The Effects of Increasing Demand on the Dynamics of the Gas Business - PowerPoint PPT Presentation

The Effects of Increasing Demand on the Dynamics of the Gas Business Seapex Presentation Singapore February 1997 BHP Petroleum

GAS RESERVES (Asia & Australia) Strong demand for energy has focussed governments and world lending institutions on optimal utilisation of energy resources, particularly gas. Asian Opportunities (undeveloped gas reserves) Country Remaining Gas 1994 Production R/P Ratio Reserves P+P (mmcfd) Y AKUTSK SAKHALIN Pakistan KURIL (TCF) ISLANDS 21.0 TCF India Australia 29.4 2632 30 HOKKAIDO C.I.S. 26.0 TCF Bangladesh 9 720* 35 Sea of Japan HONSHU Brunei 18.6 1097 50 MONGOLIA JAPAN N. KOREA China China 32 1759 50 BEIJING S. KOREA Yellow 32.0 TCF India 26.3 2000 35 SHIKOKU IRAN Sea KYUSHU PEOPLE'S REPUBLIC Indonesia 43 6005 20 ISLAMABAD AFGHANISTAN OF CHINA Malaysia 44.5 3720 30 OKINAWA SHANGHAI Vietnam PAKISTAN Myanmar* 7.0 102 190 ANOLA Pacific Ocean TAIPEI NEW DELHI NEPAL 3.4 TCF TAIWAN KARACHI BHUTAN Philippines New Zealand 2.5 537 13 JAGDISHPUR HONG KONG Pakistan 21 1627 35 INDIA BANGLADESH 3.0 TCF Arabian MYANMAR Sea SURAT HAINAN LAOS South Papua New Guinea 15 15.5 2660 BOMBA Y Bay of China Sea W Malaysia Bengal Y ANGON L UZO N BOMBAY HIGH THAILAND Philippines 3 0 VIETNAM PHILIPPINES Ba ngkok 8 TCF* CAMBODIA Andaman M A NILA E Malaysia Thailand 8.1 1057 20 Sea 21 TCF* Vietnam 3.4 77 120 SRI LANKA PALAWAN S CALE Su rat Thani MIN DA NAO 0 300 KM BRUNEI SABAH Kuala Lumpur Brunei MALAYSIA Segam at MOLUCCAS Bangladesh Singapore BORNEO 18.6 TCF SUMATRA CELEBES IRIAN JAYA 9.0 TCF Banda Sea 1994 TOTAL REMAINING GAS RESERVES PAPUA INDONESIA NEW GUINEA J A K A R TA (Asia & Australasia) Myanmar Kutei Arafura Sea 7.0 TCF Indonesia 8.0% 9.9% Indonesia 7.2% 2 TCF** PNG Australia 12.2% Thailand Malaysia 5.7% 15 TCF 8.1 TCF China Pakistan 3.0% AUSTRALIA India Natuna Sea Brunei Indonesia 3.4% Papua New Guinea 17.1% 2.7% Thailand 2 TCF (W) Bangladesh NW Australia 3.4% Myanmar 25 TCF (E) TCF Others 17.3% 11.0% Total Gas Reserves: 483.2 TCF NEW ZEALAND Others include New Zealand, Philippines and Vietnam Source: Wood MacKenzie, *modified, **uncommitted gas reserves BHP Petroleum

