Perspectives on Domestic Natural Gas Supplies and Productive … · 2018-06-04 · Play Associated Gas Production (Dry) (Bcfd) JAF2018_025.XLS Associated Gas from “Tight Oil”

1

Perspectives on Domestic Natural Gas Supplies and Productive Capacity

Prepared for:Workshop: “Growing the North American Natural Gas Production Platform”Strategies for Addressing Infrastructure Constraints, Regulatory Risks and Trade Disputes

Hosted by:EPRINC

Prepared By: Vello Kuuskraa, PresidentAdvanced Resources International, Inc.

Willard Hotel, Washington, DCApril 19, 2018


| JAF2018_027.PPT | April 18, 2018 | www.adv-res.com

2


Introduction


The U.S. has large natural gas resources that have low-to-moderate “break-even” costs.* These resources include:

§ Over 2,700 Tcf of proved plus technically recoverable unconventional gas resources (shale gas, tight gas and CBM), including significant volumes of associated gas from “tight oil”.

§ Over 400 Tcf of remaining on-shore (L-48) conventional gas reserves and resources, with much of this resource located in smaller, higher-cost-to-develop fields.

§ Nearly 200 Tcf of associated gas reserves and resources in deepwater Gulf of Mexico oil fields, with additional reserves and resources in Alaska.

With continuing gains in well performance and the “discovery” of new shale and “tight oil” plays, our understanding of the size of the ultimate U.S. natural gas resource base has increased steadily in the past two decades and will continue to do so in the future.*We define “break-even” costs as full-cycle finding and development costs with a 15% (before tax) return on investment.

3


2016 2017 2018 (e)

(Bcfd) (Bcfd) (Bcfd)

Unconventional Gas

▪ Shale Gas 42 45 52

▪ Tight Gas 15 14 13

▪ CBM 3 3 3

Total 60 62 68

Conventional Gas* 12 12 12

Total 72 74 80JAF2018_025.XLS

Status of U.S. Natural Gas Production

After declining to 72 Bcfd (dry) in 2016, natural gas production increased to 74 Bcfd in 2017. With a 4Q 2017 natural gas production rate of 76 Bcfd (dry), we look for natural gas production to have a second year of strong growth, averaging 80 Bcfd in 2018. Shale gas increases its role as the dominant source of natural gas production and growth.


U.S. Natural Gas Production (Dry)U.S. Natural Gas Production (Dry)

Source: EIA; Advanced Resources Int. Shale Gas Database, 2014.*Includes L-48 onshore, offshore and Alaska.

4


Outlook for U.S. Natural Gas Production


Led by significant increases from shales and associated gas from “tight oil”, we project domestic natural gas will reach 100 Bcfd of “production capacity” by 2025.

§ Production from Appalachian Basin’s Marcellus and Utica Shales, currently at 26 Bcfd, will provide about a third of total natural gas production by 2025.

§ Associated gas from “tight oil” (including shale oil and tight sands oil), currently at 17 Bcfd, will provide about a quarter of total natural gas production by 2025.

§ Production from the Haynesville Shale, after halting its past spectacular decline, is on the rise and is expected to be a major supply source for the next round of LNG plants.

§ Emerging shale and tight gas plays, such as the Anadarko Basin’s Stack/Scoop and the DJ Basin’s sands and shales, will more then counter declines in the pioneering Antrim, Barnett, and Fayetteville shales.

§ Active development of already discovered deepwater oil fields along with new discoveries will enable the Offshore Gulf of Mexico grow its associated gas production.

5


1. Associated Gas

Permian 264 398 445Eagle Ford 46 70 75

Williston 33 47 55Cana Woodford* 37 72 65

D-J Niobrara 25 26 24Total 405 613 664

Marcellus 39 48 55Haynesville 27 46 52

Utica 20 28 25Other** 27 30 27 *

Total 113 152 159JAF2018_025.XLS

April 2018

2. Shale Gas

Selected Basins/Plays

End of 2016 End of 2017

Active Rig Count: Selected Basins

*Does not include Kingfisher Co., Oklahoma.**Includes Barnett (3), Fayetteville (1), Ardmore/Arkoma (9), Miss Lime (2) and Granite Wash (12) in April, 2018.

Changes in Rig Counts Help Identify Growing Shale/Associated Gas Basins


Associated Gas. Rig utilization in five key “tight oil” plays (containing associated gas) has climbed from 613 at the end of 2017 to 664 today. The Permian with an increase of 47 rigs account for most of the gain.

Shale Gas. Rig utilization in other shale gas plays has rebounded from 152 at end of 2017 to 159 today. The Marcellus and Haynesville account for two-thirds of the shale gas rig fleet.

6


Appalachian Basin’s Shale Gas Production Surges


The Appalachian Basin has some of the lowest cost (at the wellhead) domestic shale gas resources.

Completion of Rover Phase I, the Leach Express, and the Access pipelines (among others) enabled natural gas production and delivery from the Appalachian Basin to increase by 2 Bcfd in 2017. Completion of additional pipelines (Rover Phase 2, SW Louisiana, and others) will support 3 Bcfd of natural gas production growth from Appalachian Basin in 2018.

However, access to regional markets and need to complete long distance pipelines to the Gulf will constrain near-term production.

Appalachian Basin’s Shale Gas Production (Dry)2016 2017 2018(Bcfd) (Bcfd) (Bcfd)

Marcellus 16.4 17.7 20.0Utica 3.8 4.5 5.5Other 0.4 0.5 0.5Total 20.6 22.7 26.0

JAF2018_025.XLS

Shale Play

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2016 2017 2018

Bakken 1.1 1.2 1.3Eagle Ford* 4.0 3.5 3.5Permian (TX / NM) 3.4 4.2 6.0Anadarko 2.3 2.5 3.3Denver 1.3 1.7 2.2Other 0.7 0.9 0.9

Total 12.8 14.0 17.2

Subtotal Shale 9.3 10.5 13.6

"Tight Oil" Play

Associated Gas Production (Dry) (Bcfd)

JAF2018_025.XLS

Associated Gas from “Tight Oil”


Associated gas from “tight oil” - - the Bakken, Eagle Ford, Permian Stack/ Scoop, Denver’s Niobrara (among others) - - has provided about half of the recent increases in natural gas supplies.

§ With higher oil prices, associated gas production from “tight oil” increased notably in 2017 and will increase further in 2018.

§ Because associated gas from “tight oil” is a by-product of oil production, at strong oil prices production of associated gas becomes essentially a “free good.”

*The Eagle Ford Shale and the STACK/SCOOP also contains non-associated gas plays not dependent on “tight oil” development or economics.

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Natural gas production from the Permian Basin provided 8.1 Bcfd (wet) of natural gas production in 2017, up from 2016. We project the Permian will provide 10 Bcfd in 2018.

