apac 2015 - singapore lng in small and mid size power · pdf file300 mw fob h power tariff fob...

• KARI PUNNONEN

• AREA BDM, OIL&GAS BUSINESS, MIDDLE-EAST, ASIA &

AUSTRALIA

• WÄRTSILÄ FINLAND OY

1 © Wärtsilä 30 October 2015 K. Punnonen

APAC 2015 - Singapore

LNG in Small and Mid Size Power

Generation

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Disclaimer

This document is provided for informational purposes only and may not be

incorporated into any agreement. The information and conclusions in this document

are based upon calculations (including software built-in assumptions), observations,

assumptions, publicly available competitor information, and other information obtained

by Wärtsilä or provided to Wärtsilä by its customers, prospective customers or other

third parties (the ”information”) and is not intended to substitute independent

evaluation. No representation or warranty of any kind is made in respect of any such

information. Wärtsilä expressly disclaims any responsibility for, and does not

guarantee, the correctness or the completeness of the information. The calculations

and assumptions included in the information do not necessarily take into account all

the factors that could be relevant.

Nothing in this document shall be construed as a guarantee or warranty of the

performance of any Wärtsilä equipment or installation or the savings or other benefits

that could be achieved by using Wärtsilä technology, equipment or installations instead

of any or other technology.

All the information contained herein is confidential and may contain Wärtsilä’s

proprietary information and shall not be distributed to any third parties without

Wärtsilä’s prior written consent.


DISCLAIMER

AGENDA:

1. Company Profile

2. LNG Terminal with Power Plant

3.LNG Based Feasibility

SMALL AND MEDIUM SIZE LNG


Wärtsilä Corporation

19,000 professionals

Marine/

offshorePower Generation

Power Solutions for

• Listed in Helsinki

• 4.9 billion € turnover (2012)

PowerPlants

ShipPower

Services


© Wärtsilä 30 October 2015 Power Plants 20155

Wärtsilä Gas Fired Power Plants, 10 – 500 MW

Viking Grace, LNG Propulsion

Estonia, 250 MW

South Africa, 180 MW

© Wärtsilä 30 October 2015 Power Plants 20156

Wärtsilä LNG Import Terminals, up to 160.000 m3


ManGa Terminal - Finland, 50.000 m3

LNG Fuel System – Dominican Republic , 34 MW – 500 m3

LNG Recieving Terminal – Power Plant


“Does the economics add up for LNG based

small and mid size power generation?”

Wärtsilä Power Plant – Technical Solution

Power Output• Single Cycle, gas engine 9MW or 18 MW

• Multi Unit Power Plant

• Net Power at Step-Up Trafo: 50, 100, 300 MW

• Outgoing Voltage: 110 kV

Fuel Consumption• Fuel: LNG (Natural Gas)

• Generator set efficiency: 46%

• Own electrical consumption: 4 MW at 400V

• Plan Net Electrical Efficiency: 43,1 - 44,5%

Ambient Conditions• Average ambient temp: 29 C (min. 10 C, max. 40C)

• Height above sea level: max. 100 m

• Methane number 80

Operational Profile• Annual Running Hours: 2912

• Plant average load: 80%

• Utilization factor: 27%

Chosen Power Plant Characteristics for the study


Wärtsilä multi-unit Power Plant for

base load and intermittent power

generation:

• CMPP, 200 MW, Brazil,

• Fuel: Natural Gas

Power Plant Configuration

Plant Size 50 MWe 100 MWe 300 MWe

Prime Mover 6X20V34SG 12X20V34SG 18X20V50SG

Plant Net Output

@site conditions

53 MWe 106 MWe 304 Mwe

Net Electrical Eff.

