and Mediterranean Middleactively involved. The unexpected tight
       market led to
 LNGDecommissioned its prices shooting up to between $16 and $17/mmBtu towards the end of
                                           0.9                    8.3        9.2
 2011.
     Existing                             77.8      100.3        100.6      278.7
      Under Construction*               14.4                    69.6         84.0
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
                                                                             44.9
      Pre-FEED
 in 2009 and 2010, also experienced 12.3             3.2        29.4
                                        a sharp rise, and vessel availability became a major
      In FEED                           20.9                    38.0         58.9
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
                                                                             68.7
      FEED Completed
 conventional sized ships instead of the55.6                    13.1
                                         Qmax/Qflex to serve more widespread LNG markets.
      Proposed without Announced Progress   101.8          7.0          160.4          269.1
 On the supply side, 2011 saw a large number 110.5
      Total                                   283.6          of new LNG project sanctions, mostly in
                                                                            419.4        813.5
    *Note: “Under as these does not include moving forward, the industry construction in Iran.
 Australia. ButConstruction” projects start the 10.8 MTPA announced to be under was also beginning to get a
    Sources: PFC Energy, frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 glimpse of the new Company Announcements
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 4.2. GLOBAL LIQUEFACTION CAPACITY
 Agreements signed by the Sabine MTPA at the end of
 Global liquefaction capacity of 278.7 Pass LNG project. 2011 marks 52% growth in capacity since
 2006. With 84 MTPA of liquefaction capacity under construction, global capacity is expected to
 increase to 334.9 MTPA by 2016 (however, not all of the capacity under construction are expected to
 come onstream by 2016). The speed of growth accelerated over the five year period from 2006 to
 2010 (when CAGR was 10.7%) as compared to the five year period from 2001 to 2006 (when CAGR
           400                                                                                  100%
      350                                                                                       90%
                                                                                                80%
      300
                                                                                                70%
      250                                        t Axis)
                   Global Nameplate Capacity (LefPage 21                                        60%
               IGU World LNG Report - 2011 І Page 4
               IGU World LNG Report - 2011             21
    MTPA


      200          % of Nameplate CapacityUtilised (Right Axis)                                 50%
                                                                                                40%
    MessageThis trend slowed in 2011, with growth at only 2.9%, as the last of the Qatari projects
       5.6%). from the President of International Gas Union
1.was 150
                                                                                                30%
  came onstream. Very few projects are announced to come onstream in 2012-2014, leaving
      100
                                                                                                20%
  expectations for a continued slowing in the growth rate before many of the Australian projects now
        IGU
  Dear50 members                                                                                10%
  under construction come onstream in the middle of the decade.
  I am indeed honoured to present to you the second IGU World LNG Report for 2011.
         0                                                                                      0%
                 1990


                        1992


                                 1994


                                         1996


                                                  1998


                                                           2000




                                                                            2004


                                                                                     2006
                                                                   2002




                                                                                             2008


                                                                                                      2010


                                                                                                               2012


                                                                                                                       2014


                                                                                                                                2016
    FIGURE 12: GLOBAL LIQUEFACTION CAPACITY BUILD-OUT, 1990 - 2016 3
    Last year, the world experienced some very interesting events, which led to some very
                                                                                      22% in
    intriguing outcomes. After experiencing a very strong growth in demand of Forecast 2010, the
    Sources: PFC Energy, Company Announcements
         400
    LNG market was poised to experience a glut situation in 2011 with Qatar producing at its      100%
    Liquefaction technology 77 MTPA over time, United States, trains: used to be a significant
    maximum capacity of has evolved whilst theallowing for larger which the world’s first liquefaction
         350                                                                                      90%
                                                            brought onstream in 1964 with a domestic
    plant in Arzew, Algeria (since decommissioned) wascargoes and increasingly rely on nameplate
    importer of LNG, continuing to turn away more                                                 80%
         300
    capacity of 0.85 MTPA. In contrast, the six Qatari mega trains (the last of which came onstream in
                                                                                                  70%
    unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
         250           employ Air Products (Lef t AP-X liquefaction technology, giving them each a
    February 2012) Global Nameplate CapacityAPCI Axis)                                            60%
                           several economies this technology       sluggish growth. However, Mother
    less LNG becauseof 7.8 MTPA. Though were experiencing not been used elsewhere, the average
    MTPA




    nameplate capacity Nameplate CapacityUtilised (Right Axis) has
         200          % of                                                                        50%
    Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
    nameplate capacity of trains brought onstream from 2006-2011 has grown tremendously when
           150                                                                                                                         40%
    The tragic earthquake earliest projects. March train could the last five years was changer”
    compared to the world’swhich hit Japan inAverage 2011 size in be considered a “game4.9 MTPA,
                                                                                            30%
    which includes the large-scale AP-X technology and its smaller Japanese municipalities/local
    for the LNG industry. The consequence which caused the sister technology, Air Product’s
        100
                                                                                            20%
    C3MR/SplitMR™ technology.
    authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
         50                                                                                                                            10%
                                                                                             LNG
    country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for 0%
          0
    jumped by almost 12% to about 79 MT.
                 1990


                        1992


                                 1994


                                         1996


                                                  1998


                                                           2000




                                                                            2004


                                                                                     2006
                                                                   2002




                                                                                             2008


                                                                                                      2010


                                                                                                               2012


                                                                                                                       2014


                                                                                                                                2016
    Meanwhile, the growing concern for the environment and a move seen to avert any serious
    Sources: PFC Energy, Company Announcements
    impact from another oil price hike, coupled with the need to enhance energy security, had led
    Liquefaction countries to evolved over time, of LNG larger trains: well as increase their
    to several technology hasenter the league allowing forimporters, asthe world’s first liquefaction
    plant in Arzew, LNG.
    consumption of Algeria (since decommissioned) was brought onstream in 1964 with a nameplate
    capacity of 0.85 MTPA. In contrast, the six Qatari mega trains (the last of which came onstream in
    February incremental Air Products APCI globe practically mopped giving them each a
    The large2012) employ demand across theAP-X liquefaction technology,up all the increased
    nameplate capacity of 7.8 MTPA. Though this turned away not been used elsewhere, the average
    cargoes churned by Qatar, as well as thosetechnology has by the United States. It is therefore
    nameplate capacity of world’s LNG onstream increased by 32%            reach 62 MT, or 26% of
    not surprising that the trains brought spot trade from 2006-2011 hastogrown tremendously when
    the world’s the LNG earliest projects. Average train size in the last five years was 4.9 MTPA,
    compared to total world’strade, and with 25 countries actively involved. The unexpected tight
    which includes the its prices AP-X technology and $16 and sister technology, Air Product’s
    LNG market led to large-scaleshooting up to betweenits smaller $17/mmBtu towards the end of
    C3MR/SplitMR™ technology.
    2011.
3
    In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 Forecast for LNG capacity to 2016 are calculated based on company-announced start dates for sanctioned projects only. As of April 2012, all
  in 2009 and project had already begin construction. sharp rise, and vessel availability became a major
sanctioned liquefaction 2010, also experienced a Planned decommissioning of plants in Algeria and Indonesia are also included.
    concern in the latter part of 2011. This is further exacerbated by the need for more of the
    conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
    On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
    Australia. But as these projects start moving forward, the industry was also beginning to get a
    glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
    position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
    North America started to move forward more aggressively, aided by several Sales Purchase
    Agreements signed by the Sabine Pass LNG project.



3
 Forecast for LNG capacity to 2016 are calculated based on company-announced start dates for sanctioned projects only. As of April 2012, all
sanctioned liquefaction project had already begin construction. Planned decommissioning of plants in Algeria and Indonesia are also included.
                   IGU World LNG Report - 2011 І Page 22
                   IGU World LNG Report - 2011 Page 4 22
                                            IGU World LNG Report - 2011 І Page 22
    Message from the President of International APACITY, 1964-2011
1.FIGURE 13: NUMBER OF TRAINS COMMISSIONED VS. AVERAGE TRAIN CGas Union
                            FIGURE 13: NUMBER OF TRAINS COMMISSIONED VS. AVERAGE TRAIN CAPACITY, 1964-2011
          6                                                                                           30
 Dear IGU members Capacity of 6
               Average            Trains Commissioned
       5                                   Average Capacity of Trains Commissioned                    25
               No. of New to present to you During the Period World LNG
 I am indeed honoured Trains Commissionedthe second IGU (right axis) Report for 2011.
                                  5
                                           No. of New Trains Commissioned During the Period (right axis)
 Last 4year, the world experienced some very interesting events, which led to some very               20




                                                                                                     No. of Trains
                                  4
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
  MTPA




       3                                                                                              15
                               MTPA

 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
                                  3
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
       2                                                                                              10
 importer of LNG, continuing to   2 turn away more cargoes and increasingly rely on domestic
       1
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume                5
                                  1
 less LNG because several economies were experiencing sluggish growth. However, Mother
       0                                                                                              0
 Nature again proved us wrong, and 1981- saying goes “nature works in mysterious ways”!
            1964-     1971-       0
                               1976-     as the 1986-         1991-     1996-    2001-     2006-
                                       1964-      1971-     1976-     1981-    1986-     1991-      1996- 2001-
             earthquake which hit Japan in March 20111995 1985
 The tragic 1970       1975    1980       1985
                                        1970
                                                     1990
                                                   1975      1980
                                                                        2000     2005
                                                                               1990
                                                                                           2011
                                                                could be considered a “game changer” 2005
                                                                                         1995       2000
 for the LNG industry.
 Source: PFC Energy        The consequence which caused the Japanese municipalities/local
                               Source: PFC Energy
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 4.3. LIQUEFACTION rely on LNG OUNTRY
 country having to CAPACITY BY Cto fill its energy vacuum. As a result, Japan’s demand for LNG
                           4.3. LIQUEFACTION CAPACITY BY COUNTRY
 At the end almost 18 to about 79 liquefaction capacity for exporting LNG. Three countries hold
 jumped by of 2011,12%countries had MT.
                               At the end of 2011, 18 countries had liquefaction capacity for exporting LNG. T
 48% of that capacity: Qatar,
                            concern for the environmentWith the and seenof Algeria, the exception
                                         and Indonesia.          exception             liquefaction
 Meanwhile, the growing 48%Malaysia capacity: Qatar, Malaysia moveIndonesia.avert any serious of
                                of that grown in each ofand a18 countries to With
 capacity has remained constant or                        the                 since 2006 (Algeria
 impact from another oil price hike, coupled with the need to enhance energy security, had led
                           capacity capacity in 2010, representing 4.5% of its capacity
 decommissioned 0.9 MTPA of its has remained constant or grown in each of the 18atcountries s  that
                         todecommissioned greenfield liquefaction projects 2010, representing LNG
                             enter the league MTPA of its capacity in (Equatorial Guinea 4.5%
 to several countries countries brought on0.9 of LNG importers, as well as increase their of
 time). Since 2006, five
 consumption of LNG. time). Since 2006, five countries brought and greenfield )liquefaction projects (Equ
 T1, Snøhvit LNG in Norway, Yemen LNG, Sakhalin 2 T1-2 in Russia on Peru LNG .
                               T1, Snøhvit LNG in Norway, Yemen LNG, Sakhalin 2 T1-2 in Russia and Peru LN
 The large incremental demand across the globe practically mopped up all the increased
 TABLE 7: LIQUEFACTION CAPACITY BY COUNTRY, 2011
                           TABLE well as those turned away by the United States. It is therefore
 cargoes churned by Qatar, as7: LIQUEFACTION CAPACITY BY COUNTRY, 2011
     Country             MTPA
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
                               Country           MTPA
     Qatar                77.0
                                and
 the world’s total LNG trade, Qatar with 25 countries actively involved. The unexpected tight
                                                  77.0
     Indonesia            34.1
                               shooting
 LNG market led to its prices Indonesia up to between $16 and $17/mmBtu towards the end of
                                                  34.1
     Malaysia             25.0
 2011.
     Nigeria              21.9 Malaysia           25.0
      Australia          19.9         Nigeria           21.9
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
                               Australia             19.9
      Algeria
 in 2009 and 2010, also18.4 Algeria
                           experienced a sharp rise, and vessel availability became a major
                                                     18.4
      Trinidad           15.5
                                2011.
 concern in the latter part of Trinidad This is further exacerbated by the need for more of the
      Egypt              12.2                        15.5
                          instead
 conventional sized ships10.8 Egyptof the Qmax/Qflex to serve more widespread LNG markets.
      Oman                                           12.2
     Russia               9.6         Oman              10.8
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
     Brunei               7.2 Russia               9.6
 Australia. But as these projects start moving forward, the industry was also beginning to get a
                              Brunei               7.2
     Yemen                6.7
                                                    the
 glimpse of the new frontiers. Eastern Africa and6.7 Eastern Mediterranean buttressed their
     UAE                  5.8 Yemen
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
     Norway               4.5 UAE                  5.8
                           move forward more aggressively, aided by several Sales Purchase
 North America started to4.5
     Peru                     Norway               4.5
     Equatorial signed
 Agreements Guinea by the Sabine Pass LNG project.
                          3.7 Peru                 4.5
         US                    1.3  Equatorial Guinea   3.7
         Libya                 0.7  US                  1.3
                                    Libya               0.7
         Total Capacity        278.7
 Source: PFC Energy                 Total Capacity      278.7
                               Source: PFC Energy
                       IGU World LNG Report - 2011 Page 234
                       IGU World LNG Report - 2011 І Page 23

    Message from the President of , 2011
1.FIGURE 14: LIQUEFACTION CAPACITY BY COUNTRYInternational Gas Union
                                                                                           Trinidad,
 Dear IGU members
              Australia,                                                                      6%
                                                         Algeria
                   7%
                                            second
 I am indeed honoured to present to you the Egypt, 4%IGU World LNG Report for 2011.
                          7%
                      Nigeria,
 Last year, the world experienced some very interesting events, which led to some very
                8%
                                            Oman, 4%
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
         Malaysia,
            9%
                                                situation
 LNG market was poised to experience a glutRussia, 3% in 2011 with Qatar producing at its
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
                                              Brunei, 3%
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
        Indonesia,
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
           12%                                Yemen, 2%
                                               UAE, 2%
 less LNG because several economies were experiencing sluggish growth. However, Mother
                                             Norway, 2%
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                                    Qatar, 27%                                         Peru, 2%
 The tragic earthquake which                                     considered a “game changer”
                                                                     hit Japan in March 2011 could be
                                                                                        Equatorial
 for the LNG industry. The                                                             Guinea, 1%
                                                                 Japanese municipalities/local
                                                                     consequence which caused the
                                                                        Libya, 0% US, 1%
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 Source: PFC Energy
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped by almost 12% to about COUNTRY
 FIGURE 15: LIQUEFACTION CAPACITY BY 79 MT. IN 2006 AND 2011
    90
 Meanwhile, the growing concern for the environment and a move seen to avert any225%        serious
                                          2006                                              had
 impact from another oil price hike, coupled with the need to enhance energy security,200% led
    80
 to several countries to enter the league of LNG importers, as well as increase their
                                          2011
                                                                                           175%
    70
 consumption of LNG.                      % Growth in Liquefaction Capacity (2006 to 2011)




                                                                                                                                                                                          % Growth in Exports
                                                                                                                                                                                   150%
         60
 The large incremental demand across the globe practically mopped up all the increased
                                                                                     125%
  MTPA




 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
     50
     surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or100% of
 not 40                                                                               26%
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
                                                                                     75%
 LNG 30market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
                                                                                     50%
 2011.
     20                                                                                                                                                                            25%
                                                                                      sluggish
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were 0%
     10
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
      0                                                                               -25%
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
                                                                                          Egypt




                                                                                                                                                                           Libya
                                    Malaysia




                                                                                                         Russia
              Qatar




                                                                     Algeria




                                                                                                                                                                      US
                        Indonesia




                                                         Australia
                                               Nigeria




                                                                                                                                                  Peru
                                                                                                  Oman




                                                                                                                           Yemen

                                                                                                                                   UAE

                                                                                                                                         Norway



                                                                                                                                                         Eq. Guinea
                                                                                                                  Brunei
                                                                               Trinidad




 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 Source: PFC Energy
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 Several as possible LNG exporters be decommissioned in the coming five years. Kenai LNG,
 position LNG trains are scheduled to as recent discoveries reflect the regions’ export potential.
 originally due offline in 2011, is now expected to aggressively, aided 2012, though ConocoPhillips
 North America started to move forward more be decommissioned in by several Sales Purchase
 (and former partner Marathon) backed off LNG project.
 Agreements signed by the Sabine Passfrom previous firm plans to do so in the past. If the train is
 taken offline, the United States will not have commercial liquefaction capacity until the planned Sabine
 Pass LNG plants come onstream in the U.S. Gulf of Mexico. Indonesia's Arun LNG continued
 decommissioning trains and Arzew/Skikda took its oldest three trains offline in late 2010 due to the
 age of the plants.
               IGU World LNG Report - 2011 І Page 24
               IGU World LNG Report - 2011 Page 4 24

   Message from the President of International Gas MTPA)
1.Qatar's six mega trains (each with liquefaction capacity of 7.8Union have all come onstream
 between 2006 and 2011 - marking the largest growth over a five year period for any LNG
 producer. The country achieved its liquefaction capacity target of 77 MTPA with the start of Qatargas
 Dear IGU members
 IV in February 2011, but has few opportunities for domestic expansion, given the ongoing moratorium
 I am indeed honouredfrom the North you the second IGU study the effects of development on the
 on new developments to present to Field as the Qataris World LNG Report for 2011.
 Last Field. Qatar has experienced some very interesting events, which led to some very
 North year, the world mentioned debottlenecking the existing mega trains, but this remains uncertain
 at this stage.
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
 As Qatari capacity has reached its target, Australia is expected to be the source of new liquefaction
               total of of 77 MTPA whilst the United currently under construction a significant
 maximumAcapacity 61 MTPA of liquefaction capacity is States, which used to be there with an
 capacity.
 additional of LNG, continuing to proposed more cargoes of FEED (Front End Engineering and
 importer of about 93 MTPA beingturn awayor in some stage and increasingly rely on domestic
 Design). Beyond Australia, a its energy needs. Moreover, Europe was expected to consume
 unconventional gas to meet number of new large-scale projects were proposed in 2011 that are
 expected because several to global liquefaction capacity, sluggish LNG projects in the United
 less LNGto add significantly economies were experiencing including growth. However, Mother
 States, again proved us wrong, and as the saying 28.3 MTPA works in mysterious had been
 Nature Western Canada and Mozambique. Althoughgoes “natureof liquefaction capacityways”!
 proposed in Nigeria, none of the partners in those projects have taken a final investment decision and
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 have not announced plans to move most of these projects forward in the near term (Brass LNG is the
 one exception industry.
 for the LNG that appearsThe consequence which caused the Japanese municipalities/local
                            to be moving forward, however slowly).
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 Beyond the 84 MTPA of LNG to fill capacity vacuum. As result, Japan’s demand for LNG
 country having to rely on liquefaction its energycurrently underaconstruction around the world, an
 jumped by almost 12% to about 79 MT.
 additional 172.5 MTPA of liquefaction capacity has either completed FEED or is currently undergoing
 Meanwhile, further 269 concern for the environment and move seen to avert any serious
 FEED, and a the growingMTPA of capacity has been proposed.a A number of projects were in some
 form of FEED in Russia and the United States in 2011, with those two countries accounting for almost
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 38% of the total during the year. Australia, Canada and Nigeria rounded out this group.
 to several countries to enter the league of LNG importers, as well as increase their
 consumption of LIQUEFACTION CAPACITY BY STATUS AS OF Q1 2012
 FIGURE 16: FUTURE LNG.
 The large incremental demand across the globe practically mopped up all the increased
     175
                                              turned away by the United States. It is therefore
 cargoes churned by Qatar, as well as thoseMiddle East
              Pacif ic Atlantic-Mediterranean
     150
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
      world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 the 125
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
     100
 2011.
  MTPA




      75
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
      50
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
      25
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
         0
 On the supply side, 2011 saw a large number of /new LNG project sanctions, mostly in
                 Under Construction       FEED Completed In FEED             Proposed
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the
 Source: PFC Energynew frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 4.4. L America started to move forward more aggressively, aided by several Sales Purchase
 NorthIQUEFACTION CAPACITY BY REGION
 Agreements signed by the Sabine Pass LNG project.
 The Pacific Basin continues to dominate the LNG export business, with 38% of 2011 liquefaction
 capacity located there and the majority of capacity expected onstream by 2016. The Qatari projects
 have led to a significant rise in liquefaction capacity in the Middle East, but with little room for growth,
               IGU World expected to remain flat in the
 capacity in the region isLNG Report - 2011 І Page 25 medium term. Though the Atlantic Basin has
 seen slow growth, 101.3 MTPA of capacity has been proposed or is in some stage of FEED in the US
 Gulf of Mexico. Still, it is unlikely all of these projects will move forward.

 Though Australian capacity is expected to eclipse the rest of the world in the medium term, a number
 of other Pacific Basin projects – including those in Canada, Russia and Mozambique – have the
               IGU World LNG Report - 2011 І Page 25

               IGU World LNG Report - 2011        Page 25
                                                       4
 Gulf of Mexico. Still, it is unlikely all of these projects will move forward.

