OAPEC

Organization of Arab Petroleum 24-25 April 2017

Exporting Countries Barcelona, Spain

The Role of Arab Countries in the Global LNG Market:

Current, Challenges and Opportunities

Gas Industries Expert

OAPEC
 Agenda

Page ▪ 2 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 OAPEC In Brief

~55% of the World’s Total 27% of the World’s Total

Reserves Reserves

Transport, Shipbuilding, 32% of the World’s Total ~15% of the World’s Total
Investment & Petroleum Oil/NGL Production Gas Production
Services

Page ▪ 3 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Development of LNG Industry in the Arab Countries: 1 st commercial LNG cargo

The official ceremony for the delivery of the 1st commercial cargo of LNG from Algeria,
by Methane Princess, was held at Canvey Island in UK on 12 October 1964.

1971 ،‫ للغاز الطبيعي المسال في أرزيو بالجزائر‬Camel ‫الصورة لمجمع‬

Capacity Cost Cargo Capacity Gas Phase

Page ▪ 4 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Development of LNG Industry in the Arab Countries: Liquefaction Capacity
Development of Liquefaction Capacity Since 1964 Distribution of Liquefaction Capacity in
the Arab Countries, 2016
7
7
Oman Yemen
UAE

Yemen
7 10.4
7
10.4 UAE
10.4 12.2 7% 5%
Algeria 10.4
12.2
12.2
Egypt 4%
10.4 12.2 9%

Egypt
Qatar
12.2

Oman
Libya 77 Qatar
10.4 77
70
77 Algeria 55%
12.2
Qatar

Egypt 54 20%
7.1
26
UAE

Oman 17
Libya

3
Algeria

24 29
Yemen 23 23 20 20 19 19
1 10
5.4 5.4 5.4 5.8 5.8 5.8 5.8 5.8
2.8 Total Capacity
Source: OAPEC 141 MTPA

Source :OAPEC

340
141
mtpa
mtpa

Arab
Qatar, Algeria, Egypt, Global countries
Oman, UAE, Yemen, capacity
Libya
The 2nd
International LNG Summit
42 %
Page ▪ 5
Barcelona, Spain, 24-25 April 2017
 Development of LNG Industry in the Arab Countries: Distribution of LNG Exports
Development of Global LNG Trade
280
Pacific
240
Basin
200 45%
Other
million tons

160 Exporters
Distribution of LNG
120 Arab Exports per Region
Countries
80 40%
Arab
40 Countries Rest of
Atlantic
0 16%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source :OAPEC, GIIGNL

World’s Total Exports

Arab’s Total Exports

Arab Exports Global trade Share in total
Growth Rate Growth Rate trade increase

Page ▪ 6 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Development of LNG Industry in the Arab Countries: Distribution of LNG Exports & Markets
Global LNG Markets

27% 17%

1% Atlantic 63%
9% Pacific 10%

10%

7%

Page ▪ 7 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Challenges & Opportunities of LNG Sector in the Arab countries

1 2
Growing local demand and Increased competition in the
production decline in the global markets with other LNG
LNG exporters like Egypt, players
Oman,..
Challenges
&
Opportunities
Availability of LNG export
Evolution of Seasonal LNG infrastructures that currently
markets within the region works under capacity
(Kuwait, Dubai, Abu Dhabi,.)
3 4

Page ▪ 8 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Challenges of LNG Sector in the Arab countries: Loosing Market Share
Market share of LNG exports from Arab countries is lowering….

Development of Arab LNG Exports & Market Share

LNG exports decreased
140 50%
from 115 mt in 2012 to
120 48% 105.5 mt in 2016

100 46%

market share %
million tons

80 44%
Market share declined from
60 42%
48% in 2011 to 40% only in
40 40% 2016

20 38%

0 36%
75% is the average of
Qatar Algeria Egypt Oman running capacity
UAE Libya Yemen Share%

Source :OAPEC, GIIGNL

Page ▪ 9 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Challenges of LNG Sector in the Arab countries: Growing Local Demand on Gas
Growing local demand & production decline in exporters like Egypt, Oman,…

Development of Gas Production& Consumption Development of Gas Production& Consumption

Figures Figures
35 70

30 60

25 50

20 40

BCM
BCM

15 30

10 20

10
5
0
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Production Consumption Production Consumption
Source :OAPEC Source :OAPEC

Demand Demand Production

Page ▪ 10 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Challenges of LNG Sector in the Arab countries: Increased Competition
Increased competition due to additional LNG quantities causing a glut of supply

Development of Global LNG Exports Share in Total Exports to Asian Markets

280 50% 23% 25%
240
Others 40% 20%
35% 35%
200 Nigeria
T&T
160 Malaysia 30% 13% 15%
Indonesia
mt

120 Australia
20% 10%
80
Arab
40 Countries 10% 5%

Arab Total Australia'

0
0% 0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

-Additional quantities from Australia after startup of Australia exported 43.5 MT in 2016 to Asian
long delayed LNG projects. markets compared to 14 MT in 2006!
-US started to export LNG from new projects.

