Corpus Christi Liquefaction Project. Welcome to our Open House

Transcription

1 Corpus Christi Liquefaction Project Welcome to our Open House

2 Corpus Christi Liquefaction Project Schedule Milestone Front End Studies FERC Application Filing Commence Front End Engineering Design Notice to Proceed to EPC Contractor Train 1 Substantial Completion Train 2 Substantial Completion Train 3 Substantial Completion Date January - July 2012 August 2012 August 2012 November 2013 March 2018 December 2018 August

3 Corpus Christi Liquefaction Project Overview Purpose: to liquefy excess domestic natural gas, particularly in the Eagle Ford Shale, for export to foreign markets, while also providing the ability to import LNG. Project is on the same site as the LNG Regas Terminal which was permitted in 2005 but never built. Liquefaction cools natural gas to condense it into a liquid. Impurities present in pipeline natural gas (such as sulfur, water, and carbon dioxide) are removed. The gas is then progressively cooled to -260 F using a refrigeration process similar to an air conditioner or refrigerator. The project will have three identical units (called trains ) with a capacity of approximately 1.8 Bcf/d. Additionally, a 24-mile-long supply pipeline from the northwest is proposed.

4 24-Mile Pipeline to Supply Natural Gas

5 Corpus Christi Liquefaction Artist Rendition

6 ConocoPhillips Optimized Cascade SM Process The natural gas is received at about 1100 psig and 70 F 2. CO2, H2S, water, and mercury are removed to prevent freezing and damage 3. The natural gas is first cooled to -25 F by a propane refrigerant 4. Then to -130 F by ethylene 5. Heavy hydrocarbons which may freeze in the LNG are removed 6. The final cooling to -215 F is done by a methane refrigerant. 7. The LNG is pumped to the LNG storage tanks where it is flashed down to -256 F.

7 ConocoPhillips Optimized Cascade SM LNG Train Process Advantages Reliability design concept based on two 50% compressors for each refrigeration cycle Turn-down Two-in-one concept provides for ~100% efficiency at 60-80% utilization Intermittency fast start-up and cool-down Proven, Reliable Design Bechtel/Conoco Phillips collaboration with 40+ year history Proven, reliable template design Kenai Alaska, 1969 Atlantic LNG Trains 1, 2, 3 and 4, 2005 Egyptian LNG Trains 1 & 2, 2005 Darwin LNG, 2006 Equatorial Guinea LNG, 2007 Angola LNG, under construction Currently under construction in Australia 3 QCLNG Gladstone LNG Wheatstone LNG Australia Pacific LNG Cheniere s Sabine Pass Liquefaction Plant is waiting on Notice to Proceed 3.5 mtpa Liquefaction Train at Darwin LNG

8 U.S. Natural Gas Markets US Natural Gas Resources US Proved Non-Producing Reserves Tcf 3,000 2,500 2,000 1,500 1, ,543 2,119 1,747 1, Conventional Shale Tcf Source: DOE, Annual Energy Outlook Annual Production from Unconventional Reservoirs Bcf/d 8 Includes Eagle Ford, Bakken Shales; Granite Wash, Piceance & Uinta Tight Sands MMB/d 4.0 Source: EIA, US Crude Oil, Natural Gas and Natural Gas Liquids Proved Reserves, U.S. Rig Activity E 2012E 2013E 2014E 2015E 2020E Liquids Gas Source: Advanced Resource Intl; Cheniere Research. Current market fundamentals in the U.S. increased production, increased natural gas reserves and lackluster increase in natural gas demand have created an opportunity to expand into exports benefitting U.S. economy, creating jobs and reducing balance of trade

9 Large supplies of natural gas are available in the U.S. with access to existing pipeline infrastructure Lower 48 Recoverable Unconventional Reserves (Tcf) Shale Gas Plays Lower 48 States Shale CBM Tight Gas 366 1, Mancos Montana Thrust Belt Greater Green River Lewis Cody Hilliard Baxter- Mancos Piceance Hermosa Paradox Marfa San Juan Barnett Woodford Gammon Pierre Raton PaloDuro Bakken Williston Excello- Mulky Woodford Anadarko Granite Wash Barnett Permian Ft. Worth Maverick Sub- Forest City Cherokee Platform Fayetteville Arkoma Haynesville Bossier Michigan Illinois Antrim New Albany Black Warrior Chattanooga Texas Louisiana Mississippi Salt Marcellus Conasauga Appalachian Shale Gas Plays s Pearsall Sabine Pass LNG Rio Grande Embayment Eagle Ford Corpus Christi Liquefaction Site 5 Source: EIA, March 2010

10 Eagle Ford Attracting Enormous Investment $19 Billion Committed so far by Major IOCs San Antonio Wet Gas/ Condensate Oil ~70 Miles Wet Gas/ Condensate Dry Gas Corpus Christi Export Project Locator Map Eagle Ford Condensate & Crude Production Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 000 b/d Rig Condensate Crude Rigs

