New Market Study Published: Taiwan Oil & Gas Report Q1 2013

New Energy research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 12 February 2013

BMI View: Refinery expansion plans have been thrown into turmoil due to political intervention and Taiwan may not see a new plant built within the next decade. Meanwhile, a growing appetite for imported gas has created a need for fresh LNG purchase schemes, with Australian and Qatari volumes on the rise and Papua New Guinea set to become a new source of supply.

The main trends and developments we highlight in the Taiwanese Oil and Gas sector are:

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In January 2012, Ichthys LNG signed a legally binding sales and purchase agreement (SPA) with Taiwan's state-owned CPC. Taiwan will take delivery of liquefied natural gas (LNG) from the Ichthys LNG project offshore Western Australia. Under the terms of the 15-year agreement, Ichthys LNG will sell 1.75mn tonnes per annum (tpa) to Taiwan from 2017. This equates to 2.4bn cubic metres (bcm) of gas a year. CPC is taking a 5% stake in Royal Dutch Shell's Prelude LNG project in Australia. CPC has agreed to buy 2mn tpa (2.7bcm) of LNG from Shell for 20 years, from 2016.
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Australia's Woodside Petroleum has let lapse a US$45bn gas supply deal for the West Australian Browse LNG Project. The 2007 agreement with CPC expired in late June 2012 after both parties consented. The now-defunct deal would have seen supply of as much as 3mn tpa of gas supplied annually for 20 years.
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Taiwan's gas-fired power generation capacity will increase 67% by 2030, Minister of Economic Affairs Shih Yen-shiang said in October 2011. This rise in capacity will be a major driver of the strong and sustained gas demand growth trend. Taiwanese demand should be around 17.9bn cubic metres (bcm) by 2016. BMI forecasts a gradual rise in Taiwanese LNG imports throughout the decade, with volumes increasing from an estimated 16.0bcm in 2013 to 18.1bcm in 2017, and to 19.6bcm by 2021.
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Given large industrial demand, which is inherent in the energy equation, consumption of oil and power is expected to move broadly in line with the GDP trend. Taiwan's domestic crude oil production is expected to be less than 700 barrels per day (b/d) in 2012, meaning virtually all of the country's oil is imported. Our forecasts for crude oil consumption are for an increase from an estimated 1.08mn b/d in 2013 to around 1.19mn b/d by 2017, and to 1.31mn b/d by 2021.
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For 2013, Taiwan's oil and gas import bill is forecast by BMI at US$47.3bn, assuming an OPEC basket oil price of US$99.1 per barrel (bbl). By 2017, and assuming an oil price of US$93.3/bbl, combined oil and gas costs are put at US$49.6bn, rising to US$53.3bn by 2021, when the oil price assumption is US$91.50/bbl.

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