25 August 2017 Global Equity Research Natural Gas
Global LNG Summary – Vol.12 Research Analysts MONTHLY David Hewitt 416 352 4583 [email protected] More from Doha (literally…) Mark Samter 61 2 8205 4537 ■ Qatar announces plan to increase capacity by 30% (23MTpa): [email protected] Following the blockade the current largest LNG producer announced plans Thomas Adolff to raise capacity to 100MTpa. (Link) 44 20 7888 9114 [email protected] ■ Our views: a) hard for Qatar to capture that much future market share, but b) Bhavesh Lodaya debottlenecking (circa 10MTpa) is likely and c) long term contract pricing is key; 212 325 2337 major price effect if Qatar softens its current contract price approach. [email protected] Gregory Lewis, CFA ■ Japanese Fair Trade Commission (FTC) publishes seminal paper on 212 325 6418 LNG procurement: challenging destination restriction and questioning [email protected] Take or Pay post project financing. (Link) Phillip Lindsay 44 20 7883 1644 ■ Our view: Some of the drafting appears balanced but some ideas appear less [email protected] ‘fair’. We expect sellers to comply with the balanced elements. Gregory Brown 44 20 7888 1440 ■ Korean FTC also now reviewing LNG contracts: Using the Japanese [email protected] FTC report as a template, it was reported in early August. (Link) ■ Our view: Buyer contagion re destination clauses was inevitable following the JFTC report. Asian spot liquidity will increase to some degree. ■ Sabine Pass Train 4 1st LNG: commissioning began in March and 1st LNG was achieved in July 2017. (Link) ■ Our view: Cheniere continues smooth construction execution as 4th train starts- up. The customer (GAIL) contract starts in 2019, so expect production in the spot market for the interim. ■ Cameron Train 1 timing slips: Sempra advised that Train 1 start-up could be delayed into 2019. (Link) ■ Our view: Slightly softens our 2018 export forecast to 3.3bcf/d (from 3.5). ■ Asian spot prices US$6.2/mmBtu (Aug 11th): prices higher basis Peru disruption, hot weather and early stockpiling. (Link) ■ Our view: temporary summer lift basis outages, supply ramps will soften prices in the latter part of the Asian summer. ■ Wheatstone T1 nearing 1st cargo: Woodside, in its quarterly earnings report commented that T1 is “well advanced and nearing completion.” (Link) ■ Our view: Start-up on schedule, expect commissioning cargoes in the spot market until Q4 2017. ■ Fortuna FLNG announces off-take agreement: Commercial terms have been agreed for Gunvor to take the full capacity. ■ Our view: Another milestone toward FID…slope will be important.
DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. 25 August 2017
Credit Suisse LNG related reports
CS adjusts its crude price deck: lower and longer: We now forecast $48/b WTI in H2 2017 and H1 2018, rising into the mid $50s in H2 2018. We push out the rebalance thru 2019, with our new long term WTI forecast at US$57.5/b. (Link).
Pacific NorthWest LNG: Another one bites the dust: The project announces its plan to not proceed within 1 week of the new British Columbia Government was sworn in. Petronas, in its announcement, appear committed to Progress Energy. With the PNW project not proceeding, and little momentum with the Kitimat project, that leaves one ‘major’ BC project – Shells Canada LNG, along with POG’s Woodfibre project in Squamish, BC. (Link).
Ophir Energy plc – Fortuna – off-taker names, financing pending: The partners have chosen Gunvor as the preferred off-taker from Fortuna FLNG and have secured principal commercial terms. A Sales and Purchase Agreement (SPA) is expected to be signed prior to the FID in 4Q17. This was 1 of the 2 remaining milestones ahead of the FID, with project financing being the last remaining hurdle to overcome. (Link).
European Gas Market: Latest trends and developments: (Link).
Japanese LNG procurement: Revolution: (Link).
Infrastructure Insights: LNG – three times the fun (and perspective): (Link).
Australian East Coast Gas: The Horse, Hunter and Stag: (Link)
Food for thought: Qatar and LNG: (Link).
Cheniere: Growing LNG market capture offsets low margin environment: (Link).
Energy Transfer: Breathing life into Lake Charles LNG: (Link).
GLNG: Another major step forward: (Link).
GLOG: Signs starting to point green: (Link).
GAIL: Quick-take: 7% EBITDA miss; US LNG worries to the fore: (Link).
Chiyoda: likely to book further expenses in Cameron LNG: (Link).
JGC – Jordan Cove EPC update: (Link).
Keppel Corp – Fuelling growth through gas solutions: (Link)
Santos – But you never normally write back? (Link).
CB&I – Coming clean (Link)
Global LNG Summary – Vol.122 Figure 1: Global LNG comps sheet