GAS PRICING Strong demand, and high value and prices for gas in power generation, means that regional pricing depends primarily on proximity to power demand markets. Strong rates of economic growth YAKUTSK SA KHA LIN KURIL ISLANDS Developing countries on the threshold of industrialisation HOKKAIDO C.I.S. $3.80 Sea of Fast rising demand for electrical power (i.e. widening Japan HONSHU MONGOLIA * For the Middle East: JA P A N N. KO REA $0.50 $2.60 BEIJING S. KO REA $3.80 capacity shortfalls) Yellow SHIKOKU IRAN Sea KYUSHU PEOPLE'S REPUBLIC AFGHANISTAN ISLAMABAD Environmental constraints OF CHINA $3.10 OKINAWA SHANGHAI PAKISTAN ANOLA TAIPEI Pacific Ocean NEWDELHI NEPAL T A IW AN KARACHI BHUTAN $3.80 HO NG JAGDISHPUR KO NG INDIA BANGLADESH Arabian $3.00 MYANMAR $2.00 SURA T Gas fired power generation capacity expansion Sea HA IN A N LAOS South BOMBAY Bay of China Sea $3.00 LU ZO N Y ANGON $1.50 Bengal BOMBAYHIGH THAILAND PH ILIP PINE S $1.50 B a ngkok VIETNAM (i.e. GTCC technology) M A N ILA $2.50 Andaman CAMBODIA Sea $2.50 SR ILA NK A P ALAWAN short construction lead time SCALE Surat Thani M IN DA NAO 0 300 KM SABAH $2.20 BRUNEI Ku ala Lumpur higher generation efficiency MALAYSIA Segamat MOLUCCAS Singapore BORNEO SUM A T RA CELEBES IRIAN JAYA Banda Sea lower emissions (i.e. as against coal) P A PU A INDONESIA NE WGU INEA J AK A R T A Co-generation Arafura Sea $3.00 Undeveloped resources without markets Strong demand for gas into power generation AUSTRALIA Gas demand centres Relatively high gas price ~ US$2.00/Mcf upwards cf urea $1.30 $3.80 Indicative market price * feedstock (US$/GJ) $1.50 * for end user High intrinsic value as a result of competing fuel prices NEW ZEALAND BHP Petroleum

INDONESIA Gas in Indonesia has been primarily developed for the export market to East Asia. The large gas resource base will continue to permit an export focus. E. Kalimantan Natuna potential LNG 6 trains plus 2 Arun High CO 2 2 TCF uncommitted soon to decline Currently over half the gas produced in Indonesia is liquefied Banda Aceh THAILAND 120 100 SOUTH CHINA SEA Lhok Seumawe into LNG, and further investments in gas export infrastructure at 5 PHILIPPINES BRUNEI 6 TCF Medan 1 TCF East Kalimantan and Natuna are planned. Natuna MALAYSIA Simeulue CELEBES SEA Java's industrialisation and energy demand growth is 2 TCF 25 TCF MALAYSIA SINGAPORE Manado Nias generating strong domestic gas demand 0 SUMATRA KALIMANTAN 10 TCF Pontianak Togian Padang Samarinda Palu Tali Abu Jambi Siberut Bangka Palangkaraya C. Sumatra Palembang 0.5 Bt proven SULAWESI INDONESIA GAS MARKET Brown coal 2 Bt Belitung Bengkulu Banjarmasin Black coal Kendari (Supply/Demand Balance) 1.1 TCF JAVA SEA 0.5 TCF 0.4 TCF INDIAN 5 BUTON 1.8 TCF Ujungpandang OCEAN Bandar Lampung 1 TCF JAKARTA Semarang Kangean Madura S. Sumatra Bandung Surabaya 1.5 TCF FLORES SEA 1.8 Bt proven East Kalimantan North Sumatra South Sumatra Java Other Fields 0.3 TCF Alor Bali Brown coal Yogyakarta 0.5 TCF Flores Mataram JAVA 8000 Denpasar Sumbawa km 600 Lombok TIMOR 0 Sumba Kupang Gas Requirements (mmcfd) 6000 100° 120° Indonesia has significant gas reserves located primarily in remote 4000 areas. Largest reserves are located in North Sumatra and East 2000 Kalimantan with gas used mostly for LNG plants. Natuna will be developed initially as an LNG project. 0 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 Demand projection as YEAR per Pertamina forecast Supply projecction as LNG Capacity Feedstock Power Generation City Gas & CNG Industry per Wood MacKenzie BHP Petroleum