§ Associated gas (wet) from “tight oil” of 5.7 Bcfd in 2017, increasing to 7.8 Bcfd in 2018, is the engine of production growth in the Permian Basin.*

§ The “discovery” of “Alpine High” in the Delaware Basin portion of the Permian Basin introduces a major new wet gas play.

Growth of Permian Basin’s Wet Natural Gas Production


*Dry associated natural gas production from “tight oil” would be approximately 25% lower, estimated at 4.2 Bcfdin 2017 and 6.0 Bcfd in 2018.

9


A major question governing the outlook for natural gas production is: To what extent will future natural gas “break-even” costs encourage or stymie gas demand and competitively priced LNG exports?

Improvements in well productivities and development efficiencies have reduced today’s “break-even” costs for shale gas.

Will more intensive well completion practices (longer laterals, more frac stages, and higher proppant volumes) improve well productivity sufficiently to counter increases in oil field service costs?

To examine this question, we selected the “core” area of the Haynesville Shale to look at future “break-even” costs.

Outlook for Future Shale Gas “Break-Even” Costs


10


Our shale gas model uses well performance and cost adjustment factors to link changes in development practices and oil field service costs to future “break-even” costs.

Use of more frac stages (33), higher proppant volumes (2,500 lbs/ft), and somewhat longer laterals (8,500 ft) will improve Haynesville Shale Play #1’s well productivity from 18.4 Bcf in 2017 to 21.2 Bcf in 2025.

Improving well performance and greater drilling efficiencies will help counter increases in service costs as well as the costs of more intensive development, limiting Year 2025 “break-even” costs to $2.60/Mcf compared to $2.50/Mcf in 2017.

Haynesville Shale Core Area “Break-Even” Costs


Actual Projected2017 2025

(@ $50/B) (@$65/B)

7,400 8,500

30 21

$15,000 $23,000

$3,400 $3,710

Frac Stages 25 33

Frac Cost ($/Stage) $60,000 $79,000

$5,100 $6,430

$8,500 $10,140

18.4 21.2

$2.50 $2.60 JAF2018_025.XLS

Total Well Drilling Costs ($M)

Lateral Length

1. Well Drilling

Days to Drill

Rig Day-Rate ($/day)

"Break-Even" Costs ($/Net Mcf)

2. Well Completion

Total Completion Costs ($000)

Total Well D&C Cost ($000)

Gross EUR/Well (Bcf)

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Closing Comments


The domestic natural gas resource base is large and yet to be fully defined.

Increases in well productivities and development efficiencies will counter increases in oil field service costs, helping maintain domestic natural gas as a low-to-moderate cost resource.

Canadian natural gas resources, led by the Montney Resource Play (Canada’s Marcellus), further support a positive outlook for North American natural gas supplies.

With the change in the natural gas paradigm from “scarcity to plenty”, the emphasis now shifts to “productive capacity” and the need for transportation infrastructure and new markets.

12


AdvancedResourcesInternationalwww.adv-res.com

Office LocationsWashington, DC4501 Fairfax Drive, Suite 910Arlington, VA 22203Phone: (703) 528-8420

Houston, TX11931 Wickchester Ln., Suite 200 Houston, TX 77043-4574 Phone: (281) 558-9200

Knoxville, TN 1210 Kenesaw Ave. Suite 1210A Knoxville, TN 37919-7736


Permian Basin

Production and Looming

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Source: Extraction rig, September 2017

PetroNerd:

Podcasts

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“Completion Design Changes

and the Impact of U

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http://ww

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Spud to Total Depth in Less than Three Days

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Extraction Oil and Gas, Septem

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Permian Basin Production

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- 2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

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2,000,000

4,000,000

6,000,000

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6/1/2000

11/1/2000

4/1/2001

9/1/2001

2/1/2002

7/1/2002

12/1/2002

5/1/2003

10/1/2003

3/1/2004

8/1/2004

1/1/2005

6/1/2005

11/1/2005

4/1/2006

9/1/2006

2/1/2007

7/1/2007

12/1/2007

5/1/2008

10/1/2008

3/1/2009

8/1/2009

1/1/2010

6/1/2010

11/1/2010

4/1/2011

9/1/2011

2/1/2012

7/1/2012

12/1/2012

5/1/2013

10/1/2013

3/1/2014

8/1/2014

1/1/2015

6/1/2015

11/1/2015

4/1/2016

9/1/2016

2/1/2017

7/1/2017

12/1/2017

Water – Barrels Per Day

Liquid – Barrels Per Day/ Gas – mcd/d

Total Liquid ProductionTotal Gas Production

Total Water Production

Water –

15 mbd

Oil –

2.9 mbd

GAS –9 plus Bcf/d

Permian Problem

sW

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Gassy reservoirs can help drive oil production –at

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It isn’t just the Permian that is the problem

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EVERYWHERE

Ultra Petroleum –

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onders for oil production and even m

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arcellus

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2830

3234

3638

4042

4446

4850

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mcf/d

Month

Marcellus Reservoir Decline Curve

20132014

20152016

2017

11,300 mcf/d

Source: PetroNerds, D

rillingInfodata

Permian Basin G

eology and Stratigraphy

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Source: Concho Resources 2ndQ

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MIAN

BASIN PR

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CE (044) By M

ahlon M. Ball

The Permian hosts a vast am

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The Permian Basin has a trem

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InventoryW

ell density, parent child problems, all com

ing into focus

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Source: Diamondback and Cim

arex April 2018 Investor Presentations

Pioneer –Then and N

ow

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Source: Pioneer Natural Resources O

ct 2013 Investor PresentationSource: Pioneer N

atural Resources April 2018 Investor Presentation

Horizontal Liquid Production

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- 20,000

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100,000

120,000

140,000

160,000

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2,000,000

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3,000,000

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1/1/2000

6/1/2000

11/1/2000

4/1/2001

9/1/2001

2/1/2002

7/1/2002

12/1/2002

5/1/2003

10/1/2003

3/1/2004

8/1/2004

1/1/2005

6/1/2005

11/1/2005

4/1/2006

9/1/2006

2/1/2007

7/1/2007

12/1/2007

5/1/2008

10/1/2008

3/1/2009

8/1/2009

1/1/2010

6/1/2010

11/1/2010

4/1/2011

9/1/2011

2/1/2012

7/1/2012

12/1/2012

5/1/2013

10/1/2013

3/1/2014

8/1/2014

1/1/2015

6/1/2015

11/1/2015

4/1/2016

9/1/2016

2/1/2017

7/1/2017

12/1/2017

Well Count

Barrels Per Day

Horizontal Well Count

Vertical Well Count

Total Liquid ProductionHorizontal Liquid Production

Vertical Liquid Production


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Associated Gas and Produced W

