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Texas LNG
Citation preview
November 2014
www.txlng.com
Texas LNG On track to supply US LNG to global markets under flexible terms and competitive prices
CONFIDENTIAL
Copyright © Texas LNG LLC
Project Overview & Shipping Impact
We are a “Pure Play” US LNG Export Project which will produce 2 MTA of LNG from 2019
We are a credible alternative to the ‘status-quo’ where few LNG suppliers control the market and the customer is taken for granted.
We will encourage flexible terms, no destination restrictions, & delivered
prices based on ‘gas-on-gas’ economics and true costs.
Our project will leverage Asian shipyards to reduce capex and thus offer the best price for our customers.
As of TODAY, we are fully funded until FID, including engineering and
permitting activities.
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Optimal location for LNG export project One of the closest ports to the Panama Canal
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Deep Ship Channel
Gulf of Mexico
Brownsville, Texas, USA
Matamoros, Mexico
Project Site
Project concept
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o 2 MTA LNG export facility in Brownsville, South Texas, USA
o 110+ Acre site directly adjoining Deepwater Ship Channel (12.9 meters) and 4 lane highway. Within 10 km from town infrastructure
o Multiple feed gas supply options o Pre-FEED completing, FEED beginning in Nov
2014, First LNG in 2019
Texas LNG’s site in Port of Brownsville is ideal for an LNG export project
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Deep Water
42 feet
(12.8 m)
Power Grid Access
Possible use of electric compressors
Close Proximity to Gas Pipelines
Multiple suppliers under discussion – Feed Gas Supply agreement signed with one of largest gas trading companies in the US (company manages or sells close to 10% of US natural gas consumption).
Wide Channel
~1,000 feet (300 m)
Turning system
to be built on site
Texas LNG site meets all critical criteria
Plot Size
110+ Acres
Waterfront
2,400 feet
(~750 m)
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Samsung Partnership: responsible for all engineering and minority equity owner in project
Conceptual Study
Pre-FEED FEED Detailed Engineering
Completed in May 2014
Commenced in June 2014 –completed
end Oct 2014.
13,000+ man-hours
Begun in Nov 2014
Estimated: Late 2015
Conceptual Study and Pre-FEED engineering is complete. Currently, over 80 full-time Samsung engineers working on FEED in Houston and Seoul, under Texas LNG technical supervision.
FEED ENGINEERING BEGAN TWO WEEKS AGO
Post ‘pre-FEED’ Capex estimates = ~$1.3 Billion for 2 MTA
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Item Current pre-FEED estimate
Barge / Skid Liquefaction Unit (2 MTA) + Storage Tank [LNG Plant: $415 MM, Storage Tank: $135 MM, Gas Pre-treatment + Utilities: $390 MM, post FID PM: $20 MM + Flares: $40 MM]
~$1000 million
Port & Shore-side Facilities [Infrastructure, Dredging & Civils: $300 MM]
~$300 million
TOTAL CAPEX (w/contingency; preliminary pre-FEED estimate)
~$1,300 million (~$1.3 billion)
Development Capital (pre-FID) excluded [Engineering, Environmental, Legal, Community studies and Samsung FEED payment].
Texas LNG will leverage Asian shipyard construction cost and schedule advantage
Australia (Queensland) $/MMBtu
Liquefaction $ 6.50
Feed Gas @ plant $ 7.00
Shipping Costs $ 1.50
Total Delivered Price $ 15.00
Typical Australia contract terms vs Texas LNG model
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Take or Pay portion
Australian LNG project Take or Pay = $13.50
Texas LNG $/MMBtu
Tolling Fee* (rise with inflation) $ 2.80 Feed Gas assumed price $ 4.00 Pipeline Tariff* $ 0.40 Operating Charge* (rise with inflation) $ 0.45 Shipping estimated $ 2.80 Panama Canal estimated $ 0.25 Total Delivered Price* $ 10.70
Take or Pay
Texas LNG’s Take or Pay = $2.80*
Liq
ue
faction
Tolling
Feed Gas
Fee
d G
as
Operating Charge
Shipping
Shipping
$/M
MB
tu
Delivered to North Asia: $15/MMBtu Delivered to North Asia: $10.7/MMBtu
Pipeline
* Texas LNG charges based on current CAPEX and OPEX pre-FEED estimates and may be adjusted as project development continues
Source: Deutsche Bank
Texas LNG’s pricing model provides very large price advantages – especially over long run
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Offtaker has a price advantage as long as oil price above $73/bbl (assuming US gas price = $4.00 + Texas LNG fees + Est. shipping vs 13.5% slope contracts in NE Asia)
Estimated delivered price $10.70
US will be the next wave of LNG supply
10 Source: RWE spot market presentation – LNGgc Mar 2014
The US has the potential to export upto >100 MTA by 2020..this would increase global LNG capacity by >30%.
