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ENERGY POLICY &ENERGY POLICY &ENERGY POLICY &ENERGY POLICY &LNG SUPPLY AND DEMAND LNG SUPPLY AND DEMAND
in TAIWANin TAIWAN
LNG Producer Consumer ConferenceLNG Producer Consumer ConferenceLNG Producer Consumer ConferenceLNG Producer Consumer ConferenceTokyo, Japan Tokyo, Japan
19 September 19 September 20122012
Sheng-Chung LINSheng-Chung LINChairmanChairman
CPC Corporation, TaiwanCPC Corporation, Taiwan
CPC CORPORATION, TAIWAN
pp
LNG Producer - Consumer Conference 2012
OutlineOutline
Ⅰ Introduction of CPC
Taiwan’s Energy PolicyⅡ
LNG Supply and Demand in TaiwanIII
VI M k t E t tiVI Market Expectations
CPC CORPORATION, TAIWAN
LNG Producer - Consumer Conference 2012
CPC Corporation, Taiwan: Leading energy company in TaiwanLeading energy company in Taiwan
CPC, established in 1946, is an integrated oil & gas company.Ranking 337th in the world and 3rd in Taiwan on the Fortune 500 list.
Exploration & Production
Natural Gas
21 fields in 7 countries
F l M k ti
2 LNG re-gasification terminals
Fuels MarketingLPGLubricants
Refinery & Petrochemicals
Filling-Station (market share:77%) CPC-owned: 639 franchise: 1,382
3 refineries (capacity:720,000 barrels/d) 1 petrochemical plant (ethylene:850,000 ton/y)
CPC CORPORATION, TAIWAN 3
LNG Producer - Consumer Conference 2012
Taiwan’s Taiwan’s Energy Energy Policy Policy gygy yy
CPC CORPORATION, TAIWAN
LNG Producer - Consumer Conference 2012
Energy Overview in Taiwan In last decade: Primary Energy grew 24%
Natural Gas increased 109% In 2011: Crude & Coal shared 79.3% of Primary Energy Supply
Natural Gas 11.6% & Nuclear 8.7% respectively 99.33% of total energy supply imported
8.7% 0.5%
140,000
160,000 gy y
Primary Energy Supply
45 3%6.9%
11.6% 10.1%0.3%
80 000
100,000
120,000
others
49.5% 45.3%
40 000
60,000
80,000 NuclearNatural GasCrude & Petrol Products
33.2% 34 %
0
20,000
40,000 Crude & Petrol ProductsCoal Products
103 KLOE
CPC CORPORATION, TAIWAN
2002 201110 KLOE
5
LNG Producer - Consumer Conference 2012
Energy & GDP Growth RateIn last decade(2002-2011): Energy Intensity: 20% decreased LNG Consumption: 125% increased Real GDP : 47% increased
2012 Estimated GDP growth rate is 1.66%
200%220%240%
Year 2002 =100%
LNG ConsumptionDomestic energy consumption +125%
140%160%180%200%
Real GDPEnergy Intensity
LNG grows rapidly
125%
47%
80%100%120%140% rapidly
in last decade
+47%
20%60%80%
2002 2005 2008 2011Source: Directorate General of Budget, Accounting and Statistics, ROC
-20%
CPC CORPORATION, TAIWAN 6
Sou ce: ecto ate Ge e a o udget, ccou t g a d Stat st cs, OC* Energy intensity, defined as Domestic energy consumption divided by Real GDP.
LNG Producer - Consumer Conference 2012
New Energy Policy in TaiwanNew Energy Policy in Taiwangy ygy y4-Stage Objectives:
Build a friendly l b
Gradually transform into
l f
Ensure nuclear
Steadily reduce nuclear energy dependence
low-carbon green energyenvironment
a nuclear-free homeland
Ensure nuclear energy safety Increase natural gas &
renewable energy utilization for eco-f i dl
Completed the i f 4th
Phase out 1st ~3rd
nuclear power plants (5 1GW)
friendly.
construction of 4th
nuclear power plant (2.7GW) in 2016.
(5.1GW) .
CPC CORPORATION, TAIWAN 7
LNG Producer - Consumer Conference 2012
LNGLNG Supply and DemandSupply and DemandⅠ
LNG LNG Supply and DemandSupply and Demandin Taiwanin TaiwanⅠ in Taiwanin Taiwan
CPC CORPORATION, TAIWAN
LNG Producer - Consumer Conference 2012
LNG/NG FacilitiesCPC owns and operates 2 receiving terminals.
