Merlin Associates

Qualification BrochureTM 2011 by Merlin Associates All Rights Reserved Houston 5625 FM 1960 W Suite 304 Houston, TX 77069 (281) 586-0045 (281) 586-7965 (fax) (713) 298-7816 (mobile) chuck.yost3 (Skype) chuck.yost@merlinassociates.com (email) website: www.merlinassociates.com

Table of Contents MERLIN ASSOCIATES WHO WE ARE .......................................................................................... 1 MERLIN ASSOCIATES TECHNICAL CONSULTANT SERVICES AND INDEPENDENT ENGINEERING SERVICES ............................................................................................................... 2 MERLINS UNIQUE QUALIFICATIONS ............................................................................................ 3 PROJECT EVALUATION AND ANALYSIS METHODOLOGY ........................................................................ 4 1. MERLIN ASSOCIATES LNG COST ESTIMATING MODELTM ................................................................. 5 1.1 General Description ............................................................................................................... 5 1.2 Options .................................................................................................................................. 6 1.2.1 Foundations ..................................................................................................................... 6 1.2.2 Acid Gas Removal System .............................................................................................. 6 1.2.3 Feed Gas Dehydration and Mercury Removal ................................................................. 6 1.2.4 Modular & Offshore Options............................................................................................. 6 1.2.5 Domestic Gas, LPG, and MEG ........................................................................................ 7 1.2.6 LNG, LPG, Condensate Storage Tanks ........................................................................... 7 1.2.7 LNG, Condensate, and LPG Loading Jetty ...................................................................... 7 1.2.8 Refrigerant Compressor Drivers ...................................................................................... 8 1.2.9 Electric Power Generation ............................................................................................... 9 1.2.9 Bulk Materials .................................................................................................................. 9 1.2.10 Labor Cost ..................................................................................................................... 9 1.2.11 Engineering, Procurement & Construction Contractor Costs ........................................ 10 1.2.12 Contingency ................................................................................................................. 10 1.2.13 Sensitivity Options ....................................................................................................... 10 1.3 Model Output ....................................................................................................................... 11 Table I .................................................................................................................................... 11 Table II ................................................................................................................................... 11 Table III .................................................................................................................................. 12 1.4 Current Cost Implications ..................................................................................................... 14 1.5 Unique Aspects of the Merlin LNG Import Terminal Capital Cost Estimating ModelTM .......... 15 2.0 LNG TECHNOLOGY COMPARATIVE STUDIES ............................................................................... 15 3.0 PROJECT IMPLEMENTATION RISK ASSESSMENT .......................................................................... 16 4.0 LNG TECHNOLOGY COURSES .................................................................................................... 17 Agenda LNG Technology and Project Formation Seminar ................................................... 18 I. Overview of LNG Industry .................................................................................................... 18 II. Project Structure and Formation ......................................................................................... 18 1.0 LNG Chain Characteristics .......................................................................................... 18 2.0 Physical and Commercial Chains ................................................................................ 18 3.0 Phases and Segments................................................................................................. 18 4.0 Organizational and Accounting Structures ................................................................... 18 III. Project Management .......................................................................................................... 18 1.0 Project Definition ......................................................................................................... 18 2.0 Project Execution Options ........................................................................................... 18 3.0 Project Engineering Procurement & Construction Contractor Qualifications ................ 18 4.0 EPC Selection ............................................................................................................. 18 5.0 Owners Project Management Team............................................................................ 18 6.0 Project Scheduling ....................................................................................................... 18 7.0 Project Guarantees ...................................................................................................... 18 8.0 Project Performance & Completion Test ...................................................................... 18 IV. Reserves and Upstream Development .............................................................................. 18

1.0 Reserves Characteristics ............................................................................................. 18 2.0 Reserves Requirements .............................................................................................. 18 3.0 Costs of Reserves ....................................................................................................... 18 V. Liquefaction Technology..................................................................................................... 18 1.0 Basic Gas Processing Technology .............................................................................. 18 2.0 Liquefaction Process Selection .................................................................................... 18 3.0 Liquefaction Train Capacity Selection .......................................................................... 18 4.0 Major Equipment ......................................................................................................... 18 5.0 LNG Storage Tank Sizing & Technology Options ........................................................ 18 6.0 Marine Facilities........................................................................................................... 18 7.0 Future Technology Trends ........................................................................................... 18 VI. LNG Shipping .................................................................................................................... 18 1.0 Containment Systems.................................................................................................. 18 2.0 Fleet Sizing .................................................................................................................. 18 3.0 Capital and Operating Costs ........................................................................................ 19 4.0 Future Trends .............................................................................................................. 19 VII. Import Terminal Technology ............................................................................................. 19 1.0 Basic Technology ........................................................................................................ 19 2.0 Vaporization Selection ................................................................................................. 19 3.0 Major Equipment ......................................................................................................... 19 4.0 LNG Storage Tank Sizing & Technology Options ........................................................ 19 5.0 Marine Facilities........................................................................................................... 19 7.0 Future Technology Trends ........................................................................................... 19 VIII. Capital & Operating Expense .......................................................................................... 19 1.0 Methodology ................................................................................................................ 19 2. Liquefaction Plant Capital Cost Variables ...................................................................... 19 3.0 Contingency ................................................................................................................ 19 4.0 Risk Evaluation ............................................................................................................ 19 5.0 Sample Liquefaction Plant Cost Estimate .................................................................... 19 6.0 Sample Import & Regasification Cost Estimate ............................................................ 19 IX. LNG Economics & Pricing ................................................................................................. 19 1.0 Cost of Service Concepts ............................................................................................ 19 2.0 Comparison of Competing Projects ............................................................................. 19 3.0 Netback Pricing ........................................................................................................... 19 4.0 Competitive Issues ...................................................................................................... 19 X. LNG Supply & Demand outlook .......................................................................................... 19 1.0 Pacific Basin Supply & Demand .................................................................................. 19 2.0 Atlantic Basin Supply & Demand ................................................................................. 19 3.0 New Sellers ................................................................................................................. 19 4.0 Emerging Markets ....................................................................................................... 19 5.0 Spot Trading & Primary Characteristics ....................................................................... 19 XI. Financing LNG Projects..................................................................................................... 19 1.0 Equity vs. Project Finance ........................................................................................... 19 2.0 Process Description ..................................................................................................... 19 3.0 Implementation Schedule ............................................................................................ 19 4.0 Risk Identification & Mitigation ..................................................................................... 20 5.0 Ship Finance ............................................................................................................... 20 5.0 MERLIN ASSOCIATES EXPERIENCE AS TECHNICAL CONSULTANT .................................................. 20 INDEPENDENT ENGINEER ............................................................................................................ 26 I. EVALUATION CRITERIA & SPECIFIC RISK ANALYSIS EXECUTION....................................... 27 1. Technical Design Analysis ..................................................................................................... 27

