LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012 ...
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LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Liquefied Natural Gas Limited5 Ord Street
West Perth WA 6005+61 8 9366 3700
www.LNGlimited.com.au
LIQUEFIED NATURAL GAS LIMITEDCorporate Presentation October 2009
Gladstone LNG ProjectFirst LNG shipment in 2012
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Overview
The LNG Limited Business
Exploiting the CSG to LNG Opportunity
Gladstone and Our Project
Future Growth Options
Key Proposition
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LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
LNG Limited – An Overview
LNG Limited is in the business of developing high margin mid‐scale LNG projects that connect affordable gas reserves with high economic value LNG markets.
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HIGH ECONOMIC VALUELNG MARKETS
AFFORDABLEGAS RESERVES
Gas Production
LNG Productionand Export
Terminal
Gas Transport(Pipeline)
LNG Transport(Shipping)
LNG Import Terminal and
Regasification
Gas Consumption
Gas Exploration
CURRENT FOCUS GROWTH STRATEGY CUSTOMERS & PARTNERS
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
LNG Limited – An Overview
Focused on exploiting mid‐scale LNG opportunities.
Team of world‐class professionals.
High‐calibre project partners.
OSMRTM liquefaction and membrane tank technology with clear competitive advantages.
Gaining long‐term access to suitable project sites and associated infrastructure.
Set to deliver Gladstone LNG – the first CSG to LNG export project in the world:Lower capital costs,
Shorter timelines,
Higher energy efficiency,
Lower environmental impact, and
Repeatable business model
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LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
LNG Limited – An Overview
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ASX Code LNG
Shares on Issue 173 million
Market Capitalisation AUD247 million (at AUD1.43/share)
Cash Reserves AUD11 million (at 30 Sep 2009)
Top 5 Shareholders 49% ownership
Top 50 Shareholders 68.5% ownership
Major Corporate Shareholders
Golar LNG Energy Limited (13.2%)Arrow Energy Limited (9.2%)
2.00
1.50
0.50
1.00
0.00
Oct OctAprJan
12 month share price (AUD)
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
LNG Limited – Our Board and Executive Team
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An world‐class team with strong capability in development, construction and operation of major energy and LNG projects, and reputation for managing risks and delivering outcomes.
AlintaGasARCO
Arrow EnergyBP
British GasCaltex Australia
ChevronChina Light & Power Hong Kong
Commonwealth BankDepartment of Infrastructure (QLD)
Gladstone Economic Industrial DevelopmentGolar LNG
Laing O’RourkeNiko ResourcesOrigin Energy
Ports Corporation of QueenslandShell
Woodside PetroleumWorley Engineering
Phil Harvey Chairman
Richard Beresford Non‐Executive Director
Nick Davies Non‐Executive Director
Bill Hornaday Non‐Executive Director
Gary Smith Non‐Executive Director
Maurice Brand Managing Director & Chief Executive Officer
Paul Bridgwood Executive Director & Chief Technology Officer
Norm Marshall Executive Director & Chief Financial Officer
Michael Schaumburg Project Director & General Manager
Geoffrey Ellison General Manager – Development
John Drew General Manager – Operations
Garry Triglavcanin Group Commercial Manager
Lincoln Clark Group Engineering Manager
David Cliff Managing Director Gas Link Global
David Gardner Company Secretary
INDUSTRY EXPERIENCE
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Exploiting the CSG to LNG Opportunity
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Strong growth in Queensland CSG reserves. Cumulative Australian gas consumption to 2030 not expected to exceed 26,000 PJ, creating significant gas export opportunity.
Queensland CSG positioned well relative to global LNG production nodes in supplying Asian LNG markets. These are premium LNG markets with price linked to oil.