   Message from the President to International the Union
1.Though Australian capacity is expectedof eclipse the rest ofGasworld in the medium term, a number
 of other Pacific Basin projects – including those in Canada, Russia and Mozambique – have the
 potential to add significant liquefaction capacity in the Asia-Pacific region in the long term as well.
 Dear IGU members
 I am 8: LIQUEFACTION CAPACITY BY B to IN 2006, second IGU MTPA
 TABLEindeed honoured to presentASINyou the 2011 AND 2016,World LNG Report for 2011.
                                                            % events, which led
 Last year, the world experienced some very interesting Growth % Growth to some very
                                                  2016
       Basin                 2006      2011                 2006-2011  2011-2016
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                                              (Anticipated)
                                                             (Actual) (Anticipated)
        market was poised to experience a glut situation in 18% with 8.4% producing at its
 LNGAtlantic-Mediterranean   65.8      77.8       84.3          2011       Qatar
       Middle capacity of 77 41.7
 maximumEast                  MTPA whilst the United States, which used to be a significant
                                       100.3     100.3        140%         0%
                                       away
 importer of LNG, continuing to turn 100.6 more cargoes and increasingly rely on domestic
       Pacific               75.6                150.3         33%        49%
                                                 Moreover, Europe was expected to consume
 unconventional gas to meet its energy needs. 334.9
       Total Capacity        183.1     278.7                   52%        20%
               because several economies were experiencing sluggish growth. However, Mother
 less LNG Energy
 Source: PFC
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 FIGURE 17: LIQUEFACTION CAPACITY BY BASIN IN 2006, 2011 AND 2016
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
     160                                                                            2016 (est.)
 for the LNG industry. The consequence which caused the Japanese municipalities/local
     140
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
     120
                                                    2011 2016 (est.)           2011
 jumped by almost 12% to about 79 MT.
     100                       2016 (est.)
                        2011                                         2006
  MTPA




 Meanwhile, the growing concern for the environment and a move seen to avert any serious
     80      2006
 impact from another oil price hike, coupled with the need to enhance energy security, had led
     60
                                          2006
 to several countries to enter the league of LNG importers, as well as increase their
     40
 consumption of LNG.
         20
 The large incremental demand across the globe practically mopped up all the increased
       0
                                                     away                       It
 cargoes churned by Qatar, as well as those turned East by the United States. ic is therefore
                Atlantic-Mediterranean        Middle                      Pacif
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 Sources: PFC Energy, Company Announcements
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 4.5. LIQUEFACTION PROCESSES
 2011.
 Seven primary liquefaction technologies were employed at the end of 2011 with a few other
 technologies used sporadically on world’s by project basis. Air Products’ four LNG processes and
 In tandem with the growth in thea project LNG trade, tanker charter rates, which were sluggish
 ConocoPhillips’ Optimized experienced a sharp rise, most widely used technologies, present on
 in 2009 and 2010, also Cascade® technology are the and vessel availability became a major
 concern in the latter part of 2011.
 94% of global LNG nameplate capacity.This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 Air Products' APC C3MR technology was the most heavily used, accounting for 66% of global
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 nameplate liquefaction capacity. Its sister technology, APC AP-X was used in another 17% of
            But which is projects Qatar. Given the nature of industry was technology as reliable
 Australia. all of as theselocated in start moving forward, the the APC C MRalso beginningato get a
 capacity -                                                              3
 and large-scale, but not massive liquefaction technology, Eastern Mediterranean buttressed their
 glimpse of the new frontiers. Eastern Africa and the new projects continue to announce plans to
 use the as possible LNG exporters as have announced plans to the regions’ AP-X potential.
 position technology. No project partners recent discoveries reflect use the APC exportmega train
 North America started to move forward more aggressively, aided by several Sales Purchase
 technology outside Qatar.
 Agreements signed by the Sabine Pass LNG project.
              IGU IGU World LNG -Report Page 26
              IGU World LNG Report - 2011 І Page 4
                  World LNG Report 2011     - 2011
                                                 26   І Page 26

   IGURE 18: LIQUEFACTION CAPACITY BY TYPE OF International Gas Union
    Message from the President BY ECHNOLOGY 2011
1.FFIGURE 18: LIQUEFACTION CAPACITYof TTYPE OF T,ECHNOLOGY, 2011
                             IGU World LNG Report - 2011 І Page 26
            APC Split MR
                IGU World
               APC Split LNG Report - 2011 І Page 26
 Dear IGU members MR APC
               0.25%
               FIGURE 18: LIQUEFACTION CAPACITY BY TYPE OF TECHNOLOGY, 2011
                    0.25%
 I am indeed honoured to SplitMR™ YPE APC second IGU
                                C3MR/Split
                                            OF the
 FIGURE 18: LIQUEFACTION APC presentTto youTECHNOLOGY, 2011 World LNG Report for 2011.
                          CAPACITY MR
                                   BY
                                       C3MR/Split
                                             APC AP-X
                             0.25%14%      some
 Last year, the world experienced MR™ very interesting events, which led to some very
            APC Split MR                          APC
                                                17%
               0.25%                                   APC AP-X
                                              C3MR/Split strong growth in demand of 22% in 2010, the
 intriguing outcomes. After experiencing a very
                                  APC       14%
                                                  MR™      17%AP-X
 LNG market was poised to3MR/Split
                                C experience a glut situation in 2011 with Qatar producing at its
                                                          APC ConocoPhillips
                                  MR™             14%
                                             APC the         17% Optimized
 maximum capacity of 77 MTPA whilst AP-X United States, which used to be a significant
                                  14%                             Cascade
                           APC C3 to                                          ConocoPhillips
 importer of LNG, continuingMR turn away more cargoes and increasingly rely on domestic
                                                17%
                                                                    11%
                              52%
 unconventional gas to meet its energy needs. Moreover,MFC                       Optimized
                                                                            ConocoPhillips
                                                                      Europe was expected to consume
                                                               Linde
                                                               ConocoPhillips Optimized
                                                                                  Cascade
                                                                                growth.
 less LNG because several economies were experiencing sluggish Cascade However, Mother
                                  APC C3MR MR                      2%
                                                                 Optimized           11%
                                        APC the
 Nature again proved us wrong, and as C3 saying goes “nature works 11%
                                     52% 52% Others Shell DMR     Cascade          in mysterious ways”!
                           APC C3MR                               3%11%       Linde MFC
                                                                             Linde MFC
                                                      1%
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
                              52%
 Source: PFC Energy                                            Linde MFC         2%2%
 for the LNG industry. The consequence which caused the Japanese municipalities/local
                                                                   2%       Shell DMR
                                                                             Shell plants
 authorities to temporarily shutdown all several nuclear Others power DMR Refrigerant (DMR)
                                                                  Others
 New processes are being employed at            the 54 projects.powered Dual Mixed which led to the
                                                              Shell Shell’s
                                                                    1%
                                                                    DMR         3%
                                                     Others                       3%
 country having to rely Energy
 process is being used at
               Source: PFC    LNG to LNG energy vacuum. 1% technology is used for the LNG
                                                                   As
                           onSakhalin fill its in Russia, APCI’s 3% a result, Japan’s demand forQatari
                                                      1%           AP-X
 jumped by almost 12% to about 79 MT.
  Source: PFC Energy
 mega-trains, and
 Source: PFC Energy the Linde Mixed Fluid Cascade    (MFC) process is in use at Snøhvit LNG in Norway.
               New processes are being employed at several projects. Shell’s Dual Mixed Refrigerant
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 New processes are being which employed at in in Russia, APCI’s AP-X technology is used for
  New processes is being used at at severalLNG need to enhance Mixed Refrigeranthad led
                               employed Sakhalin projects.
 The Snøhvitprocessplant, being came onstream several Shell’s a new process developed by the
                another areand the Linde Mixed with Cascade projects. energy security,
 impact frommega-trains, price hike, coupled Fluid the 2007,(MFC) processShell’s Dual Mixed Refri
                                                                    uses Dual
                 LNG                                                                               (DMR)
                         oil
 process is being Mixedat Sakhalin LNG in LNG APCI’s AP-X three refrigeration atfor in Qatari
                            Fluid Cascade (MFC) process comprises technology is used Snøhvit LNGused
                                                                                 is in
 Linde/Statoil. The used used at Sakhalin Russia, in Russia, APCI’s AP-Xusecyclesthe series. in Nor
  process countries            enter the league of LNG importers, as well as increase is
 to several is being to Mixed Fluid Cascade (MFC) process is in use at Snøhvit technology their
 mega-trains, and the Linde                                                               of in Norway.
 Novel project features include all electrically-driven compressors and direct useLNG seawater for
  mega-trains, and the Lindeplant,feedgas is removed and re-injected uses in new process develop
               The Snøhvit LNG the which came onstream in process is a use
 consumption of dioxide present inMixed Fluid Cascade (MFC) 2007,underground. at Snøhvit LNG
 cooling. Carbon LNG.
 The large incremental The Mixed Fluid Cascade (MFC) process comprisesup all the increased
                 LNG plant, which across the globe practically a new three developed by
 The SnøhvitLinde/Statoil. demandcame onstream in 2007, uses mopped processrefrigeration cycles in
 Linde/Statoil.Novel LNG plant, were the first to employ the APCI compressors and at the two-train,
 ExxonMobil and QatarQatar, Cascade (MFC) turned away by in AP-X technology aIt is in series.
  The Snøhvit by Petroleum whichthose electrically-driven three refrigeration direct use of
                The project features as came onstream                      United uses        new process
 cargoes churnedMixed Fluid as wellinclude allprocess comprisesthe 2007, States.cycles thereforeseawa
               cooling.                          in the feedgas is              re-injected
 15.6 MTPA Qatargas Carbon dioxide presenttrade increased removed and 7.8 MTPA underground.
 not surprising features Mixed Fluid same design(MFC) process andthereach 62 ofmega-trainsfor
 Novel project that the project. all electrically-driven compressors all todirect use MT,refrigeration cy
  Linde/Statoil. TheII include The Cascade was repeated for comprises threeseawater of
                            world’s LNG spot                        by 32%                     or 26% in
 cooling. Carbon dioxide present 3 and Qatargas III and IV. A nitrogen sub-cooling loop
 Qatar: RasGas III, Trains 2 andin the feedgas is removed and re-injected underground. is added to
  Novel project LNG and Qatar Petroleumcountries actively compressors and direct at
               total features and with 25
 the world’s ExxonMobil trade,include all electrically-driveninvolved. The unexpected tightthe tw      use of
                                                   same sized to employ the APCI first technology
 the C3MR process to increase capacity for the were the firstMCHE. It is also the AP-Xapplication of a
  cooling. gas turbine as a mechanical driver to same $16 APCI $17/mmBtu towards7.8 MTPA of
                led to its Qatargas II project. to feedgas is and
                                   shooting up The
 LNG market15.6 MTPAprices present in the betweendesign was repeated re-injected underground   the end mega-tr
 GE Frame 9 and Qatar Petroleum were the first for employ the removed and for all the the two-train,
 ExxonMobil Carbon dioxide                                               AP-X technology at
                                                       the refrigerant compressors.
 2011.         Qatar: RasGas III, The same design was repeated for IV. A nitrogen sub-cooling loop
 15.6 MTPA Qatargas II project. Trains 2 and 3 and Qatargas III andall the 7.8 MTPA mega-trains in is ad
 Qatar: RasGas theTrains 2 and (DMR) process thefor IV. same sized MCHE.which in Russia. This
 The Shell Dual Mixed Qatar Petroleum were trade, used nitrogen rates, It AP-X added to
               the and growth in theincrease capacitybeingtankerin the Sakhalin projectloop istechnology a
 In tandem with III,MR process to3 and Qatargas is andthetoAemploy the APCIis also the first applicatio
  ExxonMobil C3 Refrigerant world’s LNG III first                    charter sub-cooling were sluggish
 novel 3process usesto also experienced The same driverand the process iscompressors. process
     C MR process two9Mixedproject. a acycles in series forvessel repeated first application MTPA
               GE Frame gas capacity
 the2009 and 2010, increaseturbine as formechanicalsized MCHE. refrigerant the for all thea7.8of a
  15.6 MTPA Qatargas II
 in                                Refrigerant the same design wasIt is also air cooled for major
                                                sharp rise, and the availability became
 and Frame 9 gas latter as mechanical driver furtherrefrigerant
 GE environmental reasons. It is This is for the exacerbated by the need for more of the
 concern in the turbinepartaof 2011. sufficiently Qatargas III compressors. nitrogen sub-cooling loo
                                     2 and and
                                                       flexible to support the wide range of ambient
                                                                       and is A
  Qatar: RasGas III, Trainssub-arctic3environment. Train capacityIV.4.8 the Sakhalin project in Russia
 temperaturesThe Shell Dual Mixed Refrigerant (DMR) process is being used inMTPA.
                experienced in the
                 sized ships increase the Qmax/Qflex cycles             sized MCHE. LNG markets.
 conventional process to instead ofMixed Refrigerant to serve more widespread It is is air cooled for a
  the C3MRnovel process uses (DMR) process for the same series and the process also This
 The Shell Dual Mixed Refrigerant two capacity is being used in the Sakhalin project in Russia. the first p
 novel Frame 9 side, 2011 asreasons. cycles in series for flexibleproject sanctions, for process
  GE process uses two Mixed Refrigerant It is driver and LNG to supportcooled wide range
                                         mechanical sufficiently the process is air the mostly
 On the supply gas turbine sawaa large number of new the refrigerant compressors. in of a
               and environmental
 and environmental reasons. It is moving forward, to support the also range MTPA.
               temperatures experiencedsufficiently flexible the industry wascapacity is 4.8of to get a
 Australia. But as these projects start in the sub-arctic environment. Train wide beginning ambient
 temperatures experienced in the sub-arctic environment. Eastern Mediterranean
 glimpse of the new frontiers. Eastern Africa and theTrain capacity is 4.8 MTPA.buttressed their
  The Shell Dual Mixed Refrigerant (DMR) process is being used in the Sakhalin project in
  novel as possible LNG exporters Refrigerant cycles reflect the regions’ process is air
 position process uses two Mixed as recent discoveries in series and the export potential. coole
 North America started to move forward more aggressively, aided by several Sales Purchase
  and environmental reasons. It is sufficiently flexible to support the wide rang
 Agreements signed by the Sabine Pass LNG project.
  temperatures experienced in the sub-arctic environment. Train capacity is 4.8 MTPA.
               IGU World LNG Report - 2011 І Page 27
               IGU World LNG Report - 2011 Page 4 27

    Message from the President OF International Gas
1.FIGURE 19: LIQUEFACTION CAPACITY BY TYPEof TECHNOLOGY, 2001-2011 Union
         300                                                                       Other
 Dear IGU members
         250                                                                       Shell DMR
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
                                                                                   Linde MFC
 Last year, the world experienced some very interesting events, which led to some very
     200
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
                                                                         ConocoPhillips
  MTPA




     150                                                                 Optimized Cascade its
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at
                                                                         APC AP-X
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
     100
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                                                                         APC C3MR/Split
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
                                                                         MR
      50
 less LNG because several economies were experiencing sluggish growth.APC Split MR Mother
                                                                           However,
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                                                                         APC C3MR
           0
           2001 2002 2003 2004     Japan in 2007 2011 could be 2011
 The tragic earthquake which hit2005 2006 March 2008 2009 2010 considered a “game changer”
 Source: PFC Energy
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 4.6. FLOATING L to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 country havingIQUEFACTION
 jumped by almost 12% to about 79 MT. 2011 with Shell taking a final investment decision on its
 Floating liquefaction moved forward in May
 Prelude LNG project (INPEX joined for the environment and The 3.6 seen plant, proposed to be
 Meanwhile, the growing concern the project in March 2012). a move MTPA to avert any serious
 sited over the Prelude field off
                                  hike, coupled with Australia, is the first floating liquefaction (FLNG)
 impact from another oil price the coast of Westernthe need to enhance energy security, had led
 project to reach a final investment decision (FID). Meanwhile, PETRONAS has also reached FID for
 to several countries to enter the league of LNG importers, as well as increase their
 its proposed FLNG project off Sarawak, Malaysia and is now considering a second floating
 consumption of LNG.
 liquefaction train; the Santos Basin project in Brazil awarded a FEED contract; and the Tamar LNG
 (Israel) and incremental demand across the globe pre-FEED mopped 2011.
 The large Bonaparte LNG (Australia) partners awardedpractically contracts inup all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 Floating liquefaction the world’s discussed trade increased by 32% for 14 other MT, or
 not surprising that is also being LNG spot as the development conceptto reach 62 projects. 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 FIGURE 20: FLOATING LIQUEFACTION CAPACITY (PROPOSED AND UNDER CONSTRUCTION), BY COUNTRY
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.                                                 Total: 35.6 MTPA
                                 Iraq Papua
                                the
 In tandem with the growth in 11% world’s LNG trade, tanker charter rates, which were sluggish
                                    New Guinea
                                         a
 in 2009 and 2010, also experienced9% sharp rise, and vessel availability became a major
                                            Brazil
                      Israel of 2011. This is further exacerbated by the need for more of the
 concern in the latter part                  8%
                       14%
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
                                                Indonesia
 On the supply side, 2011 saw a large              7%
                                               number ofnew LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
                                                     Nigeria
 glimpse of the new frontiers. Eastern Africa and the 4%Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
                          Australia                 Malaysia
                                                       3%
 North America started to move forward more aggressively, aided by several Sales Purchase
                            40%
 Agreements signed by the Sabine Pass LNG project.Timor-Leste
                                                          4%

 Source: PFC Energy
              IGU World LNG Report - 2011
              IGU World LNG Report - 2011    Page 28
                                             Page 4
                                                  28

1. Message from
Looking Ahead:        the President of International Gas Union

   Will the LNG industry be able to sanction projects at a rate necessary to keep pace with
 Dear IGU members
    LNG demand growth? Significant liquefaction capacity has been proposed, but how much and
    how fast honoured to capacity you the second will World LNG meeting projected
 I am indeed that proposedpresent tocomes on-stream IGUbe critical to Report for 2011. demand
    growth.
 Last year, the world experienced some very interesting events, which led to some very
     Where will the new wave of projects come from? As Australia’s LNG development the
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010,gets
     underway, the poised to experience        glut next source of LNG growth. producing at its
 LNG market wasindustry is looking aheadaat the situation in 2011 with Qatar There are several
     areas with promising 77 MTPA whilst the United America (United States be a significant
 maximum capacity of export potential, including North States, which used toand Canada), East
     Africa of LNG, continuing to turn away Mediterranean and and Cyprus), and on domestic
 importer (Mozambique and Tanzania), Easternmore cargoes (Israelincreasingly rely Latin America
     (chiefly Brazil). Can meet its energy needs. those locations, at was expected what pace?
 unconventional gas to LNG projects materialise inMoreover, Europewhat cost, and atto consume
     How soon can the LNG market depend on volumes from these countries?
 less LNG because several economies were experiencing sluggish growth. However, Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”! and
     Will floating liquefaction technology unlock a new generation of stranded gas? As Shell
     PETRONAS took Final Investment Decision on their respective FLNG project, a “game changer”
 The tragic earthquake which hit Japan in March 2011 could be considered the world is eagerly
     the LNG other companies that will do which caused also paying close attention to the
 for anticipating industry. The consequence the same, while the Japanese municipalities/local
     progress that these two companies are making. How will floating liquefaction play out? Will it be
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
     competitive? What kind of reserves will it unlock and how soon?
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped by almost 12% to about 79 MT.
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 to several countries to enter the league of LNG importers, as well as increase their
 consumption of LNG.
 The large incremental demand across the globe practically mopped up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
               IGU World LNG Report - 2011 І Page 29
               IGU World LNG Report - 2011 І Page 4
                                                  29

5. Message from the President of
1. Special Report: Emerging LNG Markets International Gas Union
5. Special Report: Emerging LNG Markets

   Dear IGU in aggregate, emerging LNG markets have grown into a sizeable demand centre –
When taken members
When taken in aggregate, emerging LNG markets have grown into a sizeable demand centre –
importing some 11 MT in 2011. This is expected to grow in the coming decade, in spite of the
importing some 11 MT in 2011. This is expected to grow in the coming decade, in spite of the
   I am indeed five years present to you the countries were not considered to be future LNG
fact that even honoured toago many of these second IGU World LNG Report for 2011.
fact that even five years ago many of these countries were not considered to be future LNG
importers.
   Last year, the world experienced some very interesting events, which led to some very
importers.
   intriguing list of emerging LNG importers includes: Argentina, Brazil, Chile, of 22% 2010, the
The current outcomes. After experiencing a very strong growth in demand Thailand,inKuwait and
The current list of emerging LNG importers includes: Argentina, Brazil, Chile, Thailand, Kuwait and
   LNG market was poised Malaysia and a glut situation in capacity that is announced to come
Dubai (United Arab Emirates). to experienceIndonesia are building2011 with Qatar producing at its
Dubai (United Arab Emirates). Malaysia and Indonesia are building capacity that is announced to come
   maximum capacity of 77 MTPA have the United States, which used to 2013 significant
onstream in 2012; Singapore and Israelwhilst announced capacity coming onstream in be a and Poland
onstream in 2012; Singapore and Israel have announced capacity coming onstream in 2013 and Poland
    2014. Beyond these countries where away more cargoes and increasingly rely on domestic
in importer of LNG, continuing to turnterminals are already under construction, another 30 markets
in 2014. Beyond these countries where terminals are already under construction, another 30 markets
have proposed plans to build import terminals for a proposed regasification capacity of about 85 MTPA
   unconventional gas build import terminals for a Moreover, Europe was expected to 85 MTPA
have proposed plans to to meet its energy needs.proposed regasification capacity of about consume
by the end of the decade – which would nearly double current global regasification capacity to over
   less end because several economies were experiencing global regasification capacity to over
by the LNGof the decade – which would nearly double current sluggish growth. However, Mother
1,000 MTPA if all of these were to be built.
1,000 MTPA if all of these were to be built. the saying goes “nature works in mysterious ways”!
   Nature again proved us wrong, and as
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 5.1. INTRODUCTION
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 5.1. INTRODUCTION
 Emerging LNG markets accounted for all the 54 about powered world plants which led
 authorities to temporarily shutdown 10.9 MT, ornuclear4.5% of thepower LNG trade in 2011.toThis
 Emerging LNG markets accounted for 10.9 MT, or about 4.5% of the world LNG trade in 2011. Thisthe
 volume having to rely grow further as energy vacuum. As a result, Japan’s demand for LNG
 country is expected to on LNG to fill itsthese countries acquire more volumes and new emerging
 volume is expected to grow further as these countries acquire more volumes and new emerging
 markets start to import LNG.about markets represent a large and growing part of LNG import demand
 jumped start to import LNG. The markets represent a large and growing part of LNG import demand
 markets by almost 12% to The 79 MT.
 and are a diverse set of both regulated and deregulated gas markets. Some of these countries will
 and are a diverse set of both regulated and deregulated gas markets.           of these countries will
 Meanwhile, the growing concern for the environmentothers. WhereSome replaces other serious
 have a greater ability to pay increasingly high prices than and a move seen to avert any sources
                                                                           LNG
 have a                                          prices than others. Where LNG replaces other sources
 impact greater ability to pay increasingly high a with the need to enhance expected to replace falling
          expensive energy, this hike, less of
 of more from another oil price will becoupled problem; but where LNG is energy security, had led
 of more expensive energy, this will be less of a problem; but where LNG is expected to replace falling
 production countries to domestic league of players may have as well as increase
 to severalfrom inexpensive enter thesources, theseLNG importers, a difficult time paying. their
 production from inexpensive domestic sources, these players may have a difficult time paying.
 consumption of LNG.
 The large incremental demand MARKETS, 2007-2011
 FIGURE 21: LNG IMPORTED TO EMERGINGacross the globe practically mopped up all the increased
 FIGURE 21: LNG IMPORTED TO EMERGING MARKETS, 2007-2011
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
     12
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
     12
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
     10
     10
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.8
      8
       6
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
       6
   MTPA
  MTPA