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1/1/20132/1/20143/1/20154/1/20165/1/2017

GAS - mcf/d

Liquid – Barrels Per Day

GAS -Horizontal vs. Vertical

Horizontal Liquid ProductionVertical Liquid Production

Horizontal Gas ProductionVertical Gas Production

- 2,000,000

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1/1/20132/1/20143/1/20154/1/20165/1/2017

Barrels Per Day WATER

Barrels Per Day OIL

WATER –

Horizontal vs. Vertical

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Horizontal Water Production

Vertical Water Production

10 mbd

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Gas to O

il Ratio in the Permian Basin

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API Gravity in the Perm

ian Basin

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Production by API Gravity

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0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1/1/2010

3/1/2010

5/1/2010

7/1/2010

9/1/2010

11/1/2010

1/1/2011

3/1/2011

5/1/2011

7/1/2011

9/1/2011

11/1/2011

1/1/2012

3/1/2012

5/1/2012

7/1/2012

9/1/2012

11/1/2012

1/1/2013

3/1/2013

5/1/2013

7/1/2013

9/1/2013

11/1/2013

1/1/2014

3/1/2014

5/1/2014

7/1/2014

9/1/2014

11/1/2014

1/1/2015

3/1/2015

5/1/2015

7/1/2015

9/1/2015

11/1/2015

1/1/2016

3/1/2016

5/1/2016

7/1/2016

9/1/2016

11/1/2016

1/1/2017

3/1/2017

5/1/2017

7/1/2017

9/1/2017

11/1/2017

1/1/2018

Barrels Per Day

0-2525-35

35-4040-45

45-5050+


rillingInfodata

Permian Basin Decline Curve

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-

100

200

300

400

500

600

700

800

01

23

45

67

89

10111213141516171819202122232425262728293031323334353637383940414243444546474849505152

BARRELS PER DAY

MO

NTH

20132014

20152016

2017

# of Wells Included in

Month 1

20131,154

20141,656

20151,838

20161,697

20172,604


rillingInfodata

Measuring Productivity

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0 2 4 6 8 10 12 14 16 18

1/1/08

8/1/08

3/1/09

10/1/09

5/1/10

12/1/10

7/1/11

2/1/12

9/1/12

4/1/13

11/1/13

6/1/14

1/1/15

8/1/15

3/1/16

10/1/16

5/1/17

BARRELS PER FOOT

First 6 Month Cum

ulative Production Per Lateral Foot

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1/1/08

9/1/08

5/1/09

1/1/10

9/1/10

5/1/11

1/1/12

9/1/12

5/1/13

1/1/14

9/1/14

5/1/15

1/1/16

9/1/16

5/1/17

FEET

Average Lateral Length


rillingInfodata

Bone Spring Reservoir Decline Curve

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-

100

200

300

400

500

600

700

800

900

1,000

01

23

45

67

89

10111213141516171819202122232425262728293031323334353637383940414243444546474849505152

BARRELS PER DAY

MO

NTH

20132014

20152016

2017


rillingInfodata

Top Permian Basin O

perators by Production

OperatorDaily Liquids b/d

Daily Gas mcf/d

1O

CCIDENTAL ENERGY COM

PANYINC.276,024

556,347 2

PIONEER NATURAL RESO

URCES COM

PANY210,694

461,204 3

CONCHO

RESOURCES INC.

197,709 659,170

4EO

G RESOURCES INCO

RPORATED

131,031 407,233

5APACHE CO

RPORATIO

N102,584

477,368 6

EXXON M

OBIL CO

RPORATIO

N91,408

285,160 7

ANADARKO E&

P ONSHO

RE LLC88,790

295,583 8

DIAMO

NDBACK E&P LLC

83,932 123,888

9CHEVRO

N U.S.A. INC.82,071

397,068 10

ENCANA CORPO

RATION

72,643 157,580

11PARSLEY ENERGY O

PERATIONS LLC

71,987 184,253

12ENERGEN CO

RPORATIO

N68,566

234,231 13

CIMAREX ENERGY CO

MPANY

64,035 477,567

14KINDER M

ORGAN INCO

RPORATED

51,368 158,186

15RSP PERM

IAN LLC49,326

104,704 16

MEW

BOURNE HO

LDINGS INC48,960

202,757 17

RD SHELL47,638

117,148 18

DEVON ENERGY CO

RPORATIO

N45,105

177,719 19

SURGE OPERATING LLC

44,011 42,721

20SM

ENERGY COM

PANY40,563

73,676 21

LAREDO PETRO

LEUM INC.

37,173 214,359

22CENTENNIAL RESO

URCE PRODUCTIO

N LLC35,086

81,964 23

RKI EXPLORATIO

N & PRO

DUCTION LLC

35,030 185,845

24JAGGED PEAK ENERGY LLC

30,546 50,148

25ENDEAVO

R ENERGY RESOURCES LP

30,464 63,261

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Source: PetroN

erds, D

rillingInfodata

Why Everyone N

ow Cares

about “Basis Swaps”

Operators can protect them

selves against capacity constraints for both oil and gas through outright derivative hedges as w

ell as basis sw

aps.

Flurry of investor concerns about capacity constraints.

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Midland Basis Sw

aps: Q4 2016 vs Q

4 2017

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Source: PetroNerds, H

edgeAware. Survey of 41 publicly traded E&

Ps.

Natural G

as: A Role for

Public Lands?

The Institute for Energy Research

Tom Pyle, President —

@Tom

JPyle

Natural G

as Resources

�We have m

ore gas than we

know w

hat to do with.

�1980 DO

E estimate: U

.S. had 35 years’ w

orth of natural gas.�Today, 37 years later, D

OE

estimate: 100 years.

Shale Revolution

�The Shale Revolution

changed everything�Technology, private and state lands, property rights�50 percent surge in production�Price cut in half

What role have

federal lands played?

What role have

federal lands played?

Federal Onshore G

as Production Volum

e (mcf)

Federal Offshore G

as Production Volum

e (mcf)

Why the

Production G

ap?

Private Land O

wnership

Permitting:

Federal vs. State

0 50

100

150

200

250

300

Average W

ait in Days

This trend didn’t begin w

ith the O

bama

Adm

inistration

What are w

e leaving on the table?

IER Study:

Economic

Benefits of

Federal Lands Production

What’s the proper

perspective on the role of public land?

Solutions

�Divestm

ent

�State Managem

ent

•Stream

line Permitting Process

•A

ccurate Inventory of Resource B

ase

•R

evenue Sharing with States

"It's tough to make

predictions, especially about the future…

"

…but there w

ill always

be a role for public lands. Tom

Pyle —@

TomJPyle

instituteforenergyresearch.org

Ad

rian Reed SV

P Strategy and

Risk Tellurian Inc.

