David-Stokes_Timera_EAGC_Nov18

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3 scenarios forprice evolution3 key drivers of increasing supply flex value1. Import dependency – longer supply chains2. Power sector swing – gas on margin + intermittency3. Ageing infrastructure – low investment this decade3 potential paths for European hub price evolutionSqueezeStrong Asian demandoutstrips supplyConsensusPrices ease with NewLNG + Russia flowsSlowdownLNG spills into Europe(e.g. demand shock)Pricing benchmarksST risk of price spikesacross Winter 18/19Source: Timera EnergyEuropean Autumn Gas Conference Nov 2018Note: Asia & Europestructurally convergedSource: Timera Energy6
New modelOld modelChallenge A:Value captureValue capture models(e.g. pipes, storage, regas)LT contractassetcustomer12345 trends impacting gasasset value captureTrendValue shifting to prompt‘Shock’ value risingLT contracts rolling offFlex value recoveringassethubOPTIMISEcommercialfunctionmultiplecustomers5 ways to boost midstream asset value1. Optimise asset variable costs(i.e. reduce cost hurdle to capture value)2. Optimise asset supply chain (e.g.entry/exit, maintenance, fuel gas, linepack)3. Retain asset flexibility into prompt(i.e. capturing vs selling out flex value)European Autumn Gas Conference Nov 20185Optimisation creating value4. Use hubs to enhance asset flex & services(i.e. de-link services from physical asset)5. Broaden/refine capacity product offering(e.g. customer netting, virtual products)7
Page 1 and 2: European gas marketMarket evolution
Page 3 and 4: Global gas marketis tighteningGloba
Page 5: bcmaKey driver:Russian flowsRussian
Page 9 and 10: Asset valuationChallenge C:Asset in

David-Stokes_Timera_EAGC_Nov18

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