 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
       4
       4
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
       2
       2
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
       0
       0
                                       start
 Australia. But as these projects 2008 moving forward, the industry2010 also beginning to get a
                   2007
                   2007               2008
                                                          2009
                                                          2009
                                                                       was
                                                                      2010
                                                                                     2011
                                                                                     2011
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
                    Argentina       Kuwait         Brazil      Chile UAE    Thailand
                                                                      the
 position as possible LNG exporters as recent discoveries reflectUAE regions’ export potential.
                    Argentina       Kuwait         Brazil      Chile        Thailand
 North Cedigaz, started LNG Reports, PFC Energy
 Sources:AmericaWaterborneto move forward more aggressively, aided by several Sales Purchase
 Sources: Cedigaz, Waterborne LNG Reports, PFC Energy
 Agreements signed by the Sabine Pass LNG project.
 The wave of emerging LNG importers continues to grow for a number of reasons. In some markets
 The wave of emerging LNG importers continues to grow for a number of reasons. In some markets
 (e.g. Malaysia and Indonesia), countries look to match geographically diverse reserves with demand
 (e.g. Malaysia and Indonesia), countries look to match geographically diverse reserves with demand
 centres as basins near demand centres mature. For markets such as Argentina and Chile, which are
 centres as basins near demand centres mature. For markets such as Argentina and Chile, which are
 facing insufficient production – and oftentimes reserves, imports are needed to satisfy domestic gas
 facing insufficient production – and oftentimes reserves, imports are needed to satisfy domestic gas
 demand. Finally, other markets (e.g. Thailand, Poland) have embraced LNG imports as a method to
 demand. Finally, other markets (e.g. Thailand, Poland) have embraced LNG imports as a method to
               IGU World LNG Report - 2011 Page 304
               IGU World LNG Report - 2011 І Page 30

    Message from the President of International Gas Union
1.diversify gas supply originations. As the first wave of these countries has begun importing LNG, most
 have maintained or increased utilisation rates of their terminals, importing more volumes year over
 year.
 Dear IGU members
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 FIGURE 22: TERMINAL UTILISATION RATES, BY COUNTRY 2010 AND 2011
 Last year, the world experienced some very interesting events, which led to some very
    100%
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
      90%
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
      80%
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
      70%
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
      60%
       LNG
 less50% because several economies were experiencing sluggish growth. However, Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
      40%
      tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 The30%
     the
 for 20% LNG industry. The consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
     10%
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
      0%
 jumped by almost 12% to about 79 MT.
                  Argentina




                                  Brazil




                                                  Chile




                                                                              UAE
                                                               Kuwait




                                                                                             Thailand
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
     several countries red
 to 2010 denoted by the bar into enter the league of LNG importers, as well as increase their
    2011 denoted by LNG.
 consumption of dash
 The large incremental demand across the            globe practically mopped up all the increased
 Sources: Cedigaz, Waterborne LNG Reports, PFC Energy
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 Another 22 MTPA of regasification capacity
                                               trade increased construction, with 62 MT, or 26% of
 not surprising that the world’s LNG spot is currently under by 32% to reach a further 165 MTPA
 proposed to be built before the end of the decade. Even though some of these projects will not move
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 forward, the potential for growth is significant. In the last five years, existing small-scale importers
 have market led to its prices shooting up
 LNG seen average utilisation rates of 41%. to between $16 and $17/mmBtu towards the end of
 2011.
  5.2. GAS R with the growth in the world’s LNG trade, tanker charter
 In tandem ESERVES AND PRODUCTION LOCATED DISTANT FROM MARKETS rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 A number of markets currently import or plan to import LNG because the country’s gas reserves are
 located far the demand centres that have historically been served by the need for more fields
 concern in from latter part of 2011. This is further exacerbated by nearby producing gasof the
 which are now maturing. instead of the Qmax/Qflex to serve LNG widespread have remaining
 conventional sized shipsWhile both Indonesia and Malaysia are more exporters andLNG markets.
 domestic reserve potential, gas reserves lie number locations with share sanctions, mostly in
 On the supply side, 2011 saw a large in remote of new LNG aproject allocated to exports via
 LNG – and each is now considering importing LNG (or, in the industry was also beginning to get a
 Australia. But as these projects start moving forward,the case of Indonesia, shipping domestically
 producedof the to domestic terminals). Africa demand centres would require a pipeline, or as is
 glimpse LNG new frontiers. Eastern Major and the Eastern Mediterranean buttressed their
 planned, import terminals that can satisfy local demand.
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 5.3. INSUFFICIENT GAS PRODUCTION
 Agreements signed by the Sabine Pass LNG project.
 A second set of importers are looking to increase gas imports to compensate for the decline in
 domestic gas production, or to substitute imported gas for imported oil and coal. Many countries that
 had previously produced sufficient gas sold volumes inexpensively domestically, but with waning
 production and buoyed demand from cheap prices, many of these markets are turning to LNG
 imports.
               IGU World LNG Report - 2011 Page 314
               IGU World LNG Report - 2011 І Page 31

   Message from the President of face a country-wide Union
1.The Philippines, Thailand and Vietnam International Gas decline in reserves and/or limited
 investment in exploration. Moreover, access to easy, cheap gas is increasingly a thing of the past in
 Indonesia, members
 Dear IGU Thailand, Malaysia and Vietnam. In these countries, remaining reserves are smaller in size,
 in more difficult environment (high CO2, deepwater, high temperature, etc), and to develop and
 produce the honoured to much bigger capital and much longer time. Imports are either a
 I am indeedgas will requirepresent to you the second IGU World LNG Report for 2011. bridge, or
 a contingency in world experienced of such gas interesting events, which
 Last year, the case the development some very reserves does not materialise. led to some very
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 Latin
        market was poised to experience a glut situation in in the global gas market. Besides
 LNG American markets have historically been marginal players2011 with Qatar producing at its
 exports from Trinidad, the region mostly boasted a limited trade between Brazil, Bolivia, Argentina,
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
 and Chile. But a whole new market has opened up in Latin America: Chile, Argentina, and Brazil have
 all opened six regasification terminals away them with more planned. More importantly, in Chile
 importer of LNG, continuing to turnbetweenmore cargoes and increasingly rely on domestic
 unconventional gas used to replace oil, and so the Moreover, Europe high. expectedPetrobras has
 and Argentina, gas is to meet its energy needs. ability to pay is very was In Brazil, to consume
 less LNG because several economies were experiencing boost both supply However, Mother
 a number of associated gas fields coming onstream that shouldsluggish growth. and demand; even
 so, the demand trajectory is so strong that Petrobras “nature works in mysterious a floating
 Nature again proved us wrong, and as the saying goes postponed its plans to build ways”!
 liquefaction facility that could export gas and
                                                 March 2011 could be build another “game changer”
 The tragic earthquake which hit Japan in is advancing its plans toconsidered a import terminal in
 the country.
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 Underlying to temporarily shutdown all of these markets is strong economic growth. Together, the
 authorities LNG import ambitions in many the 54 nuclear powered power plants which led to the
 three traditional to rely on LNG to fill its energy vacuum. As a result, as Thailand and Singapore
 country having Asian exporters (Indonesia, Malaysia and Brunei) as well Japan’s demand for LNG
 are home to more 12% to million people,
 jumped by almostthan 400 about 79 MT. and their combined GDP neared $1.47 trillion in 2010, on
 par with India’s growing As a gas consumer, these markets used 13.4 bcf/d avert any serious
 Meanwhile, theeconomy. concern for the environment and a move seen to in 2010, more than
 China,
         from another consumed individually. Over the last to years, gas demand growth was a
 impact India or Japan oil price hike, coupled with the need fiveenhance energy security, had led
 respectable 4.6% against a global average of 2.3% a year.
 to several countries to enter the league of LNG importers, as well as increase their
 consumption of LNG.
 FIGURE 23: LNG IMPORTS BY YEAR OF ENTRY INTO LNG MARKET
 The large incremental demand across the globe practically mopped up all the increased
   300
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
                 2000s
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
   250           1990s
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
                 1980s
 2011.
     200              1970s
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
                 1960s
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
   150
MT




 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
    100
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
     50
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
       -
           2000       2001    2002   2003   2004   2005   2006   2007   2008   2009   2010   2011
 Source: PFC Energy
              IGU World LNG Report - 2011     Page 32
                                                   4
              IGU World LNG Report - 2011     Page 32

    Message from the
1.5.4. ENERGY SECURITY President of International Gas Union
 The second major reason countries look to build regasification capacity and sign LNG import contracts
 Dear IGU members
 is to ensure supply security. While various delivery threats – perceived or real – exist in each region,
 I am indeed honoured to to build terminals in nearly every corner of Report for 2011.
 this has led to proposals present to you the second IGU World LNG the world (with the notable
 exception of the United States).
 Last year, the world experienced some very interesting events, which led to some very
 intriguing outcomes. After experiencing a very strong growth in or propose building terminal
 Above-ground risk spurred a number of countries to look to builddemand of 22% in 2010, the
 LNG market if it poised to experience and the Baltic countries launched their plans to develop
 capacity, even was remains unused. Polanda glut situation in 2011 with Qatar producing at its
 maximum capacity of 77 MTPA build the United States, which used The undersea Nord
 LNG imports as Gazprom looked to whilst alternate supply routes to Europe. to be a significant
 importer of LNG, continuing region away more leaves and increasingly rely to additional
 Stream pipeline bypasses the to turn altogether andcargoes the markets susceptible on domestic
 unconventional gas to meet its energy needs. Moreover, Europe was (expected onstream in
 influence from the Russians. While Poland’s terminal is under construction expected to consume
 less LNG because several economies were Baltic nations have yet growth. However, Mother
 2014) and LNG contracts in place with Qatar, theexperiencing sluggish to decide on a definitive plan,
 though two options are moving forward. Likewise, above-ground risk in the Middle East brought
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 Israel, Lebanon and Jordan to propose building LNG import capacity. Supply routes from North Africa
 The been threatened which hit in the last year, raising concern in each country. Israel is the
 have tragic earthquakewith unrest Japan in March 2011 could be considered a “game changer”
 for the LNG with its offshore terminal currently under construction and expected onstream in 2013
 furthest ahead,industry. The consequence which caused the Japanese municipalities/local
 authorities recent discoveries and discussion nuclear powered pipeline to which led to the
 in spite of to temporarily shutdown all the 54of building either apower plantssend domestically
 country having the home LNG or even energy export project.
 produced gas to to rely onmarketto fill its an LNG vacuum. As a result, Japan’s demand for LNG
 jumped by almost 12% to about 79 MT.
 In Southeast Asia, Thailand and Singapore look to supplement existing imports and boost energy
 Meanwhile, the growing concern from an exclusive reliance move seen to avert any serious
 security through diversification awayfor the environment and a on pipeline imports. Singapore has
 impact discussions with current pipeline gas suppliers Malaysia and Indonesia; but if incremental
 been in from another oil price hike, coupled with the need to enhance energy security, had led
 to several is insufficient, enter the has already indicated it is prepared to as increase their
 piped supply countries to the city-stateleague of LNG importers, as wellcontract more LNG to
 consumption existing
 supplement itsof LNG. 3 MTPA LNG contract with BG. In Thailand, PTT relies solely on pipeline
 imports from Myanmar. Although it agreed to take additional gas from Myanmar starting in 2013, it has
 The large uncomfortable with its across the globe practically mopped
 always beenincremental demand reliance on only one source of gas supply. up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 5.5. POTENTIAL GROWTH
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG with the 32 countries that have existing between $16 and $17/mmBtu towards the end of
 Along market led to its prices shooting up toregasification capacity or terminals under construction,
 another 30 emerging LNG import markets have announced plans to build capacity. If all of these
 2011.
 terminals are built, these countries will have a combined capacity of 246 MTPA by 2018 – nearly half
 In total global regasification capacity of 608 MTPA in 2012.
 thetandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further to start in 2012 the need for construction
 This is clearly ambitious: some of the projects proposedexacerbated byhave yet to startmore of the
 conventional sized terminals may never be built, but to desire to build the capacity is markets.
 and some authorisedships instead of the Qmax/Qflex the serve more widespread LNGindicative of
 the optimism that these countries can import LNG to alleviate fuel concerns. Technological innovation
 On the supply side, 2011 saw less than a year: of new proposed its sanctions, mostly in
 means that a terminal can be built ina large number Argentina LNG projectfloating terminal in 2007
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 and started importing LNG in 2008. Though 13% of the projects currently under construction are
 glimpse of the new regasification terminals, 35% of        Eastern proposed or authorised terminals
 dependent on floating frontiers. Eastern Africa and the remainingMediterranean buttressed their
 position use a floating concept. The technology provides reflect the flexibility and an option to
 expect toas possible LNG exporters as recent discoveriestremendous regions’ export potential.
 North America started more quickly than historically possible. This has also Sales Purchase
 bring capacity onstream to move forward more aggressively, aided by several facilitated counter
 Agreements trade, by demand centres LNG project.
 seasonal LNGsigned withthe Sabine Passin the Middle East and Latin America dependent on gas for
 cooling and heating, respectively, from May to August – when Japan and Korea have historically
 required fewer LNG imports for heating.
                     IGU World LNG Report - 2011 Page 334
                     IGU World LNG Report - 2011 І Page 33

    Message from the President of International Gas Union
1.FIGURE 24: POTENTIAL CAPACITY GROWTH BY COUNTRY (ANNOUNCED START DATES)
        250
 Dear IGU members
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
    200

 Last year, the world experienced some very interesting events, which led to some very
    150
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
    100
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
 MTPA




 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                Capacity in 2011
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
      50
 less LNG because several economies were experiencing sluggish growth. However, Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
       0
              2000

                     2001

                            2002

                                   2003

                                          2004

                                                 2005

                                                        2006

                                                               2007

                                                                      2008

                                                                             2009

                                                                                    2010

                                                                                            2011

                                                                                                   2012

                                                                                                          2013

                                                                                                                 2014

                                                                                                                        2015

                                                                                                                               2016

                                                                                                                                      2017

                                                                                                                                             2018

                                                                                                                                                    2019

                                                                                                                                                           2020
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The consequence which caused the Japanese Argentina
          Puerto Rico           Dominican Republic       Portugal
                                                                               municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
          Canada                Brazil                   Kuwait               Chile
          United Arab rely on    to fill its energy vacuum. As a result, Japan’s demand for LNG
 country having to Emirates LNG Netherlands              Thailand             Sweden
          Norway                Pakistan                 Albania              Indonesia
 jumped by almost 12% to about 79 MT.
          Malaysia              Lebanon                  Singapore            Bangladesh
              Philippines                          Israel                                  Jordan                              Poland
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
          Lithuania             Ukraine               Jamaica             Estonia
 impact from another oil price hike, coupled with the need to enhance energy security, had led
          Ireland               Bahrain               Vietnam             Uruguay
          Canary Islands        El Salvador           Kenya
 to several countries to enter the league of LNG importers, as wellCroatiaincrease their
                                                                           as
 consumption of LNG.
 5.6. large incremental demand across the
 TheIMPACT OF TECHNOLOGICAL DEVELOPMENTS globe practically mopped up all the increased
 Technology is creating more as well for LNG. Recent developments in floating regasification have
 cargoes churned by Qatar, demand as those turned away by the United States. It is therefore
 opened new markets to world’s LNG spot trade increased by 32% to reach 62 these countries
 not surprising that theLNG imports and accelerated the time frame on which each ofMT, or 26% of
 can begin importing LNG. Argentina was the first example of the speed with which a country tight
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected could
 start market LNG, its prices shooting up took just under a year to build its Bahia Blanca end of
 LNGimportingled to given a floating option: itto between $16 and $17/mmBtu towards theterminal
 2011.
 and start importing volumes – incredibly quick when compared to the length of time an onshore
 terminal would have taken to complete.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 Further, and 2010, also markets employing floating regasification to import became a major
 in 2009 in addition to newexperienced a sharp rise, and vessel availability new volumes, new
 technologies are creating new 2011. This is further exacerbated by the need looking of the
 concern in the latter part of demand centres. Companies and governments arefor morefor new
 conventional gas in sectors where gas use has historically been limited. LNG for transportation - for
 ways to utilize sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a fleets and potentially LNG-fired power sanctions, mostly in
 fuelling shipping vessels, car and truck large -number of new LNG project plants are examples of
 future markets for LNG.
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
              IGU World LNG Report - 2011    Page 34
                                                  4
              IGU World LNG Report - 2011    Page 34

1. Message from the President of International Gas Union
Looking Ahead:

   How many more
 Dear IGU members emerging markets will start to import LNG? Over the past years, a large
    number of countries have proposed to import LNG – but a much smaller number has actually done
     so. How many countries will be able the second IGU World LNG Report for complexities of
 I am indeed honoured to present to youto overcome the commercial and logistical2011.
     developing LNG import capacity?
 Last year, the world experienced some very interesting events, which led to some very
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
     How will
 LNG marketthe addition of emerging markets impact LNG flows? with Qatar producing at its
                was poised to experience a glut situation in 2011 As more markets import LNG,
     there is a wider “floor” that is created beneath LNG prices as there are more destinations where
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
     LNG can go and as there are more potential buyers that can come into the market when prices are
     low. Will emerging markets turn away a floor under and increasingly will that floor be
 importer of LNG, continuing to indeed put more cargoesLNG prices? How rely on domestic
     determined? And what does mean needs. development, for profitability, and for companies’
 unconventional gas to meet itsitenergyfor project Moreover, Europe was expected to consume
 less LNG because several economies were experiencing sluggish growth. However, Mother
     marketing strategy?
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
     Will LNG contracting trends begin to more accurately reflect this growth in
 The tragic earthquake which hit Japan in March 2011 could be considered a “game markets?changer”
     Though some of the newest LNG importers have signed long-term contracts, some have not
 for the LNG industry. The consequence which caused the Japanese municipalities/local
     signed long-term contracts, requiring a continual return to the spot market. Though tightening
     demand might lend credence to these new importers looking for power plants which exporters
 authorities to temporarily shutdown all the 54 nuclear powered long-term agreements,led to the
     with having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 country trading ambitions may view this as an excellent opportunity to leave volumes available for
     increased spot 12%
 jumped by almostsales. to about 79 MT.
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
    Can the
               another expect hike, coupled with partially to enhance energy security, had led
 impact from markets oil price to fully – or even the need – utilise this growing regasification
    capacity? Many of the most recent terminals to come onstream or start construction have
 to several countries to enter the league of LNG importers, as well as increase their
    identified some form of supply that allow them to utilise their growing capacity, but many
 consumption of LNG. proposed terminals lack LNG supplies and will either move forward only with
    companies that have
     firm supply contracts demand across the globe practically mopped up calling.
 The large incrementalor with the hope that building a terminal will bring suppliersall the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
      surprising that the world’s LNG spot sharply increased consumption and create huge
 not Can technology innovation lead to trade increased by 32% to reach 62 MT, or 26% of
     demand for LNG? More and more countries are turning to gas – and LNG – as an alternative to
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
     other energy sources. Just as the current price environment has incentivised this switch,
                    to its prices shooting up to between $16 and $17/mmBtu towards the end of
 LNG market led innovation has made the move that much more viable. Floating regasification has
     technological
 2011.
     proven a driving force in speedy growth in the number of countries that can import LNG. Likewise,
     industrial uses growth without regasification – directly charter rates, which were sluggish
 In tandem with thefor LNG in the world’s LNG trade, tanker in use in power generation and in
     transportation, such as experienced a sharp rise, and vessel availability centres.
 in 2009 and 2010, also ships and fleet vehicles, could create even more demandbecame a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011     Page 35
                                               Page 4
                                                    35

1. Message from the President of International Gas Union
6. LNG Receiving Terminals
Gas is the fuel of choice to meet growing demand for energy and replace existing fuels in both
 Dear IGU members
developed and emerging markets. This is clearly reflected in both the number of countries
 I am indeed honoured to present those actually using that capacity Report for 2011.
building regasification capacity andto you the second IGU World LNG to import LNG.
  Last year, the world experienced to grow in interesting events, – reflecting the increased
Global regasification capacity continued some very 2011 – to 608 MTPA which led to some very
  intriguing outcomes. After experiencing number of markets. Many of these 22% in importing
demand for gas (and LNG) in an ever-larger a very strong growth in demand ofnew LNG2010, the
  LNG were was poised to experience a glut situation recently as Qatar producing have
marketsmarketnot expected to be LNG importing markets as in 2011 withfive years ago, but at its
  maximum capacity of of MTPA whilst the United States, which used to be a significant
collectively built 32.7 MTPA77 regasification capacity and have increasingly used that capacity. Floating
  importer of LNG, has added to turn away more to these and increasingly rely on unknown,
regasification capacitycontinuing a measure of flexibilitycargoes markets that was previously domestic
  unconventional inexpensive capacity that can be Moreover, Europe In expected to consume
providing relatively gas to meet its energy needs. built over a short time.wasspite of growing capacity
in new regions, capacity in some markets - notably the United States and Spain - is increasingly
  less LNG because several economies were experiencing sluggish growth. However, Mother
underutilised.
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!

 6.1. tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 TheOVERVIEW
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 The number of markets turning to LNG to meet
 authorities to temporarily shutdown all the 54 gas demand has grown considerably over the past
                                                  nuclear powered power plants which led to the
 decade with more than double the number of countries having regasification capacity in 2011 than in
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 2001. Since 2006, eight countries started to import LNG: Argentina, Brazil, Canada, Chile, Kuwait,
 jumped by almost 12% to about 79 in the
 the Netherlands, Thailand and Dubai MT. United Arab Emirates. Notably, five out of these eight
 Meanwhile, located in South America and the Middle East, two non-traditional avert any serious
 countries are the growing concern for the environment and a move seen to and emerging LNG
 impact from another oil price hike, coupled with the are Belgium, China, the Dominican Republic,
 importing regions. The world’s other 17 LNG importers need to enhance energy security, had led
 to several countries to Japan, Mexico, Portugal, Puerto Rico, Korea, well as increase their
 France, Greece, India, Italy, enter the league of LNG importers, as Spain, Taiwan, Turkey, the
 United Kingdom and the United States.
 consumption of LNG.
 The large incremental demand across the globe practically mopped up all the increased
 6.2. RECEIVING TERMINAL CAPACITY GLOBALLY
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by of 2011, representing 608 26% in
 There were 89 regasification terminals around the world at the end 32% to reach 62 MT, or MTPA of
 regasification capacity. Out of the 89 terminals, 29 started commercial operations between 2006 and
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 2011, totalling 245 MTPA in new capacity. Ten of these terminals are offshore facilities: nine of those
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 use floating regasification technology and one (Adriatic LNG in Italy) employs a gravity-based
 2011.
 structure. One terminal, the floating Gulf Gateway regasification terminal in the US Gulf of Mexico,
 was decommissioned in 2011. the world’s LNG trade, tanker charter rates, which were sluggish
 In tandem with the growth in
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.




