About Japan LP Gas Association

Transcription

1

2 About Japan LP Gas Association

3 Contents 1. Lowering of the mandatory stockpile level, plus other current topics 2. LP gas industry s initiatives in Japan 3. Challenges and efforts of the LP gas industry over the coming years 3

4 Chapter 1 Lowering of the mandatory stockpile level, plus other current topics 4

5 Building up national stockpile scheme completed lowering of the mandatory stockpile level for the private sector National stockpile target to last 50 days achieved in November 2017 (stored in five locations). After February 2018, the mandatory private sector stockpile level was lowered from 50 to 40 days worth of national imports. Total Capacity of National LP Gas Stockpiling Base: 1,500,000 tons Above Ground Underground 5

6 Japan s LP gas stockpile framework - timeline Year Mandatory private stockpile National stockpile LP gas stockpiles made mandatory with the revised Oil Stockpiling Act. Private sector stockpiles of 50-days worth achieved in March. Government panel proposed to lower stockpile levels. Relevant ministry ordinance revised in December. Private sector stockpiles reduced to 40- days worth effective from February. National LP gas stockpile target was developed to mitigate supply disruption risk after the Gulf War : ( 1.5 million tons / worth 40 days by 1991 standards). Nanao Base, Fukushima Base and Kamisu Base completed. 40,000 tons of propane released after the March 11 disaster (replaced by private sector stockpiles). Kurashiki Base and Namikata Base completed in March. National stockpile target achieved in November 2: 50-days worth, or 1.4 million tons. 6

7 LP gas import sources by country (propane and butane) US import share in Japan rose significantly in line with the US LP gas output growth. Total 13,424 11,574 11,604 10,696 10,521 10, % 13.4% 12.0% 12.9% 9.7% 4.9% ((1,000 千トン ) tons) 3.1% 29.1% 14.0% 24.4% 8.2% 13.7% 29.4% 28.3% 11.6% 12.0% 24.7% 22.4% 21.2% 31.8% 23.5% 18.9% 11.0% 11.2% 21.7% 17.6% 56.3% 12.1% 9.6% 15.8% 12.7% 11.6% 9.7% 10.8% 11.2% 5.9% CY2012 CY2013 CY2014 CY2015 CY2016 CY2017 Source: Japan LP Gas Association 7

8 Key LP gas exporting countries actual and forecast volumes LP gas seaborn supply is expected to grow further, notably from the US. Source: Poten & Partners 8

9 US shipping points Location Started Capacity Enterprise 2013* Targa 2013 Nederland 2015 Total Free Port million tons Marcus Hook 2016* Others *At the time of initial expansions. <Inside the Gulf of Mexico> Ferndale (Petrogas) Marcus Hook (Sunoco) GalenaPark (Targa) Nederland (Sunoco) Oiltanking (Enterprise) Freeport (Philips 66) 9

10 Efforts to diversify import sources Gulf States (Approx. 18 days) Ferndale, WA (Approx. 12 days) Houston, TX (Approx. 28 days) Marcus Hook, PA (Approx. 29 days) Ichthys Prelude (Approx. 8 days) VLGC bound for Japan passing through the new Panama Canal (June 27, 2016) 10

11 US propane export volumes vs. inventory levels US domestic inventories decrease as export volumes grow in ,000 Stock: Export volume: 3,000 ( 在庫量 : 百万バーレル ) ( 輸出量 : 千トン ) 1,000 barrels 1,000 tons 2, ,000 2,600 80,000 60,000 2,400 2,200 2,000 1,800 40,000 1,600 20,000 1,400 1, 月 2 月 3 月 4 月 5 月 6 月 7 月 8 月 9 月 10 月 11 月 12 月 1,000 在庫 2015 stock 2015 在庫 2017 stock 2017 輸出量 2015 export 2015 輸出量 2017 export 2017 Source: EIA 11

