LP Gas: Exceptional

Energy for AsiaEnergy for Asia

Michael Kelly

Director, Market Development

WLPGA

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3

AgendaAgenda

1. Who we are

2. Why LP Gas

3. Asian LP Gas markets

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3. Asian LP Gas markets

4. Conclusions

� The Unique Global Association representing the LP Gas Industry for 20 years

� More than 175 members operating in 90 countries in the world

� Representing the interests of the full LP Gas value chain from producer to distributor

� Partnering with key global organisations such as the ADB, UNFCCC and the WHO

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� Partnering with key global organisations such as the ADB, UNFCCC and the WHO

As the authoritative, global voice for LP Gas, the WLPGA promotes the use of LP

Gas worldwide to foster a cleaner, healthier and more prosperous world.

A powerful Industry AssociationA powerful Industry Association

The WLPGA – Our Mission

� Demonstrate the benefits of LP Gas and position it as clean

energy

� Create the environment to develop and sustain LP Gas

markets

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To add value to the sector by driving premium demand for the product To add value to the sector by driving premium demand for the product

� Identify and stimulate innovation

� Promote compliance with good practices

� Facilitate and drive information exchange among all

stakeholders

Asian Development Bank Energy for All (E4 All)Asian Development Bank Energy for All (E4 All)

• 1 billion people in Asia and the Pacific region without access to modern energy

• E 4 All will:

— Promote decentralized energy systems for urban and rural communities

— New financing mechanisms for the poor such as Microfinance schemes

• E4 All has set a target of providing access to modern energy services for 100

million people in the region by 2015

• E4 LPG: WLPGA is leading a working group on LP Gas as part of the E4 All

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• E4 LPG: WLPGA is leading a working group on LP Gas as part of the E4 All

initiative

– Working group formed in Timor Leste

– Formation of a working group on island developing states

– Interventions in Bangladesh, India, China, Papua New Guinea

Why LP Gas is the right fuel for AsiaWhy LP Gas is the right fuel for Asia

LP Gas is propane or butane or a mixture of the two. It is always present as a product of oil refining and also is always present naturally in natural gas (methane) fields and crude oil fields.

It can be distributed in relatively cheap, small containers and used for cooking, heating, lighting and commercial/industrial activities.

LP Gas has significant health, safety and environmental benefits compared to traditional solid fuels, such as wood/biomass and coal, or other refined fuels such as kerosene or paraffin.

Neither Propane nor Butane is on the IPCC list of Greenhouse Gases. Methane is.

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Because it’s portable:

• Bottles can be can be stored indefinitely

• Easily transported

LP Gas is LP Gas is accessible

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• Easily transported

• Used virtually anywhere -- from urban centres to

remote regions

When and where costly, grid-based energy services are unavailable

• …Because it’s a clean fuel:

• It burns cleanly

• No smoke or residual particulate matter

• Relatively low pollutant emissions

• Low Green House Gas (GHG’s)

LP Gas is an LP Gas is an AcceptableAcceptable alternativealternative

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• Low Green House Gas (GHG’s)

emissions

• Helps fight deforestation by substituting

“traditional fuels”

• Frees women and girls from drudgery of

searching for firewood

LP Gas LP Gas has a has a low GHG footprintlow GHG footprint

200

250

300

KG

CO

2 E

qu

ivila

nt p

er m

illio

n B

TU

Coal

LP Gas is NOT a zero – GHG fuel: However in most cases it can

make major and immediate contributions to real emission reductions

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0

50

100

150

Natura

l Gas

LPGEth

anol(E

85)

Motor G

asolin

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osen

eDies

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el oil

Bitum

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s Coal

Electri

city f

rom

Coal

KG

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TU

CoalElectricity : 3.5LP Gas: 1

LP Gas LP Gas reduces reduces indoor air pollutionindoor air pollution

According to the landmark 2006 WHO study “Fuel

For Life, Household Energy and Health”

• … smoke from indoor cooking fires kills 1.6 million every year, more

more people than malaria, and almost as many as unsafe water and

sanitation

•

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• … smoke in the home is the fourth greatest cause of death and

disease in the world’s poorest countries

• WHO have highlighted LP Gas as the cost effective solution for

reducing pollution from cooking fuel

Investing US $ 13 billion per year to halve, by 2015, the number of people worldwide cooking with solid fuels by providing them with access to LP Gas shows a payback of US $ 91 billion per year.

When the LP Gas cylinder comes into kitchensWhen the LP Gas cylinder comes into kitchens

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LP Gas cylinder arrived in kitchens. Before and after.

LP Gas allows for LP Gas allows for incremental developmentincremental development

Stage 3: LP Gas bulk tank,

fuelling stove, refrigerator, water

boiler and generator

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Stage 1: LP Gas cylinder inside

feeding stove

Stage 2: LP Gas cylinder outside,

piped in to fuel stove, refrigerator

and light

A word about global supplyA word about global supplyLP Gas Supply, Million TonsLP Gas Supply, Million Tons

Latin America

Europe

Africa

Other

200

250

300

350

400 • LP Gas Production is Rising in Nearly Every Region of the World. Global Prod (2007) is 230 MM Tons

• Supply is expanding rapidly – a 60 million ton increase expected between 2006 and 2015

NOTE: 1.0 Million Tons per Year is NOTE: 1.0 Million Tons per Year is

Approximately 32,000 BPD.Approximately 32,000 BPD.