                                                                Courtesy: Photographic Services Shell International Ltd.
                                              IGU World LNG Report - 2011 І Page 36
                                              IGU World LNG Report - 2011 Page 4 36

    Message from the President ERMINALS, 1980-2016
1.FIGURE 25: START-UPS OF LNG RECEIVING Tof International4 Gas Union
                             18                                                                                                                         Under                    60
                                                   Floating
     Dear IGU members
                  Onshore                                                                                                                            Construction
                             16
                    No. of Countries with
                                          to Receiving Terminals IGU World
     I am indeed honoured to presentLNGyou the second (right axis) LNG Report for 2011.                                                                                          50
                             14
     New Terminals or Expansion




     Last year, the world experienced some very interesting events, which led to some very
           12                                                                             40




                                                                                                                                                                                      No. of Countries
     intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
           Phases Online




     LNG10  market was poised to experience a glut situation in 2011 with Qatar producing at its
     maximum capacity of 77 MTPA whilst the United States, which used to be a significant 30
            8
     importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
     unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
            6                                                                             20
     less LNG because several economies were experiencing sluggish growth. However, Mother
            4
     Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                                                                                          10
                                  2
     The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
     for the LNG industry. The consequence which caused the Japanese municipalities/local
            0                                                                                 0
                                      1990


                                               1992


                                                       1994


                                                                1996


                                                                          1998


                                                                                        2000


                                                                                                  2002


                                                                                                           2004


                                                                                                                   2006


                                                                                                                           2008


                                                                                                                                    2010


                                                                                                                                                  2012


                                                                                                                                                                2014


                                                                                                                                                                         2016
     authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
     country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
     Source: PFC almost
     jumped byEnergy 12% to about 79 MT.
     Meanwhile, the growing concern for the environment and a move seen to avert any serious
     Regasification capacity continues to grow, especially in new markets. Out of the 24 projects currently
     impact from another oil price hike, coupled with the need to enhance energy security, had led
     under construction (including new terminals and terminal expansions), 18 are completely new
                  countries to enter the league countries importers, as well as increase their
     to severalOnce these are completed, five new of LNG will have LNG import capacity: Indonesia,
     terminals.
     consumption of LNG.
     Israel, Malaysia, Poland and Singapore. These will join the countries that have only brought terminals
     The large the last five demand across considered potential LNG importers decade ago. The
     onstream in incremental years and were not the globe practically mopped up aall the increased
     fact that churned by Qatar, as such as Kuwait and the United the Emirates are importing LNG is
     cargoes Middle Eastern countrieswell as those turned away by ArabUnited States. It is therefore
     a sign of how much the structure of the market has changed in recent years.
     not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
     the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
     FIGURE 26: GLOBAL RECEIVING TERMINAL CAPACITY, 2000-2016
     LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
         800
     2011.
         700
     In tandem with the growth ininthe world’s LNG trade, tanker charter rates, which were sluggish
                  Under Construction 2011-2012
                  2010,
     in 2009 and Existing also experienced a sharp rise, and vessel availability became a major
         600
     concern in the latter part of 2011. This is further exacerbated by the need for more of the
         500
     conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
      MTPA




                       400
     On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
         300
     Australia. But as these projects start moving forward, the industry was also beginning to get a
     glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
         200
     position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
         100
     North America started to move forward more aggressively, aided by several Sales Purchase
           0
     Agreements signed by the Sabine Pass LNG project.
                                       2000

                                                2001

                                                       2002

                                                              2003

                                                                       2004

                                                                                 2005

                                                                                           2006

                                                                                                    2007

                                                                                                            2008

                                                                                                                   2009

                                                                                                                          2010

                                                                                                                                  2011

                                                                                                                                           2012

                                                                                                                                                         2013

                                                                                                                                                                  2014

                                                                                                                                                                          2015

                                                                                                                                                                                  2016




     Sources: GIIGNL, PFC Energy

4
    Forecast through 2016 based on company-announced start dates for regasification capacity currently under construction.
               IGU World LNG Report - 2011 І Page 37
               IGU World LNG Report - 2011 Page 374


    Message TERMINALS BY COUNTRY
1.6.3. RECEIVINGfrom the President of International Gas Union
 Japan, the United States and Korea held 62% of global regasification capacity at the end of 2011.
 Dear IGU members
 While Japan and Korea have increased LNG imports, capacity in the United States has been left
 underutilised. Including the United Kingdom and Spain, the top five regasification 2011.
 I am indeed honoured to present to you the second IGU World LNG Report forcapacity markets
 held 75% of global capacity at the end of 2011 with the remaining 25% located in the 22 other LNG
 importing countries. Japan continues some very interesting events, which led to some with
 Last year, the world experiencedto hold the world's largest portion of regasification capacity, very
 intriguing outcomes. located there via 28 very strong growth in was particularly useful in 2011
 29% of global capacity After experiencing aterminals. This capacity demand of 22% in 2010, the
 after market was disaster, when the country increased imports by 8.2 MT, Qatar producing at its
 LNG the Fukushima poised to experience a glut situation in 2011 with or about 12%.
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
 FIGURE 27: LNG REGASIFICATION C
 importer of LNG, continuing APACITY BY COUNTRY, 2011
                                 to turn away more cargoes and increasingly rely on domestic
                       to meet
 unconventional gasFrance, 3%its energy needs. Moreover, Europe was expected to consume
                                     India, 2%
                                               Taiwan, 2%
 less LNG because several economies were experiencing sluggish growth. However, Mother
                    China, 3%                      Mexico, 2%
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                                                     Netherlands, 1%
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
                      Spain UK                         Turkey, 1%
 for the LNG industry. The consequence which caused the Japanese municipalities/local
                       7%    6%
                                                        Italy, 1%
                 temporarily shutdown all the 54 nuclear powered power plants which led to the
 authorities to Korea
                                                       Canada, a
 country having to rely on LNG to fill its energy vacuum. As 1%result, Japan’s demand for LNG
                13%
 jumped by almost 12% to about 79 MT.                 Argentina, 1%
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
                                Others,11%            Belgium, 1%
           United States,
 impact from another oil price hike, coupled with the need to enhance energy security, had led
                20%                                    Brazil, 1%
 to several countries to enter the league of LNG importers, as well as increase their
                                                      Thailand, 1%
 consumption of LNG.                                   Chile, 1%
                                   Japan                       Greece, 1%
                                                                      practically
 The large incremental demand across the globe Portugal, 1% mopped up all the increased
                                    29%                               Kuwait, 1%
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
                                                                   Smaller Mkts*, 1%
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 *”Smaller Markets” includes capacity in the United Arab Emirates, Puerto Rico, Sweden and Norway. Each of these
 LNG market led to its global regasification up to
 countries has less than 1% of prices shooting capacity.between $16 and $17/mmBtu towards the end of
 2011.
 Sources: GIIGNL, PFC Energy
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.




                                                                    Courtesy: Photographic Services Shell International Ltd.
                                IGU World LNG Report - 2011 І Page 38
                                IGU World LNG Report - 2011 Page 4 38

    Message from ERMINAL CAPACITY of OUNTRY IN 2006 AND 2011
1.FIGURE 28: RECEIVING Tthe PresidentBY CInternational Gas Union
         200
 Dear IGU members
                                                                                                                                                                                                              2006                     2011
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
    150
 Last year, the world experienced some very interesting events, which led to some very
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
      100
  MTPA




 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
       50
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
        0
 less LNG because several economies were experiencing sluggish growth. However, Mother




                                                                                                                                                                                                  Spain
                                                                                                                         Japan




                                                                                                                                                                         Portugal
                                                                                                         India
                               Belgium




                                                                           Dom. Rep.
                   Argentina




                                                                                       France




                                                                                                                                                                                                                                       UK


                                                                                                                                                                                                                                                  US
                                                                                                                                 Korea
                                                                                                Greece


                                                                                                                 Italy
                                         Brazil


                                                           Chile




                                                                                                                                                  Mexico




                                                                                                                                                                                                                                            UAE
                                                  Canada


                                                                   China




                                                                                                                                                                                                          Taiwan
                                                                                                                                         Kuwait


                                                                                                                                                           Netherlands


                                                                                                                                                                                    Puerto Rico




                                                                                                                                                                                                                              Turkey
                                                                                                                                                                                                                   Thailand
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 authorities to PFC Energy
 Sources: GIIGNL, temporarily shutdown all the 54 nuclear powered power plants which led to the

 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 6.4. RECEIVING TERMINALS BY REGION
 jumped by almost 12% to about 79 MT.
 East Asia, which growing concern for the environment Korea move seen to avert fast-growing
 Meanwhile, the includes traditional LNG importers Japan, and a and Taiwan as well as any serious
 China,
        from another oil price hike, coupled the the need to enhance energy security, had led
 impactheld the majority (48% or 289 MTPA) ofwith world’s regasification capacity at the end of 2011.
 East Asia has historically accounted for a larger share of global regasification capacity, (about 70%
 to several countries to enter the league of LNG importers, as well as increase their
 throughout the 1990s and early 2000s), but its share has been declining dramatically since the mid-
 consumption of LNG.
 2000s due to capacity additions in North America, and to a lesser extent Europe, and the emergence
 of LNG importing markets: South and Southeast globe practically mopped up all the
 The large incremental demand across the Asia, South America and the Middle East. increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 FIGURE 29: REGASIFICATION CAPACITY BY REGION, % SHARE OF TOTAL
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
     100%                                                                   Middle East & North
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
                                          North America
                                                                                   Africa
       market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 LNG 90%
                                             Europe
 2011.
             80%                                                                                                                                                                                                                South America
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
      70%
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
                                                                               South & Southeast
                                                                                     Asia
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
      60%
   % Share




 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
             50%
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
      40%                                 East
 Australia. But as these projects start movingAsia
                                               forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
      30%
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
      20%
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
      10%

             0%
               1990                  1992             1994           1996                1998             2000           2002            2004              2006                 2008                 2010

 Sources: GIIGNL, PFC Energy
                    IGU World LNG Report - 2011 Page 394
                    IGU World LNG Report - 2011 І Page 39

    Message TERMINAL President of International Gas Union
1.6.5. RECEIVINGfrom theLNG STORAGE CAPACITY
    At the end of Q1 2012, the world’s regasification terminals had over 42 million cubic metres (mmcm)
    Dear IGU members
    of combined LNG storage capacity 5. The top six countries with the largest storage capacities together
    accounted for 80% of global LNG storage capacity: Japan and Korea alone accounted for the
    I am indeed honoured to present to you the second IGU World LNG Report for 2011. majority
    (51.5%), Japan with 15.5 mmcm of capacity and Korea with 6.3 mmcm, followed by the United States
    (10.3%), Spain world experienced some very interesting events, which led to some very
    Last year, the(8%), China (6.2%) and the United Kingdom (4.9%). 20 countries together make up
                            global LNG storage very strong growth in demand of 22% of China: in
    intriguing outcomes. ofAfter experiencing a capacity. Important to note is the growthin 2010, the
    the remaining 19.1%
    2011, the country brought 0.74 experience a glut situation onstream, propelling producing at its
    LNG market was poised to mmcm of LNG storage capacityin 2011 with Qatar it into the top tier.
    maximum capacity of 77 MTPA whilst the United States, which used to be a significant
    importer LNG STORAGE TANK C to turn COUNTRY AS cargoes
    FIGURE 30: of LNG, continuingAPACITY BYaway moreOF Q1 2012 and increasingly rely on domestic
    unconventional gas to meet itsTaiwan, 3%      India, 2% France, 2%
                                      energy needs. Moreover, Europe was expected to consume
                                                               Mexico, 1%
                                                                  sluggish growth. However, Mother
    less LNG because several economies were experiencing Netherlands, 1%
    Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
                                    China, 6%                       Turkey, 1%
                                  Spain, 8%
                                         UK, in
    The tragic earthquake which hit Japan 5% March 2011 could be considered a “game changer”
                                                                   Chile, 1%
    for the LNG industry. The consequence which caused the Japanese municipalities/local
                     US, 10%
                                                                 Canada, 1%
    authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
                                                                  result, 1%
    country having to rely on LNG to fill its energy vacuum. As aBelgium, Japan’s demand for LNG
    jumped by almost 12% to about 79 MT.                         Thailand, 1%
                                                             Others, 8%                   Argentina, 1%
    Meanwhile, theKorea, 15% concern for the environment and a move 1%
                   growing                                        Brazil, seen to avert any serious
    impact from another oil price hike, coupled with the need to enhance energy security, had led
                                                                  Italy, 1%
                                                                  Portugal, 1%
    to several countries to enter the league of LNG importers, as well as increase their
                                                                Smaller Markets,
    consumption of LNG.                                                2%
    The large incremental demand across the globe practically mopped up all the increased
                                          Japan, 37%
    cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
    not surprising that the world’s LNG spot trade increased by 32% Norway, Puerto Rico, or 26%
    *”Smaller Markets” includes storage capacity in the Dominican Republic, Greece, Kuwait,to reach 62 MT, the United of
    Arab Emirates and Sweden. Each of these countries has less than 0.5% of global LNG storage capacity.
    the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
    LNG market led
    Source: PFC Energy to its prices shooting up to between $16 and $17/mmBtu towards the end of
    2011.
    6.6. RECEIVING T the growth in the world’s LNG trade, tanker SEND-OUT CAPACITY
    In tandem with ERMINAL MAXIMUM BERTHING CAPACITY AND GAScharter rates, which were sluggish
    A 2009 and 2010, also experienced a sharp rise, accommodate vessels with a LNG carrying
    in majority (slightly more than 50%) of LNG terminals canand vessel availability became a major
    capacity of over latter part ofa2011. This ishas doubled since 2005 as new terminals haveof the
    concern in the 150,000 cm, share which further exacerbated by the need for more come
    onstream with berthing capacities of the Qmax/Qflex to growing number of existing terminals are
    conventional sized ships insteadover 150,000 cm and aserve more widespread LNG markets.
    upgrading facilities to accommodate larger ships.
    On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
    Australia. But as these projects start moving forward, the industry was also beginning to get a
    glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
    position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
    North America started to move forward more aggressively, aided by several Sales Purchase
    Agreements signed by the Sabine Pass LNG project.



5
  The storage capacity is the combined capacity of the LNG storage tanks. Data and graphs include onshore and offshore/floating LNG storage
tanks.
                              IGU World LNG Report - 2011
                              IGU World LNG Report - 2011   Page 40
                                                            Page 4
                                                                 40

    Message from the President LNG TERMINALS IN 2006 AND Union
1.FIGURE 31: ANNUAL SEND-OUT CAPACITY OF of International Gas 2011

 Dear IGU members
    25
                                                                                2006      2011
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
                        20
  Number of Terminals




 Last year, the world experienced some very interesting events, which led to some very
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 LNG15  market was poised to experience a glut situation in 2011 with Qatar producing at its
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
       10
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
 less LNG because several economies were experiencing sluggish growth. However, Mother
        5
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
       0
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
            Up to 1 bcm/yr 1-5 consequence bcm/yr causedbcm/yrJapanese municipalities/local
 for the LNG industry. Thebcm/yr           5-10 which   10-20 the     20-30 bcm/yr   >30 bcm/yr
 Source: PFC Energy
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 A large part of the increase in smaller-sized terminals stems from the commissioning of floating
 jumped by almost the Bahía Blanca and Puerto Escobar terminals in Argentina; Pecém and
 terminals, including12% to about 79 MT.
 Meanwhile, Brazil; Dubai in the UAE; the environment and a move the Northeast any serious
 Guanabara inthe growing concern for the Teesside GasPort in the UK; seen to avert Gateway and
 impact from another US coast; and the Mina Al-Ahmadi GasPort in Kuwait. Contracts were led
 Neptune LNG off the oil price hike, coupled with the need to enhance energy security, hadalso
 signed for countries to in Indonesia (West Java), Lithuania (Klaipeda LNG) increase their
 to severalfloating terminalsenter the league of LNG importers, as well asand Israel (Israel
 LNG), all of which are
 consumption of LNG. announced to come onstream in the medium term, with many more countries
 and developers studying or planning offshore terminal developments.
 The large incremental demand across the globe practically mopped up all the increased
 cargoes SHARE OF A Qatar, as well APACITY OF LNG T away by the AND 2011
 FIGURE 32:churned byNNUAL SEND-OUT Cas those turnedERMINALS IN 2006United States. It is therefore
     surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 not 100%
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
      90%
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
                                                                                     >30 bcm/yr
      80%
 2011.                                                                               20-30 bcm/yr
   % Share of Total




                        70%
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
                                                                                  10-20 bcm/yr
      60%
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became bcm/yr
                                                                                  5-10
                                                                                       a major
      50% in the latter part of 2011. This is further exacerbated by the need for more of the
 concern
                                                                                  1-5 bcm/yr
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
      40%
                                                                                       Up to 1 bcm/yr
      30%
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
      20%
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
      10%
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
       0%
 North America started to move forward more aggressively, aided by several Sales Purchase
                          2006                               2011
 Agreements signed by the Sabine Pass LNG project.
 Source: PFC Energy


 6.7. REGASIFICATION TERMINAL TECHNOLOGY
 The long lead time and high investment cost for land-based terminals, together with safety concerns
 and environmental considerations have recently resulted in an increased interest in offshore re-
               IGU World LNG Report - 2011 І Page 41

               IGU World LNG Report - 2011     Page 41
                                                    4
 gasification terminals. A variety of offshore concepts have been developed:

       A Floating Storage and Regasification Unit Gas is an
1. Message from the President of International(FSRU)Union LNG carrier with on-board
         regasification capability. It either can be a conversion of an existing carrier or purpose built.
         It remains attached to a single point mooring system offshore and receives LNG from other
 Dear IGU members
         carriers by ship-to-ship transfer. The LNG is stored, regasified on demand and exported to
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
         shore by a subsea pipeline.
 Last year, the world experienced some very interesting events, which led to some very
          An LNG Storage and Regasification Vessel (LNG SRV) is a carrier with in 2010, the
 intriguing outcomes. After experiencing a very strong growth in demand of 22% regasification
          equipment onboard. The carrier docks at a floating buoy and exports its gas to the shore via
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
          a subsea pipeline. Shipboard regasification can take 5-7 days before the carrier is depleted
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
          and can sail to its next destination.
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
          A Gravity-Based Structure (GBS) is a submersible structure was expected rests on the
 unconventional gas to meet its energy needs. Moreover, Europe that permanentlyto consume
          sea floor and contains integral LNG experiencing and regasification equipment on the
 less LNG because several economies were storage tanks sluggish growth. However, Mother
          topside. It is us wrong, and as the costly goes “nature works there are no proposals
 Nature again proved a robust, but also rathersaying solution and currently in mysterious ways”! for
          additional GBS which hit
 The tragic earthquake projects. Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The consequence which caused the Japanese municipalities/local
          Other concepts are at a conceptual stage such as Hiload. It is a floating docking station to
          which an LNG carrier is able to the via a friction-based power plants which led to the
 authorities to temporarily shutdown all dock54 nuclear poweredattachment system. The LNG is
          regasified offshore and exported to shore via a As a pipeline. Onshore regasification
 country having to rely on LNG to fill its energy vacuum.subsearesult, Japan’s demand for LNG
          terminals 12% to about innovation
 jumped by almosthave also seen 79 MT. including use of air vaporisers in hot and wet climates,
          and cold integration with neighbouring industry to and a overall efficiency.
 Meanwhile, the growing concern for the environment improvemove seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 LNG receiving terminals convert imported LNG back to its gaseous state by using either an open loop
 to several countries to enter the league of LNG importers, as well as increase their
 or closed loop heating system. An open loop system uses a continuous stream of seawater as the
 consumption of LNG.
 heat source for regasification and can pump up to 200 million gallons of sea-water per day in the
 The large a closed loop system, portion the globe practically mopped up in the to provide
 process. In incremental demandaacross of the gas cargo, about 1-2%, is burnt all orderincreased
 cargoes churned regasification. This those has higher emissions from States. It is therefore
 the heat source forby Qatar, as well as system turned away by the Unitedgas combustion than an
 not surprising that the world’s impact on trade life and is by 32% to reach most terminals.
 open loop system but has minimalLNG spot marineincreased the system used by 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
Looking Ahead:
 2011.
     By how much growth in domestic LNG trade, tanker charter LNG which were sluggish
 In tandem with the will rising the world’sgas demand, especially in rates, exporting countries,
     impact LNG supply experienced a term? Several traditional LNG exporters are major
 in 2009 and 2010, alsoand prices long sharp rise, and vessel availability became aalready
     building the latter part of 2011. This is further exacerbated by the need for more of the
 concern in or are planning to build LNG receiving capacity. Indonesia is channelling some volume
     from its LNG plant for use in the domestic market, and a few others may also follow. To what
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
    extent would such imported LNG impact on the prices of the local gas market? .
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
     Will new as capacity lead to moving demands on LNG supply? In addition to get a
 Australia. ButLNGthese projects startextreme forward, the industry was also beginning tothe 32
     countriesthe new frontiers. Eastern Africa and the Eastern construction, another 29 countries
 glimpse of with existing regasification capacity or capacity under Mediterranean buttressed their
     around possible LNG exporters as recent discoveries reflect the regions’ export potential.
 position asthe world are studying or planning LNG imports to meet domestic gas needs. Would the
     high number of proposed regasification capacity be a good aided by several Sales Purchase
 North America started to move forward more aggressively, indicator of the future LNG market?
 Agreements signed by the Sabine Pass LNG project.
    Will new technology continue to impact the number of LNG importers? Many of the latest
    markets that have begun importing LNG have been able to do so more quickly than was previously
    possible due to technological developments. As more countries seek to address supply security or
    energy cost concerns, this is likely to grow even more.
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011    Page 42
                                              Page 4
                                                   42