2. Project Management and Systems......................................................................................... 27 3. Project Schedule .................................................................................................................... 28 4. Project Implementation .......................................................................................................... 28 5. Estimated Capital Costs ......................................................................................................... 28 6. Operating and Maintenance Costs ......................................................................................... 29 II. INITIAL PROJECT REVIEW AND RISK ANALYSIS REPORT ................................................... 29 A. Scope of Work ....................................................................................................................... 29 B. Project Documentation Desired for Review in Merlin Home Office ......................................... 29 C. Key Personnel Desired Available for Questions & Answers ................................................... 31 D. Project Risk Analysis Report ................................................................................................. 31 III. ONGOING PROJECT REVIEW AND ANNUAL PROJECT REPORTING ................................. 32 A. Ongoing Project Review ........................................................................................................ 32 B. Annual Project Reporting ....................................................................................................... 33 C. Project Special Reports ......................................................................................................... 33 IV. PROJECT COMPLETION WITNESSING ................................................................................. 33 TECHNICAL & BENCHMARKING STUDIES .................................................................................. 34 1.0 Qualifications and Experience .............................................................................................. 34 1.1 LNG Cost & Competition Report ....................................................................................... 34 1.2 Project Finance Support ................................................................................................... 34 1.3 LNG Project Pre-Feasibility, Feasibility, and Conceptual Studies...................................... 35 1.4 Direct Benchmarking Studies ............................................................................................ 36 1.4.1 Shell Global Solutions, Internationl ........................................................................... 36 1.4.2 Texaco - 2001........................................................................................................... 37 1.4.3 Bechtel International ................................................................................................. 37 1.4.4 Phillips Petroleum Co. .............................................................................................. 37 1.4.5 West Niger Delta Sponsors....................................................................................... 37 1.4.6 Angola LNG Project Sponsors .................................................................................. 37 1.4.7 BP - 2004 ................................................................................................................. 37 1.4.8 BP 2007................................................................................................................. 38 1.4.9 ConocoPhillips Sunrise Project Sponsors ................................................................. 38 1.4.10 ConocoPhillips QatarGas 3 .................................................................................. 38 1.4.11 Brass LNG Project Sponsors .................................................................................. 39 1.4.12 Chevron Energy Technology Company .................................................................. 39 1.5 Technology Evaluation and Selection Studies .................................................................. 39 OWNERS ENGINEER..................................................................................................................... 40 COST OF CONSULTANT SERVICES ............................................................................................. 41 CLIENT LISTING ............................................................................................................................. 44 DOMESTIC & INTERNATIONAL ENERGY COS. ..................................................................................... 44 BANKS & FINANCIAL INSTITUTIONS ................................................................................................... 44 ENGINEERING/CONSULTING AND VENDOR COS. ................................................................................ 45 OTHER ........................................................................................................................................... 45 TECHNICAL PAPERS AND PUBLICATIONS ........................................................................................... 46 RESUMES OF KEY PERSONNEL ........................................................................................................ 48 CHARLES C. YOST, III ..................................................................................................................... 49 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 49 Experience Summary................................................................................................................. 49 Employment ............................................................................................................................... 49 WILLIAM W. LEWIS, P.E. ................................................................................................................. 59 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 59

EXPERIENCE SUMMARY......................................................................................................... 60 PUBLICATIONS ........................................................................................................................ 60 MARIE NAKLIE ................................................................................................................................ 62 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 62 Experience Summary................................................................................................................. 62 WILLIAM P. STEWART...................................................................................................................... 66 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 66 Experience Summary................................................................................................................. 66 PUBLICATIONS ........................................................................................................................ 69 PATENTS: ................................................................................................................................. 71 COMPANY FACTS ....................................................................................................................... 72

Merlin Associates Who We AreScope of Services Technology Evaluation Project Risk Assessment Techno-Economic Studies Process Design Services Design/Engineering Assistance Project Management Services Technical Education/Training Programs

Areas of Expertise Offshore/Onshore Oil & Gas Production Offshore/Onshore Gas and Liquid Pipelining Natural Gas Processing Base Load LNG Technology & Production, Shipping, and Import Terminals Independent Power Production Synthetic Fuels Production Fertilizer Manufacture Cryogenic Process Engineering Computerized Capital and Operating Cost Modeling

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Merlin Associates Technical Consultant Services and Independent Engineering ServicesMerlin Associates is a process engineering consulting company with extensive experience in the gas production and LNG industries. We have been in business since June 1985. Approximately 45% of our work effort is as third party technical advisors to commercial banks and multi-lateral funding agencies providing project financing to LNG and gas production projects. The remaining 55% is to the major international energy companies, state energy companies, and larger independent energy companies providing consulting services in support of pre-feasibility, feasibility, and conceptual studies evaluating participation in large gas production, pipeline, natural gas liquefaction and re-gasification projects, and independent power production projects. We provide consulting services to our clients from the wellhead to the burner-tip/buss bar covering all aspects of design engineering, cost estimating, project management, scheduling, and construction monitoring for these projects. LNG chain projects are often broken into the segments of production, liquefaction, shipping, import terminal, and end-user (power generation and/or gas distribution). We have extensive detailed experience in all these segments. Merlin Associates has proprietary cost estimating models that provide high accuracy capital and operating cost estimates for each of these segments. Merlin Associates are specialists in consulting engineering for offshore production facilities and pipelines, onshore gas processing plants of various types, and project risk analysis for feasibility and conceptual design evaluation. Our personnel have worked as major participants on offshore production projects in Malaysia, Indonesia, South Africa, U.K. and Norwegian North Sea, Arabian Gulf, Australia, and the Gulf of Mexico. We teach courses in offshore facility design, LNG technology, Project Finance, and project risk analysis. Our services are entirely computer based working primarily from our U.S. offices for worldwide locations. In addition to pure consulting engineering, we offer technical education in several areas. We have developed and taught an LNG Technology course at several client locations and the Topsides Facilities Design Module for the Tension Leg Platform Design course sponsored by the ASME Offshore Mechanics & Arctic Engineering Division as part of the Offshore Technology Conference held annually in Houston. We have an intensive Offshore Process Facility Design Course presented over a 2 week period that we have taught in numerous locations worldwide. We have taught the Fundamentals of Base-Load LNG for Gas Technology Institute numerous times using our own course materials. We have a proprietary course that covers all aspects of the full LNG chain from gas production through the import terminal. We have a proprietary course on Project Finance that we have presented on several occasions. Merlin Associates has participated in numerous projects supporting project financing by commercial and multi-lateral financing agencies. Many of these assignments have included all the segments of the LNG chain while some have involved only a single segment such as the liquefaction facilities. With this broad experience resource Merlin Associates is capable of providing technical consulting services across the full spectrum of energy production, transmission, and end-user industries. This is demonstrated by the variety of projects listed in our personnel resumes.

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Merlins Unique QualificationsLNG chain projects involve feedgas, pipelines, liquefaction, shipping, regasification, and end-user facilities and are typically extremely capital intensive (US$ 2 - 15 billion). LNG chain projects require a very long period of capital expenditure during the design, procurement, and construction phases (3-5 years) before there is any income, and, due to their large size and complexity, are nearly always multiparticipant projects. It has become very common to use project financing for these projects since their large required investment exceeds the available internal financing of all but the very largest international energy companies. Securities issues are also available as an alternative financing facility for many LNG projects. Most large energy projects have a loan collateral basis that can be evaluated - the recoverable hydrocarbon reserves that will be produced by the project. Due to the very large investment and the large volume of energy reserves that will be processed by the typical LNG project, the project's recoverable hydrocarbon reserve collateral cannot be considered liquid in the normal sense. This leads to a project without a prime source of loan collateral for project financing. The only source of collateral to the investing or financing participant is the firm long term LNG or power sales contract between sellers and buyers although the sales contract must be to buyers that are regarded as very financially sound companies. This type of exposure for both the equity participants and the international financing community traditionally requires conservative project evaluation and risk analysis. A LNG chain project that is not complete (including all the segments) and capable of meeting its sales contract requirements has essentially no value as an asset against the loan. The salvage value of even the best available gas processing/shipping/regasification technology is very low without something to process. The only loan value is essentially the sales revenue generated after the chain begins operation. Although historically this has always been a problem for LNG projects, the problem has become critical since about 1980 for several reasons. The size (and cost) of a world class base load LNG plant has dramatically increased since the industry began in the late 1960's. This is largely a result of utilizing economies of scale through ever larger facilities in order to obtain minimum unit costs. The LNG facility is built of high cost critical new technology components that have tended to have the highest inflation rates although overall inflation rates was very low from 1988 through 2002. Expansion in the LNG industry since 2003 has resulted in shortages of all technical, construction management, and project management resources. The facilities are constructed using mostly the highest skill-level construction workers that are in short supply the world over, their wage rates have tended to increase with the greatest rate of acceleration. The onstream time for all the facilities in the chain is critical to project economic return. All the chain components tend to be extremely conservative in providing redundant backup equipment and this philosophy became extreme during the 1980s.