12 Trend of Mont Belvieu price compared with crude oil (WTI) MB price went up against crude oil in 2017, followed by tight LP gas supplies due to lower inventory levels. ($/T) Left axis: MB price Right axis: MB/WTI (%) 12

13 Trend of LP gas price produced in the Middle East vs. US (Japan arrival basis) Middle East price is strengthening its correlation with MB since Both CP and MB on the rise in 2017, together with oil prices increase. ($/T) $1,200.0 $1,100.0 Middle East price (CP plus spot freight) $1,000.0 $900.0 Panama toll raised +100,000 USD (VLGC round trip) $800.0 $700.0 $600.0 $500.0 Panama expansion $400.0 $300.0 US price (MB plus spot freight and plus terminal fee) $

14 ($/T) 1,000 Trend of crude oil price (AL) and CP (propane) Arabian Light crude oil (propane calorific equivalent value) Saudi Arabia CP Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 (%) % Saudi Arabia CP Arabian Light crude oil (propane calorific equivalent) 77.1% 70 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 14

15 Chapter 2 The LP gas industry s initiatives in Japan 15

16 Trend of LP gas demand in Japan Peaking in 1996, LP gas demand has been in decline and continued to do so in FY2016. (Demand) 20,000 19,703 kt 1,000 tons 18,000 14,151 kt 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 電力用 Electricity 化学原料用 Chemical 都市ガス用 Town gas 自動車用 Vehicle 産業用 Industrial 家庭業務用 Household Source: Japan 出典 : LP 日本 Gas LPAssociation ガス協会 16

17 Demand creating initiatives of each sector (year 2030 target) Household Volume of demand: 5.1 million tons Commercial Volume of demand: 2.2 million tons Industrial Volume of demand: 6.2 million tons Transport Volume of demand: 1.3 million tons High-efficiency water heaters 16 million units GHP Equivalent to 1,200,000 kw Fuel conversion 1,580,000 tons LPG vehicles 560,000 units Fuel cells for homes 1.5 million units FRP containers Expand usage Disaster response bulk supply system Facilitate installation Industrial LPG furnace Cogeneration Equivalent to 1,600,000 kw LPG taxis LPG trucks Source: Medium to long-term outlook, second revision, Japan LP Gas Association, November

18 Standardization of technology for producing FRP containers and acceleration of their usage Fiber Reinforced Plastics FRP container advantages Pressure resistance performance is 100% higher than iron containers, it does not explode in fires, it is very safe. Half the weight of steel, highly portable (reduce freight workload). Colorful and aesthetic, blends well with indoor and outdoor scenes. Plastic does not rust, suitable for boats and use in coastal areas. Technology standardization < 10 kg or lighter containers: From 2016> <20 kg containers: From spring 2018> 18

19 Crude oil Coal LP gas LNG Town gas Promotion of installation of GHP and cogeneration systems Support the conversion to a diversified energy system, considering the energy-saving measures and utilizing the experience of disasters. Gas heat pump (GHP) Cogeneration system Advanced Greenhouse Power demand peak control CO 2 emission coefficients comparison Index of emission factors per unit calorie is calculated as crude oil being 1 Workable also in cold district Backup power for hospitals 19

20 Trend of automotive LP gas consumption and the number of LPG vehicles (1,000 tons) Volume 1,626 1,594 1,570 1,486 1,409 1,370 1,295 1,231 1,177 1,110 1, (Vehicles) 350,000 (Stations) 2, ,000 1,800 1,774 1,713 1,700 1,622 1,612 LPG vehicles LPG stations 1,576 1,572 1,513 1,503 1,498 1,458 1,800 1, ,000 1, ,000 1,200 1, , , , , , , , , , , , , , , , FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY

21 Acceleration of the spread of LPG vehicles to respond to disaster-recovery and care-giving needs Toyota Motor JPN-TAXI <LPG hybrid> Nissan Motor NV200 <LPG bi-fuel> <Available since October 2017> <Taxi available since July 2015> For care-giving, ready for wheelchairs and seniors For diversifying fuel for official cars, introduction to local governments Certified for: Eco-Car tax break (national tax) and special treatment of green vehicles (local tax) <Standard passenger vehicle available since June 2017> LPG taxis supported disaster recovery activities in

