HE Yury P. Sentyurin, PhDSecretary General

Gas Exporting Countries Forum (GECF)

4 April 2019

APPO Cape VII Congress and Exhibition

Malabo, Equatorial Guinea

Algeria

Bolivia

Egypt

Iran

Libya

Nigeria

Trinidad

and Tobago

Equatorial

Guinea

Venezuela

Russia

MEMBERS

Qatar

United Arab

Emirates

Oman

Norway

Kazakhstan

Iraq

Azerbaijan

OBSERVERS

Peru

Algeria

Bolivia

Egypt

Iran

Libya

Nigeria

Trinidad

and Tobago

Equatorial

Guinea

Venezuela

Russia

MEMBERS

Qatar

United Arab

Emirates

Oman

Norway

Kazakhstan

Iraq

Azerbaijan

OBSERVERS

Peru

G a s Re s e rve s

( 1 4 4 Tc m)

G a s Pr o d u c ti on

( 1 , 6 5 0 b c m)

45% 64%

Pi p e l i ne G a s Ex p orts

( 4 4 7 b c m)

54%

LNG Ex p o r t s

( 1 5 6 M t )

Gas Exporting Countries Forum (GECF)

AngolaAngola

2

70%

Where does gas industry stand (2018-2019)?

Global gas demand in 2018

grew at preliminarily estimated

4.6% annual growth (+170 bcm),

its fastest rate since 2010, driven

by higher energy demand and

substitution from coal

Gas demand growth was

especially strong in the United

States (+80 bcm or +10.5%) and

China (+42 bcm or almost +18%)

Continued growth in natural gas

demand driven by developing

countries due to environmental

concerns

Uncertainty in natural gas

demand in developed countries

due to push for renewable energy

particularly in Europe and restart

of nuclear in Japan

Natural Gas Demand

Growth in natural gas

production led by the U.S. as

well as the Middle East, Africa

and Russia

Decline in Europe’s natural gas

indigenous production (phasing

out of production from Groningen

gas field)

Natural Gas Supply

China became the world’s largest

natural gas importer in 2018, ahead

of Japan

Exponential growth in global LNG

trade expected to continue in the

short-term

LNG Trade

Shipping

LNG spot charter rates

exceeded $52000/day in

2018, growth of 84%

Moderate spot LNG

charter rates expected in

2019 mainly due to the

commissioning of new LNG

carriers

Convergence of global spot

LNG and natural gas hub

prices in the short-term

leading to a loss of arbitrage

across basins

Prices

3

Successive downward

revision of the global

economic growth

Economic Growth

• Large reductions in renewables subsidies

• Large-scale solar PV projects put on hold

• Incentives for gas supply chain (pricing of residential

consumers, less restrictions for foreign investors in

upstream, emissions standards, support to storage)

• Relaxed restrictions on coal, particularly for new

power plants.

China

• Adoption of the 8th long term electric plan

• Larger support to renewables (11% target by

2030)

• Coal continues to play a key role

• Nuclear capacity to decrease over the long

term. (But, construction of two previously

halted plants has restarted).

• Adoption of the 5th Strategic Energy Plan

• Focus on renewables and efficiency

• Nuclear plants restarting (target: 20-22% share by

2030)

• Advancing liberalization of gas markets

• Intensification of renewables auctioning

• Support to natural gas (upstream incentives (HELP

policy); advancing gas price reforms, reduction of

LNG taxes, support of gas as a back-up to

renewables and as a substitute to oil in transport

and industry)

• Support to domestic coal production and clean coal

technologies.

Japan

Other Asia

South Korea

• Efforts in the framework of ASEAN to achieve gas

and power integration; support to renewables and

energy efficiency.

India

• Endorsement of new regulations (“clean energy for all energy

package”)

• New energy efficiency and renewables targets (respectively 32.5%

and 32% by 2030)

• Adoption of Revised Energy Performance of Buildings Directive

• Carbon market reforms Phase IV

• Increased coal restrictions (phasing out coal; emissions standards).

European Union

• Actions in the context of the

implementation of energy

independence policy

• Opening new areas for oil and gas

exploration;

• Repealing the Clean Power Plan;

• Lift the barriers on federal coal leasing;

• Reconsidering methane emissions;

• Imposing import taxes for Chinese

renewable equipment.

• Policy push towards more renewable

energy and natural gas

• Gas supported as back up to renewables

(incl. hydro) and as substitute to oil

• Auctioning of renewable capacities

emerged as a main renewable support

scheme

• Advancing gas markets reforms to attract

investors in domestic supply and

infrastructure.

Latin America

United States

4

Energy policy map (as of April 2019)

Africa

• LNG2Africa Initiative .

