Morgan Stanley Oil

5/25/2018 Morgan Stanley Oil

1/19

TECHNIP-COFLEXIP

LNG PLANT PRICING

CONSIDERATION

TECHNIPTECHNIP

--COFLEXIPCOFLEXIP

LNG PLANT PRICINGLNG PLANT PRICING

CONSIDERATIONCONSIDERATION


2/19

BRIEF HISTORY OF LNGBRIEF HISTORY OF LNG

???????? : first liquefaction of methane by ???: first liquefaction of methane by ???

1917 : Liquefaction of gas to extract helium (Texas)1917 : Liquefaction of gas to extract helium (Texas)

1920/30s1920/30s : LNG produced to store natural gas in USA: LNG produced to store natural gas in USA

1944 : major accident in Cleveland peak shaving1944 : major accident in Cleveland peak shaving

1950s : start of new era of development1950s : start of new era of development

1959/60 : trial runs of Methane Pioneer from USA to UK1959/60 : trial runs of Methane Pioneer from USA to UK

1964 : Camel plant (Algeria) commissioned, first1964 : Camel plant (Algeria) commissioned, first

commercial deliveries to UK and Francecommercial deliveries to UK and France

2001 : annual LNG trade of 1072001 : annual LNG trade of 107 mtmt (+ 7.5% over last 20 years)(+ 7.5% over last 20 years)


3/19

0

500

1000

1500

2000

2500

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 '00

Billioncm/

NATURAL GAS AND LNG TRADENATURAL GAS AND LNG TRADENATURAL GAS AND LNG TRADE

NG ConsumptionNG Consumption

NG International TradeNG International Trade

LNG TradeLNG Trade


4/19

LNG DEMAND VERSUS INSTALLED CAPACITYLNG DEMAND VERSUS INSTALLED CAPACITY

0

20

40

60

80

100

120

140

160

180

200

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 '00 '02 '04 '06 '08 '10

M

ta

INSTALLED CAPACITYINSTALLED CAPACITY

DEMANDDEMAND


5/19

LOCATIONS OF LNG PLANTS

Existing

Under construction


6/19

EVOLUTION OF TRAIN CAPACITYEVOLUTION OF TRAIN CAPACITY

0,00

1,00

2,00

3,00

4,00

5,00

6,00

1960 1970 1980 1990 2000 2010

Milliontonn

esperyea


7/19

FRACTIONATIONFRACTIONATION

REFRIGERATIONREFRIGERATIONSULPHURSULPHURRECOVERYRECOVERY

TYPICAL BLOCK DIAGRAMTYPICAL BLOCK DIAGRAM

ACID GASACID GAS

REMOVALREMOVAL

DEHYDRATIONDEHYDRATION

AND MERCURYAND MERCURYREMOVALREMOVAL

LIQUEFACTIONLIQUEFACTIONNITROGENNITROGEN

REMOVALREMOVAL

LNG STORAGELNG STORAGE

AND LOADINGAND LOADING

C3C3 C4C4 GasolineGasoline


8/19

MAIN LIQUEFACTION TECHNOLOGIESMAIN LIQUEFACTION TECHNOLOGIES

A.P.C.I.A.P.C.I. -- C3/MR : 57 trains in operation + 7 under constructionC3/MR : 57 trains in operation + 7 under construction

PHILLIPSPHILLIPS -- Optimised Cascade : 3 trains in operation (Trinidad &Optimised Cascade : 3 trains in operation (Trinidad &

Tobago) + 1 under construction (Tobago) + 1 under construction (IdkuIdku Egypt)Egypt)

STATOIL/LINDESTATOIL/LINDE -- MFCP : 1 train under construction (MFCP : 1 train under construction (SnohvitSnohvit -- NorwNorw

AXENSAXENS -- LIQUEFIN : No referenceLIQUEFIN : No reference

SHELLSHELL DMR : 2 trains in project (Sakhalin)DMR : 2 trains in project (Sakhalin)


9/19

TYPICAL PRICE BREAKTYPICAL PRICE BREAKDOWN OF A TWO TRAINDOWN OF A TWO TRAINLIQUEFACTION PLANTLIQUEFACTION PLANT

LNG PRICESLNG PRICES

Plant cost $/Plant cost $/tpytpy versus year of commissioningversus year of commissioning

Unit cost $/Unit cost $/tpytpy versus year of commissioningversus year of commissioning

Plant Cost s/Plant Cost s/tpytpy versus train capacityversus train capacity

Price Break down of a two train liquefaction plantPrice Break down of a two train liquefaction plant


