17th INTERNATIONAL CONFERENCE & EXHIBITION ON

17th INTERNATIONAL
& EXHIBITION
LIQUEFIED NATURAL
GAS (LNGCONFERENCE
17)
ON LIQUEFIED NATURAL GAS (LNG 17)

Singapore:
<Title
Presentation>
<Title
Presentation>
Emergence
ofofaof
new
LNG market
By:
<Author
Name>,
<Organization>
By:
<Author
Name>,
<Organization>
By:
Dr.
Anthony
Barker,
BG Group
<Date>
<Date>
16 April
2013

Legal notice
The following presentation contains forward-looking statements concerning BG Group plcs
strategy, operations, financial performance or condition, outlook, growth opportunities or
circumstances in the countries, sectors or markets in which BG Group plc operates. By their
nature, forward-looking statements involve uncertainty because they depend on future
circumstances, and relate to events, not all of which can be controlled or predicted. Although
the Company believes that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have been
correct. Actual results could differ materially from the guidance given in this presentation for a
number of reasons. For a detailed analysis of the factors that may affect our business,
financial performance or results of operations, we urge you to look at the Principal risks and
uncertainties included in the BG Group plc Annual Report & Accounts 2011. Nothing in this
presentation should be construed as a profit forecast and no part of this presentation
constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group
plc or any other entity, and must not be relied upon in any way in connection with any
investment decision. BG Group plc undertakes no obligation to update any forward-looking
statements.
No representation or warranty, express or implied, is or will be made in relation to the
accuracy or completeness of the information in this presentation and no responsibility or
liability is or will be accepted by BG Group plc or any of its respective subsidiaries, affiliates
and associated companies (or by any of their respective officers, employees or agents) in
relation to it.

Singapores challenges
2011 gas demand
4.0%

2011 gas supply

15.9%

20.3%

75.7%

Power
Power
Industry
Industry
Other
Other

84.1%

Indonesia
Indonesia
Malaysia
Malaysia

Source: Wood Mackenzie, November 2012 & EMA Singapore Energy Statistics Report 2012

2011 fuel mix for

electricity generation
3.6%
18.4%

78.0%

Natural gas
Gas
Petroleum
Petroleum products
Products
Others
Others

Consolidating demand
Marketing multiple gas sales
contracts

Singapore LNG demand

3.5

Inventory management and

24/7 commercial operations

2.5

mtpa

Market development

3.0

2.0

1.5
1.0
0.5

0.0
2013 2014 2015 2016
Sources: BG Group estimates 2012,Schlumberger Business Consulting, 2009

Meeting Singapores challenges

Energy Market
Authority of
Singapore

Terminal owner
(Singapore LNG)

LNG supplier
(BG Group)

Source: BG Group, 2012

Aggregator
(BG Group)

Gas buyers

mtpa

BG Groups LNG marketing

Singapore
Henry
Hub

Source: BG Group Strategy Presentation, February 2012

Global assets, supply and markets

UK

Canada
USA

Japan
Egypt

Trinidad
& Tobago

India

China
Singapore*

Nigeria

EG
Tanzania

Australia

Brazil
Chile
Equity position
Existing long term supply source

Liquefaction under construction

Existing import capacity

Potential liquefaction

Long term customer

*

Exclusive right to supply

Incremental gas generation

capacity
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014

MW

Policy and regulatory support

Source: Tri-Zen Consulting, BG Group estimates, May 2012

EMA initiatives and policies

Pipeline gas moratorium

Vesting contracts
SLNG step-in and
underwriting

Long-term sales

10 gas buyers and ~15

GSAs

Source: BG Group, November 2012

Long-term sales projection

3.2
3.0
2.8
2.6
2.4
2.2
2.0
1.8
1.6
Q1 2010
Q4 2010
Q3 2011
Q2 2012
Q1 2013
Q4 2013
Q3 2014
Q2 2015

Approx 2.6 mtpa

contracted with 10 20
year supply periods

mtpa

3 mtpa exclusive franchise

to supply Singapore

Singapore franchise state of play

3.50
3.00
mtpa

2.50
2.00

1.50
1.00
0.50
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033

0.00

Remaining
(3mtpa
Franchise Forecast)
ContractedSales
long-term
sales
Contracted
Sales
Remaining Long-term
sales (3 mtpa
franchise forecast)
Source: BG Group, November 2012

Long-term sales

Demand growth driven by

industry

4.0
2.0
2025

2023

2021

0.0
2019

gas import contracts

6.0

2017

Replacement of expiring pipeline

8.0

2015

Buying interest seen from

2018 onwards

10.0

2013

Singapores power market

is now well supplied with
long-term volumes

12.0

mtpa

BG Group has contracted at

three long-term price tranches

Incremental demand
Sumatra pipeline gas replacement
Natuna pipeline gas replacement
Malaysia pipeline gas replacement
BG Group franchise

Short-term supply security

3.5

Available volumes for short-term sales

3.0

mtpa

2.5
2.0
1.5
1.0
0.5
0.0
2013

Source: BG Group, December 2012

2014
BG Group committed volumes
Potential for short-term sales

2015

Short-term sales
Through 2012, BG Group worked
closely with the regulator (EMA) to
develop:

2013 volumes
21%

Standardised master short-term GSAs

Stand alone short-term GSAs

Short-term interest driven by:

Ramp up and commissioning
requirements
Operational concerns
Commercial opportunities to access
spot LNG
Pipeline gas displacement
Power market opportunities

79%

Long-term sales
Short-term sales

Consolidating demand

2 cargoes

3 cargoes

0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0

1 cargo

mt

Aggregator's short-term and spot GSAs

GSA1

GSA2

GSA3

GSA4

GSA5

Cargoes

Market development
Relative pricing of
fuel oil & Brent
300

Spot LNG

Singapore
Term
LNG

Fuel oil &

oil products

2005 = 100

Electricity
procurement

Malaysia
piped gas

250
200
150

LNG
inventory

Indonesia
piped gas

2005
2006
2007
2008
2009
2010
2011
2012

100

Fuel oil
Source: BG Group, November 2012

Brent

Aggregator franchise long-term contracted supply

Long-term supply opportunities (EMA consultation paper)
Terminal max throughput facilities under construction

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

16
14
12
10
8
6
4
2
2010

mtpa

Singapore market overview

Aggregator franchise 3 mtpa

Short-term supply opportunities
Gas demand (EMA consultation paper)

Sources: BG Group estimates, November 2012 & EMA procurement framework consultation paper, March 2012

Pipeline gas displacement

Spot LNG prices regularly

support short-term
displacement of pipeline gas
with LNG

Spot LNG prices

LNG is competitive against

pipeline gas in Singapore

Pipeline gas
displacement

Pipeline gas prices

Market development LNG reloads

Physical reload capability
enables break bulk
trans-shipment
Demand side interest in LNG
reloads for various regional
markets
Early stage assessment of
LNG bunkering under way

SLNG full development

Source: EMA.gov.sg

Conclusions
Close cooperation among
BG Group, SLNG and EMA

Aggregator model tailor made

to meet Singapores gas
market challenges. It could be
adapted to introduce LNG to
new markets
BG Group is committed to
ongoing development of
Singapore gas market