• Year of Energy

• South Africa: Integrated Resources Plan

• Tunisia: to produce 25% of its energy from renewables

• Algeria: plan to deploy 22 GW of renewables by 2030

22%

32%27%

5%

2%

2%10%

2017

14,144

Mtoe

26%

29%21%

5%

3%

6%

10%2040

17,829

Mtoe+3,685 Mtoe

(+26%)

Natural Gas Oil Coal Nuclear Hydro Renewables Biomass and Waste

81%

76%

19%

24%

2017

2040

Fossil Fuels Non-Fossil Fuels

5

Natural gas in the global energy mix: 22% now to 26% by 2040

Source: GECF Secretariat based on data from the GECF GGM

The urban population is expected to be a primary demand driver

6

Urban population by region in 2017 and 2040 (mn)

+751 +6 +30 +98 +98 +120 +491

0

1000

2000

3000

4000

5000

6000

Asia Pacific Eurasia EUNorth America Latin America MENASub-Saharan Africa

55

63

48

58

33

63

76

82

80

63

38

58

65

52

66

36

62

78

84

82

65

42

62

69

58

74

44

64

82

86

86

67

49

20

30

40

50

60

70

80

90

2017 2025 2040

Share of urban population (%)

Source: GECF Secretariat based on data from the GECF GGM

Southeast Asia and India will remain the engines for the global economy and energy demand

7Source: GECF Secretariat based on data from the GECF GGM

3.6 3.7

3.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2000-2017 2017-2025 2025-2040

EU North America Developing Asia

Developed Asia Latin America Eurasia

Sub-Saharan Africa MENA

Projected GDP growth composition to 2040 (p.p. per annum) Projected GDP growth composition to 2040 (2017$

trillion in PPP)

+45

+121

+37

1.9% 4.9% 3.0%

0

50

100

150

200

250

300

2017 Developedeconomies

DevelopingAsia

OtherEconomies

2040

69

272

CAAGR 2017-2040

Global natural gas demand growth by region (bcm)

and associated CAAGR (%) Global natural gas demand growth by sector (bcm)

Gas demand: 1.7% CAAGR

+ 887+ 221

+ 220+ 174 + 63 + 11

+ 142

0

1000

2000

3000

4000

5000

6000

2017 Power

GenerationIndustry Transport Domestic

SectorsFeedstocks Heat

GenerationOther Uses 2040

Power Generation Industry TransportDomestic Sectors Feedstocks Heat GenerationOther Uses

+ 628

+ 477+ 244 + 139 + 113 + 82 + 35

0

1000

2000

3000

4000

5000

6000

2017 AsiaPacific

NorthAmerica

MiddleEast

Africa LatinAmerica

Eurasia Europe 2040

Asia Pacific North America Middle East Africa

Latin America Eurasia Europe

Source: GECF Secretariat based on data from the GECF GGM8

Global natural gas demand to increase by 46%, from 3709 bcm in 2017 to 5427 bcm in 2040

3.4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

AsiaPacific

NorthAmerica

MiddleEast

Eurasia Europe LatinAmerica

Africa TotalWorld

Annual average growth rate of gas production, 2018-2040 (%)

6.2%

9.2%

Africa’s share in global natural gas production (%)

2040

2018

0 100 200 300 400 500 600

2018

2040

Africa’s marketed gas production (bcm)

9

Increasing role of Africa in global gas supply

Source: GECF Secretariat based on data from the GECF GGM

93% 93% 91%86%

73%72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

100

200

300

400

500

600

2018 2020 2025 2030 2035 2040

Africa marketed natural gas production and share of GECF countries (bcm, %)

Algeria Angola Egypt Equatorial Guinea Libya

Nigeria Mozambique Tanzania Other Africa GECF Share

10

Africa global gas production and GECF contribution

Source: GECF Secretariat based on data from the GECF GGM

• Collective efforts to promote natural gas thanks to its environmental credentials and ability to

partner with renewables in power generation

• In transportation sector, natural gas needs to be promoted as bunker fuel & as NGV

• Need to promote and implement environmental policies that are friendly to natural gas, and to

pursue cooperationwith global environmental organizations

CCS is a must

Has to be addressed

Role of R&D

11

Natural Gas Weighted Against Substantial

Challenges

12

Tehran Declaration (the 3rd Gas Summit of The Heads of State and Government of GECF Member Countries, November 23, 2015, Tehran,Iran): To “enhance and strengthen cooperation, coordination and exchange of views among Member Countries and all stakeholders inthe industry to achieve the GECF objectives, inter alia through the creation of a GECF Gas Research Institute, subject to satisfactoryfeasibility study result, recalling that the location of the Institute shall be in Algeria, as well as cooperation in the fields of technology,logistics, management and development of human resources in order to promote efficiency, innovation, technology transfer andinternational best practices”.

Declaration of Santa Cruz de la Sierra (the 4th Gas Summit of The Heads of State and Government of GECF Member Countries, November24, 2017, Santa Cruz de la Sierra, Bolivia): To “strengthen and improve the analysis, technology transfer, training, research anddevelopment of the gas industry, through cooperation and coordination among GECF Member Countries, in particular through the GasResearch Institute inAlgeria”.

Research and development

Exchanging data, expertise and views

Sharing best practices and lessons learnt in the industry

GRI’s forms of cooperation

Gas Research Institute: unlocking the full potential of

gas through technological innovation

Conclusion

Natural gas w ill cont inue to

play a robust roll in the

future energy mix; it s

posit ion as an af fordable,

available and sustainable

fuel necessitates it s

inclusion in the dialogue

arrangement

Natural gas can cont r ibute

to f ight ing energy pover ty

and to fulf i l l ing climate

change object ives and the

Sustainable Development

Goals

GECF count r ies w ill

maintain or expand their

gas product ion capacity,

and w ill remain the most

reliable suppliers to our

valued consumers

At the hear t of the GECF’s

Long Term St rategy is the

idea that informat ion

exchange and dialogue are

the pr imary mechanisms

behind coordinated gas

market developments.

13