Perspectives of Natural Gas demand and supply balance in Korea

IEEJ: October 2005

Perspectives of Natural Gas demand and supply balance in Korea

Dr. Boyoung KIMHead of Center for Gas Economics & Management, KOGAS

‘Northeast Asia Petroleum Forum 2005’Seoul, 22 September 2005

‘Northeast Asia Petroleum Forum 2005’Seoul, 22 September 2005

2

ＩＥＥＪ：　Ｏｃｔｏｂｅｒ　2005

CONTENTS

1. Perspectives of Economic Development in Korea

2. Natural Gas Demand in Korea

3. Natural gas demand-supply Balance and the role of LNG spot cargo

4. What will be occurring in Korea LNG market in the future

3


1. Perspectives of Economic Development in Korea

4


1.1 1.1 Macroeconomic TrendsMacroeconomic Trends

-8-6-4-202468

1012

1996 1997 1998 1999 2000 2001 2002 2003

KOREA US JAPAN UK CHINA

GDP Growth Rate

Source : MOCIE

5


1.2 1.2 Perspectives of Economic indicatorsPerspectives of Economic indicators

2.8

3.5

54

4.4

5.8

OECD

2003 Economic Outlook

3.4-3.12.9--3.2Unemployment Rate

3.63.33.53.13.63.03.3Consumer Price

-500~9-611.8-23Current Account($100mil.)

-1.4-5.95.04.85.24.4Private Consumption

3.15.95.75.65~5.95.65.3GDP

IMFHyundaiLGSamsungKIETKDI 2003

Source : KDI

6


1.3 1.3 Primary Energy ConsumptionPrimary Energy Consumption

Petroleum(47.6%)

Coal(23.8%)

Nuclear(15.1%)

LNG(11.2%)

Firewood & (1.5%)

Hydro(0.8%)

Source : KEEI

7


1.4 1.4 TOE/1000$ in OECD CountryTOE/1000$ in OECD Country

0.1970.2040.2220.271-IEA

0.2010.2080.2280.278-OECD

0.2700.2590.3010.281-MEXICO

0.1520.1620.1870.2310.289UK

0.2210.2360.2730.3530.419US

0.1060.1110.1080.1240.143JAPAN

0.3510.3730.3210.329-KOREA

20032000199019801970

Source : IEA Energy Balances of OECD Country

8


1.5 1.5 Energy IndicatorsEnergy Indicators

3.5023.2812.8602.519CO2 Emission/Population5.9625.5094.7344.104PEC/Population 0.1560.1740.1890.205CO2 Emission/GDP0.2650.2930.3130.373PEC/GDP(toe/mil 1,000$)175.8162.4138.7118.4CO2 Emission(t-CO2 mil)299.3272.7229.6192.9Primary Energy Consumption (mil toe)

1,127.4931.8733.5578.7GDP(2000Price) (Tril. KRW)50.249.548.547.0Population(mil)2015201020052000

Source : KEEI

9


2. Natural Gas Demand in Korea

10


2.1 The 7th Long-term Demand Forecasting of Natural gas

31,6546,76124,8938,4945,26911,1302017

3.93%0.32%5.36%6.93%6.44%3.97%AAGR

30,3266,53923,7877,9725,00010,8152016

29,4056,68322,7227,4774,74210,5032015

27,9516,25121,7007,0104,49610,1942014

27,0666,35720,7096,5654,2579,8872013

26,0366,27719,7596,1474,0279,5852012

26,1997,34718,8525,7553,8089,2892011

25,6227,63917,9835,3883,5988,9972010

24,3147,18517,1295,0393,3918,6992009

24,5458,24516,3004,7093,1918,4002008

24,6359,24915,3864,3692,9748,0432007

22,8968,39014,5064,0522,7687,6862006

21,5567,89813,6583,7582,5727,3282005

21,0868,24112,8453,4872,3876,9712004

18,4476,46811,9793,3242,1986,4572003

totalElectricSub-totalindustrialcommercialResidential

City-gas

11


2.2. The Gap between Low & High Demand

1,000 tons

12


2.3 The pattern of Gas Demand

Demand pattern for Electricity Demand pattern for City Gas

TDR=3.86TDR=1.80

13


3. Natural Gas demand- Supply Balance and the role of LNG spot cargo

14


3.1 LNG Contracts

80Ex-Ship‘05 ～ ’081.540(average)MLNG Ⅱ

53Ex-Ship‘04 ～ ’082.571(average)MLNG ⅢMalaysia

86Ex-Ship‘04 ～ ’083.596(average)Ras LaffanQatar

S

100Ex-Ship‘03 ～ ’101.850NWSAustralia

80Ex-Ship‘03 ～ ’107.3150+50(opt)MLNG ⅢMalaysiaM

75PNG‘04 ～ ’181.540East-SeaKorea

70Ex-Ship‘97 ～ ’132.570BLNGBrunei

50FOB‘08 ～ ’287.3200YLNG*Yemen

70FOB‘08 ～ ’285.5150Sakhalin Ⅱ*Russia

53FOB‘00 ～ ’2414.8406OLNGOman

50FOB‘99 ～ ’2417.9492Ras LaffanQatar

70Ex-Ship‘08 ～ ’287.3150+50(opt)MLNG Ⅲ*

50FOB‘95 ～ ’157.3200MLNG ⅡMalaysia

50FOB‘98 ～ ’173.6100BADAK Ⅴ

50FOB‘94 ～ ’147.3200KOREA Ⅱ

50Ex-Ship‘86 ～ ’078.4230ARUN Ⅲ

Indonesia

L(ExceptPOSCO/SKContract )