22 Acceleration of the spread of Bulk-Supplying Systems responding to disasters Promoting supplying systems responding to disasters in public-private partnerships Kitchen appliance Daily use Gas A/C Gas water heater At times of disaster Bulk supplying system 病院 Hospital 学校 School Soup / Rice kitchen 避難所 Shelter Facility Budget Subsidy ratio Total subsidized systems Temporary hot bath 2018 government subsidy program Hospital, nursing home, permanent/temporary public shelter JPY 600 million 1) Private facility: 66% 2) Public facility: 50% 391 units (as of January 2018) 22

23 Improving supply-side resiliency measures Generator car and connector Kawasaki, Nanao, Yokkaichi, Fukushima Connector Aomori, Niigata, Chiba 344 Core filling stations Aomori Nanao Niigata Chiba Fukushima Kawasaki Yokkaichi 23

24 Chapter 3 Challenges and efforts of the LP gas industry over the coming years 24

25 Japan s energy policy from a long-term perspective Long Term Energy Outlook (2014 published version) Primary energy supply Revision in line with the Paris Agreement CO 2 emissions (Million kiloliter ) Fossil fuel Renewable and Nuclear (100 million tons) Electricity Transport Industrial Heating (home/commercial) billion tons LPG (3%) billion tons (-26% against 2013) 75% 25% 2050 年 Source: document from the 23 rd meeting of the Natural Resources and Fuel Committee of the Advisory Committee for Natural Resources and Energy, METI etc. 2.0 Carbon-free innovations Electricity: zero emissions Transport/heating: convert to electricity/hydrogen Carbon reduction outside Japan 0.2 bil. tons (-80% without reference) 25

26 LP Gas as potential fuel for ships Fuel of Korean ferry converted to LPG (GE Group) Development of LPG vessel, VLGC (Mitsubishi) World LPG Forum (Marrakesh, Oct 2017) <Challenges and efforts to spread LP Gas> Global LP gas demand outlook Borderless collaboration between LP gas business operators: still lacking leaders Establish supplying framework, partnership with current bunker operators WLPGA report on LPG for marine engines CO2 reduction as well as Sox control expected 26

27 Deregulation of Japan s domestic energy market FY2016 FY2017 FY2020 FY2022 Electricity market Retail market: completely deregulated Transmission and distribution sectors separated Town gas market Conventional regional monopolies Retail market: completely deregulated Pipeline sector separated Current number of households Total number of households Electricity only Town gas LP gas 53 million households* 6 million 25 million 24 million New players *incl. overlaps ICT Automotive industry, etc. <<<< Breaking down market borders >>>> Competition between energy sources accelerated by new market entries 27

28 Price transparency and normalization of business practices To make LP gas more attractive to consumers and win the competition between energy sources, business operators are required to align with government guidelines, disclosing the standard fee menu and the clear indications of the fee structure on utility bills, in an effort to enhance price transparency and normalize business practices. <Government decisions> (1) <Establishment of guidelines for normalizing LP gas retail business practices> Effective from February 22, 2017 (revised in February 2018) In the same manner as electricity and town gas, guidelines for normalizing business practices (e.g. announcing a standard fee menu and monthly payments, explaining the reasons before raising prices, and responding appropriately to customers inquiries) have been created. (2) <Partial revision of the Ordinance for the Enforcement of the LP Gas Act> Effective from June 1, 2017 Disclose the LP gas fee structure to consumers. (3) <Partial changes to the operation and interpretation of the Ordinance for the Enforcement of the LP Gas Act> Effective from June 1, 2017 Disclose the fee structure to residents in rental homes. Clarify interpretation of the Ordinance to avoid problems when removing the existing LP gas supply systems. 28

29 Summary: future efforts of the LP gas industry 29

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