Net Heat Rate

43,1%

8271 kJ/kWhe

43,2%

8250 kJ/kWhe

44,5%

8013 kJ/kWhe


LNG cons/day

@100% load

499 m3 998 m3 2778 m3


LNG Consumption at max. and average loads


Gas Consumption, max. Load 470 m3/day 941 m3/day 2741 m3/day

Gas Consumption, average

load – 27% capacity factor

125 m3/day 251 m3/day 731 m3/day


Annual Consumption,

Average load - 27%

49.000 m3 97.000 m3 269.000 m3

LNG Tank Size vs. Operational Profile


0

20 000

40 000

60 000

80 000

100 000

120 000

0 5 10 15 20 25 30 35

LN

G T

an

k S

ize m

3

Number of Days

LNG Tank Size vs. Capacity Factor300 MW

LNG Storage Tank Minimum Size:

Power Plant Sizes: 50 and 300 MW

20, 50 and100% utilization factor

7 – 30 day storage capacity

7 day reserve

10% heel requirement

0

5 000

10 000

15 000

20 000

25 000

0 5 10 15 20 25 30 35

LN

G T

an

k S

ize m

3

Number of Days

LNG Tank Size vs. Capacity Factor - 50 MW

Capacity Factor 20%

Capacity Factor 50%

Capacity Factor 100%

Operational Profile:

8 hours per day

Average load 80%

Utilization factor: 27%

Re-fill interval: 14 days

From 107.000 to 17.000 m3

LNG Storage Tank Capacity Determination

Main Parameters for storage tank capacity determination:

Refill every 14 days as per

shipping information

Safety inventory: 7 days

Heel requirement: 10%

Gas consumption as defined

For average gas consumption

Plant Size LNG-Tank Capacity

50 MWe 3.100 m3

100 MWe 6.200 m3

300 MWe 17.200 m3

50 MW Power Plant:

7000 m3 LNG Storage

Bullet steel tanks 7X1000 m3

pressurized 6 bar(g)

LNG Recieving Terminal – Power Plant


300 MW Power Plant:

17.200 m3 LNG Storage

Flat Bottom, full containment tank

Atmospheric pressure

Terminal Effect Constituents

LNG ”Terminal Effect”

LNG transportation •All in cost by LNG provider is considered. Gas price increase due to transportation.

All in Transportation Cost (US$/MMBTU) :•50 MW – 2,14 US$/MMBtu•100 MW – 1,85 US$/MMBtu•300 MW – 1,43 US$/MMBtu

Terminal Investment•Total Investment effect on gas price:

Effect on Gas Price (US$/MMBtu)Plant Size Capex Cost•50 MW 4500 €/m3 1,52•100 MW 3900 €/m3 1,29•300 MW 3500 €/m3 1,20

Terminal O&M •Operational cost relatively insensitive for Terminal size•Maintenance cost follows the size

Effect on Gas Price (US$/MMBtu)Plant Size Cost•50 MW 1,19•100 MW 0,70•300 MW 0,45

Investment Fundaments for Terminal•Existing harbour facilities – no maritime or off-shore works•Project Life time for evaluation and gas price calculations: 25 years•Weighted average cost of capital: 10%•LNG average inventory Working Capital between 3 to 15 M€ depending on the project capacity


LNG ”Terminal Effect”

Plant Size Terminal Effect -

$/MMBtu

50 MWe 4,85

100 MWe 3,84

300 MWe 3,09


Terminal RelatedShipping Cost

-

1,00

2,00

3,00

4,00

5,00

6,00

50 MW 100 MW 300 MW

Term

inal E

ffect

US

D/M

MB

tu

Terminal Effect on Gas Price

”Distribution Gas Price”


LNG Consumption 49.000 m3 97.000 m3 269.000 m3

Plant Size LNG FOB Price-

$/MMBtu

50 MWe 10

100 MWe 9,7

300 MWe 9,2

LNG FOB-Prices negotiated based on estimated annual LNG consumption


-

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

50 MW 100 MW 300 MW

Term

inal E

ffect

US

D/M

MB

tu

Terminal Effect on Gas Price

Terminal Cost ($/MMBtu)

All in shipping cost($/MMBtu)

LNG cost FOB ($/MMBtu)

