Energy and commodity price benchmarking and market insights · 01-Mai-2013 01-Jul-2013 01-Sep-2013...

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Energy and commodity price benchmarking and market insights

An international perspective on energy prices IFIEC Energy Forum 2014

Matthew Monteverde 11 June 2014

The slow globalisation of gas


Liquefaction capacity to jump

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0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2030

Bn

m³

Liquefaction capacity additions by year Algeria

Angola

Australia

Brunei

Canada

Cyprus

Equatorial Guinea

Indonesia

Iran

Iraq

Malaysia

Mozambique

Nigeria

Papa New Guinea

Russia

Tanzania

USA


Liquefaction capacity to outpace demand growth


0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2030

Bn

m³

Liquefaction capacity additions by year

New liquefaction capacity Demand growth




0

100

200

300

400

500

600

700

800

900

1.000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Cu

mu

lative

, b

n m

³

Cumulative new liquefaction v demand growth

New liquefaction capacity Demand growth




-150

-100

-50

0

50

100

150

200

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Cu

mu

lative

, b

n m

³

Net shortfall-surplus

Net new LNG supply


Global prices remain divided


0

2

4

6

8

10

12

14

16

18

20

Ja

n-0

4

Ap

r-0

4

Ju

l-0

4

Okt-

04

Ja

n-0

5

Ap

r-0

5

Ju

l-0

5

Okt-

05

Ja

n-0

6

Ap

r-0

6

Ju

l-0

6

Okt-

06

Ja

n-0

7

Ap

r-0

7

Ju

l-0

7

Okt-

07

Ja

n-0

8

Ap

r-0

8

Ju

l-0

8

Okt-

08

Ja

n-0

9

Ap

r-0

9

Ju

l-0

9

Okt-

09

Ja

n-1

0

Ap

r-1

0

Ju

l-1

0

Okt-

10

Ja

n-1

1

Ap

r-1

1

Ju

l-1

1

Okt-

11

Ja

n-1

2

Ap

r-1

2

Ju

l-1

2

Okt-

12

Ja

n-1

3

Ap

r-1

3

Ju

l-1

3

Okt-

13

Ja

n-1

4

Ap

r-1

4

Ju

l-1

4

$/m

n B

tu

The three-speed market persists

Japan LNG Henry Hub NBP


Japanese import prices


0

5

10

15

20

25

Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14

$/m

n B

tu

Spot and long-term delivered prices by exporting country

Term Spot

Term: Abu Dhabi, Australia, Brunei, Indonesia, Malaysia,

Oman, Qatar, Russia, US

Spot: Algeria, Belgium, Egypt, Equatorial Guinea,

France, Norway, Nigeria, Peru, Spain, Trinidad, Yemen




0

5

10

15

20

25

Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14

$/m

n B

tu


Term Spot Japan oil index








0

5

10

15

20

25

Mai 12 Okt 12 Apr 13 Okt 13 Apr 14

$/m

n B

tu


Term Spot Japan oil index ANEA





Europe


The collapse


40

45

50

55

60

65

70

75

01-Mai-2013 01-Jul-2013 01-Sep-2013 01-Nov-2013 01-Jan-2014 01-Mrz-2014 01-Mai-2014

p/t

h

Forward month prices for Winter 2013-14/Summer 2014

Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14


Winter demand at historic lows


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50

100

150

200

250

300

350

400

450

J F M A M J J A S O N D

Mo

nth

ly a

ve

rag

e d

em

an

d (

mn

m³/

d)

UK demand at lowest since at least 1998

Range 1998-2013 Winter 2013-14


Storage


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20

40

60

80

100

120

Jan Mrz Mai Jun Aug Okt Dez

Pc o

f to

tal ca

pa

city

German stocks unusually high after mild winter

2010 2011 2012 2013 2014


Storage


0

20

40

60

80

100

120


Pc o

f to

tal ca

pa

city


2010 2011 2012 2013 2014 2014 - projected at recent injection rate


Storage


0

20

40

60

80

100

120


Pc o

f to

tal ca

pa

city


2013 2014 2014 - projected at recent injection rate

8.4bn³


Storage


0

20

40

60

80

100

120


Pc o

f to

tal ca

pa

city


2013 2014 2014 - projected at recent injection rate

8.4bn³ 50mn m³/d

The US


US spot prices and the winter of 2013-14


3

4

4

5

5

6

6

7

7

8

8


$/m

n B

tu

US day-ahead prices

Henry Hub




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5

10

15

20

25

30

35

40

45


$/m

n B

tu

US day-ahead prices

Henry Hub Chicago




0

10

20

30

40

50

60

70

80


$/m

n B

tu

US day-ahead prices

Henry Hub Chicago Algonquin

European shale gas


European shale reserves


0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

BG DK FR DE NL PL RO ES UA UK

Ris

ke

d te

ch

nic

ally

re

co

ve

rab

le r

ese

rve

s (

bn

m³)

