Tony Regan - Tri-Zen International Singapore - Can there be another Australian LNG project – A look at the global competition faced by Australian projects

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Tony Regan - Tri-Zen International Singapore - Can there be another Australian LNG project – A look at the global competition faced by Australian projects

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Tony Regan delivered the presentation at the 2014 South East Asia Australia Offshore and Onshore Conference (SEAAOC). ...

Tony Regan delivered the presentation at the 2014 South East Asia Australia Offshore and Onshore Conference (SEAAOC).

SEAAOC is Northern Australia's largest and longest established petroleum conference and brings together major players involved within Australasia's oil, gas and petroleum industries. The event is run as a partnership between Informa Australia and the Department of the Chief Minister - Northern Territory Government of Australia.

For more information about the event, please visit: http://bit.ly/SEAAOC2014

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  • 1. www.tri-zen.com Can there be another Australian LNG project? Tony Regan, Principal Consultant Tri-Zen International, Singapore
  • 2. www.tri-zen.com 22 Introduction to TRI-ZEN  TRI-ZEN is a consulting business focused on energy and utilities  We cover upstream & downstream, technical, commercial & financial  We offer a wide range of services:  Consulting  Strategy  Business Development  Project Management  Organizational Development  Alliances  Due diligence for M&A, project finance and IPO’s  Lead consultants located across Asia with a global extended network  Clients include the leading companies in energy and professional services based in Asia, Europe & North America
  • 3. ThyssenKrupp Uhde Energy & Power ThyssenKrupp Uhde Energy & Power  Uhde Energy & Power, Oil and Gas Centre of Excellence based in UK, supporting regional Design centres including Uhde Australia.  A technical management consultancy providing multi-discipline technical support for major capital developments. The company has a significant track record of experience in the oil & gas, LNG and power sectors worldwide providing high quality project services to asset owners, operators and contractors in the oil, gas, LNG and renewables industries.  Core engineering design services focussed around process, facilities, utilities and structures with specialist services for due diligence and peer review, feasibility study, option appraisal, conceptual design and project management.  120 professional engineers, 20 LNG professionals Experience gained from:  Over 30 LNG import terminals  Over 15 LNG liquefaction projects  13 Floating terminal projects (both FPSO’s and FSRU’s)  11 floating liquefaction projects (FLNG)
  • 4. www.tri-zen.com Question 1  Are explosive costs and inadequate productivity affecting fresh investment in Australian projects 4
  • 5. www.tri-zen.com Question 1  Are explosive costs and inadequate productivity affecting fresh investment in Australian projects YES 5
  • 6. www.tri-zen.com US$/tonne capacity 6 NWS T4 Darwin T1 NWS T5 Pluto T1 Gorgon PNG LNG QCCLNG GLNG Icthys Wheatstone Pluto T2 Browse 0 500 1000 1500 2000 2500 3000 3500 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Start up date Aus Pacific Increased project costs
  • 7. www.tri-zen.com Project cost overruns 7 0 10 20 30 40 50 60 70 Cost variations FID v Latest est US$/bn FID US$/bn Latest est US$/bn US$ 1.3bn added to GLNG to account for net present cost of 3P gas purchased Latest estimate : Standard Chartered Bank Source: SCB, Bernstein Research