7. Message from
1. LNG Carriers the President of International Gas Union
The LNG trade hit an all time high of 241.5 MT, mainly arising from the Fukushima crisis in March
  Dear IGU members
2011, contributed to charter rates reaching historic highs, and resulted in a boom in orders for
  I am indeed honoured to present to you the second IGU World LNG Report for 2011.
newbuild vessels.
  Last year, the for LNG vessels initially began interesting events, and Q1 2011 some very
The charter marketworld experienced some very to tighten in Q4 2010 which led to as the price
  intriguing outcomes. After experiencing very widened, resulting in greater 22% in 2010, the
differential for LNG in the Atlantic and Pacificabasinsstrong growth in demand of interest in sending
  LNG from was poised to experience a glut into Asian 2011 with Qatar producing at its
cargoesmarketthe Atlantic Basin and Middle East situation in markets. This arbitrage opportunity
  maximum capacity of 77 MTPA whilst the United States, which used to be able to serve
increased journey lengths, placed a premium on non Q-Class, conventional-sized vessels a significant
all terminals, and ultimately increased demand for spot shipping charters. The surge in LNG demand in
  importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
the Japanese market, as a result of the Fukushima crisis, as well as higher demand in the United
  unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
Kingdom, India and China, and the emerging markets, added even greater momentum to this situation.
 less LNG because several economies were experiencing sluggish growth. However, Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 7.1. OVERVIEW
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 At the end of 2011, the global LNG fleet consisted of 360 vessels of all types, with a combined
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 capacity of 53 mmcm, which was 150% higher than in 2006. Growth was largely the result of
 authorities to temporarily shutdown all boom nuclear powered power vessels, which occurred
 deliveries associated with the last cyclical the 54in orders for newbuild LNG plants which led to the
 country having in 2004 when 68 orders energy vacuum. As a result, Japan’s year.
 most prominentlyto rely on LNG to fill its for all vessel types were placed in a singledemand for LNG
 jumped by almost 12% to about 79 MT.
 The average size of LNG concern for the environment and a move seen to the commissioning
 Meanwhile, the growingcarriers has also increased in recent years partly dueto avert any serious
 of larger Q-Series vessels associated with Qatar.
 impact from another oil price hike, coupled with Deliveries of Q-Series vessels were completed in
                                                      the need to enhance energy security, had led
 2010, resulting in the addition of 31 Q-Flex (210,000-217,000 cm) and 14 Q-Max (261,700-266,000
 to several countries to enter the league of LNG importers, as well as increase their
 cm) vessels to the global fleet. In 2011, the average capacity global fleet was 147,951 cm. By
 consumption of LNG.
 contrast, the average size of vessels in the newbuild order book at the end of 2011 was 162,132 cm,
 The large incremental larger capacities the globe practically
 reflecting the trend toward demand across for conventional vessels. mopped up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot uses of LNG vessels, which reach 62 MT, of 26% of
 There is also growing demand for alternativetrade increased by 32% to consists mainly or Floating
 Storage and Regasification Unit (FSRU) vessels. Many companies have also looked to develop
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 Floating Production, Storage and Offloading (FPSO) vessels, which facilitate floating liquefaction.
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 This technology remains unproven, though Shell in cooperation with Technip sanctioned the world’s
 2011.
 largest floating liquefaction plant in May 2011.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 7.2. VESSEL T 2010,
 in 2009 andYPES also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 The term “conventional LNG vessels” refers to the Moss-type or membrane vessels, which are greater
               sized less instead of the Qmax/Qflex to serve more include Q-Series types, which
 conventional cm andships than 180,000 cm. Non-conventional vessels widespread LNG markets.
 than 125,000
 offer the supply side, 2011 saw a large number in new LNG project
 On the largest capacities between currently available, of addition to FSRUs. sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 FSRUs of the new frontiers. both transporting LNG like traditional LNG carriers, and additionally
 glimpseare typically capable of Eastern Africa and the Eastern Mediterranean buttressed their
 offer the onboard functionality of regasifying LNG, which is reflect the land usually via a buoy-
 position as possible LNG exporters as recent discoveries delivered toregions’ export potential.
 connected pipeline. This onboard regasification capability eliminates the need for a traditional
 North America started to move forward more aggressively, aided by several Sales Purchase
 onshore regasification terminal, allowing the FSRU to function as a floating terminal for other
               signed by to Sabine own LNG project.
 Agreementsvessels andthedeliver itsPass LNG cargo directly to land. Some FSRUs are permanently
 conventional
 moored as floating regasification terminals, but the majority of the vessel type alternate as a floating
 terminal or LNG carrier at different points in a year.

 Shell and Technip’s FPSO vessel, which took FID in conjunction with the Prelude LNG project in 2011,
 will be the world’s largest vessel, estimated at about 600,000 tonnes. Given the unprecedented and
                IGU World LNG Report - 2011       Page 43
                                                       4
                IGU World LNG Report - 2011       Page 43

    Message from the President of International Gas Union
1.technically challenging nature of the project, Shell has stipulated that it will privilege execution over its
 announced timeline. Several other players are interested in pursuing FPSO newbuilds, but none have
 thus far made as much progress as the Shell-Technip duo, except Malaysia’s FLNG project offshore
 Dear IGU members
 Sarawak.
  I am indeed honoured to present to you the second IGU World LNG Report for 2011.
 7.3. year, the world experienced some very interesting events, which led to some very
 LastVESSEL CAPACITY AND AGE
 intriguing LNG carriers ranges significantly, very strong growth in to the fleet 22% in 2010, the
 The size ofoutcomes. After experiencing abut more recent additionsdemand of demonstrate a bias
 LNG market with larger capacities. The a glut cross-border LNG with Qatar producing at to
 toward vesselswas poised to experiencesmallest situation in 2011 vessels, typically 14,000 cm its
 maximum are mostly 77 to transport LNG United States, which used terminals in Japan.
 40,000 cm, capacity of used MTPA whilst the from Southeast Asia to smallerto be a significant
 importer also much smaller carriers – away more cargoes and increasingly rely on domestic
 There are of LNG, continuing to turn7,500 cm and below – which are used in domestic and coastal
 unconventional delivery of LNG to remote areas. The most common class of LNG to consume
 trades, facilitatinggas to meet its energy needs. Moreover, Europe was expected carrier has a
 capacity between 125,000-149,000 cm, representing 62% of the global fleet. The vast majority of
 less LNG because several economies were experiencing sluggish growth. However, Mother
 newbuild orders over the past decade in the next capacity category, 150,000 cm to 177,000 cm.
 Nature vessels of this size represent 18% of the current “nature works in mysterious ways”!
 Existing again proved us wrong, and as the saying goesfleet. Finally, the largest category of LNG
 The tragic earthquake which hit Japan in March 2011 could be considered a Q-Max (261,700-
 vessel is the Q-Series, which is composed by Q-Flex (210,000-217,000 cm) and “game changer”
 266,000 cm) types.
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 authorities LOBAL LNG FLEET BY CAPACITY, the 54 nuclear powered OF TOTAL)
 FIGURE 33: Gto temporarily shutdown all2011 (NUMBER OF CARRIERS, % power plants which led to the
  country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
  jumped by almost 7% to about 79 MT.
             13%    12%
                                          Below 125,000 cm
  Meanwhile, the growing concern for the environment and a move seen to avert any serious
  impact from another oil price hike, coupled with the need to enhance energy security, had led
      18%                             125,000 cm to 149,000 cm
  to several countries to enter the league of LNG importers, as well as increase their
  consumption of LNG.
                                          150,000 cm to 177,000 cm
 The large incremental demand across the globe practically mopped up all the increased
                         62%        as those turned cm
 cargoes churned by Qatar, as well210,000 cm to 266,000away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 Source: PFC Energy
 2011.
  In tandem with the growth in the fleet at the end of 2011 was approximately 11 years, largely due
  The average age of the global LNGworld’s LNG trade, tanker charter rates, which were sluggish
  to deliveries from the last cyclical newbuild order boom in 2004. 88% of the vessels in the global fleet
  in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
  were under 25 years of age. In general, safety and operating economics dictate that vessel owners
  concern in the latter part of 2011. This is further exacerbated by the need for more of the
  begin considering retiring a vessel after it reaches the age of 30, although several vessels may
  conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
  operate for more than 40 years.
  On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
  Australia. of 2011, approximately start moving forward, the industry was But beginning to get a
  At the end But as these projects 10% of the global fleet was over 30 years. also the tightening of the
  glimpse of the 2011 and the Eastern Africa and LNG charter rates for the next couple of their
  charter market innew frontiers. anticipated strength ofthe Eastern Mediterranean buttressed years
  has encouraged vessel owners to postpone retirements. It also suggests the high level of difficulty in
  position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
  anticipating the decision-making process, which vessel owners will undertake for as long as the
  North America started to move forward more aggressively, aided by several Sales Purchase
  charter market remains at historic highs.
  Agreements signed by the Sabine Pass LNG project.
                        IGU World LNG Report - 2011 І Page 44
                        IGU World LNG Report - 2011 Page 4 44

    Message from the President of International Gas Union
1.FIGURE 34: GLOBAL LNG FLEET BY AGE, 2011 (NUMBER OF CARRIERS, % OF TOTAL)
                            1%
                                   4%
     Dear IGU members
                                               2%
     I am indeed honoured 5% present to you the years
                          to                 >40
                                                 second IGU World LNG Report for 2011.
     Last year, the world experienced some very interesting events, which led to some very
                                            35-39 years
     intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
     LNG market was poised to experience 30-34 years
                                             a glut situation in 2011 with Qatar producing at its
     maximum capacity of 77 MTPA whilst the United States, which used to be a significant
                                            25-29 years
     importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
     unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
                                            1-24 years
                 88%
     less LNG because several economies were experiencing sluggish growth. However, Mother
     Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
     Source: PFC Energy
     The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
     7.4. CHARTER industry. The consequence which caused the Japanese municipalities/local
     for the LNG MARKET
     authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
     A major driver to rely on LNG to fill its energy vacuum. LNG shipping market in 2011 was the
     country havingfor the flurry of newbuild order activity in theAs a result, Japan’s demand for LNG
     tightening of short-term charter rates. The charter market for LNG vessels initially began to tighten in
     jumped by almost 12% to about 79 MT.
     Q4 2010 and Q1 2011 as the price differential for LNG in the Atlantic and Pacific basins widened,
     resulting in greater arbitrage opportunities from the Atlantic Basin and Middle to avert any serious
     Meanwhile, the growing concern for the environment and a move seenEast to Asian markets.
     This preference to sell price hike, coupled with the need to enhance energy security, had on
     impact from another oil into the Pacific Basin increased journey lengths, placed a premium led
     conventional vessels capable of serving league markets, importers, led to an increase in demand
     to several countries to enter the all Asian of LNG and generallyas well as increase their
     for short-term, spot charters. 6 The surge in demand from Japan, which occurred as a direct result of
     consumption of LNG.
     the Fukushima crisis, added even greater momentum to this trend as LNG suppliers rushed to divert
     cargoes to incremental demand
     The large the Japanese market. across the globe practically mopped up all the increased
     cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
     not surprising that LNG CHARTER RATES & N trade ORDERS
     FIGURE 35: ESTIMATED the world’s LNG spotEWBUILDincreased by 32% to reach 62 MT, or 26% of
                                                                                               tight
     the world’s total LNG trade, and with 25 countries actively involved. The unexpected vessels
       $'000/day                                                                          # of
     LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
                                 Spot Market
       140                                                                                         15
     2011.                       Long-term
       120
                                in the world’s LNG trade,                                           12
     In tandem with the growth Conventional Newbuild Orders tanker charter rates, which were sluggish
       100
     in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
        80                                                                                          9
     concern in the latter part of 2011. This is further exacerbated by the need for more of the
     conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets. 6
        60

     On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
        40
                                                                                                   3
     Australia. But as these projects start moving forward, the industry was also beginning to get a
        20
     glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
         0                                                                                         0
                   possible LNG exporters as Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11
     position asMay-08 Sep-08 Jan-09 May-09 recent discoveries reflect the regions’ export potential.
          Jan-08
     North America started to move forward more aggressively, aided by several Sales Purchase
     Agreements signed by
     Sources: Argus, PFC Energy the Sabine Pass LNG project.

     Short-term, spot charter rates doubled in 2011 to an average of $78,000/day. By Q1 2012, spot
     charter rates exceeded $130,000 for newer, more efficient vessels. Long-term charter rates rose12%

6
    Q-Series vessels are able to deliver LNG to a finite number of terminals, which have the capacity to receive such large-capacity vessels.
                       IGU World LNG Report - 2011              Page 45
                                                                     4
                       IGU World LNG Report - 2011              Page 45

     2011 to $78,000/day. President of International Gas Union
1.in Message from theThose interested in chartering a vessel were generally reluctant to sign long-
     term deals in such a strong charter market, as long-term rates crept close to the breakeven between
     Dear IGU and ordering newbuild vessels.
     chartering members

     I am indeed honoured to present to you the second IGU World LNG Report for 2011.
     7.5. NEWBUILD ORDERS
     Last year, the world experienced some very interesting events, which led to some very
     2011 proved to be a very strong year for newbuild vessel orders, especially following the Fukushima
     intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
     crisis in March 2011. During the period between March and December, 55 orders were placed for
     newbuild conventional and to experience a glut situation in 2011 with Qatar for these types in
     LNG market was poisedFSRU vessels. In total, 57 newbuild orders were placed producing at its
     2011, second only to the last cyclical order boom for LNG in 2004 when 68 to be
     maximum capacity of 77 MTPA whilst the United States, which used vessels,aincluding Q-    significant
     Series vessels, were ordered in a turn year. 7 more cargoes and increasingly rely on domestic
     importer of LNG, continuing to singleaway The cumulative number of outstanding orders in the
     order book stood at 67 at the end energy
     unconventional gas to meet itsof 2011. needs. Moreover, Europe was expected to consume
     less LNG because several economies were experiencing sluggish growth. However, Mother
     Nature again FLEET AND wrong, and as the saying goes “nature works in mysterious ways”!
     FIGURE 36: LNGproved usORDER BOOK, 2011
       # Vessels
     The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
       30
     for the LNG industry. The consequence which caused the Japanese municipalities/local
       25
     authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
                                                                      On Order   Current Fleet
       20
     country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
       15
     jumped by almost 12% to about 79 MT.
       10
     Meanwhile, the growing concern for the environment and a move seen to avert any serious
        5
     impact from another oil price hike, coupled with the need to enhance energy security, had led
     to 0several countries to enter the league of LNG importers, as well as increase their
                       Sovcomflot
                            Nakilat




                    Cardiff Marine
                            Awilco
               Teekay LNG/Nakilat


                       Hoegh LNG




                  Hanjin Shipping
                           NGSCO
               Maran Gas Maritime
                     GasLog LNG




                     Hyundai M.M.




                 Exmar/Excelerate
            Oman Shipping Co/MOL




               Nakilat/Overseas S.
               ProNav S.M./Nakilat
                 Teekay/Marubeni




                          Dynagas
                        JC Nakilat




                                Eni
                        Stena Bulk

                       Hyproc S.C.




                Excelerate Energy
                    Brunei Shell T.




              Sovcomflot/NYK Line
                Maran G.M./Nakilat
                           M.I.S.C.


                         BG Group


                              MOL




                          BW Gas
                        Golar LNG




                      Teekay LNG
                BW Gas/Marubeni

                      BP Shipping

                     Knutsen OAS




                            K Line




                      SK Shipping




                        Korea Line

                 MOL/NYK/Teekay




                  MOL/China S. G.
                         NWSSSC
                       Bonny G. T.




                         NYK Line



                  China LNG S.C.




     consumption of LNG.
     The large incremental demand across the globe practically mopped up all the increased
     cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
     not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
     the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
     LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
     2011.
     In tandem with
     Source: PFC Energythegrowth in the world’s LNG trade, tanker charter rates, which were sluggish
     in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
     The largest players in the market have traditionally been NOC-affiliated shipping companies such as
     concern in the latter part of 2011. This is further exacerbated by the need for more of the
     Nakilat, MISC Berhad, and Bonny Gas Transport, in addition to large Japanese shipping players such
     conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
     as Mitsui O.S.K. Lines (MOL) and Teekay. In 2011, other players made a push into the ranks of the
     elite. In particular, independent shipping companies of new LNG project Maritime and GasLog
     On the supply side, 2011 saw a large number Golar LNG, Maran Gas sanctions, mostly in
     LNG have been these projects in making orders during the post-Fukushima period. As charter
     Australia. But asquite aggressive start moving forward, the industry was also beginning to get a
     markets of other forms of shipping such as and the Eastern Mediterranean buttressed their
     glimpse for the new frontiers. Eastern Africadry bulk and VLCC continue to experience cyclical
     downturns, possible companies are privileging the counter-cyclical opportunity offered by the
     position as shipping LNG exporters as recent discoveries reflect the regions’ export potential.
     tightening LNG charter
                               to move Based more aggressively, 44 orders placed during the post-
     North America started market. forward on these conditions, aided by several Sales Purchase
     Fukushima period were “speculative” or “non-associated”, meaning they are not known to be
     Agreements signed by the Sabine Pass LNG project.
     associated with a liquefaction project charter or a general charter at the time the order was placed.

     The order book at the end of 2011 included five orders for FSRU vessels, which were placed by three
     companies Excelerate Energy, Golar LNG and Höegh LNG.
7
    All orders for Q-Series vessels were made from 2004 through 2007.
              IGU World LNG Report - 2011    Page 46
              IGU World LNG Report - 2011    Page 46
                                                  4


   Message floating liquefaction vessels was limited to a Gas firm newbuild order associated with
1.The market forfrom the President of International single Union
 Shell’s Prelude LNG project.
 Dear IGU members
Looking Ahead:
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
     Would the world experienced scheduled to be completed sometime in 2015, lead to
 Last year, the 57 newbuild vessels some very interesting events, which led to some very
     weakening of charter rates? The order boom in 2011 for newbuild LNG vessels, which are
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
     scheduled to be delivered toward the middle of the decade, could lead to an increase in capacity
     that overshoots poised to charters.
 LNG market was demand for experience a glut situation in 2011 with Qatar producing at its
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
     Considering that the charter turn away more cargoes and increasingly rely on domestic
 importer of LNG, continuing to rates for LNG vessels are now very high, what strategy should
     owners of new to meet its adopt? Unprecedentedly high charter rates are prompting LNG
 unconventional gasLNG plants energy needs. Moreover, Europe was expected to consume
     offtake customers of liquefaction projects currently under sluggish growth. However, Mother
 less LNG because several economies were experiencing construction to consider ordering their
     own vessels rather than contracting speculative newbuild orders.
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
     Would earthquake which hit by some March 2011 could be considered a excess capacity
 The tragic the delay experienced Japan in of the ongoing LNG projects lead to “game changer”
 for sometime in 2015/16?The consequence which caused the under construction could result in
     the LNG industry.         Delays to liquefaction projects currently Japanese municipalities/local
     vessels chartered to those projects all the 54 nuclear powered power plants whichwork.toThis
 authorities to temporarily shutdown temporarily entering the spot market in search of led         the
                   lead to downward fill its energy vacuum. As a result,
     would in turn to rely on LNG topressure on short-term charter rates. Japan’s demand for LNG
 country having
                            to about 79 MT.
 jumped by almost 12%older LNG vessels (around 30 years) take the risk of extending the
     Should owners of
    charter the growing concern for very high charter rates? The decisions made by serious
 Meanwhile,of such vessels in view ofthe environment and a move seen to avert any shipping
    companies regarding the timing coupled with for older vessels will play an important role in
 impact from another oil price hike, of retirements the need to enhance energy security, had led
    several countries to enter charter market over the importers, as
 to determining the tightness of the the league of LNG next few years. well as increase their
 consumption of LNG.
 The large incremental demand across the globe practically mopped up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
              IGU World LNG Report --2011
               IGU World LNG Report 2011     Page 47
                                                  4
                                             Page 47

1. Message from the President of International Gas Union
8. Impact of Unconventional Gas on the LNG Industry
The rapid transformation of the US gas market following the shale gas boom has already had an
  Dear IGU members
impact on the global LNG industry, but this impact could grow if the US exports shale gas as
  I am if unconventional gas can have the same transformative impact on other markets.
LNG or indeed honoured to present to you the second IGU World LNG Report for 2011.
   Last year, boom in the US and its dampening impact on the events, which led to some very
The shale gas the world experienced some very interestingcountry’s LNG demand has amplified
   intriguing outcomes. After experiencing a very strong 2010. in the absence of in US as a
the supply and demand balance in the market in 2009 and growth Yetdemand of 22% the2010, the
   LNG market was poised to experience a time at which in LNG with tightens by a couple its
significant LNG importer merely pushes back the glut situation the 2011marketQatar producing at of
   maximum capacity of 77 MTPA whilst the United able to which the success a significant
years. The bigger question is whether other countries will beStates, replicateused to be of the US?
  importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
 8.1. INTRODUCTION
  less LNG because several economies that experiencing sluggish growth. However, Mother
 The following report discusses the factorswere led to the unconventional gas boom in the US, the
  Nature has already had wrong, and as markets, the potential for material mysterious ways”!
 impact itagain proved us on regional gas the saying goes “nature works inshale gas production to
  The tragic earthquake which resulting in March 2011 could be also addresses the potential for
 be replicated elsewhere, and thehit Japanimpact on LNG demand. It considered a “game changer”
 the US to export shale gas as LNG, another impact from the shale gas boom that will affect the LNG
  for the LNG industry. The consequence which caused the Japanese municipalities/local
 market over the next decade and beyond.
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 jumped HALE GAS 12% AND IMPACT MT.
 8.2. US Sby almostBOOM to about 79 ON US LNG GAS DEMAND

  Meanwhile, the growing concern for the environment and a move seen to avert an serious
 Since 1950, the US gas system has gone through five phases. First, production grew byany average
 6% per annum from 1950 until it peaked in 1973. Second, production started to fall in 1974 until it
  impact from another oil price hike, coupled with the need to enhance energy security, had led
 bottomed out in 1986 – in that period, production declined by over 25%. Third, from 1987 to 2000, US
  to several countries to enter 1.3% annually, LNG to a significant well as output, but still
 production increased by a sustainedthe league of leading importers, as recovery in increase their
  consumption peak. Fourth, production hit another peak in 2000 and started to decline by 1.2% per
 below the 1973of LNG.
  The large incremental demand across the experienced its most dramatic growth in increased
 annum until 2005. From 2006 onward, productionglobe practically mopped up all the the last 40
  cargoes churned by Qatar, as well annum. turned output surpassed the 1973 peak.
 years, growing by an average 3.6% peras those In 2011, away by the United States. It is therefore
  not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 The growth in gas production has been driven chiefly by the ability to produce unconventional
  the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 resources at ever cheaper rates. Unconventional gas includes shale, coal bed methane and tight gas
  LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 which are all characterised by low natural permeability in the reservoir (commercial gas volumes do
  2011.
 not “flow” naturally). Using horizontal drilling and hydraulic fracturing, combined with tighter well
  In tandem a higher rate of drilling versus conventional gas charter rates, which been able to
 spacing andwith the growth in the world’s LNG trade, tankerfields, companies havewere sluggish
  in 2009 and permeability to extract ever sharp rise, and vessel availability became a major
 create sufficient2010, also experienced aincreasing commercial volumes from these reservoirs.
  concern in the latter part of 2011. This is further exacerbated by the need for more of the
  conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
  On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
  Australia. But as these projects start moving forward, the industry was also beginning to get a
  glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
  position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
  North America started to move forward more aggressively, aided by several Sales Purchase
  Agreements signed by the Sabine Pass LNG project.
                IGU World LNG Report - 2011 Page 484
                IGU World LNG Report - 2011 І Page 48

    Message from the PRODUCTION                 FIGURE Gas Union
1.FIGURE 37: US NATURAL GASPresident of International38: SHARE OF SHALE GAS IN US GAS PRODUCTION
   700                                                                     35%
 Dear IGU members
  600                                                                      30%
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.