Reserves

Technically recoverable shale oil and shale gas resources: an assessment of 137

shale formations in 41 countries outside the United States – EIA – June 2013


European shale reserves


0

5.000

10.000

15.000

20.000

25.000

BG DK FR DE NL PL RO ES UA UK CA MX AR AU

Ris

ke

d te

ch

nic

ally

re

co

ve

rab

le r

ese

rve

s (

bn

m³)

Reserves

Technically recoverable shale oil and shale gas resources: an assessment of 137

shale formations in 41 countries outside the United States – EIA – June 2013


Such drilling is not happening in Europe


0 100 200 300 400 500

NL

BE

UK

DE

IT

CH

CZ

DK

PL

SL

FR

PT

HU

PA

AT

TK

ES

UA

BG

IE

Persons/km²

Population density


Such drilling is not happening in Europe


Analysis and presentation of the results of the public consultation “Unconventional fossil fuels

(e.g. shale gas) in Europe – Final report – European Commission DG Environment 3 October 2013


Northwest European prices lowest since 2010


0

50

100

150

200

250

Okt 2001 Okt 2003 Okt 2005 Okt 2007 Okt 2009 Okt 2011 Okt 2013

$/t

API 2 prices hover around $75/t

API2 index




0

5

10

15

20

25

0

50

100

150

200

250


€/M

Wh

$/t

API 2 hover around $75/t or €7/MWh

API2 index


Coal price decline is global


0

5

10

15

20

25

0

50

100

150

200

250


€/M

Wh

$/t

The drop in prices is not limited to northwest Europe

API2 index API4 index API 6 index

US coal exports and global trade


Worldwide coal exports increasing


0

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200

300

400

500

600

700

800

900

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

mn

t

Supply from major exports rising

Indonesia China Australia Russia Poland South Africa Canada United States Colombia


Worldwide coal exports increasing


-20

0

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40

60

80

100

0

100

200

300

400

500

600

700

800

900

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

mn

t

Rate of increase accelerated early in the decade

Growth rate Coal exports


Coal exports: 2007

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US: 24mn t

Colombia: 68mn t

South Africa: 65mn t

Russia: 77mn t

Australia: 112mn t

Indonesia: 122mn t


Coal exports: 2013


US: 44mn t

Colombia: 75mn t


Russia: 109mn t

Australia: 188mn t

Indonesia: 330mn t


Coal exports: 2007


6mn t


Coal exports: 2013


46mn t

23mn t

5mn t




0

50

100

150

200

250


$/t

API 2 prices hover around $75/t

API2 index

What could change this situation?

The US exports less?


The US power supply mix is price sensitive


50

70

90

110

130

150

170

190

Sep 2008 Sep 2009 Sep 2010 Sep 2011 Sep 2012 Sep 2013

TW

h

The surge in gas-fired power output was temporary

Coal Gas




50

70

90

110

130

150

170

190


TW

h

Power output

Coal Gas

0

1

2

3

4

5

6

7

8


$/m

n B

tu

Gas prices

Henry Hub Katy SoCal




50

70

90

110

130

150

170

190


TW

h

Power output

Coal Gas

0

50

100

150

200


$/t

Coal prices

API 2 - monthly average

India buys more?


The importance of India


US: 44mn t

Colombia: 75mn t


Russia: 109mn t

Australia: 188mn t

Indonesia: 330mn t

India: 122mn t


The rupee


30

35

40

45

50

55

60

65

70

Nov 2001 Nov 2003 Nov 2005 Nov 2007 Nov 2009 Nov 2011 Nov 2013

INR

, m

on

thly

ave

rag

e

Weakness of the rupee effectively lowers Indian buying

INR/USD


The rupee


30

130

230

330

430

530

630


Ind

ex, N

ove

mb

er

20

01

= 1

00


API 4 (USD) API 4 (INR)


The rupee


15

35

55

75

95

115

135

155

175

30

130

230

330

430

530

630


$/t

Ind

ex, N

ove

mb

er

20

01

= 1

00


API 4 (USD) API 4 (INR)

Producer investment cycles?


Will overcapacity come out of the market?


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0

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60

80

100

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20

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60

80

100

120

140

160

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$/t

Price and historic export growth

Export growth rate API2 annual average

Conclusions

Any questions?

Matthew Monteverde

VP — Generating Fuels

[email protected]

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Energy and commodity price benchmarking and market insights · 01-Mai-2013 01-Jul-2013 01-Sep-2013...

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