  • 8. www.tri-zen.com Project cost overruns 8 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Cost variations FID v latest estimates US$/tpa FID US$/tpa Latest est US$/tpa US$ 1.3bn added to GLNG to account for net present cost of 3P gas purchased Latest estimate : Standard Chartered Bank Source: SCB, Bernstein Research
  • 9. www.tri-zen.com Question 2  Competing for capital needed to develop future projects of global play 9
  • 10. www.tri-zen.com Question 3  What is the reality of the global competition from new and emerging markets such as the USA, Canada, Russia & East Africa? 10
  • 11. www.tri-zen.com R/P = 98 R/P = 265 R/P = 41 Euro 47 mill tnNorth America 9 mill tn Caribb, Cent & S. America 21 mill tn Forecast LNG Supply & Demand 2015 LNG demand (million tonnes) Asia Pacific 111 mill tn Africa 71 mill tn Middle East 103mill tn Liquefaction capacity (million tonnes) Asia Pacific 211 mill tn (Existing, under construction, planned) Europe Liquefaction Capacity 313 million tonnes Base case demand 300 million tonnes
  • 12. www.tri-zen.com R/P = 98 R/P = 265 R/P = 41 Australia Norway Algeria Nigeria Eq. Guinea Trinidad Peru Oman Qatar Yemen Abu Dhabi Brunei Malaysia Indonesia Egypt Libya Russia Global LNG liquefaction capacity 2020 Angola Colombia PNG Global liquefaction capacity 405 million tonnes Russia USA Existing plus under construction
  • 13. www.tri-zen.com Liquefaction projects expected to reach FID in 2010 13 Mill tn Start Shareholders Contracts Pluto T2 5 2013 Woodside Tokyo Gas (1.75 M tn), Kansai Electric (2 M tn) Pluto T3 5 2014 Woodside Ichthys 8 2015 Inpex, Total Fisherman's Landing 1.5 2012 LNG Ltd, Golar, Arrow Toyota Tsushu (1.5 M tn) Gladstone LNG 3.6 2014 Petronas, Santos Petronas (2 M tn with option for another 1 M tn) Queensland Curtis 7.4 2014 BG CNOOC (3.6 M tn plus portfolio options) Australia Pacific 7 2014 Origin, ConocoPhillips PNG 8 2014 InterOil Total 45.5 Liquefaction projects expected to reach FID in 2010 Australia – the only show in town All other projects had been suspended/cancelled as the recession hit
  • 14. www.tri-zen.com The competition in Asia Pacific 14 Project Country Mill tn FID Start up Shareholders BC LNG Export Canada 1.8 2012 2015 LNG Partners, Hasla First Nation Kitimat LNG Canada 10.0 2014 2018 Apache, Chevron LNG Canada Canada 6.0 2015 2019 Shell, Mitsubishi, KOGAS, PetroChina Prince Rupert LNGCanada 14.0 2015 2020 BG Pacific NW LNG Canada 10.0 2014 2018 Petronas, Sinopec, Japex, IOC, Petroleum Brunei Aurora LNG Canada ? ? ? Nexen/CNOOC Grassy Point Canada SK E&S Grassy Point Canada Woodside WCC LNG Canada 15.0 ExxonMobil Kitsault Canada 20.0 2014 Kitsault Energy Triton LNG Canada 2.3 Triton, AltaGas, Idemitsu Woodfibre LNG Canada 2.1 Pacific Oil and Gas Abadi Indonesia 2.5 2013 2018 Inpex, Shell Tannguh T3 Indonesia 3.8 2013 2018 BP, MI Berau, CNOOC, Nippon Oil, KG Berau, LNG Japan, Talisman Basrah Iraq 2.0 ? ? Shell, Mitsubishi Mocambique Mocambique 20.0 2013 2018 Anadarko, ENI Sakhalin T3 Russia 4.8 2014 2018 Gazprom, Shell, Mitsui, Mitsubishi Vladivostok Russia 10.0 2013 2017 Gazprom, Itochu, Japex, Inpex, Marubeni Sakhalin 1 Russia 5.0 2018 Rosneft, ExxonMobil PNG LNG T3 PNG 4.0 2018 ExxonMobil, Oil Search TBA PNG 5.0 InterOil Total Stanley PNG 3.0 Horizon Oil, Osaka Gas Tanzania Tanzania 10.0 2019 BG, Statoil Jordan Cove USA 6.0 2018 Veresen Inc Oregon LNG USA 9.6 ? ? Leucadia National Corporation Alaska USA 15.0 ? BP, ConocoPhillips, ExxonMobil and TransCanada 181.9 Proposed & planned Asia Pacific liquefaction projects