April 2018

Importance of Infrastructure

for LNG

Export

Cautionary statem

ents

The information in this presentation includes “forw

ard-looking statements” w

ithin the meaning of

Section 27A of the Securities A

ct of 1933, as amended, and Section 21E of the Securities Exchange

Act of 1934, as am

ended. All statem

ents other than statements of historical fact are forw

ard-looking statem

ents. The words “anticipate,” “assum

e,” “believe,” “budget,” “estimate,” “expect,”

“forecast,” “initial,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “w

ill,” “would,” and

similar expressions are intended to identify forw

ard-looking statements. The forw

ard-looking statem

ents in this presentation relate to, among other things, anticipated supply, dem

and and other factors that m

ay affect the LNG

industry and Driftw

ood Holdings, including the financing of D

riftwood Holdings.

Our forw

ard-looking statements are based on assum

ptions and analyses made by us in light of our

experience and our perception of historical trends, current conditions, expected future developm

ents, and other factors that we believe are appropriate under the circum

stances. These statem

ents are subject to numerous know

n and unknown risks and uncertainties, w

hich may cause

actual results to be materially different from

any future results or performance expressed or im

plied by the forw

ard-looking statements. These risks and uncertainties include those described in the “Risk

Factors” section of our Annual Report on Form

10-K for the year ended Decem

ber 31, 2017 filed with

the Securities and Exchange Com

mission (the “SEC

”) on March 15, 2018 and other filings w

ith the SEC

, which are incorporated by reference in this presentation. M

any of the forward-looking

statements in this presentation relate to events or developm

ents anticipated to occur numerous

years in the future, which increases the likelihood that actual results w

ill differ materially from

those indicated in such forw

ard-looking statements.

The forward-looking statem

ents made in or in connection w

ith this presentation speak only as of the date hereof. A

lthough we m

ay from tim

e to time voluntarily update our prior forw

ard-looking statem

ents, we disclaim

any comm

itment to do so except as required by securities law

s.

Reserves and resources

Estimates of non-proved reserves and resources are based on m

ore limited inform

ation, and are subject to significantly greater risk of not being produced, than are estim

ates of proved reserves.

Forward

looking statements

Discla

imer

344

49 46

565

127

20172025

New

capa

city

49

382 532

101

20172025

Grow

th

Global call on U.S. natural gas

Business mod

el

U.S. supply push…

…and global dem

and pull

Source: W

ood M

ackenzie, Telluria

n Research.

Notes:

(1) Includes the Perm

ian, H

aynesville, Utica

, Ma

rcellus, Ana

da

rko, Eagle Ford

.(2) Ba

sed on a

dem

and

growth estim

ate of 4.5%

post-2020.

(3) Ca

pa

city required

to meet d

ema

nd grow

th post-2020.

3

5171

2046

75Bcf/d

Output from

selected sha

le basins (1)

mtpa

Globa

l LNG

production ca

pacity

mtpa

Takeaway

infrastructure

Required

Under construction

Other

U.S.

Supply infrastructure

Required(3)

29

(2)

150

Under

construction

221

New

infrastructure required

Implica

tions for the U.S.4

13 Bcf/d of incremental production at risk of flaring w

ithout additional infrastructure investment

Source: EIA

; ARI; Tellurian analysis

Notes:

(1) $1,000/tonneaverage

§LN

G export capacity required

:―

Up to 100 mtpa: 13 Bcf/d

(20 Bcf/d

less ~7 under construction)

―~$100 billion

(1)

§Pipeline capacity required

:―

Around

20 Bcf/d

―~$70 billion

LNG

liquefaction terminal

Opera

ting/under

constructionFuture

Export capa

city

13 bcf/d

6

1

8

1

20Total estim

ated 2017-2025 production grow

th, Bcf/d

Required future investment:

§~$170 billion

§A

t least 7 Bcf/d

export capa

city

4

Continued shale revolution productivity im

provements

Sources:D

rillingInfo; Tellurian a

nalysis

5

Months on production

Delaware Basin vintage type curves

mcf/d0

500

1,000

1,500

2,000

2,500

06

1218

2430

3642

4854

6066

7278

84

20112012

20132014

2015

2016

2017

2018

0

500

1,000

1,500

2,000

2,50020102012

20142016

20182020

Average Delaw

are Basin peak month production

mcf/dYear com

pleted

32%

CA

GR

7.3

5.5

12.816.0

17.618.4

5.6

Permian gas projections

Notes:

1A

ssumes 80%

wet ga

s to dry ga

s conversion

6

Alternative sources:

§IHSM

arkit

§RBN

§BTU analytics

EoY2017

Grow

th to 2025

None

HighW

ell productivity improvem

ent scenarios

LowM

id

7-12%

CA

GR

Bcf/d

~15

11-15

15-17

Bcf/d

Wet 1gas

volume,

Bcf/d9.1

5-1416

2022

23

Tellurian pipeline network

Notes:

(1) Included

in Driftw

ood H

oldings.

(2) Currently not includ

ed in D

riftwood

Hold

ings illustrative fina

ncials (slid

es 8, 9, 11 and

12); comm

ercial a

nd regula

tory inp

rogress and

financia

l structuring under review

.

7Pipeline netw

ork

Driftwood Pipeline

(1)

Ca

pacity (Bcf/d

)4.0

Cost ($ billions)

$2.2 Length (m

iles)96

Dia

meter (inches)

48C

ompression (H

P)274,000

Status

FERC a

pproval pend

ing

Haynesville Global A

ccess Pipeline(2)

Ca

pacity (Bcf/d

)2.0

Cost ($ billions)

$1.4Length (m

iles)200

Dia

meter (inches)

42C

ompression (H

P)23,000

Status

Open sea

son: 2/21/18

Permian G

lobal Access Pipeline

(2)

Ca

pacity (Bcf/d

)2.0

Cost ($ billions)

$3.7Length (m

iles)625

Dia

meter (inches)

42C

ompression (H

P)258,000

Status

Open sea

son: 3/20/18

Bringing low-cost gas to Southw

est Louisiana

1

2

3

123Driftw

ood Term

inal

0

100

200

300

400

500

20152016

20172018

20192020

20212022

20232024

2025

Dem

and pull

Globa

l LNG

Demand outlook

Sources: Wood

Ma

ckenzie, Tellurian Resea

rch.N

otes:(1) A

ssumes 85%

utilization ra

te. (2) Ba

sed on a

ssump

tion that LN

G d

ema

nd grow

s at 4.5%

p.a

. post-2020.

8

127 mtpa of new

liquefaction

capacity required by 2025

(1)

mtpa

Under

construction

In operation

Dem

and(2)

107 mtpa

Margins and price signals

Business mod

el

Netback prices to the Gulf C

oast (1)

Sources: Platts, C

ME, Telluria

n Research.