Newest proven technology and increased automation have been steadily implemented in LNG projects to reduce operating and maintenance costs as well as to improve onstream operating factors. This has tended to increase initial capital investment. Merlin Associates Independent Engineering Services Page No. 3

For all these reasons, the LNG project participants have increasingly used outside third party technical consultants to evaluate project costs, technical risks, project schedule, and efficiency of design. Merlin Associates was, in fact, started to fulfill this demand. Merlin has been the technical consultant to the financing community on most LNG base load grass-roots installations and LNG expansions built since 1983. We have also provided similar services to several of the equity participants on the same projects during this same period. Merlin has also provided consulting services for preliminary feasibility studies for many operating companies considering entry into the LNG business and to several LNG buyers during this period. Merlin is in the unique position of having a very detailed and inclusive LNG capital cost database as a result of providing consulting services to nearly all the existing LNG projects in the areas of efficiency improvement and debottlenecking combined with our work in support of LNG project financing. Most companies who would have this information are either the major energy companies operating the facilities or the very large engineering companies who have provided the detailed engineering for the LNG projects. Neither of these parties is an easy source of cost data to outside parties. The operating companies must protect their competitive positions and will not willingly share expensive information. The engineering companies will provide the services but at a very high price - their equivalently experienced personnel are most efficiently used in directing and managing detailed design of very large projects, not providing consulting services where the major charge is only for their own time. Merlin has detailed cost breakdowns for nearly all the LNG projects installed. We do not provide the actual data from our database but do use it to provide our consulting services to our clients. We carefully and rigorously protect our clients confidential information but are able to provide a valuable service in a timely manner due to being a small and specialized consulting engineering company. We pride ourselves on being very efficient through the use of leading edge computer technology and have the most current process engineering, CAD, mathematical and statistical analysis software programs, and a very large library of standard business software packages. Merlin Associates have equivalent experience and expertise in the areas of offshore and onshore oil and gas production facilities, pipelines, and natural gas processing. Merlin have used imaginative and innovative methods of adapting standard software packages to quickly provide capital cost estimating that is fully backed up and supported down to actual bills of material for our highest quality cost estimates. Merlin has been a leader in developing a consistent methodology for project technical, capital, and schedule risk analysis for LNG projects. This developing methodology has been utilized to develop our proprietary cost estimating models. Merlin has provided benchmark analysis for many clients. In some cases they wished to compare existing projects against each other, in other cases we have developed benchmark studies for a single project using alternative liquefaction technologies.

PROJECT EVALUATION AND ANALYSIS METHODOLOGYMerlin is available for assistance to any or all of the various parties concerned with the project and can provide this assistance in several ways depending on the particular client's needs. The most common first step is to develop a preliminary Basis of Design (BOD) for the specific project being evaluated. The BODprelim is used to prepare an initial cost estimate and then to perform a series of agreed sensitivity tests to better optimize the BOD. The core element of the Merlin LNG Project Feasibility Study is our proprietary LNG Capital/OperatingTM; LNG ShippingTM; and, LNG Import TerminalTM, and Power Merlin Associates Independent Engineering Services Page No. 4

Generation Cost Estimating ModelsTM. Merlin utilizes a generic cost estimating model for the feed gas production and pipeline segments of the LNG chain.

1. MERLIN ASSOCIATES LNG COST ESTIMATING MODELTM1.1 General Description Merlin Associates has a large and detailed database of the existing LNG project costs as a result of: previous assignments providing consulting services to the existing LNG project participants; as the Technical Consultant to the financial institutions providing project financing for the existing LNG project participants; and, through Merlins internal development of process design and cost estimating software for LNG projects as well as other oil & gas process industries. This database includes actual purchase order and sub-contract cost detail for many of the existing LNG projects. The core elements of the Merlin LNG Chain Cost Estimating expertise are our proprietary LNG Capital/Operating; LNG Shipping; and, LNG Import Terminal Power Generation Cost Estimating ModelsTM. Merlin Associates has used its continually updated database as the basis for our proprietary LNG Chain Capital Cost Estimating ModelsTM. The input for the Merlin ModelsTM is developed in a relatively short period allowing a high accuracy cost estimate to be provided quickly and at significantly lower cost than the traditional engineering cost estimating model. The models include the actual equipment list for all the projects included in the database. When the model calculates a capital cost estimate the equipment that is appropriate for the specified project is selected. The equipment costs are adjusted to reflect the proper throughput on the basis of various capacity adjustment power factors. The Merlin LNG ModelsTM database includes actual LNG-specific cost data for throughputs of 2.5, 3.0, 3.3, 3.8, 4.2, 4.45, 4.7, 5.3 and 6 million tonnes per annum (Mtpa) train capacities. The new cost estimate is developed by interpolating between the increment of train capacity that is higher and lower than its own rate. This low degree of interpolation is made using Merlin capacity factors that have been verified by many cost estimate cases and supports the high accuracy available from the Merlin ModelTM. Merlin has conducted specific studies of 7.8 Mtpa, 9 Mtpa, and 10.2 Mtpa train sizes for various clients and the data from these studies is incorporated in the model to support cost estimates of larger train sizes. Clearly this data is theoretical, not yet based on actual train cost data, and therefore, subject to a higher level of uncertainty. The standard Merlin ModelTM includes a specific equipment list for the following LNG liquefaction processes: APCI propane precooled multi-component refrigerant process ConocoPhillips Optimized Cascade (COPOC) process Shell Global Solutions International Dual Mixed Refrigerant process Linde Multi-Fluid Cascade (MFC) process APCI AP-X process Lummus/ABB/Randall NicheLNGsm process Black & Veatch Pritchard PRICO II process

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In addition, Merlin has developed special models for the following process: APCI Dual Mixed Refrigerant Process BHPs Compact LNG process

The model cost estimate is based on obtaining worldwide bids for all significant components. Most project host countries maximize their project content provided they can supply technically equivalent items with competitive pricing. The actual equipment costs from the various projects are updated quarterly to a new basis year using the Nelson-Farrar indices, which are published periodically by the Pennwell Publishing Co. to reflect inflationary cost increases for oil and gas equipment and materials in the USA. The capital costs are adjusted to the selected Cost Estimate Date from the Capital Cost Estimate basis year using the Nelson-Farrar calculated escalation factor. Most project host countries maximize their project content provided they can supply technically equivalent items with competitive pricing. Certain equipment components are sized and specified within the capital cost-estimating model. These are the large cost items that are custom designed for every LNG train. 1.2 Options 1.2.1 Foundations The model has the option to include piled foundations by a simple Y/N. 1.2.2 Acid Gas Removal System When required, the model calculates the required acid gas removal contactor size based on gas capacity and determines liquid circulation rates with a check as to which stream has priority in sizing the contactor nearly always gas capacity. The model then sizes all the components of the acid gas removal system (contactor, regenerator, reflux accumulator, overhead condenser, etc.) calculating wall thicknesses, vessel dimensions and weights, cooler exchanger surface, pump capacity and head, motor sizes, etc. This data is then used to determine the costs for each of the components using the database. The model handles DGA, activated MDEA, and Sulfinol. It can be modified to handle others. 1.2.3 Feed Gas Dehydration and Mercury Removal The model calculates the required dehydrator bed sizing, vessel dimensions and weights. The model verifies the required filter and mercury guard bed sizing. With this data, the model determines the cost of the components from the database. 1.2.4 Modular & Offshore Options If the Modular Construction option is selected the model factors costs for the modules that can be used in either offshore or onshore applications. Typically the bulk materials are increased to reflect the additional structural steel of the modules, additional piping connections and valving to allow interconnects between the modules, and additional engineering design time required to separate the equipment into modules. For pure modular construction there are usually additional freight costs associated with sending all the equipment to the fabrication/shipyard and then back to the plant site these are selected specifically at the Freight Cost cell on the input Merlin Associates Independent Engineering Services Page No. 6

data sheet. The modular option assumes a maximum module size of 4,000 tonnes and for a typical 3.5 5 mtpa train size will have 60 80 modules. An LNG project that is estimated using the Modular option is developed on the basis that the Pipe Alleys are constructed as modules and shipped to the plant site. No further modularization is assumed in the generic LNG application. This results in modules with relatively small weight, limited by their shipping physical dimensions. An option is available for maximum modularization wherein the majority of the process equipment is fabricated installed on modules with an assumed maximum weight of 4,000 tonnes. This results in approximately 200 modules per train. Labor rates are developed on a separate spreadsheet for the fabrication/shipyard with potential for expatriate labor and national labor appropriate for the shipyard location. 1.2.5 Domestic Gas, LPG, and MEG The model will handle addition of a Domestic Gas plant that sometimes occurs on foreign locations that have a local demand for domestic gas supply. This plant includes gas conditioning, LPG separation, and compression. The model can be used to generate costs for only an LPG separation plant rather than an LNG plant. The model has the option to include MEG separation, purification, and storage for projects using MEG to prevent hydrate formation in their upstream production facilties. 1.2.6 LNG, LPG, Condensate Storage Tanks The model calculates the storage tank dimensions and weights for Single Containment, Double Containment, and Full Containment options. This includes all the tank shell, roof, and floor components steel and concrete as appropriate, foundation concrete and steel, and insulation volume. The model uses the specified steel weights and concrete volumes with associated labor manhours (adjusted for productivity and local labor rates) to determine the cost components for the site-specific cost estimate. The model then selects the costs from the appropriate technology for use in the model output. 1.2.7 LNG, Condensate, and LPG Loading Jetty The model calculates the steel and concrete for the appropriate jetty based on specified length. The cost model uses a specified steel piled jetty with concrete deck design for all calculations. The model uses the specified steel weights and concrete volumes with associated labor manhours (adjusted for productivity and local labor rates) to determine the cost components for the site-specific cost estimate. The capital costs are adjusted to the selected Cost Estimate Date from the Capital Cost Estimate basis year using the input escalation factor. The model is based on obtaining worldwide bids for all significant components. Most project host countries maximize their project content provided they can supply technically equivalent items with competitive pricing.

