Navius Research Inc. and Steve Davis & Associates produced a conceptual design for powering the LNG terminal on the North Coast that would maximize renewables at its production facility and do so reliably, affordably and on schedule—using established commercial technologies. Further, doing so reduces that plant’s carbon pollution by 45 percent, its air emissions - nitrogen oxides - by 70 percent and increases local permanent jobs by 40 percent. The cost for all these benefits? A 1 percent increase in projected sales price of the LNG.

1. 1
Proposed British Columbia
LNG Facilities and
Renewable Power
Feasibility Assessment
May 13, 2014
Steve Davis & Associates Ltd.

2. OUTLINE
I. Basic parameters for powering the Liquefied
Natural Gas (LNG) facility
A. Sizing, assumptions and objectives
B. Scenarios: D-Drive, Ancillary Renewables-Grid and
Maximum Renewables
II. Maximum Renewables Scenario
A. Description of Power Facilities
B. Schedule
C. Reliability
• Power availability, by fuel, as wind generation changes
III. Summary of Scenario Comparisons
IV. APPENDIX: Reference Slides
2

3. I. Basic Powering Parameters
• Single LNG Facility
‒Producing 22 MTPA (Million Tonnes per Annum)
• 1,000 MW power requirement (at full build out)
‒Compression = 800 MW
‒Ancillary = 200 MW
‒Built in two phases; 500 MW each
• Power Scenarios Considerations
 Designs proposed by LNG proponents
 Designs by recent and proposed LNG
– e.g. No shared facilities
 Government and BC Hydro goals & constraints
– e.g. No increase to other BC Hydro ratepayers3

4. Design Objectives
1. Maximize renewable generation
2. Meet LNG industry requirements on:
 Reliability and
 Schedule – meet terminal start-up date
3. Reduce Greenhouse Gas (GHG) emissions
4. Reduce local emissions (i.e. NOx)
5. Provide Legacy of power infrastructure
6. Avoid BC Hydro twinning transmission lines
7. Create permanent local jobs
8. Minimal increase in cost of LNG produced4

5. 3 Scenarios
1. Direct Drive (D-Drive)
– Single cycle gas turbines (SCGT) directly drive
Compression and power Ancillaries
2. Ancillary Renewables - Grid
– Highly efficient SCGT direct drive for Compression
– Ancillary powered by Grid connected to wind
3. Maximum Renewables (Max RE)
– Combined cycle gas turbine (CCGT), Reciprocating
Engines (Recips), Boil-off-gas (BoG) turbines and
wind power produce electricity to drive Compression
– Ancillary powered by Grid connected to wind
5

6. Power #s for 3 Scenarios
6

7. D-Drive vs Max Renewables
7

8. Ancillary RE-Grid vs Max
Renewables
8

9. II. Max. Renewables Scenario
• 1,000 MW power requirement for E-LNG
 Built in two phases of 500 MW each
 Compression = 800 MW. Ancillary = 200 MW
• Ancillary load is driven by the grid connected
to local wind project
• Compression uses electrical motors that can
be fully driven by gas power
 Phase 1 is CCGT; Phase 2 adds Recips.
 Wind output is used to reduce generation from
gas engines and power ancillary
9

10. Facilities Map
10
Wind Farm
Reciprocating
Gas Engines
LNG
Facility
Ancillary
CCGT
Grid
LNG Facility
Compression
Boil Off Gas
Gas Turbine
Maximum RE

11. Facility Sizes*:
11
Wind Farm
Reciprocating
Gas Engines
LNG
Facility
Ancillary
CCGT
Grid
LNG Facility
Compression
Boil Off Gas
Gas Turbine
MW
783
MW
400
MW
40
MW
360
MW
200
MW
200
MW
800
MW
* At Full Build-Out

12. Energy:
12
Wind Farm
Reciprocating
Gas Engines
LNG
Facility
Ancillary
CCGT
Grid
LNG Facility
Compression
Boil Off Gas
Gas Turbine
TWh/y
ear
2.2 1.6 0.3 3.0
1.7
1.8
7.0
Result = 44% Renewables

13. Power Cost:
13
Wind Farm
Reciprocating
Gas Engines
LNG
Facility
Ancillary
CCGT
Grid
LNG Facility
Compression
Boil Off Gas
Gas Turbine
$ per
MWh
$144 $86 $72
$62
$95
$108

