BW LPG Limited · OSL:BWLPG
BW LPG — Argus Americas LPG Summit - Miami 2015
18 slides from BW LPG's conference presentation, Feb 5, 2015
Slide 1: BW LPG - Argus Americas LPG Summit, Miami
BW LPG Argus Americas LPG Summit - Miami February 5 2015 1
Slide 2: Important information and disclaimer
Important information and disclaimer This presentation has been produced by BW LPG Limited (“BW LPG”) exclusively for information purposes. This presentation may not be reproduced or redistributed, in whole or in part, to any other person. Matters discussed in this presentation and any materials dis
Slide 3: Section I: Business Update - VLGC Market Overview
Section 1 Section I Business Update VLGC Market Overview
Slide 4: VLGC Fleet Growth & TCE Rates
VLGC Fleet Growth & TCE Rates Annual VLGC Fleet Growth vs. VLGC TCE Rates 1996-2014 25% $100,000 Fleet Growth 20% Fleet Growth Forecast 77,000 $80,000 TCE Rates 15% $60,000 10% $40,000 5% 5.3% $20,000 - (5%) - 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 5: VLGC & LGC Historical Rates
VLGC & LGC Historical Rates 2014 was a record year for both VLGCs & LGCs; VLGC spot rates currently at ~$70kpd Trailing Ten Year Monthly Nominal VLGC One Year Timecharter-Equivalent Rates ($ Per Day) $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 - January February March April May June J
Slide 6: Section II: Business Update - LPG Export Potential
Section 1 Section II Business Update LPG Export Potential
Slide 7: Consensus bull & bear views on effect of oil price drop on U.S. LPG exports
Consensus bull & bear views on effect of oil price drop on U.S. LPG exports • Lower oil price leads to lower naphtha price and narrower arbitrage • Rig counts, and thus production, will decline – Rig productivity has increased but average well productivity has decreased BEAR – Production can only be
Slide 8: Bear Argument #1 - Rig Count by Trajectory & Basin
Bear Argument #1 - Rig Count by Trajectory & Basin Declining rig counts will lead to decreased production growth U.S. Rig Count By Trajectory 2,500 Directional Horizontal Vertical 2,000 1,500 1,000 500 - Horizontal Rigs By Shale Play 1,200 Bakken Eagle Ford Haynesville Marcellus Niobrara Permian Uti
Slide 9: Bear Argument #2 – LPG Arbitrage
Bear Argument #2 – LPG Arbitrage European & U.S. propane prices have exhibited strong correlation to WTI since Opec announcement, resulting in the narrowing of the arbitrage window Propane Prices v Crude Price ($ Per Ton) VLGC Trader Profit Per VLGC Cargo Since 2012, USGC - Asia ($ Per Ton) $1,400 9
Slide 10: Bull Argument #1 - 2015 Capex & Production Guidance
Bull Argument #1 -2015 Capex & Production Guidance 10% production growth despite 24% decline in capex CAPEX ($m) PRODUCTION (mboe/d) Company 2014 2015 %Δ 2014 2015 %Δ Abraxas Petroleum $190 $53 (72%) 6 7 20% Anadarko Petroleum 8,918 8,000 (10%) 839 896 7% Antero Resources 3,050 1,800 (41%) 168 235 4
Slide 11: Bull Argument #2 - U.S. LPG Export Terminal Capacity
Bull Argument #2 - U.S. LPG Export Terminal Capacity Enterprise, P66 & Occidental all confirmed LPG export projects, underpinned by term contracts 45 Petrogas 40 Trafigura/Buckeye DCP Midstream 35 Pembina Sage Midstream 30 Occidental Phillips 66 25 MMTPA Sunoco Targa 20 Enterprise 15 10 5 - Q2 2014
Slide 12: Consensus U.S. LPG Production & BW LPG U.S. LPG Export Forecast
Consensus U.S. LPG Production & BW LPG U.S. LPG Export Forecast Export CAGR of 16% over next two years supported by doubling of export capacity over same period US LPG Production & Exports (mmtpa) 90.0 30.0 LPG Production (LHS) 80.0 LPG Production Forecast (LHS) (2014 - 2016 CAGR - 7.2%) 25.0 70.0 L
Slide 13: Quarterly VLGC Demand / VLGC Fleet / US Capacity Growth
Quarterly VLGC Demand / VLGC Fleet / US Capacity Growth Quarterly U.S. LPG Export Capacity / VLGC Demand / VLGC Fleet Forecast (YE 2013 Base = 100) 160 450 VLGC Demand (LHS) 400 150 VLGC Fleet (LHS) US Export Capacity (RHS) 350 US Export Capacity (Base = 100) 140 VLGC (Base = 100) 300 130 250 120 20
Slide 14: Top Export & Import Country Forecast
Top Export & Import Country Forecast Ranking Δ mmtpa CAGR 2013-17 2013-20 2013-25 2013-17 2013-20 2013-25 2013-17 2013-20 2013-25 1 USA USA USA 10.3 17.3 22.7 21.4% 16.8% 11.2% 2 Algeria Iran Iran 3.1 2.9 4.2 11.4% 21.5% 14.7% 3 Iran Algeria Algeria 2.0 2.2 2.6 31.6% 4.9% 3.2% 4 Abu Dhabi Australia
Slide 15: Panama Canal Expansions
Panama Canal Expansions Demand decreases by 1 VLGC assuming PC transit relative to CGH Main VLGC Trade Future Assumed VLGC trade AG – Asia US – Asia (PC)) Round trip sailing time: Round trip sailing time: 36 days 50 days (+39% compared to main VLGC trade) Growing VLGC Trade Future Expected VLGC trad
Slide 16: Section III: Business Update - Ethane Market Outlook
Section 1 Section III Business Update Ethane Market Outlook
Slide 17: Ethane Fleet Demand Outlook
Ethane Fleet Demand Outlook VLEC demand forecast of 20 – 30 vessels The most significant tonnage demand for ethane to date has been into Europe There are significant unrealized opportunities in Asia & Latin America for further development: Million tons per annum Ship Demand (# v 1 2 Region Cur
Slide 18: BW LPG
BW LPG