Ticker Rating Price Price Price Price Target Upside Market EV FX EPS Con EPS Credit Suisse PE ROE Dividend Yield Netdebt/ Perf Price to Target Capital IBES (Reporting Ccy) vs Consensus (Netdebt+Equity) LC 1-Jan 23-Aug YTD US$b US$b 15A 16A 17E 16A 17E 16A 17E 15A 16A 17E 15A 16A 17E 15A 16A 17E 15A 16A 17E DEVELOPERS Anadarko APC.N NR 48.6 43.0 -12% na na 24 36 BP BP.L O GBp 354 445 26% 530 20% 112 147 USD 0.3 0.1 0.3 0.1 0.3 -1% 3% 18 41 41 6% 3% 6% 7% 7% 7% 21% 26% 27% Chevron CVX.N NR 90.0 106.6 19% na na 202 247 Cheniere LNG.A O USD 37.3 41.6 12% 58.0 40% 9.9 31 USD (4.4) (2.7) (1.9) (2.4) (0.1) 12% 2020% nm nm nm 110% 44% -53% 0% 0% 0% 91% 96% 89% ConocoPhillips COP.N NR 46.7 43.7 -6% na na 54 78 Engie (GDF Suez) ENGIE.PA N EUR 16.3 14.3 -12% 13.2 -8% 41 69 EUR 1.1 1.0 1.1 1.4 1.0 -25% 10% 13 14 14 6% 6% 7% 7% 7% 5% 49% 51% 50% Eni SpA ENI.MI N EUR 13.8 13.2 -5% 14.5 10% 56 73 EUR 0.2 (0.1) 0.6 (0.1) 0.6 -20% 3% 74 nm nm 1% -1% 4% 6% 6% 6% 24% 22% 20% ExxonMobil XOM.N NR 78.0 76.6 -2% na na 318 357 Gazprom GAZPq.L U USD 3.7 3.9 4% 4.2 8% 45 na USD 1.1 1.2 0.7 4 3 3 7% 7% 4% 3% 3% 4% 16% 14% 17% Inpex 1605.T NR 1,186 1,051 -11% na na 14 14 Japex 1662.T NR 3,265 2,182 -33% na na 1.2 1.4 Liquefied Natural Gas LNG.AX NR USD 0.8 0.5 -32% na na 0.2 0.2 Marathon Oil MRO.N NR 12.6 11.0 -12% na na 9.4 14 Mitsubishi Corp 8306.T NR 757 665 -12% na na 80 na Mitsui & Co 8031.T NR 1,446 1,605 11% na na 26 54 Noble Energy NBL.N NR 32.9 23.7 -28% na na 10 16 Novatek NVTKq.L N USD 82.2 104.8 28% 110.0 6% 31 34 USD 3.9 9.5 10.1 12.8 9.0 -26% 12% 26 11 11 20% 27% 23% 1% 3% 3% 43% 20% 11% Oil Search OSH.AX O AUD 6.7 6.7 0% 6.8 -1% 8.2 11 USD 0.2 0.1 0.2 0.1 0.2 0% -6% 23 77 77 8% 2% 5% 2% 1% 1% 42% 40% 38% Ophir Energy OPHR.L O GBp 98 81 -18% 100 25% 0.7 0.6 USD (0.5) (0.1) (0.0) (0.2) (0.0) -54% -6% nm nm nm -20% -5% -1% 0% 0% 0% nc nc nc Origin Energy ORG.AX N AUD 4.7 7.5 59% 7.3 -3% 10.4 17 AUD 0.4 0.3 0.4 0.3 0.4 -2% 3% 18 28 28 4% 4% 6% 4% 1% 0% 45% 41% 40% Royal Dutch Shell RDSa.L O GBp 1,526 2,140 40% 2,500 17% 189 262 USD 1.7 0.9 1.8 1.0 1.8 -12% 1% 16 30 30 7% 4% 8% 7% 7% 7% 14% 28% 23% Santos STO.AX O AUD 3.7 3.5 -6% 4.0 15% 5.7 9 USD 0.0 0.2 0.0 0.1 0% 34% 78 78 1% 5% 0% 0% 31% 27% Statoil STL.OL U NOK 124 146 18% 130 -11% 61 88 USD 0.8 (0.1) 1.2 (0.1) 1.2 -8% 6% 24 nm nm 6% -1% 11% 5% 5% 5% 27% 36% 29% Total TOTF.PA N EUR 41.3 43.7 6% 44.5 2% 129 156 USD 4.5 3.5 4.1 3.4 4.0 3% 3% 11 15 15 11% 8% 9% 5% 5% 5% 22% 22% 15% Woodside WPL.AX U AUD 28.7 29.7 4% 25.6 -13% 19 24 USD 1.4 1.0 1.1 1.0 1.2 0% -9% 17 22 22 8% 6% 6% 5% 4% 4% 22% 23% 24% BUYERS Chubu 9502.T NR JPY 1,663 1,438 -14% na na 9.9 32.1 CNOOC 0883.HK O HKD 8.1 9.1 13% 13.2 45% 52 70 CNY 0.5 0.0 0.6 0.0 0.5 43% 33% 17 544 544 5% 0% 8% 7% 5% 4% 26% 24% 21% Gail (India) GAIL.BO U INR 277 384 39% 300 -22% 10.1 10.4 INR 14.5 18.3 25.2 20.3 26.2 -10% -4% 26 21 21 7% 8% 11% 1% 1% 2% 30% 28% 24% Kogas 036460.KS NR KRW 36,850 45,700 24% na na 3.7 25.5 PetroChina 0857.HK N HKD 5.0 4.9 -3% 5.0 4% 206 269 CNY 0.2 0.0 0.1 0.0 0.2 7% -19% 21 96 96 3% 1% 2% 2% 1% 2% 26% 23% 24% Petronet LNG PLNG.BO O INR 130 231 78% 250 10% 5.3 5.1 INR 6.0 10.2 12.6 10.2 11.9 0% 6% 37 22 22 15% 19% 21% 1% 2% 3% 8% nc nc Sinopec 0386.HK O HKD 4.7 5.7 22% 8.3 45% 104 134 CNY 0.3 0.4 0.5 0.4 0.4 1% 21% 18 13 13 5% 7% 9% 3% 5% 7% 19% 8% 6% Tokyo Electric 9501.T NR JPY 699 449 -36% na na 6.5 na Tokyo Gas 9531.T NR JPY 571 570 0% na na 12 17 ENGINEERING & CONSTRUCTION (E&C) CONTRACTORS Chicago Bridge & Iron CBI.N N USD 39.0 11.0 -72% 13.0 18% 1.1 2.8 USD 5.9 5.2 (1.7) 4.2 (1.8) 22% -3% 2 2 2 -25% 38% -15% 60% 3% 3% 49% 52% 53% Chiyoda 6366.T U JPY 923 565 -39% 520 -9% 1.4 0.1 JPY 20 (116) (114) (116) (48) 0% 137% 28 nm nm 3% -20% -22% 2% 1% 1% nc nc nc Fluor FLR.N N USD 47.2 37.6 -20% 41.0 9% 5.3 5.0 USD 2.9 2.0 1.4 2.3 1.5 -14% -7% 13 19 19 13% 9% 6% 2% 2% 2% nc nc nc Halliburton HAL.N O USD 34.0 39.0 15% na na 34 42 USD 1.6 (0.0) 1.0 (0.0) 1.1 16% -9% 25 nm nm 9% 0% 10% 0% 0% 0% 25% 47% 48% JGC 1963.T O JPY 1,863 1,731 -7% 2,500 44% 4.0 2.6 JPY 148 28 76 (24) 45 -218% 68% 12 61 61 9% 2% 5% 2% 2% 2% nc nc nc KBR KBR.N O USD 16.9 14.9 -12% 19.0 28% 2.1 2.3 USD 1.5 (0.3) 1.4 (0.3) 1.4 -3% -2% 10 nm nm 20% -6% 22% 0% 0% 0% nc nc nc Saipem SPMI.MI U EUR 9.4 3.1 -67% na na 3.6 5 EUR (0.5) 0.2 0.1 0.2 0.2 -2% -36% nm 14 14 -12% 3% 2% 0% 0% 0% 61% 24% 25% Schlumberger SLB.N O USD 69.8 63.2 -9% 78.0 23% 87 98 USD 3.4 1.2 1.6 1.1 1.5 1% 3% 19 55 55 12% 4% 6% 2% 3% 3% 29% 29% 29% Technip TECF.PA NR EUR 45.7 67.4 47% na na 9.5 Worley Parsons WOR.AX U AUD 4.6 12.7 175% 9.5 -27% 2.5 3.2 AUD 0.7 0.6 0.5 0.6 0.6 -1% -7% 18 24 24 9% 7% 7% 2% 0% 0% 29% 29% 27% SHIPPERS / OTHER Chart Industries GTLS.OQ NR USD 18.0 33.1 84% na na 1.0 1.0 Daewoo Shipbuilding & Marine Eng 042660.KS NR KRW 50,700 44,800 -12% na na 3.4 8.9 Dynagas LNG DLNG.N O USD 9.7 14.2 46% 18.0 27% 0.5 1.2 USD 1.6 1.7 1.0 1.7 1.0 0% 0% 9 8 8 16% 18% 12% 12% 12% 12% 65% 64% 66% Energy Transfer Equity ETE.N O USD 13.7 16.8 22% na na 18 61 USD 1.4 0.9 1.3 0.9 1.3 8% 0% 12 18 18 -127% -45% -129% 9% 7% 7% 61% 65% 64% GasLog Partners GLOP.N O USD 26.1 23.3 -11% 28.0 20% 0.9 1.7 USD 2.3 2.2 2.3 2.3 2.2 -5% 2% 10 11 11 11% 11% 11% 8% 8% 9% 54% 54% 51% Golar LNG GLNG.OQ O USD 15.8 21.5 36% 35.0 63% 2.1 3.7 USD (1.8) (1.9) (2.1) (2.0) (1.4) -3% 46% nm nm nm -9% -10% -14% 8% 1% 1% 45% 42% 57% Hӧegh LNG HLNGH.OL NR NOK 94.3 83.8 -11% na na 0.8 1.4 Keppel KPLM.SI O SGD 6.5 6.3 -3% 8.7 37% 8.5 14 SGD 0.8 0.4 0.5 0.4 0.5 0% 17% 8 15 15 14% 7% 8% 5% 3% 3% 34% 36% 35% Mermaid Marine Australia MRM.AX NR AUD 0.3 0.2 -29% na na 0.1 0.3 Samsung Heavy Industries 010140.KS O KRW 9,417 10,900 16% 17,000 58% 3.7 6.7 KRW -5,218 -433 364 -485 315 -11% 15% nm nm nm -28% -2% 2% 0% 0% 0% 34% 31% 20% TransCanada TRP.TO O CAD 45.2 63.3 40% na na 44 77 CAD 2.8 2.9 2.8 3.0 0% -2% 23 23 10% 12% 4% 4% 63% 64% TeeKay LNG Partners TGP.N NR USD 13.2 17.1 30% na na 1.4 3.3
Source: Company data, IBES, Reuters, Credit Suisse estimates. As at 24 August 2017. 25 August 2017
Global LNG Summary – Vol.123 25 August 2017
LNG prices
Figure 2: Basin and landed LNG prices
Source: the BLOOMBERG PROFESSIONALTM service, FGE, Credit Suisse estimates. Argus.