Page ▪ 11 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Opportunities of LNG Sector in the Arab countries: Regional Markets
Evolution of Seasonal (small ) LNG markets within the region

Development of Natural Gas Imports in the Arab

Countries There is a rapidly growing demand on
48 LNG to meet electricity requirements
40

32
bcm

LNG imports increased from 1 bcm in

24
2009 to reach ~ 22 bcm in 2016
16
Pipelines
imports
8

0 In 2016, there are 5 LNG markets in

2005 2009 2010 2011 2012 2013 2014 2015 2016
four countries compared to one market
Pipelines imports UAE LNG Kuwait LNG Egypt LNG Jordan LNG
in 2009
Source :Author Estimates

Page ▪ 12 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Opportunities of LNG Sector in the Arab countries: Regional Markets
7 FSRUs in Kuwait, UAE (Dubai, Abu Dhabi), Jordan & Egypt

2015 2009 2016

FSRU FSRU FSRU

5.2 bcm/y 7.8 bcm/y 7.1 bcm/y

Jordan
Kuwait
Egypt
UAE
Intra-trade

2015 2010
2015 2015

FSRU FSRU
8.2 bcm/y 4.9 bcm/y
FSRU FSRU
7.8 bcm/y 5.2 bcm/y

*FSRU: floating storage and re-gasification unit

Page ▪ 13 The 2nd International LNG Summit
Barcelona, Spain, 24-25 April 2017
 Opportunities of LNG Sector in the Arab countries: The European Market
European gas supply in 2015 Prospects for Gas in Europe
Algeria &
Others (LNG) (bcm)
Qatar (LNG)
8% 2%
482 510 510
Alegria &
Libya
(Pipeline) 248 220
6% 150
C. Asia Production
2015 2020 2035
(Pipeline) 50% -234
Russia -290
3% -360
(Pipeline)
31%

Production Demand Net Imports

Supply is defined as production plus extra-regional imports Source:cedigaz

10% 50%
1
LNG 2015 56% 71%
2020 2035

Dependence on 40% 2
imports Pipelines 26%

Page ▪ 14 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Opportunities of LNG Sector in the Arab countries: The European Market
LNG Availability of LNG export infrastructure that run under capacity

Egypt
4% Italy

Yemen Spain
% operating of LNG plants in 2016

0%

Algeria
40%
Algeria
Libya Egypt
Oman UAE
78%

UAE
101% Boosting Exports to Europe
▪Existing export infrastructure is working under capacity
Qatar ▪Upon completion of gas development projects by European
Oil& Gas majors, it is possible to boost gas exports from 2016
102%
levels

Page ▪ 15 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Prospects of LNG Sector in the Arab Countries: Production Development Projects
Algeria
Egypt bcm/y Production Development Projects (2017-2 )
▪ WND Project, 2017 50 ▪ 8 Projects, 2016-2019

▪ Zohr Mega Project, 2017 3.1

40
▪ Atol Project, 2018
3.6 UAE
30
▪ Shah phase 2, 2020
28 21
14.2 ▪ Bab Project, 2020
20
1.4
Qatar 1.8 5.2 5.2
10 4.0 Oman
14.5 1.8
▪ Barzan Project, 2017 12.4 3.0 10.3 10.3 ▪ Block-62, 2016
4.4
▪North Field upgrade, 0 ▪ Khazzan 1& 2, 2020
2021 Egypt Qatar Algeria UAE Oman
Source :Author Estimates

Page ▪ 16 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Prospects of LNG Sector in the Arab Countries: LNG Terminals Projects

UAE UAE
Lebanon Bahrain Kuwait Morocco
(Sharqa) (Fujairah)

LNG LNG LNG LNG LNG LNG

Terminal terminal terminal terminal terminal terminal
(FSRU ) (FSRU) (FSU) (onshore) (Onshore) (Onshore)

5.2 bcm/y 5.2 bcm/y 4.1 bcm/y 12.3 bcm/y 15.5 bcm/y 7 bcm/y

2018 2018 2018 2019 2021 2025

Page ▪ 17 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Prospects of LNG Sector in the Arab Countries: Liquefaction & Regasification
2025 2021
2017 By 2020/2021

7 bcm/y
FSRU
5.2 bcm/y
FSRU
5.2 bcm/y
FSRU
7.8 bcm/y
15.5 bcm/y
B Re-gasification
Capacity
~90 bcm/y

Lebanon

Jordan
Kuwait
32%
Egypt

UAE

68%

2017 2018
FSRU FSRU
8.2 bcm/y 4.9 bcm/y
FSRU FSRU FSU 2018
5.2 bcm/y 5.2 bcm/y

FSRU
4.1 bcm/y

FSRU
A Liquefaction
Capacity
~192 bcm/y
7.1 bcm/y 12.3 bcm/y
7.8 bcm/y

Page ▪ 18 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Conclusions
1st commercial LNG cargo globally shipped from Algeria
Arab countries played a key role in the development of LNG
1964’s industry

Total LNG nameplate capacity in the Arab countries

This represents 42% of the global LNG capacity
141

Share of LNG exports from the Arab countries

Asia is the main market (63%) followed by Europe (27%) and
40% Middle East (9%) while Americas account for 1%

Gas Development Projects

17 are planned to start in (2017-2022) with total production
capacity of 150 bcm/y and total investments of $ 80 billion.

10% Share of LNG imports in European Supply

It will increase to 15% by 2020 and to 26% by 2035 giving a
huge potential to increase imports from Arab LNG exporters

Page ▪ 19 The 2nd International LNG Summit

Barcelona, Spain, 24-25 April 2017
 Questions?

12
11 1

10 2

9 3

8 4
7 5
6

Eng.Wael A.Moati
Gas Industries Expert,
OAPEC

whamed_eng@oapecorg.org

Page ▪ 20 The 2nd International LNG Summit

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