LNG Importation Initiative Saldanha –Cape Town … · LNG Terminal Opex Feedstock Cost Capex....
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LNG Importation Initiative Saldanha – Cape Town Corridor Fossil Fuel Foundation – 21 May 2014
Transcript of LNG Importation Initiative Saldanha –Cape Town … · LNG Terminal Opex Feedstock Cost Capex....
LNG Importation Initiative
Saldanha – Cape Town Corridor
Fossil Fuel Foundation – 21 May 2014
Cape West Coast Gas Development
ü Western Cape Provincial Cabinet defined natural gas as a strategic priority (May 2013)
ü Prefeasibility study on the importation of LNG concluded (April 2013)
ü Provincial Treasury makes funds available to drive agenda (Sept 2013)
ü Transaction Advisor appointed (October 2013)
ü Ongoing engagements with key stakeholders
Cape West Coast Gas Development
q Conceptual Design Phase (Pre-Feasibility), followed by aPreliminary Engineering Phase
q Prefeasibility study on the importation of LNG concluded.
Pre-feasibility studyq Gas Market:
q Conducted an extensive market update toverify value of “convertible” gas market
q Gas supply options:q piped gas from neighboring or near-
neighboring countriesq indigenous gas reserveq importation of LNG/CNG
q LNG Terminal Infrastructure:q offshore submerged terminalq submerged terminal – Port of Saldanha
Bayq conventional terminal - Port of Saldanha
Bayq Onshore infrastructure:
q ± 116 km transmission pipelineq ± 126 km Distribution pipeline
Phase 2
Phase 1
Potential gas markets –Atlantis, Cape Town Metropolis
q Existing 1 350 MWAnkerlig OC peak powerstation near Atlantis
q Ankerlig can beconverted to 2070 MWCCGT mid-merit powerstation
q Future potential gas-firedpower stations inMilnerton and/orSaldanha Bay
q Existing commercial & industrial markets in Atlantis & Cape Metropolis regionq Total identified market approximately 89 MMBtu/y (±1.8 MMt/a LNG)
Potential gas markets – Transportation Sector
q Existing Western Cape Transport Fleet –8 179 vehicles:
o MyCity – 267 busses
o Golden Arrows – 1073 busses
o Sibanye – 78 busses
o CCT & WCPG Fleets – 6 500 trucks &corporate fleets
o Logistics & distribution Fleets – 260delivery vehicles
q Total fuel consumption – 28.3 million litres per annum (± 1 MMGJ/a equivalent)
Industrial hubs – Atlantis & Cape Town Metropolis
Potential gas markets – Saldanha Bay
q ArcelorMittal:q Expansion of Electric Arc Furnace and caster
rolling mill operationsq Rare Metals Industries:
q Processing of titanium slag stockpiled atExxaro smelter
q BHP Billiton:q Manganese smelter
q Steel Authority of India:q SAEL steel smelter
q Frontier Rare Earths:q Rare earth separation plant for production of
rare earth oxidesq Dedicated chlor-alkali plant for production of
hydrochloric acid
Potential electricity requirements – Saldanha Bay
q An initial power requirement of 280 MW:q ArcelorMittal – 120 MWeq Exxaro Namakwa Sands – 80 MWeq Back of port industries – 80 MWe
q Potential expansion programs (2014 – 2016):q ArcelorMittal – 60 MWeq Rare Metals Industries (RMI) – 160 MWe
q Future potential programs (≈ 2018):q BHP manganese smelter - 580 MWeq SAEL steel smelter – 160 MWeq Frontier Rare Earths – 70 MWe
LNG supply options
Evaluation of LNG supply availability (2018/9)q Portfolio suppliersq East Africa
§ Mozambique - (Anadarko, Eni East Africa)§ Tanzania - (Ophir Energy, StatoilHydro)
q West Africa§ Angola - (Angola LNG)§ Nigeria - (Nigeria LNG, Brass River)
q Middle East§ Oman – (Al Qalhat LNG)§ Qatar – (QatarGas LNG Company, RasGas’ Ras Laffan City)
q Australasia§ Australia – (Chevron ‘s Wheatstone LNG)
LNG delivery description
q FSRU connected to demountable buoyserving as LNG terminal
q LNG shuttle tankers delivering LNG tothe FSRU from supplier(s)
