2
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But interest on other European markets has grown rapidly over
the past years…
* 2018 extrapolated from 2018 YTD volumes
** Other European Hub include NCG, GPL, PEGN, TRS, ZTP, AUS VTP, PSV, PVB, OTE, SLK , POL VTP, MGP
0
5,000
10,000
15,000
20,000
25,000
30,000
2011 2012 2013 2014 2015 2016 2017 2018**
TW
h
Volumes Traded OTC and Exchange
NBP TTF Other European Hubs
3
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0%
40%
80%
120%
160%
PS
V
PV
B
TT
F
GP
L
PE
GN
NC
G
ZT
P
CE
GH
TR
S
NB
Pavera
ge
y-o
-y %
in
cre
as
e
y-o-y % increase from 2011* to 2016
… With a large increase on all continental hubs…
* 2018 extrapolated from 2018 YTD volumes (Jan-Aug)
** Other European Hub include SLK, OTE. HUN, POL VTP
* vs 2012 for Italy and Spain, vs 2013 for CEGH, vs 2014 for ZTP
Source: LEBA, TSOs
0
2,000
4,000
6,000
8,000
10,000
2011
2012
2013
2014
2015
2016
2017
2018**
TW
h
OTC and Exchange Volumes Traded
TRS
Other EU**
PVB
CEGH
PEGN
PSV
ZTP
GASPOOL
NCG
4
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Platts has historically been focusing on forecasting activity on short and long term for most liquid markets
Source: Oxford Institute for Energy Studies
5
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.. Where most volumes traded are spot
0%
20%
40%
60%
80%
100%
NB
P
TT
F
AU
S V
TP
PV
B
PS
V
ZE
E/Z
TP
GP
L
NC
G
PE
GN
TR
S
OT
E
Product split for 2016 total volume traded
Year
Seasons
Quarter
Month
Spot/Prompt
Mature ; Active; Poor; Inactive
Source: Oxford Institute for Energy Studies
6
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What role will European hubs play as global LNG supplies
increase over the next two years?
1. Act as differentials to other global hubs (HH/JKM) reacting to the global balance
2. Price independently, connecting with the global market on the back of a regional demand and supply balance
3. Become a key benchmark for spot and contract LNG looking for flexibility in a liquid hub
4. Act as a sink for an over-supplied global LNG market
7
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JKM is breaking out to historical new highs?
0
2
4
6
8
10
12
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
US
D/M
MB
tu
JKM Spot Prices
2015 2016 2017 2018
8
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Maybe not so much from a historical perspective
0
2
4
6
8
10
12
14
16
18
20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
US
D/M
MB
tu
JKM Spot Prices Since ‘09
Range 2018 Average
9
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Actually, when one looks versus oil – LNG’s key price setter –
the market is incredibly strong
4%
6%
8%
10%
12%
14%
16%
18%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
%
JKM slope vs. 3-month Brent
Range 2018 Brent Equivalent Average
10
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Supply weakness has been driving price strength this summer
0
50
100
150
200
250
201
8/5
/1
201
8/5
/8
2018/5
/15
201
8/5
/22
201
8/5
/29
2018/6
/5
201
8/6
/12
201
8/6
/19
2018/6
/26
201
8/7
/3
201
8/7
/10
2018/7
/17
201
8/7
/24
201
8/7
/31
201
8/8
/7
201
8/8
/14
201
8/8
/21
201
8/8
/28
201
8/9
/4
201
8/9
/11
201
8/9
/18
Mcm
/d
Global Tanker Loadings Y/Y
11
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Supply weakness has been driving price strength this summer
-25%
-15%
-5%
5%
15%
25%
35%
45%0
50
100
150
200
250
201
8/5
/1
201
8/5
/8
2018/5
/15
201
8/5
/22
201
8/5
/29
2018/6
/5
201
8/6
/12
201
8/6
/19
2018/6
/26
201
8/7
/3
201
8/7
/10
2018/7
/17
201
8/7
/24
201
8/7
/31
201
8/8
/7
201
8/8
/14
201
8/8
/21
201
8/8
/28
201
8/9
/4
201
8/9
/11
201
8/9
/18
%
Mcm
/d
Global Tanker Loadings Y/Y JKM Spot M/M
12
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Higher Asian pricing and Asian premiums over NW Europe have
led to increased reloads from Europe…but beware shipping
0
5
10
15
20
25
30
35
40
45
50
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Mcm
/d o
f E
uro
pean
Relo
ad
s
JK
M/T
TF
Sp
read
($/M
mb
tu)
European Reloads JKM-TTF Spread
13
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TTF and JKM relationship most relevant in summer, Brent
remains main driver for LNG
R² = 0.7084
R² = 0.3425
0
2
4
6
8
10
12
14
0 5 10 15
$/M
MB
tu (
JK
M)
$/MMBtu (TTF)
TTF versus JKM
Summer Winter Summer Trend Winter Trend
R² = 0.5689
R² = 0.6667
0
2
4
6
8
10
12
14
0 20 40 60 80
$/M
MB
tu (
JK
M)
$/Barrel (Brent)
Brent versus JKM
Summer Winter Summer Trend Winter Trend
14
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JKM expected to stay strong through this winter as Northeast
Asian demand picks up seasonally
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
-200
-150
-100
-50
0
50
100
150
$/M
MB
tu
Mcm
/d
M-o-m Change in NE Asian Demand JKM
15
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While we forecast JKM to eclipse 12$ this winter we are not
bullish
0
2
4
6
8
10
12
14
$/M
MB
tu
JKM Henry Hub TTF Forecast HH Forecast TTF Forecast JKM
16
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Paper/derivative market for JKM continues to grow
17
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Interaction with other energy hubs, JKM reflects sea borne LNG
delivered North East Asia
NBP/ TTF
Brent/ JCC
Henry Hub
NE Asian demand (Power/Heating)
Platts JKMSpot demand and availability
18
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Approved companies in MOC counter-party review process so far
Source: Platts
19
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Bids
Bids , offers & trades for physical cargoes and swaps converge and demonstrate JKM value
Offers
Price convergence &
demonstration of JKM
value
MOC pricing period
Incremental price change
of 1-5 cents/MMBtu every 2
minutes
Reasonable bids &
offersPri
ce
Time
Intraday
values@
3pm SGT
4pm 4.30pm
20
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0
1
2
3
4
5
6
7
8
13-Jun 20-Jun 27-Jun 4-Jul 11-Jul 18-Jul 25-Jul 1-Aug 8-Aug 15-Aug 22-Aug 29-Aug 5-Sep 12-Sep 19-Sep 26-Sep 3-Oct 10-Oct
20
Growth of LNG MOC information (June 13 to October 10, 2018)
97 bids, offers and trades
so far
Source: Platts
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Hierarchy of assessment data quality
21
• Published live through Platts’ systems
• These take precedence over other
non-window information as value at a
given time can be determined.
• Communicated via IM, phone or email, Platts
seeks to verify this information with market
participants throughout the day
• This information can be used alongside other
influencing factors, such as oil and gas prices,
to determine the assessment.
• Notional prices only give an
indicative value
• Can be disregarded in the case
of differing influencing factors
such as oil and gas price
movements or other supply and
demand fundamentals
Firm,
transparent &
detailed bids/offers
Trades, bids and offers verified and
corroborated by market participants
Notional prices, previous trades, tender results
Firm MOC @ 4.00pm to
4.30pm
Intra-day values @
3pm
22
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Rise of the non utility buyer
23
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LTC terms and project financing is changing
24
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24
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