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1.2.8 Refrigerant Compressor Drivers The model specifically handles APCIs Propane Precooled Multi-Component Refrigerant (PMR), ConocoPhillips Optimized Cascade (COPOC), several Dual Mixed Refrigerant (DMR) technologies, the Multi-Fluid Cascade (MFC), the APCI AP-XTM three refrigerant large train (AP-XTM), and the NicheLNGSM dual refrigerant liquefaction processes. Merlin can also provide custom applications by internally modifying the basic model for any other preferred liquefaction process. The input data sheet requires that the type of driver be specified options are for industrial Frame type gas turbines 3, 5C, 5D, 6, 7, 9; aero-derivative gas turbines LM2500, LM2500P, LM2500R, RB211, 6000, Trent; and Steam turbines, or motor drive for each refrigerant cycle. Motor sizes up to 75 MW are available. The model calculates site rating for the selected gas turbine model making adjustment for the average ambient temperature and taking into account: air intake duct pressure drop losses, exhaust duct losses, air compressor degradation between overhauls, gas turbine degradation between overhauls, and reflects the API Design Margin. If Waste Heat Recovery modules are specified the reduction in power due to additional pressure drop losses are also included. Using internally specified power requirements for the specified liquefaction technology for each refrigeration cycle, the model determines the power required vs. the site-adjusted power available from the specified driver. The model will then determine how many of each driver size is needed for each refrigerant cycle. The operator can input helper motor or steam turbine size for each driver and the model will then adjust how many drivers are necessary with the helper motor or steam turbine assistance. The operator has the option to specify combustion air precooling for the gas turbines or not which will increase the site adjusted power available with the appropriate additional capital cost. The operator can also shift some of the Multi-component Refrigerant load of the APCI process to the pre-cooling refrigerant driver to obtain a better overall balance just as is done with the APCI process design. The operator can also shift some of the intermediate level and/or highest level refrigerant (where applicable COPOC, MFC, and NicheLNGSM) load to the pre-cooling refrigerant driver or the low-level driver to obtain an overall better power balance just as is done with the actual licensors design packages. If the End-Flash option is selected the model will calculate the size of compressor driver required to boost the gas back to the fuel gas system. If the NicheLNGSM liquefaction process is selected, the model will calculate the power required for the feedgas booster compressor between the C3+ separation expander plant and the inlet to the liquefaction plant. It will also include costs for the driver, compressor, and associated components sized to support the compressor unit and the expander separation plant. If the Deep Propane Recovery option is selected in order to extract 90%+ of C3+ from the feedgas, [APCI, APX, DMR processes typically only extract about 60-65% as LPG products without this option] the model will include heat exchangers, compander, and booster compressor for the C3+ separation expander plant installed between the feedgas conditioning equipment and the inlet to the cryogenic portion of the liquefaction plant. It will size the driver required and include costs for the driver, compressor, and expander separation plant. Merlin Associates Independent Engineering Services Page No. 8

If the LPG Plant Only option is selected in order to extract 90%+ of C3+ from the feedgas, the model will include all the components for an expander separation plant including booster compressor for the residue gas and a full fractionation plant to support commercial LPG production. It will size the feedgas conditioning plant, expander plant, fractionation system, compressor driver required and include costs for all the facilities. 1.2.9 Electric Power Generation The model allows selection of purchasing electric power rather than generating its own. In this case the model deletes various components specific to the power generation modules but includes the normal transformers and switchgear assuming that 13 KV power is purchased from a local power grid. The model allows selection of full Combined Cycle with large power island using a combination gas turbine-waste heat recovery steam generator (HRSG)-steam turbine power generation, Simple Cycle steam turbine power generation with HRSG on the refrigerant gas turbines, or specification of preferred gas turbine power generators. Based on the specification of preferred power generation option the model contains algorithms to determine the power requirements that will include non-refrigerant plant power demand as well as refrigerant power demand if motor drivers are specified. Using this analysis, the number and size of the power generation components will be determined and costed. There are several options to specify the source of heat recovery for steam generation and process requirements. 1.2.9 Bulk Materials Bulk material costs for other sections of the plant are calculated based on factors against various categories of equipment costs based on actual experience at the most recent LNG projects. 1.2.10 Labor Cost The Merlin LNG Capital Cost Estimate ModelsTM also contain the actual manhours and breakdown of the individual construction subcontracts for labor rates, supervision, indirects, overheads, and profit markup for each of the projects. The manhours and markups are used (after adjustment for throughput differences) to calculate expected construction labor costs. The labor costs are calculated using expected site-specific productivity relative to the US Gulf of Mexico and expected site-specific all-in labor rates. Site-specific labor rates and productivities are obtained from Merlins database of LNG plant costs supplemented by data published in Richardsons International Construction Factors Location Cost Manual. Where available, client supplied site specific data is used to establish local construction labor rates and to make adjustments to the Merlin Associates Capital Cost Estimating Models data. The major variable for LNG project costs is local construction site labor costs and worker productivity. The cost estimate model uses labor rates and productivity as demonstrated on previous and current LNG projects with adjustment to a new project location. The costestimating model uses a work force that includes the normal skilled worker classifications in proportions demonstrated on previous LNG projects all over the world. The direct wage paid to the individual worker for the various crafts is marked up to reflect the subcontractor overhead costs, profits, local site expenses, supervision, consumables, and subcontractor supplied equipment.

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Engineering "factor" algorithms are used to project the liquefaction segment equipment costs based on interpolation from the database of actual plant costs consistent with the specified liquefaction technology, actual site data, and available basis of design data. 1.2.11 Engineering, Procurement & Construction Contractor Costs The model includes an assumed organizational structure for the Home Office and Project Construction Site locations. The organization size is adjusted for the number of trains and whether the project is an Expansion or Grassroots project. The base model includes a historical database of EPC costs for a wide range of alternate contractors and site locations. Home Office and Site efficiencies are automatically adjusted for various liquefaction technologies, Home Office locations, and Construction Site locations. The project can be tailored in several ways including: a base labor rate can be input that will then use algorithms to establish the other labor rates; the efficiency of National EPC members is adjustable; Home Office and Construction Site General Administration and Fee rates are adjustable; various mobilization costs can be tailored for alternative Home Office and Site locations. 1.2.12 Contingency Merlins LNG Capital Cost Estimating ModelTM allows input of a client-specified contingency. Since the model uses largely a database of actual costs for existing or fully committed lumpsum LNG projects, Merlin Associates has demonstrated that the model has an accuracy of at least + 10% of the total onshore project capital cost so long as estimated projects are consistent with the Basis of Design parameters of the existing projects. The model has been updated based on Merlins own engineering analysis and work with the liquefaction licensors for various liquefaction train options and for train sizes up to about 10 Mtpa. Merlin does not recommend a generic level of contingency but will typically use the clients own corporate value. Merlin provides risked contingency calculations for project finance and conceptual design studies based on statistical analysis of the Cost Estimating ModelTM inputs and internal calculations. A typical contingency of 3% to 4% is provided on most of the current projects in progress. Merlin also continually updates the model on the basis of study work for future innovative process designs and potential large train configurations being considered by various project sponsors and by the various liquefaction technology licensors, as well as study work for various clients, and Merlins own internal research. The current Merlin model allows quick evaluation and sizing of the primary refrigerant compressor drivers for many gas turbine alternatives as well as steam turbines and electric motor drivers with all the major liquefaction technologies currently being considered. 1.2.13 Sensitivity Options The model allows for a multiplicity of sensitivity studies about the project BOD including but not limited to the following options: Greenfield project or Expansion project, [the model will not include the cost for various supporting utility and plant infrastructure components when the Expansion option is selected except those actually required for the Expansion project]; type of liquefaction technology; type, quantity, and arrangement of refrigerant compressor drivers;

