Trends in LNG Markets

1. Trends in LNG Markets

2. Global Liquefaction Capacity Forecast .

3. 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 ~ $6.00 - $8.00 /MMBtu by 2020

4. 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 2005 2006 2007 2008 2009 Total Total% %Unlikely Pre-2020 Pre -2020 Volumes % Pre - 2020 Japanese Cos 5.9 3.2 18.7 0.2 14.2 42.3 21% 0% 42.29 26% IOCs 14.1 8.4 17.8 3.8 4.7 48.8 24% 40% 29.43 18% Chinese NOCs 2.6 9.3 1.5 5.5 7.4 26.3 13% 11% 23.25 14% Korean Cos 5.1 2.1 4.6 1.0 3.5 16.3 8% 0% 16.28 10% European Cos 4.6 1.7 3.4 0.7 8.3 18.7 9% 20% 14.99 9% Other 5.7 - 1.0 0.5 7.6 14.8 7% 0% 14.80 9% Other Asia 3.0 - 3.0 4.0 7.8 17.8 9% 34% 11.80 7% Indian Cos - 2.5 4.8 - 7.5 14.8 7% 41% 8.75 5% Total 41.0 27.2 54.8 15.7 6 0.9 199.6 100% 19% 161.60 100%

5. 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

6. Australia Source for Majors

7. 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

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

9. LNG – A BRIEF STUDY • LNG Characteristics • LNG Cycle • Natural Gas: Production & Reserve • Demand: Natural Gas • LNG Scenario

10. 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 THE LNG CYCLE LNG projects comprise several distinct distinct elements, each of which is necessary to implement a successful project:

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

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

13. JETTY LNG DOWNSTREAM – BLOCK DIAGRAM Return Gas Blowers Flare / Vent BOG compressors Storage Tanks Vapor Return Arm Recon denser Vaporizer 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 Unloading Arms HP Send- Out Pump Re-gasification System

14. 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 --- 85.1 – 96.7% (Lean) Ethane --- 1.9 – 8.6% (Rich) Propane --- 0.68 – 4.1% i – Butane, n – Butane --- Traces – 3.0% Mol. Wt. --- 16.8 – 20.0 (Rich) Gross Heating Value --- 10.450 Kcal / NM Specific Gravity --- 0.44 – 0.50 2 2

15. 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.

16. Estimate of Natural Gas Reserves (TCM)

17. Estimate of Share of Gas Reserves • 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.

18. Estimate of Natural Gas Production (BCM / Year)

19. Prognosticated Natural Gas Demand

20. LNG Producing Countries

21. LNG CONSUMERS