The Liquefied Natural Gas (LNG) Market 2012-2022

CNOOC is already running LNG regasification terminals at Fujian, Guangdong and Shanghai with a total capacity of 13.0mtpa and the company has an ambitious goal of joining the existing and newly built gas terminals with long reaching pipelines as far afield as possible towards central China.

Other Chinese companies such as CNPC and Sinopec are also building LNG terminals. CNPC is to inaugurate the small scale Ansai LNG receiving terminal in the province of Shaanxi Province. This 0.4mtpa terminal will cost $170m to be constructed. Table 4.9 shows details of LNG import terminals that are under planning, constructed and those that are operational.

Table 4.9 Existing, Planned & Under Construction Chinese LNG Import Terminals (Location, Owner, Status, Capacity MTPA & BCM/A) Location Owner Status Capacity Shantou Sino Gas & Energy Planned 3.0mtpa (4.14bcm/a) Tangshan CNPC Planned 3.5mtpa (4.8bcm/a) Tianjing CNOOC Planned 3.0mtpa (4.14bcm/a) Tieshan Port, Beihai City, Guangxi Sinopec Planned 5.0mtpa (6.9bcm/a) Province Yangpu, Hainan Island CNOOC Planned 2.0mtpa (2.76bcm/a) Ansai, Shaanxi Province CNPC Under Construction 0.4mtpa (0.55bcm/a) Dalian, Liaoning Province PetroChina In operation/Under 9.5mtpa Expansion (13.1bcm/a) Jieyang, Guangdong Province CNOOC Under Construction 2.0mtpa (2.7bcm/a) Shandong Sinopec Under Construction 3.0mtpa (4.1bcm/a) Ningbo Port, Province of Zhejiang CNOOC Under Construction 3.0-6.0mtpa (4.1- 8.3bcm/a) Zhuhai CNOOC Under Construction 3.5mtpa (4.83bcm/a) Jiangsu PetroChina (55%), Jiangsu In operation 3.5mtpa Guoxin Investment Group Ltd (4.83bcm/a) (10%) and Pacific Oil & Gas Holding (35%) Dapeng Guangdong Dapeng LNG In operation 3.7mtpa (5.1bcm/a) Company (CNOOC & BP) Fujian CNOOC In operation 2.6mtpa (3.6bcm/a) Shanghai CNOOC (45%) Shenergy Group In operation 3.0mtpa (55%) (4.14bcm/a)

Source: Visiongain 2012

www.visiongain.com Page 94

The Liquefied Natural Gas (LNG) Market 2012-2022

Table 4.41 The Eurasian LNG Market Forecast 2012-2022 ($bn, AGR %) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $bn 0.8 0.8 0.9 0.9 0.9 1.0 1.0 1.1 1.1 1.2 1.2 1.3 AGR(%) 3.0 4.2 4.3 4.7 4.5 4.3 4.2 4.1 4.0 4.2 4.5

Source: Visiongain 2012

Table 4.42 The Eurasian LNG Market Forecast CAGR (%) 2012-2022, 2012-2017, and 2017-2022 2012-2022 2012-2017 2017-2022 CAGR (%) 4.3 4.4 4.2 Source: Visiongain 2012

Figure 4.46 The Eurasian LNG Market Forecast 2012-2022 ($bn) 1.4

1.2

1.0

0.8

$ bn 0.6

0.4

0.2

0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year

Source: Visiongain 2012 www.visiongain.com Page 152

The Liquefied Natural Gas (LNG) Market 2012-2022

7. Expert Opinion

7.1 Höegh LNG

Höegh LNG is based in Norway, with more than 30 years of experience in the LNG industry, the company has nine LNG carrier vessels and operates a number of FSRU units across the globe and is considering investment in an FLNG unit. Arild Jæger is the Head of Investor Relations at Höegh LNG. Visiongain would like to thank him for his comments.

7.1.1 Höegh LNG in the Liquefied Natural Gas Market

Visiongain: What are the major LNG expansion or development projects in which Höegh LNG is involved?

Arild Jæger: Höegh LNG ordered its first LNG tanker in the late 1960s and the company began transporting LNG in 1973. The business strategy of the company is to offer floating LNG services. Now the company provides three types of services; a) LNG transportation, b) Floating storage regasification and offloading units (FSRU) and c) Floating LNG production (FLNG). We have a ten year contract in Lithuania and a twenty year contract in Indonesia for FSRU utilisation. For Floating LNG production (FLNG) we are conducting engineering studies for the Tamar field offshore Israel Tamar & Leviathan offshore field and we have established a joint venture company with the state oil and gas company, Petromin of Papua New Guinea and DSME E&R of South Korea to develop FLNG in Papua New Guinea.

7.1.2 Advantages of FLNG Facilities over Onshore LNG Terminals

Visiongain: What are the advantages of FLNG over onshore LNG liquefaction terminals?

Arild Jæger: FLNG platforms can be more economic for small to medium sized LNG production and they can be more cost effective for production from stranded gas fields, where building a pipeline will be too expensive. In certain areas there are risks of volcanic activity which make it difficult or impossible to place a pipeline on the seabed. Furthermore, in certain countries, local infrastructure is limited and makes onshore LNG liquefaction plant construction time consuming and expensive. FLNG terminals can be placed into a new location and begin operation in a shorter time scale than building an onshore liquefaction plant.

www.visiongain.com Page 179

The Liquefied Natural Gas (LNG) Market 2012-2022

8. Leading Companies in the Liquefied Natural Gas (LNG) Market

This chapter divides companies into three major categories; firstly companies producing gas and LNG; secondly LNG carrier vessel owners and operators; and thirdly, companies that offer technologies, engineering solutions for construction, repair and maintenance of LNG infrastructure.

8.1 Energy Companies in the Liquefied Natural Gas (LNG) Production Market

The following energy companies are involved in LNG production, terminal loading and offloading, regasification and marketing of natural gas. Some of these companies also own LNG vessels.

8.1.1 Abu Dhabi National Oil Company (ADNOC)

Headquarters: Abu Dhabi, UAE ADNOC is the United Arab Emirates' state owned oil and gas company, created to process and export the oil and gas reserves of the country, which are among the largest in the region. Through its subsidiary Abu Dhabi Gas Liquefaction Company (ADGAS), established in 1973, it has been producing and exporting LNG since 1977. ADGAS has a total liquefaction capacity of 7.6mtpa. However, more recently the company is also developing an LNG import terminal.

8.1.2 Apache Corporation

Headquarters: Minneapolis Minnesota, US Apache was formed in 1954 and is now a major oil and gas exploration and production company. Apache agreed to supply gas from Julimar in Western Australia and Chevron’s Wheatstone (LNG) hub and become an equity partner. Apache’s 55% interest in the Devil Creek Gas Plant in Western Australia came online in February 2012. Apache Corporation reported full-year 2011 earnings of $4.5bn or $11.47 per diluted common share, showing an increase of 50% from $3bn or $8.46 per share in 2010. Company’s return on investment was 12.8% and annual paid dividends per share were $0.68 in 2011.