Monetizing shale gas-prospectus-adi


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Monetizing shale gas-prospectus-adi

  1. 1. Monetizing Shale GasBenchmarking Gas Utilization and Conversion OptionsProspectusMulti-Client Study ADI ANALYTICS LLC Houston  New Delhi +1 (281) 506-8234 © 2009-2012 ADI Analytics LLC
  2. 2. The discovery and rapid proliferation of shale gas basins inNorth America is driving up natural gas supplies but … North American Shale Gas Basins U.S. Natural Gas Supply (Trillion Cubic Feet Per Year) 25.1 23.4 21.3 19.2 2000 2010 2020p 2030p Shale Gas OtherSource: U.S. Department of Energy; EIA Annual Energy Outlook 2011 1
  3. 3. … Depressing gas prices and altering oil-gas price parityleading to new interest in gas utilization and conversion U.S. Natural Gas and Oil Prices (Nominal Price, U.S. $ / BOE) Recent Market Themes $181 Oil and gas at Oil and gas out  Gas substituting coal for power price parity of price parity  LNG importers considering conversion to export terminals $119  Chemical companies planning Gas price, new crackers in shale basins $/MM Btu $76 $9.68 $54 $7.19  Producers exploring gas $50 $5.18 conversion to fuels / chemicals $4.43 $40 $29 $25  Efforts to promote natural gas- based transportation 2005 2010 2020p 2035p Gas OilSource: EIA Annual Energy Outlook 2011 2
  4. 4. This multi-client study has benchmarked a number of optionsto utilize, convert, and monetize natural gas and … Gas Utilization Options Gas Conversion Processes Natural Electricity Gas Oxygen Syngas LNG Fischer Methanol Hydrogen Tropsch Natural Chemicals Gas Diesel Gasoline Ammonia Liquid Fuels Naphtha DME Refineries Jet Fuel Olefins Fuel Cells Transportation Transportation fuels Chemicals 3
  5. 5. … Addressed key questions to deliver several actionableinsights for various stakeholders … Representative Study Questions Deliverable Insights  What happens to LNG Markets Costs / Economics LNG imports?  Forecast supply and  Estimate capex / opex  Will U.S. export shale gas? demand of gas, NGLs, and products  Benchmark options based on IRR, NPV,  Will GTL be used to convert gas to gasoline and diesel?  Evaluate supply and markets, and risks Liquid Fuels demand impacts (GTL)  Are hydrogen or DME  Discuss key business feasible?  Assess impacts in models multiple scenarios  How much NGL supply can  Evaluate key scenarios Chemicals be absorbed for chemicals? and NGLs  Which markets will U.S. chemical resurgence serve? Competitive Activity Technology  How much coal will gas  Gather competitive  Review technologies to replace to produce power? intelligence to review convert gas into LNG, Power market developments GTL (gasoline, diesel)  Will carbon policy have a and chemicals role?  Assess regulatory issues  Discuss leading  Can we shift to a CNG-based technology licensors transportation infrastructure?  Evaluate CNG marketTransportation  Profile emerging gas  What are key CNG penetration for signposts? transportation utilization technologies 4
  6. 6. … Including economics of various gas monetization optionsat different scales and locations in North America Gas Monetization Options and Plant Capacities Feed LNG GTL MTG MM cfd MM tpa bpd bpd 100 N/A ~10,000 ~10,000 500 3.8 ~54,000 ~54,000 1,000 7.6 ~100,000 ~100,000 Gas Monetization Plant Locations Location LNG GTL MTG U.S. East Coast U.S. Gulf Coast Rockies Western Canada 5
  7. 7. In addition, all recent project proposals, technologydevelopment, and other competitive activity is profiled Areas of Competitive Activity 1 Liquefied  Proposals for over 10 plants across North America Natural  Conversion of import terminals Gas (LNG)  New export terminals 2 Gas to Liquids  Proposals for 4 projects across North America (GTL) / Methanol  New GTL and MTG projects to Gasoline (MTG)  Technology development efforts 3  Proposals for ~10 NGL and ethane pipelines Midstream  Proposals for 17 new fractionators 4  Proposals for 4 ethane crackers Petrochemical  New ethane crackers Crackers  Revamp or expansion of existing crackers 5 Natural Gas  Efforts to promote natural gas-based transportation Vehicles (NGVs)  Fleet conversions to use natural gas as a fuelCONFIDENTIAL 6
