dr. wolfgang peters, mbagasvaluechain.com/cms/wp-content/uploads/2018/03/2018_01-30_p… · dr....
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Dr. Wolfgang Peters, MBA
Managing Director, The Gas Value Chain Company GmbH, Germany
Former CEO, RWE Supply & Trading CZ, a.s., Czech Republic
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
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IEA: Second gas revolution: LNG revolution
LNG to overtake piped gas in global trade
Source: IEA WEO 2017
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
4
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IEA WEO 2017:
Rapid further development creates new diversities and
interdependencies
Source: IEA WEO 2017
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Slido intervention # 1
What do you think is the projected 2040 global gas
demand in the IEA’s WEO 2017 New Policies
Scenario (vs. 3,635 bcm/a in 2016)?
A. 2,500 bcm/a
B. 4,100 bcm/a
C. 5,300 bcm/a
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IEA WEO 2017:
Gas only fossil fuel with respectable growth
Source: IEA WEO 2017
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
8
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Prices of previously isolated regions now
benchmarked by (tradable) spreads LNG driven spread arbitrage causes price convergence
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Source: IEA Global Gas Security Review 2017
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
10
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Slido intervention # 2
What is the EU’s projected import requirement in
2040 conform the IEA’s WEO 2017 New Policies
Scenario?
A. 60 bcm/a
B. 150 bcm/a
C. 390 bcm/a
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Can Europe benefit from global gas market?
IEA WEO 2017: Europe’s import needs rise to 390 bcm/a in 2040
Source: IEA WEO 2017
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Can Europe benefit from global gas market?
Europe capable of sending price signals by traded markets
Source: IGU Wholesale Gas Price Survey 2017 Edition
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Can Europe benefit from global gas market?
North-West European markets deeply liquid
Source: ICIS Heren, European Gas Markets 15-11-2017
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Can Europe benefit from global gas market?
Redundant import capacities: ~210 bcm/a of LNG regas
terminals (~75% idle)
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Source: GIE LNG Map 2018
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
16
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Availability of LNG in case of need?
Increasing share of flexible global LNG supply volumes
17
Source: IEA Global Gas Security Review 2017
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Availability of LNG in case of need?
Global LNG supply response time reduces significantly
18
Source: IEA WEO 2017
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
19
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First edition IEA Global Gas Security Review 2016:
Security of supply to be redefined: regional approach no longer
appropriate
“As the role of gas … evolves, a narrow approach
to gas security focussing on gas as a stand-alone
fuel in an individual region is no longer
appropriate.”
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Source: IEA Global Gas Security Review 2016
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
21
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Second edition IEA Global Gas Security Review 2017:
Caveat: Unexpected ‘shocks’ nonetheless possible
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Source: IEA Global Gas Security Review 2017
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IEA Caveat: ‘Shocks’ nonetheless possible: U.S.A. E.g. Hurricane Harvey reminds of concentration risk Gulf Coast
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Source: IEA Global Gas Security Review 2017
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IEA Caveat: ‘Shocks’ nonetheless possible: Qatar
Geopolitical strife did not cause supply disruptions, supplies within
5 year range
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Source: IEA Global Gas Security Review 2017
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IEA Caveat: ‘Shocks’ nonetheless possible: France
Neglect of interconnectivity TRS Southern France
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Source: IEA Global Gas Security Review 2017
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IEA: Second gas revolution spurs Global Gas Market
Rapid further development & rising demand◦ Slido intervention # 1
Prices of previously isolated regions now
benchmarked by (tradable) ‘spreads’
Can Europe benefit from global gas market?◦ Slido intervention # 2
Availability of LNG in case of need?
IEA: Security of supply redefined
IEA Caveat: ‘unexpected shocks’ possible
Example Nordstream 2: US sanctions & EC
regulatory efforts misplaced◦ Misplaced US sanctions: ‘money talks’
◦ Misplaced EC efforts: ‘Putin phobia’ no longer warranted
26
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Misplaced US sanctions: ‘Money talks …’ – not
sanctions
Source: ICIS Heren
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Premium NBP over HH required
Full cost: 15% HH + ~$2.25 liquefaction + 0.50 shipping + $ 0.50
regas = ~$3.70/MMBtu
Marginal cost (liquefaction sunk): ~$1.45/MMBtu
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Misplaced EC efforts to derail Nordstream 2:SoS has transformed from bi-lateral physical dependency to a
functionality of price signals in an integrated traded market
Ukrainian Crisis 2009: Andrej Budajew, “Putin’s recalcitrant bride”
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