lng import terminals: challenges and opportunities import terminals: challenges and opportunities...
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LNG Import Terminals: Challenges and Opportunities
13th October 2016
Mangesh PatankarHead of Business Development (Asia Pacific), Galway Group
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Galway Group has been actively involved in energy projects across the globe
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Small-Scale LNG Value chain
Project Development Support, Techno-Commercial Advisory and Capital Raising Services
Opportunity Definition Concept Framing Deal Development Financing Asset Operations
Canada
USA
PeruMozambique
Indonesia
Uruguay
Hawaii
Panama Colombia
Puerto Rico
US Virgin Islands
Mauritius
South Africa
Bahrain
East Coast India
Vietnam
PhilippinesCuracao
El Salvador
Chile
Netherlands
Cyprus
NigeriaSingapore
Abu Dhabi
Japan
Korea
Thailand
Pakistan
MexicoJamaica
Myanmar
Australia and US liquefaction projects are driving a supply glut that will last into the early years of next decade
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Small-Scale LNG Value chain
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50
100
150
200
250
300
350
400
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
MT
PA
Existing Under Construction LNG Demand
Outages will reduce the forecasted oversupply
Supply from pre-FID projects required only beginning 2023
The ensuing supply glut will increase penetration of gas in China & India, as well as firm the role of LNG in emerging markets
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Small-Scale LNG Value chain
South-East Asia
Central Americas and Carribean islands
India
China
Middle East
Emerging markets defined as countries that commenced LNG imports post 2010 or are likely to commission LNG imports in future
Emerging LNG Markets (Large Scale & Small Scale)
Africa
PakistanBangladesh
Regas terminals can be classified into two types: Land based and Floating
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Small-Scale LNG Value chain
Onshore Floating
• Industry “Standard”
• Cost: $0.5 - $1.5+ Billion
• 3-4 years construction
• Most suitable for larger, base
load service (economics)
• Require deep water port
• Require sizeable land area
• Rapidly growing option
• Cost: $125-$250+ MM
(FSRU) plus $50 - $200+
MM (infrastructure)
• Construction: 12-30 months
• Unit costs can be higher
depending on throughput
• Require deep water port
• Flexibility to redeploy
Marine facilitiesTanks
Vaporizers &
Utilities
Berth & Mooring
System
FSRU or
FSU + Regas or
FRU + Storage
Tanks
Vaporizers &
Utilities
Onshore or Floating
• Emerging option
• Cost: $50+ million
• Construction: 2+ years
• Onshore or floating (barges)
• Unit costs highly dependent
on throughput
• May not require deep water
port if serviced by small
scale ships/barges
Standard LNG Terminals Small Scale LNG
Understanding the terminal characteristics is key to selecting the type of regas suitable for the market
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Key Characteristics
Land based vs FSRU
Project Lead TimeSignificantly shorter for FSRU, in countries where Government
permitting process is simple
Capital CostLower unit capex cost for FSRU compared to onshore terminal, but
difficult to achieve economies of scale as demand grows
Opex Higher for FSRU than onshore regas terminals
Weather ConditionsHarsh weather conditions will impact the annual terminal availability
factor for FSRU
Returns Suboptimal utilisation will affect returns for FSRU significantly
Shipping CostShipping costs likely to be higher for FSRU, given limited storage
capacity
Site & Market specific feasibility studies required to decide the type of regas, the configuration and the technology
Viable LNG Import Terminal Solution is an Important Component of Establishing Credibility with Suppliers
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Small-Scale LNG Value chain Most LNG sourcing strategies aim to establish a competitive
environment amongst potential suppliers to obtain:
Competitive price,
Fair terms and conditions and
Security of supply
The buyer would want to involve multiple qualified potential suppliers in a process (Request for Proposal or parallel negotiations) to create that competitive environment
To attract multiple qualified potential suppliers, buyer must establish its credibility with potential suppliers
Credibility and reliability as a buyer
Creditworthiness, Offtake reliability, etc.
Credibility and reliability of existing gas and LNG infrastructure
Credibility and technical viability of gas and LNG infrastructure development plans
Key Takeaways
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The ensuing LNG supply glut will support the development ofemerging importers, thereby increasing the opportunities forinvestment in regas terminals
New markets can be categorised into:
Large scale
Small Scale (< 1 MTPA)
The decision for land-based vs floating is market & locationspecific. Regas configuration & technology should be“acceptable” to as many potential suppliers as possible
Head Office: 3009 Post Oak Blvd., Suite 950, Houston, Texas 77056 Phone: +1 713 952 0186 Fax: +1 713 952 9861Regional Office: 8 Temasek Boulevard #22-04 Suntec Tower 3 Singapore 038988 Phone: +65 6222 7917 Fax: +65 6235 4415
www.galwaygroup.com
Thank You
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