14. Two
Gas
Turbines
@ 120 MW
each
One
Steam
Turbine
@ 120 MW
14 2-on-1 CCGT Totaling 360 MW

15. Reciprocating Gas Engines
15
Twenty 18 MW engines + One 40 MW Steam Turbine = 400 MW
Photo of 20 engines at 231 MW wind-chaser project near Denver

16. RECIPROCATING ENGINES
Excellent Wind Chasers
• Very fast start and high ramp rates
• Modular (e.g. 20 engines at 18 MW each),
yields efficient part-load operation:
– Individual units can be turned off and on,
rather than turned down.
• Combined-cycle increases efficiency
• High reliability, especially w. multiple units
• NOx can be lower than gas turbines
16

17. Power Availability
17
0
200
400
600
800
1,000
1,200
0 10 20 30 40 50 60 70 80 90 100
MWAvaiable
% of hours each year
Power Available by Source - Maximum Renewables, Full build-out
CCGT
Wind
Grid
Combined Cycle
Recips.
BoG Turbine

18. B. Schedule
Maximum Renewables Scenario
• Planned Schedule and Phasing
• Upsetting Events - Delay in:
 CCGT or Reciprocating Engines
 Transmission
 Wind Energy
 Other LNG facility
18
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.

19. Current Experience
• There are many examples of CCGTs,
SCGTs and Reciprocating Engines
 Lead time ~ 5 years*
• B.C. has four operating wind farms:
 Lead time ~ 5 - 6 years*
• Transmission
 Capacity upgrades to Prince Rupert or Kitimat
are straightforward and already underway
 Transmission lines from wind farms
19
* Source: BC Hydro 2013 Resource Options Update Report

20. Power Schedule and Phasing
20
0
500
1000
1500
2000
2500
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
MWInstalled
CCGT
BoG Turbine
Grid, phase 1
Grid, phase 2
Combined Cycle Recips.Wind 1
Wind phase 1
Wind 2
Compression Load, Phase 2
Total Load, Phase 2
Total Load, Phase 1
Compression Load, Phase 1
Phase 1 on-line in 2019
Phase 2 on-line in 2022

21. Upset Event:
CCGT or Recips. are Late
• Are generation plants more likely than
D-Drive to be delayed?
 Generation plants have more flexible siting.
Air permitting should be quicker in a
chosen location than in a required location.
 Separate target to oppose, but supports
lower environmental impacts.
• Plants are dedicated to individual facility
21

22. Upset Event:
Transmission Upgrades Late
• Twinned line to coast is not needed
• Wind farm or interconnection late?
 Run on grid plus thermal generation
22

23. Upset Event:
Other LNG Facility is Late
• Has no bearing on power supply
• No generation and transmission is
contingent on multiple facilities
23

24. C. RELIABILITY
Max Renewables Scenario
• Statistics at steady state operation
 Current use: familiarity and reliability
 Availability and efficiency
 Redundancy
• Responses to upsetting events
 Wind variation
 Transmission outage
24
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.

25. Current Use
• Unfamiliar?
 Snohvit E-LNG plant: Operating since 2007
 Freeport E-LNG plant: Under-construction
 Woodfibre LNG application to NEB involves E-LNG
 CCGT are common technology
 Global capacity of large recips.: 55GW+ in 2013*
• Unreliable?
 Initial Snohvit problems explained and overcome
‒ Joint owner, GDF Suez, proposes E-LNG design on next project
 Shell/Siemens report*: higher efficiency, lower costs
 ABB report*: faster delivery, lower downtime
25
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.* See Appendix G for Reference Sources

26. Availability and Efficiency
• CCGT (phase 2)
 Full output for over 75% of time
 Never less than 60% output
 94% avg. utilization: high efficiency
• Combined cycle reciprocating engines
 Modular: reliable and no penalty for part load
operation
26
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.

27. Redundancy
• Different levels of redundancy are
possible
• All scenarios considered have same
amount of redundancy:
 allows apples-to-apples comparison
27
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.

28. Upset Event:
Key Points- Wind Variation
• When no wind:
 CCGT and reciprocating engines at 100%
• When full wind:
 CCGT at 60% output, recips. are idled
• When wind ramps up or down
 Use reciprocating engines to follow wind
 Small scale battery storage (e.g. GE’s
Brilliant Platform) creates smooth power to
follow with 30 minute foresight
28
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.

