FLNG Changing The LNG Industry

Transcription

1 FLNG Changing The LNG Industry SEB Enskilda Nordic Seminar Copenhagen, 07 January 2010

2 FLEX LNG overview When Bigger is Not Better

3 FLEX LNG Elevator Speech FLEX LNG was founded in 2006 with the objective to commercialize the world s first floating liquefaction units FLEX LNG Competitive Advantages Currently four LNG Producer hulls on order at Samsung Heavy Industries in Korea*) All units with a liquefaction capacity of mtpa Lumpsum, turnkey EPCIC contract for LNGP no.1 with options for future units A strong organisation in London, Oslo and Australia with broad competence and experience Debt Free Significant equity capital base World class yard taking EPCIC responsibility FLEX LNG Unmatched visibility on delivery Shortest construction time An advanced generic FLNG design with great adaptability for many fields Organisation focusing exclusively on FLNG Unmatched visibility on CAPEX *) LNG Producer hull includes hull, storage tanks, power generation, offloading equipment, topsides support, accommodation, ship-board turret system and all utilities nessessary to support the installation of the 1.7 MTPA topside 3 Concept Adaptability

4 FLEX LNG Producer Key facts Classification DNV 1A1, Floating Offshore LNG Liquefaction Terminal Overall (riser to offloading) Fuel Shrinkage: Approx. 10 % Maintenance 20 years on-station maintenance Turret Internal Submerged Turret Production system (STP) from APL Liquefaction Capacity: mtpa LNG Accomodation 150 POB (regular +temporary) LNG Storage Capacity: Up to m 3 Condensate/LPG Storage: Up to m 3 Feed Gas: Approx mmscf/day Image courtesy to Samsung Heavy Industries 4

5 Relationship Between FLEX LNG And SHI - Strong EPCIC framework is crucial in securing commercial viability Single contract Lumpsum, turnkey EPCIC (incl. on-site) Successful partnership with Samsung Heavy Industries FLEX LNG Single EPCIC contract Samsung Heavy Industries Clear legal responsibilities Close collaboration together with financial and legal advisors in order to ensure commercial structures that together with the EPCIC framework will result in bankable projects Umbrella Contract Topsides Hull EPCIC contract signed with SHI 18 th September

6 Key Applications For an LNG FPSO Small stranded offshore non-associated gas fields Provide a feasible development concept for small stranded offshore gas fields with 1-2 tcf of reserves Associated gas projects Provide a viable alternative for large scale associated gas flaring or reinjection projects (eg in West Africa, Gulf of Mexico) Onshore gas fields Offer a cheaper, quicker, and less complex solution for onshore gas fields (e.g. Papua New Guinea, CBM projects in Australia) Pipeline gas Locate LNG FPSO alongside a jetty. Liquefy gas taken from existing pipeline infrastructure (e.g. the domestic pipeline grid) Early production/cash flow Provide an early production system for large offshore gas fields Lead time to first cash flow can typically be cut by 50% Large gas field staged developments Accelerate production and provide lower production cost per ton for large developed gas fields that have liquefaction capacity constraints Deepwater gas fields/long tie-back distances Reduce CAPEX for deepwater offshore gas fields and longer tieback distances 6

7 FLNG Becoming a Reality - Potential FLNG project in the public domain as of end 2009 Company: Shell/Statoil Field: Nnwa Doro Location: Offshore Nigeria Company: Shell Field: NEMed Location: Offshore Egypt Company: Petronas Location: Offshore Malaysia Company: Shell Field: Prelude Location: Browse Basin, Australia Company: Teekay, ML Field: Kitimat Location: Offshore Canada Company: BG Field: Block 5c Size: 1.5 TCF Location: Offshore Trinidad Company: Inpex Field: Abadi Size: 10 TCF Location: Offshore Indonesia Company: Talisman Field: Pandora, Rift Location: PNG Company: Woodside Field: Sunrise Location: Timor Sea Company: Petrobras Field: Tupi and Guara Location: Pre-salt discoveries, offshore Brazil Company: Ophir Field: Lykos and Fortuna Size: 1.5 TCF- 3TCF Location: Offshore Equatorial Guinea Company: Tullow Oil Field: Kudu Location: Offshore Namibia 7 Company: PTTEP Field: Coogee, Cash, Maple Location: Timor Sea Company: GDF Suez and Santos Field: Petrel, Tern and Frigate Location: Bonaparte Basin, Australia Company: FLEX LNG Field: Chuditch, Bilby, Wombat Location: Timor Sea

8 Minza Oil & Gas - Status FLEX LNG has signed a Share Purchase Agreement to buy Minza Oil & Gas which holds a 100% ownership of JPDA A in the Timor Sea Location and Prospects Licence was previously held by Shell which drilled the Chuditch discovery in 1998 Highly prospective area that is very well suited for FLNG projects and estimates suggest that field could hold in excess of 1TCF of recoverable resources New 2D Seismic programme has been completed, awaiting results of processing and interpretation Farm-out process underway and detailed discussions ongoing with several parties Target to reach agreement during Q