Figure 3: Basin and benchmark landed LNG prices Figure 4: Price differential between basin and in Asia benchmark landed prices in Asia
17 9 US$/mmBtu US$/mmBtu 8 15 7 6 13 5 4 11 3 2 9 1 - 7 (1) (2) 5 (3) Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 JCC-Linked HH-landed NBP-landed JCC linked-HH landed JCC linked-NBP landed
Source: the BLOOMBERG PROFESSIONALTM service, FGE, Credit Suisse estimates Source: the BLOOMBERG PROFESSIONALTM service, FGE, Credit Suisse estimates
Global LNG Summary – Vol.124 25 August 2017
Figure 5: Japan—overall realized vs North Asia spot price Figure 6: CS 2017 price forecasts
18 12 US$/mmBtu US$/mmBtu 10
13 8
6
8 4
2
3 - 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 N Asia Contract ANEA spot price (2)Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 US in Asia - low CS N Asia spot forecast NBP forecast NBP HH HH forecast Delta ANEA spot price N Asia contract forecast
Source: FGE, Argus Northeast Asia (ANEA) spot price Source: FGE, the BLOOMBERG PROFESSIONALTM service, Credit Suisse estimates
Figure 7: Argus Northeast Asia (ANEA) recent spot Figure 8: Japan—contracted vs delivered spot prices prices (DES prices) US$/mmBTU 12 20 US$/mmBtu 11 18 10 16 9 14 8 12 7 10 6 8 5 6 4 4 Sep-16 Jan-17 May-17 Sep-17 2 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Contract-based Arrival based
Source: Argus Northeast Asia (ANEA) spot price Source: METI
Figure 9: LNG shipping spot rates (2011-2017 YTD) Figure 10: LNG fleet development (2017 YTD – 2020)
Source: Clarksons, Credit Suisse estimates Source: Clarksons, Credit Suisse estimates
Global LNG Summary – Vol.125 25 August 2017
LNG OFS awards database
Global Project Tracker Database: Within our Project Tracker database we follow around USD35bn of active bids, representing prospects for the OFS industry. We also follow a further USD8bn of projects currently on hold. We've tracked close to USD11bn of awards year to date, including the major Coral South FLNG development, but also a series of smaller FEED and pre-FEED work on projects including Sakhalin 2 LNG, Leviathan and Darwin LNG.
Figure 11: LNG Project Awards by Region Figure 12: Live LNG Prospects by Region
Middle East 12%
2017 ytd Europe 4%
Africa 34%
2016
Asia Pacific 0 2000 4000 6000 8000 10000 12000 44% USDm Americas 6% Africa Americas Asia Pacific Europe Middle East
Source: Credit Suisse research Source: Credit Suisse research
BP and Kosmos are seeking technical and commercial proposals for the Tortue project. BP issued a request for proposal (RFP) to at least eight contractors including TechnipFMC, SBM Offshore, Modec and Samsung Heavy Industries for an EPC contract for the spread-moored Tortue FPSO. Upstream, 16 August, suggest that the FPSO will be installed in shallow water adjacent to a breakwater, and will handle production from six deepwater subsea wells. The VLCC sized vessel will include a separation unit, with gas sent to one or more FLNG vessels. Upstream suggests that 10% of the gas produced from the initial development wells would be piped to Mauritania and Senegal for power feedstock use. The likes of OneSubsea, Baker Hughes GE and TechnipFMC have also received RFP's for the SPS system. Anadarko has signed two agreements with the Mozambique government, moving its two-train LNG development closer to FID. The agreements, announced in a press release on 31 July allow Anadarko to design, build and operate the marine facilities for its LNG project. Before any potential investment decision Anadarko needs to secure sales and purchase agreements for the produced LNG, and secure financing. The two-train, 12mtpa facility would support the Golfinho/Atum development within Offshore Area 1. Anadarko drilled the play-opening Windjammer well in 2010, and had awarded a Saipem / Chiyoda joint venture a USD7bn contract to build the LNG park. Novatek is likely to select Saipem to build the offshore gravity based platforms for Arctic LNG 2. According to Reuters, 17 July, Saipem would fabricate the modules in the Northwest region on Murmansk, and then deliver them by sea to Gydan, around 2,000km away. In May, Novatek signed an agreement with the TechnipFMC/NIPIgaz/Linde consortium to cooperate on the design and construction of the GBS foundations for the project. According to Upstream. 17 July, Arctic LNG 2 is expected to have an output matching or exceeding Yamal. Its first line, which will produce 5.5 million tonnes of LNG a year, is expected to be launched later this year and Yamal will be producing 16.5 million tonnes by 2019.
Global LNG Summary – Vol.126 25 August 2017
Petronas and its JV partners have cancelled the USD27.6bn Pacific NorthWest LNG facility in British Columbia. The partners made the decision following a total review of the project amid changes in market conditions, citing prolonged depressed prices and shifts in the energy industry, according to a press release on 25 July. If approved the project would have been a two train, 12mtpa export facility. Feedstock would've come from Petronas’ subsidiary Progress Energy Canada’s gas assets in British Columbia. Bechtel and the TechnipFMC/Samsung Engineering/China Huanqiu, KBR/JGC consortiums had previously submitted proposals to build two LNG trains at Lelu Island as part of a USD8bn EPCI contract. LNG Canada bidding parties seek new subcontractor pricing. TechnipFMC/KBR, Fluor/JGC, Saipem/CB&I and Chiyoda/Bechtel – the four bidding parties for LNG Canada have approached Asian yards to quote new prices for module fabrication subcontracts, according to Upstream, 14th July. Similar to the contracting structure at Yamal, modules for the revised development are likely to be built in Asian yards under the management of a EPC contractor. Upstream suggests that the consortia approached various facilities in China, Thailand, India, Malaysia and the Philippines, including five who have worked on Yamal. The Shell-led LNG Canada development would be located in Kitimat and comprise two 6mtpa trains, with options for two more. In 2014, the CFSW consortium was awarded the main contractor package, but subsequently a new process was launched to identify a construction contractor to manage all of the design and construction work. FERC will allow Fourchon to commence the pre-filing procedure for its LNG project. Fourchon LNG plans to build a 2mtpa terminal in an initial phase, with a proposed second phase expanding the capacity to a total of 5mtpa. The terminal would include up to ten liquefaction trains, pre-treatment facilities and two storage tanks. Fourchon expects to file a formal application with FERC no later than February 2018. Black & Veatch won the jetty topside and onshore LNG facilities for Jafrabad LNG. Under a contract signed on July 25 Black & Veatch will perform the EPC for the facilities that will support a 5mtpa FSRU that will be moored to a fixed jetty. Jafrabad is set to become India's first FSRU terminal when it comes on stream in 2020. CFT and Victrol will build a LNG bunkering barge for Shell. The joint venture will build and operate the 110m vessel which will have the capacity to carry 3,000m³ of LNG. The barge is set to commence bunkering operations in the port of Rotterdam in 2019. Gazprom and Shell sign agreement for Baltic LNG feasibility study. Early in August, Gazprom and Shell agreed to commence a technical solutions study for the 10mtpa Baltic LNG project. The partners also intend to develop a conceptual schedule for the implementation of the project, according to LNG World News, August 10. Jordan Cove contract awarded, pending US regulatory approval. The JGC/Kiewit/Black & Veatch joint venture has secured the Jordan Cove LNG export plant EPC contract. The project requires approval from the Federal Energy Regulatory Commission, which is unlikely until late 2018. In February the commission approved Veresen's pre-filing application, having rejected it in 2016. Veresen will file a new application in August. The plant is designed to support two 3mtpa LNG trains - with feedstock coming from the Ruby gas pipeline and the planned Pacific Connector line. Should the project receive Federal approval, Veresen will make a final investment decision in 2019, with the facility due on-line in 2024. Veresen has already secured Japanese buyers for half of its capacity. Fortuna LNG project finds buyer for LNG. Fortuna LNG project (OneLNG providing the FLNG Unit) took another major step forward with Gunvor (private) committing to be the buyer of the LNG. This should not be too much of a surprise to the market as there were at least 3 potentially buyers (including Chinese) identified in the process. We view this news as positive as it is another hurdle leaped moving Fortuna forward. With a buyer lined up financing remains the final hurdle before Fortuna FLNG moves to FID. The Fortuna
Global LNG Summary – Vol.127 25 August 2017
partners are in discussions with a consortium of Chinese financial institutions, which includes lenders to GLNG's first FLNG unit the Hilli Episeyo. While FID is expected later this year, the process is taking longer than initially expected (mid-2017), but with an offtake agreement in place FID is further de-risked. McDermott/GE are expected to provide an integrated SURF/SPS system for the project, with a contract award pending FID.
