Slide 1: Adding Value in the LNG Supply Chain
Teekay Shipping Adding Value in the LNG Supply Chain Bjorn Moller ONS Conference Stavanger, August 24, 2006 f TEEKAY – THE MARINE MIDSTREAM COMPANY ® www.teekay.com Good afternoon, ladies and gentlemen. I am excited to be here at this year’s ONS Conference and, in particular, to be participating on
Slide 2: Teekay – A Global Franchise
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Teekay – A Global Franchise f Founded 1973 by the late Torben Karlshoej f Transnational company with 5,100 employees worldwide f Largest tanker company by market capitalisation (NYSE: “TK”) f Transporter of more than 10% of the world’s seaborne oil f Lea
Slide 3: Leader in Marine Energy Transportation
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Leader in Marine Energy Transportation 40 Shuttle Tankers 24 Product 4 Floating 64 Crude Oil 14 Gas Tankers Storage Tankers Tankers Tankers The Teekay Marine Midstream Concept 3 This slide illustrates “The Teekay Marine Midstream Concept”, which refers t
Slide 4: The LNG Supply Chain
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® The LNG Supply Chain Gas Gas Reserve Reserve Export Export Transportation Transportation Import Import Gas LNG LNG Production Liquefaction Regasification Shipping Facilities Terminals 15-20% 30-45% 20-30% 15-25% of landed cost of landed cost of landed co
Slide 5: LNG Shipping – Facts and Figures
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Shipping – Facts and Figures f When super-cooled to -163oC, 600m3 gas becomes 1m3 LNG 0 Butane Propane - 50 Coldest temperature recorded on f 1959: Methane Pioneer (5000m3) carries - 100 Earth first LNG cargo (Antarctica) f Since then 33,000 LNG carg
Slide 6: LNG Shipping – Facts and Figures
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Shipping – Facts and Figures f One full cargo delivered by a Q-Max LNG carrier can heat every home in the UK for one day (26 million homes) ! 6 I found this statistic to be fascinating when I was preparing my notes for today: a full cargo delivered b
Slide 7: LNG Shipping Growth Outpaces Emerging Markets!
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Shipping Growth Outpaces Emerging Markets! Car Ownership in China: 19% wth: n nu al Gro A 2001: 5 million cars 2005: 10 million cars Source: Source: The The Economist Economist Global LNG Shipping Capacity: % 2 th: 2 l G row ua Ann 2005: 23 million m
Slide 8: Today’s Discussion
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Today’s Discussion The evolving role of shipping in the LNG supply chain PAST PRESENT FUTURE 8 Given the significant developments in the LNG sector overall, you would expect the role of shipping in the supply chain to be quite dynamic. On the following s
Slide 9: LNG Trade – The Early Years
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Trade – The Early Years f Gas was considered an unwanted, low- value by-product of oil production f LNG trade confined to countries with no indigenous gas reserves f Dedicated supply lines into regulated markets f Liquefaction (Malaysia, Indonesia) f
Slide 10: The Early Supply Chain Picture
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® The Early Supply Chain Picture Main Main Regasification Regasification Areas Areas Liquefaction Liquefaction Areas Areas Current Current Shipping Shipping Routes Routes Existing Existing Regasification Regasification Terminals Terminals Liquefaction Liqu
Slide 11: LNG Shipping Remains Static
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Shipping Remains Static f Little change in vessel characteristics: f 1975-2000: Standard LNG carrier was ~130,000m3 f Steam turbine propulsion only f Moss-type containment system f Liner-type trades = “Floating Pipeline” f Average number of ships bui
Slide 12: Success Factors in LNG Shipping – in the past
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Success Factors in LNG Shipping – in the past Key success factors: fLNG experience fProven record in health, safety and environment fReputation for reliable customer service fCompetitive operating costs SHIPPING THEME: “TRIED AND TESTED” 12 In this first
Slide 13: The evolving role of shipping in the LNG supply chain
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® The evolving role of shipping in the LNG supply chain PAST PRESENT FUTURE 13 13
Slide 14: LNG Lift-Off!
