TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

14-17 March 2005 Bilbao, Spain

TANGGUH LNG TANGGUH LNG –– ENERGY EFFICIENCY ENERGY EFFICIENCY MEASURES THROUGH LIFE CYCLE MEASURES THROUGH LIFE CYCLE

COST ANALYSISCOST ANALYSIS

Co Authors: Richard Phillips III – BP

Tim Solis – BP Hitoshi Konishi - JGC

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

AGENDA

1. Introduction 2. Project Objectives3. Life Cycle Cost Approach4. Energy Efficiency Measures5. Project Status6. Summary

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

Arun Arun Bontang Bontang

TangguhTangguh

INTRODUCTION

Tangguh LNGTangguh LNG

Tangguh will become Indonesia’s third liquefaction center, joining Arun in Sumatra and Bontang in Kalimantan

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

INTRODUCTION

LNG Sales Drives Two Train Launch • Fujian Sales – China new LNG market (2.6 mmtpa) • Sempra Sales – first long term Asia Pacific sales to North America (3.7 mmtpa)• SK / K-Power – new Korean LNG Buyers (1.15 mmtpa)

Fujian, 2.6mmtpa

SK / K-Power 1.15mmtpa

Sempra 3.7mmtpa

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

OBJECTIVES

• Safety• Reliability• Energy Efficiency• Liquefaction Technology Competition• Low Cost Producer• Greenfield Development• Social and Community Interfaces

The Project Philosophy established the key Tangguh Objectives :

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

LIFE CYCLE COST APPROACH

Life Cycle Cost (LCC) used as Objective Measure to Evaluate• Competing Liquefaction Technologies • Energy Efficiency Measures • Green House Gas Reduction Features • Design Optimizations

LCC Approach considered• CAPEX (lump sum EPC price) • OPEX (operating expenses)

– Fuel consumptions – Plant maintenance – Chemical / catalyst make up – Refrigerant consumption – HC losses

Lowest Net Present Value based on LCC selected as winning bidder

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

LIFE CYCLE COST APPROACH

Key metrics of LCC approach • Fuel Gas Value • Incremental LNG credit

(to allow competing bidders to match most efficient refrigeration driver configuration with selected liquefaction technology)

• Interest/Discount Rate• Life Cycle Period

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

ENERGY EFFICIENCY MEASURES

LCC approach allowed incorporation of innovative, energy efficient, reduced greenhouses gas emission, environmental and design optimization features in the winning design from the consortium of Kellogg Brown & Root/JGC/Pertafiniki

Major Features:• Extensive use of heat recovery

in a combined cycle application to produce 27% (320MW) of plant’s total energy demand

• Selection of Propane Pre-Cool Mixed Refrigerant liquefaction process

• Application of Split Mixed Refrigerant Compressor Configuration

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

ENERGY EFFICIENCY MEASURES

Major Features (cont’d): • Recovery of LNG Ship Vapors during loading to

achieve no operational flaring. • Selection of proprietary tertiary activated amine solvent

for the gas conditioning system. • Dual flash separation step for the rich amine circuit of

the gas conditioning system• Selection of tandem seals for rotating equipment in

hydrocarbon service to minimize fugitive emissions.

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

Major features (cont’d): • Innovative relief analysis technique to reducing flaring loads

and relief system equipment designs through the use of dynamic simulation.

• Plot plan improvements substantiated by extensive use of computational fluid dynamic simulation to model hot air recirculation to minimize plant footprint.

• Siting of marine facilities (LNG jetty and off loading dock) such that operational dredging is not required.

• Establishment of single status employee basis for operating company thereby reducing infrastructure needs and minimizing environmental impact.

ENERGY EFFICIENCY MEASURES

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

ENERGY EFFICIENCY MEASURES

26.9 320.4Total

0.911.0 Power Generation

4.350.3Frame 7EA Steam Helper Turbines

21.7259.1AGRU

Total Plant (%) Recovered Energy (MW)

Tangguh LNG Project Deep Combined Cycle Application

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

LNG Loading Dock

LNG Loading Dock

Control Room

Control Room

AirportAirport

Community

Community

LNG Trains

LNG Trains

LNG Storage

LNG Storage

Cargo DockCargo Dock

Gas Production Facilities

Maintenance Area

Gas Production Facilities

Maintenance Area

• US$ 3 billion initial development cost for onshore & offshore

• Two train 3.8 mmtpa capacity each, gas drive, air cooled, C3 precool/mixed refrigerant process

• KJP (Kellogg Brown & Root, JGC and Pertafiniki) as appointed contractor

Tangguh LNG Plant Design

• $ 200m worth of long lead equipment orders placed - Gas Turbines, Refrigerant compressors, Main Cryogenic Heat Exchangers, LNG Storage Tanks plates.

• $ 50m Early Work Program w/ KJP: Pioneer camp, construction dock, tree clearing

• Formal EPC award 1Q 2005

PROJECT STATUS

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS

• 4 Stages of Safety Review – HAZID,HAZAN, HAZOP(2)• Independent Reliability, Availability, Maintainability (RAM) studies –

94% availability Projected• Risk Based Assurance

- Proved Design- Meets BP Group Risk Criteria- QRA, Blast Over Pressure, Fire Risk Assessment, Vapor Cloud Dispersion, Flare Radiation, Tsunami Study

• Incorporation of Lesson Learned• Social/Community

- Babo Airport Up grade- Tanah Merah Village Relocation

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

Babo Runway – June 2003

Babo/Saengga UXO found near runways

PROJECT STATUS - Babo Airstrip Before

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS - Babo Airstrip After

Babo Hangar Babo April 2004

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS - Tanah Merah Before

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS - Tanah Merah (Baru) After

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS - Pioneer Camp

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS - Site Activities

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

PROJECT STATUS - Wooden Jetty

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

SUMMARY

These major Energy Efficiency Measures have allowed the Tangguh design to achieve benchmark results which compare very favorably and possibly best in class with other recent LNG projects.

Key Benchmarks

Tangguh 3.8 mmtpaTrain size

Typical Design

Tangguh 3.5 mmtpaTrain size3Q 2003

Specific Combustion CO2tons CO2/ton LNG

4.4

0.24

200

4.8

0.26

TBASpecific Cost$/ton LNG

Specific Fuel MMBTU/ton LNG 5+

0.3+

200 - 250

TANGGUH LNG-- TANGGUH LNGTANGGUH LNG

Muchas Gracias y Adios Muchas Gracias y Adios