                                                        % Share of Total
    500                                             25%
 Last year, the world experienced some very interesting events, which led to some very
    400                                              20%
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 bcm




    300                                              15%
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
    200
 maximum capacity of 77 MTPA whilst the United 10%    States, which used to be a significant
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
    100                                               5%
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
      0                                               0%
 less LNG because several economies were experiencing sluggish growth. However, Mother
       1950 1960 1970 1980 1990 2000 2010                1990    1995   2000    2005    2010
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
 Sources: EIA, PFC Energy                               Source: EIA
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 This growth in shale gas production has emerged as a shock to the LNG system for two reasons:
 first, it has made clear that the consequence which caused the Japanese the next decade (at
 for the LNG industry. The US will not import significant volumes of LNG overmunicipalities/local
 least), and to temporarily already altered 54 nuclear of both power plants which led to the
 authorities furthermore hasshutdown all thethe dynamicspowered the Canadian and Mexican gas
 markets having and second, there fill its energy vacuum. As a result, Japan’s demand for LNG
 country as well; to rely on LNG to is growing uncertainty over whether other countries will be able to
 replicate the experience to about and hence, reduce their own needs for imports. Together, these
 jumped by almost 12% of the US 79 MT.
 two prospects could reshape the LNG industry.
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 8.3. IMPLICATIONS OF US S enter the league of RADE importers, RICES
 to several countries toHALE GAS BOOM ON LNG TLNG FLOWS AND Pas well as increase their
 consumption of LNG.
 Perhaps the most important global implication of this “shale gas revolution” is that the US no longer
 needs as much LNG as
                           demand across the globe practically mopped the importance of US
 The large incremental previously forecasted. One useful way to think aboutup all the increased
 LNG is to re-examine the forecasts done by the Energy Information Administration (EIA) at the US
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 Department of Energy. In its 2005 Annual Energy Outlook (AEO 2005), the EIA was forecasting that
 the surprising that to world’s much as trade in 2010 to meet demand and offset or drop in
 not US would need theimport as LNG spot70 bcmincreased by 32% to reach 62 MT, the 26% of
 indigenous total LNG trade, and LNG production in actively involved. The unexpected tight
 the world’sproduction. Given actual with 25 countries 2010, this would have amounted to a global
 market share of 23%, making shooting world’s second largest LNG market after Japan. To meet
 LNG market led to its prices the US theup to between $16 and $17/mmBtu towards the end of
 2011.
 this projected rise in imports, there was a boom in US regasification capacity, which increased
 sevenfold between 2002 and 2010.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 As the production growth story proved to be sustainable, those expectations shifted: by 2008, the EIA
 thought in by latter part would only need further However, even the numbers turned out to
 concernthat the2010, the USof 2011. This is 34 bcm. exacerbated by thoseneed for more of the
 be optimistic. In the 2011 instead EIA significantly downgraded its LNG import expectations, and
 conventional sized ships AEO, theof the Qmax/Qflex to serve more widespread LNG markets.in
 2012 it supply even 2011 projecting that the US of new LNG project sanctions, mostly in
 On thehas gone side, further,saw a large number will become a net LNG exporter by 2016, after
 the start But as these projects start moving forward, the industry was also train of to get a
 Australia. up of Cheniere Energy’s Sabine Pass liquefaction project, the firstbeginning which is
 announced to come onstream in 2015.
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 In addition to Sabine Pass, there are now seven other proposed liquefaction projects in the continental
 US (excluding Alaska). to move forward more aggressively, aided by several Sales Purchase
 North America startedHowever, Sabine Pass is the only one to have secured contracts for any of its
 proposed capacity. by the Sabine Pass LNG project.
 Agreements signedThree other projects have announced start-up dates: Cove Point LNG in 2016,
 Freeport LNG in 2016, and Corpus Christi LNG in 2017.
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011   Page 49
                                             Page 4
                                                  49

    Message FORECASTS President of International40: US Union
1.FIGURE 39: EIA from the FOR US LNG IMPORTS FIGURE Gas REGASIFCATION CAPACITY VS. IMPORTS
     200                                                     175
 Dear IGU members
           AEO 2005                                                  US Regas Capacity
     150       AEO 2008                                      150
 I   am indeed honoured                                          LNG Report
                          to present to you the second IGU World US LNG Imports for 2011.
               AEO 2011                                      125
 Last year, the world experienced some very interesting events, which led to some very
   100        AEO 2012                              100
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the




                                                       bcm
 bcm




 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
     50                                              75
 maximum capacity of 77 MTPA whilst the United 50    States, which used to be a significant
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
      0
                                                     25
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
 less LNG because several economies were experiencing sluggish growth. However, Mother
    -50                                               0
 Nature again proved us wrong, and as the saying goes “nature 2002 2004 2006 2008 2010
        2000  2005   2010  2015   2020   2025           2000   works in mysterious ways”!
Source: EIA                                            Source: PFC Energy
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 This means that not only has a significant source of demand for global LNG supplies has disappeared,
                 temporarily add to global LNG supply by powered of the plants which led to will
 authorities to US is likely toshutdown all the 54 nuclear the middle power current decade. This the
 but in fact the
 have a having to impact LNG to markets over the next As a result, Japan’s demand for LNG
 country significant rely on on LNG fill its energy vacuum. decade, but it has already transformed
 regional by almost 12% to about 79 MT.
 jumped dynamics in North America. In particular, US net imports from Canada have declined steadily
 since 2007, the net exports to Mexico the environment and a move seen to gas any US has
 Meanwhile,while growing concern for have grown. Lower demand for Canadianavertin the serious
 coincided with declining price hike, coupled with production, enhance energy security, of lower
 impact from another oilCanadian conventional gas the need to but an important implication had led
 demand for Canadian gas in the US is that new shale gas being developed in western Canada is now
 to several countries to enter the league of LNG importers, as well as increase their
 more likely to be exported as LNG. There are several projects proposed, and these are likely to add
                   LNG.
 consumption ofin the Pacific Basin over the next decade, including Kitimat LNG, BC LNG, LNG
 to LNG supply
 Canada and the PETRONAS/Progress LNG the globe practically mopped up In the increased
 The large incremental demand across project in Canada’s Pacific Northwest. all Mexico, greater
 availability of pipeline Qatar, as well has already led away LNG imports States. It this trend is
 cargoes churned by gas from the USas those turnedto lowerby the Unitedin 2011, andis therefore
 likely to continue:
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 FIGURE 41: US NET to its WITH C shooting up to       FIGURE 42: MEXICAN LNG IMPORTS
 LNG market led TRADE pricesANADA AND MEXICO between $16 and $17/mmBtu towards the end of
 2011.
    10                                                    800

 In tandem with the growth in the world’s LNG trade, 700
    8                                                 tanker charter rates, which were sluggish
                                                       and
 in 2009 and 2010, also experienced a sharp rise, 600 vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
    6                                                 500
                                                       mmcm




              sized
 conventional Canadaships instead of the Qmax/Qflex to serve more widespread LNG markets.
 bcm




       4                                              400
 On the supply side, 2011 saw a large number of300
               Mexico                                   new LNG project sanctions, mostly in
     2
 Australia. But as these projects start moving forward, the industry was also beginning to get a
                                                      200
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
      -                                               100
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
                                                         0
 North America started to move forward more aggressively, aided by several Sales Purchase
    (2)
        2007 2008
 Agreements signed by 2009the Sabine 2011 LNG project. 2007
                              2010   Pass
                                                                 2008   2009   2010   2011
Source: PFC Energy                                      Source: PFC Energy


 Given that LNG investments have a long-lead time, there has been a significant amount of LNG
 capacity that has come onstream between 2009 and 2012 that was constructed based on the market
 expectations of 2005, whereby the US would become a major import market. This LNG had to find a
                     IGU World LNG Report - 2011 І Page 50
                     IGU World LNG Report - 2011 Page 4 50

    Message from the 2010, it found International Europe as well
1.new place to go – and inPresident of a home mostly inGas Union as in emerging markets
 (Middle East and Latin America). In 2011, following the Fukushima disaster, Japan absorbed most of
 the incremental LNG as its nuclear reactors were taken offline. Thus, while the lack of more imports
 Dear IGU members
 needed from the US produced a glut in gas supplies, new supply has been effectively absorbed by the
 I am indeed honoured to present to you on prices outside of North America. for 2011.
 market, minimising any downward pressurethe second IGU World LNG ReportSpecifically, this has
 two implications for gas pricing.
 Last year, the world experienced some very interesting events, which led to some very
  intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 First, the US market has become effectively disconnected from the broader global market, and
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
 remained so even as prices elsewhere moved towards convergence in 2011. While Henry Hub has
 maximum capacity of with prices in either Europe or Asia, the disparity between Henry Hub and
 never correlated perfectly77 MTPA whilst the United States, which used to be a significant
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
 prices elsewhere has been magnified since 2008. In 2011, US gas prices were more than 68% lower
 unconventional gas while they also traded at a Moreover, Europe was expected to consume
 than prices in Japan, to meet its energy needs.growing discount to UK gas prices (-33% in 2010,
 less LNG because several economies were several companies that own regasification terminals
 and -55% in 2011). As a result of this disparity, experiencing sluggish growth. However, Mother
 Nature again proved us wrong, and as the LNG from North America.
 which are idle have proposed to start exportingsaying goes “nature works in mysterious ways”!
  The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
  FIGURE 43: GAS PRICES IN SELECT MARKETS           FIGURE 44: EUROPEAN GAS PRICES, OIL-LINKED VS. SPOT
  for the LNG industry. The consequence which caused the Japanese municipalities/local
  authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
     14                                                  16                                NBP
  country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
     12                                                  14                                Oil Linked
  jumped by almost 12% to about 79 MT.                   12
           10
  Meanwhile, the growing concern for the environment and a move seen to avert any serious
 $/mmBtu




                                                        10
     8
  impact from another oil price hike, coupled with the need to enhance energy security, had led
                                                                $/mmBtu




                                                         8
  to several countries to enter the league of LNG 6importers, as well as increase their
     6
  consumption of LNG.
     4
                                                                          4
                 US              UK
 The2 large incremental demand across the globe practically mopped up all the increased
                                                        2
                 Japan Qatar, as Germany those turned away by the United States. It is therefore
 cargoes churned by              well as
     0                                                  0
                                                         2005 2006 2007 2008 62   2010 26% of
 not surprising that the world’s LNG spot trade increased by 32% to reach 2009MT, or 2011 2012
         2005 2006 2007 2008 2009 2010 2011
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
Source: PFC Energy                                   Source: PFC Energy
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.
 Second, increased supply into Europe put temporary pressure on the linkage between oil-linked and
 In tandem there. In 2009, in average oil-linked contract price exceeded the spot price at NBP by
 spot prices with the growth the the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced of 2010 rise, and vessel availability became in some
 about $3.5/mmBtu. However, by the end a sharp the gap had disappeared as buyers werea major
 concern in the latter part of with sellers. further exacerbated by the need for more of the
 cases able to renegotiate terms2011. This isBuyers succeeded in linking some of the volumes they
 conventional sized ships instead of oil; they also to serve a relaxation of take-or-pay (TOP)
 purchase to spot prices rather than the Qmax/Qflexachieved more widespread LNG markets.
 provisions. In 2011, however, this trend proved temporary: NBP fell slightly as the UK absorbed a
 On the supply volume of LNG from large number of new LNG project sanctions, mostly in
 greatly increased side, 2011 saw a Qatar, while rising oil prices pulled oil linked prices higher.
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa from a Eastern Mediterranean buttressed their
 Thinking about the importance of US shale gas and themore structural perspective, there are three
 position to possible
 questionsas consider: LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
     First, is the US shale gas revolution sustainable, and
 Agreements signed by the Sabine Pass LNG project. at what price is shale gas viable? And what
            risks are associated with its production? In 2011, the answers to these questions became
            somewhat clearer. First, the shale gas revolution is looking increasingly robust, as persistent low
            prices, and a massive shift in drilling to target oil rather than gas has yet to slow rising gas
            production in the US. While there are cyclical factors contributing to this, such as portfolio high-
            grading (companies drilling only on their best acreage), and JVs in which the operator’s drilling
            costs are carried by its partners for a set time period, it nonetheless appears that structural trends
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011     Page 51
                                               Page 4
                                                    51

    support sustainability. That is, the of International Gas Union
1. Message from the President cost of producing shale gas has been driven down to a level at
      which production can be sustained long term even in a relatively low price environment, though
      eventually growth
 Dear IGU members is likely to slow or even temporarily reverse as the cyclical trends cited above
      play out. And though restrictions on hydraulic fracturing due to its perceived or real
       indeed honoured to could have a the second IGU production Report in 2011.
 I amenvironmental impactspresent to youmaterial impact on World LNGpotential for some areas, the
      actual impact remains highly uncertain. Current policy trends mostly support continued
        year, the drilling, but this could change over time if environmental which prove some very
 Last expansion ofworld experienced some very interesting events, impacts led to significant.
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
         market the poised of experience a glut of US LNG 2011 with Qatar produced short
 LNGSecond iswas question to whether the absencesituation in import demand has producinga at its
       or long-term glut of supplies. From a global United States, glut seen in 2009-2010 has proven
 maximum capacity in 77 MTPA whilst the perspective, the which used to be a significant
       short-lived, though much of that has more cargoes increased Japanese on domestic
 importer of LNG, continuing to turn away been driven by and increasingly rely demand post-
       Fukushima, gas to could change depending Moreover, Europe was power policy there. In
 unconventional and thismeet its energy needs. on the evolution of nuclearexpected to consume
       the near-term, very little incremental LNG capacity is set to come onstream, meaning markets are
        LNG because tight so long as Japanese demand remains high. As the However, of LNG
 less likely to remain several economies were experiencing sluggish growth. next wave Mother
       capacity proved over the coming decade, demand growth in China, India and other emerging
 Nature againis added us wrong, and as the saying goes “nature works in mysterious ways”!
      tragic earthquake which hit Japan in another major glut, but this could a “game economic
 The markets now appears likely to prevent March 2011 could be considered change if changer”
      trends reverse. Over the long term, the most significant question remains whether other
 for the LNG industry. The consequence which caused the Japanese municipalities/local
      countries will be able to replicate the boom in shale gas seen in the US.
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
      And third, what is the potential fill its of US LNG exports on global markets? demand for LNG
 country having to rely on LNG toimpact energy vacuum. As a result, Japan’sThe total amount of
 jumped by almost 12% to about 79 MT. over 100 MTPA (137 bcm), but much of this capacity is
      proposed LNG capacity in the US is now
     highly speculative and very unlikely to move forward. Sabine Pass LNG, the project with the
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
     greatest momentum and a relatively high likelihood of being built, has a total of 18 MTPA (four 4.5
     MTPA trains) proposed. While it coupled with the that some LNG export capacity will be built in
 impact from another oil price hike, now appears likely need to enhance energy security, had led
     the US, countries to enter the league how much is possible, and thus the impact on LNG
 to several there remains great uncertainty overof LNG importers, as well as increase their
     markets of LNG.
 consumptionis likewise uncertain. At the low end, 18 MTPA represents about 6% of current global
     capacity, not insignificant but also not likely to transform global trade patterns or market
       large incremental demand across the globe practically mopped up all the increased
 The dynamics.
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 8.4. world’s IN UNCONVENTIONAL GAS PRODUCTION OUTSIDE NORTH AMERICA
 the GROWTH total LNG trade, and with 25 countries actively involved. The unexpected tight
 The market led to its prices shooting up has generated interest in unconventional gas around of
 LNGsuccess of the US in boosting shale gas to between $16 and $17/mmBtu towards the endthe
 2011. In Asia, Europe, Latin America and Africa, companies want to apply the knowledge and
 world.
 expertise gained in North America to other reservoirs globally. Interest is growing rapidly, but to-date,
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 development is still at a very early stage. At this point, several observations can be made:
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
      The in the latter part of 2011. This is further exacerbated by the need in more be as
 concern global resource base is thought to be significant – estimated by the US EIAfor 2011 toof the
      high as 6,623 ships tcm) – of this is a geological estimate of resources in place that could
 conventional sizedtcf (188instead butthe Qmax/Qflex to serve more widespread LNG markets.
     possibly be produced, and does not reflect economic or other considerations that will prevent
                                      large number is new more project sanctions, mostly in
 On the supply side, 2011 saw a produced. Thereof much LNG activity needed before we know
     much of this gas from ever being
     exactly how much unconventional moving forward, the industry was also beginning to get a
 Australia. But as these projects startgas exists and, more importantly, how much can be produced
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
     economically.
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
     The shale started to move forward more aggressively, aided by several coming together:
 North Americagas revolution in North America was the result of a number of factors Sales Purchase
     a prime signed by the large service sector capacity, favourable pricing, easy to market gas,
 Agreements resource base, Sabine Pass LNG project.
     clear property rights, a supportive government, etc. These conditions are largely absent in most
     other places – and even when some conditions are present (for example, high prices), others are
     not (availability of rigs, people, services or easy access to pipelines or clear sub-surface mineral
     rights, etc.).
                IGU World LNG Report - 2011
                IGU World LNG Report - 2011     Page 52
                                                Page 4
                                                     52

1. Message from the President of International Gas Union
    Every play is different. Even in the US, productivity (and hence profitability) is highly variable with
     good wells being as much as 30-40 times better than the worst wells. There are also enormous
     productivity gains
 Dear IGU members over time as companies learn how to produce optimally from specific
     reservoirs. In that sense, the industry’s challenge is to “adapt” not merely “adopt” the best
      indeed from America.
 I ampracticeshonoured to present to you the second IGU World LNG Report for 2011.
         year, the industry consensus that the production outlook for which led to some very
 Last There is an world experienced some very interesting events, unconventional gas is very
       uncertain. Most likely, unconventional a very strong growth in demand of 22% in 2010, as
 intriguing outcomes. After experiencinggas production may grow in certain niche markets suchthe
         market China and a few others in Europe situation in 2011 To Qatar producing at of
 LNGAustralia, was poised to experience a glut and Latin America. withdate, a limited number its
       horizontal wells of 77 MTPA fracturing United States, with used to be in Argentina,
 maximum capacity with hydraulic whilst thehave been drilled which mixed results a significant
       Poland, LNG, continuing to turn away more promising in terms of reported production rates
 importer of China and Australia. Of these, the most cargoes and increasingly rely on domestic
       have been in China meet its energy needs. Moreover, Europe was expected to consume
 unconventional gas to and Australia. In China, with activity dominated by the incumbent NOCs, who
        LNG because IOC majors as partners, it experiencing more years before activity builds to a
 less have brought in several economies were may be severalsluggish growth. However, Mother
       level where material shale gas production is seen, and many uncertainties remain over the quality
       of again proved us wrong, be as the saying goes “nature works has been somewhat more
 Natureplays and whether they will andeconomic to drill. In Australia, activity in mysterious ways”!
      tragic earthquake which hit Japan in March 2011 could be several years “game
 The widespread, but commercial production likewise remains at least considered aaway. changer”
 for the LNG industry. The consequence which caused the Japanese municipalities/local
 Therefore, while there is certainly the potential for unconventional gas to transform the global market
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
 in the same way that it transformed the North American market, it is clear that the level of activity
 globally is not to rely on LNG In some countries such As a result, Japan’s demand for early
 country havingat that point yet.to fill its energy vacuum. as Australia and China there are LNG
 indicators that look 12% to about 79 MT.
 jumped by almost promising; other countries such as Argentina and Poland are also moving quickly.
 But in several others – for example, France and South
                                                              and move seen to avert are already
 Meanwhile, the growing concern for the environmentAfrica,athe political constraintsany serious
 delaying drilling for shale gas. Development will be thus slow and uneven around the world.
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 to several countries to enter the league of LNG importers, as well as increase their
Looking Ahead:
 consumption of LNG.
     Is the incremental demand US sustainable? Portfolio high-grading and the increased
 The large shale gas boom in theacross the globe practically mopped up allthe expiration of
     drilling JV carries are pointing towards a slowing of growth. However, the overall continuation of
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
     shale gas production at a high level now appears structurally sound, as producers have been able
      surprising that the world’s to the point of increased by 32% to reach possible even in a
 not to improve drilling economicsLNG spot trade making shale gas production 62 MT, or 26% of
      world’s low price environment.
 the relatively total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011. the success of the shale gas sector in North America be replicated in other countries
     Can
     with significant unconventional gas reserves? A few charter rates, which were sluggish
 In tandem with the growth in the world’s LNG trade, tanker countries outside North America are
     already on their way to tapping shale and CBM gas reserves, namely Australia and China. Many
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
     more countries across Asia, Europe and South America have also proposed developing
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
     unconventional gas, but significant quantities of production remain far off.
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On Will the US shale gas revolution result in North America emerging as a substantial LNG
      the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
     exporter? Over the past two years, eight existing and the industry was also beginningin the US
 Australia. But as these projects start moving forward, proposed regasification terminals to get a
     meant to import LNG into British Columbia, and the Eastern replaced with four proposed LNG
 glimpse of the new frontiers. Eastern AfricaCanada have been Mediterranean buttressed their
     export projects. The potential impact
 position as possible LNG exporters asof LNG exports from North America is yet to be determined,
                                            recent discoveries reflect the regions’ export potential.
     though it will likely depend heavily on the long-term oil-gas price environment, and government
 North America started to move forward more aggressively, aided by several Sales Purchase
     policy. Some LNG exports now appear inevitable, but the final scale remains highly uncertain.
 Agreements signed by the Sabine Pass LNG project.
               IGU World LNG Report - 2011
               IGU World LNG Report - 2011     Page 53
                                               Page 4
                                                    53