WinterWinter(%)(%)

DeliveryDeliveryConditionConditionPeriodPeriodShareShare

(%)(%)MPTAMPTA

(10,000Tons)(10,000Tons)ProjectProjectCountryCountryContractContract

15


3.2 Gas Shortage problem in Winter

TDR=2.7

Siberian air mass(Northwest monsoon)

16


4.0 4.2

0.9

3.20.1

6.06.7%

10.8%

0

2

4

6

8

10

12

14

1996 1997 1998 1999 2000 2001 2002 2003

MTPA

0%

2%

4%

6%

8%

10%

USA

Europe

Asia

79%

32%

19%

24%

2%

45%

1996 2003

Source : KOGASnote ) Involving the middle term Contracts (less than 5 years)

Share of LNG spot cargoShare of LNG spot cargo

3.3 The trend of World LNG Spot market

17


4. What will be occurring in Korea LNG market in the future?

18


4.1 Several conditions of an Emergency Outbreak in Demand-Supply Balance

1. Seasonality problem in Korea

2. Specially Cold Winter

3. Unexpected Increasing of LNG spot demand

4. Continuous High Oil Price

5. Structural difference between two Gas Market

6. Limitation of LNG storage tank Capacity

8. No surplus LNG spot cargoes

7. Unstable Liquefaction Plant

19


4.2 Pay attention to US LNG market

Source : Deutsch BankSource : Deutsch Bank

20


4.3 Difference of gas price systemMonthly data

Daily data

21


Gas price on January in US

22


4.4 4.4 The temperature of AsiaThe temperature of Asia--Pacific on JanuaryPacific on January

Siberian air mass(Northwest monsoon) Arctic air mass

If…“Jan 16 2009, it will be -17°Cin the early morning,

which is -5°C lower than last year the same day and then

it be continue for a week”

Source : http://reefgis.reefbase.org

23


A Natural disaster : Hurricane Katrina's Impact on the Energy Industry

Source : Purvin & Gertz, Inc.

Crisis created along the Gulf Coast by Hurricane Katrina.

24


4.6mtpa

0 mtpa

17.8mtpa

53.9 mtpa 50mtpa

7.1 mtpa

38.1mtpa

67.8 mtpaChinaChina’’s Total consumption of s Total consumption of

NG will be 85mtpa in 2010NG will be 85mtpa in 2010 USAUSA’’s Total Consumption ofs Total Consumption ofNG will be 550mtpa in 2010NG will be 550mtpa in 2010

LNG consumption in 2002

LNG consumption in 2010

0 mtpa

11.3mtpa

Tsunami

4.5 The future of Asia-Pacific LNG market

Baja California

25


US ; The Master plan of LNG Terminals

The seismic center of Tsunami in Asia-Pacific LNG Market

26


통 영

용 강

진 주

밀 양

청 도

경 산

평 택 생 산 기 지

울 산

평 택

반 월

일 산

평 촌

의 정 부

분 당대 치

통 영 생 산 기 지

비 인

대 천

보 령

하 남

여 수

순 천

서 산

나 주

당 진

목 포

정 읍

전 주

익 산군 산

논 산 연 산

중 동

인 천

중 촌

중 부 도 시 가 스

청 주

조 치 원

천 안

영 종

인 천 생 산 기 지

계 룡

유 성

수 신

성 환

영 동양 강

제 원

진 산

해 미

홍 성

광 천

서 천

웅 천

김 제

신 태 인

북 이

장 성

비 아

무 안

평 동

율 촌

장 등

삼 기

담 양

목 사 동

월 출

승 주하 동

진 월곤 명

사 천

개 천마 암

마 산

김 해

창 원

학 장

장 림

양 산

화 명

청 량

웅 상

진 장

외 동

김 천

용 강

포 항안 강

고 경

금 호

공 산

관 음

중 리

왜 관

북 삼

금 릉

공 근

홍 천

춘 천

횡 성

원 주

문 막이 천

용 인

여 주

송 학여 산

부 곡

상 계천 현

광 주

포 곡

광 양

서 울 지 사 경 인 지 사 충 청 지 사 서 해 지 사 호 남 지 사 경 북 지 사 경 남 지 사

강 원 지 사

건 설 중

범 례

고 성

동 김 천

장 호 원

음 성

앙 성충 주

경 산

청 도

밀 양

진 주

흥 사

4.6. How to escape from Tsunami?

27


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Perspectives of Natural Gas demand and supply balance in Korea

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