LNG IMPLEMENTATIONPLANNINGA Plan to Serve the State of Hawai‘i                          The  Gas  Company,  LLC  
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
HAWAII’S ENERGY LANDSCAPE• Hawai‘i has no sources of naturally occurring oil or gas.• Abundant sunlight, wind, geothermal ...
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
HAWAI‘I IS THREATENED BY OILDEPENDENCE              Hawai‘i Power Generation By Source (2010) Geothermal                  ...
WHAT WE DO• Making SNG Converting naphtha to methane @ $35.00/MCF• LPG distribution @ $28/MCF
THE HAWAI‘I ENERGY MARKET                           $25                           $20                                     ...
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
WHY HAWAI`IGAS    Capabilities & Experience                                                HAWAI`IGAS    Skilled workforce...
DISTRIBUTION CHALLENGES• Island economy presents distribution challenges similar to Northern Europe• LNG model follows cur...
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
MACQUARIE GROUP           Macquarie Group                Macquarie Infrastructure and Real Assets (MIRA)             $9.8b...
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
THE THREE-PHASE LNG PLAN                 LNG MOBILE  Phase I        EMERGENCY BACKUP   Portable LNG containers and vaporiz...
LNG IMPLEMENTATION DETAILElements             Phase I              Phase II                          Phase IIITiming      ...
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
ENTIRE STATE TO SHARE BENEFITS• Develop up to 20 million gallons of LNG storage  capacity on Oahu     - Centered on Oahu –...
TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach•...
INVESTMENT IN CCGT NECESSARY                                       Lowers costs for                                       ...
BRINGING BUSINESS ANDGOVERNMENT TOGETHER  Unified approach to serving the islands                                         ...
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HawaiiGas LNG Presentation