9. Message from the President of International Gas Union
1. The LNG Industry in the Years Ahead
      Will Japan’s nuclear outage continue to affect global LNG demand? The future of nuclear
 Dear IGU members
      power continues with uncertainty after the accident in Japan in 2011. While it is still too early to
      tell how much LNG present to be the second the World of nuclear plants and
 I am indeed honoured todemand will you impacted by IGU shut in LNG Report for 2011.an overall
      policy shift away from nuclear in select countries, the potential upside for gas is significant.
 Last year, the world experienced some very interesting events, which led to some very
       How high will the tally of countries a very to LNG imports demand of 22% needs rise?
 intriguing outcomes. After experiencing turning strong growth in to meet domestic in 2010, the
        market was poised to experience a glut and Southeast Asian countries began importing
 LNG Just as the Middle Eastern, South American, situation in 2011 with Qatar producing at its
       LNG in the last five 77 MTPA whilst theinUnited regions, and potentially to be have plans to
 maximum capacity of years, more countries these States, which used Africa, a significant
       begin LNG, continuing next few years. How significant will the additional demand impact on
 importer ofimporting LNG in theto turn away more cargoes and increasingly rely on domestic
       the market?
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
       How because several gas boom were United States affect LNG prices? The LNG market
 less LNG long will the shaleeconomies in the experiencing sluggish growth. However, Mother
       tightened as a result of robust demand growth in 2011 and the demand mysterious ways”!
 Nature again proved us wrong, and as the saying goes “nature works in shock from Japan in the
      aftermath of the which hit Daiichi March           In that be considered a “game overhang
 The tragic earthquake FukushimaJapan in tragedy.2011 couldmarket environment, the changer”
      generated by shale gas in the United States is slated to last less than many market analysts had
 for the LNG industry. The consequence which caused the Japanese municipalities/local
      anticipated.
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
      Is having to rely on LNG to fill its energy vacuum. continue? Japan’s demand for LNG
 countrythe pace of growth in liquefaction capacity set to As a result,Incremental LNG supply into
      the market is 12% to about 79 MT.
 jumped by almost expected to slow in 2012-2014 as all of Qatar’s trains have come onstream and
      Australia’s liquefaction capacity is not expected onstream until later in the decade. Only three
     liquefaction growing scheduled to come onstream in 2012: the Skikda-GL1K Rebuild serious
 Meanwhile, the plants areconcern for the environment and a move seen to avert anyproject in
     Algeria, Angola oil price hike, coupled with LNG in Australia. Arzew-GL3Z (Gassi had led
 impact from another LNG T1 in Angola and Pluto the need to enhance energy security, Touil) is
 to several countries to enter the league of LNG importers, as well as increase their
     announced to come onstream in 2013.
 consumption of LNG.
      Will all the announced liquefaction capacity come online as scheduled?                 84 MTPA in
      large incremental is under across the globe another 92.1 MTPA up all the increased
 The liquefaction capacity demand construction, though practically mopped has been announced to
      come onstream by 2016, well as those liquefaction capacity to 454 MTPA           is year, as
 cargoes churned by Qatar, asbringing global turned away by the United States.inItthattherefore
      opposed that the MTPA LNG spot trade increased by 32% may not 62 MT, or 26% of
 not surprising to 278.7 world’sin 2011. Still, some of these plants to reach come onstream on
      schedule and decommissioning of older countries actively offset a minor share of this growth.
 the world’s total LNG trade, and with 25 plants is expected to involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
      What nations will drive future growth in liquefaction capacity? Though Qatar has been the
 2011.
      source of much of the world’s new liquefaction capacity over the last decade, the country has
      completed the growth in the world’s LNG trade, tanker charter IV. Australia is projected to
 In tandem with its last currently planned train – the 7.8 MTPA Qatargasrates, which were sluggish
      surpass Qatar as the experienced exporter by theand vessel decade, given its 61 MTPA of
 in 2009 and 2010, also largest LNG a sharp rise, end of the availability became a major
      capacity currently part construction.
 concern in the latter underof 2011. This is further exacerbated by the need for more of the
     Will global LNG receiving capacity continue on serve more widespread LNG markets.
 conventional sized ships instead of the Qmax/Qflex toa strong growth trajectory? Roughly 94
       MTPA of regasification saw a large number of new LNG project sanctions, onstream
 On the supply side, 2011capacity is currently under construction and announced to bemostly in
       by the end these projects completed, global regasification capacity will beginning to get a
 Australia. But asof 2016. Once start moving forward, the industry was also stand at about 709
       MTPA. Commissioning of new floating regasification vessels (which have shorter development
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
       lead times) could further increase LNG receiving capacity within this time frame.
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
       Will the LNG shipping market continue to tighten in 2012? by shipping will be driven by
 North America started to move forward more aggressively, aidedLNG several Sales Purchase
 Agreements signed by the Sabine Pass LNG project. deliveries; second, Qatar has chartered a
       three main factors: first, a slowdown in new vessel
      number of smaller vessels to increase the flexibility of its fleet; and third, an increase in players
      looking to do long-haul trade (including re-exporting from the United States) adding to miles
      travelled even though volumes may not grow. Together, these three factors have helped push
      up spot charter rates in 2011 and led to a dramatic number of LNG ship orders, with 55 ships
      ordered between March and December 2011.
               IGU World LNG Report - 2011      Page 54
               IGU World LNG Report - 2011      Page 54
                                                     4


APPENDIX I: Table of President of International Gas Union
1. Message from the Recently Commissioned Liquefaction Plants
                                       Nameplate
            Project           Start                                                                 Liquefaction
 Dear IGU members
  Country
             Name             Year
                                        Capacity                    Project Partners*
                                                                                                    Technology
                                        (MTPA)
 I am indeed honoured to present to you the second IGU World LNG Report for 2011.
                                                                               ConocoPhillips
  Trinidad     ALNG T4        2006        5.2      BP, BG, Repsol, NGC Trinidad                      Optimized
 Last year, the world experienced some very interesting events, which led to some very   Cascade®
               NLNG T4 After 2006
 intriguing outcomes.
   Nigeria                            4.1 a very strong growth in demand of 22% inAPC C3MRthe
                             experiencing    NNPC, Shell, TOTAL, Eni                      2010,
   Nigeria     NLNG T5       2006     4.1    NNPC, Shell, TOTAL, Eni                     APC C3MR
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
                                             Omani Govt, Petroleum Development Oman
 maximum capacity of 77 2006
   Oman       Qalhat LNG
                                               United Union Fenosa Gas, used              significant
                             MTPA whilst the(PDO), Shell,States, whichItochu, to be a APC C MR
                                      3.7                                                       3
                                             Mitsubishi, Osaka Gas, TOTAL, Korea LNG,
                                                     cargoes
 importer of LNG, continuing to turn away more Partex, Itochu and increasingly rely on domestic
                                             Mitsui,
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume  ConocoPhillips
                                             ConocoPhillips, Santos, INPEX, Eni, TEPCO,
 less LNG because several 2006
   Australia Darwin LNG T1                    experiencing sluggish growth. However, Mother
                              economies were Tokyo Gas
                                      3.6                                                 Optimized
                                                                                         Cascade®
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!ConocoPhillips
  Equatorial
               EG LNG T1      2007        3.7      Marathon, GE Petrol, Mitsui, Marubeni             Optimized
  Guinea
 The tragic earthquake which hit Japan in March 2011 could be considered a “gameCascade®      changer”
 for the LNG industry. The consequence which caused the Japanese municipalities/local
   Norway    Snøhvit LNG T1  2007        4.2    Statoil, Petoro, TOTAL, GDF SUEZ, RWE **    Linde MFC

 authorities to temporarily shutdown all the 54 nuclear powered power plants whichAPC C3to the
   Qatar      RasGas II (T3) 2007        4.7    Qatar Petroleum, ExxonMobil                  led MR/
                                                                                            Split MR™
                                                NNPC, Shell, TOTAL, a                       APC C LNG
 country having to rely on LNG to fill its energy vacuum. As Eni result, Japan’s demand for3MR
   Nigeria      NLNG T6      2008        4.1
             almost Shelf
 jumped by North West12% to about 79 MT.
   Australia                 2008        4.4
                                                BHP Billiton, BP, Chevron, Shell, Woodside,
                                                                                            APC C3MR
                  T5                               Mitsubishi, Mitsui
             the growing 2009
 Meanwhile,Qatargas II (T1) concern for the environment and a move seen to avert any serious
  Qatar                                 7.8    Qatar Petroleum, ExxonMobil              APC AP-X
 impact from another oil price hike, coupled with the need to enhance energy security, had led
  Qatar     Qatargas II (T2)  2009      7.8    Qatar Petroleum, ExxonMobil, TOTAL       APC AP-X
  Qatar     RasGas III (T1)   2009      7.8    Qatar Petroleum, ExxonMobil              APC AP-X
 to several countries to enter the league of LNG importers, as well as increase their
                                               TOTAL, Hunt Oil, Yemen Gas Co., SK Corp, APC C3MR/
 consumption of LNG.
  Yemen     Yemen LNG T1      2009      3.4
                                               KOGAS, Hyundai, GASSP                    Split MR™
                                                   BP, CNOOC, JX Nippon Oil & Energy, Mitsubishi,   APC C MR/
             incremental                          globe practically mopped Mitsui               increased
 The large Tangguh LNG T1 demand across the INPEX, LNG Japan, KG Berau, Talisman, up all the Split MR™
  Indonesia                   2009       3.8                                                          3



            Tangguh by Qatar,2009 well as those turned away by the United States. It is therefore
 cargoes churned LNG T2
  Indonesia                    as        3.8
                                                BP, CNOOC, JX Nippon Oil & Energy, Mitsubishi, APC C3MR/
                                                INPEX, LNG Japan, KG Berau, Talisman, Mitsui   Split MR™
 not surprising that (T1) world’s LNG spot trade increased byMitsubishi reach 62 MT, Shell26% of
  Russia     Sakhalin 2
                        the   2009       4.8    Gazprom, Shell, Mitsui,
                                                                        32% to                 or DMR
              total 2 (T2)                      Gazprom, actively involved. The unexpected tight
 the world’s SakhalinLNG trade, and with 25 countriesShell, Mitsui, Mitsubishi
  Russia                      2009       4.8                                                   Shell DMR
               led to its                  up
 LNG market Qatargas III prices shooting7.8 to between $16 and $17/mmBtu towards the AP-X of
  Qatar                       2010              Qatar Petroleum, ConocoPhillips, Mitsui        APC end
 2011.
  Qatar      RasGas III (T2)  2010       7.8    Qatar Petroleum, ExxonMobil                    APC AP-X
                                                   TOTAL, Hunt Oil, Yemen Gas Co., SK Corp,         APC C3MR/
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
   Yemen    Yemen LNG T2    2010       3.4
                                              KOGAS, Hyundai, GASSP                 Split MR™
              2010,                      a                                          APC C3major
 in 2009 and Peru LNG also experienced4.5 sharp rise, and vessel availability became a MR/
   Peru                     2010              Hunt Oil, Repsol, SK Corp, Marubeni
                                                                                    Split MR™
                                                                                    APC of
 concern in the latter part of 2011. This is further exacerbated by the need for more AP-Xthe
   Qatar     Qatargas IV    2011       7.8    Qatar Petroleum, Shell
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 Source: PFC Energy
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 * Companies are listed by size of ownership stake, starting with the largest stake
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 ** Hess sold its stake in Snøhvit LNG in November 2011
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                 IGU World LNG Report - 2011           Page 55
                                                            4


APPENDIX II: Table of Liquefaction Plants Under Gas Union
1. Message from the President of International Construction
                                                                 Nameplate
                                                 Announced
 Dear IGU members
  Country                    Project
                                                  Start Year
                                                                  Capacity                        Project Partners*
                                                                  (MTPA)
      indeed honoured GL1K Rebuild to you2012 second IGU World LNG Report for 2011.
 I amAlgeria    Skikda - to present       the        4.5    Sonatrach
      Angola             Angola LNG T1              2012             5.2        Chevron, Sonangol, BP, Eni, TOTAL
                                                                            which led to Gas
 Last year, the world experienced some very interesting events, Kansai Electric, Tokyosome very
       Australia       Pluto LNG T1       2012         4.3     Woodside,
                 Arzew - After experiencing a very strong growth in demand of 22% in 2010, the
 intriguing outcomes.GL3Z (Gassi Touil)
        Algeria                           2013         4.7     Sonatrach
                                                               Chevron, ExxonMobil, Shell, Osaka Gas, at its
 LNG market was poised to experience a glut situation in 2011 with Qatar producing Tokyo
       Australia      Gorgon LNG T1       2014         5.0
                                                                which Electric
 maximum capacity of 77 MTPA whilst the United States,Gas, Chubu used to be a significant
      Indonesia     Donggi-Senoro LNG     2014         2.0     Mitsubishi, Pertamina, KOGAS, Medco
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                                                               ExxonMobil, Oil Search, Government of Papua
     Papua New
                        to LNG T1
 unconventional gasPNG meet its energy 2014
       Guinea
                                                               New Guinea, Santos, JX Nippon Oil consume
                                           needs. Moreover, Europe was expected to & Energy,
                                                       3.3
                                                               MRDC, Marubeni, Petromin PNG
 less LNG because several economies were experiencing sluggish growth. However, Mother
                                                               ExxonMobil, Oil Search, Government of Papua
     Papua New
                       PNG wrong,                              New Guinea, in mysterious ways”!
 Nature again proved usLNG T2 and as the saying goes “nature works Santos, JX Nippon Oil & Energy,
       Guinea
                                          2014         3.3
                                                                                MRDC, Marubeni, Petromin PNG
      tragic                                in March 2011 could BG, CNOOC
 TheAustralia earthquake which hit Japan 2014
                  Queensland Curtis LNG T1               4.3     be considered a “game changer”
     the LNG industry.Pacific LNGconsequence which caused the Japanese municipalities/local
 for Australia     Australia   The T1       2015         4.5    ConocoPhillips, Origin Energy, Sinopec
                     Gladstone shutdown all 2015 54 nuclear powered power plants which led to the
 authorities to temporarilyLNG T1
     Australia                              the          3.9    Santos, PETRONAS, TOTAL, KOGAS
                                                                Chevron, ExxonMobil, Shell, Osaka Gas,
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand forTokyo
     Australia         Gorgon LNG T2        2015         5.0
                                                                Gas, Chubu Electric
                                                                                                        LNG
 jumped by almost 12% to about 79 MT.2015
     Australia         Gorgon LNG T3                     5.0
                                                                Chevron, ExxonMobil, Shell, Osaka Gas, Tokyo
                                                                                Gas, Chubu Electric
                                                                move Gas
 Meanwhile, the growing concern for the environment and aBG, Tokyo seen to avert any serious
    Australia  Queensland Curtis LNG T2  2015          4.3
                  Gladstone LNG hike, coupled with the need to enhance energy security, had led
 impact from another oil priceT2
    Australia                            2016          3.9     Santos, PETRONAS, TOTAL, KOGAS

                 Wheatstone enter
                                                               Chevron, Apache, TEPCO, increase
 to several countries to LNG T1 the league of LNG importers, as well as KUFPEC, Shell,their
    Australia                            2016          4.5
                                                               Kyushu Electric
 consumption of LNG.                                           Chevron, Apache, TEPCO, KUFPEC, Shell,
     Australia         Wheatstone LNG T2            2016             4.5
                                                                                Kyushu Electric
                                                                                    INPEX, TOTAL, up all the Gas, Toho
 The large incremental demand across the globe practically moppedTokyo Gas, Osaka increased
     Australia           Ichthys LNG T1              2017               4.2
                                                                                     the
 cargoes churned by Qatar, as well as those turned away by Gas United States. It is therefore
                                                                                    INPEX, TOTAL, Tokyo Gas, Osaka Gas, Toho
      surprising that Ichthysworld’s LNG spot trade increased byGas
 not Australia            the LNG T2                 2017               4.2           32% to reach 62 MT, or 26% of
      world’s           LNG trade, and               25
 the Australia totalPrelude LNG (Floating) with 2017 countries 3.6                    involved.
                                                                         activelyShell, INPEX The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 Source: PFC Energy
 2011.
 * Companies are listed by size of ownership stake, starting with the largest stake
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                IGU World LNG Report - 2011
                IGU World LNG Report - 2011         Page 56
                                                    Page 4
                                                         56

1. Message from the President of International Gas Union
APPENDIX III: Table of Liquefaction Plants Which Have Completed FEED
                                                              Nameplate
                                              Announced
 Dear IGU members
  Country                 Project
                                               Start Year
                                                               Capacity                  Project Partners*
                                                               (mmtpa)
   am                                    the
 I US indeed honoured to present to you2015 second IGU World LNG Report for 2011.
               Sabine Pass LNG (Liq.) T1           4.5    Cheniere Energy
  Australia             Pluto LNG T2             2015            4.3      Woodside
 Last year, the world experienced some very interesting events, which led to some very
   Australia           Pluto LNG T3          2015          4.3     Woodside
                            After experiencing a very strong growth in demand of 22% in 2010, the
 intriguing outcomes.Pass LNG (Liq.) T2
   US            Sabine                      2016          4.5     Cheniere Energy
                                                                   ConocoPhillips, Qatar producing
 LNG market was poised to experience a glut situation in 2011 with Origin Energy, Sinopec at its
   Australia      Australia Pacific LNG T2   2016          4.5
                         of LNG MTPA whilst the United 5States,NNPC, ConocoPhillips, Eni, TOTAL, Itochu,
 maximum capacityBrass 77 T1
   Nigeria                                   2016
                                                                    which used to be a significant
                                                                   LNG Japan, Sempra
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                                                                   NNPC, ConocoPhillips, Eni, TOTAL, Itochu,
 unconventional gas to meet its energy 2016
   Nigeria             Brass LNG T2           needs. Moreover, Europe was expected to consume
                                                            5
                                                                   LNG Japan, Sempra
   Eq. LNG                                   were                  Marathon, GE Petrol, However,
 lessGuinea because several economies 2016 experiencing sluggish growth.Mitsui, Marubeni Mother
                        EG LNG T2                         3.25

 Nature again proved us wrong, and as the
   US            Sabine Pass LNG (Liq.) T3   2017 saying goes “nature works in mysterious ways”!
                                                           4.5     Cheniere Energy
  US              Sabine Pass LNG (Liq.) T4      2017            4.5      Cheniere Energy
 The tragic earthquake which hit Japan 2017
   Russia                Shtokman LNG                                               be considered a
                                                      in March 2011 could Gazprom, TOTAL, Statoil “game changer”
                                                                        7.5
 for the LNG industry. The consequence which caused the Japanese municipalities/local
   Nigeria                   NLNG T7                  N/A               8.4         NNPC, Shell, TOTAL, Eni
                             NLNG shutdown all the 54 nuclear powered power plants which led to the
 authorities to temporarily T8
   Nigeria                                            N/A               8.4         NNPC, Shell, TOTAL, Eni

 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 Source: PFC Energy, status as of March 2012
 jumped by almost 12% to about 79 MT.
 * Companies are listed by size of ownership stake, starting with the largest stake

 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
APPENDIX IV: Table of Recently Commissioned LNG Receiving Terminals
 to several countries to enter the league of LNG importers, as well as increase their
 consumption of LNG.                   Announced
                                                   Nameplate
  Country                  Project*                           Capacity           Project Partners**          Concept
                                               Start Year
 The large incremental demand across the globe practically mopped up all the increased
                                                      (MTPA)
      Japan       Sodegaura (Expansion)       2008      1.6
 cargoes churned by Qatar, as well as those turned away by TEPCO, Tokyo Gas                 Onshore
                                                                  the United States. It is therefore
                                                                 CNOOC, Fujian Investment &
                                                                   32% to Co.                26%
 not surprising that the world’s LNG spot trade increased byDevelopment reach 62 MT, orOnshore of
      China              Fujian LNG           2008      2.6

 the world’s total LNG trade, and with 25 countries 0.1
      China             Mengtougou            2008                 involved. The
                                                         activelyShanghai Gas Group unexpected tight
                                                                                            Onshore
                Hazira LNG prices shooting up to between $16 and $17/mmBtu towards the end of
 LNG market led to its
       India                (Debottlenecking) 2008      1.1      Shell, TOTAL               Onshore

 2011.
     Belgium      Zeebrugge (Expansion)       2008      3.3      Publigas, Fluxys           Onshore
        UK           Grain LNG (Phase 2)         2008            6.4      National Grid Transco              Onshore
                                          LNG          tanker charter rates, which were sluggish
 In tandem with the growth in the world’s2008 trade, 3.0
       US        Northeast Gateway (OS)                        Excelerate Energy               Floating
                       also experienced a sharp rise,19.5 vessel availability became Onshore
 in 2009 and 2010, Sabine Pass
       US                                2008           and    Cheniere Energy                 a major
 concern in the latter part LNG 2011. This is further exacerbated by the need
       US             Freeport
                               of        2008         11.2
                                                               Michael S. Smith Co., ZHAfor more of the
                                                               FLNG Purchaser, Dow             Onshore
                                                               more widespread LNG markets.
 conventional sized ships instead of the Qmax/Qflex to serve Chemical, Osaka Gas
       Mexico             Costa Azul             2008            7.5      Sempra                             Onshore
     the supply Bahia Blanca GasPort (OS)a large number of new LNG projectYPF
 On Argentina     side, 2011 saw               2008       3.0      Enarsa, Repsol,
                                                                                    sanctions, mostly in
                                                                                                Floating
 Australia. But as these projects start moving forward, the industry was also beginning Onshore a
     Taiwan           Taichung LNG             2009       3.0      CPC                           to get
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
      China
                 Dapeng LNG (Guangdong,
                                               2009       3.0      CNOOC, BP                    Onshore
 position as possible Expansion)
                        LNG exporters as recent discoveries reflect the regions’ export potential.
      China           Shanghai LNG             2009       3.0      Shenergy Group, CNOOC        Onshore
 North America started to move forward2009
       India      Dahej LNG (Expansion)
                                                                            by
                                                more aggressively, aided LNG several Sales Purchase
                                                          3.5      Petronet                     Onshore
                  Mina by the GasPort
 Agreements signed Al-Ahmadi Sabine Pass LNG project.
       Kuwait                                    2009            3.7      Excelerate Energy                  Floating
                            (OS)
                                                                          RREEF Infrastructure, Eni, Gas
       Spain         Sagunto (Expansion)         2009            1.5      Natural Fenosa, Osaka Gas,         Onshore
                                                                          Oman Oil
                                                                          ExxonMobil, Qatar Petroleum,
        Italy      Adriatic LNG/Rovigo (OS)      2009            5.8                                         Floating
                                                                          Edison
                  IGU World LNG Report - 2011            Page 57
                                                              4
                  IGU World LNG Report - 2011            Page 57

