LNG Shipping Leaders23 June 2020 • 09:00-09:45 BST

Part ofMaritime Leaders Webinar Week22-26 June 2020

Presentation documents:Page 2: Debbie Turner, Howe Robinson PartnersPage 3: Riju Cherlan, BW LNG

© Howe Robinson Partners All rights reserved.1

Charter rates – where are they headed?

• More volatility• Increasing number of steam vessels

in open market• Around USD 20k premium for gas

injection narrowing in tight market• As gas prices fall, size and engine

less important• New volumes not increasing as fast

as vessels• Number of uncommitted vessels

could lead to hold on short term ordering

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TFDE Steam Gas injection

usd 000/d

FROM RESILIENCE TO REIMAGINATION RIJU CHERIAN

THE CONTENTS OF THIS PRESENTATION ARE THE AUTHORS SOLE RESPONSIBILITY.

PRE-COVID -19 SCENE

• Natural gas consumption continued to grow in 2019 although it cooled down compared to 2017-18 caused by warm winters, surge of output from US and Australia

• Global gas trade expanded, driven by LNG which contributed by 12% in 2019

• Coal to natural gas switching was the largest single contributor to consumption growth

• Rapidly falling spot prices in Europe and Asia as LNG supply outstripped demand growth

• 2019 was a record year for investment in LNG export projects with almost 95 bcm/y of new capacity confirmed

SOURCE: GAS 2020 IEA

Short term

• Significant demand drop as a result of Covid-19

• Over-supply of LNG

• Record-low gas prices in Europe and Asia

• Shipping demand and rates are under pressure

• Several cargoes cancelled / deferred

Medium- to long-term

• Low price stimulates demand

• LNG well positioned to displace coal

• Natural gas (and hence LNG) is viewed as a key bridging fuel from carbon intensive to renewable energy

• Longer term solid outlook for LNG provides for opportunities as markets rebalance

LNG MARKET DEVELOPMENTS

RESILIENCE

Survival in the immediate term

RETURN

Navigating to Next Normal

RE-IMAGINATION

Design for a New Economic Reality

FROM RESILIENCE TO RE-IMAGINATION

• Ensure continuity of operations • Impact on crewing operations• Covid 19 risk mitigations• Guidelines and outbreak

management plans• Supply chain stabilization• Operational excellence matters more

now more than ever

• New ways of working & collaboration

• New business models • Re-evaluate models for risk analysis • Accelerate digitalisation • Accelerate focus on climate change

and sustainability

• Adjust to new realities • Resume crew changes • Remote surveys of vessels • Vessel certifications • SIRE & ship approvals • Manage with travel/ quarantine

restrictions