in NW Europe By: <Author Name>, <Organization> By: - PowerPoint PPT Presentation

17 th INTERNATIONAL CONFERENCE & EXHIBITION ON 17 th INTERNATIONAL CONFERENCE & EXHIBITION LIQUEFIED NATURAL GAS (LNG 17) ON LIQUEFIED NATURAL GAS (LNG 17) Zeebrugge LNG terminal: from regas terminal to veritable LNG hub <Title of Presentation> <Title of Presentation> in NW Europe By: <Author Name>, <Organization> By: <Author Name>, <Organization> By: Pieterjan Renier, Fluxys <Date> <Date> 17 April 2013

Fluxys: gas infrastructure company for Europe BBL NEL INTERCONNECTOR TENP TERMINAL GNL DUNKERQUE TRANSITGAS LNG Transmission Storage terminalling 2 LNG 17 - 20130417

Zeebrugge LNG terminal: 25 years of operation  Reception of LNG carriers from 7 500 m³ to 266 000 m³ (Q-Max)  ~1 300 LNG carriers received: ~100 different ships  75 million tonnes LNG unloaded 3 LNG 17 - 20130417

At first: regas terminal for the Belgian market … 2008 2008 During initial supply contract:  Regas terminal as security of supply instrument for Belgian market  1 terminal user  Throughput capacity: 3.4 mt/y  Facility acts as attractor for new gas infrastructure investments 1987 4 LNG 17 - 20130417

… while developing the Zeebrugge area as key gas landing point Interconnector pipeline Zeepipe from Norwegian ⇆ United Kingdom gas fields LNG INTERCONNECTOR TERMINAL 1998 1987 To Zeebrugge : 9 bcm/y 20 bcm/y To UK : 27 bcm/y ZEEBRUGGE BEACH TRADING 1998 ZEEPIPE TERMINAL 1993 16 bcm/y Zeebrugge area: throughput capacity of ~ 50 bcm/y = approximately 10% of border capacity needed to supply Europe 5 Fluxys 01.2013 LNG 17 - 20130417

Zeebrugge Beach: attractive trading place providing price index GWh/day 2500  76 active traders  2012: net traded volume of 752 TWh 2000 1500 1000 500 0 6 LNG 17 - 20130417

2004-2008: open season for open access terminal services  3 terminal users  First capacity enhancement: doubling throughput capacity to 6.7 mt/y 7 LNG 17 - 20130417

As from 2008: creating an LNG hub for NW Europe 2008  Optimum take away capacity: security of supply instrument for NW Europe  Developing the terminal as a versatile tool for our clients Optimum LNG reception flexibility Optimum destination flexibility Reload LNG: Pipe gas ships and throughout 2008 tanker trucks NW Europe 8 LNG 17 - 20130417

Receiving LNG carriers: anything goes  Physical mooring: reception of any size LNG carriers: small - standard - Q-flex - Q-max (7 500 m³ to 266 000 m³ LNG)  Contractual set-up: combining long-term contracts with spot deliveries 9 LNG 17 - 20130417

Take away capacity from the terminal: ample capacity to all neighbouring countries and systems  The Netherlands:  United Kingdom: 11 bcm/year 27 bcm/year  Germany and further east: 13 bcm/year  Luxembourg:  France, Italy and Spain: 1.6 bcm/year 20 bcm/year 10 LNG 17 - 20130417

LNG price spreads: re-export opportunities 25 20 15 $/mmBtu 10 5 0 2010 2012 2013 2009 2011 Japan Spain Belgium US 11 LNG 17 - 20130417

LNG ship loading: a flurry of destinations Ship loadings 30 25 20 10 10 6 6 4 0 2008 2009 2010 2011 2012 12 LNG 17 - 20130417

LNG transport by road: truck loading service  Capacity of 4 000 loadings/year  Destinations: The Netherlands, UK, Germany, Poland > Industrial sites without pipe gas supply > LNG refuelling stations > LNG as fuel for shipping 350 316 300 250 200 150 100 65 50 5 0 2010 2011 2012 13 LNG 17 - 20130417