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type of overall cooling system to be utilized (seawater, freshwater recirculating, or air fin); type of regasification technology to be used on the import terminal model; type, number, and quantity of LNG storage tanks; whether to include LPG extraction, fractionation, storage and loading/unloading; labor sourcing and the impact of expected labor costs and productivity; number and quantity of condensate storage tanks; length of product loading/unloading jetty; complexity and participant makeup of the Project Formation Team; cost of potential supporting infrastructure facilities

These sensitivity studies are conducted quickly and can be used to develop an agreed optimized BOD or a set of BOD that cover the full expected range of implemented project requirements. The models also calculate expected Annual Operating Costs using industry experience factors adjusted by installed capital costs. The models reflect expected operating and maintenance labor costs and productivity on the basis of expected local construction labor costs and productivity. 1.3 Model Output The output from the Merlin LNG Capital Cost Estimating ModelTM is provided in a series of tables. Table I Table I provides the cost by major plant system for specified equipment categories including Columns, Heat Exchangers, Turbines/Compressors, Pumps, Tanks/Vessels, and Packaged Equipment. These costs are priced on an FOB factory basis and are summed across to provide a total cost by plant system. Table II The first column of Table II has the total equipment costs for each plant system provided in Table I but adjusted for Material Related Expenses. Material Related Expenses include Host Country Import Duty (0.00%); Third Party Inspection (0.67%); Vendor Assistance (0.01%), and Freight (12+%). When the modular option is selected the model adds freight costs for the additional delivery from the fabrication yard to the project site. The nominal average percentage for each of these categories is provided in parenthesis but the operator has the option of inputting any desired percentage for any category. This percentage is applied to the FOB equipment cost from Table I. Table II then shows the Supply & Erect subcontractor cost for supplied equipment and materials. The model automatically includes the following contracts as Supply and Erect batch plant for concrete and black top used in site preparation, flares and support stacks, product storage tanks, and plant buildings. Small amounts are allocated for miscellaneous small contractors for all the various plant systems. Merlin Associates Independent Engineering Services Page No. 11

Table II then shows the bulk materials supplied free-issue by the EPC contractor to the various subcontractors. These costs are factored from the total equipment costs developed for each of the plant systems. Table II then shows the labor costs for all subcontractors. These costs include the direct labor and site supervision for all subcontractors. The costs use the all-in rate that includes all the sub-contractor costs actual hourly rates by skill, benefits, overhead, small tools, work consumables, subcontractor provided construction equipment, and then project specific costs such as: target incentive/bonuses; travel incentives; travel expense for mobilization and demobilization as well any interim trips; and site living expenses for meals, housing, and travel around the site. These costs are summed across to provide a total cost by plant system. Below the plant systems carried down from Table I, Table II has costs for Plant Buildings; Capital Spares, Chemicals, and Startup Equipment charges for dehydration, acid gas removal, etc that are considered part of Working Capital; Construction Camp Operation and Maintenance these are the costs to operate and maintain the construction camp (if provided) during the construction, commissioning, and startup phases of the project; EPC Site Management and Services that includes the EPC contractors site project management team, subcontractor monitoring and general supervision, etc.; EPC Contractor Home Office and Fees that includes the cost for the home office detailed design and procurement team, overheads, and profits for the contractor. The Plant Buildings are specified in the model and costs calculated based on how many trains and site location. Spares and Chemicals are factored from equipment costs. Construction Camp Operations and Maintenance is a function of the size of the camp as determined by the peak staffing level specified in the input data sheet. EPC home office costs are calculated as described above. EPC site costs are calculated as described above. At the bottom of Table II, the model calculates the total manhours by dividing site labor costs by the All-in rate to give a close approximation of direct labor and supervision manhours. The model also reports direct manhours for the Construction Site and the Shipyard location if a modular option is selected. Table III The first section of Table III shows the Marine and Harbor costs. These are very often done as a separate subcontract(s) and occasionally as a separate EPC contract. They are very site specific and most of the costs have been explained previously. Ship Handling Facilities are project owned and capitalized tugboats necessary to moor and undock the LNG and product carriers. At least three tugboats are normally involved in every mooring and unmooring operation and in addition at least one spare is provided. At least one of the tugboats is equipped for full fire-fighting capabilities. Alternatively, a lease arrangement may be used and no capital cost will accrue to the project. The Engineering costs in this category are those specific to the Marine facilities and are factored from them. The next section of Table III shows the non-plant Infrastructure Costs. These include the construction camp, permanent operations camp, and general community infrastructure. The Merlin Associates Independent Engineering Services Page No. 12

construction camp is sized from the peak staffing input. The permanent operations camp is specified on the input data sheet, as are the community infrastructure costs. This total category varies from nothing to more than $200-million. At this point all costs are summed vertically to provide the total Engineering, Procurement, and Construction Contractor cost. The model divides this cost by the design LNG capacity to produce the unit cost US$/tonne of annual LNG capacity for comparison to alternative projects. The remaining category of Table III is Other or Owner costs. The first component shown is Operating Company Project Management Costs. This category accounts for expenses incurred by the Project Owners Special Purpose Company that is set up by the project participants to own, in most cases, and operate the facility. Major costs included in the Owner Cost category are discussed below. Admin & Tech Service, Office and Field Management the Project Management Team (PMT) during project implementation. This is 100% Operator Company expense for their own administrative and technical personnel those people charging directly to the project. It does not include corporate overhead and project monitoring costs by the Participant companies. Outside Services are for the use of various outside technical, engineering, reproduction, transportation, and other supporting services necessary for the Operator Company not justified as full time internal personnel. Fees & Royalties expenses are primarily payments for the use of Participant company technical services and royalty payments for the use of proprietary information/technology from either Participant or outside companies. The model automatically calculates royalty fees for the ConocoPhillips Optimized Cascade process and the activated MDEA process. Vehicles & Temporary Facilities covers Operator temporary offices and storage buildings at the construction site, and vehicles for Operator personnel at all locations during the construction phase.

Owners Project Management Costs are factored based on whether the project has been specified as Complex, Mega Multi-Participant Project (Northwest Shelf, Angola), Simpler Multi-Participant Project (Oman LNG, Nigeria LNG), or Single Participant Project (ELNG, Atlantic LNG). The designator reflects whether decisions are straight forward and how many parties deliberate over them. The next component of Other costs is Capitalized Movables. This is the cost for plant trucks, maintenance equipment, laboratory equipment, furniture, etc. The model has a built-in list for this that is the same for all projects although not a huge amount of money. The next component of Other costs is Pre-Commitment/Pre-Operational Expenses. These are project development and pre-plant startup operational expenses and include pre-feasibility studies, feasibility studies, Front End Engineering Design study, contract negotiations for EPC, marketing, shipping, etc. Some companies capitalize these costs to the specific project when it proceeds others do not. The amount is specified amount on the input data sheet. The next component of Other costs is Construction All Risk Insurance. The current insurance market makes it difficult or impossible for some contractors to obtain this insurance. Most Merlin Associates Independent Engineering Services Page No. 13