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Lift-Off! Global demand …shortfall of for gasnatural gas to is growing in grow key Global GlobalLNG …and demand is driving prices higher LNGDemand Demand steadily, but…….. markets… Strong Strongincentive incentivetoto expected expected to increaseata
Slide 15: Everyone Wants a Slice of the Action
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Everyone Wants a Slice of the Action f LNG has become fastest growing part of global energy trade f Number of exporting countries up from 8 (1996) to 21 (est. 2012) f More energy and utility companies getting involved f Integrated supply chain project mo
Slide 16: Logistics Chain - Getting Complicated!
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Logistics Chain - Getting Complicated! Main Main Regasification Regasification Areas Areas Current Current Shipping Shipping Routes Routes Liquefaction Liquefaction Areas Areas Regasification Regasification Terminals Terminals -- Existing Existing Future
Slide 17: LNG Shipping Scene – “Big is Beautiful”
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Shipping Scene – “Big is Beautiful” f Vessels changing dramatically to drive down unit transportation cost: f Standard vessel size grows to 150,000m3, then 160,000m3 f Jumbo vessels: 215,000m3, then 265,000m3 f New propulsion systems: dual-fuel diese
Slide 18: LNG Shipping Scene – Ramping Up!
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG Shipping Scene – Ramping Up! f Required annual investment in LNG shipping: $10-15 billion f Shipyards experience bottlenecks f Potential shortage of experienced crews and other LNG specialists f Shipping remains the “floating pipeline”, i.e. dedicate
Slide 19: Success Factors for Shipping Today
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Success Factors for Shipping Today New key success factors: fAccess to large amounts of low cost capital fClose ties with shipyards fMastering technical challenges in construction and operation of new ship designs fAvailability of experienced staff SHIPP
Slide 20: The evolving role of shipping in the LNG supply chain
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® The evolving role of shipping in the LNG supply chain PAST PRESENT FUTURE 20 20
Slide 21: LNG in the Future – Optimising the System
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® LNG in the Future – Optimising the System f Political / social factors shaping LNG industry: f Concerns regarding security of energy supply f National energy companies taking on greater market role f Local resistance to location of terminals (NIMBY, BANA
Slide 22: Logistics Chain - Options Options Options
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Logistics Chain - Options Options Options Main Main Regasification Regasification Areas Areas Current Current Shipping Shipping Routes Routes Liquefaction Liquefaction Areas Areas Regasification Regasification Terminals Terminals -- Existing Existing Fut
Slide 23: The New Dynamics of LNG Shipping
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® The New Dynamics of LNG Shipping Requirement for new, flexible solutions: f Floating storage and regasification terminals (FSRU) f LNG carriers with onboard regasification (Regas) f Ship-to-ship transfer services Energy Bridge Schematic f Ice-class tonna
Slide 24: Future Success Factors
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Future Success Factors …more new key success factors: fInnovation in logistics solutions fTrusted custodian of customers’ reputation fRisk appetite to invest in new concepts fFinancial strength to withstand risks fStrong project management skills SHIPPIN
Slide 25: Summing Up…
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Summing Up… THE CHALLENGE BEFORE AFTER 25 So, summing up, the challenge for LNG shipping is to successfully move from the simple picture on the left to the much more complex model on the right. 25
Slide 26: Summing Up…
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Summing Up… THE CHALLENGE BEFORE AFTER 26 ..or put differently, the LNG shipping industry was, until recently, enjoying the equivalent of a tranquil Sunday boat trip on the lake. LNG shipping has recently received a major injection of steroids, but the r
Slide 27: Shipping - Adding Value in the LNG Supply Chain
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Shipping - Adding Value in the LNG Supply Chain 9 9 9 9 9 9 9 9 9 9 9 9 “CREATING OPTIONALITY” p! To he rt fo “EXPANDING ing BOUNDARIES” ch a Re “TRIED AND TESTED” 27 In my view, the truly successful LNG shipping companies of the future will demonstrate
Slide 28: Teekay - The Marine Midstream Company
TEEKAY SHIPPING–THE MARINE MIDSTREAM COMPANY® Teekay - The Marine Midstream Company 28 28