Developing the Zeebrugge LNG terminal into a hub for small-scale LNG as well Hamburg 500 km Amsterdam Rotterdam Antwerp Dunkirk Ghent Le Havre LNG as fuel for long-haul trucks: 5 mt/y potential LNG as bunker fuel: 40 mt/y potential Fluxys LNG terminal 14 LNG 17 - 20130417

LNG as a fuel: environmental benefits  Immediate impact on carbon footprint: on average 20% less CO 2  Immediate impact on health footprint: > Particulate matter and SO x : negligible > at least 50-60% less NO x  Fuel price Source: ESA 15 LNG 17 - 20130417

European Commission: clean fuel strategy propositions  Ships: LNG refuelling installations in all 139 maritime and inland ports on the Trans European Core Network (2020-2025)  Long haul trucks: LNG refuelling installations every 400 km along the roads of the Trans European Core Network (2020) 16 LNG 17 - 20130417

Shipping: severe sulphur emission standards key driver for changing over to LNG 0.1% as from 2015 in SECA zone Sulphur Emission Control Area World wide norm SECA norm  Fuel oil: 1-3% S  Marine Diesel Oil: 0.001 – 0.5% S  LNG: S negligeable IMO standards included in amendments to Sulphur directive by the European Commission 17 LNG 17 - 20130417

LNG as fuel for truck transport If you need LNG  US: you will have to liquefy natural gas  Europe: you could find it at large scale regas terminals, however - Seller’s reference: Asian LNG prices - Today’s market is too small to divert cargoes 50 45 Margin … but 40 $/mmBtu 35  LNG trucks 30  LNG refuelling station 25  Quid excise tax? 20  Quid LNG price? 15 10 5 0 Diesel LNG (Europe) LNG (Asia) Fuel Excise duties 18 LNG 17 - 20130417

LNG vs MGO price: room for market development 25 Margin … but $/mmBtu 20  LNG ships 15  LNG bunkering infrastructure  10 Quid regulation?  Quid LNG price? 5 0 HFO MGO LNG LNG (Asia) (Europe) Main challenge: developing downstream LNG infrastructure HFO and MGO, Rotterdam prices, 03 Apr. 2013 19 LNG 17 - 20130417

Downstream: a closer look at what is needed Bunker barge Loading of bunker barges and feeder ships: as from 2015 Fluxys LNG terminal Feeder ship Intermediate storage Bunker barge LNG trailer Loading of LNG trailers: already available LNG Cutting through the chicken-and-egg position: LNG Fluxys to invest in downstream LCNG LNG chain in Belgium CNG 20 Fluxys 01.2013 LNG 17 - 20130417

2nd jetty under construction: commissioning 2015 2 nd jetty  Reception of LNG carriers with capacity from 2 000 to 217 000 m³ LNG (including LNG bunker carriers) > Unloading and loading > Ship-to-ship transfers  Long-term market for bunker vessel loading developing: 200 berthing slots already sold under long-term contracts 21 LNG 17 - 20130417

Already supplied with LNG from Zeebrugge: LNG barges Argonon: LNG powered barge for Deen Shipping Greenstream LNG powered barge dedicated for Shell 22 LNG 17 - 20130417

… and LNG refuelling stations (some examples) LNG 24: Zwolle (NL) LNG Europe: Oss (NL) 23 LNG 17 - 20130417

CONCLUSIONS  Zeebrugge LNG terminal: successful metamorphosis into versatile LNG hub for shippers to be active on the European market > Multi-shipper operation combining long-term contracts with spot deliveries > Optimum reception flexibility > Optimum destination flexibility: pipe gas and LNG  LNG as fuel for ships and trucks > Significant market potential > Zeebrugge LNG terminal is ready > Challenge: developing downstream LNG infrastructure 24 LNG 17 - 20130417

Pieterjan Renier pieterjan.renier@fluxys.com +32(0)2 282 62 07 25 LNG 17 - 20130417