29. Partial Wind to No Wind
29
0
200
400
600
800
1,000
1,200
0 10 20 30 40 50 60 70 80 90 100
MWavaialable
% of hours each year
Power Available by Source - Maximum Renewables, Phase 2
CCGT
Wind
Grid
Combined Cycle
Recips.
BoG Turbine
Full Wind No Wind
Recips: 90 MW to 400 MW in 30 seconds
Wind: At worst, would drop in 15-30 minutes

30. Full Wind to No Wind
30
0
200
400
600
800
1,000
1,200
0 10 20 30 40 50 60 70 80 90 100
MWavaialable
% of hours each year
Power Available by Source - Maximum Renewables, Phase 2
CCGT
Wind
Grid
Combined Cycle
Recips.
BoG Turbine
Full Wind No Wind
CCGT: 216 MW to 360 MW in 2 minutes (75 MW/min)
Recips: 0 MW to 400 MW in 2-5 minutes (hot start)

31. Upset Event:
Transmission Failure
• Only ancillary load is powered from grid
• Frequent short duration (e.g. lightning
strikes) outages won’t affect liquefaction
• Transmission from wind farms is new: build
with insulation
31
STEVE DAVIS & ASSOCIATES LTD.
STEVE DAVIS & ASSOCIATES LTD.

32. III.a Summary: Max RE vs D-Drive
• Increase Renewables from 0% to 44%
 Increase wind from 0 MW to 783 MW, and
 Reduce thermal generation by replacing SCGTs with
wind-chasing Reciprocating Engines and BoG Turbines.
• Maintain LNG Reliability & Schedule requirements
• Increase local permanent jobs by 43%
• Build $2.9 billion wind power legacy
• Power & Reduce GHG intensity by 46%
 Reduce NOx by 68%
• Increase Power Cost by 19%
• Increase LNG Sales Price by 1.1%
32

33. III.b Summary: Max RE vs Ancillary Grid
• Increase Renewables from 20% to 44%
 Increase wind from 630 MW to 783 MW, and
 Reduce thermal generation by replacing half the SCGTs with
wind-chasing Recip. Engines and BoG Turbines.
• Maintain LNG Reliability & Schedule requirements
• Increase local permanent jobs by 2%
• Increase wind power/transmission investment 26%
 Reduce GHG intensity by 24%
 Reduce NOx by 38%
• Increase Power Cost by 15%
• Increase LNG Sales Price by 0.9%
33

34. IV. APPENDIX
A. Facilities Map: Direct Drive Scenario
B. Facilities Map: Ancillary RE – Grid Scenario
C. Capex for Maximum Renewables Scenario
D. Comparison Table: 3 Scenarios
E. Summary Comparison Table: D-Drive vs.
Ancillary RE – Grid
F. Key Assumptions in Financial Model
G. Reference Sources
34

35. Appendix A Facilities Map:
Ancillary Renewables - Grid
35
Wind Farm
LNG
Facility
Ancillary
SCGT
Grid
LNG Facility
Compression

36. Appendix B
Facilities Map: Direct Drive
36
LNG
Facility
Ancillary
SCGT
LNG Facility
Compression
Boil Off Gas
Gas Turbine

37. Appendix C Capex:
37
Wind Farm
Reciprocating
Gas Engines
LNG
Facility
Ancillary
CCGT
Grid
LNG Facility
Compression
Boil Off Gas
Gas Turbine
Maximum Renewables
2.70
$ BILLION
0.45 0.03 0.41
0.198

38. Summary Table38 Appendix D

39. D-Drive vs Ancillary RE - Grid
39
Appendix E

40. Modeling Assumptions
40
Appendix F

41. Reference Sources
for statements on slide 9
• Global capacity of large scale recips 55 GW
– Wartsila Power Plants References see:
www.wartsila.com/en/power-plants/references
• Shell/Siemens report:
– All electric driven Refrigeration Compressors in LNG Plants offer
advantages.
– By Fritz Kleiner, Siemens AG and Steve Kauffman, Shell
Development Ppy. Ltd., presented at GasTech2005
• ABB report:
– All electric LNG plants; Better, safer, more reliable – and
profitable.
– By Håvard Devold, Tom Nestli & John Hurter ©2006 ABB
Process Automation Oil and Gas
41
Appendix G

42. Navius Research Inc.
Michael@naviusresearch.com
604.683.1452
Steve Davis & Associates Consulting Ltd.
svdavis@shaw.ca
604-926-8352
42