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LNG bunker supply and infrastructure .ppt

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					GAZPROM G4T
LNG bunker supply and infrastructure development by Gazprom



24 April 2012
 Overview
 1. European gas market fundamentals
 2. LNG bunker fuel – potential in North / Baltic Sea ECA
 3. Gazprom – core supplier of LNG fuel to ECA 1 customers in future
 4. Q&A




    2
 1. European Gas Market




   3
European natural gas demand and supply


 Substantial share of Russian gas
  approx. ~30 %
 LNG supplies to Europe have been
  dropping since May 2011 due to a
  more attractive Asian markets
 European gas production reached
  its plateau and expected to decline       * Average over past 3 years


  over the next decade
Example: production in Holland
   expected to drop by ~30% by 2020
   compare to 2012



                                            * Countries taken into account : France, Belgium, Holland, Germany

 4      Source: GM&T Commercial Analytics
       Oil Linked and Hub Based Natural Gas Pricing

Average European Oil- Indexed Gas Price = 13 $/mmBtu
LSFO 1% 380cs ARA FOB = 19.5 $/mmBtu
LSGO 0.1% ARA FOB = 25.9 $/mmBtu


                                                                                                                                         Finland

                                                                                                                       NAANTALI          PORVOO
                                                                                         Norway
                                                                                                                                 INKOO
                                                                                                        Sweden                           Estonia                                 Russia
                                                                                                                                                                            (European part)
                                                                                                           NYNASHAMN

              Hub / Market
                                                                                                                                            Latvia

                                                                                                                                       Lithuania
                                                               TEESSIDE                                                Klaipeda

              Based
                                                                                             Denmark
                                                               GASPORT
                                                                              WILHELMSHAVEN                                  (to Russia)
                                                                                                                                                       Belarus
                                            Ireland                                                     POLSKIE LNG
                                                            Great
                                               DRAGON
                                                            Britain
                                               LNG

                                                                                                        Oil Linked
                                                                            Netherlands
                                                     SOUTH GRAIN LNG GATE                                                   Poland
                                                   HOOK LNG                             Germany
                                                                    ZEEBRUGGE                                                                                            Ukraine
                                                                         Belgium
                                                                                Luxembourg                 Czech Rep.
                                                                                                                            Slovakia
                                                                                                                                                                  Moldova

                                                   MONTOIR                                                 Austria          Hungary
                                                  DE BRETAGNE       France           Switzerland                                                      Romania
                                                                                                            Slovenia
                            EL FERROL LNG                                                                              Croatia
                                                                                                 TERMINALE GNL         Bosnia and Serbia
                                                                                                    ADRIATICO          Herzegovina
                                                                                                                                                            Bulgaria   MARMARA
                                                BILBAO                                   GNL ITALIA
                                                                                                                                                                        EREGLISI
                                                                             FOS CAVAOU &                                   Montenegro
                                                                Andorra
                                                                             FAS SUR MER
                                                                                            OLT OFFSHORE
                                                                                                       Italy                         FYR Macedonia                                                         Existing and Proposed LNG
                                                                                            LNG TOSCANA
                             Portugal
                                              Spain        BARCELONA
                                                                                                                                       Albania                                           Turkey            Regasification Terminals :
                                                                                                                                                                   ALIAGA LNG
                                                  SAGGAS LNG                                                                                       Greece

                      SINES LNG
                                             CARTAGENA
                                                                                                                                                                                                                    Existing
                             HUELVA                                                                                                                 REVITHOUSSA
                                                                                                                                     Malta
                                                                                                                                                                                                  Cyprus
                                                                                                                                                                                                                    Under Construction /
               th
* Prices as of 18 April 2012                                                                           NUOVE ENERGIE                                                                                                Planned

         5
Key Factors Affecting Gas Markets in Europe




6    Source: www.bafa.de, Argus Gas
 2. LNG bunker fuel – potential in North/ Baltic Sea ECA




  7
    Emission Control Zones

• SOx – 0.1% from 1st Jan 2015
• NOx – by 80% from Tier I levels in ECAs, and by 20% for Tier II (global) compliance




                                                   ECA 1




                  ECA 2                              ECA 3
                                Caribbean ECA
                                                                                           ECA 4




                                                                                  Singapore Green
                                                                                  Initiative, Hong Kong’s
                                                                                  Fair Winds Charter


ECA Zone 1 – Is the most promising opportunity

Imperative – to upgrade marine transport to cleaner fuel in Europe so that to enhance the
global evolution of the shipping industry

     8
LNG bunker demand potential in ECA 1
Demand for LNG bunkering will be driven by relative cost to traditional
marine fuels
                                                     Scenario Analysis of LNG Bunker Demand
   • Total bunker fuel demand depends on economic         in the Baltic / North Sea 2011-2030
   growth patterns and type of vessel e.g.
   Cargo:
     - GDP and manufacturing
   Passenger:
     - Travel and tourism

   • LNG bunker fuel demand, as part of total bunker fuel
   demand, will be determined regionally by:

   - Relative price levels with traditional marine fuels
   (HFO, MGO)
   - ECA or other ship emissions controls
   - LNG fuel and infrastructure availability
   - Composition of ship traffic
   - NOx scrubbing and NOx adsorption traps (not widely     Source: PACE Global

   accepted)                                                Base Case: LNG $15.73/MMBtu < equivalent HFO price with scrubbers

                                                            Case 2: LNG $20.25/MMBtu < MDO equivalent price
                                                            (LNG supply too costly, sulphur limits only adopted based on regulation)
   •    LNG demand may exceed 20 mtpa after 2025
                                                            Case 3: LNG $13.62/MMBtu < HFO equivalent price
                                                            (LNG heavily incentivized, fuel switch is made based on best economics)

                                                            Case 4: LNG $15.73/MMBtu > HFO equivalent price, due to a lagging
                                                            economy and declining demand.