Notes:

(1) Forwa

rd p

rices for 2018 assum

ing $1.79/mm

Btuship

ping cost from

USGC

to East A

sia using Pla

tts JKM.

(2) Platts G

ulf Coa

st Ma

rker.

9

$5 $6 $7 $8 $9

$10

$11

Q1-2018

Q2-2018

Q3-2018

Q4-2018

Mar-18

Nov-17

Jul-17

2018 JKM forw

ard prices up $2.50 since July 2017

Avg. 2018

JKM price

up 42% this

year

$ 0

$ 5

$ 10

$ 15

$ 20

Jan

Jul

Jan

Jul

Jan

Jul

Jan

Jul

Jan

Jul

Jan

JulDriftw

ood LNG

FOB USG

C $3.00/m

mBtu

Apr 2018

GC

M(2)

12 Mar 2018:

$6.50/mm

Btu

20132014

20152016

20172018

Q1

Q2

Q3

Q4

2018

$/mm

Btu$/m

mBtu

Driftw

ood LNG

terminal

Note:

(1) Engineering, procurem

ent and

construction costs before ow

ners’ costs, financing costs a

nd contingencies.

10

Driftwood LN

G term

inal

Land§

~1,000acres near Lake C

harles, LA

Capacity

§~27.6 m

tpa

Trains§

Up to 20 trains of ~1.38 mtpa each

§C

hart heat exchangers§

GE LM

6000PF+ com

pressors

Storage§

3 storage tanks§

235,000 m3each

Marine

§3 m

arineberths

EPC C

ost§

~$550 per tonne§

~$15.2 billion(1)

Artist rendition

Driftw

ood LN

G

Additional m

aterial

11

Plentiful, cheap U.S. gas endowm

ent

Implica

tions for the U.S.12

Production growth and resource base from

selected U.S. unconventional basins

Source: EIA; Tellurian analysis

411

112

74

23

52

Resource size, Tcf

Marcellus-Utica

HaynesvilleEagle Ford

Permian

Anadarko

7.37.9

20172025

7.313.0

20172025

24.633.0

20172025

5.66.1

20172025

5.810.2

20172025

50.6

70.219.6

20172025

Incrementa

l prod

uction

Total selected basin shale production,Bcf/d

Infrastructure first wave

Implica

tions for the U.S.13

As a result, industry built new pipelines, reversed old ones and developed the first w

ave of LNG

export projects

Source: EIA; W

ood Mackenzie, RBN

, Tellurian analysis.

0.3 Bcf/d

5.6 Bcf/d

2.4 Bcf/d

0.7 Bcf/d

LNG

liquefaction terminal

Export capa

city

Opera

tingUnd

er construction

2.6C

ompleted pipeline

reversals and new

construction, Bcf/d

1.7

Current LN

G investm

ent:§

~$60 billion §

9 Bcf/d export capacity

4.8

2.61.3

The number of LN

G m

arket participants has grown rapidly

14G

lobal LN

G

FSRU technology is rapidly expanding the number of countries consum

ing LNG

Sources:IHS M

arkit

0 10 20 30 40 50 60

19901995

20002005

20102015

20202025

§Floa

ting storage a

nd

regasifica

tion units (FSRUs) provid

e emerging m

arkets a

fa

ster and

often cheaper

option than la

nd-ba

sed

termina

ls to begin importing

LNG

§By yea

r-end 2017, 40%

of import

ma

rkets utilized FSRUs

§IH

S forecasts tha

t over 50% of

import m

arkets w

ill utilize FSRU term

inals by 2025

Num

ber of countries

FSRU-only im

porters

Both onshore a

nd FSRU

Onshore-only

importers

Global gas com

moditizing

15G

lobal LN

G

Today’s LNG

market exhibits rem

arkable similarities to the global oil m

arket of late last century

Sources: SPE; https://ww

w.e-education.psu.edu/em

e801/node/455

Global oil

1940s1970s

2004-2005: BG builds

14 mtpa

net long portfolio w

ith 100%

destination flexibility

1980s 1983: Oil futures

trading begins

1940s: Vertically

integrated IOC

s dom

inate interregional trade

1970s: North Sea

becomes one of the first

fields without dedicated

downstream

market

providing destination flexibility

1960s1950s

1990s2000s

1970s-80s: Emergence

of crude oil markers:

WTI, Brent, Forties, etc.

1970s1980s

1960s1990s

2000s2010s

1959: First LNG

cargo shifts from

Algeria

2017: JKM financial

swaps volum

e quadruples year on year

1980s to present: oil is a globalized m

arket:§

Emergence of hedging/price risk

managem

ent products§

Financial trading grows to 500

million barrels per day –

dwarfing

physical trade

Global gas

Vertically integrated and inflexible

Vertically integrated and inflexibleRapidly com

moditizing

1973: Oil price shock

ushers in the advent of physical spot m

arkets, high and volatile prices

1980s: Oversupply

facilitates more

competition, the

emergence of

intermediaries,

fragmentation

Com

moditized and flexible

2011: Fukushima

increases Japanese dem

and for LNG

–spot prices clim

b and becom

e more

volatile

2012: Cheniere m

akes FID

on Sabine Pass LNG

–

all volumes destination

flexible and linked to Henry Hub

Sources:Kpler, M

aran Gas, IHS, W

ood Mackenzie.

Notes:

LNG

storage assumes half of fleet is in ballast, 2.9 Bcfcapacity per vessel.

Average cargo size ~2.9 Bcf, assum

ing 150,000 m3ship.

In 2017, approximately a third of all LN

G cargoes are estim

ated to be spot volumes.

Assum

es 12% per annum

demand grow

th.

Daily LN

G supply readily available across the globe

16Em

ergence of a liquid

LNG

ma

rket

488610

715894

20172020

Bcfof LNG

storage

# of LN

G

vessels

# of

cargoes load

edper d

ay

LegendLNG

carrier –

lad

enLN

G ca

rrier –unla

den

LNG

Storage -2017Ja

pan + Korea

termina

ls:633 Bcf

LNG

vessels:686 Bcf

1419

20172020

Grow

ing LNG

supply availability in all regions

Emergence of a

liquid LN

G m

arket

17

By regionG

lobally

47

20172020

Atlantic Basin

4 4

20172020

Middle East

68

20172020

Pacific Basin

1419

20172020

# of

cargoes load

edper d

ay

# of cargoes loaded per day

(1)

Source: W

ood Mackenzie, Tellurian Research.

