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November-2016
1
Ecuador’s LPG Outlook
Xavier Rodríguez
2
VALUE CHANGE FOR LPG IN ECUADOR
LPG SUPPLY IN ECUADOR 2016
LPG PRODUCTION 2006-2016
LPG IMPORT
LPG BY REGION
SALES BY PROVINCE AND SECTOR
LPG PRICES
MARKET SHARE BY DOMESTIC TRADING
NATURAL GAS – LNG
CONCLUSIONS
AGENDA
VALUE CHANGE FOR LPG IN ECUADOR
LPG SUPPLY IN ECUADOR 2016 (MT/DAY)
4
Import : 2.192
Esmeraldas
391
Shushufindi
270
La Libertad
1
Monteverde
January-September 2016
Production : 672
LPG PRODUCTION 2006-2016
5
503
334
494 515
475
603 638 621
478
363
672
0
100
200
300
400
500
600
700
800
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
MT/
DA
Y
January-September 2016
PRODUCTION 2006-2016
6
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
ESMERALDAS (MT) SHUSHUFINDI (MT) LA LIBERTAD (MT)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IMPORT PRODUCTION
PRODUCTION AND IMPORT (MT)
7
82%
18%
ANNUAL IMPORTS
8
82%
18%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Average = 800 thousand MT
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
MONTHLY IMPORTS
9 Average = 68 thousand MT/MONTH
SALES BY SECTOR
10
82%
7% 1%
1%
RESIDENTIAL INDUSTRIAL AGRICULTURAL AUTOFUEL
Residential 91%
LPG BY REGION
11
82%
RESIDENTIAL (MT) 91% ANDES 341.474 50% COAST 315.976 46% AMAZON 29.145 4% GALAPAGOS 879 0,1%
SALES BY PROVINCE
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PROVINCE POPULATION MT/DAY PICHINCHA 2.576.287 531 GUAYAS 3.645.483 528 AZUAY 712.127 229 MANABÍ 1.369.780 192 TUNGURAHUA 778.115 139
5 provinces consume 64 % of Residential LPG
20000
40000
60000
80000
100000
120000
140000
160000
PICHINCHA GUAYAS AZUAY MANABÍ LOS RÍOS
143,505 142,623
61,884 51,737
37,404
January-September 2016 (MT)
LPG RESIDENTIAL SECTOR
13 Provinces with higher consumption
21%
9% 8%
5%
21%
SALES BY SECTORS (MT/DAY)
14
2.509
191 41 17
2.690
261 63 19
Jan-Sep 2016 2015
MARKET SHARE BY DOMESTIC TRADING
15
39.06%
30.93%
12.38%
5.43%
4.06% 3.13% 5.00%
DURAGAS S.A. ENIECUADOR S.A. CONGAS ESAIN S.A.
AUSTROGAS LOJAGAS OTRAS
Tariff average : 117 (USD/MT)
LPG PRICES (JAN-OCT 2016)
16
MONTH PRICE IN TERMINAL (including value added tax) January 0,65 February 0,64 March 0,64 April 0,63 May 0,66 June 0,64 July 0,71 August 0,68 September 0,70 October 0,65
ED 338 and 799
Maximum selling price: Residential : 0,11 USD/Kg Agricultural and Autofuel : 0,33 USD/Kg
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Import LPG Infraestructure
2015 3 mmpcd
2016 7 mmpcd
Industrial Sector Ceramic, Plastics, Glass
2015 48 mmpcd
2016 52 mmpcd
2015 45 mmpcd
2016 45 mmpcd
2015 31 tmd
2016 94 tmd
GN
LNG
BLOQUE 6 CAMPO AMISTAD
LIQUEFACTION PLANT
TERMOGAS MACHALA
Production cost
2015 $1,14 mmbtu
2016 $0,56 mmbtu
Liquefaction plants price Electric sector price
$2,75 mmbtu
Industrial sector price
$5,31 mmbtu Transportation 0,002 mmbtu/Km
• Prices do not include value added tax (IVA) • Data 2016: January - September
VALUE CHANGE FOR NATURAL GAS IN ECUADOR
2010 2011 2012 2013 2014 2015
Termogas 11,688 8,474 13,997 16,206 18,223 16,605
Planta GNL 88 156 1,378 1,962 2,187 944
Producción 11,776 8,630 15,375 18,169 20,410 17,549
-
5,000
10,000
15,000
20,000
25,000
MM
PC
NG of Bloque 6 satisfies the totality of the requirements of the national market
BALANCE OF NATURAL GAS (NG)
• NG at the entrance of liquefaction plants $2.75 mmbtu, plus added value tax.
• NG delivered to the public companies of the electric sector $2.75 mmbtu.
• LNG for the industrial sector $5.31 mmbtu plus transportation cost of NLG $0.0020745 mmbtu plus added value tax.
Prices determined by ED 338 and 799
NG AND LNG PRICES
7 mmcfd
13% NG to the liquefaction plant
Pichincha 11 MTD
Chimborazo 11 MTD Guayas
6 MTD
Azuay
66 MTD
45 mmcfd,
87% NG to the power generation
52 mmcfd
January – September 2016
CONSUMPTION OF NATURAL GAS AND LNG IN ECUADOR
ELECTRIC GENERATION
Requirements: a basic demand of about +100 mmpcd;
Infrastructure for the import volume of 150-200 mmpcd; and
Installation of a plant NGCC of 600MW near the port of Monteverde
MARKETS FOR IMPORTED LNG
2010 2011 2012 2013 2014 2015
DEMANDA 22 24 25 26 28 28
EXPORTACIONES 1 1 1 1 1 0
PRODUCCION 10 12 12 11 10 8
IMPORTACIÓN 12 13 14 16 20 19
- 5
10 15 20 25 30 35
MM
BLS
BALANCE OF GASOLINE
2010 2011 2012 2013 2014 2015
DEMANDA 32 29 30 33 36 34
PRODUCCION 12 14 13 12 11 11
IMPORTACIÓN 20 15 17 21 25 24
- 5
10 15 20 25 30 35 40
MM
BLS
BALANCE OF DIESEL
In the last 5 years, in average, 63% of the demand of diesel has been satisfied with imports.
In 2015, 69% of the demand was satisfied with diesel.
In the last 5 years, in average, 62% of the demand of gasoline has been satisfied with imports.
In 2015, 69% of the demand was satisfied with imports.
BALANCE OF OTHER PRODUCTS
CONCLUSIONS
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From 2006 to 2016, Ecuador has imported an average of 800 thousand MT, representing 82% of total consumption. The remaining 18% corresponds to domestic production.
Residential sales in the 2010-2016 period have remained constant with 2,600 MT/day. It is expected, that at the end of this year LPG production reaches record approx. 240 thousand MT through the rehabilitation of the Esmeraldas Refinery.
In the last 6 years the vehicle market segment has not increased. It reached a maximum peak in 2011 with 31 MT/day; today, it is 17 MT/day only in the city of Guayaquil.
The market for industrial and agricultural segment has remained constant over the last 6 years with an average sales of 220 MT/day and 47 MT/day respectively.
CONCLUSIONS
25
LPG prices in Ecuador are still subsidized.
Now, Ecuador has an LPG import infrastructure that complies with all
international standards in order to allow the participation of more traders, majors or state companies that are interested in supplying this hydrocarbon.
On the other hand, the 87% of NG produced in Ecuador is allocated to the
electricity sector, and the remaining 13% is shipped to the liquefaction plant.
The liquefaction plant supplies LNG to industries, mainly to the ceramics
industry in 4 provinces of Ecuador.