Bowen & Surat Basins2P – 15,858 PJ3P – 36,969 PJProspective – 43,261 PJ
Galilee BasinProspective – 21,745 PJ
CSG‐LNG Margin Opportunity
CSG Supply Price
LNG Off-take Price
1.5mtpa LNG requires
~90PJ/yr gas
Bowen & Surat Reserves (2P & 3P)
HIGH ECONOMIC VALUELNG MARKETS
AFFORDABLEGAS RESERVES
(‘000 PJ)
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Exploiting the CSG to LNG Opportunity
LNG LimitedDevelopment Strategy
ConventionalDevelopment Strategy
Securing gas supply Mid‐scale reserves targetedPartnerships or integration
Large‐scale reserves onlyAcquisitions / integration
Accessing LNG markets Partnerships ordirect marketing to users
Short‐term contracts possible
Direct marketing to users orinternal trading
15‐25 year contracts required
Key project characteristics
Low capital costHigh efficiencyLow emissions
Reduced time‐to‐market
High capital costMediocre efficiency
Prolonged development schedule
Liquefaction technology ProprietaryMid‐scale trains
LicensedLarge‐scale trains
Storage technology Membrane tanks Full containment tanks
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CHALLENGING THE CONVENTIONAL
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Gladstone LNG Project Overview
GLADSTONE LNG
PROJECT
3. LNG OFFTAKE2. GAS SUPPLY
5. PROJECT FUNDING & ECONOMICS
ARROW ENERGY HOA(TRAIN 1)
GOLAR & TOYOTA TSUSHO HOAs(TRAIN 1)
12 years + 24 month ramp-up90PJ/yr gas supply
12 years + 24 month ramp-up1.5 mtpa LNG offtake
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1. PROJECT LOCATIONFISHERMAN’S LANDING
OSMRTM LIQUEFACTION & MEMBRANE TANKSSKEC & Laing O’Rourke EPC ContractCB&I Project Management Consultant
USD500m CAPITAL COST (EXCLUDING PORT)BNP Paribas Project Financial Advisor
Acceptable returns on one train at floor price and strong economic improvement
with additional trains
4. TECHNOLOGY & EPC CONTRACTS
Under utilised site with existing infrastructure well suited to mid-scale LNG plant
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Fisherman's Landing LNG ProjectsProject Scale
Considered (mtpa)First LNG
LNG Limited ~3 2012
Curtis Island LNG ProjectsProject Scale
Considered (mtpa)First LNG
Origin and ConocoPhillips ~16 2014
Santos and Petronas ~10 2014
BG Group ~12 Late 2013
Shell and Arrow ~16 2014
1. Project Location
GLADSTONE LNGFisherman’s Landing
Curtis Island
LNG Export
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LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Advantages of Fisherman’s Landing
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Low complexity, under utilised and well suited to mid‐scale
LNG plant.
Site is serviced by a natural deepwater harbour with
dredging approvals for a larger Targinie Channel in place.
Site is protected and does not require breakwater
infrastructure.
Essential infrastructure elements including roads and
water are in place.
Potential for expansion.
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
2. Gas Supply
Success requires a reliable long‐term supply of affordable gas reserves of the right volume and specification.
Heads of Agreement with Arrow Energy for CSG of specified quality restated in February 2009 and progress of Arrow’s project being carefully monitored.
Requisite Pipeline Licence from Surat Basin to Gladstone Gas Gate required by Arrow.
Entire gas supply for Train 1 sourced from Arrow (1,200 PJ):
45PJ/A (Year 1) Ramp‐up gas,
75PJ/A (Year 2) Ramp‐up gas, and
90PJ/A (Year 3 – Year 14) On‐stream gas.
CSG floor price with upside linked to oil price agreed.
Mid‐scale LNG trains easily duplicated...major benefit to gas suppliers.
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GLADSTONE LNGPROJECT
Arrow Energy Limited (ASX:AOE) is Australia's largest holder of CSG acreage with interests in more than 65,000 km2 and currently certified gross gas reserves of 703 PJ (1P), 4,092 PJ (2P) and 9,312 PJ (3P).
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
3. LNG Off‐take
Heads of Agreement with Golar LNG Energy in February 2009 to deliver LNG to Golar at the existing Fisherman’s Landing No. 5 Berth at The Port of Gladstone on a free on board (FOB) basis.
Golar entered into a Heads of Agreement with Toyota Tsusho in September 2009 to purchase 1.5 MTPA from Gladstone LNG.
