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LNG Demand Situation and Trade Issues

Chinese Taipei

APEC Regional LNG Trade Facilitation

Jane. H.J. LiaoDeputy CEO of Natural Gas Business

July 15 2015

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1. The Market- now and then2. LNG Issues3. How Can APEC Help4. Find the Needs5. LNG in Chinese Taipei

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Content

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LNG Demand and IssuesChinese Taipei

APEC Regional LNG Trade Facilitation

Jane LiaoDeputy CEO of Natural Gas Business

July 15 2015

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The Market Now and Then

Then

LNG Target Market : USA (Import)Specification: Leaner LNG Vessel : Q max/Q FlexTrain Capacity: Mega project

Focused market : US, Canada/ Shale Gas (Exports)Pricing : HH/ de-oil linked Term: Shorter (10-15 yrs)Destination: More Flexible

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LNG Market Transformation

1995 2000 2005 2010 2015 2020 2025

Asian financial crisis

Oversupply (Take-or-pay)

• Indonesia shortfall

• Yemen delayed• Sakhalin delayed

US import project

Historical high oil price

• Global financial crisis

• Oil price dropped

Planned US LNG export

Canada LNG export

Driving forces of cargo diversion

Buyer’s Market

Paradigm Shift

Seller’s Market

US LNG start to export

？ ？

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The LNG Issues

• Business Model• The Relationship • The Dilemma

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How Can APEC Help

Top sellers and buyers within the APEC

•Contradiction ? •The Balance ?

Industry

Government

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Find the Needs

Reliable Supply

Rationale Pricing

Mechanism

Flexible Terms

Cliché?

•Find out what you need•Let the market decide the road ahead !!!!!

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Energy Consumption Mix

Structure of Energy Consumption

Source: Bureau of Energy, MOEA

Electricity accounted for 49% of total energy consumption in 2014. Major fuels for power generation : Coal (33.6%), Gas (27.9%) and Nuclear (16.3%).

Electricity Mix

Coal

Gas

Nuclear

Cogeneration

Hydro

Oil

Renewable

33.60%

27.90%

16.30%

16.10%

2.90%

2.50%

0.80%

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Qatar44%

Malaysia21%

Indonesia16%

PNG7%

Others11%

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LNG in Chinese Taipei (2014)

Imported LNG98%

Indigenous Gas2%

LNG Imported

13.3 MTPA Supply Demand Gas sold

17.6 billion m3

Power Sector80%

Industrial7%

Residential13%

Taipower62%

IPPs18%

Industrial7%

Residential13%

Brunei

Yemen

Australia

Oman

Russia

Nigeria

E.G

AlgeriaSpain

T&T

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Receiving Facilities

2 LNG receiving terminals in 13.3MT was imported in 2014The 3rd receiving terminal to be built by 2024The total receiving capacity to 20MTPA

Off-shore PipelineOn-shore Pipeline

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