Power Tariff Constituents

LNG Based ”Power Tariff”

Fuel Cost•Fuel cost for power plant as per the “Distribution Gas Price”•Lube oil consumption: 0,3 g/kWh•Lube oil price: 2 US$/Litre

Back-Ground

Power Plant Investment•EPC part of total Investment (M€)

•50 MW – 700 US$/kW•100 MW – 680 US$/kW•300 MW – 665 US$/kW

Power Plant O&M •Variable O&M cost: 7-9 US$/MWh •Fixed O&M cost typically between 5 – 10 US$/kW annually•Fixed insurance cost•Fixed Administrative costs

Investment Fundaments for Power Plant•Power Plant Site location next to the LNG Terminal•Gas delivered to plant at 10 bar(g)•For simplicity; 100% equity financing considered•Return on Equity (ROE) Target: 15%•Project Life time for evaluation and power tariff calculations: 25 years•Running profile: annual running hours 2912h, average load 80%, capacity factor 27%

Sasol New Energy Holdings, South Africa O&M Agreement with thousands of MW sView of 6 engines modular engine hall


0,00%

-53,05%

-31,34%

-8,88%1,23%

6,46%9,44%11,25%12,40%12,82%13,45%13,89%14,19%14,41%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

- 60 000

- 50 000

- 40 000

- 30 000

- 20 000

- 10 000

-

10 000

20 000

0 1 2 3 4 5 6 7 8 9 10111213141516171819202122232425

US

D/Y

ear

Years

Equity Investment, Dividends and IRR

Power Tariffs with various gas prices

Simple Pay-Back Time

around 6 years


-

50,00

100,00

150,00

200,00

250,00

50 MW Terminal 100 MW Terminal 300 MW Terminal

Po

we

r Ta

riff

US

D/M

Wh

Power Tariff with Terminal Effect Gas Price

ROE Fixed Cost Variable Cost Fuel Costs

Absolute Power Tariffs


-

50,00

100,00

150,00

200,00

250,00

50 MWTerminal

50 MW FOB 100 MWTerminal

100 MWFOB

300 MWTerminal

300 MWFOB

Po

we

r Ta

riff

US

D/M

Wh

Power Tariff FOB Price vs. Terminal Effect Price

ROE Fixed Cost Variable Cost Fuel Costs

Terminal Effect to Power Tariff – 100 MW case:

Terminal Effect on gas price: 3,84 USD/MMBtu

Power Tariff: 148 to 182 USD/MWh

Power Tariff increase: 34 USD/MWh

Plant

Size

Terminal

Effect - $

50 MWe 4,85

100 MWe 3,84

300 MWe 3,09

One USD/MMBtu – “Rule of Thumb”

1 USD/MMBtu Effect – 100 MW case:

Investment difference: 18 MUSD

Power Tariff increase: 8 USD/MWh

Power Plant Utilization Factor: 27%

Terminal Investment Gas Price Increase Change in Power Tariff

1 USD

/MMBtu

18

MUSD

8 USD

/MWh


30 April 2013 POWER PLANTS 201321 © Wärtsilä

Final Conclusions

Terminal economics is case specific

• Each case must be studied indivudually

• LNG FOB-price dominates the Distribution

Gas Price

• Real operational conditions for LNG tank

dimensioning is important

Gas fired power plant – a natural choice

• Green-Field power development LNG is

preferable vs. HFO

• Peaking operations high efficiency Internal

Combustion Engine with fast start-up

capability is ideal:

– Electrical efficiency > 45%

• At its highist the ”Terminal Effect” will

increase the power tariff by around 20%

WARTSILA.COM

Smart Power Generation

Thank You

KARI PUNNONEN

[email protected]

+358-50-5986470

Finland

FREDERIC CARRON

[email protected]

+6597209510

Singapore

mailto:[email protected]

mailto:[email protected]

apac 2015 - singapore lng in small and mid size power · pdf file300 mw fob h power tariff fob...

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