Entire LNG production from Train 1 sold:
45PJ/A (Year 1) Ramp‐up gas,
75PJ/A (Year 2) Ramp‐up gas, and
90PJ/A (Year 3 – Year 14) On‐stream gas.
LNG floor price with upside linked to oil price agreed.
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Golar LNG Limited (OSE:GOL and NASDAQ:GLNG) is one of the world’s largest independent owners and operators of LNG carriers with over 30 years of experience. Its subsidiaryGolar LNG Energy Limited is advancing the company’s midstream to upstream integration.
Toyota Tsusho Corporation (TSE:8015) is the trading company of the Toyota Motor Group and is the sixth largest trading company in the world. It undertakes a wide range of business including trading, manufacturing, processing, and retailing.
Success requires long‐term sale of high economic value gas to off‐takers and contracted end‐buyers with solid credit ratings.
GLADSTONE LNGPROJECT
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Technical highlights of LNG Limited Approach Benefits for LNG Project Development
Smaller land access requirement Increases ability to strategically locate LNG projectsPotential to site closer to gas supplyPotential to site closer to existing infrastructure such as sheltered deepwater harbours and roads
Simple and efficient processUsing proven liquefaction technologyLow equipment count
Highly efficientLow construction costEasier installationEasier operation & maintenanceFast shut down and start upFaster on‐site construction
Use of proven membrane tank technology Lower construction cost of around 50%Faster construction by around 8 months
4. Technology and EPC Contracts
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Mid‐scale liquefaction technology is critical to LNG Limited’s strategic focus in developing mid‐scale LNG projects.
OSMRTM ProcessDeveloped and owned by LNG Limited
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
MixedRefrigerant System
MR Cooler (x2)
BOGCompressor (x2)
Feedgas
LNGShipLoading
CHP Plant
Inlet AirChiller
SuctionScrubber (x2)Once
ThroughSteamGenertor
Gas Sweatening Plant
DehydrationPlantChillerHeater
LP Fuel(Aux Boiler)
Gas Turbine Compressor (x2) HP Fuel
ProcessSteam
AmmoniaRefrigeration
Plant
PlantPower
CO2
H2 0
MarineFlare
Ammonia Refrigerant
Aux Boiler
MR Make-up
OSMRTM PROCESS
AmineRegen
STG
ACC
BFWPump
LNG Storage& Ship Loading LNG Tank
LNG Pumps (x4)
H2 0
ColdBox(x2)
GridPower
To ColdBox # 2
From ColdBox # 2
4. Technology and EPC Contracts
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Cold-Box Liquefactio
n UnitPre‐Cooling
Cool Gas
Mixed RefrigerantCooling &
Compression
Membrane Tank Storage and Shipping
Cold‐Box Liquefaction
Unit
1
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OSMRTM KEY DESIGN FEATURES
Simplicity in design, construction and operation
Faster build
Reduced capital intensity
Mid‐scale
Location flexibility
Reduced capital requirement
High efficiency and low emissions
Better economics
Reduced emissions
Gas turbine inlet air cooling improves plant capacity by 15%
Supplementary cold‐box cooling improves plant capacity and efficiency by 20%
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Total energy efficiency improvement of 30%over conventional LNG processes results fromOSMRTM process innovations:
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
4. Technology and EPC Contracts
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Performance Metric C3 MR* Optimized Cascade* OSMR
Total Plant Efficiency
90‐92%90‐93%
(Aero Derivatives)93‐94%
(Aero Derivatives)
Availability 92‐93%92‐94%
(2 in 1 Train)95‐96%
(2 in 1 Train)
Liquefaction Process Comparison
LNG Limited’s OSMRTM Process will have superior performanceagainst globally dominant liquefaction technologies.
Credible independent technical validation obtained.
Project Execution
SK Engineering & Construction (SKEC) and Laing O’Rourke (LOR) jointly undertaking FEED to ensure definitive and seamless EPC Contract. SKEC and LOR are proven contractors in major infrastructure projects and both have strong balance sheets.
CB&I, the world’s leading EPC contractor in conventional LNG storage and with recent large‐scale LNG plant EPC experience, has been appointed Project Management Consultant to mitigate execution risks.