11 Expanding U.S. Natural Gas Exports Will Promote stability in domestic natural gas pricing by raising domestic natural gas productive capacity Stimulate state, regional and national economies through job creation, increased economic activity and tax revenues, including the direct creation of approximately 3,000 engineering and construction jobs during the course of the project and, indirectly, 30,000-50,000 permanent jobs in the exploration and production sector Reduced reliance on foreign sources of oil by promoting domestic production of petroleum and by encouraging the drilling of wells in areas where there is a significant amount of natural gas associated with crude oil and natural gas liquids ( NGL ) Improve U.S. balance of payments through the exportation of approximately 2 Bcf/d of natural gas valued at approximately $5 billion, and the displacement of $1.7 billion in NGL imports thus furthering the President s National Export Initiative Promote liberalization of the global natural gas trade through the fostering of a global, liquid market, based on prices cleared in free and openly traded natural gas markets Advance national security and the security of U.S. allies through diversification of global natural gas supplies Increase economic trade and ties with foreign nations, including neighboring countries in the Americas, and displace environmentally damaging fuels in those countries

12 Corpus Christi Liquefaction Infrastructure and Jobs Infrastructure Investment ~ $10 B Direct Jobs About 160 permanent jobs at the terminal Average construction jobs of 1,800 for four to five years Peak of 3,000 construction jobs Estimated 15 million work hours Indirect Jobs Will support 30,000 to 50,000 permanent jobs in natural gas industry Construction timeline

13 What Is Liquefied Natural Gas (LNG)? LNG is natural gas that has been super-cooled to -260 F to condense it from a gas into a liquid Liquefaction reduces volume by 600-to-1 Stored cold in insulated containers at near atmospheric pressure Safe to store and transport LNG is colorless, odorless, non-corrosive and non-toxic When vaporized, LNG is only about half the weight of air

14 LNG is a safe, environmentally-friendly fuel LNG is odorless, non-toxic and non-corrosive LNG would rapidly evaporate if spilled, leaving no residue on water or soil, nor any slick or sheen Once LNG is returned to natural gas, produces relatively low emissions when burned to heat homes, generate electricity and fuel vehicles All facilities will be located within the existing Cheniere property boundaries, previously reviewed and approved by FERC and other federal and state agencies No impacts to Threatened or Endangered Species No impacts to cultural resources Dredge material will be used to cover old bauxite beds, greatly reducing current dust problem and protecting groundwater Wetland impacts will be mitigated through U.S. Army Corps of Engineers permit the new protection to be built around Shamrock Island Operation of new facilities will comply with National Ambient Air Quality Standards (NAAQS) and Texas Commission on Environmental Quality regulations Shamrock Island Mitigation Site

15 LNG Safety / Security LNG PROPERTIES LNG is stored in tanks at near atmospheric pressure If LNG is released, it quickly vaporizes to natural gas Natural gas is flammable only in a narrow range of 5% 15% of natural gas in air LNG vapors (methane) are not explosive in an unconfined environment LNG LIQUEFACTION PLANTS AND TERMINALS There are currently 38 LNG liquefaction plants and 87 LNG terminals in the world, with another 16 and 26 in construction (respectively) LNG liquefaction plants have had an exemplary safety record for 48 years The Terminal design emphasizes early detection, with gas, temperature and UV/IR sensors tied into a shutdown system Modern tanks composed of 9% nickel-steel, have been in use since 1954 and have never had a failure. The CC Liquefaction Plant will have full containment LNG tanks (each inner tank surrounded by an outer concrete tank 3 foot thick) Regulations require safety zones around LNG facilities large enough that any flammable vapors would not reach the facilities' property lines and any fire would not impact those beyond the property line PORT AND WATERWAY SAFETY / SECURITY The USCG determines the suitability of a waterway to transport LNG safely and creates safety and security rules for each specific port USCG conducts background checks of LNG carrier crews and conducts ship searches Access to the LNG Terminal will be tightly controlled through gated security and continuous surveillance monitoring and all workers will be required to have TWIC cards Safety zones are in place to safeguard carriers, harbors, ports and waterfront facilities as part of a facility security plan to minimize vulnerability LNG CARRIERS First voyage of LNG tanker Methane Pioneer occurred in 1959 LNG carriers have made more than 105,000 voyages without any major accidents or safety problems, either in port or at sea No LNG ship has ever had a loss of containment LNG ships are always double-hulled and feature primary and secondary cargo containment systems to prevent leaks or ruptures in the unlikely event of a grounding or collision

16 LNG Shipping Double-hulled, state-of-the-art tankers LNG is stored in a special containment system within the inner hull Kept at about 1.5 psi above atmospheric pressure at -260ºF Many safety features for cargo containment & fire prevention Well over 105,000 safe voyages 3

17 What Will I See?

18 Shamrock Island Mitigation Site Shamrock Island is an uninhabited island in Corpus Christi Bay that serves as an important rookery for large numbers of nesting birds Additional Breakwaters Beach erosion and a loss of wetlands along the northern end of the island diminish vital bird nesting habitat Corpus Christi Liquefaction has begun preparation work on compensatory mitigation at Shamrock Island for unavoidable impacts to aquatic resources at the Project site Mitigation will include the creation of additional breakwaters to protect the island, preserve tidal wetlands, and create additional habitat for submerged aquatic vegetation

19 Shamrock Island Mitigation Site

20 Who Is FERC? FERC is an independent agency that regulates and oversees energy industries in the economic and environmental interest of the American public with the intention of providing dependable, affordable energy through sustained competitive markets. Federal Energy Regulatory Commission: 888 First Street, N.E. Washington, DC Public Inquiries