Trends in LNG Markets

Global Liquefaction Capacity Forecast.

Higher Gas Prices in Asia In the US, gas is a traded commodity with robust growth on the supply side, while is Asia LNG prices are defined by long – term contracts linked to the price of oil The price differential between the US and Japan, currently - $2.00 /MMBtu, is forecasted to grow to ~ $ $8.00 /MMBtu by 2020

Securing LNG New LNG Contracts over the last five years are dominated by Asian players and IOCs Indian companies make up a small up a small share of these contracts LNG Contract Deals Signed Between 2005 and 2009 (in mmtpa) Company Type Total Total% %Unlikely Pre-2020 Pre Volumes % Pre Japanese Cos % 0% % IOCs % 40% % Chinese NOCs % 11% % Korean Cos % 0% % European Cos % 20% % Other % 0% % Other Asia % 34% % Indian Cos % 41% % Total % 19% %

Contracting LNG from Liquefaction Project Future supply growth is heavily weighted to the Pacific Basin Atlantic Basin Projects in particular are hampered by geopolitical risks and growing domestic demand

Australia Source for Majors

Is Floating Liquefaction Potential Game Changer? Floating liquefaction holds great potential for LNG producers: -The new technology will allow for the development of smaller, more stranded gas reserves previously too distant from markets to monetize -Once proven, new developments could be online faster than traditional liquefaction projects, as NIMBY and permitting concerns are avoided, and the actual liquefaction “plant” may already exist (and is mobile) Australia will likely be the proving ground for the world’s first floating liquefaction project. About a dozen such projects have been proposed; half of these are in Australia. The country provides an ideal place to test the new technology because: -Producers face minimal to no political, environmental or regulatory risk in offshore Australia -Sufficient feedstock exists and is not threatened by domestic demand needs -Other proposed locations for floating plants include Brazil, Canada, Egypt, Indonesia, Iran, Iraq and Nigeria, most of which face greater risks for testing and proving this new technology -Shell has two other proposed floating liquefaction projects in Australia waters, as well as a proposed project in Iraq and in Egypt

PRESENTATION ON “Global Overview of the LNG Business and Key Trends”

LNG – A BRIEF STUDY  LNG Characteristics  LNG Cycle  Natural Gas: Production & Reserve  Demand: Natural Gas  LNG Scenario

THE LNG CYCLE Upstream: Gas Reservoir Development Gas Production Facilities … Treatment and Liquefaction LNG Storage, Loading Terminal and Jetty LNG Tankers Down stream: LNG Unloading Terminal and Jetty Storage Compression Pipeline and Downstream Consumer Development LNG projects comprise several distinct distinct elements, each of which is necessary to implement a successful project:

LNG UPSTREAM – BLOCK DIAGRAM Train - 1 Slug Catcher Gas Sweetening Dehydration Mercury Removal Dehydration Mercury Removal LNG Storage, Loading Sulfur Recovery LPG Condensate Fractionation Sulfur Storage, Loading Train - 2 Train - 3 Feed Gas From Offshore LNG Liquids Sulfur CO2+H2S

LNG TERMINAL – A SIMPLE DEPICTION (1) Marine Facilities (2) LNG Receiving and Storage Facilities (3) Vaporization Facilities LNG Tanker Jetty LNG LNG Tank Pump Cold Water Vaporizers Gas Export Press

LNG DOWNSTREAM – BLOCK DIAGRAM JETTY Unloading Arms Vapor Return Arm Return Gas Blowers Flare / Vent BOG compressors Storage Tanks Recon denser Vaporizer HP Send- Out Pump Re-gasification System To Pipeline LNG jetty, berth, unloading LNG Storage tanks LNG re-gasification system LNG Pumping System In-tank and External LNG Pumps Vapor handling system Supporting facilities

LNG CHARACTERISTICS  Methane in Natural Gas does not liquefy under pressure. To make LNG, Natural Gas must be liquefied through refrigeration.  Becomes liquid at – 160 C at atmospheric pressure.  Volume reduces by 620 times when liquefied.  Spilled LNG will crack a steel plate like boiling water hitting frozen glass. LNG Composition (Typical Mol %) N---0 – 1.0% Methane – 96.7% (Lean) Ethane – 8.6% (Rich) Propane – 4.1% i – Butane, n – Butane---Traces – 3.0% Mol. Wt – 20.0 (Rich) Gross Heating Value Kcal / NM Specific Gravity – 0.50

LNG – GREEN AND SAFE LNG is … Odorless, Non – toxic (harmful components removed) And non – corrosive. Less dense than water – evaporates if spilled in ocean or water bodies LNG vapors are lighter than air – less chance of ignition if emitted. LNG is not under pressure for shipping and storage. LNG does not explode. Natural gas burns more efficiently and cleaner than any other fuel.

Estimate of Natural Gas Reserves (TCM) North Americe South / Central America Europe & Eurasia Middle East Africa Asia Pacific Total

Estimate of Share of Gas Reserves CountryTCM%Share Russian Iran Qatar Turkmenistan Saudi Arabia America United Arab Emirates Nigeria Egypt Libya Algeria Indonesia Malaysia Iraq Norway Australia Other Total Major gas reserves away from mature markets Close to developing markets Russia & Iran hold 40% of Gas reserve. LNG exporting countries Hold 50% of reserves.

Estimate of Natural Gas Production (BCM / Year) North America South / Central America Europe & Eurasia Middle East Africa Asia Pacific Total

Prognosticated Natural Gas Demand

LNG Producing Countries EXISTINGUNDERPOSSIBLETOTAL CONSTRUCTIONPROPOSED ALGERIA – – 29.4 ANGOLA AUSTRALIA – – 82.7 BRUNEI EGYPT EQUATEORIAL GUIENA INDONESIA IRAN LIBYA MALAYSIA NIGERIA NORWAY OMAN PAPUA NEW GUIENA PERU QATAR RUSSIA TRINDAD UAE USA VENEZUYELA LNG YEMEN TOTAL – – 494.4

LNG CONSUMERS Belgium China France India Italy Japan Mexico East Mexico West Singapore South Korea Spain Taiwan UK US East Others Total