Global LNG Summary – Vol.128 25 August 2017
Figure 13: LNG Prospects Snapshot Project/Field Country Sub-sector Client Contract Details Value (USDm) Abadi LNG Indonesia EPC Inpex EPC contract for the FLNG vessel with capacity increased to 7.5mmtpa 5000 Arctic LNG 2 Russia EPC Novatek Subcontractor to build the LNG modules Baltic LNG Russia EPC Gazprom 10mtpa LNG export terminal Bangalesh LNG Bangladesh EPC Petrobangla Construct and commission 7.5mtpa onshore LNG terminal Browse LNG Australia Pre-FEED Woodside Early engineering work for a tieback to the North-West Shelf facility Browse LNG Australia EPC Woodside 800km subsea pipeline Browse LNG Australia SURF Woodside SURF system for the FPSO Browse LNG Australia SPS Woodside SPS system for the FPSO Caldita-Barossa LNG Australia FEED Conoco-Phillips FEED related to the gas FPSO Caldita-Barossa LNG Australia FEED Conoco-Phillips FEED for the subsea system Caldita-Barossa LNG Australia FEED Conoco-Phillips FEED for the SURF system Caldita-Barossa LNG Australia Floating Conoco-Phillips EPC for the FPSO - likely to be a VLCC 1200 Caldita-Barossa LNG Australia Pre-FEED Conoco-Phillips FPU, a SURF system and a 270km export pipeline to Darwin LNG plant Cash Maple LNG Australia SURF PTTEP Tieback to Darwin LNG plant Cash Maple LNG Australia SPS PTTEP Tieback to Darwin LNG plant Congo FLNG Congo-Brazzaville Floating New Age Petroleum Contractor will carry out further engineering before submitting a final price 500 Dahej LNG India Brownfield Petronet LNG To expand capacity from 15mtpa to 17.5mtpa 150 Darwin LNG Australia Brownfield Conoco-Phillips Engineering as well as operations and maintenance services over a three year period along with extension options Elk-Antelope LNG PNG FEED Oil Search FEED for the Elk-Antelope discovery Emirates LNG UAE EPC Emirates LNG EPC to build an LNG storage and regasification unit with 9mtpa capacity 800 Fortuna LNG Equatorial Guinea SURF Ophir EPCIC contract for the subsea portion of the project 450 Fortuna LNG Equatorial Guinea SPS Ophir EPC for subsea package - four well subsea system Fourchon LNG USA EPC Fourchon 2mtpa LNG import terminal at Port Fourchon, Louisiana Gharraf LNG Iraq EPC Petronas Two packages available - 1) a CPP with two new trains, 2) an integrated gas processing plant Greater Poseidon Australia Floating Conoco-Phillips EPC for the FPSO - likely to be a VLCC 1200 Hazira LNG India EPC ONGC EPC of 200mcm capacity LNG storage tank 150 Jafrabad LNG India Floating Swan Energy FSRU contract Jansz-lo LNG Australia SURF Chevron SURF package Jansz-lo LNG Australia SPS Chevron Subsea manifolds and additional subsea facilities Jansz-lo LNG Australia FEED Chevron Parallel FEED for semisub and subsea/riser package Jorf Lasfar LNG Morocco EPC ONEE EPC for LNG import terminal 800 Kerawalapitiya LNG Sri Lanka EPC Petronet LNG 2mtpa LNG import terminal 250 Lake Charles LNG USA EPC Shell 15mtpa LNG export terminal Leviathan LNG Israel T&I Noble Energy T&I of infield flowlines, risers and manifolds, umbilicals, jumpers 100 Leviathan LNG Israel EPC Noble Energy Two gas export lines connecting the field to landfall sites 200 Leviathan LNG Israel SPS Noble Energy Four well subsea package Leviathan LNG Israel SURF Noble Energy SURF package 250 Leviathan LNG Israel Hook-up Noble Energy Commissioning and operations of field infrastructure Lindi LNG Tanzania EPC Shell EPC for a planned LNG plant Lindi LNG Tanzania EPC Shell EPC for a planned pipeline LNG Canada Canada EPC Shell Construction work for initial phase comprising two 6mmtpa LNG trains. 2000 LNG Import Terminal Kuwait EPC KOC EPC for 1.44bcfd import terminal. 2900 LNG Terminal Russia EPC Novatek EPC for LNG transshipment terminal on the Kamchatka Peninsula Magnolia LNG USA EPC LNG Ltd EPC for LNG export facility Main Pass LNG USA EPC Global LNG Two FLNG vessels to act as a hub Mamba LNG Mozambique SURF ENI SURF package - four export pipelines and a SPS 2000 Mamba LNG Mozambique EPC Eni EPC for two 5mmtpa LNG trains at the Afungi LNG complex 8000 Nong Fab LNG Indonesia EPC PT Australasia LNG LNG hub terminal – 15mtpa facility developed in two phases of 7.5mtpa 1000 Pluto LNG Australia EPC Woodside Phase two expansion to include new, small train Port Sudan LNG Sudan Pre-FEED Sunagas Pre-FEED for LNG import facility and an 830-kilometre gas pipeline
Global LNG Summary – Vol.129 25 August 2017
Project/Field Country Sub-sector Client Contract Details Value –USDm) Prelude FLNG Australia Accommodation Shell Accommodation vessel for six months with three one month options Rotan FLNG Malaysia SPS Murphy Oil Subsea production equipment comprising at least seven trees, subsea and 200 topside controls Rotan FLNG Malaysia SURF Murphy Oil SURF package covering 24kms of flexible risers and 6km of flexibles 250 Sakhalin 2 LNG Russia EPC Gazprom EPC for a third train at Sakhalin 2 1400 Scarborough LNG Australia FEED ExxonMobil FEED work on the project Scarborough LNG Australia EPC ExxonMobil EPC of the FLNG vessel (6-7mmtpa processing capacity) 3000 Seven Plus LNG Nigeria EPC NLNG Two LNG trains at Bonny Island Seven Plus LNG Nigeria FEED NLNG FEED for 2 new LNG trains at Bonny Island Tangguh LNG Indonesia FEED BP Parallel FEED for FLNG facilities development Third LNG gas plant Taiwan EPC CPC Corporation EPC for 3mmtpa terminal including two/three LNG storage tanks, a jetty 1000 and export pipeline Third LNG gas plant Taiwan EPC CPC Corporation Project management services for Third LNG plant 200 Tortue/Ahmeyim LNG Senegal Floating Kosmos VLCC sized FPSO with 13,000t topside Tortue/Ahmeyim LNG Senegal SURF Kosmos SURF package Tortue/Ahmeyim LNG Senegal SPS Kosmos Six well SPS package Tortue/Ahmeyim LNG Senegal Floating Kosmos 2.3mtpa FLNG, with 600mcfd progressing capacity Wenzhou LNG China EPC Sinopec EPC for a LNG import terminal with 3mtpa capacity. The terminal could 1600 eventually be expanded to 10mtpa Woodfibre LNG Canada EPC Pacific Oil & Gas EPC for the 1.2mtpa LNG facility in British Colombia Yolanda/Yoyo LNG Equatorial Guinea Floating Noble Energy Potential FLNG development Source: Company data and Credit Suisse Research.