projects have determined that it is cheaper for the project company to buy the insurance than to let the EPC furnish it. The cost is calculated as a percentage of the EPC contract value. The next component of Other costs is Pre-Operational Expense. This includes the cost to mobilize, staff, train, develop office space, and develop the initial Project Company Corporate staff and the plant operating and maintenance crew. The cost is calculated as a percentage of the EPC contract cost. The next component of Other costs is Construction Period Local Taxes. A few projects have incurred local taxes. The amount is specified amount on the input data sheet. The next component of Other costs is Royalty Payments for technology licensors. One of the liquefaction licensors charges a substantial royalty. A few of the internal processes use licensed technology. The amount is specified amount on the input data sheet. The last component of Other costs is Startup Expense. Typically, an experienced staff of specialist startup operators and technicians are brought in six months prior to startup and stay on site for three to six months after startup to help deal with the issues common to a new, large, and very complex processing facility. The cost is calculated as a percentage of the EPC contract cost. The Sum of the EPC facilities cost and the Owner related costs provides the Total Project Cost. Merlin Associates does not typically provide contingency in their estimates. If the client wants a specified contingency, it can be put into the Input data sheet and will show up here on the Output report. The Total Project Cost is then totaled vertically to this point. 1.4 Current Cost Implications In addition, Merlin has had several assignments in recent years to assist our clients in understanding the changing LNG cost environment. From about 1995 through 2002 the LNG industry experienced a period of minimal cost escalation 1 to 1.5% annual escalation and even lower in some locations. Beginning in 2002, the demand for equipment and materials used in LNG plants began rapidly increasing. The increase is a result of increasing demand for LNG projects but even more so by the huge economic expansion of developing countries China in particular. This has resulted in material and equipment escalation far in excess of the 1995 2002 period and remains on an ever-increasing growth rate. Specific to LNG project demand, manufacturers and fabricators supporting the LNG industry apparently began approaching their installed capacity at about this same time. Delivery times for long-lead equipment items have been increasing since about January 2003. A few of the manufacturers have increased their capacity such that this is not a continuing problem; however, many of them have not been able to increase their capacity as fast as demand has grown. Further exacerbating this problem is the exchange rate between the US$ and the Euro. Historically, LNG projects were implemented on almost a 100% US$ contractual basis regardless of their site location or sourcing of equipment and other resources. Beginning in 2003, the US$ began declining against the Euro. Compressors, gas turbines, alloy pressure vessels, and many types of heat exchanger are typically supplied by Euro based manufacturers. Today the typical LNG project has a sigMerlin Associates Independent Engineering Services Page No. 14

nificant portion of its expenditures on the basis of the Euro. The US$ is often used for a majority of the remaining contract expenditures with a minority of expenditures split between Far East and host country denominations. This changing split in project expenditures has resulted in a significant increase in LNG project costs historically estimated on a 100% US$ basis. Beginning in about January 2003, the demand for other LNG project resources particularly EPC home office skilled labor and construction site management labor began to exceed the then available supply. This demand is currently continuing to increase faster than new supplies have developed. The end result of this rapidly changing scenario is that project costs are currently experiencing 9 12% annual escalation. EPC demand caused escalation is more than that. A project trying to be completed during the period 2008 2012 falls into what Merlin categorizes as extreme high EPC demand. The single major factor triggering this phenomenon is the Qatari scheduled implementation of six 7.8 Mtpa projects every 9 months for a period of about 3 4 years. It is important to understand that on a project with a 4 year execution schedule AFTER final investment decision will experience as much as a 50% increase in money-of-the-day project costs compared to projects that are currently starting up. 1.5 Unique Aspects of the Merlin LNG Import Terminal Capital Cost Estimating ModelTM Capital cost data for specific LNG import terminals included in the Merlin LNG Import Terminal Capital Cost Estimating ModelTM database have been updated to reflect current costs for LNG storage tanks, unloading systems, relief and blowdown systems, and utility systems derived from LNG liquefaction plant projects using similar/identical equipment and from the few actual LNG Import terminal projects which have been implemented in the recent past. LNG import terminals, because of their location and dependency on gas sendout demand pattern are even more site and project specific than liquefaction plants. The Merlin LNG Import Terminal Capital Cost Estimating ModelTM is based on a design philosophy typical for a major international energy company being installed in Europe or the US and in emerging energy markets of developing countries, typically supplying a large electric power generation plant. It does not reflect the highly conservative basis of design used for Japanese import terminals with their unique safety, security of supply, environmental, and demand characteristics. Estimating methodology is similar to that used in the liquefaction model. A project specific equipment list is developed using appropriate capacity and escalation factors. Bulk material costs are calculated from factors against related equipment costs based on actual installation cost data. Labor manhours are developed on a US Gulf of Mexico basis and labor costs calculated based on expected site productivities relative to the US Gulf of Mexico and site specific all-in labor rates. The model results have been demonstrated to be within + 10% of lump-sum cost estimates prepared by engineering-procurement-construction contractors using the same basis of design characteristics.

2.0 LNG TECHNOLOGY COMPARATIVE STUDIESMerlin has provided process engineering studies and cost estimating benchmarking studies to all the major LNG liquefaction process licensors. These study efforts have been to provide independent review of the competing liquefaction processes to the licensors in support of their ongoing optimization efforts. As a result of these studies and the work that Merlin has done in support of project finance of many of the existing and ongoing LNG projects, we have developed a broad and very detailed database of the Merlin Associates Independent Engineering Services Page No. 15

technical aspects of many of the LNG processes. We have used this database to support studies for many clients in their selection of the most appropriate LNG liquefaction process for their potential projects. Merlins efforts in this area vary. The most detailed approach is involves developing a fully detailed process simulation for the potential project for each of the process technologies of interest with associated capital cost estimate. Alternatively we provide energy and material balance information for the envelope around the liquefaction unit and develop only enough information to specify major equipment components that are used to develop the detailed cost estimates.

3.0 PROJECT IMPLEMENTATION RISK ASSESSMENTMerlin commonly evaluates projects utilizing risk assessment criteria. Merlin assesses the likely outcome due to various failure scenarios of the project execution plan. The Operator and Prime Contractor usually place emphasis on achieving on-time and under-cost completion and do not always provide contingency planning until a crisis develops. The project execution plan as agreed between Operator and Prime Contractor is usually realistic for the specified assumptions but is probably neither optimistic nor overly pessimistic. It is most often described as a plan with a 50% probability of being achieved within budget and schedule - it also has a 50% probability of exceeding the cost estimate and not being completed on time if it has truly been developed with this philosophy. In addition to cost and schedule variance, the other major project risk exposure is confidence in reliability and capacity of the project facility. Merlin has a unique history and reputation for providing both technical risk analysis and standard project risk analysis. Technical risk analysis includes detailed review of the process technology, the specific hardware to be used, and the overall project implementation planning. Merlin Associates will provide a set of risk criteria or a band of predicted outcomes. The basis of Merlin's risk analysis is development of an independent capital cost estimate using Merlin's proprietary Capital Cost Estimators. Merlins proprietary project schedule is linked to the capital cost estimator. Merlin has developed and maintained a summary level project schedule for each of the LNG chain segments utilizing only sufficient activities to determine project duration, critical path activities, and sufficient activities to allow detailed capital cost estimating. The summary level project schedule will typically have 400-600 activities depending on whether the full feedgas system is included or not. The Merlin summary level project schedule with the Merlin capital cost estimate predicts expenditure phasing on monthly and annual time periods. The capital cost estimate with the associated project schedule is the Merlin deterministic capital cost estimate. This detailed estimate is summarized to 30-50 major cost categories for probability analysis. Statistical probability analysis for the costs and schedule is done using the @Risk program with Latin Hypercube random sampling of all the assigned probability distributions. We use triangular probability distributions and take into account the affects of cost/schedule variables that have internal dependencies with other cost/schedule variables. A typical probability analysis requires from 750 to 1500 iterations in order to produce smooth probability curves. Although the full spectrum of project probabilities are developed, Merlin typically report the Mean nonexceedance probability data (usually similar to the project's 50% probability data); the 75% non-exceedance probability data (sometimes called "Most Likely"); and the 95% non-exceedance probability data (often called the "Worst Case Scenario"). The Merlin 75% probability data is a prediction of project outcomes assuming industry average problems, engineering judgment of additional project costs for the site-specific location to resolve these problems, and adjustment for known site-specific problems. The 95% probability data assumes a higher frequency and duration of problem occurrences. Merlin Associates Independent Engineering Services Page No. 16

The complete risk analysis method is justified for the financing community on all LNG grass roots chain projects and most expansion projects. It is frequently justified for many of the equity participants who often do not have internal technical expertise in LNG technology and an up-to-date database of LNG project costs. Use of a third party consultant jointly by the LNG sellers and buyers is useful to eliminate internal disagreements and can greatly assist in reaching agreement on the actual details of the final sales agreement. Most LNG projects are multi-participant projects where an independent third party used jointly by all parties can be very helpful in avoiding internal conflicts.

4.0 LNG TECHNOLOGY COURSESMerlin Associates presents LNG technology and formation courses directly and on sub-contract. A typical agenda for an LNG technology seminar is shown below. The course is normally presented completely by Merlin personnel although occasionally outside experts are also used.

