Cooperation Competition in AsiaPacific LNG Market APEC EGCFE

Cooperation & Competition in Asia-Pacific LNG Market APEC EGCFE Workshop March 21 -23, 2005 The Grand Hotel, Chinese Taipei Dr. Boyoung KIM KOGAS

CONTENTS q q q Yesterday Nowadays Tomorrow in Asia-Pacific LNG Market 2

World Natural Gas Trade 76. 65 38. 31 10. 93 48. 3 12. 36 20. 07 World NG consumption: 2. 08 b ton l International Trade 510 m ton (25 % of total consumption) l Trade by Pipeline NG : 370 m ton Trade by LNG : 140 m ton - Japan : 60. 0 m ton (43%) - Korea : 19. 0 m ton (14%) in 2003 30. 59 l 3. 7 5. 36 10. 05 8. 2 22. 74 Source : bp 3

World LNG Trades 4

ships 2 nd rush hour 1, 000㎥ wh en When the 3 rd Rush hour of LNG consumption will be ? ? Coming-up the New Era in LNG Market 1 st rush hour Source : Clarkson Research Studies 5

The Restriction of Expanding LNG Market 46. 0 MJ/nm 3 Alaska (40. 2) Trinidad & T (40. 8) Algeria (41. 8) Nigeria (43. 9) Indonesia (43. 9) Australia (44. 4) Africa & America South-East Asia Middle-East Asia Malaysia (44. 7) Qatar (44. 3) Abu Dhabi (44. 6) Oman (45. 4) 40. 0 Low Calorie 43. 0 High Calorie LNG Quality 6

World LNG Demand : Forecasting Unit : mtpa 2000 2005 E 2010 E 2015 E Japan 53. 4 58. 3 67. 8 75. 6 Korea 15. 0 25. 2 38. 1 48. 4 Taiwan 4. 3 5. 9 9. 0 13. 5 India - 2. 0 10. 5 16. 0 China - - 7. 1 13. 0 72. 7(71. 4%) 95. 6(63. 7%) 132. 5(48. 9%) 166. 5(44. 7%) France 9. 0 8. 8 11. 8 14. 0 Spain 6. 9 15. 5 18. 8 35. 2 - 2. 6 19. 9 27. 2 Europe (total) 23. 9(23. 5%) 37. 9(25. 3%) 72. 7(26. 9%) 103. 0(27. 7%) US East Coast 4. 9 15. 0 45. 0 70. 0 US West Coast - - 5. 0 10. 0 Mexico - - 11. 3 15. 8 5. 1(5. 0%) 16. 5(11. 0%) 65. 5(24. 2%) 103. 0(27. 7%) 101. 8(100%) 150. 0(100%) 270. 6(100%) 372. 5(100%) Asia (total) U. K America (total) TOTAL Source : LNG Global 2004, Deutsch Bank 7

World LNG Demand : Forecasting (cont. ) Europe Asia America 132. 5 72. 7 23. 9 2000 yr 65. 5 5. 1 2010 yr 2000 yr 2010 yr Unit : mtpa 8

Perspectives of the great Shifting in LNG market - Consumers : Japan, Korea, Chinese Taipei U. S. A, EU (Spain, France, Italy, U. K) - Producers : Indonesia, Malaysia Qatar, Algeria, Australia, Russia (The Far East) 9

Tsunami in Asia-Pacific LNG market 10

LNG Demand : US, Japan, Chinese Taipei and Korea LNG Demand 1990 1995 2000 2004 E 2005 E 2006 E 2007 E 2010 E 2015 E 04 -07 CAGR USA 1. 7 0. 4 4. 9 12. 7 15. 0 18. 7 27. 7 50. 0 80. 0 30% JAPAN 32. 4 43. 5 53. 4 57. 7 58. 3 60. 2 62. 1 67. 8 75. 6 2% Chinese Taipei 0. 7 2. 5 4. 3 5. 9 6. 4 6. 9 7. 4 9. 0 13. 5 8% KOREA 2. 1 7. 1 15. 0 20. 2 25. 2 27. 8 30. 4 38. 1 48. 4 15% Source : LNG Global 2004, Deutsch Bank North America ; R/P=9. 711

US ; The Master plan of LNG Terminals The seismic center of Tsunami in Asia-Pacific LNG Market 12

The price gap ; US East Coast vs. US West Coast Average $5. 28/mm. BTu Average $6. 00/mm. BTu Source : The future relationship between LNG pricing in the Asia-Pacific and the Atlantic-Mediterranean, PFC Energy 13

Volumes of spot LNG and NYMEX gas price Source : Poten & partners, LNG in World Markets 14

The price gap ; Henry Hub vs. LNG into Japan $9. 13 Source : The future relationship between LNG pricing In the Asia-Pacific and the Atlantic-Mediterranean, PFC Energy $7. 42 15

Trend : The Market share of LNG spot trade “Market share of LNG Spot Trade” Source : Han Wonhee, Quarterly Review of Gas Economics & Management (KOGAS) 16

The Future of Asia-Pacific LNG market Winter Season 4. 6 mtpa China’s Total consumption of NG will be 85 mtpa in 2010 0 mtpa 7. 1 mtpa 53. 9 mtpa 67. 8 mtpa 17. 8 mtpa 5. 3 mtpa 9. 0 mtpa LNG consumption in 2002 LNG consumption in 2010 50 mtpa USA’s Total Consumption of NG will be 550 mtpa in 2010 Tsunami 38. 1 mtpa 0 mtpa 11. 3 mtpa 17

Relationship among Asia-Pacific Economies Cooperation & Competition 18

Thank You Tel : +82 -31 -710 -0840 e-mail : kimby@kogas. or. kr 19