Notes:

(1) one cargo represents ~3 Bcfof LNG

Driftw

ood Holdings’ operating costs

Business mod

el

Total anticipated cost of ~$3/mm

Btu locks in low cost of supply

$0.88

$0.36

$0.79

$0.22

$2.25

$0.75

$3.00

Drilling a

nd

completion(1)

Opera

tingG

athering,

processing and

tra

nsportation(2)

Contingency

Delivered

cost

Liquefaction

costTota

l

Sources: Wood

Ma

ckenzie, Tellurian Resea

rch.N

otes: (1) D

rilling and

comp

letion ba

sed on w

ell cost of $10.2 million, 15.5 Bcf EUR, a

nd 75.00%

net revenue interest (“NRI”)(8/8ths).

(2) Ga

thering, processing a

nd tra

nsporta

tion includes tra

nsporta

tion cost to Driftw

ood p

ipeline to m

arket.

18

Upstream cost

$/mm

Btu

Liquefaction cost

(1)

(2)

Mexic

o’s

Dem

and R

isks:

Am

id a

n E

volv

ing E

nerg

y L

andscape

Em

ily E

. Me

din

a

Energ

y R

efo

rm: M

exic

o’s

energ

y tra

nsfo

rmatio

n

A b

rief h

isto

ry o

f PE

ME

X

•P

EM

EX

was c

reate

d in

1938 b

y th

en-M

exic

an P

resid

ent

Lazaro

Card

enas

•N

atio

nal s

ym

bol

•D

eclin

e o

n P

EM

EX

’s p

roductiv

ity

The c

reatio

n o

f the e

nerg

y re

form

•A

ppro

ved in

Decem

ber 2

013 a

nd p

assed s

econdary

legis

latio

n in

August 2

014

•O

pen e

nerg

y s

ecto

r (explo

ratio

n, a

nd p

roductio

n) to

dom

estic

and fo

reig

n p

rivate

com

panie

s

Obje

ctiv

es o

f the e

nerg

y re

form

•T

ransfo

rm n

atu

ral g

as m

odel to

enhance e

nerg

y s

ecurity

•P

rom

ote

infra

stru

ctu

re d

evelo

pm

ent

•O

pen a

ccess to

pro

ducers

and u

sers

and p

rovid

e fo

r

com

petitiv

e g

as p

ricin

g

The m

ain

obje

ctiv

es o

f the e

nerg

y re

form

are

to tra

nsfo

rm th

e n

atu

ral g

as m

odel to

enhance e

nerg

y s

ecurity

, pro

mote

infra

stru

ctu

re d

evelo

pm

ent a

nd o

pen a

ccess to

pro

ducers

and u

sers

, and p

rovid

e fo

r com

petitiv

e g

as p

ricin

g.

Energ

y tra

de b

etw

een M

exic

o a

nd th

e U

S

Natural gas exports to M

exico from the

United States w

ere 4.6 Bcf/d in 2017.

Mexic

o is

the U

nite

d S

tate

s’ s

econd-la

rgest e

xport m

ark

et (a

fter C

anada) a

nd th

ird-la

rgest tra

din

g p

artn

er (a

fter

Canada a

nd C

hin

a). In

2017, tw

o-w

ay tra

de in

goods a

nd s

erv

ices to

tale

d $

623 b

illion.

Mexico accounts for 60%

of U.S. gasoline

exports....and 65% of U

.S. natural gas exports.

Overv

iew

of M

exic

o’s

energ

y m

ix

Mexic

o h

as s

ignific

antly

incre

ased n

atu

ral g

as im

ports

from

the U

S d

rivin

g a

n o

il-to-g

as fu

el s

witc

h in

the p

ow

er s

ecto

r,

whic

h is

help

ing th

e c

ountry

meet its

GH

G e

mis

sio

n re

ductio

n ta

rgets

.

Source:EIA,Mexicoenergyoutlook2016

Facto

rs d

rivin

g n

atu

ral g

as d

em

and

Natu

ral g

as in

Mexic

o h

as b

een a

nd w

ill contin

ue to

be in

dem

and. T

he M

inis

try o

f Energ

y’s

pro

jects

, a 3

.8 p

erc

ent in

cre

ase

in a

vera

ge a

nnual d

em

and fo

r the n

ext 1

4 y

ears

due to

ele

ctric

ity g

enera

tion d

em

and.

Mexic

o’s

mid

stre

am

build

-out

Mexic

o’s

dom

estic

pip

elin

e n

etw

ork

expansio

n p

lan, in

clu

des 1

2 a

dditio

nal p

ipelin

es (3

,200 m

iles) w

ith a

tota

l capacity

of 9

.7 B

cf/d

.

•S

IST

RA

GA

S, o

pera

ted b

y C

EN

AG

AS

, is th

e la

rgest

transporta

tion s

yste

m in

Mexic

o a

ccountin

g fo

r

10,0

68km

.

•C

om

isió

n F

edera

l de E

lectric

idad (C

FE

) has a

tota

l

of 4

,495 k

m o

f pip

elin

es u

nder c

onstru

ctio

n.

•T

he C

RE

is c

reatin

g a

transpare

nt a

nd p

rice

transpare

nt m

ark

et.

•O

n J

une 1

6, 2

017 it re

moved th

e p

rice c

ap th

at

PE

ME

X c

ould

charg

e fo

r natu

ral g

as.

•P

EM

EX

is re

quire

d to

rele

ase 7

0%

of th

e v

olu

me o

f

its g

as s

upply

portfo

lio.

Main

risks fa

cin

g M

exic

o’s

natu

ral g

as p

roje

cts

•P

olitic

al s

ituatio

n, M

exic

o’s

pre

sid

entia

l

ele

ctio

ns

•A

MLO

, frontru

nner in

polls

Left-w

ing p

arty

MO

RE

NA

,

(Natio

nal R

egenera

tion M

ovem

ent)

•N

AF

TA

•N

atio

nalis

t vie

ws

•C

ut o

n e

nerg

y im

ports

•In

cre

ase in

Mexic

o’s

dom

estic

natu

ral g

as p

roductio

n

•Land rig

hts

•P

rocess o

f media

tion a

nd consulta previa

•Irre

gula

rity in

land title

s

•C

RE

’s re

quire

ments

do n

ot m

atc

h M

exic

o’s

reality

•S

ecurity

concern

s

•V

iole

nce m

ost p

rom

inent a

round s

hale

oil a

nd g

as

reserv

es

•S

tiffenin

g o

f fuel in

pip

elin

es b

y n

on-s

tate

acto

rs

•In

frastru

ctu

re b

uild

-out c

halle

nged b

y n

on-s

tate

acto

rs

Op

po

rtun

ities fo

r the

US

in M

exic

o’s

mid

stre

am

bu

ild-o

ut

“Mexic

o’s

success w

ill mean A

meric

an s

uccess,

partic

ula

rly fo

r those w

ho s

ee re

al v

alu

e in

securin

g N

orth

Am

eric

an e

nerg

y in

dependence”-

Meghan L

. O’s

ulliv

an.