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North America

Middle East

Asia

Latin America

0

50

100

150

200

1990 1995 2000 2005 2010 2015 2020 2025

• The Middle East will Surpass North America Around 2010 to Become the Largest Producing Region

• Supply Growth will be Very Strong in the Middle East– with LP Gas Production Expanding by Over 60% Between 2007 and 2015

Source: Source: Purvin & GertzPurvin & Gertz

Far Far EastEast (8(8))

JapanJapanChinaChinaTaiwanTaiwanSouth KoreaSouth KoreaNorth KoreaNorth KoreaHong KongHong KongMacauMacauMongoliaMongolia

Regions and nations of AsiaRegions and nations of Asia

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Southeast Asia Southeast Asia (10)(10)

BruneiBruneiCambodiaCambodiaIndonesiaIndonesiaLaosLaosMalaysiaMalaysiaMyanmar (formerly Burma)Myanmar (formerly Burma)PhilippinesPhilippinesSingaporeSingaporeThailandThailandVietnamVietnam

IndianIndianSubSub--Continent Continent (7)(7)

IndiaIndiaPakistanPakistanBangladeshBangladeshSri LankaSri LankaNepalNepalBhutanBhutanAfghanistanAfghanistan

Asia Population

45.0%

Asia

Rest of World

3.05 Billion3.05 Billion 3.72 Billion3.72 Billion

15.5%42.0%

Far East

Indian Sub-Continent

Southeast Asia

1.58 Billion1.58 Billion

1.57 Billion1.57 Billion577.3 Million577.3 Million

55.0%42.4%

• At 3.72 billion people, Asia represents 55% of the world population

• Indian Sub-Continent has a slightly larger population than the Far East, with about

14.8 million more people.

• Indian Sub-Continent accounts for 42.4% of Asian population with 1.58 billion people,

Far East 42.0% with 1.57 billion and Southeast Asia 15.5% with 577.3 million

Source: Source: Purvin & GertzPurvin & Gertz

2008 Per Capita LP Gas Consumption by Region

16.7

31.7

30

40Kilograms per CapitaKilograms per Capita

8.0

16.7

0

10

20

Far East Southeast Asia Indian Sub-Continent

Source: Source: Purvin & GertzPurvin & Gertz

2008 Per Capita LP Gas Consumption

179.6

141.5

97.6

66.3

63.1

51.8

48.514.6China

Other Far EastMalaysiaThailand

SingaporeTaiwanJapan

Republic of KoreaKilograms per CapitaKilograms per Capita

14.6

10.1

10.1

9.9

7.3

5.4

4.3

1.3

0 20 40 60 80 100 120 140 160 180 200

Other Indian SubConPakistan

Other SE AsiaIndonesia

IndiaPhilippines

VietnamChina

Source: Source: Purvin & GertzPurvin & Gertz

Demand vs. Total Population

100

120

140

160

180

200

800

1000

1200

1400

kg/capita

Population

Millions of ResidentsMillions of ResidentsKilograms per CapitaKilograms per Capita

The 5 largest Asian The 5 largest Asian countries by populationcountries by populationare among the lowest are among the lowest

kg/capita consumers of kg/capita consumers of LP LP GasGas

0

20

40

60

80

100

Brunei

Mac

auBhuta

nM

ongolia

Singa

poreLa

os

Hong Kong

Cambodia

Sri L

anka

Taiw

an

Nort

h Kore

aM

alay

siaN

epal

Afghan

ista

n

South

Kore

aM

yanm

arTh

aila

ndVie

tnam

Philippin

esJa

pan

Bangl

adesh

Pakist

anIn

donesia

India

China

0

200

400

600

GasGas

Source: Source: Purvin & GertzPurvin & Gertz

Quick overview of market developments

• Chinese LP Gas demand has rebounded from disappointing 2008

• Demand potential remains very high for several Asian countries

• Petrochemical LP Gas demand has jumped in Asia

• Great potential in Southeast Asia market

– Indonesia could become a huge importer

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– Indonesia could become a huge importer

– Vietnam market has great growth potential

– Thailand’s market is a wildcard, tied to retail price levels and subsides

• Kerosene-to-LP Gas conversion program remains underway

– Expected to improve, leading to a very large Asian market, dependent on LP Gas imports

Conclusions

• LP Gas supply is increasing in supply

• LP Gas is an ideal fuel for a rapidly changing and urbanizing Asia

as it is clean, low carbon, acceptable and accessible and requires

minimal investments in infrastructure or R & D.

• Strong endorsement of LP Gas has been received from key global

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authorities

• Innovative applications for LP Gas can be found in both the

developed and developing world

• The World LP Gas Association is ready to assist

23rd World LP Gas Forum

29 September – 1 October 2010

And finally…And finally…And finally…And finally…

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Madrid

Don’t miss it!

Thank youThank you

ELPIJI MALAYSIA

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