Global LNG Summary – Vol.12 10 25 August 2017
LNG imports—North Asia
Figure 15: Monthly North Asia LNG Imports (YoY Figure 14: Monthly North Asia LNG Imports Change) 18 mn ton 40% 17 16 15 20%
14 10% 13 0% 12 11
10 -20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 5Y range 5Y average 2015 2016 2017 YoY Change 3MMA Change
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 17: Average North Asia prices and YoY Figure 16: Breakdown by source country Change
Others 17 US$/mmBTU 30% Abu Dhabi 7% Qatar Brunei 3% 20% PNG 20% 15 5% 3% 10% Oman 13 4% 0% 11 -10% Russia 6% -20% 9 -30% Australia 7 Indonesia 29% -40% 8% Malaysia 5 -50% 15% Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 YoY Change North Asia Avg
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 18: Average and top 4 landed LNG prices Figure 19: Share of North Asian Buyers
17 US$/mmBTU 100% 3% 5% 8% 9% 10% 11% 12% 13% 90% 8% 8% 17% 19% 9% 9% 8% 15 8% 8% 9% 80% 10% 25% 25% 9% 13 70% 27% 24% 26% 25% 23% 22% 60% 21% 22% 11 50% 9 40% 64% 30% 62% 57% 56% 58% 7 55% 56% 56% 53% 50% 20% 5 10% Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 0% Qatar Australia Malaysia 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Indonesia N Asia Avg Japan Sth Korea Taiwan China YTD
Source :FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Global LNG Summary – Vol.12 11 25 August 2017
LNG imports—Japan
Figure 21: Monthly Japan LNG Imports (YoY Figure 20: Monthly Japan LNG Imports Change) 9.0 mn ton 30% 8.5 25% 8.0 20% 15% 7.5 10% 7.0 5% 6.5 0% -5% 6.0 -10% 5.5 -15% 5.0 -20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 5Y range 5Y average 2015 YoY Change 3MMA Change 2016 2017
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 22: Breakdown by source country Figure 23: Average Japan prices and YoY Change
17 60% US$/mmBTU Others 50% PNGOman6% 15 40% 5% 3% 30% Brunei Australia 13 20% 4% 29% Abu Dhabi 10% 6% 11 0% -10% Indonesia 9 -20% 7% -30% 7 -40% Russia -50% 9% Malaysia 18% 5 -60% Qatar Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 13% YoY Change 3MMA Change
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 24: Average and top 4 landed LNG prices Figure 25: Japan avg LNG price, Brent and JCC
20 17 120 US$/mmBTU US$/bbl 18 110 15 100 16 US$/mmBTU 13 90 14 80 12 11 70 60 10 9 50 8 7 40 6 30 5 20 4 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jul-14 Jul-15 Jul-16 Apr-14 Apr-15 Apr-16 Apr-17 Oct-14 Oct-15 Oct-16 Australia Malaysia Qatar Jan-14 Jan-15 Jan-16 Jan-17 Russia Japan Cty Avg Japan Cty avg JCC Brent Source: FGE, Credit Suisse estimates Source: FGE, the BLOOMBERG PROFESSIONALTM service, Credit Suisse estimates
Global LNG Summary – Vol.12 12 25 August 2017
LNG imports—South Korea
Figure 27: Monthly South Korea LNG Imports (YoY Figure 26: Monthly South Korea LNG Imports Change) 5.0 mn ton 100% 4.5 80% 60% 4.0 40% 3.5 20% 3.0 0% -20% 2.5 -40% 2.0 -60% 1.5 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YoY Change 3MMA YoY Change 5Y range 5Y average 2015 2016 2017 Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 29: Average South Korea prices and YoY Figure 28: Breakdown by source country Change
Others 17 50% Peur US$/mmBTU 7% 40% Nigeria 1% Qatar Brunei 15 30% 3% 30% Russia3% 20% 4% 13 10% Malaysia 0% 9% 11 -10% 9 -20% -30% Oman 7 -40% -50% 14% Australia 20% 5 -60% Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Indonesia YoY Change 3MMA Change 9%
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 30: Average and top 4 landed LNG prices Figure 31: South Korea avg LNG price and Brent
21 17 120 US$/mmBTU US$/mmBTU US$/bbl 19 110 15 100 17 13 90 15 80 11 70 13 60 11 9 50 9 7 40 30 7 5 20 5
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jul-14 Jul-15 Jul-16 Jul-17 Apr-14 Apr-15 Apr-16 Apr-17 Oct-14 Oct-15 Oct-16 Qatar Oman Indonesia Jan-14 Jan-15 Jan-16 Jan-17 Malaysia Sth Korea Sth Korea Cty Avg Brent (RHS) Source: FGE, Credit Suisse estimates Source: FGE, the BLOOMBERG PROFESSIONALTM service, Credit Suisse estimates
Global LNG Summary – Vol.12 13 25 August 2017
LNG imports—China
Figure 33: Monthly China LNG Imports (YoY Figure 32: Monthly China LNG Imports Change) 4.5 mn ton 100% 4.0 80% 3.5 60% 3.0 40% 2.5 2.0 20% 1.5 0%
1.0 -20% 0.5 -40% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5Y range 5Y average 2015 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 2016 2017 YoY Change 3MMA YoY Change
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 34: Breakdown by source country Figure 35: Average China prices and YoY Change
Others 15 US$/mmBTU 40% USA 6% 14 PNG 2% 30% 5% 13 20% Indonesia 12 6% 10% 11 0% Australia 10 Malaysia -10% 48% 9 13% 8 -20% 7 -30% 6 -40% Qatar 5 -50% 19% Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 YoY Change China Cty Avg
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 36: Average and top 4 landed LNG prices Figure 37: China avg LNG price and Brent
20 US$/mmBTU 14 120 US$/mmBTU US$/bbl 18 13 110 100 16 12 90 14 11 80 10 12 70 9 10 60 8 8 50 7 6 40 6 30 4 5 20 2 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-14 Jul-15 Jul-16 Jul-17 Apr-14 Apr-15 Apr-16 Apr-17 Oct-14 Oct-15 Oct-16 Australia Qatar Malaysia Jan-14 Jan-15 Jan-16 Jan-17 China Cty Avg Brent (RHS) Indonesia China Cty Avg
Source: FGE, Credit Suisse estimates Source: FGE, the BLOOMBERG PROFESSIONALTM service, Credit Suisse estimates
Global LNG Summary – Vol.12 14 25 August 2017
LNG imports—Taiwan
Figure 39: Monthly Taiwan LNG Imports (YoY Figure 38: Monthly Taiwan LNG Imports Change) 1.6 80% mn ton 1.5 60% 1.4 1.3 40% 1.2 20% 1.1 0% 1.0 0.9 -20% 0.8 -40% 0.7 0.6 -60% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 5Y range 5Y average 2015 2016 2017 YoY Change Taiwan Cty Avg