                                                   Union
1. Message from the President of International GasQatar Petroleum, ExxonMobil,
        UK              South Hook (Phase 1)          2009             7.7                                   Onshore
                                                                                  TOTAL
        UK                  Dragon LNG                2009             4.3        BG Group, PETRONAS, 4Gas   Onshore
 Dear IGU members Point (Expansion)
      US      Cove                                    2009             5.4        Dominion                   Onshore

                                         the        IGU
 I am indeed honoured to present to you 2009 second 11.2 World LNG Report for 2011.
       US          Cameron LNG                              Sempra                                           Onshore
      Canada                 Canaport                 2009             7.5        Repsol, Irving Oil         Onshore
         year,
 Last Brazil the world experienced some very interesting events, which led to some very
                      Pecém (OS)        2009        1.8      Petrobras                    Floating
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
        Brazil
                  Guanabara LNG/Rio de
                                        2009        3.7      Petrobras                    Floating
                      Janeiro (OS)
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
                                                             BG Group, ENAP, ENDESA,
        Chile
                       of 77 MTPA whilst the United2.5
 maximum capacity Quintero LNG          2009
                                                              which                       Onshore
                                                      States,Metrogas used to be a significant
                                                             Shikoku Electric, Cosmo Gas,
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
       Japan             Sakaide        2010        0.7
                                                             Shikoku Gas
                                                                                          Onshore
                                        needs. Moreover, Europe was expected to consume
 unconventional gas to meet its energy 2010
        UAE            Dubai (OS)                   3.0      Golar                        Floating
        LNG
 less Spain because several economies were experiencing sluggish growth. However,Onshore
                  Barcelona (Expansion) 2010        4.7      ENAGAS                        Mother
                                                             GDF SUEZ, in mysterious ways”!
 Nature again proved us wrong, and as the saying goes “nature worksTOTAL
       France
                      FosMax LNG
                                        2010        6.0                                   Onshore
                      (formerly Fos Cavaou)
 The   tragic
        UK      earthquake which hit
                       Grain LNG (Phase 3)                            be considered
                                            Japan in March 2011 could National Grid Transco a “game changer”
                                                  2010        5.2                                    Onshore
 for the LNG industry. The consequence which caused the
       UK          South Hook (Phase 2)           2010        7.7
                                                                      QatarJapanese municipalities/local
                                                                      TOTAL
                                                                            Petroleum, ExxonMobil,
                                                                                                     Onshore
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
       US         Elba Island III (Phase 1)       2010        3.5     El Paso                        Onshore
                    Lake on LNG
 country having to rely Charles (IEP)to fill its energy vacuum. As a result, Japan’s demand Onshore
       US                                         2010        3.9     Southern Union, AIG Highstar   for LNG
                     12% LNG (OS)
 jumped by almost Neptuneto about 79 MT. 2010
       US                                                     3.0     GDF SUEZ                       Floating
       Chile          Mejillones LNG (Phase 1)        2010             1.5        GDF SUEZ, Codelco          Onshore
                                                               move LNG (Chugoku
 Meanwhile, the growing concern for the environment and aMizushima seen to avert any serious
                                                                                         had led
 impact from another oil price hike, coupled with the need to enhance energy security,Onshore
     Japan     Mizushima LNG (Expansion) 2011         0.9     Electric, JX Nippon Oil &
                                                              Energy)
                         to enter the league of LNG importers, as well as increase their
 to several countries Yufutsu
     Japan                               2011         0.0     Japex                     Onshore
 consumption of LNG. (Expansion)
     Japan       Ohgishima               2011         1.6     Tokyo Gas                 Onshore

      large
 The China incremental demand across2011 globe 3.5
                   Rudong/Jiangsu LNG         the             PetroChina, Pacific Oil,
                                                     practically mopped up Jiangsu increased
                                                              Guoxin                   all the Onshore
                                                               the United States. It
 cargoes churned by Qatar, as well as those turned away by PetroChina, Dalian Port, Dalian is therefore
      China                Dalian           2011     3.0                                       Onshore
                                                              Construction Investment Corp
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
     Thailand      Rayong (Map Ta Phut)     2011     4.9      PTT, EGAT, EGC                   Onshore
                                                      activelyENAGAS
 the world’s total LNG trade, and with 25 countries 0.0
      Spain      Huelva (Storage Expansion) 2011
                                                                involved. The unexpected tight Onshore
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
                                                              RREEF Infrastructure, Eni, Gas
 2011.Spain        Sagunto (Expansion 2)    2011     1.2      Natural Fenosa, Osaka Gas,       Onshore
                                                                                  Oman Oil
                     growth LNG             LNG         tanker
 In tandem with theNynashamn in the world’s2011 trade, 0.3
      Sweden                                                                     which were sluggish
                                                                                  AGA Gas rates,
                                                                                 charter AB Onshore
      Norway          Fredrikstad          2011        0.0     Skangass LNG                 Onshore
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
                                                               Gasunie, Vopak, Dong,
                        part of                                EconGas, the need
 concern in the latterGATE LNG 2011. This is further exacerbated by E.ON, RWE for more of the
    Netherlands                            2011        8.7                                  Onshore

                                                               more widespread LNG Onshore
 conventional sized ships instead of the Qmax/Qflex to serve Qatar Petroleum, ExxonMobil, markets.
        US        Golden Pass Phase 1      2011        7.5
                                                                                  ConocoPhillips
                                                                       Qatar project sanctions, mostly in
 On the supply side, 2011 saw a large number of new LNG Petroleum, ExxonMobil,
         US              Golden Pass Phase 2      2011        8.1                                   Onshore
                                                                       ConocoPhillips
                                 projects start moving forward, the industry was also beginning to get a
 Australia. But as these(formerly Clean
                       Gulf LNG                                        El Paso, GE Energy Financial
         US                                       2011       11.2                                   Onshore
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
                           Energy Terminal)                            Services, Sonangol
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
     Argentina           Puerto Escobar (OS)      2011        3.7      Enarsa                       Floating

 North America started to move forward more aggressively, aided by several Sales Purchase
 Source: PFC Energy
 Agreements signed by the
 * (OS) refers to offshore terminals Sabine Pass LNG project.
 **Companies are listed by size of ownership stake, starting with the largest stake
                IGU World LNG Report - 2011     Page 58
                                                     4
                                                     58


APPENDIX V: Table of LNG Receiving Terminals Gas Union
1. Message from the President of International Under Construction
                                                    Nameplate
                                        Announced
  Country                Project*                    Capacity            Project Partners**
 Dear IGU members                        Start Year
                                                     (MTPA)
                   Dabhol present to
 I am indeed honoured to LNG
      India                                the
                                       you2012 second IGU World LNG Report for 2011.
                                                       2.0    GAIL, NTPC
    Indonesia         Nusantara (OS)          2012        3.0     Pertamina, PGN
                   Lekas experienced some very interesting events, which led to some very
 Last year, the worldLNG (Malacca)
      Malaysia                           2012         4.0     PETRONAS
                  Sines After experiencing a very strong growth in demand of 22% in 2010, the
 intriguing outcomes. LNG (Expansion
      Portugal                           2012         2.0     REN
                         Phase 1)
         market was poised to experience a glut situation in 2011Samsung, KOGAS producing at its
 LNGMexico              Manzanillo       2012         3.7     Mitsui,
                                                                      with Qatar
                    Bahia 77 MTPA whilst the United States, which used to be a significant
 maximum capacity ofBlanca (OS)
      Argentina                          2012         3.7     Enarsa
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
                       (Expansion)
        China
                  gas to meet its energy 2012
 unconventionalShanghai LNG (Expansion)               0.0     Shenergy Group, CNOOC
                                          needs. Moreover, Europe was expected to consume
        India           Kochi LNG        2012         2.5     Petronet LNG
        LNG                              were
 less Japan because several economies 2013 experiencing sluggish Gas
                       Ishikari LNG                   1.4     Hokkaido
                                                                        growth. However, Mother
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
        China       Tianjin FSRU (OS)    2013         2.2     CNOOC

 The tragic earthquake which hit Japan 2013
       China          Ningbo, Zhejiang                          be considered a “game changer”
                                           in March 2011 could CNOOC
                                                       3.0
        India     Hazira LNG (Expansion)   2013        1.4     Shell, TOTAL
 for the LNG industry. The consequence which caused the Japanese municipalities/local
        India        Kochi LNG Phase 2     2013        2.5     Petronet LNG
                                           the
 authorities to temporarily shutdown all 2013 54 nuclear powered power plants which led to the
     Singapore   Jurong Island LNG Phase 1             3.5     Singapore Energy Market Authority
                         Israel LNG
 country having to rely onLNG to fill its energy vacuum. As a result, Japan’s demand for LNG
       Israel                              2013        1.8     Israel Natural Gas Lines
 jumped by almost 12% to about 79 MT.2013
       Spain          El Musel (Gijon)                 5.8     ENAGAS
        Italy         Livorno (OS)       2013         2.7
 Meanwhile, the growing concern for the environment and aE.ON, IREN, OLT Energy, Golar any serious
                                                               move seen to avert
      China         Zhuhai (CNOOC)       2013         3.5     CNOOC
 impact from another oil price hike, coupled with the need to enhance energy security, had led
                   Dahej LNG (Second
       India                             2013         2.5     GSPC,
 to several countries to Phase 1) the league of LNG importers, Petronet LNG as increase their
                   Expansion enter                                    as well
 consumption of LNG.
    Singapore  Jurong Island LNG Phase 2 2013         2.5     Singapore Energy Market Authority
      Japan              Naoetsu              2014        1.5     INPEX
      large
 The Japan incremental demand across the globe 3.5
                        Hibiki LNG        2014       practically mopped up all the increased
                                                              Saibu Gas, Kyushu Electric
                                                               the United States. It is therefore
 cargoes churned by Qatar, as well as those turned away by ENAGAS, EVE, RREEF Infrastructure
      Spain        Bilbao (Expansion)     2014       2.5
                                                                32% Hainan Development Holding Co.
 not surprising that the world’s LNG spot trade increased byCNOOC, to reach 62 MT, or 26% of
      China            Hainan LNG         2014       2.0
      China              Qingdao          2014       3.0      Sinopec
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNGPoland             Swinoujscie        2014       3.6      GAZ-SYSTEM SA
       market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
      Korea             Samcheok          2015       6.8      KOGAS
 2011.
     France              Dunkirk          2015       9.4      EDF, Fluxys, TOTAL
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 Source: PFC Energy
 in 2009 and 2010, also                                                                  major
 * (OS) refers to offshore terminals experienced a sharp rise, and vessel availability became a
 concern in the latter part of 2011. This is further exacerbated by the need for more
 ** Companies are listed by size of ownership stake, starting with the largest stake     of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                    IGU World LNG Report - 2011          Page 59
                                                              4


1. Message from the President of International Gas Union
APPENDIX VI: Table of Emerging Market Import Capacity
                     Number of                  Number of                               Capacity Under      First Year as LNG
                      Exiting                   Terminals          Existing Capacity    Construction or          Importer
 Dear   IGU members Terminals in
        Country
                                            Proposed or Under       in 2011 (MTPA)     Proposed in 2011    (by announced start
                       2011                   Constr. in 2011                              (MTPA)                  date)
 I am indeed honoured to present to you3 the second IGU World LNG Report for 2011. 2008
       Argentina       2                              7.5          12.8
 Last year, the world experienced some very interesting events, which led to some very
           Brazil           2               5             5.5            17.2           2009
           Chile            2               3
 intriguing outcomes. After experiencing a very strong 3.9                6.2           2009
                                                           growth in demand of 22% in 2010, the
          Kuwait            1               0             3.7             0.0           2009
 LNG market was poised to experience a glut situation in 2011 with4.5
   United Arab Emirates     1               1             3.0
                                                                            Qatar producing at its
                                                                                        2010
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
          Norway            1               0             0.0             0.0           2011
 importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
         Sweden             1               0             0.3             0.0           2011
 unconventional gas to meet its energy 0needs. Moreover, Europe was expected to consume
         Thailand           1                             4.9             4.9           2011
 less LNG because several economies 3
          Albania           0               were experiencing sluggish growth. However, Mother
                                                          0.0            16.8           2012
        Indonesia proved us 1
 Nature again                wrong, and as the saying goes “nature works in mysterious ways”!
                                           14             0.0            18.7           2012
        Malaysia                0                    6                    0.0                 9.7                2012
                                           in
 The tragic earthquake which hit Japan 4 March 2011 0.0
       Pakistan           0                             could be considered a “game changer”
                                                                        21.7         2012
 for the LNG industry. 0 The consequence which caused the Japanese municipalities/local
      Bangladesh                           1            0.0             3.7          2013
                                           the          powered power plants which led to the
 authorities to temporarily shutdown all 3 54 nuclear 0.0
       Colombia           0                                          Unspecified     2013
        Ghana             0                1            0.0          Unspecified
 country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand2013 LNG
                                                                                      for
         Israel           0                1            0.0             1.8          2013
 jumped by almost 12% to about 79 MT.1
        Jordan            0                             0.0             0.7          2013
                                                          and
 Meanwhile, the growing concern for the environment 0.0 a move seen to avert any serious
     Philippines           0              3                              4.5            2013
     Singapore another oil 0
 impact from                                              0.0 to enhance energy security, had led
                           price hike, coupled with the need
                                          1                              6.0            2013
       Estonia             0              2
 to several countries to enter the league of LNG 0.0      importers, as 0.7             2014
                                                                         well as increase their
      Jamaica              0              1               0.0            1.2            2014
 consumption of LNG. 0
      Lithuania                           2               0.0            4.0            2014
 The large incremental 0
      Panama              demand across the globe practically mopped up all the increased
                                        1              0.0        Unspecified       2014
       Poland            0              1              0.0           5.4            2014
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
     South Africa        0              1              0.0        Unspecified       2014
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
       Ukraine           0              1              0.0           7.3            2014
                                        25
 the world’s total LNG trade, and with 1 countries actively involved.5.9The unexpected tight
       Bahrain           0                             0.0                          2015
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
    Canary Islands       0              2              0.0           1.9            2015
 2011. Croatia           0              2              0.0           10.9           2015
        Denmark                 0                    1                    0.0             Unspecified            2015
                                                                                      sluggish
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were2015
      El Salvador        0                1             0.0            1.3
                                                                                      a
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became 2015major
         Ireland         0                1             0.0            7.2
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
       Lebanon           0                1             0.0            2.0           2015
       Uruguay sized ships instead of the 1
 conventional            0                Qmax/Qflex to serve more widespread LNG markets.
                                                        0.0            2.7           2015
        Vietnam                 0                    2                    0.0                 3.0                2015
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
        Kenya            0               1               0.0              2.0            2016
 Australia. But as these projects start moving forward, the industry was3.6
        Aruba            0               1               0.0                               to
                                                                           also beginningN/A get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
       Bulgaria          0               1               0.0           Unspecified        N/A
        Cuba possible LNG exporters as 1
 position as             0                               0.0 reflect the regions’ export potential.
                                         recent discoveries               2.0             N/A

        America started to move forward1 more aggressively, aided by several Sales Purchase
 NorthGermany            0                               0.0              2.9             N/A
       Morocco           0               1               0.0              3.6             N/A
 Agreements signed by the Sabine Pass LNG project.
        Romania                 0                    1                    0.0             Unspecified             N/A
        Sri Lanka               0                    2                    0.0                 0.3                 N/A

 Source: PFC Energy
 * (OS) refers to offshore terminals
 Note: Capacity proposed or under construction in 2011 includes expansion phases, which are not included in the tally of
 terminals proposed or under construction.
             IGU World LNG Report - -2011 Page 60
              IGU World LNG Report 2011 Page460


1. Message from the President of International Gas Union
 Sources

      IGU members
 Dear1. Bloomberg
      indeed honoured to present to you the second IGU World LNG Report for 2011.
 I am 2. Cedigaz
 Last year, the world experienced some very interesting events, which led to some very
       3. Company reports and announcements
 intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
 LNG market was poised to experience a glut situation in 2011 with Qatar producing at its
       4. German Federal Office of Economics and Export Control (BAFA)
 maximum capacity of 77 MTPA whilst the United States, which used to be a significant
       5. of LNG, continuing to turn Natural Gas cargoes and increasingly rely on domestic
 importerInternational Group of Liquefied away more Importers (GIIGNL)
 unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
       LNG because several economies were experiencing sluggish growth. However, Mother
 less 6. Japanese Ministry of Finance
 Nature again proved us wrong, and as the saying goes “nature works in mysterious ways”!
     7. PFC Energy (including PFC Energy’s Global LNG Service Databases)
 The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
      8. LNG States Energy Information Agency (EIA)
 for the Unitedindustry. The consequence which caused the Japanese municipalities/local
 authorities to temporarily shutdown all the 54 nuclear powered power plants which led to the
      9. having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
 country United States Department of Energy (DOE)
 jumped by almost 12% to about 79 MT.
     10. Waterborne LNG Reports
 Meanwhile, the growing concern for the environment and a move seen to avert any serious
 impact from another oil price hike, coupled with the need to enhance energy security, had led
 to several countries to enter the league of LNG importers, as well as increase their
 consumption of LNG.
 The large incremental demand across the globe practically mopped up all the increased
 cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
 not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
 the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
 LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
 2011.
 In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
 in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
 concern in the latter part of 2011. This is further exacerbated by the need for more of the
 conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
 On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
 Australia. But as these projects start moving forward, the industry was also beginning to get a
 glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
 position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
 North America started to move forward more aggressively, aided by several Sales Purchase
 Agreements signed by the Sabine Pass LNG project.
                    IGU LNG Report Report І 2011 Page 61
                     IGU World LNG - 2011 Page Page461
               IGU World World LNG Report - -2011 І61

    1. Message
Acknowledgement from the President of International Gas Union
     Acknowledgement

       Dear IGU thank thank
      The IGU to members the following organisations for providing their staff to be a member of
The IGU wisheswishes tothe following organisations for providing their expert expert staff to be a member of
      the Task Force which has been entrusted to oversee the preparation and publication of this
he Task Force which has been entrusted to oversee the preparation and publication of this report: report:
       I am indeed honoured to present to you the second IGU World LNG Report for 2011.
         The year, Malaysian Gas Association
              Malaysian world experienced some very interesting events, which led to some very
      1.Last 1. The the Gas Association
       intriguing outcomes. After experiencing a very strong growth in demand of 22% in 2010, the
         PETRONAS,was poised to
            market Malaysia
      2.LNG2. PETRONAS, Malaysia experience a glut situation in 2011 with Qatar producing at its
        maximum capacity of 77 MTPA whilst the United States, which used to be a significant
           3. Shell International Exploration and Production B. V., The Netherlands
      3. Shell International Exploration and Production B. V., The Netherlands
        importer of LNG, continuing to turn away more cargoes and increasingly rely on domestic
      4.unconventional gas to meet its energy needs. Moreover, Europe was expected to consume
             4. Royal The Netherlands
          Royal Vopak,Vopak, The Netherlands
        less LNG because several economies were experiencing sluggish growth. However, Mother
          International Group Group of Liquefied Natural Gas goes “nature works in mysterious ways”!
             5. International of Liquefied and as the Importers (GIIGNL), France
      5.Nature again proved us wrong, Natural Gas sayingImporters (GIIGNL), France
        The tragic earthquake which hit Japan in March 2011 could be considered a “game changer”
           6. Malaysia LNG Sdn
      6. Malaysia LNG Sdn Bhd Bhd
        for the LNG industry. The consequence which caused the Japanese municipalities/local
          Total, Francetemporarily shutdown all the 54 nuclear powered power plants which led to the
      7.authorities to France
             7. Total,
        country having to rely on LNG to fill its energy vacuum. As a result, Japan’s demand for LNG
             8. by almost 12% to Company Limited,
      8.jumped Qatargas Operatingabout 79 MT.
          Qatargas Operating Company Limited, Qatar Qatar
        Meanwhile, the growing concern for the environment and a move seen to avert any serious
           9. States Department of Energy (DOE)
      9. United United States Department of Energy (DOE)
        impact from another oil price hike, coupled with the need to enhance energy security, had led
        to several countries to enter the league of LNG importers, as well as increase their
             10. Institute of Economics, Japan
      10. Institute of EnergyEnergy Economics, Japan
        consumption of LNG.
       The large incremental demand across the globe practically mopped up all the increased
       cargoes churned by Qatar, as well as those turned away by the United States. It is therefore
       not surprising that the world’s LNG spot trade increased by 32% to reach 62 MT, or 26% of
       the world’s total LNG trade, and with 25 countries actively involved. The unexpected tight
       LNG market led to its prices shooting up to between $16 and $17/mmBtu towards the end of
       2011.
       In tandem with the growth in the world’s LNG trade, tanker charter rates, which were sluggish
       in 2009 and 2010, also experienced a sharp rise, and vessel availability became a major
       concern in the latter part of 2011. This is further exacerbated by the need for more of the
       conventional sized ships instead of the Qmax/Qflex to serve more widespread LNG markets.
       On the supply side, 2011 saw a large number of new LNG project sanctions, mostly in
       Australia. But as these projects start moving forward, the industry was also beginning to get a
       glimpse of the new frontiers. Eastern Africa and the Eastern Mediterranean buttressed their
       position as possible LNG exporters as recent discoveries reflect the regions’ export potential.
       North America started to move forward more aggressively, aided by several Sales Purchase
       Agreements signed by the Sabine Pass LNG project.
Office of the Secretary General
c/o Statoil ASA
0246 Oslo
Norway

Telephone:   + 47 51 99 00 00
Fax:         + 47 22 53 43 40
Email:       secrigu@statoil.com
Website:     www.igu.org




PETRONAS
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