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Building in LNG and Methanol15th Asia Upstream Conference: April 21st - 22nd, 2010Jürgen Hendrich, Managing Director & Chief Executive Officer
DisclaimerThis presentation includes certain forward-looking
statements that have been based on current expectations
about future acts, events and circumstances. These
forward-looking statements are, however, subject to risks,
uncertainties and assumptions that could cause those acts,
events and circumstances to differ materially from the
expectations described in such forward-looking statements.
These factors include, among other things, commercial and
other risks associated with estimation of potential
hydrocarbon resources, the meeting of objectives and other
investment considerations, as well as other matters not yet
known to the Company or not currently considered material
by the Company.
MEO Australia accepts no responsibility to update any
person regarding any error or omission or change in the
information in this presentation or any other information
made available to a person or any obligation to furnish the
person with further information.
at 26:34 S
0 500 km
Carnarvon Basin
Existing Building
16.3 Mtpa 14.3 Mtpa
Planned
~38 Mtpa
Browse Basin
Existing Building
Nil Nil
Planned
~18 Mtpa
Bonaparte Basin
Existing Building
3.5 Mtpa Nil
Planned
~ 10 Mtpa
Onshore Queensland - CSG
Existing Building
Nil Nil
Planned
~12 Mtpa
Australian LNG provincesMEO operates in basins with existing LNG infrastructure
0255075
100125150
1970 1975 1980 1985 1990 1995 2000 2005
Mtpa
Japan South Korea Taiwan
Other India China
Asian net gas imports
Source: BP Statistical Review 20090
10
20
30
40
50
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mtpa
Rest of World China
Global Methanol Demand
Source: ICI & MMSA
Bonaparte & Browse Basins1 existing LNG project (3.5 Mtpa) – remoteness/quality issues
Darwin
Bayu Undan
Ichthys
Evans Shoal
Tassie Shoal Hub location
Heron
Blackwood
Darwin
Torosa
CruxFrigate Tern
Petrel
Blacktip
BrecknockCalliance
0 100 km
Joint
Petroleum
Development
Area
Barossa/Caldita
Source: Encom Gpinfo and public sources
Timor-Leste Abadi
NT/P68
NT/P68(relinquished)
Prelude(not shown)
GreaterSunrise
GDF Suez bought 60% of
Petrel/Tern/Frigate for US$370m
(US$0.31/Mcf)
Magellan buys 40% ofEvans shoal for A$200m
Poseidon(not shown)
Economic considerationsResource Value Enhancing Options
• Resource size
• Hydrocarbon liquids − condensate & LPG
• Contaminants − CO2, H2S, mercury
• Development costs − Water depth, reservoir quality
• Distance to processing − environmental issues
− political issues
− pipeline terrain
• Certainty − reservoir
− development concept
• Market for product
• Cooperative development?
• Accelerated liquids production?− eg Bayu-Undan liquids stripping
• Removal & sequestration - eg Gorgon CO2 sequestration
• Technology improvements
• Move the processing location?− resolve issues
− seek compromises (mutual benefits?)
− Avoid complex/high risk traverses
• Improve technical confidence − reservoir studies and appraisal drilling
− use proven development technology
• Diversify?
Bonaparte Basin Development DriversMEO gas discoveries have clear path to market
Project Discovery ProductionGas/LNG/MeOH
Distance Deep Dry Dirty Disputed
Bayu-Undan 1995 2001/2006
Blacktip 2001 2009/no LNG
Blackwood (MEO 100%)
2008 FID + 3.5 yrs
Heron (MEO 100%)
2008 FID + 3.5 yrs ? ?
Greater Sunrise 1975 ?
Petrel/Tern/Frigate
1969 ?
Evans Shoal 1988 ?
Barossa / Caldita 1973/2005 ?
• Disputed: - jurisdiction related complexities
NT/P68 (MEO 100%)Renewal Outline
Darwin
NT/P 48
JPDA 03-19
03-20NT/RL 2
NT/P 62
NT/P 63
NT/P 64
NT/P 61
NT/P 65
NT/P 68
NT/P 69NT/P 70
NT/P 72
NT/P 71
JPDA 06-101
S06-06
WA-403-P
WA-405-P
NT/P 73
Masela
NT/P 76
NT/P 80
NT/P 79
NT 08-3
W 08-1
NT 09-1
Blackwood 3D
Epenarra 3D over Heron Nth/Sth
NT/P68
Top Elang/Plover Reservoir
Contour Interval: 20 m
MEO gas discoveries (100%) & 3D seismicPermit renewal accepted, acreage award pending
Improved porosity suggested by seismic
Advanced seismic processing Acoustic impedance (AI) studies to predict reservoir sweet spots
Heron-2 porosity = 6%co-incides with low AI
Improved porosity suggested by seismic
Tassie Shoal – a natural hub locationSolves remoteness & gas quality (CO2 sequestered into methanol)
0 500m
ACP LNG Storage Tank
LNG Plant (3 mtpa)
Methanol Plant
(5,000 tpd stage 1)
Cooling
Water
Outlet
Gas Supply
Pipelines
Methanol Loading Buoy
PLEM
LNG Load out
N
0 100 km
Darwin
NT/P68 original
Abadi
Barossa
Tassie Shoal
Caldita
Evans Shoal
Greater Sunrise
Indonesia
Australia
JPDAHeron
Blackwood East
Blackwood
NT/P68
LNG Tank(170,000 m3)
Methanol Plant (5,000 tpd/1.75 Mtpa Stage 1 only)(For CO2 sequestration)MEO 50%, Air Products 50%
LNG Plant (3.0 Mtpa)MEO 100%
Accommodation and Control Platform (ACP)
Tassie Shoal Projects – Single ModulesEnvironmental approvals secured – pending gas supplies
Timor Sea LNG ProjectCombines two established designs
+
=
Air Products/Aker Kvaerner 1990’s Concept
Timor Sea LNG Plant – one moduleArup Concept Elevating (ACE) Platform (100m x 50m)
Methanol plant on concrete GBSCombines two proven technologies
+ =
• Plant based on Davy Process Technology M5000 plant operating in Trinidad
• GBS builds on the experience from ExxonMobil’s Adriatic Re-gas terminal
Economic enhancementsMEO’s plan to enhance resource value
• Cooperative development?