    9
 3. Gazprom – core supplier of LNG fuel




  10
  GM&T Regional Offices



                                                                   Manchester
                                                                                                 Berlin


                      Houston                         London
                                                      London                                                          Moscow


                                                           Paris

                                                                                                                                              Singapore
                                                                                     Zug




UK/London              UK/Manchester              North America/Houston     Germany/Berlin             France/Paris                 Switzerland/Zug                   Asia Pacific/Singapore

T: +44 20 8614 1312    T: +44 845 230 0011        T: +1 281 404 4500        T: +44 845 230 0011        T: +33 1 42 99 7350          T: +41 417 232 680                T: +65 6671 9001
info@gazprom-mt.com    enquiries@gazprom-mt.com   info.usa@gazprom-mt.com   enquiries@gazprom-mt.com   info.france@gazprom-mt.com   info.switzerland@gazprom-mt.com

    11
Solid track record of safe LNG
operations and trading

    Global operations from London, Houston, Singapore

    Strong global presence, covering all markets

    365/24/7 global trading and shipping

    Over 7 years of LNG trading operations

    Over 6.2 million tonnes of LNG traded

    Regas Capacity at Energia Costa Azul

    Chartered fleet: 5 vessels

    Delivered 100th LNG cargo

    79 MSPAs in place




12
Gazprom’s LNG trading

A Solid Track Record of Delivery




                                                           Volume traded,
                                                    Year
                                                               bcm
                                                    2005        0.16
                                                    2006        0.44
                                                    2007        0.45
                                   Source country   2008        0.64
                                   Market country   2009        1.84
                                                    2010        2.54
                                                    2011        3.04
 13
 Sakhalin: Russian strategic LNG projects




  14
Sakhalin LNG – Gazprom’s first LNG Project

                       Reserves: 600 bcm of gas, 170 mln tonnes of Crude Oil
                       LNG Plant: 2 x trains producing 9.6 mtpa per annum
                       Project structure:
                            • Gazprom – 50% +1
                            • Shell – 27.5%
                            • Mitsui –12.5%
                            • Mitsubishi –10%

                       Cargoes delivered to Japan, Korea, China, India and the
                        Middle East
                       Sakhalin expansion is being considered




15
 Shtokman: Russian strategic LNG projects




  16
    Shtokman: Russian strategic LNG projects

   Reserves: 3.9 tcm of gas and 53.4 mln
    tonnes of gas condensate
   Development:
     • 11 bcma pipe gas by 2016
     • 7.5 mtpa of LNG by 2017
     • Subsequent phases with growing LNG
         production
     • Up to 37.5 mtpa in 3 phases
   Upstream development: Gazprom (51%),
    Total (25%), Statoil (24%)
   Marketing: GM&T
   Target markets in North America, Europe,
    India and Mediterranean countries
   FID expected by July 1st 2012
   To be made available for ECA 1 bunkering
    customers



    17
 Small to mid scale LNG plants: Russian strategic LNG projects




  18
   Baltic Liquefaction facilities

                                                                                                              Shtokman

Russia
I - Petrodvorets (8,000 t/y)
II – Vyborg (8,000 t/y)
III – Kaliningrad 25,000 t/y (planned 100,000 t/y)
IV – Kingisepp 7,000 t/y (planned 10,000 t/y)
V – Dalnyaya Bay (500,000 t/y)

Under discussions
Additional supply of up to 1.5 mln tonnes of LNG                                             Finland
in total in the Baltic sea region (net of Shtokman)
                                                                                                                II
                                                                                                       VI            V
                                                                                                                          I
                                                       Norway                                                        IV
Norway / Scandinavia                                                 Sweden
                                                                                                                                          Russia
Skangass – (300,000 t/y)                       Skangass                                             Estonia                        (European part)



                                                                                                       Latvia

Finland                                                Denmark                                Lithuania
                                                                                      III
VI – Porvoo site (20,000 t/y)
                                                                                      (to Russia)
                                                                                                                      Belarus



                                        Netherlands
                                                                                   Poland
                                                           Germany
                                                                                                                                Ukraine
                                         Belgium

                                              Luxembourg              Czech Rep.
                                                                                       Slovakia




     19
 Other activities of GM&T



• Development of technical specifications of LNG bunkering vessels (GM&T jointly with SCF and
RMRS) - Near completion
- Design and construction planned for Q1’13 start

• Active involvement in LNG bunkering regulatory work (with RMRS and ABS and via SIGTTO)

• Third party LNG supply for trading volumes up to 2015-2016
 - Negotiations with Gazprom and GM&T business partners underway

• Anchor customers to supply LNG from 2013
 - negotiations underway with several ship-owners

• Upgrade of GM&T’s LPG coaster fleet (on time-charter) to dual-fuel engines from 2015

• Infrastructure development - seeking partners for storage / hub operators




 20
Summary


• European gas markets – growing role of exports gas (pipeline and LNG), relevance of
oil-indexation and diversity of supply concerns (eg. LNG pulled to Asia) while Russian
remains a core reliable supplier

• North / Baltic Sea – potential catalyst of upgrading global merchant fleet to a
cleaner more sustainable fuel – LNG

• Gazprom has the unique potential to offer stable LNG supply in ECA 1 starting from
2013 (subject to infrastructure constraints)

• Several projects in the Baltic region– unique opportunity

• Gazprom Group is keen to champion this development and welcomes new
partnerships and cooperation



 21
     4. Q&A




22

				
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