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 40: Breakdown by source country Figure 41: Average Taiwan prices and YoY Change
Othres 17 US$/mmBTU 40% OmanBrunei 7% 30% 1%3% Qatar 15 Trinidad 32% 20% Australia 1% 13 10% 7% 0% 11 -10% Russia -20% 9 -30% 9%PNG 12% -40% Malaysia 7 -50% 14% 5 -60% Indonesia Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 15% YoY Change Taiwan Cty Avg
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 42: Average and top 4 landed LNG prices Figure 43: Taiwan avg LNG price and Brent
22 17 120 US$/mmBTU US$/mmBTU US$/bbl 20 110 15 18 100 16 13 90 14 80 11 12 70 10 9 60 50 8 7 6 40 4 5 30 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jul-14 Jul-15 Jul-16 Apr-14 Apr-15 Apr-16 Apr-17 Oct-14 Oct-15 Oct-16 Qatar Malaysia Indonesia Jan-14 Jan-15 Jan-16 Jan-17 PNG Taiwan Avg Taiwan Cty Avg Brent (RHS)
Source: FGE, Credit Suisse estimates Source: FGE, the BLOOMBERG PROFESSIONALTM service, Credit Suisse estimates
Global LNG Summary – Vol.12 15 25 August 2017
LNG imports—Rest of Asia
Figure 44: Monthly Rest of Asia LNG Imports Figure 45: Monthly India LNG Imports 3.5 1.9 mn ton mn ton 3.0 1.7
2.5 1.5
2.0 1.3
1.5 1.1
1.0 0.9
0.5 0.7 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012-16 range 2012-16 average 2015 2012-16 range 2012-16 average 2015 2016 2017 2016 2017
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 46: Monthly Thailand LNG Imports Figure 47: Monthly Singapore LNG Imports 0.60 0.35 mn ton mn ton 0.50 0.30 0.25 0.40 0.20 0.30 0.15
0.20 0.10
0.10 0.05
- - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012-16 range 2012-16 average 2013 2014 2015 2016 2017 2015 2016
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Figure 48: Monthly Malaysia LNG Imports Figure 49: Monthly Pakistan LNG Imports 0.40 0.50 mn ton mn ton 0.45 0.35 0.40 0.30 0.35 0.25 0.30 0.25 0.20 0.20 0.15 0.15 0.10 0.10 0.05 0.05 - - (0.05) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb2013Mar Apr2014May Jun 2015Jul Aug 2016Sep Oct Nov2017 Dec 2015 2016 2017
Source: FGE, Credit Suisse estimates Source: FGE, Credit Suisse estimates
Global LNG Summary – Vol.12 16 25 August 2017
LNG economics
Figure 50: LNG shipping costs (US$/mmBtu) at US$44.5/bbl oil using US$40k/day charter rate 2016 Europe (NW) Europe (SW) Europe (SE) Japan/Korea China Singapore Brazil India r r r r r r r r e e e e e e e e r r r r r r r r m m m m m m m m e e e e e e e e t t t t t t t t m m m m m m m m n n n n n n n n i i i i i i i i u u u u u u u u a a a a a a a a
From ($/mmbtu) s w s w s w s w s w s w s w s w
t t t t t t t t m m m m m m m m c c c c c c c c c c c c c c c c c i i c i i c i i c i i c i i c i i c i i c i i z a z a z a z a z a z a z a z a t t t t t t t t t t t t t t t t e e e e e e e e e n e n e n e n e n e n e n e n c c c c c c c c c c c c c c c c r r r r r r r r i i i i i i i i u a r r u a r r u a r r u a r r u a r r u a r r u a r r u a r r D S P A A D S P A A D S P A A D S P A A D S P A A D S P A A D S P A A D S P A A United States (Gulf) 0.7 - - - - 0.7 - - - - 0.8 - - - - 1.7 1.9 1.3 1.8 3.9 1.6 1.8 1.4 2.0 4.1 1.4 1.6 1.6 - - 0.7 - - - - 1.4 1.4 - - - United States (West) 1.5 - 1.2 1.3 2.6 1.5 - 1.2 1.5 3.0 1.6 1.7 1.3 1.6 3.3 0.6 - - - - 0.7 - - - - 0.9 - - - - 1.1 - 1.2 - - 1.1 - - - - United States (East) 0.5 - - - - 0.5 - - - - 0.6 - - - - 1.6 1.7 1.3 1.6 3.4 1.5 1.6 1.4 1.8 3.7 1.4 1.5 1.6 2.0 4.2 0.7 - - - - 1.3 1.3 - - - Canada 1.6 - 1.3 1.2 2.4 1.5 1.8 1.3 1.4 2.9 1.6 1.7 1.4 1.5 3.2 0.6 - - - - 0.7 - - - - 0.8 - - - - 1.1 - 1.3 - - 1.0 - - - - Norw ay 0.2 - - - - 0.4 - - - - 0.5 - - - - 1.5 1.5 1.5 1.2 2.4 1.4 1.4 1.6 1.3 2.7 1.3 1.3 - 1.5 3.2 0.7 - - - - 1.2 1.1 - - - Nigeria 0.6 - - - - 0.5 - - - - 0.6 - - - - 1.2 - - - - 1.1 - - - - 0.9 - - - - 0.5 - - - - 0.9 - - - - Angola 0.6 - - - - 0.5 - - - - 0.6 - - - - 1.1 - - - - 1.0 - - - - 0.8 - - - - 0.5 - - - - 0.8 - - - - Tanzania 0.9 - - - - 0.8 - - - - 0.9 1.2 - - - 0.9 - - - - 0.8 - - - - 0.6 - - - - 0.7 - - - - 0.5 - - - - Moazambique 0.9 - - - - 0.8 - - - - 0.9 - - - - 0.9 - - - - 0.8 - - - - 0.6 - - - - 0.6 - - - - 0.5 - - - - Algeria 0.3 - - - - 0.2 - - - - 0.3 - - - - 1.4 1.3 1.6 1.5 3.0 1.3 1.2 - - - 1.2 1.1 - - - 0.6 - - - - 1.1 0.9 - - - Egypt 0.5 - - - - 0.3 - - - - 0.3 - - - - 1.6 1.2 1.7 1.6 3.4 1.5 1.1 - - - 1.3 1.0 - - - 0.8 - - - - 1.2 0.8 - - - Papua New Guinea 1.3 1.4 - 1.5 3.1 1.3 1.3 - 1.7 3.5 1.4 1.2 - 1.8 3.8 0.5 - - - - 0.5 - - - - 0.4 - - - - 1.0 - - - - 0.6 - - - - Middle East 1.3 1.0 - - - 1.2 0.9 - - - 1.3 0.8 - - - 0.8 - - - - 0.7 - - - - 0.5 - - - - 1.1 1.3 - - - 0.3 - - - - Malaysia 1.2 1.3 - 1.5 3.1 1.2 1.1 - 1.7 3.5 1.3 1.0 - 1.8 3.7 0.4 - - - - 0.3 - - - - 0.2 - - - - 1.0 - - - - 0.4 - - - - Indonesia 1.2 1.2 - 1.6 3.3 1.1 1.1 - - - 1.2 1.0 - - - 0.5 - - - - 0.4 - - - - 0.2 - - - - 1.0 - - - - 0.4 - - - - Australia (NWS) 1.2 1.3 - 1.6 3.4 1.1 1.2 - - - 1.2 1.1 - - - 0.5 - - - - 0.4 - - - - 0.3 - - - - 1.0 - - - - 0.5 - - - - Australia (East) 1.3 1.5 - 1.6 3.2 1.3 1.3 - 1.7 3.6 1.4 1.3 - 1.9 3.9 0.5 - - - - 0.5 - - - - 0.5 - - - - 1.0 - - - - 0.7 - - - - Russia (East) 1.5 1.5 1.4 1.1 2.3 1.4 1.4 1.4 1.3 2.6 1.5 1.3 1.5 1.4 2.9 0.3 - - - - 0.4 - - - - 0.5 - - - - 1.3 - - - - 0.7 - - - - Trinidad 0.6 - - - - 0.5 - - - - 0.6 - - - - 1.5 - 1.2 1.7 3.6 1.4 - 1.3 - - 1.2 1.5 - - - 0.5 - - - - 1.1 1.3 - - - Peru 1.1 - 1.0 - - 1.0 - 1.0 - - 1.1 - 1.1 - - 1.0 - - - - 1.1 - - - - 1.2 - - - - 0.7 - - - - 1.2 - 1.4 - - Russia (Yamal) 0.4 - - - - 0.5 - - - - 0.6 - - - - 1.6 1.6 1.7 1.0 1.9 1.6 1.6 1.8 1.1 2.2 1.4 1.4 - 1.3 2.6 0.9 - - - - 1.3 1.2 - 1.6 3.2
Source: Credit Suisse estimates