10/19

PLANT COST $/TPY VERSUS YEAR OF COMMISSIONINGPLANT COST $/TPY VERSUS YEAR OF COMMISSIONING

100

200

300

400

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 20

Year

$

per

tpy


11/19

PLANT COST $/PLANT COST $/TpyTpy VERSUS TRAIN CAPACITYVERSUS TRAIN CAPACITY

100

200

300

400

0 1 2 3 4 5 6

Train Capacity in MMTpy

$

pertpy


12/19

TRAIN COST VERSUS YEAR OF COMMISSIONINGTRAIN COST VERSUS YEAR OF COMMISSIONING

0

50

100

150

1990 1995 2000

Year

$

per

tpy

TYPICAL PRICE BREAKTYPICAL PRICE BREAK DOWN OF A TWO TRAINDOWN OF A TWO TRAIN


13/19


2 TRAINS2 TRAINS 45 %45 % toto 65 %65 %

UTILITIESUTILITIES 8 %8 % toto 15 %15 %

OFF SITEOFF SITE 20 %20 % toto 40 %40 %

COMMONCOMMON 7 %7 % toto 10 %10 %

TOTAL LNG PLANTTOTAL LNG PLANT

OTHERSOTHERS 1515 toto 30 %30 %

TOTAL LNG PROJECTTOTAL LNG PROJECT130 %130 %

100 %100 %

115 %115 %



14/19


2 TRAINS2 TRAINSMini MaxiMini Maxi CriteriaCriteria

Common/inlet facilitiesCommon/inlet facilities 1 % 10 %1 % 10 % Project DefinitionProject Definition

Acid Gas removalAcid Gas removal 3 %3 % 8 %8 % Gas compositionGas composition

DehydrationDehydration 2 %2 % 3 %3 %

Mercury removalMercury removal 1 %1 % 1 %1 %

Refrigeration/Liquefaction 25 % 40 %Refrigeration/Liquefaction 25 % 40 % Cooling systemCooling systemCompressors configurationCompressors configuration

FractionationFractionation 1 %1 % 3 %3 %

Sulphur recovery/Sulphur recovery/prillingprilling 0 %0 % 3 %3 %

_____ ___________ ______

TOTALTOTAL 45 % to 65 %45 % to 65 %



15/19


UTILITESUTILITES

Mini MaxiMini Maxi CriteriaCriteria

Power Generation :Power Generation : 3 % 7 %3 % 7 % Gas or steam turbineGas or steam turbine

Cooling water :Cooling water : 2 %2 % 6 %6 % Cooling systemCooling system

(air(air waterwater seawater)seawater)

Other Waters, Steam,Other Waters, Steam, Project definition,sparingProject definition,sparing

Fuel, Air, Nitrogen :Fuel, Air, Nitrogen : 3 %3 % 6 %6 % philosophyphilosophy

_____ ___________ ______




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OFF SITEOFF SITEMini Maxi Criteria

LPG Storage & Loading 10 % 20 %LPG Storage & Loading 10 % 20 % Storage capacity & tankStorage capacity & tank

specificationspecification

LPG Storage & LoadingLPG Storage & Loading 0 % 13 % Project definition0 % 13 % Project definition

Condensate StorageCondensate Storage

& Loading& Loading 0 %0 % 2 %2 % Project definitionProject definitionLoading JettyLoading Jetty 4 %4 % 8 %8 % Sea and Site conditionsSea and Site conditions

Flare & Liquid blowFlare & Liquid blow--down 3 % 5 %down 3 % 5 %

Others Fire protectionOthers Fire protection

Drainage, Waste tr.Drainage, Waste tr. 3 %3 % 4 %4 %_____ ___________ ______




17/19


COMMONCOMMONMini MaxiMini Maxi

Site infrastructure, road & fencesSite infrastructure, road & fences 2 % 4 %2 % 4 %

Control roomControl room -- SubstationsSubstations 2 %2 % 2 %2 %

DCS, ESD,FG & TelecomDCS, ESD,FG & Telecom 2 %2 % 3 %3 %

Administration, maintenance buildingsAdministration, maintenance buildings 2 %2 % 3 %3 %

_____ ___________ ______




18/19


OTHERSOTHERSMini Maxi Criteria

Gas pipelineGas pipeline 1MM$ per Km1MM$ per Km On project definitionsOn project definitions

Site PreparationSite Preparation 2 %2 % 5 %5 % Site conditionsSite conditions

Material Off LoadingMaterial Off Loading Airport 2 %Airport 2 % 6 %6 % Remote areaRemote area

Residential areaResidential area 4 %4 % 8 %8 % Client requirementClient requirementSpare partsSpare parts 2 % 5 %2 % 5 % Client requirementClient requirement

MovablesMovables 2 %2 % 4 %4 % Client requirementClient requirement

Training & StartTraining & Start--upup 1 %1 % 2 %2 % Take over definitionTake over definition

_____ _______ ________TOTALTOTAL 15 % to 30 %15 % to 30 %


19/19

THE TRENDSTHE TRENDS

CONTINUOUS INCREASING OF THE UNIT CAPACITY :CONTINUOUS INCREASING OF THE UNIT CAPACITY :

8 Mty are now considered8 Mty are now considered

New Process developments : APCINew Process developments : APCI APX, AXENS, OthersAPX, AXENS, Others

New Driving MachinesNew Driving Machines

Frame 9 Gas Turbine (3,000 rpm)Frame 9 Gas Turbine (3,000 rpm)

Electric MotorsElectric Motors

New 3,000 rpm compressorsNew 3,000 rpm compressors

New Unit lay outNew Unit lay out

TANKS CAPACITY UP TO 200,000 m3 ARE CONSIDEREDTANKS CAPACITY UP TO 200,000 m3 ARE CONSIDERED

ENVIRONMENTAL CONCERNENVIRONMENTAL CONCERN

Acid Gas ReAcid Gas Re--injectioninjection

LNG FLOATING PLANT ON BARGE (FLNG)LNG FLOATING PLANT ON BARGE (FLNG)

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