*Company estimates based on information in the public domain.
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
5. Project Economics and FundingPROJECT FUNDING
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Golar LNG Energy providing financial support to LNG Limited as agreed in Equity Support Agreement.
BNP Paribas appointed as Project Financial Advisor.
USD250m Equity (50%) USD250m Debt (50%)
Finance to be sourced from:40%
40%20%
LNG LimitedUSD100m
Golar LNG Energy & Toyota TsushoUSD100m
Arrow EnergyUSD50m
Banking Consortium
Export Credit Agencies
Equipment Suppliers
USD500m* Project Capital Cost‡
*Subject to final exchange rates.‡Excluding port costs.
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
5. Project Economics and FundingPROJECT ECONOMICS
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Acceptable project returns for Train 1.
Low Train 2 capital cost (USD200‐250m) further improves project business case.
Gladstone Project Economics Summary Train 1
LNG Production Volume 1.5 Mtpa of LNG (Post Ramp‐up Period)77 million MMBtu/yr of LNG
Ramp‐up Period 24 monthsLNG Offtake / Gas Supply Price Margin Target ~USD2.50 per MMBtu of LNG at Floor PriceLNG Production Cost Target (excluding gas) ~USD0.50‐0.70 per MMBtu of LNG
Capital Cost USD500* million‡
Ownership (proposed) LNG Limited (40%)Golar LNG Energy / Toyota Tsusho (40%)Arrow Energy (20%)
*Subject to final exchange rates.‡Excluding port costs.
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Future Growth Options
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LNG Limited will grow through:
Gladstone LNG Project expansion – Train 2 gas supply key focus,
Upstream integration, and
Regional diversification.
Major opportunities are emerging in Australia and other global markets.
Commit to our next LNG Project and provide guidance in the current financial year.
HIGH ECONOMIC VALUELNG MARKETS
AFFORDABLEGAS RESERVES
Gas Production
LNG Productionand Export
Terminal
Gas Transport(Pipeline)
LNG Transport(Shipping)
LNG Import Terminal and
Regasification
Gas Consumption
Gas Exploration
CURRENT FOCUS GROWTH STRATEGY CUSTOMERS & PARTNERS
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Key Proposition
LNG Limited is in the business of developing high margin LNG projects.
Gladstone LNG remains the company’s strategic focus and is on‐track to deliver first LNG in 2012.
Next steps:Finalise development approvals to enable commencement of construction,Convert existing HOAs into definitive agreements,Raise project funding, andSecure gas for Train 2.
Current and future projects have strong economics and will be characterised by:Lower capital costs,Shorter development and construction timelines, Higher energy efficiency, andLower carbon emissions and lower overall environmental impact.
High‐calibre project partners and a driven team of experienced professionals will underpin our success.
Repeatable formula is underpinned by proprietary engineering, site selection, partner selection, and financing.
Project expansion, upstream integration and regional diversification underpin future growth options.
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LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Disclaimer
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The information in this presentation is not an offer or recommendation to purchase or subscribe for securities in Liquefied Natural Gas Limited (ASX:LNG) or to retain any securities currently being held. This presentation does not take into account the potential and current individual investment objectives or the financial situation of investors.
This presentation was prepared with due care and attention and the information contained herein is current at the date of the presentation.
This presentation contains forward looking statements that are subject to risk factors associated with the gas and energy industry. The expectations reflected in these statements are reasonable, but they may be affected by a range of variables that could cause actual results or trends to differ materially, including but not limited to: price and currency fluctuations, geotechnical factors, drilling and production results, development progress, operating results, reserve estimates, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates.
All references to dollars, cents or $ in this document is a reference to US Dollars, unless otherwise stated.
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
Liquefied Natural Gas Limited5 Ord Street
West Perth WA 6005+61 8 9366 3700
www.LNGlimited.com.au
LIQUEFIED NATURAL GAS LIMITEDCorporate Presentation October 2009
Gladstone LNG ProjectFirst LNG shipment in 2012
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012
LIQUEFIED NATURAL GAS LTD First LNG shipment in 2012