9 FLEX LNG overview When Bigger is Not Better

10 Private and Confidential Onshore LNG Development Costs Remain Stubbornly High The recent global economic turmoil has resulted in some cost reductions in the oil and gas industry The IHS CERA Upstream Capital Costs Index (UCCI), which tracks costs associated with the construction of new oil and gas facilities dropped 4 percent from May 2009 to November 2009 to an index level of 202 points UCCI Index New Paradigm For The LNG Industry Nov 2005 May 2006 Nov 2006 May 2007 Nov 2007 May Nov May 2009 Nov Values are indexed to the year 2000, meaning that capital costs of $1 billion in 2000 would in May 2009 equal $2.02 billion However, although the UCCI is dropping, it is bottoming out and it still has a long way to go before construction costs reach levels that would significantly reduce the cost of new LNG projects USD/ton liquefaction capacity Source: IHS Cambridge Energy Research Associates (IHS CERA) PNG LNG Angola (late 2013) (late 2012) Pluto LNG (2011) FLEX LNG (2013) ALNG ( Trinidad 2003) Annual LNG liquefaction capacity (mtpa) Gorgon LNG (late 2014) 10 Source: FLEX LNG, Industry Reports

11 Gorgon LNG Reaches FID at a Cost of US$37 Billion Private and Confidential In September 2009 the partners of Gorgon LNG Chevron, Shell and Exxon reached a Final Investment Decision for a 15 mtpa LNG project with targeted start up in 2014 Press Release from Chevron 13 September 2009 The cost of the overall project yields a unit cost of ~2,500 USD/ton liquefaction capacity However, when isolating the elements that are estimated to be unique to an onshore LNG project the unit cost is reduced to ~1,750 USD/ton liquefaction capacity. This is still more than double the comparable unit cost for projects utilising FLEX LNG s technology 11

12 Private and Confidential FLNG Bundles Facilities and Infrastructure Into One Unit - Building in a controlled environment greatly reduces CAPEX and complexity An onshore LNG development involves logistical complexities which are not always applicable to, and far greater than, an FLNG development An FLNG yard utilises infrastructure that has already been put in place and can thereby leverage from already existing investments Typical LNG Project Development Cost Breakdown Typical Onshore Development Cost Breakdown Source: WorleyParsons, J.P.Morgan Source: WorleyParsons, J.P.Morgan 12

13 Economies of Scale Are Not Working - Onshore LNG projects are ~50% more costly than medium-scale FLNG Private and Confidential When recently published CAPEX figures for LNG projects in Australasia are adjusted for costs which are unique to onshore LNG projects (to compare to unique costs for FLNG projects) the median USD CAPEX of 1344 USD/ton liquefaction capacity is ~50% above FLEX LNG s maximum cost of ~700 USD/ton liquefaction capacity Project Capacity (mtpa) CAPEX (BUSD) Unique to onshore LNG (71%) CAPEX USD/ton liquefaction capacity Gorgon PNG LNG QCLNG GLNG Wheatstone Pluto Sunrise Browse APLNG Scarborough Source: Company Reports, J.P.Morgan estimates Given the economies of scale principle large LNG developments should provide unit costs that are lower than the growing medium-sized FLNG industry. This is not the case and the LNG industry now seems to be accepting that the new paradigm for the onshore LNG industry will mean costs significantly above 1,000 USD/ton liquefaction capacity and a competitive disadvantage when compared to FLNG projects 13

14 Lack of Economies of Scale for Large LNG FPSOs 1 x Large FLNG Barge Multiple LNG Producers Large FLNG 1 x LNGP 2 x LNGP Production (mtpa) CAPEX (bn USD) ~ Shrinkage (%) OPEX (USD p.d.) 220, , ,000 Start / 2014 Two fields are evaluated of 2.0 and 5.0 TCF CAPEX service costs are calculated as a tolling structure where the NPV of the tolling fee equals the NPV of the CAPEX costs Discount factor is 11% 14

15 Medium scale FLNG Significantly More Cost Effective Liquefaction costs NPV project cash flow What are the reasons for medium scale FLNG being economically superior? Shorter lead time Lower CAPEX per tonnes optimised design 15

16 Maximise Existing Facilities and Knowledge Vessel beam (m) Comparing Floating Hydrocarbon Production Systems Existing FPSOs LNG Producer Large FLNG barges Vessel length (m) Large FLNG barge concepts do not fit within existing construction practices, Overall topsides weight Module size and weight Lifting and handling Yard slot Time in dock Equipment sizes Complexity Risk: Stretching Yard Limits Construction Completion Performance 16

17 Leading the Liquefaction Revolution From 2013 Onwards This is Going to Become a Familiar Sight The LNP Producer A generic design with great adaptability Wouter Pastoor