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LNG terminals of tomorrow
In search of the right balance between competitiveness and flexibility Jean-Marc Leroy CEO STMFC Gaz de France Vice-President Major Infrastructures Division
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European Gas Storage Workshop
Contents European LNG market perspectives: stronger competition in the LNG terminals? How can LNG terminals adapt to this new situation? Fos Cavaou terminal in this context Main conclusions Benoit Labaune
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1. LNG: a role in supply that increases rapidly
European Gas Storage Workshop 1. LNG: a role in supply that increases rapidly EU gas market : increasing dependance of foreign gas supplies Gas consumption increase ( : ~2%/year) Indigineous gas production decrease Dependance: 40% in vs 65% in 2020 LNG : the key issue Flexibility Security of supply Projected growth of LNG share in supply 2005: 10% 2020: 27% LNG imports Pipeline imports Domestic production Consumption : : between 1.5% and 1.9% per year (cedigaz) Global insight : %/year Dépendance (Global insight) Gas : % % Source : Global Insight Benoit Labaune
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1. Mediterranean basin: numerous LNG terminals planned
8 existing More than 5 extensions or under construction 8 in project
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European Gas Storage Workshop
Contents European LNG market perspectives: stronger competition in the LNG terminals? How can LNG terminals adapt to this new situation? Fos Cavaou terminal in this context Main conclusions Benoit Labaune
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2. What are the key characteristics expected from an LNG terminal?
An ideal location that ensures flexibility Several LNG routes Downstream gas market size Upstream availability and downstream flexibility Availability Port quality Available regasification capacities Large LNG specifications Downstream flexibility on send-out Competitiveness for the whole chain LNG production (~40% of total cost) + shipping (~40%) + + regasification (~20%)
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2. LNG terminal operation requires a compromise…
2. Slope depends on send-out Volume 1. Total storage space 3. Tanker arrival threshold: Available tank storage space > tanker volume Delta T: interval between LNG tankers Time Downstream objective: Low slope for continuous emission Upstream objective: minimize Delta T Contradiction ! LNG operation: the right balance between price and flexibility Key parameters: total storage space, send-out capacity…
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... between price and flexibility
LNG terminal characteristics fix the relation between price and flexibility… … nevertheless the operator has leeway for optimisation Price Operational rules: Optimization opportunities Availibility / Flexibility
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European Gas Storage Workshop
Contents European LNG market perspectives: stronger competition in the LNG terminals? How can LNG terminals adapt to this new situation? Fos Cavaou terminal in this context Main conclusions Benoit Labaune
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3. Fos Cavaou terminal characteristics
A new terminal near Marseille and existing Fos terminal Progress report 2005: construction start End 2007: berthing of the first LNG carrier (commissioning) 2008: start of operation Terminal characteristics Annual send-out capacity: 8.25 billion m3 / year 3 tanks with a capacity of 110,000 m3 each Berthing facilities: ready for 205,000 m3 LNG tankers Potential for the future: 800,000 m² site
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3. Fos Cavaou: a location that ensures flexibility
Several possible LNG routes Egypt Atlantic Basin Algeria Middle East Existing Fos Tonkin terminal Fos Cavaou terminal Port quality 24-hour access (tide independent) direct access from sea
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opportunities to develop UIOLI rules, secondary market
Conclusions Competition in LNG terminals will increase Shippers: reservation capacities reservation for allowing flexibility but not necessarily used opportunities to develop UIOLI rules, secondary market Consequences for LNG terminals more variability on operation Operators will adapt to new conditions accordingly commercial offer creativity operational flexibility
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