Introduction to U.S. LNG Supply Chain and Infrastructure

GREat Seminar LNG 17 Thomas Quine President Northstar Industries, LLC

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1. U.S. LNG Supply and Supply Chain

2. Current, Planned, and Developing LNG Infrastructure

3. Conclusion

Appendix

A. Source and End Use Major Components

Presentation Segments

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23.5 TCF/Y Non-linear Use

20 TCF is produced domestically (The oil market is almost 2X the NG market; equivalent to approximately 40 TCFY of NG)

3 TCF Imported from Canada and declining.

.175TCF imported LNG in 2012, lowest since 1999.

Approximately 100 LNG Facilities in US; 37 located in Northeast.

8 Marine Import Terminal in the US.

Approximately 100 BCF of LNG Storage in US.

Approximately 3.5 TCF of Underground Storage in US.

Approximately 400 gas storage fields in US.

Gas costs per MMBTU: approximately $3.33 (Henry Hub: February 2013)

U.S. Gas Supply Summary

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EIA Projected Energy Spread Measured in Price Per MMBtu

Conclusion: the projected spreads will sustain a growing off pipeline LNG/CNG marketplace

2012 EIA Data 0.00

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Diesel Transportation (Delivered)

Fuel Oil Industrial (Delivered)

Propane Transportation (Delivered)

Propane Industrial (Delivered)

Henry Hub Spot

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Big Picture Potential

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U.S. Natural Gas Supply Chain: Pre Shale

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U.S. Natural Gas Supply Chain: Post Shale

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1. U.S. LNG Supply and Supply Chain

2. Current, Planned, and Developing LNG Infrastructure

3. Conclusion

Appendix

A. Source and End Use Major Components

Presentation Segments

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Approx. 100 LNG Facilities; Mostly LDC Peaking Plants

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Off Pipeline LNG Model

Project Components:

• Source Location Siting

• Permitting

• Design

• Pipeline Interconnect

• Gas Marketing

• Prefab Components

& Construction

• Liquefaction

• Truck Loading

• End User Facilities Permitting

& EPC

• Logistics

• Billing

• O&M

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1. U.S. LNG Supply and Supply Chain

2. Current, Planned, and Developing LNG Infrastructure

3. Conclusion

Appendix

A. Source and End Use Major Components

Presentation Segments

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EIA Projected Energy Spread Measured in Price Per MMBtu

Conclusion: the projected spreads will sustain a growing off pipeline LNG/CNG marketplace

2012 EIA Data 0.00

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Diesel Transportation (Delivered)

Fuel Oil Industrial (Delivered)

Propane Transportation (Delivered)

Propane Industrial (Delivered)

Henry Hub Spot

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1. U.S. LNG Supply and Supply Chain

2. Current, Planned, and Developing LNG Infrastructure

3. Conclusion

Appendix

A. Source and End Use Major Components

Presentation Segments

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LNG Source Site Major Components

Liquefaction & Storage Truck Loading

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1. Marine Terminals (Import or Export) • Ship Loading or Unloading • On-Site Storage • Liquefaction or Vaporization • Truck Loading

2. Peak-Shaving • Liquefaction or Truck Unloading • On-Site Storage • Vaporization • Truck Loading

3. Base-Load • Liquefaction or Truck Unloading • On-Site Storage • Vaporization • Truck Loading

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Three Major Types of LNG Facilities

1. Vehicular Fueling

• Truck Unloading or Liquefaction

• On-Site Storage

• Vehicle Fueling

2. Stranded Gas Reserves

• Liquefaction

• On-Site Storage

• Truck Loading

3. Land Fill Gas

• Liquefaction

• On-Site Storage

• Truck Loading

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Other Types of LNG Facilities

• Natural Gas Expander

• Cascade Refrigeration

• Mixed Refrigerant

• Nitrogen Recycle

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Types of Liquefaction Systems

1. Field Erected (API-620 Appendix Q):

• 1,000,000 to 42,000,000 Gallons (3,800 to 160,000 Cubic Meters)

• 0.5 to 2 psig Design Pressure

• Pre-Stressed Concrete

• Single Containment (9% Nickel Steel Inner Tank & Carbon Steel Outer Tank)

• Full Containment (9% Nickel Steel Inner Tank & Concrete Outer Tank)

• External or Internal Sendout Pumps

2. Shop Fabricated (ASME):

• 30,000 to 70,000 Gallons (113.5 to 265 Cubic Meters)

• 70 to 250 psig Design Pressure

• 9% Nickel Steel Inner Tank & Carbon Steel Outer Tank

• Horizontal or Vertical Configuration

• Above Ground or Buried

• Differential Pressure Sendout or External Sendout Pumps

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Two Main Types of LNG Storage Tanks

LNG End Use Site Major Components

Odorant Remote Heat or Ambient Vaporizers

Storage Truck Unloading

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• Direct Fired

• Indirect Fired Water Bath

• Indirect Fired Submerged Combustion

• Ambient Heat

• Remote Heated Shell and Tube

• Remote Heated Falling Film

• Open Rack Seawater

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Types of Vaporizers