Energy and commodity price benchmarking and market insights

Transcription

1 Energy and commodity price benchmarking and market insights London, Houston, Washington, New York, Portland, Calgary, Santiago, Bogota, Rio de Janeiro, Singapore, Beijing, Tokyo, Sydney, Dubai, Moscow, Astana, Kiev, Porto and Johannesburg

2 European gas and global LNG 5 June 2013 IFIEC Europe Brussels

3 US shale coal now

4 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 2,0 1,9 1,8 1,7 1,6 1,5 1,4 1,3 1,2 1,1 1,0 US marketed gas production

5 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 2,0 1,9 1,8 1,7 1,6 1,5 1,4 1,3 US marketed gas production

6 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 2,0 1,9 1,8 1, Gustav/Ike 1,6 1,5 1,4 1, Katrina/Rita US marketed gas production

7 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 2,0 1,9 +628mn m³/d 1,8 1, Gustav/Ike 1,6 1,5 1,4 1, Katrina/Rita US marketed gas production

8 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 2,0 1,9 or times UK demand each day 1,8 1,7 1, Gustav/Ike 1,5 1,4 1, Katrina/Rita US marketed gas production

9 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 2,0 1,9 or times Chinese demand each day 1,8 1,7 1, Gustav/Ike 1,5 1,4 1, Katrina/Rita US marketed gas production

10 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 3,0 2,5 2,0 1,5 US production 35pc shale in ,0 0,5 0,0 Dry onshore Associated Coalbed Dry offshore Alaska Tight Shale

11 bn m³/d US shale coal now, LNG later? Shale drives record US gas production 3,0 US production 50pc shale in ,5 2,0 1,5 US production 35pc shale in ,0 0,5 0,0 Dry onshore Associated Coalbed Dry offshore Alaska Tight Shale

12 US shale coal now 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% US electricity turns away from coal Coal Gas Nuclear Renewable Other

13 US shale coal now % US electricity turns away from coal 90% 80% 70% 16pc gas Coal Gas Nuclear renewable other % 50% 40% 30% 20% 10% 0% 30pc gas Coal Gas Nuclear Renewable Other Coal Gas Nuclear renewable other

14 Steam coal exports (mn t/yr) US shale coal now Net exports 2005 AEO

15 Steam coal exports (mn t/yr) US shale coal now Net imports 2005 AEO 2013 AEO

16 Q102 Q302 Q103 Q303 Q104 Q304 Q105 Q305 Q106 Q306 Q107 Q307 Q108 Q308 Q109 Q309 Q110 Q310 Q111 Q311 Q112 US shale coal now EU27 coal import balance SA/US/AUS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Australia South Africa US

17 US shale LNG later?

18 LNG imports (mn t) US once on course for vast imports Net imports 2005 AEO

19 Oregon Bradwood Oregon LNG Portwestward Jordan Cove US once on course for vast imports California Sound Energy Port Esperanza Ocean Way Cabrillo Port Clearwater Port Planned or proposed import projects New England Downeast LNG Quoddy Bay Calais Weaver s Cove Keyspan NY/NJ Crown Landing Blue Ocean Broadwater Liberty Safe Harbor Maryland Cove Point II Sparrows Point 1.4bn m³/d of sendout capacity Texas Vista del Sol Ingelside Port Arthur Port Lavaca Corpus Christi Beacon Point Louisiana Creole Train Cameron II Main Pass Gulf Landing Pearl Crossing Port Pelican Alabama/Mississippi Bienville Compas Point Casotte Landing Gulf LNG Florida/Georgia Port Dolphin Calypso Elba Island III

20 LNG imports (mn t) US once on course for vast imports Net imports 2005 AEO 2008 AEO

21 LNG imports (mn t) US poised for exports Net imports 2005 AEO 2012 AEO 2013 AEO

22 Oregon Oregon LNG Jordan Cove US poised for exports Planned or proposed export projects Maryland Cove Point Georgia Elba Island 725.3mn m³/d of liquefaction capacity Texas Gulf Coast Freeport Golden Pass Corpus Christie Lavaca Bay Louisiana Main Pass Sabine Pass Lake Charles Cameron Mississippi Gulf LNG

23 US LNG exports, but at what price?

24 $/mn Btu Exporting US shale, but at what price? US LNG exports must compete on price Jul 13 Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 US futures NBP

25 $/mn Btu Exporting US shale, but at what price? 115pc Nymex commodity cost US LNG exports must compete on price Jul 13 Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 US futures +15 pc basis NBP

26 $/mn Btu Exporting US shale, but at what price? 115pc Nymex commodity cost +$2.85 fixed cost (margin) US LNG exports must compete on price Jul 13 Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 US futures +15 pc basis Fixed NBP

27 $/mn Btu Exporting US shale, but at what price? 115pc Nymex commodity cost +$2.85 fixed cost (margin) +Freight US LNG exports must compete on price Jul 13 Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 US futures +15 pc basis Fixed Freight NBP

28 $/mn Btu Exporting US shale, but at what price? 115pc Nymex commodity cost +$2.85 fixed cost (margin) +Freight US LNG exports must compete on price Jul 13 Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 US futures Fixed NBP +15 pc basis Freight Breakeven for DE power, free CO2

29 Gas prices and the power sector

30 /MWh Gas prices and the EU power sector Costs and P/L scenarios Real 31 May coal Real 31 May gas Fuel costs CO2 cost Profit/Loss Power price

31 /MWh Gas prices and the EU power sector Implies CO2 price at 48.75/t At least 10x higher than current prices Costs and P/L scenarios Real 31 May coal Real 31 May gas CO2 balanced coal CO2 balanced gas Fuel costs CO2 cost Profit/Loss Power price

32 /MWh Gas prices and the EU power sector Implies CO2 price at 48.75/t At least 10x higher than current prices Costs and P/L scenarios Implies gas price at 18.30/MWh -20 Real 31 May coal Real 31 May gas CO2 balanced coal CO2 balanced gas Gas balanced coal Fuel costs CO2 cost Profit/Loss Power price Gas balanced gas

33 Global shale resources

34 Global shale resources Trillion m³ EIA April 2011

35 Australia France Germany Netherlands Norway U.K. Denmark Sweden Poland Turkey Ukraine Lithuania United States Canada Mexico China India Pakistan South Africa Libya Tunisia Algeria Morocco Western Sahara Mauritania Venezuela Colombia Argentina Brazil Chile Uruguay Paraguay Bolivia Trillion m³ Global shale resources Chinese resources estimated to be larger than those of the US Technically recoverable shale gas resources Trillion m³

36 bn m³/yr China will still require imports Even at target, shale still insufficient to completely close supply gap Implied import requirement Shale target

37 Shale oil more of the same?

38 mn bl/d US crude production Shale drives rebound in US oil output US crude output

39 mn bl US crude stocks Crude stocks at or near historic highs East Coast (Padd 1) Midwest (Padd 2) Cushing Gulf Coast (Padd 3) Rocky Mountain (Padd 4) West Coast (Padd 5) 24 May 2013 Observed max

40 $/bl US-North Sea price spreads WTI v Brent Jun Jun Jun Jun Jun Jun-2012 Brent-WTI

41 Matthew Monteverde VP Generating Fuels Argus Media London Copyright notice All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this presentation you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, FMB, ARGUS publication titles and ARGUS index names are trademarks of Argus Media Ltd. Visit for more information. Disclaimer All data and other information presented (the Data ) are provided on an as is basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law.