Philip olivier's presentation slides from the 2010 World National Oil Companies Congress that took place in June in London.

1. World National Oil Companies Congress – 24 June 2010 – London
Dynamics of the LNG markets
Philip OLIVIER
President of GDF SUEZ LNG

2. 2
This presentation is not intended to provide the basis for any evaluation of GDF SUEZ or of any
of its subsidiaries. Although GDF SUEZ uses reasonable care to include in this presentation
information which it believes is up-to-date and accurate, GDF SUEZ makes no representation or
warranty as to the adequacy, accuracy, completeness or correctness of such information nor
does it warrant or represent that the presentation shall be complete in every respect. GDF SUEZ
shall have no liability resulting from the use of the information provided in this presentation nor
shall it have any liability for the absence of any specific information herein. The information may
be changed by GDF SUEZ at any time without prior notice. Nothing herein may be considered as
being an offer to purchase or subscribe securities. The name and logo of GDF SUEZ, as well as
the name and logo of affiliated companies, that appear in this presentation are trademarks and
trade names protected by national and international laws. The copyright on this presentation
belongs to GDF SUEZ.
London - 24 June 2010

3. 3
Global LNG production - pre-crisis
London - 24 June 2010

4. 4
London - 24 June 2010
Global LNG production - post-crisis

5. 5
First ever significant decrease in world natural gas
consumption in 2009
Pre recession
forecast
• Pre recession
forecast : 2.6% p/a
• 3‐4 year delay to
recover to 2008
global gas demand
level
• Pipeline gas to
recover in
2014/2015
London - 24 June 2010

6. 6
Pipeline gas and LNG consumption – crisis and
recovery : 2010-2015 Focus
• 2009 assumed gas
overcapacity :
~ 100 BCM
• +1,6% yoy gas
demand growth
expected in 2010‐
2015
• As LNG has to
flow and find a
home, world gas
recovery may first
absorb LNG, and
then pipeline gas
100
BCM
(BCM)
CERA – GDF SUEZ analysis
London - 24 June 2010

7. Natural gas worldwide supply overcapacity
in 2009
7
2009 gas
consumption
decrease
Additional LNG
capacity
2009/2008
supply
overcapacity
50
10
12
12
Europe
N & S
America
Asia
72
30 102
Hypothesis : 2008 supply/demand balanced year, no storage effect taken into account
(BCM) • 2009 assumed gas
overcapacity of 100
BCM originates mostly
from European
consumption decrease
and additional LNG
capacity coming on‐
stream.
Source: GDF SUEZ
London - 24 June 2010

8. (BCM)
Asian natural
gas demand
decrease
Additional
LNG
contracted
to Asia
Natural gas
oversupply
in Asia
LNG redirected
to NA, SA and
ME
LNG
redirected to
Europe
Source: GDF SUEZ
12
13
UK
10
In 2009 :
• An additional 25 BCM
is forced from the
Pacific Basin to the
Atlantic Basin
8
10 NA
25 14
11
London - 24 June 2010
8
2009 Natural gas oversupply - Asia

9. 2009 Natural gas oversupply – Europe
2009 European
natural gas
demand
decrease
Additional
redirected LNG
to Europe
(BCM) In 2009 :
Significant impact of the
crisis on the European
natural gas market, and
especially on the
European LNG market
Oversupply absorbed by
pipeline reduction,
domestic production
decrease and storage
9
50
11 63
Natural gas
oversupply
to Europe
Source: GDF SUEZ
Additional
contracted LNG
to Europe
2
London - 24 June 2010
9

10. 2009 Natural gas oversupply – North America
2009 North
American natural
gas demand
decrease
Additional LNG
to North America(BCM) In 2009 :
Minor impact of the crisis
on the North American
natural gas market (20
BCM oversupply vs 770
BCM of natural gas
market, i.e. 2.6%).
Oversupply assumed
mostly absorbed by
storage
10
Natural gas
oversupply
to North America
10
10 20
Source: GDF SUEZ
London - 24 June 2010
10

11. 11
NBP and Henry Hub comparison
In a LNG surplus
context:
• Market
anticipates short
term NBP/HH
convergence, then
slow divergence
• HH becoming
price floor for NBP
Forward curves 2010‐2015
London - 24 June 2010
11

12. 12
European case example: UK LNG needs
• Reduction of UK
domestic gas
production: 31 BCM
from 2005 to 2009
• UK LNG imports in
2009: 11 BCM
(incl. 6 BCM from
Qatar)
• UK LNG needs to
accelerate as
production decline
expected to continue
Source : GDF SUEZ
London - 24 June 2010
12

13. 13
Global LNG production and demand
• Strong sensitivity to pace
of recovery creates huge
uncertainties on total gas
demand
• Current surplus assumed
absorbed by pipelines
• New LNG capacities might
be required in 2014 but
some of the potential
liquefaction projects will
be further postponed
• In the short term, a long
market, but in the
medium/long term, a
potential tighter market
and a need for new
capacities
100 BCM gas bubble
London - 24 June 2010
13

14. London - 24 June 2010
14
Changing supply/demand balance in Asia
• Asian demand
growth: +5%/year
in 2010‐2020
• Many buyers still
waiting before
contracting new LT
supply
• In the short‐term:
Asia will not be THE
destination for
flexible LNG

15. London - 24 June 2010
15
Flexible & uncommitted volumes available
for the Atlantic Basin
• About 35 MTPA
available for the
Atlantic Basin
(incl. Middle East)
between 2013
and 2015

16. REDISCOVERING ENERGY
16
London - 24 June 2010