•A

ccess to

Mexic

o’s

libera

lized e

nerg

y m

ark

et

•M

exic

o’s

dem

and g

row

th o

ver th

e n

ext d

ecade

•F

avora

ble

geogra

phy a

nd lo

gis

tics

•T

he re

aliz

atio

n o

f North

Am

eric

an e

nerg

y

independence is

to s

om

e d

egre

e d

ependent o

n

the s

uccess o

f Mexic

o’s

energ

y re

form

goin

g

forw

ard

.

UnderstandingtheFutureEvolutionofAsianGas

Markets:ChinaandIndia

GrowingtheAm

ericanNaturalGasProductionPlatform

EPRINCW

orkshop

AshutoshShastri,EnerStratConsulting,U

KLucianPugliaresi,EPRIN

C

April 19th2018

Washington D

C, U

SA

1949-19591960-1978

1979-19911992-1998

1998-2008Today

HISTO

RIC

AL PR

OG

RESSIO

N O

F THE C

HIN

ESE OIL &

GA

S IND

USTRY

5thDivisionof19thPLAArm

yformedinto

an“OilCorps”

OilSelfsufficiency

viewedascriticalto

nationalsecurity

MinistryofPetroleum

Industryform

edin1955

ChinaImportsO

ilproductsfrom

Russia

RegionalPetroleum

Administration

Bureausformed

Oil&

GasproductionpicksupbutrelationswithRussiastartto

strain

5thDivisionof19thPLAArm

yformedinto

an“OilCorps”

OilSelfsufficiency

viewedascriticalto

nationalsecurity

MinistryofPetroleum

Industryform

edin1955

ChinaImportsO

ilproductsfrom

Russia

RegionalPetroleum

Administration

Bureausformed

Oil&

GasproductionpicksupbutrelationswithRussiastartto

strain

Chinalaunchesitseconom

icliberalisationpolicy(1978)

PAB-BigContractRegim

eStarts(1981)

MPIabolishedand

CNPCformed(1988)

Productionmatures

Oilim

portsrise

PABsbecomelegal

entitiesandde-centralisationexperim

entstarts

PABde-centralisationrecognisedasa“m

anagement

disaster”(1995)

Pricerationalisationtoalignw

ithinternationaloilprices

Industrylossesballoon,productivitydropsandim

portsrise

Bigbangindustryreform

(1998)

Petroleumindustry

equatedtoNationalSecurity

Re-centralisationthroughassetsw

aps

CNPC,SinopecGroupandPetroChinaarecreated(1999)

Growthininternational

activity

AbipolarCNPCbeginstotakeshape

Source: EnerStratAnalysis

1949-19601961-1974

1975-19901991-2003

2004-2016Today

HISTO

RIC

AL PR

OG

RESSIO

N: IN

DIA

N O

IL & G

AS IN

DU

STRY

OilFieldsAct1948

Petroleumand

NaturalGasRules1959

FormationofO

NGC

RussianTechnicalCooperationProgram

mestarts

Conflictswithform

erim

perialcompanies

riseduetoconcernsofm

onopolies

Petroleumindustry

andnationalsecuritygetequated.

IOCxenophobiabegins

totakeshapeonthebackofm

onopoliesconcernsandtheIranCoupof1952

GoIstartstotakestepsfornationalisationofpetroleum

industry

IOCLiscreatedasa

nationalmarketing

company

1973Oilcrisesshapes

thedebateonstrategicsecurity,suspicionofforeigncom

paniesheightened.

NewNational

companiesarecreated

fromtheoilindustry

nationalisationinitiative

1974:OilIndustry

DevelopmentBoard

1976:BPCl1974:HPCL1984:GAIL1988:PetronetLNG

IOCsexitIndia

Aperiodcalled“thegoldenageofnationalcom

panies”begins,ONGCleadsthepack.

BalanceofPayment

CrisesinIndia(1991)

EconomicLiberalisation

Policyannounced(1991)

DGHasan“upstream

regulator”iscreated1993

NELProundsforprivatesectorparticipationannounced(1993)

FirstLNGdealissignedwithQ

atar(2002)

FirstLNGarrivesin2005

Newgasdiscoveries

inD6

TheReliancePSCsagaplaysout

TheLNGandPipelinesinfrastructurestartstopick(2010)


Source:IEEJ–EPRIN

C“FutureofAsianLNG”2017

Asean+India–

100MMTRangein2030Forecast

Source:IEEJ–EPRIN


Mostvolum

eriskfromIndia

Source:IEEJ

ASEAN–LIQ

UEFACTIO

NandREGASCapacity--2017

Source:IEEJ–EPRIN


Transmission Pipelines

Existing Gas pipelines

LPG Pipeline

GA

IL’s Upcom

ing PipelineR

IL’s East West Pipeline

Other proposed Pipelines

LNG

Terminal

JAG

DISH

PUR

PHO

OLPU

R

BH

ATIN

DA

BAREILLY

DISPUR

DELH

I

AG

AR

TALA

BA

RO

DA

LUC

KN

OW

PATNA

AH

MED

AB

AD

RAJKOT

KO

TA

MATHANIAG

WALIO

R

UJJAIN

AGRA

KOLKATA

GAYA

BOKARO

VARANASIJHANSI

DAH

EJ I & II10 m

mtpa

CO

IMB

ATO

RE

MA

NG

ALO

RE

MU

MBAI

BH

UB

AN

ESHW

AR

KR

ISHN

APA

TNA

M

NELLO

RE

BANGALO

RE

KO

LHA

PUR

SOLAPUR

KA

KIN

AD

A

VIJAYA

WA

DA

DABH

OL

5 mm

tpa

KA

NJIK

KO

D

AURAIYA

GO

A

CUTTACK

VIJAYPUR KA

NPU

R

NA

NG

AL

GURG

AUN

PUNE

BH

AR

UC

H

SUR

AT

HYDERABAD RA

JAM

UN

DR

Y

BHOPAL

BARMER

Hisar

Jhajjarr

Dadri –B

awana –

Nangal P/L

Chainsa –Jhajjar –

Hisar P/L

DVPL PH

-II

GR

EP II

EWPL

KOC

HI

5 mm

tpa

Dabhol-B

angalore P/L

Kochi-K

oottanad-Bangalore-

Mangalore P/L

Haldia-

Jagdhispur P/L

CH

ENN

AI

TUTIC

OR

IN

TIRU

CH

CH

IRA

PALLI

DA

MR

A

JAB

ALPU

R

BH

ILAI

JAISA

LMER

TAPI P/L From

Pakistan

Surat Paradip P/L

HAZIR

A5 m

mtpa

Gas N

etwork in India

GA

S NETW

OR

K IN

IND

IA


CICGDNETW

ORK–

23CITIESPROPO

SEDTOBE

CONNECTED–

56CITIES

CG

D N

ETWO

RK

OF IN

DIA

-THENEXTW

AVE


CHINAGASSU

PPLYTO2040–

EIA(billionsofcubicfeet/day)

TERMCO

NTRACTSSIGN

EDBYINDEPEN

DENTEN

TITIESSINCE2015

Source:S&PGlobalPlatts

ChinaHistoricalandFutureNaturalGasDem

andfromVariousSources

Source:HowardRogers,O

IES,varioussources,2015forecast

Actualfor2017,258BCM

CH

INA &

IND

IA: SIM

ILAR

ITIES AN

D D

IFFEREN

CES

KeySimilarities

KeyDifferences

PetroleumandGassectorsinbothcountriesareview

edas“victim

s”ofthemixedeconom

ymodel-thenom

an'slandbetw

eenplanned/centralisedgovernment

dominatedindustryandafreem

arketeconomy.