Very disruptive as it will be priced very differently than current LNG
Independents (like Texas LNG, can and will develop projects that will not be controlled by ‘big oil’
Number of LNG shipping routes has grown…
11 Source: Singapore Energy Studies Institute presentation “Prospects for Trans-Pacific Gas Trade”, March 2012
And LNG Shipping distances have already increased..
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Source: U Western Australia at LNG World Singapore Aug 2014
But once the US enters the picture, things will really change!
13 Source: BG Canada at Gastech – April 2014
In addition, many buyers of US LNG are not end-users
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Source: JP Morgan Cazenove –Global
LNG updated April 2014
Number of ships required is a function distance to market
15 Source: Braemar Shipping Services presentation “Assessment of Global LNG Shipping” Sept 2012
Every 1
MTA of US
exports to
Asia = 2.3
ships for
the trade
US LNG exports will dramatically increase demand for ships
16 Source: Morgan Stanley : LNG Exports Helpful, but No Panacea – Nov 2012
Every 1 Bcf/d = 7 MTA
requires 25 ships
(if market is Japan
from US) AND 17 for
Korea
If less than 50% of all US project proceed,
80 MTA will be exported from US by 2020
The numbers are huge..
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If 40% goes to Asia If 60% goes to Europe
32 MTA (4.3 Bcf/d) 48 MTA (6.5 Bcf/d)
73 Ships 58 Ships
Total : 130 Ships
Required
Thankfully, there are many new ships coming to the market..but are they enough?
18 Source: Simpson Spence Young at Gastech – April 2014
Approximately 300 LNG Tankers active today
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Project highlights
Pure Play US LNG Export Company
Optimal Location
and Community
Support
Low-Risk Customer- Friendly
Tolling model
Experienced & Motivated
Team
Innovative Barge/Skid-
Based Solution
Multiple Feed Gas Supply options
Limited environmenta
l impact expected
Strong Partnership
with Samsung
Efficient use of local labor
Pre-FEED engineering completed – FEED began
Nov2014
Ready to commence
FERC process
FULLY FUNDED AND FEED HAS BEGUN
For the first time in history, small independent entrepreneurial companies (such as Texas LNG) are able to develop LNG export projects. These players, as well as larger known LNG plant operators are betting big on US exports… Thus, US exports WILL change the LNG shipping world as we know it…. BUT will you, members of the Shipping Industry be prepared for this?
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Parting thoughts
Disclaimer
Cautionary Statement:
The information and materials in this document are ; Provided for informational purposes only and are subject to addition, deletion and modification without notice at the sole discretion of Texas LNG LLC. ; Not warranted or guaranteed to be correct, complete or up-to-date. The information and materials could include technical inaccuracies and other errors. ; Provided “As Is” without any representation or warranties of any kind. No liability, direct or consequential, of any kind arising from the use of information and materials contained in this document or linked website is accepted. ; Not to be considered or to be constituted as investment advice or as any type of offer, offer, invitation, solicitation or recommendation in relation to the purchase or sale of any type of financial instruments or security in any jurisdiction.
Any forward looking statements contained in the information and materials in this document are only predictions and are subject to risks, uncertainties and assumptions, many of which are outside the control of Texas LNG LLC or its officers or representatives. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this document. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements .
Readers are strongly advised to complete their own investigations to the accuracy and completeness of the contents of this or any other communication or document, written or oral, provided by or referred to by Texas LNG LLC or its officers or representatives.
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