11

An Economic Delivery System

For Stranded Gas Resources

Presented by

Lim Man Onn

CEO, Partnership for Equitable Growth

APEC EGCFE Workshop, Taipei

21-23 March 2005

Pressurised Natural Gas Carrier – Pressurised Natural Gas Carrier – PNGPNG

22

A new method for safe, cost-effective and reliable gas transportation system

Innovative application of known technology

Unlock stranded and static resources which are uneconomic under LNG and pipeline schemes

Various PNG concepts considered including

Fluor LNG Coselle

Knutsen OAS PNG Carrier with DVN certification

Enersea and Trans Canada concepts with ABS and Lloyds classification approvals

Pressurised Natural Gas Carrier – Pressurised Natural Gas Carrier – PNGPNG

33

Technical Parameters of Knutsen Standard Size Carrier

Operating pressure : 240 bars or 3,500 psig

No of gas cylinder : 2,672

Volume of gas carrier : 20 Ksm3 or 20,000 DWT

L0A = 276 m Beam : 54 m Draft design : 13.5 m

Draft Ballast : 11 m Service speed : 15.5 knots

Pressurised Natural Gas Carrier – Pressurised Natural Gas Carrier – PNGPNG

44

Pressurised Natural Gas - PNG Carrier(for the transportation of natural gas directly from the source to the market)

55

An Illustration of the PNG Pipe System

66

Distance to Market Distance to Market (Km)(Km)

Number of Knutsen Standard Size Number of Knutsen Standard Size ShipShip

1,0001,000 662,0002,000 12123,5003,500 21215,0005,000 3030

Knutsen Standard ShipKnutsen Standard Ship == 20,000 20,000 DWTDWT

Service speedService speed == 15.5 15.5 knotsknots

Service days/yearService days/year == 330330Aggregate field size Aggregate field size requiredrequired

== 44TCF or 8 x 500 Bcf TCF or 8 x 500 Bcf fieldsfields

Number of PNG Carriers required for delivery of

500 Mcf/day of gas for different distances to market

77

Delivery Cost versus Distance Relationship - PNG

0.00

0.50

1.00

1.50

2.00

2.50

1,000 2,000 3,000 4,000 5,000

Distance between Field & Market (Km)

US

$/M

btu

0.79

1.10

1.52

1.96

88

A flexible and scalable infrastructure delivery system

Higher unit cost of PNG versus LNG vessels more than offset by absence of LNG liquefaction and receiving terminals

Scalability of PNG systems “commoditize” gas trading

Free buyer from long term, large volume take or pay commitment

Could potentially commercialize 30% of discovered stranded and static resources

Pressurised Natural Gas Carrier – Pressurised Natural Gas Carrier – PNGPNG