Bothcountrieshavechallengesofmanaginghigh

economicgrow

th,highpopulation,dangerousairqualityissues,lackofpoliticallyindependentinstitutionsandissuesofpolicytransparency

Bothcountriesarekeentoreduceconsumptionofhigh

emissionfossilfuels,developrenew

ableenergysystems

andfacedomesticpressurestoact.

Bothcountriespositthemselvesaslargeconsum

ersofcleanburningnaturalgas-bothare“talkingthetalk”

Bothcountrieshaveplanstodeveloptheirown

unconventionalresources.

Importantdifferencesinindustrystructure:w

hileChinahasverticallyintegratedregionalm

onopolystructures,Indiahasspecialisedandnationallyoperatingm

onopolystructures.

Bigdifferencesontheurgencyfordevelopinggasfiredelectricitygenerationcapacities:W

hileChinaissignallingaclearintenttoshiftcoalfiredgenerationtogasandatscale-suchsignalsarenotpalpableinIndia.

LargeindustrialsinChinaareemergingasdirectinternational

buyerswhereasIndianstateow

nedentitiesareplayingroleofdem

andaggregators.

Importantdifferencesintheoperationalstyleofpolicym

akersinbothcountries;especiallyw

hileChineseinstitutionsappearreticenttoopenlydiscuss[pricingreform

theIndianinstitutionsappeartobeopentodiscussion.

Chinawithsignificantinternationalpipelineinterconnection

systemshastheopportunitytoplayoffpipelinegasandLNG,

IndiawillbeaLNGdrivenplay.


LN

G m

ar

ke

t

in S

ou

th

Ea

st

/S

ou

th

As

ia&

US

-Ja

pa

nE

ne

rg

y/

Inf

ra

st

ru

ct

ur

e

Co

op

er

at

ion

April 2018

Takeshi SOD

A

Special Advisor

Ministry of E

conomy, Trade &

Industry (ME

TI), JA

PAN

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as Dem

and in the world

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Policy recomm

endations from IE

EJ/E

PRIN

C

1.DevelopingmoreliquidandflexibleLNGm

arketp

AA

Dp

2.PreparingforexpansionofUSLNGproductionandexportp

A,

Cp,

DC

Ap

AD

3.SupportingtheexpansionoftheAsianLNGmarket

pA

p

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pA

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tilization M

easures

Capacity B

uilding

500 people

In 5 years

Finance$10 billion of investm

ent by Japan’s public

and private sectors

Liquid L

NG

Markets

InternationalC

onsensus on the benefits

of LN

G

lThe 6

thConference w

as held on October 18

th, 2017 with attendance of

12 ministers from

consuming and producing countries.

lM

inister Sekoannounced Japan’s contribution and com

mitm

ent ($10 billion financing and 500 people

capacity building) to expand Asian LN

G m

arket.

Announcem

ent at LN

G Producer C

onsumer C

onference

US-Japan

Energy/Infrastructure

Cooperation

•U

Sand

Japanagreed

toprom

otecooperation

onthe

following

attheU

S-JapanSum

mit �

Nov 6, 2017

�

①To prom

ote Japan-US Strategic E

nergy Partnership (JUSE

P)under the Japan-US

Economic D

ialogue②

To collaborate on Infrastructure cooperation in third countries through financial cooperation betw

een government agencies

(i) MO

C b/w

ME

TI and U

STD

A, (2) M

OU

b/w N

EX

I/JBIC

and OPIC

<2 principles>(1)

Open and com

petitive energy marketare indispensable to ensuring secure energy supply

(2)U

niversal access to affordable and reliable energyis needed to help eradicate poverty, fuel

economic grow

th, and increase global security

<3 Geographic regions>

(1)Southeast A

sia(2)

South Asia

(3)Sub-Saharan A

frica

<4 Priorities>(1)A

dvanced nuclear technology(2)H

ELE coal technology, including CC

US

(3)Global m

arket for natural gas(4)Energy infrastructure

Japan-US Strategic E

nergy Partnership (JUSE

P)

+*

JBIC

-Japan Bank for International C

ooperation-

The M

ission of JBIC

JBIC

's mission is to contribute to the sound developm

ent of Japan and international economy

and society by providing financing services targeting four main objectives:

lProm

oting the overseas development and securem

ent of resourceswhich are im

portant for Japan

lM

aintaining and improving the international com

petitiveness of Japanese industriesl

Promoting the overseas business having the purpose of preserving the global environm

ent, such as preventing global w

arming

lPreventing disruptions to international financial order or taking appropriate m

easures with respect

to damages caused by such disruption (M

arket Stability)

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XI -N

ippon Export and Investm

ent Insurance -

Scope of Business (abstract)

1)To conduct trade and investment insurance business operations com

plying with the provision

of Chapter III of the Trade and Investm

ent Insurance Act of Japan.

2)To conduct business incidental to the business stated in 1) above.

Purpose To efficiently and effectively conduct insurance business of covering risks w

hich arise in foreign transactions and w

hich are not covered by comm

ercial insurance

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Way Forw

ard: Our Plan in 2018

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Th

ank

you

!

Takeshi SOD

A

(email) soda-takeshi@

meti.go.jp

IPAAFrederick J. Law

rence

VP-Economics &

International Affairs

Oil Country Tubular G

oods

Source: Census and IHS M

arkit

Rig Count –M

ore with Less

Source: Baker Hughes

Top Importers –

2017 OCTG

and LP

S.Korea697,086

1,062,1781,759,264

Mexico

160,131454,659

614,790

India392,950

8,900401,850

Canada175,442

183,929359,371

Germany

148,85658,617

207,473

Brazil47,340

158,285205,625

Argentina6,541

192,932199,473

Taiwan

60,113132,472

192,585

Austria0

163,569163,569

Russia30,839

127,508158,347

Japan54,104

89,930144,034

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