q LNG availability from either technologyproviders or LNG supplier(s)
q Initial studies indicate a scheduleddelivery every 15 days (pending size ofFSRU & shuttle vessels)
q Approximately 30 hrs to connect,discharge & disconnect
q Methodology provide anchorageflexibility in Saldanha Bay region
q Security of supply – LNG availabilityq Short lead time
International FLNG projects
q 17% of projects in rough marine environmental conditions (tandem offloading)
q FSRU technology well suited to countries lacking natural gas infrastructure
FLNG Supply technologyq 22 FSRU re-gasification projects
worldwideq Approximately 30 project currently
evaluatedØ 16 projects in Asia/Middle EastØ 6 projects in South AmericaØ 11 projects in Europe/Africa
q 83% of new projects in benign waters(side-by-side offloading)
LNG Terminal Option – Offshore
q Semi-submerged LNG Terminalq Phase 1 – Atlantis, Cape Metropolis,
Paarl & Wellingtonq 69 Km Transmission Pipeline
q 105 KM Distribution Pipeline
q Phase 2 – Saldanha Bayq 62 Km Transmission Pipelineq 13 Km distribution Pipeline
LNG Terminal Option – Port of Saldanha Bay
q Port of Saldanha Bay
o Quayside terminal with land-based storage tanks
o Semi-submerged LNG Terminalwith permanently moored FSRU
o Breakwater construction withside-by-side offloading
Economic Results – Net Present Value
Case 1Case 2 Case 3
Case 1.1.1Case 1.1.2
Case 1.2.1Case 1.2.2
Case 2.1.1Case 2.1.2
Case 3.1.1Case 3.1.2
Case 3.2.1Case 3.2.2
500 MMGJ
700 MMGJ
900 MMGJ
1100 MMGJ
1300 MMGJ
1500 MMGJ
1700 MMGJ
1900 MMGJ
2100 MMGJ
2300 MMGJ
2500 MMGJ
$ 200 mill $ 250 mill $ 300 mill $ 350 mill $ 400 mill $ 450 mill $ 500 mill $ 550 mill $ 600 mill $ 650 mill $ 700 mill
Tota
l Gas
Offt
ake
Total Capital Cost
Net Present Value
Economic Results – Sensitivity Diagram
-2000
-1500
-1000
-500
0
500
1000
1500
75.0% 87.5% 100.0% 112.5% 125.0%
NPV
: $ m
ill
Sensitivity to Input Scenario
Sensitivity Diagram
Gas Sales Volume
Sales Price
LNG Terminal Opex
Feedstock Cost
Capex
Project Work Plan and Milestones
Year Year 1 Year 2 Year 3 year 4 Year 5 Year6 Year 7
Key Dates:NERSA/Governmental Approvals EIA ApprovalFinal Investment DecisionFirst Commercial Gas
Licencing:EIA Authorization & ApprovalNersa License Applications & Approvals
Transmission, Distribution & TradingGas Importation Registration
Government PermittingApplication for Gas ImportationApplication under Sea Shore ActPermit - Prevention of Marine PolutionApplication to NPA - National Ports ActSA Reserve BankSouth African Treasury
Legal AgreementsGas Supply AgreementsGas Transportation AgreementsGas Sales & Purchase Agreements
Project Funding
Construction Periods:Ankerlig Conversion
Onshore LNG Receiving Terminal Saldanha Bay Transmission Pipeline Development Saldanha/Atlantis/CT
Distribution Pipeline DevelopmentSaldanha Bay, Atlantis/Cape Town
Offshore LNG Terminal Transmission & Distribution Pipeline Development Phase 1 - Offshore to Atlantis/CT Phase 2 - Atlantis to Saldanha Bay
Distribution Pipeline DevelopmentPhase 1 - Atlantis/Cape Town Phase 2 - Saldanha Bay
Cape West Coast LNG Development - Typical Schedule of Activities
Engineering Procurement & Construction PeriodPlanning & Permitting Period
Dec 14
Dec 14
Jan 20Jan 18
Dec 14
Progress & the way forward – March 2014
Western Cape Provincial Cabinet defined natural gas as a strategic priority
Provincial Treasury makes funds available to drive agenda
Prefeasibility study on the importation of LNG (April 2013)
Transaction Advisor appointed (October 2013)
Studies in progressq Assessment for Marine Environmental Conditionsq Socio-economic Impact Assessmentq Environmental Screening & Safety Study
Promotion of LNG Importation to relevant government & private institutions i.e. NERSA, DoE, DPI, National Treasury, Eskom, PetroSA, IDC, DBSA, EIUG, etc