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Agenda LNG Technology and Project Formation Seminar I. Overview of LNG Industry II. Project Structure and Formation 1.0 LNG Chain Characteristics 2.0 Physical and Commercial Chains 3.0 Phases and Segments 4.0 Organizational and Accounting Structures III. Project Management 1.0 Project Definition 2.0 Project Execution Options 3.0 Project Engineering Procurement & Construction Contractor Qualifications 4.0 EPC Selection 5.0 Owners Project Management Team 6.0 Project Scheduling 7.0 Project Guarantees 8.0 Project Performance & Completion Test IV. Reserves and Upstream Development 1.0 Reserves Characteristics 2.0 Reserves Requirements 3.0 Costs of Reserves V. Liquefaction Technology 1.0 Basic Gas Processing Technology 2.0 Liquefaction Process Selection 3.0 Liquefaction Train Capacity Selection 4.0 Major Equipment 5.0 LNG Storage Tank Sizing & Technology Options 6.0 Marine Facilities 7.0 Future Technology Trends VI. LNG Shipping 1.0 Containment Systems 2.0 Fleet Sizing Merlin Associates Independent Engineering Services Page No. 18

3.0 Capital and Operating Costs 4.0 Future Trends VII. Import Terminal Technology 1.0 Basic Technology 2.0 Vaporization Selection 3.0 Major Equipment 4.0 LNG Storage Tank Sizing & Technology Options 5.0 Marine Facilities 7.0 Future Technology Trends VIII. Capital & Operating Expense 1.0 Methodology 2. Liquefaction Plant Capital Cost Variables 3.0 Contingency 4.0 Risk Evaluation 5.0 Sample Liquefaction Plant Cost Estimate 6.0 Sample Import & Regasification Cost Estimate IX. LNG Economics & Pricing 1.0 Cost of Service Concepts 2.0 Comparison of Competing Projects 3.0 Netback Pricing 4.0 Competitive Issues X. LNG Supply & Demand outlook 1.0 Pacific Basin Supply & Demand 2.0 Atlantic Basin Supply & Demand 3.0 New Sellers 4.0 Emerging Markets 5.0 Spot Trading & Primary Characteristics XI. Financing LNG Projects 1.0 Equity vs. Project Finance 2.0 Process Description 3.0 Implementation Schedule Merlin Associates Independent Engineering Services Page No. 19

4.0 Risk Identification & Mitigation 5.0 Ship Finance Merlin also provides specific seminars on Project Finance (3 4 days), Gas Processing, and LNG Technology Selection.

5.0 MERLIN ASSOCIATES EXPERIENCE AS TECHNICAL CONSULTANTMerlin Associates has provided Technical Consulting services for most of the major international energy companies of the world and many of the national energy companies. This work has been performed on nearly every potential LNG Export and Import Project considered. A brief listing of the LNG Export and Import projects Merlin has worked on are shown below:

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Project No. 900105

Project Location Canada USA Sao Paulo, Brazil United Kingdom Italy Portugal Germany Japan Finland Yugoslavia India Korea Taiwan Sao Paulo, Brazil India & China West Coast, India East Coast, Malaysia Sao Paulo, Brazil Barcelona, Spain East Coast, Italy Izmir, Turkey Ashquelon, Israel Izmir, Turkey Hong Kong, China Generic Hong Kong, China Hong Kong, China Hong Kong/Shanghai Karachi, Pakistan Sines, Portugal Ennore, India Generic Generic Ennore, India Generic Fortaleza, Brazil Gujarat Pipavav, India Pecem, Brazil Sines, Portugal Guandong, China Dabhol, India Tuntex, Taiwan China - Guangdong India - Hazira Turkey - Izmir Spain - El Ferrol Brazil - Sao Paulo Columbia Bahamas, Freeport USA & Mexico Shenzen, China

Full listing of LNG Import Terminal Experience of Merlin Associates Client Name Type of Work LNG Cost & Competition Study-1st Ed. Full capital, Operating & Maintenance cost estimates Sold to general industry 2, 4, 6, and 8 million tonnes/year options Co-Authored with Poten & Partners Cost of Service calculations

920801 941103 950102 950104 950504 950602 950603 950604 950605 950902 951002 951101 951103 960101 960104 960406 960501 960503 960703 961002 970502 970903 971002 980203 980701 980702 981002 981003 991003 950307

Nova Corp/Techno Plan/Tenneco Amoco Amoco YTL Amoco Amoco Amoco Amoco Amoco Amoco Amoco Exxon Arco Arco Exxon VICO/Lasmo CIR, Inc Texaco Enron Mobil Tamil Nadu Industrial Dev Corp Mobil Texaco Texaco Texaco Texaco Enron IDBI/Enron Arco LNG Cost & Competition Study-2nd Ed. Sold to general industry Co-Authored with Poten & Partners

Feasibility Study Feasibility Study-Comparison multi-supply/import options Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Organization/staffing study BOD for FEED Prelim FEED Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Develop Cost Est Model Develop Cost Est Model Engr Spec, SPA, Developer Selection Expand Cost Est Model Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Proj Finance, Indep Engineer Indep Engr, Due Diligence for Investor Full capital, Operating & Maintenance cost estimates 2 million tonnes/year and 4 million tonnes/year Cost of Service calculations

000603 010701 010901 020204

Ryder-Scott/EcoPetrol Enron Chevron-Texaco Guangdong LNG Project Owners

Feasibility Study Feasibility Study Feasibility Study Due Diligence Study for Project Owners & ABN AMRO

Year Performed 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1992 1994 1995 1995 1995 1995 1995 1995 1995 1995 1995 1995 1995 1996 1996 1996 1996 1996 1996 1996 1997, 1998 1997 1997 1998 1998 1998 1998 1998 1999 1999 1999 1999 1999 1999 2000 2001 2001 2002

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Project No. 020302 030102 030403 031102 040302 040702 040703 050103 050202 050307 060501 071203

Project Location Lazaro Cardenas, Mexico Freeport LNG Import Terminal Cost Estimate Manatee Import Terminal, Florida, USA Sears Island Maine, USA, LNG Import Terminal Freeport LNG Import Terminal Port Lavaca Import Terminal Import Terminal Standards & Regulations St John's, Nova Scotia, Canada-Canaport LNG Import Terminal Bear Head LNG Import Terminal, Canada Pakistan LNG Import Terminal Isle of Grain Import Terminal Cost Estimate - Poten Lithuanian LNG Import Terminal - SAIC

Full listing of LNG Import Terminal Experience of Merlin Associates Client Name Type of Work Tractebel International Project Definition Study Freeport LNG, Freeport, TX, USA Provide Independent Cost Estimate for FERC filing Manatee LNG Import Co. LLC Provide Feasibility Study for Project Formation Process Manatee LNG Import Co. LLC Provide Feasibility Study for Project Formation Process Royal Bank Scotland, ConocoPhillips Indep Engr, Due Diligence for Lender CrossTex Energy Inc. Indep Engr, Due Diligence for Investor State of California Technical Advisor Irving Oil & Repsol Provide Advisory Consulting Services to Develop Basis of Design for Import Terminal and support Owner during FEED study Anadarko Petroleum Co Indep Engr, Due Diligence for Investor Sui Southern Gas Co Ltd. Develop Basis of Design for FEED study RFP EON Ruhrgas Provide Third Party Capital Cost Estimate SAIC Develop Basis of Design for FEED study RFP

Year Perfo 2002 2003 2003/20 2003/20 2004/20 2003/20 2005/20 2005/20

2005/20 2005/20 2006 2008

LNG Import Terminal Work Experience 2 of 2

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Project No. 85001 890301 900104 900602 900701 901001 901101 910501 910801 911201 911202 920601 920602 920605 920701 920703 930102 930301 930302 930401 930501 930503 930601 930801 930802 931001 940201 940401 940501 940503 940504 940702 940706 940802 941002 941101 941201 950105 950301 950302 950303 950305 950306 950307 950401 950403 950404 950501 950502 950503 950703 950802 950901 951003 951102 951201 960102 960103 960104 960105 960203 960302 960401 960402 960404 960502 960601 960602 960701 960901 961003