Figure 51: LNG shipping costs (US$/mmBtu) at US$44.5/bbl oil using US$60k/day charter rate 2016 Europe (NW) Europe (SW) Europe (SE) Japan/Korea China Singapore Brazil India r r r r r r r r e e e e e e e e r r r r r r r r m m m m m m m m e e e e e e e e t t t t t t t t m m m m m m m m n n n n n n n n i i i i i i i i u u u u u u u u a a a a a a a a
From ($/mmbtu) s w s w s w s w s w s w s w s w
t t t t t t t t m m m m m m m m c c c c c c c c c c c c c c c c c i i c i i c i i c i i c i i c i i c i i c i i z a z a z a z a z a z a z a z a t t t t t t t t t t t t t t t t e e e e e e e e e n e n e n e n e n e n e n e n c c c c c c c c c c c c c c c c r r r r r r r r i i i i i i i i u a r r u a r r u a r r u a r r u a r r u a r r u a r r u a r r D S P A A D S P A A D S P A A D S P A A D S P A A D S P A A D S P A A D S P A A United States (Gulf) 0.7 - - - - 0.7 - - - - 0.8 - - - - 1.9 2.1 1.4 2.0 4.4 1.8 2.0 1.5 2.2 4.7 1.6 1.8 1.7 - - 0.8 - - - - 1.5 1.5 - - - United States (West) 1.7 - 1.3 1.4 2.9 1.6 - 1.3 1.6 3.4 1.8 1.9 1.4 1.8 3.8 0.7 - - - - 0.8 - - - - 1.0 - - - - 1.2 - 1.3 - - 1.2 - - - - United States (East) 0.6 - - - - 0.6 - - - - 0.7 - - - - 1.8 1.9 1.5 1.8 3.9 1.7 1.8 1.6 2.0 4.2 1.6 1.6 1.8 2.2 4.8 0.7 - - - - 1.5 1.4 - - - Canada 1.8 - 1.4 1.3 2.7 1.7 2.0 1.4 1.5 3.2 1.8 1.9 1.5 1.7 3.6 0.6 - - - - 0.7 - - - - 0.9 - - - - 1.3 - 1.4 - - 1.2 - - - - Norw ay 0.2 - - - - 0.4 - - - - 0.5 - - - - 1.7 1.7 1.7 1.3 2.7 1.6 1.6 1.8 1.5 3.1 1.5 1.4 - 1.7 3.6 0.8 - - - - 1.4 1.2 - - - Nigeria 0.6 - - - - 0.5 - - - - 0.6 - - - - 1.3 - - - - 1.2 - - - - 1.0 - - - - 0.5 - - - - 1.0 - - - - Angola 0.7 - - - - 0.6 - - - - 0.7 - - - - 1.2 - - - - 1.1 - - - - 1.0 - - - - 0.6 - - - - 0.9 - - - - Tanzania 1.0 - - - - 0.9 - - - - 1.1 1.3 - - - 1.0 - - - - 0.9 - - - - 0.7 - - - - 0.8 - - - - 0.6 - - - - Moazambique 1.0 - - - - 0.9 - - - - 1.0 - - - - 1.0 - - - - 0.9 - - - - 0.7 - - - - 0.7 - - - - 0.6 - - - - Algeria 0.4 - - - - 0.2 - - - - 0.3 - - - - 1.6 1.4 1.7 1.7 3.4 1.5 1.3 - - - 1.4 1.2 - - - 0.7 - - - - 1.3 0.9 - - - Egypt 0.5 - - - - 0.4 - - - - 0.3 - - - - 1.8 1.3 1.9 1.8 3.8 1.7 1.2 - - - 1.5 1.0 - - - 0.8 - - - - 1.4 0.8 - - - Papua New Guinea 1.5 1.6 - 1.7 3.6 1.5 1.4 - 1.9 4.0 1.6 1.4 - 2.1 4.3 0.5 - - - - 0.5 - - - - 0.5 - - - - 1.1 - - - - 0.7 - - - - Middle East 1.5 1.1 - - - 1.4 0.9 - - - 1.5 0.9 - - - 0.9 - - - - 0.8 - - - - 0.6 - - - - 1.2 1.4 - - - 0.3 - - - - Malaysia 1.4 1.4 - 1.7 3.5 1.3 1.2 - 1.9 4.0 1.4 1.1 - 2.0 4.3 0.4 - - - - 0.3 - - - - 0.2 - - - - 1.1 - - - - 0.5 - - - - Indonesia 1.3 1.4 - 1.8 3.7 1.3 1.2 - - - 1.4 1.1 - - - 0.5 - - - - 0.4 - - - - 0.2 - - - - 1.1 - - - - 0.4 - - - - Australia (NWS) 1.3 1.4 - 1.8 3.9 1.3 1.3 - - - 1.4 1.2 - - - 0.6 - - - - 0.5 - - - - 0.3 - - - - 1.1 - - - - 0.5 - - - - Australia (East) 1.5 1.6 - 1.8 3.7 1.5 1.5 - 2.0 4.1 1.6 1.4 - 2.1 4.4 0.6 - - - - 0.5 - - - - 0.5 - - - - 1.1 - - - - 0.7 - - - - Russia (East) 1.7 1.7 1.6 1.3 2.6 1.6 1.5 1.6 1.5 3.0 1.8 1.5 1.7 1.6 3.3 0.3 - - - - 0.4 - - - - 0.6 - - - - 1.4 - - - - 0.8 - - - - Trinidad 0.6 - - - - 0.6 - - - - 0.7 - - - - 1.6 - 1.4 1.9 4.1 1.5 - 1.5 - - 1.4 1.6 - - - 0.5 - - - - 1.3 1.4 - - - Peru 1.3 - 1.1 - - 1.2 - 1.1 - - 1.3 - 1.2 - - 1.1 - - - - 1.2 - - - - 1.3 - - - - 0.7 - - - - 1.4 - 1.6 - - Russia (Yamal) 0.4 - - - - 0.6 - - - - 0.7 - - - - 1.9 1.8 1.9 1.1 2.1 1.8 1.7 2.0 1.2 2.4 1.6 1.5 - 1.5 3.0 1.0 - - - - 1.5 1.3 - 1.8 3.7
Source: Credit Suisse estimates
Global LNG Summary – Vol.12 17 25 August 2017
Companies Mentioned (Price as of 24-Aug-2017) Anadarko Petroleum Corp. (APC.N, $42.98) BP (BP.L, 443.15p) CNOOC (0883.HK, HK$9.11) Chart Industries, Inc. (GTLS.OQ, $33.13) Cheniere Energy, Inc. (LNG.A, $41.55) Chevron Corp. (CVX.N, $106.61) Chicago Bridge & Iron (CBI.N, $11.02) Chiyoda Corp (6366.T, ¥570) Chubu Electric Power (9502.T, ¥1,430) ConocoPhillips (COP.N, $43.69) Daewoo Shipbuilding & Marine Engineering (042660.KS, W44,800) Dynagas LNG Partners LP (DLNG.N, $14.16) ENI (ENI.MI, €13.14) Energy Transfer Equity, LP (ETE.N, $16.83) Engie (ENGIE.PA, €14.5) ExxonMobil Corporation (XOM.N, $76.61) Fluor (FLR.N, $37.58) GAIL (India) Ltd (GAIL.BO, Rs383.05) GasLog Partners LP (GLOP.N, $23.3) Gazprom (GAZPq.L, $3.88) General Electric (GE.N, $24.39) Golar LNG Ltd. (GLNG.OQ, $21.47) Halliburton (HAL.N, $39.03) Hoegh LNG (HLNGH.OL, Nkr84.0) INPEX Corp (1605.T, ¥1,056) JGC Corp (1963.T, ¥1,738) Japan Petroleum Exploration (1662.T, ¥2,197) KBR Inc. (KBR.N, $14.86) Keppel Corporation (KPLM.SI, S$6.36) Korea Gas Corp (036460.KS, W45,500) Kosmos Energy Ltd (KOS.N, $7.0) Liquefied (LNG.AX, A$0.535) MMA Offshore Limited (MRM.AX, A$0.19) Marathon Oil Corp (MRO.N, $11.02) McDermott International (MDR.N, $5.84) Mitsubishi UFJ Financial Group (8306.T, ¥660) Mitsui & Co (8031.T, ¥1,597) Modec (6269.T, ¥2,319) NOVATEK (NVTKq.L, $104.1) Noble Energy (NBL.N, $23.72) Oil Search (OSH.AX, A$6.87) Ophir Energy plc (OPHR.L, 80.0p) Origin Energy (ORG.AX, A$7.49) Pembina Pipeline Corporation (PPL.TO, C$40.01) PetroChina (0857.HK, HK$4.82) PetroChina (601857.SS, Rmb7.96) Petronet LNG Limited (PLNG.BO, Rs226.35) Royal Dutch Shell plc (RDSa.L, 2134.5p) Saipem (SPMI.MI, €3.03) Samsung Heavy Industries (010140.KS, W10,750) Santos Ltd (STO.AX, A$3.47) Schlumberger (SLB.N, $63.19) Sempra Ener (SRE.N, $118.63) Sinopec (0386.HK, HK$5.72) Sinopec (600028.SS, Rmb5.96) Statoil (STL.OL, Nkr146.2) TechnipFMC (FTI.PA, €21.42) Teekay Corporation (TK.N, $9.12) Teekay LNG Ptns (TGP.N, $17.1) Tokyo Electric Power (9501.T, ¥445) Tokyo Gas (9531.T, ¥563) Total (TOTF.PA, €43.44) Veresen (VSN.TO, C$17.48) Woodside Petroleum (WPL.AX, A$29.3) WorleyParsons (WOR.AX, A$13.1)
Disclosure Appendix Analyst Certification David Hewitt, Mark Samter, Thomas Adolff, Bhavesh Lodaya, Gregory Lewis, CFA, Phillip Lindsay and Gregory Brown each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.