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HawaiiGas LNG Presentation

  1. 1. LNG IMPLEMENTATIONPLANNINGA Plan to Serve the State of Hawai‘i The  Gas  Company,  LLC  
  2. 2. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital2 Proprietary Material 11/27/2012
  3. 3. HAWAII’S ENERGY LANDSCAPE• Hawai‘i has no sources of naturally occurring oil or gas.• Abundant sunlight, wind, geothermal energy - No sufficient infrastructure to capture, store and convert that energy to serve our needs. Chevron Refinery Tesoro Refinery• The two oil refineries near Honolulu produce nearly 90% of the fuel used in Hawai‘i • Sub-scale for continued profitable operation.3 Proprietary Material 11/27/2012
  4. 4. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital4 Proprietary Material 11/27/2012
  5. 5. HAWAI‘I IS THREATENED BY OILDEPENDENCE Hawai‘i Power Generation By Source (2010) Geothermal Photovoltaic 2% Wind ~1% 2% Coal Hydroelectric 15% ~1% Municipal Solid Waste 3% Biomass ~1% Petroleum 76% Source: HI Department of Business,• Hawai‘i is the most oil-dependent state - ~ 85% of our total primary energy, 76% of our electricity, and ~97% of our transportation fuels are produced from oil
  6. 6. WHAT WE DO• Making SNG Converting naphtha to methane @ $35.00/MCF• LPG distribution @ $28/MCF
  7. 7. THE HAWAI‘I ENERGY MARKET  $25  $20 • LNG - technically and $6.10 economically feasible $/mmBTU  delivered $9.60  $15 • LNG for Hawai‘i underway  $10 • Economic benefits for all Hawaii in power and  $5 industrial • The simple price  $-­‐ LNG-­‐-­‐Low LNG-­‐-­‐High Low-­‐Sulfur advantage is 30-45%-- Cost Cost Fuel  Oil even after liquefaction 115%  Henry  Hub Shipping  to  Hawaii Liquefaction  Cost Regasification and delivery costs LSFO,  Honolulu7
  8. 8. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital8 Proprietary Material 11/27/2012
  9. 9. WHY HAWAI`IGAS Capabilities & Experience HAWAI`IGAS Skilled workforce – gas engineering, operations, compliance and safety State-wide presence and operating infrastructure Our land-based approach supports state-wide LNG service Solid financial position and ability to scale operations Local operating experience Started import process Diversifies fuel supply for state LPG or Containerized LNG distribution capability Gas utility franchise serving all urban centers9 For Intended Use Only 11/27/2012
  10. 10. DISTRIBUTION CHALLENGES• Island economy presents distribution challenges similar to Northern Europe• LNG model follows current LPG model – O`ahu terminal with barge distribution Kaua`i – Gas Service Maui County – Gas Service O`ahu- Gas Service Maui County – Electric Demand Kaua`i – Electric Demand O`ahu - Electric Demand Barge Hawai`i Island – Gas Service Huki Kai Barge: 424,000 Gallons Hawai`i Island – Electric Pono Kai Barge: 657,000 Gallons DemandHAWAI`IGAS serves 68,658 (35,349 utility and 33,309 nonutility) residential and commercial customers 10 Proprietary Material 11/27/2012
  11. 11. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital11 Proprietary Material 11/27/2012
  12. 12. MACQUARIE GROUP Macquarie Group Macquarie Infrastructure and Real Assets (MIRA) $9.8bn+ $94b ~100 ~55 Assets Under Properties Market Capitalization Portfolio Management Businesses $339bn+ Global leader in infrastructure and real in total AUM assets management – operating in 23 countries* 14,200+ staff across 70+ offices in 28+ countries Portfolio Companies Provide: Global provider of: GAS +22 million • Banking households • Financial advisory • Investment & funds management ELECTRICITY +2.7 services in major international million households financial centers • *Data as of March 31, 201212 Proprietary Material 11/27/2012
  13. 13. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital13 Proprietary Material 11/27/2012
  14. 14. THE THREE-PHASE LNG PLAN LNG MOBILE Phase I EMERGENCY BACKUP Portable LNG containers and vaporizers EXPANDED ISO DELIVERIES Phase II & PERMANENT STORAGE Stationary LNG storage and vaporizers VESSEL DELIVERIES Phase III & EXPANDED STORAGE Small-scale (Methane-Coral class) LNG/LPG carriers to Hawaii;; cryotanks 14
  15. 15. LNG IMPLEMENTATION DETAILElements Phase I Phase II Phase IIITiming 2013-2015 2016-2018 2019-2025Purpose SNG system backup Small scale thermal and power Large scale power generation generationSupply Logistics ISO container on ISO container on conventional LNG tanker or barge with conventional ships ships ongoing ISOVolume 6% of SNG 10-15% of SNG 75% of SNG load Neighbor Specialized commercial and Islands + Oahu power gen industrial applications of 200-500 MWInfrastructure and Up to 20 ISOs Phase I plus up to 120 ISOs and LNG terminal facility andEquipment 1-2 vaporizers additional vaporizers distribution infrastructureStorage Mobile ISOs One or more locations with 15-25 million gallons of 70,000 gallons storage statewideFERC Yes Yes Yes 11/27/201215 Proprietary Material
  16. 16. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital16 Proprietary Material 11/27/2012
  17. 17. ENTIRE STATE TO SHARE BENEFITS• Develop up to 20 million gallons of LNG storage capacity on Oahu - Centered on Oahu – population 850,000;; 1600 MW generating capacity - Storage location within close proximity to Pearl Harbor and critical Dept. of Defense installations Energy Security National Security Economic Security Environmental Security17 Proprietary Material 11/27/2012
  18. 18. TOPICS• Hawaii’s Energy Landscape• The Price of Paradise• Why HAWAI‘IGAS• Strength of Macquarie Partnership• Our Approach• LNG Centralized Storage• Essential support for commitment of capital18 Proprietary Material 11/27/2012
  19. 19. INVESTMENT IN CCGT NECESSARY Lowers costs for consumers Benefits power producers, vehicles and marine transportation Clean low carbon alternative to petroleum
  20. 20. BRINGING BUSINESS ANDGOVERNMENT TOGETHER Unified approach to serving the islands 20

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