INDONESIA Gas pricing for the fertiliser industry in Indonesia is dictated by ministerial decree. The low pricing is a result of providing cheap fertiliser products to the rural constituencies. Gas prices have risen rapidly, in response to intense demand GAS PRICING East Kalimantan Fertiliser plant 1.00 East Java US$/MCF (Delivered to the user) Power generation (PLN Gresik) 2.53-3.00 (ARCO-Kodeco) Gas Pricing into LNG plants State gas company 2.16 Generally based on an index to the Indonesia Crude Price Fertiliser plant 2.00 Average net price (1994): US$2.06/Mcf West Java Power generation (?) 3.00 Power generation (PLN Maura Karang) 2.45 (ARCO) *Cement (Indocement & Semen Cibinong) 3.00 *Cement (Tri Manunggal Pesaka Cement) 2.70 Steel Industry 3.00 Gas prices for urea (as dictated by Ministerial decree) Steel Industry (as fuel) 2.00 State gas company (Jakarta & Bogor) 1.50 1991 Ministerial decree State gas company (Cirebon) 1.25 East Kalimantan fertiliser co 1.00 Trend Fertiliser industry 1.00 1.00 North Sumatra PIM & AAF to South Sumatra 4 units 1.00 South Sumatra 1.00 higher West Java Kujang Power generation (minor volume) 3.00 price Fertiliser industry (large volume) 1.00 Post-1991 Ministerial decrees (ie new or modified plants) 1.50 South Sumatra remodelled unit North Sumatra Gresik 2.00 Power generation (minor volume) 3.00 Fertiliser plant (Aceh) 1.00 Paper Mill 1.50 BHP Petroleum

THAILAND Thailand's gas supply is heavily committed to power generation expansion plans. Domestic ammonia/urea production is not likely to occur. The power generation sector will continue to dominate gas demand MYANMAR (i.e. EGAT plans to double gas-fired capacity over the next 10 years). NAMPHONG THAILAND Khonkaen Industrialisation in the country is driving a high growth rate in electricity consumption. Khanchanaburi LAOS Yadana Ta Luang Kang Koi Gas use in the residential and industrial sectors will grow as the Bang Pa -in BANGKOK pipeline network is expanded (i.e. Bangkok ring). Ratchburi Bangpakong LNG Local gas supply is constrained. Yetagun Rayong CAMBODIA Pipeline imports from Myanmar and Malaysia represents the best ANDAMAN SEA option for incremental gas supply. Potential LNG buyer. Platong VIETNAM ERAWAN THAILAND NATURAL GAS MARKET COMPLEX Khanom (Supply/Demand Balance) BONGKOT Krabi LNG (possibility) JOINT DEVELOPMENT AREA (THAILAND-MALAYSIA) 1st Contract (Unocal) 2nd Contract (Unocal) 3rd Contract (Unocal) Pailin (Unocal) SONG KHLA Sikirit (Shell) Nam Phong (Esso) Bongkot (Total) Yadana (Total) Yetagun (Texaco) JDA BEKOK PRAI 4000 Natural gas field DUYONG MALAYSIA ARUN SOTONG KERTEH Gas Requirements (mmcfd) Natural gas KUALA 3000 LUMPUR demand location Existing pipeline SEGAMAT INDONESIA 2000 Future pipeline BASIR GUDANG Gas reserves are mainly concentrated offshore in the Gulf of Thailand 1000 (i.e. 7 TCF) Expanding infrastructure 0 90 91 92 93 94 95 96 97 98 99 2000 2001 2002 2003 2004 2005 capacity debottlenecking. YEAR Demand projections as per links with Myanmar and Malaysia PTT forecast and EGAT generation energy plan Feedstock Industry Bangkok Ring EGAT (Energy Plan) IPP PTT has a contract for 525 mmcfd of gas from the Yadana Supply projections as per offshore gasfield starting from 1998 * Assumes all IPP generating capacity to be gas fired (ie LNG) Wood MacKenzie IPP to build a total at 10600 MW by 2006 BHP Petroleum