a l t e r n a t i v e l o g o - memorial university of

ALTERNATIVE LOGO

January 2005

BackgroundProposal DriversOpportunitiesProject Scope

Facility ConceptsComponentsFacilitiesLocationPreliminary economics capex, opex, IRR

Discussion

CONTENTS CONTENTSCONTENTS

BACKGROUND BACKGROUNDBACKGROUND

BP Statistical Review of World Energy 2004

Proved natural gas reserves at end 2003



Distribution of proved natural gas reserves 2003



Natural gas production by area



Natural gas reserves-to-production (R/P) ratios



Natural gas consumption by area



Natural gas consumption per capita



Major natural gas trade movements


Current (2003) LNG trade movements

BACKGROUNDBACKGROUNDBACKGROUND

Import Capacity Current North American LNG Terminals

Lake Charles•BG: 100% capacity•630 MMcf/d – 1.8 Bcf/d in 2005•Storage: 6.3 – 9.0 Bcf•BG will have new capacity•BTU Range: 950 – 1200

Elba Island•BG/Marathon: 100% of capacity•440 – 800 MMcf/d in 2005•Storage: 4.0 – 7.3 Bcf in 2006•Shell will have new capacity•BTU Range: 1000 -- 1075

Total LNG capacity in 2005:

5.625 Bcf/d

Cove Point•1.0 – 1.8 Bcf/d•Storage 5.0 – 7.8 Bcf in 2005•Statoil will have new capacity•BTU Range: 967 – 1100

Everett•725 MMcf/d•Storage: 3.4 Bcf•Not open access•BTU Range: 950 – 1150

Energy BridgeExcelerate: 100% capacity500 MMcf/dAPL technology req.Operational Feb ’05BTU Range: no upper limit


Current US LNG Facilities


Historic and Proposed Baseload Capacity at Existing U.S. Receiving Terminals

Proposed LNG Marine Terminals in North AmericaBACKGROUNDBACKGROUND

BACKGROUND


Proposed Marine Terminals in the GOM – Offshore and Onshore

Greenspan calls for gas tradeBy Martin Crutsinger in Washington

THE US needs to expand the global trade in natural gas as a way to prevent future sharp price increases from harming its economy, Federal Reserve Chairman Alan Greenspan said today.

Greenspan said a dramatic rise in recent years in the price of both oil and gas for delivery six years into the future was almost certain to have an impact on the US economy. But he said the impact was likely to be greater for users of natural gas because they had no global supply to cushion price increases. "If North American gas markets are to function with the flexibility exhibited by oil, more extensive access to the vast world reserves of gas is required," Greenspan said in remarks to an energy conference sponsored by the Centre for Strategic and International Studies. Greenspan said imports of liquefied natural gas accounted for only two per cent of the US market last year, in part because environmental and safety concerns have limited the number of US ports with facilities to handle liquefied natural gas, or LNG, shipments.

But he said that situation could be changing. "Given notable cost reductions for both liquefaction and transportation of LNG, significant global trade is developing," he said. "And high natural gas prices projected by distant futures prices have made imported gas a more attractive option for us." Greenspan said the fact that worldwide imports account for 57 per cent of global oil consumption but only 23 per cent of natural gas consumption showed the growth potential for trade in natural gas.


Conditions in place:

• Rapid decline of traditional methane supply sources unable to meet existing and future demands

• Continued methane demand growth consistent with economic expansion, emissions-related pressures and convenience factors

• Growing requirement for security and stability of energy supply for US

• Huge methane import infrastructure deficiencies in US including terminal capacity, storage, blend flexibility

• Exponential growth of LNG supply side capacity and emergence of spot market

DRIVERS DRIVERSDRIVERS

OPPORTUNITYOPPORTUNITYOPPORTUNITY

Improve LNG import to North American by:

• Providing nearby transshipment facility(s) for suppliers to enhance North American market penetration

• Constructing a deepwater port terminal capable of handling existing LNG fleet and largest new-build tankers

• Providing for cargo transfer from conventional and new-build to buoy friendly vessels

• Facilitating spec blend of “site-friendly” LNG from various above and below-spec sources

• Providing typical transshipment benefits and efficiencies, including: storage and sales hub for any or all players, off-peak storage an quckenedmarket response, low demurrage, and low weather risk…

• Avoiding EPA/FERC regulations for new construction of LNG storage near heavily populated areas

PROJECT SCOPE SCOPEPROJECT SCOPE

PRESENT SCOPE: INITIAL PHASE:

• Port, storage and plant CONCEPTUAL layout to optimize flexibility and growth

• Dialogue with suppliers, shippers and importers for prospective use commitment are required to cure concept and mobilize cash flow for FEED

• Identification and securing of port sites for at least two LNG-GO facilities proximate to North American market

Customers Supply Side:

Dialogue ongoing with following parties:

Investment Profile and Participants:

Customers Demand Side:

Dialogue ongoing with following parties:

PROJECT SCOPE SCOPEPROJECT SCOPE

Shipping and Charter Players:

Facility CONCEPT CONCEPTCONCEPT

Primary Components:

PortConsiderations include proximity to prospective terminals, shipping route logistics, including bathymetry, safety and environmental regs., mooring options, number and size of vessels, and in situ infrastructure/port services

Piping and Metering Considerations include: ship to ship, ship to storage, ship to blend, storage to blend, blend to ship, storage to ship, plus other related to boiloff.

Storage Considerations include vessel size, blending requirements, tank accepted practices and cost efficiencies, spot market development, expandability…

Regasification and ReliquificationConsiderations include pipeline connectivity, local demand, boiloff rates …

CONCEPT CONCEPTCONCEPT

Facility Conceptual Layout:

Proposed Start-up Specifications:

Berthing Facilities 1@ 220,000 1@ 140,000m3

Offloading Rate 2 @ 10,000 m3

per hour

Total Storage Volume 350,000+ m3

Regasification Rate 150 mmscfd

Pipeline Pressure 750 psig

Boil off To recondenserplant

Liquifaction Boiloffmaintenance

(space for future 20 mmscfd)


Plant Schematic:

LNG Storage Tanks 3 @ 75,000 m3

LNG Blending Tank150,000 m3

Pipeline gas at export pressure

Cooling Tower

Metering& Valve Station

Recondenser

Rack Vaporizor

Pier Pipeline Rack

Low Pres. Pump

High Pres. Pumps

Trun

k R

ack

Pine Needle Plant


Loading, Transfer Unloading Schematic (finger pier option):

LNG Super Tanker220k m3

LNG Carrier Vessel135k m3

Buoy Friendly

Pipeline Rack to Plant

Pilot and tug supplemental

operations

Access to International Shipping LanesLocal anchorageSuitable regional bathymetryAccess to emergency response, piloting etc


General Source Contours Relative to Destination

Site Selection

Site SelectionCONCEPT CONCEPT

CONCEPT

Key Sources Transportation Routes

Site Selection

CONCEPTCONCEPT

Geographic regions within scope of consideration

Region 1 = GONORTH

Region 2 = GOSOUTH

CONCEPT

REFERENCE MAP FOR

GO SOUTHOPTION

SEB


CONCEPT

GO SOUTH Option – Prospective Sites


CONCEPT

GO NORTH OptionProspective Sites

LABRADOR SEA

Nain

Cartwright

NORTH ATLANTIC OCEAN

REFERENCE MAP FOR

GO NORTHOPTION

SEB

40o

55o

600 km

45o55o65o

LABRADORSt. Anthony

St. John’sBonavista

Cape Race

50o

45o

NEWFOUNDLAND

HalifaxCanso

Yarmouth

St.Andrews

Saint JohnNorth American Gas Grid

Gas Prone Areas

Placentia Bay:

• Deepwater• Considerable tanker handling

capabilities/services• Refinery, oil transshipment

terminal in operation• Industrial space available both

green field and brown• Politically/business friendly and

receptive to investment• Potential for future pipeline gas

from offshore resources

Site Selection


GRASSY POINT GREENFIELD OPTION

LONG HARBOUR INDUSTRIAL SITE BROWN FIELD OPTION


CONCEPT

GRASSEY POINT GREENFIELD OPTION Newfoundland Transshipment (NTL) Terminal at Whiffen Head, Placentia Bay

Proposed LNG Site at Grassy Point

Site SelectionCONCEPT CONCEPT CONCEPT

GRASSY POINT GREENFIELD OPTION - schematic


CONCEPT

LONG HARBOUR INDUSTRIAL SITE BROWN FIELD OPTION

Tanker Berth #1

Tanker Berth #2

Available Facility


CONCEPT

LONG HARBOUR INDUSTRIAL SITE - Schematic

CAPEX ITEMS

CONCEPTCONCEPT

OPEX ITEMS

CONCEPTCONCEPTCONCEPT

IRR

CONCEPTCONCEPTCONCEPT

DISCUSSIONDISCUSSIONDISCUSSION

To Be Ann.

Facility Conceptual Layout:

Expansion

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