1. 1 Robert Pritchard APEC ENERGY TRADE & INVESTMENT TASK FORCE 16 November 2009 CURRENT RISKS & OPPORTUNITIES FOR LNG TRADE

2. 2 The Key Role of LNG A proven and affordable technology Not just a “transitional fuel” Reduces the pace of growth of global GHG emissions Alleviates energy security concerns

3. 3 APEC LNG Plants November 2009 EconomyCapacity (mtpa) Australia19.3 Brunei7.2 Indonesia36.6 Malaysia22.8 Russia9.6 USA1.4 Total96.9

4. 4 How LNG Trade is Conducted Most sold under 15 – 25 year long-term contracts Needed by both sellers and buyers for their security Spot and arbitrage markets developing

5. 5 Current Risks More LNG “looking for a home” (a good thing for APEC energy security) Development still depends on buyers entering into long-term contracts Carbon cost could cause “carbon leakage”

6. 6 Asia-Pacific Partnership (APP): Gas Market Growth Project Findings Producers and end users continue to rely on each other to develop the market Substantial growth opportunities Policies needed: –to support market development –provide certainty for investors

7. 7 What Should the Task Force Do? (i)Seek endorsement of Ministers for: vigorous expansion of LNG trade and investment the development of carbon trade (ii)Recognise importance of alignment of climate policies (iii)Recognise continuing importance of public education