LNG IMPACT ON LITHUANIAN NATURAL GAS MARKET

Transcription

1 LNG IMPACT ON LITHUANIAN NATURAL GAS MARKET May 29, 2015 DOMINYKAS TUČKUS

2 CONTENTS I. LITGAS activities II. Trends in Lithuania III. LNG market situation and outlook 2

3 LITGAS: activities NATURAL GAS SUPPLY AND TRADING LNG TERMINAL INFRASTRUCTURE 3

4 LITGAS: activities Designated supplier for Klaipeda LNG terminal ensuring baseload supplies to energy producers Natural gas trading, small scale LNG supplies and bunkering 21% of natural gas market in Lithuania in

5 II TRENDS IN LITHUANIA 5

6 Regional price comparison In the 1h of 2014 Russian natural gas delivered to Lithuania was on average 30% more expensive than delivered to Germany Natural gas prices ( /MWh) in 1H Germany Lithuania Source: Quarterly Report on European Gas Markets, 2014 Q4 European Commission, Directorate-General for Energy, Market Observatory for Energy 6

7 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Price trend in Lithuania 450 Lithuanian average weighted natural gas import price EUR/1000 m In May 2014: LITGAS signs terms sheet with Statoil AB Lietuvos Dujos negotiates a ~20% discount from Gazprom 150 Source: National Commission for Energy Control and Prices (Lithuania) 7

8 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Price trend in Lithuania 450 Lithuanian average weighted natural gas import price 400 EUR/1000 m LNG import price for 2015 for energy producers 12% lower than average natural gas import price in 2014Q1 In May 2014: Average LITGAS wholesale signs terms price sheet with on Statoil NG exchange in 2015Q /MWh AB Lietuvos Dujos negotiates a ~20% discount from Gazprom 150 Source: National Commission for Energy Control and Prices (Lithuania), GET Baltic natural gas exchange 8

9 Natural gas consumption TWh -20% Sources: Eurostat, National Commission for Energy Control and Prices (Lithuania), Central Statistical Bureau of Latvia, Estonian Ministry of Economic Affairs and Communications 9

10 New opportunities New gas interconnectors will increase market reach Bunkering fuelling LNG capable ships, ferries in the sea Shipping to small LNG terminals onshore the Baltic Sea LNG regasification markets Baltic-connector LNG marine + small scale markets GIPL Markets accessible starting the 1 st of January, 2015 Markets accessible after regional interconnections are finished Markets accessible through reloading terminals LNG terminals ( m3) in development 10

11 Facing challenges Decreasing demand Non-liberalized natural gas market in Latvia Different measurement systems in the Baltic states TPA for transit/storage has not been fully implemented in Latvia significant progress achieved in the last 2 years 11

12 III LNG MARKET SITUATION AND OUTLOOK 12

13 LNG market: flows and volumes LNG trade flows 30 importing countries 19 exporting countries 376 BCM total liquefaction capacity 947 BCM total regasification capacity 421 LNG carriers 32,45 34,28 LNG imports, BCM 4,10 1,56 20,98 18,98 37,62 89,20 Japan S. korea China Rest of Asia Europe S. America Middle East 7,73 10,58 12,72 19,14 LNG exports, BCM 33,70 13,09 17,38 23,60 24,83 Qatar Malaysia Australia Indonesia Trinidad Nigeria Algeria Šaltinis: GIIGNL 13

14 LNG market: perspectives BCM LNG supply BCM LNG demand Other Africa Australia U.S. Russia Qatar Other South and Central America Europe Asia-Pacific Šaltinis: BP World Energy Outlook

15 LNG market: prices NBP JKM 80 S. America 30 28,42 28,40 26,17 26,45 26,06 26,38 29,29 31,11 31,10 27,22 25,73 60 Spain HH Moldova 20 18,70 40 Brent Ukraine Belarus NG price EUR/MWh 10 12,12 7,93 11,08 6,19 20 Russia Brent price USD/barrel

16 Natural gas trading trends Natural gas traded on European hubs increased by 18% in % of the world s LNG traded on a spot or short-term basis (+7% in 2014) 35% 30% 25% 20% 15% 10% 5% Share of spot/short-term contracts 0% Source: Quarterly Report on European Gas Markets 2014 Q4 (EC DG Energy), The LNG Industry in 2014 (GIIGNL) 16

17 LNG market: import terminals in Europe 80% 70% 60% 50% 40% 30% 20% 10% 0% inventory/terminals capacity Regas capacity utilization 17

18 Natural gas supply alternatives Typical pipeline gas supply contract in CEE LNG spot market Typical US LNG supply structure Term years - Min. 20 years Volume > 0.5 BCM/year - 5 cargoes/year Indexation Oil products/brent NBP/Brent/fixed/HH HH/fixed Credit support Flexible/none LC/PCG Sovereign guarantees Take or Pay 80% annual None 100% Price level 6-7 $/MMBtu 6-9 $/MMBtu 7-9 $/MMBtu Political uncertainty High Medium Low 18

19 Conclusions Baltic states no longer isolated from the global gas markets In Lithuania LNG has put a cap on pipeline gas prices LNG supply outlook is positive: increasing competition putting pressure on traditional natural gas suppliers In Europe LNG has proved to be an efficient tool ensuring security of energy supplies and balancing the peaks in demand Challenges: Regulation still lagging behind Decreasing consumption 19

20 THANK YOU!