The Great Gas Game Katarina Johnsson, Head of Origination SEB Merchant Banking

Transcription

1 The Great Gas Game Katarina Johnsson, Head of Origination SEB Merchant Banking European Gas Price Development

2 Agenda COMMODITY PRICE DRIVERS THE EUROPEAN GAS MARKET THE SHALE GAS REVOLUTION FUTURE TRENDS 2

3 What Determines a Commodity Price? Consumption vs. Production In a strong consumption growth environment frequently out of sync Consumption & Production volumes Physical balance is unlikely to settle down into a stable situation for many years to come. Commodities likely to move in and out of high and low volatility periods Production Consumption Strong consumption growth: Either too little production capacity or too much Generally long lead times to increase production Speed of investments and technology developments vs. consumption growth are not matched At times, sheer size of investments that is needed Time 3

4 From Emerging to Developed Markets Industrialisation, Urbanisation, Infrastructure building, Consumption 4

5 Energy Consumption per capita 9 Energy cons. per capita (ton oil eq.) USA South Korea Japan China GDP / capita current USD 5

6 European Gas Markets A global market North Sea (LNG US) LNG Atlantic NBP ZEE TTF NCG Gaspool R U S S I A LNG Qatar PEG CEGH PSV CDG LNG W Africa Morocco Algeria Tunisia Libya LNG Med 6

7 20 Historical Natgas Prices Comparison Financial Crisis Fukushima Shale gas in US aug/13 maj/13 feb/13 nov/12 aug/12 maj/12 feb/12 nov/11 aug/11 maj/11 feb/11 nov/10 aug/10 maj/10 feb/10 nov/09 aug/09 maj/09 feb/09 nov/08 aug/08 jun/08 mar/08 dec/07 sep/07 jun/07 mar/07 dec/06 sep/06 jun/06 mar/06 dec/05 BAFA UK NBP US Henry Hub UK NBP forward Henry Hub forward LNG Japan Corp LNG Import Price Note that the oil indexed border contract also have some daily flexibility USD/MMBtu

8 Natural Gas - Current Price Drivers 8

9 The Scale of Shale Can the US story be repeated Source: Financial Times 9

10 Trends for the European Gas market The Globalisation of the Gas Market LNG trade continues to expand Energy security New supply and trade routes From Oil indexation to Gas indexation The gas hubs are developing LNG export US linked to HH Market structure for flexibility Demand Development China - domestic supply/demand Natural gas for power generation Natural gas for transport 10

11 Sales Note Disclaimer This marketing material has been prepared by SEB s Commodities Sales desk for informational purposes only. It is not for distribution to the public or to a large number of persons, but is intended to be distributed to the named recipients. Although containing the honestly held views of its author, no representation is made as to its accuracy or completeness. It does not constitute independent, objective investment research, and is therefore not protected by the arrangements which SEB has put in place designed to prevent conflicts of interest from affecting the independence of its investment research. Opinions of the Sales desk may be inconsistent with views and recommendations contained in research previously published by SEB, and where the latter is referred to, you are strongly advised to read the full report and its accompanying disclosures before taking any action. This document does not constitute investment advice and is being provided to you without regard to your investment objectives or circumstances. Anyone considering taking actions based upon the content of this document is urged to base investment decisions upon such investigations as they deem necessary. Any forward-looking statements, opinions, and expectations are subject to risk, uncertainties and other factors that may cause actual results to differ materially from those projected. Past performance is no guarantee of future results. This document does not constitute an offer or an invitation to make an offer, or solicitation of, any offer to subscribe for any securities or other financial instruments. To the extent permitted by law, SEB accepts no liability whatsoever for any direct or consequential loss arising from use of this document or its contents. SEB, its affiliates or employees may, to the extent permitted by law, have positions in, buy/sell in any capacity, or otherwise participate in, any financial instrument referred to herein or related securities/futures/options or may from time to time perform or seek to perform investment banking or other services to the companies mentioned herein. This document is confidential to the recipient, any dissemination, distribution, copying, or other use of this communication is strictly prohibited. Skandinaviska Enskilda Banken AB (publ) is incorporated in Sweden as a Limited Liability Company. It is regulated by Finansinspektionen, and by the local financial regulators in each of the jurisdictions in which it has branches or subsidiaries. 11