  • 15. www.tri-zen.com The competition - Atlantic 15 Project Country Mill tn FID Start up Shareholders Cameroun LNG Cameroun 3.5 2014 2018 GdF, SNH Goldboro NS Canada 5.0 2018 Piedidae Energy Melford NS Canada 4.5 2016 2020 H Energy Eq. Guinea T2 Eq. Guinea 4.4 2012 2018 Marathon,Sonagas, Mitsui, Marubeni, Union Fenosa, GALP Tamar FLNG Israel 3.0 2013 2018 Noble Energy, DorGas, Isramco, Pangea & Delek Brass Nigeria 10.0 2013 2017 NNPC, ENI, ConocoPhillips, Total Yamal 2 Russia 16.5 2022-25 Novatek Pechora Russia 2.6 ? 2018 Ch-Oil&Gaz Baltic LNG Russia 10.0 2018 Gazprom Freeport LNG USA 13.2 2012 2017 Freeport LNG, Macquarie Lake Charles USA 15.0 ? 2017 BG, Southern Union Cove Point USA 7.8 ? 2017 Dominion Cameron USA 12.0 ? 2018 Sempre Energy Corpus Christie USA 13.5 ? 2017 Cheniere Brownsville USA 20.0 ? 2018 Gulf Coast LNG Export Lake Charles LA USA 8.0 2017 Magnolia LNG Pascagoula USA 11.5 ? ? Gulf LNG Liquefaction Elbe Island USA 4.0 ? ? El Paso (Southern LNG) Lavaca Bay TX USA 3.0 2013 2017 Excelerate (FLSO) Golden Pass USA 15.6 ? 2018 ExxonMobil, Qatar Petroleum Main Pass USA 24.0 ? 2018 United Energy, Freeport-McMoRan Energy Ingleside TX USA 8.0 ? 2018 Pangea LNG Plaquemines LA USA 8.0 2018 CE FLNG (Cambridge Energy) Cameron Parish LA USA 1.4 Waller LNG Services Cameron Parish LA USA 1.5 Gasfin Development Cameron Parish LA USA 5.0 Venture Global Brownsville TX USA 24.0 Eos LNG, Barca LNG Brownsville TX USA 7.0 Annova LNG Brownsville TX USA 4.0 2018 Texas LNG West Cameron FLNGUSA 14 Delfin LNG Plaquemines LA USA 2 Louisiana LNG Energy 282 Proposed & planned Atlantic Basin liquefaction projects
  • 16. www.tri-zen.com Term LNG contracts Japan & China 16 Abu Dhabi 0% Australia 37% Brunei 4% Indonesia 6% Malaysia 7% Oman 3% Papua New Guinea 3% Qatar 11% Russia 6% USA 19% Others 4% Japanese term contracts 2020 Australia 45% Canada 8% Indonesia 4% Malaysia 5% PNG 3% Qatar 17% Russia 5% Others 13% Chinese term contracts - China 2020 60 million tonnes100 million tonnes
  • 17. www.tri-zen.com Where will FLNG fit in?  Where will FLNG fit in? Is this the way to go for Australia 17
  • 18. www.tri-zen.com FLNG Projects 18 Early proposed projects were off West Africa but focus switched to Australia Now going global – Malaysia, Indonesia, Iraq, Israel, Colombia Africa and USA FLNG Firm Existing Proposed PNG AUSTRALIA Greater Sunrise, 3.5 mtpa Bonaparte, 2 mtpa Shell/Prelude, 3.5 mtpa Scarborough, 6 mtpa Echuca Shoals, 1.5 mtpa Abadi, 2.5 mtpa INDONESIA TIMOR LESTE PTT Cash Maple, 2 mtpa Evans Shoal, Pandora 1.2 mtpa Petronas FLNG, 1.2 mtpa Petronas FLNG 1.5 mtpa Others: Iraq, Shell, Mitsubishi 2 mtpa Israel, Noble, Delek, DSME Colombia, Exmar 0.5 mtpa USA , Excelerate 3 mtpa, Main Pass 24 mtpa Browse, 12 mtpa
  • 19. www.tri-zen.com R/P = 98 R/P = 265 R/P = 41 FLNG Projects Firm Proposed Iraq Canada USA Colombia Gabon Namibia Mocambique Israel Malaysia Indonesia Australia PNG FLNG Projects Under construction – 4 Pre FEED/FEED stage – 9 Study/Prospects 19 Congo Eq. Guinea Cameroun Mauritania
  • 20. www.tri-zen.com 20 We add value  Strategy  Asset optimisation  Sector studies  Market studies  Forecasting  Commercial and technical studies  Commercial representation  New market entry  Detailed business cases  Project finance and management  Mergers & Acquisitions  Organisational Development Based in Singapore with consultants in: Bangkok Beijing Hong Kong Melbourne Perth Sydney Calgary London TRI-ZEN International Pte Ltd Ocean Financial Centre 40-00, 10 Collyer Quay, Singapore 049315 Tel: 65 6254 4791 tony.regan@tri-zen.com