TatanTatanStationStation
TunghsiaoTunghsiao
Taichung LNG Taichung LNG Receiving TerminalReceiving Terminal
TunghsiaoTunghsiaoStationStation
Figure “8” loop of G T i iGas Transmission Network
Tank storage: 480,000 KLCapacity of unloading: 4.5 mtpa
YungYung--An LNG An LNG Receiving Receiving TerminalTerminalgg
Tank storage: 690,000 KLCapacity of unloading: 9 mtpa
CPC CORPORATION, TAIWAN
Capacity of unloading: 9 mtpa
9
LNG Producer - Consumer Conference 2012
LNG Supply:Historical imported volumeHistorical imported volume
98% Natural gas imported. 6th largest LNG importing country in the world. Rising demand of LNG results from the growth of electricity and
industry.
10 912.0
12
15 Unit: MTPA
140%
150% LNG growth rateElectricity growth rate
Y2007=100%+45%
8.3 9.1 8.8 10.9
9
12
130%
140% Electricity growth rateGDP growth rate
+17%
3
6 110%
120% +17%
+4%
-
3
2007 2008 2009 2010 201190%
100%
2007 2008 2009 2010 2011
CPC CORPORATION, TAIWAN
2007 2008 2009 2010 2011
10
LNG Producer - Consumer Conference 2012
LNG Demand:Main customers & electricity mix
82 % gas for power generation (Taipower & IPPs) in 2011 29 % electricity from gas-fired generators (15GW)
Main customers & electricity mix
29 % electricity from gas-fired generators (15GW) LNG as main substitute for nuclear when existing plants
decommissioned
TaipowerGas Customers Mix Electricity Mix
p60%Industrial
7%2.6%
4.3%Renewable Energy
Cogeneration
Residential19 0%
3.3%
1.4%
Nuclear
Oil
Hydro Power
IPPs22%
11%
29 1%29 1%
40.3%
19.0%
Gas
Coal
Nuclear
CPC CORPORATION, TAIWAN
29.1%29.1%Gas
11
LNG Producer - Consumer Conference 2012
LNG Procurement Strategy
• Purchase from reliable & stable sources• Purchase from reliable & stable sources at reasonable price
• Major volume from long-term contractsSecurity
• Allocation to worldwide supply sourcesDi it • Interest in new supply sources from
USA, Canada and AustraliaDiversity
• Portfolio of pricing index, Oil-linked & US Gas-linkedCompetitiveness
• Participation in upstreamCompetitiveness
CPC CORPORATION, TAIWAN 12
LNG Producer - Consumer Conference 2012
CCConsumers ExpectationsConsumers Expectations
CPC CORPORATION, TAIWAN
LNG Producer - Consumer Conference 2012
Main LNG Consumers Three major LNG importing countries, Japan, South Korea and
Taiwan (JKT), account for 53% global LNG trade in 2011.
2010 2011 % changeJapan South Korea Taiwan
Taiwan (JKT), account for 53% global LNG trade in 2011. JKT increase LNG import by 9.9% in 2011.
70.8779.09
11.6
11
12
80
100
20
30
10
11
60
Gro
wth
(%)
ty (1
06 T
)
10
chan
ge
32.64
11.18
35.55
12.28.929.12 9
20
40
G
Dem
and
Q'
-10
0
y-o-
y %
2008 2010 2011
80Japan South Korea Taiwan
-20
Year
2009
CPC CORPORATION, TAIWAN 14
Source; The LNG Industry, 2011 & 2011, GIIGNL
LNG Producer - Consumer Conference 2012
Consumers ExpectationsConsumers ExpectationsppMore Supply & More Flexibility = More CompetitionMore Supply
To meet increasing global demand, it requires more investment on LNG supply chain and unconventional production technology.
Government policy to encourage LNG export and import, including application of LNG as fuel for marine tankers and land vehiclesand land vehicles.
Fair treatment to all importing countries and eliminate free-trade obstacles.
More Flexibility
Diverse gas price indexation, oil-linked and gas-linked, to allocate risk of pricing fluctuation.y
More flexibility on destination to invigorate market.
CPC CORPORATION, TAIWAN 15
LNG Producer - Consumer Conference 2012
ConclusionConclusion
• LNG/NG plays a critical role in the global energy market as theLNG demand steadily increases• LNG/NG plays a critical role in the global energy market as the
primary alternative for crude and nuclear.• Taiwan’ s new energy policy promotes LNG utilization.
• Qatar & Australia are major supply countries for its abundant natural source and stable environment
More LNG supply is expected
natural source and stable environment.• Asian market is looking forward to US and Canada LNG without
trade restriction.
• For above purpose, support for and investment in LNG supply chain are continually required from government and LNG
Prepare for the coming Golden Age of Gas
chain are continually required from government and LNG industry.
• LNG market is drastically changing; all players need more communication and cooperation.
CPC CORPORATION, TAIWAN
communication and cooperation.
16
LNG Producer - Consumer Conference 2012
Thank You for Your Attention
LNG Producer - Consumer Conference 2012