Full listing of LNG Export Project Experience of Merlin Associates Project Location Client Name Australia's North West Shelf Woodside Petroleum Ltd. Kvaerner Floating LNG Cost Est Kvaerner Engr Kangean Island LNG Study ARCO-Indonesia F Train PT Badak - Ind Cost Est Pertamina/VICO Malaysia LNG Petronas Kenai Alaska LNG State of Alaska Sakhalin LNG Tokyo Gas F Train PT Badak Proj Fin Pertamina NWS LNG Capacity Increase Woodside Petroleum Ltd. NLNG Project Review IFC/NLNG F Train-Long Term Retainer Pertamina Gorgon Project Texaco Trinidad - Atlantic LNG British Gas Venezuelan LNG Inquiry Exxon Malaysia LNG Occidental Sakhalin II LNG Marathon Netherlands Gasunie, NV GasUnie, NV MLNG Phase II - Tech Audit Petronas Scarborough LNG Study Exxon Cristobal Colon Study Exxon LNG Study Phase II Amoco PNG Cape Possession LNG Study Exxon Gorgon Integration Evaluation Texaco Alaskan LNG Study Exxon, Arco, BP Natuna LNG Study Exxon Cristobal Colon LNG Lagoven, PdVsa Sakhalin Project Capex Est Exxon Yemen Capex Estimate Exxon Trinidad Project - Atlantic LNG Amoco Competitive Pacific LNG Study Chevron PT Badak G Train 3rd Party Est Pertamina A/FE LNG Study GasUnie, NV APCI Owners Seminar Presentation APCI Trinidad LNG Project Texaco Max LNG Train Size Study Exxon, Amoco Multiple Project LNG Cost Analysis Exxon Gorgon Proj Risk Analysis Texaco Gorgon/Natuna Project Competitive Analys Texaco Pipeline vs LNG Study Brown & Root Engineer Gorgon Pricing Strategy Texaco LNG Competitive Project Analysis Texaco LNG Project Comparisn Arco Alaska LNG Supply & Demand Study Amoco C & C Study, 2nd Edition LNG Industry Trinidad LNG Cost Est Phillips Pet Co. PT Badak G Train Expansion Petronas/Credit Lyonnais Natuna/Arun Act Cost Data Amoco Cristobal Colon Cost Est Shell Sakhalin LNG Operating Exp Amoco Oil & Gas Jrnl - LNG Economics LNG Industry Timor Sea LNG Study Hardy Pet, Oryx, etc Oman LNG Prelim Project Study Oman LNG, Chase Gorgon Competitive Analysis Exxon LNG Proj Sched Milestone Data Exxon One Train Economies of Scale Enron LNG Oper/Maint Study Atlantic LNG Trinidad Bid Analysis Exxon APCI Cost Reduction Study Exxon China LNG Competitive Study Exxon LNG Seminar Texaco G Train Project Monitoring Petronas Qatar Material Bal Study Enron Board of Directors Presentation Oryx Calibrate & Adjust Cost Model Exxon Oman LNG Project OLNG/ABN AMRO Natuna FEED Contract Strategy Exxon Qatar LNG Capex Est. Enron DME/LNG COS Amoco Amazon LNG Tenneco Develop Capex Model Mobil H Train Project Review Pertamina

Type of Work Year Performed Indep. Engr 1985-1992 Tech Consult 1989 Tech Consult 1990-91 Tech Consult 1990 Owners Engr 1990-91 Expert Witness 1990-91 Tech Consult 1990 Indep. Engr 1991-93 Indep. Engr 1991 Indep. Engr 1991-92 Indep. Engr 1991-93 Tech Consult 1992 Tech Consult 1992 Tech Consult 1992 Tech Consult 1992 Tech Consult 1992 Tech Consult 1993 Indep. Engr 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993-1996 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Indep. Engr 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1997-1999 Tech Consult 1995 Indep. Engr 1995-1998 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995-1996 Indep. Engr 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Indep. Engr 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Indep. Engr 1996-2001 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Indep. Engr 1996

LNG Export Project Work Experience 1 of 3 Merlin Associates Independent Engineering Services Page No. 23

Project No. 961005 961202 970301 970303 970701 970803 971202 971203 981003 981201 990501 990602 990801 991102 000102 000301 000303 000602 001002 010101 010202 010203 010504 010603 010902 010903 011001 011201 020202 020203 020402 020502 020503 021001 021202 021203 021204 030101 030301 030401 030701 030705 030803 030901 031001 031101 031201 031203 031205 040103 040201 040203 040301 040504 040604 040705 041101 041102 041103 041104 041104 050101 050106 050301 050302 050304 050305 050503 050601 050901 050902

Full listing of LNG Export Project Experience of Merlin Associates Project Location Client Name Bayu-Undan Audit Consultancy PPCo, BHP, Hardy, et al Natuna SCSA Cost Review Exxon Norwegian LNG Saga Petroleum PRICO II LNG Third Party Audit Pritchard-Black & Veatch OLNG Bond Issue Chase/OLNG Small LNG Proj Economics Poten & Partners Tangguh 3rd Prty Cost Est ARCO Pertamina-H Train Monitoring Pertamina/Fuji Bank Dabhol Phase II Financing-Indian Banks IDBI Tangguh Optimization ARCO Tangguh FEED/EPC Contracts ARCO LNG Course Texaco LNG Ship Project Finance NLNG/CSFB Badak LNG Reliab & Enhancemnt Pertamina/Fuji Bank Venezuela LNG Project Enron Floating LNG Third Party Review ExxonMobil LNG Proj Cost Benchmarking Shell Darwin LNG Project Evaluation TEPCO Tangguh Owner Estimate BP/Pertamina LNG Cost Analysis - Benchmark 2010 Shell CSFB NLNG Ship 10 Finance NLNG/CSFB Camisea LNG Chain Pre-Feas Study Hunt Oil Corp OLNG Refinance OLNG/Bk Tokyo-Mitsub LNG Cost & Competition 2002 LNG Industry NLNGPlus Project Finance NLNG, Credit Lyonnais, Citibank, et al Bolivia/Chile LNG Benchmark Repsol/BG/BP/Bechtel Camisea Owner's Engineer Hunt Oil Corp Brass LNG Benchmark Phillips, Agip, NNPC Egyptian LNG Project Finance BG, Edison, EGPC - SocGen West Niger Delta Cost Sensitivity ExxonMobil, Conoco, Chevron, NNPC Amazon/Green LNG Petrobras NLNG Ship 11 - 14 Finance NLNG/Fortis Bank Venezuela Deltana LNG Technology Study PDVSA/INTEVEP Equatorial Guinea LNG Technology Study Marathon Oil Co. Qatar LNG Technology Study Qatar Petroleum Tangguh Owner's Estimate Update BP/Pertamina NLNG Train 4 & 5 Monitoring NLNG, Credit Lyonnais, Citibank, et al GTI - Project Finance Course - Beijing US Trade Agency, Gas Tech Institute EOG Resources, Inc. - ALNG Train 4 EOG Resources Angola Benchmarking Study - BP/CT/EM Angola LNG Project Team Qalhat LNG Independent Engineer Government of Oman, OLNG Equatorial Guinea Third Party Cost Estimate Marathon Oil Co. Tangguh Large Train Prelim Cost Est BP/Pertamina ELNG Train 2 Independent Technical Consultant BG, Petronas, EGPC - Calyon et al Benchmark Study BP Donggi LNG Project US Market Price Study Medco, Pertamina, BP-Migas Angola LNG Owner's Estimate Angola LNG Project Team Algeria-Expert Witness for Lawsuit Sonatrach OLNG Replacement Cost Update OLNG Tangguh EPC Contract Price Escalation Study BP Algeria-GL1Z MCHE Failure/Replacement Study Sonatrach ELNG Train 1 - Construction Monitoring BG, Petronas, EGPC - Calyon et al QGas II Technology Study Marubeni Camisea LNG Due Diligence Evaluation Burlington Resources Sunrise LNG Benchmark Study ConocoPhillips OLNG/Qalhat Combined Replacement Cost OLNG and MOG of Oman AIChE Spring Meeting Presentation - LNG Costs American Institute of Chemical Engineers QGas III - Schedule Benchmark Study ConocoPhillips QatarGas 3 - Benchmark Cost ConocoPhillips MFC Technology Benchmark Study Statoil Snhvit Capital Cost Benchmark Study Statoil BOD Upgrade for Shtokmanovskoye Hydro Oil & Gas Company IQPC Conference Presentation-LNG Costs IQPC Brass LNG Project Benchmark & Optimization Brass LNG Project Sponsors Asian LNG Supplies - Singapore-LNG Costs Conference Company Peru Camisea Capital Cost Update Hunt Oil Corp GTI Base Load LNG Course - Sep 26 - 30, 2005 Houston Gas Technology Institute Qgas 3 - Capex Analogs for COP AFE approval ConocoPhill