Global LNG Summary – Vol.12 18 25 August 2017
*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12-month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, which was in operation from 7 July 2011. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances. Not Rated (NR) : Credit Suisse Equity Research does not have an investment rating or view on the stock or any other securities related to the company at this time. Not Covered (NC) : Credit Suisse Equity Research does not provide ongoing coverage of the company or offer an investment rating or investment view on the equity security of the company or related products. Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward. Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors. Credit Suisse's distribution of stock ratings (and banking clients) is:
Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 44% (64% banking clients) Neutral/Hold* 40% (59% banking clients) Underperform/Sell* 14% (53% banking clients) Restricted 2% *For purposes of the NYSE and FINRA ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors. Important Global Disclosures Credit Suisse’s research reports are made available to clients through our proprietary research portal on CS PLUS. Credit Suisse research products may also be made available through third-party vendors or alternate electronic means as a convenience. Certain research products are only made available through CS PLUS. The services provided by Credit Suisse’s analysts to clients may depend on a specific client’s preferences regarding the frequency and manner of receiving communications, the client’s risk profile and investment, the size and scope of the overall client relationship with the Firm, as well as legal and regulatory constraints. To access all of Credit Suisse’s research that you are entitled to receive in the most timely manner, please contact your sales representative or go to https://plus.credit-suisse.com . Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: https://www.credit- suisse.com/sites/disclaimers-ib/en/managing-conflicts.html . Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties. Credit Suisse has decided not to enter into business relationships with companies that Credit Suisse has determined to be involved in the development, manufacture, or acquisition of anti-personnel mines and cluster munitions. For Credit Suisse's position on the issue, please see https://www.credit-suisse.com/media/assets/corporate/docs/about-us/responsibility/banking/policy-summaries-en.pdf . See the Companies Mentioned section for full company names Credit Suisse currently has, or had within the past 12 months, the following as investment banking client(s): APC.N, BP.L, 0883.HK, GTLS.OQ, LNG.A, CVX.N, CBI.N, COP.N, DLNG.N, ENI.MI, ETE.N, ENGIE.PA, XOM.N, GLOP.N, GAZPq.L, GLNG.OQ, HAL.N, KBR.N, KPLM.SI, MRO.N, 8306.T, NVTKq.L, NBL.N, OSH.AX, OPHR.L, ORG.AX, 0857.HK, RDSa.L, SPMI.MI, SLB.N, 0386.HK, STL.OL, TOTF.PA, WPL.AX, 601857.SS, 600028.SS, PPL.TO, FTI.PA, MDR.N, GE.N Credit Suisse provided investment banking services to the subject company (APC.N, BP.L, GTLS.OQ, LNG.A, COP.N, DLNG.N, ETE.N, XOM.N, HAL.N, KPLM.SI, 8306.T, OSH.AX, ORG.AX, RDSa.L, SLB.N, STL.OL, TOTF.PA, WPL.AX, PPL.TO, GE.N) within the past 12 months. Credit Suisse currently has, or had within the past 12 months, the following issuer(s) as client(s), and the services provided were non-investment- banking, securities-related: APC.N, BP.L, 0883.HK, LNG.A, COP.N, ENI.MI, XOM.N, GAZPq.L, HAL.N, MRO.N, 8306.T, 0857.HK, RDSa.L, SLB.N, 0386.HK, STL.OL, TOTF.PA, 601857.SS, 600028.SS, GE.N
Global LNG Summary – Vol.12 19 25 August 2017
Credit Suisse has managed or co-managed a public offering of securities for the subject company (BP.L, LNG.A, ETE.N, XOM.N, 8306.T, WPL.AX, GE.N) within the past 12 months. Within the past 12 months, Credit Suisse has received compensation for investment banking services from the following issuer(s): APC.N, BP.L, GTLS.OQ, LNG.A, COP.N, DLNG.N, ETE.N, XOM.N, HAL.N, KPLM.SI, 8306.T, OSH.AX, ORG.AX, RDSa.L, SLB.N, STL.OL, TOTF.PA, WPL.AX, PPL.TO, GE.N Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (APC.N, BP.L, 0883.HK, GTLS.OQ, LNG.A, CVX.N, CBI.N, COP.N, DLNG.N, ENI.MI, ETE.N, ENGIE.PA, XOM.N, FLR.N, GLOP.N, GAZPq.L, GLNG.OQ, HAL.N, KBR.N, KPLM.SI, MRO.N, 8306.T, NVTKq.L, NBL.N, OSH.AX, OPHR.L, ORG.AX, 0857.HK, RDSa.L, SPMI.MI, STO.AX, SLB.N, 0386.HK, STL.OL, TOTF.PA, WPL.AX, 601857.SS, 600028.SS, PPL.TO, FTI.PA, MDR.N, GE.N) within the next 3 months. 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Credit Suisse beneficially holds >0.5% long position of the total issued share capital of the subject company (ETE.N, WOR.AX). Credit Suisse has a material conflict of interest with the subject company (CVX.N) . Credit Suisse is engaged as the Sole Financial Advisor and Joint Financier to the Consortium (consists of AC Energy, Star Energy Group Holdings Pte. Ltd., Star Energy Geothermal Pte. Ltd., and Electricity Generating Public Company Ltd.) for the purchase of Chevron’s geothermal operations in Indonesia and the Philippines. Credit Suisse has a material conflict of interest with the subject company (XOM.N) . Kofi Adjepong-Boateng, a Senior Advisor of Credit Suisse, is a Senior Advisor to Exxon Mobil (XOM) Credit Suisse has a material conflict of interest with the subject company (GAZPq.L) . 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Global LNG Summary – Vol.12 20 25 August 2017
Credit Suisse International ...... Thomas Adolff ; Phillip Lindsay ; Gregory Brown Credit Suisse Equities (Australia) Limited ...... Mark Samter Credit Suisse Securities (Canada), Inc...... David Hewitt To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the FINRA 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Credit Suisse International ...... Thomas Adolff ; Phillip Lindsay ; Gregory Brown Credit Suisse Equities (Australia) Limited ...... Mark Samter Credit Suisse Securities (Canada), Inc...... David Hewitt Important disclosures regarding companies or other issuers that are the subject of this report are available on Credit Suisse’s disclosure website at https://rave.credit-suisse.com/disclosures or by calling +1 (877) 291-2683.
Global LNG Summary – Vol.12 21 25 August 2017
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