• Accelerated liquids production?
• Economic disposal of contaminants
• Lower development costs
• Reduce distance to processing − resolve environmental issues
− seek compromises (mutual benefits?)
• Improve technical confidence − reservoir studies and appraisal drilling
− use proven technology
• Diversify Markets
• Tassie Shoal development hub
• Hub lowers threshold economics
• Sequestration into methanol− Sequestration revenue stream
• Single module facilities− Pre-fabricated and pre-commissioned
• Tassie Shoal development hub− environmental approvals in place
− willing to share infrastructure
• Advanced seismic processing − Acoustic impedance studies
− Tassie Shoal LNG and Methanol
• LNG and methanol products
• Plant costs savings driven by lower SE Asian construction costs
• Pipeline cost savings estimates are distance related
Estimated costs (US$M) Darwin LNG Tassie Shoal LNG Potential Savings
Plant Costs 1,549 (WorleyParsons est) 1,090 (WorleyParsons est) 459
Pipeline * 943 (WorleyParsons data) 288 (WorleyParsons data) 655
LNG Tank 300 (MEO est) 330 (Arup est) (30)
Loadout/Jetty 200 (MEO est) 277 (TORP est) (77)
Project Development &
Owners Costs (6.25%) 188 (same % as TSLNGP) 106 (Fluor/APCI/MEO est) 82
Total Project Cost $3,180m $2,091m $1,089m
* Based on pipeline from Greater Sunrise to Tassie Shoal vs Greater Sunrise to Darwin
Tassie Shoal saves >US$1bn in capexStudy compared similar land based LNG plant
Dampier
WA-360-P
0 50 km
East Artemis Prospect(~12 Tcf)
Io/Jansz(15 - 18 Tcf)
Perseus(11 Tcf)
Angel(2 Tcf)Pluto
Wheatstone
NWS Project (30 Tcf)Existing
16.3 Mtpa (5 trains)
Pluto Project (4.5 Tcf)Under Construction 4.3 Mtpa (1 train)
Expansion needs gas
Greater Gorgon Project (40 Tcf)Under Construction 10 Mtpa (2 trains)
Potential Expansion to 25 Mtpa (5 trains)
Barrow
Island
Wheatstone ProjectPlanned
8.6 Mtpa (2 trains)
Scarborough(8 - 10 Tcf)
Carnarvon Basin – THE LNG address!MEO’s acreage is located on trend with recent discoveries
Gorgon(15-18 Tcf)
WA-361-P
Carnarvon Basin Development DriversLocation, size & gas quality drives economics
Project CapacityMtpa
Discovered ProductionGas/LNG
Distance Dry Dirty Deep
NWS Gas Project 16.3 1971 1984/1989
Pluto I(in construction)
4.3 +2? x 4.3
2005 2010/20112013, 2014
Greater Gorgon (in construction)
10 +3 x 5
1981 2014
Wheatstone (in FEED – FID 2011)
10 2004 2016 ?
Artemis Prospect(MEO 20%)
? 2010? ?
Scarborough 6? 1979 ?
• Distance: - long distance from suitable processing site
• Deep: - significant water depth &/or reservoir depth
• Dry: - lack of significant hydrocarbon liquids
• Dirty: - presence of contaminants (e.g. CO2)
Base Calypso
Depth Map
Amplitude
Extract
Interpreted
gas-water contact
Interpreted
gas-water contact
Artemis Prospect: WA-360-P (MEO 20%+) Perseus Field – NWS JVInterpreted gas-water
contact
Published
outline of field
New 3D’s revealed ~12 Tcf* Artemis ProspectDHI conformable with structure – similar to Perseus field
• * Estimated mean prospective recoverable resource
• + Post farm-out of 50% interest to Petrobras, subject to regulatory approvals
• Estimated Geological Chance of Success (GCOS) = 32%
• Gas quality expected to be similar to Pluto & Wheatstone
• Multiple monetisation options
SummaryTailor the project to address the key development drivers
• Discovering gas in Australia is NOT the issue - monetising discovered gas IS
• Challenge paradigms - innovation does not automatically mean increased risks
• Consider alternative markets – LNG is not the only option
• Mitigate risks
− Look to nature for solutions
− Use existing/proven technology
− Comprehensive studies before significant capital expenditure
• Collaboration can build a bigger pie for all stakeholders
• Accelerating developments enhances value for all stakeholders
• Sequestration is multi-dimensional eg geo/bio/chemical (eg methanol)
• Tailor solutions to address the geo-circumstances (including geo-political)