  8. 8. The “Table of Contents” reflects the study’s structured andcomprehensive scope of work … 1 Executive Summary Methanol to DME / Gasoline  Technology and licensors review 6  Product demand and pricing Introduction  Cost and economic analyses  Purpose and objectives  Recent competitive / market developments 2  Deliverables and benefits  Study team and methodology Natural Gas Liquids (NGLs) Utilization  Supply, demand, and pricing outlook 7  Review of cross-basin infrastructure Overview of Natural Gas Industry  Recent competitive / market developments  Gas supply, sources, and outlook 3  Gas demand, user segments, and outlook Natural Gas Vehicles (NGVs)  Imports, exports, and supply-demand gaps  Fleet size and growth assessment 8  Impact on natural gas consumption  Infrastructure costs and market development Liquefied Natural Gas (LNG)  Technology and licensors review Gas Demand Scenarios 4  Product demand and pricing  Sector-wise gas assessment  Cost and economic analyses 9  Growth scenarios for gas demand  Recent competitive / market developments  Comparison of supply-demand gaps Competitive Landscape Gas to Liquids (GTL)  Profiles of ~40 project proposals in …  Technology and licensors review 10  … LNG, GTL, and MTG and … 5  Product demand and pricing  … Midstream, chemicals, and NGVs  Cost and economic analyses  Recent competitive / market developments 11 Appendix: Methodology & AssumptionsCONFIDENTIAL 7
  9. 9. … Executed by a team with top-tier industry and consultingexperience along with deep gas monetization expertise … Expert Team Uday Turaga holds a PhD in Fuel Science from Penn State and an Commodity pricing MBA from UT Austin. Through stints at ExxonMobil, ConocoPhillips, Oil/gas project economics and Booz, Uday has developed strategy for shale gas operators, Refining / fuels technology analyzed economics of oil/gas projects, commercialized fuels Technology assessment technology, and conducted regulatory analysis / scenario planning Project management Colin McHattie brings technical and commercial oil, gas, and LNG E&P asset management project initiation and development experience spanning over 30 Project development years with ConocoPhillips. His contributions spans management, Gas commercialization business, geoscience, and research roles including serving as Strategic planning Manager Gas-to-Liquids and Carbon Conversion Technologies. New opportunity/tech assessment Vis Viswanathan brings 35 years of experience with Akzo-Nobel, Gas and syngas conversion ConocoPhillips, and Lummus in process development / economics Risk evaluation and technology evaluation for refining and chemicals. He brings Process economics deep expertise in gas monetization, including Gas-to-Liquids. He Technology assessment holds a Ph.D. from University of Minnesota in Chemical Engineering. Process selection Vishakha Shembekar brings deep expertise in oil and gas, Natural gas-derived chemicals chemicals, and renewables with emphasis on chemical industry Chemical pricing / markets applications of natural gas. She holds a Ph.D. from the Indian Technology assessment Institute of Technology, Mumbai and brings nearly 10 years of Analytical modeling experience gained at Cornell, Dow, and Merck.CONFIDENTIAL 8
  10. 10. … Using a robust methodology with findings peer reviewedby distinguished advisors and Fortune 500 subscribers Methodological Tools Peer Review / Subscriber Validation  Study Subscribers Including Fortune 500 companies: Subscribers have reviewed our study and contributed to it Hypothesis Driven by providing non-confidential inputs Primary Secondary Research Research  EPC Company: Leading EPC firm with expertise in GTL, LNG, and Chemicals Methods reviewed cost methodology and data and Tools Analytical  LNG Expert: Recently-retired Technical Modeling Analysis executive from a leading LNG player guided the LNG analyses and findings Value Chain Analysis  GTL Expert: Renowned GTL expert with experience in three majors advised on the GTL analyses and findings 9
  11. 11. In summary, our study is independent, current, and unique,and will benefit you with actionable deliverables and insights  Supply, demand, price, and market outlook for natural gas and NGLs  Apples-to-apples economic comparison of LNG, GTL, and chemicals Deliverables  Profiles of competitive activity and project plans in gas monetization  Synopses of gas monetization process and technology readiness  Two interim updates, findings workshop, and final report  Cutting-edge market perspectives on natural gas monetization  Independent analysis of investment options around gas monetization Benefits  Appraisal of best-in-class gas monetization processes and technologies  Access to deep industry and top-tier consulting expertise cost-effectively  Participation in a subscriber-driven, interactive, and peer-reviewed study Operating Companies Corporate Functions Service Providers  Oil / Gas Majors  EPC Firms  Banks Audience  National Oil Cos.  R&D Groups  VC Firms  Midstream Firms  Strategy Teams  PE Investors  E&P Independents  Tech. Licensors  Governments  Chemical Companies  Industry Associations  Consulting Firms 10
  12. 12. Subscribers can join and participate in this study at acompetitive and cost-effective fee Fee: U.S. $24,900  Fee is due on sign-up Final report and  Quote is valid until March 31, 2012 workshop scheduling available January 2012 Subscription includes following deliverables:  Draft report  Client workshop  Final ~250-page report  Insights / analyses for select client questions This study and its contents will represent an original effort by ADI Analytics LLC based on its own research and analyses and published and unpublished information from third parties. However, ADI Analytics LLC, its owners, and associates neither provide warranties nor assume liabilities of any kind for the offered reports and consulting services. For more info, contact Uday Turaga at +1.832.768.8806 or turaga@adi-analytics.comCONFIDENTIAL 11
  13. 13. ADI Analytics is a boutique energy consulting firm that solvesclient problems using a rigorous data-driven approach … Markets Technology Operations Functions Oil & Gas Exploration Production Refining Distribution Power & Mining Coal Generation Transmission Carbon Renewables & Cleantech Biomass Solar Wind Geothermal Chemical & Industrial Plastics Materials Auto ManufacturingCONFIDENTIAL 12
  14. 14. … Offering services that help clients understand markets,develop strategy, improve operations, and deploy technology Conduct in-depth research and Benchmark client capabilities, analysis to identify new markets or costs, and competitiveness against Market Competitive segments, their size, profitability, industry based on public information Research Benchmarking growth, competitive landscape, and rigorous modeling and suggest client fit, and execution strategy improvement ideas Build valuation models to analyze Understand technologies including investments in capital projects, Investment Technology their business impact, cost, trends, businesses, or capabilities to Analysis Assessment competing options, deployment risk, estimate economic value, ROI, and commercialization success NPV, IRR, risks, and other metrics Advise clients on competencies and Implement programs for ideation, improving them with organization portfolio development, stage-gate Business Innovation and resource alignment to enhance maturation, open innovation, IP Strategy Strategy competitiveness, entry barriers, and management, functional excellence, shareholder value and talent development Develop and explore carefully Assess organizational goals and “as drawn future scenarios to define Scenario Process is” processes to identify gaps and medium-, long-term visions and Planning Design design “to be” processes that fill pressure-test them through gaps and achieve target goals quantitative, analytical modelsCONFIDENTIAL 13
  15. 15. In recent work, we have supported blue-chip clients onvarious business and technical consulting projects Assessed costs, economics, Select Clients U.S. Department feasibility, and commercialization of Energy potential of several renewable  U.S. Department of Energy energy technologies  National Institute of Standards and Technology Identified strategic and technical Upstream needs to establish an unconventional  Fortune 100 Oil and Gas Major Independent business and designed a fit-for-  FTSE 100 Oil and Gas Major purpose organization  Fortune 500 Coal Company Sized market, growth, and segment  Recent IPO Biofuels Start-Up Venture profitability of the oilfield services Capital Firm industry as groundwork to build  Energy-Focused VC Firm investment fairway  Ben Franklin Technology Partners  Fortune 500 E&P Company Energy Supported diversification strategy by Equipment sizing market and profiling customer  Energy Training Services Vendor Vendor willingness to switch vendors  Asian Chemical ConglomerateCONFIDENTIAL 14
  16. 16. We look forward to working with you Uday Turaga, Ph.D. Colin McHattie Vis Viswanathan, Ph.D. +1 (832) 768-8806 +1 (832) 359-5906 +1 (832) 457-6486 +1 (281) 506-8234 15