Innovative Solutions for Small Scale LNG “Logistics & Infrastructure”

Saunak Rai 26th Aug 2016

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1. The IM Skaugen Group of Companies 2. Small Scale LNG – Market Opportunities 3. Innovative SSLNG Logistics Solutions

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I.M. Skaugen SE – a company with close to hundred years of history… Incorporated in 1916

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…a history of innovation and partnerships 1916-1938

1946-1959

1960-1968

1968-1988

1971-1980

1981-1988

Early adopter of Steam and Diesel technology, first tanker

Conversion of ships to refugee carriers after WWII, First Diesel Electric engines

Pioneer in bulk shipment of cement and large scale ship-to-ship transfers

Pioneered the specialised cruise concept - RCCL

State-of-theart Rig and Supply vessels for offshore oil & gas activities

New design concept: «Pure Car Carrier»

1988-1996

First Sinoforeign JV

1996-2000

2003

Design and ordering of the Super-Coolers ethylene carriers

First purposebuilt lightering tankers and pioneered STS activities in the US gulf

2007

Start of design and concept of smallscale LNG

2009-2012

Pioneering gas transportation by devloping LPG/Ethylene/LNG (‘Multigas’) vessels

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Leveraging the LNG competencies in the IMS and our Strategic Partners, we can effectively manage the LNG interfaces IMS, with its fleet of six LNG carriers, can provide: • • • •

LNG logistics for regional distribution LNG bunkering service for the marine market LNG gas-up and cool-down service for “warm” LNG carriers LNG equipment approved for LNG STS operations

Our Strategic partners can provide: • • • • • •

LNG Storage and Regas equipment LNG supply LNG Ship to shore transfers LNG terminals / facilities LNG Ship to Ship (STS) transfers Gas based or Dual Power plants

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First Small Scale LNG Logistics in China • Skaugen/Norgas has been the pioneers in Small Scale LNG Logistics in China • First

company

to

carry

out

Domestic

transport of LNG by ships in China • Dec 2012 : Performed commissioning of Jovo LNG terminal in China. • Jan 2013 : Carried the first commercial LNG cargo to the Jovo LNG terminal from Dalian LNG terminal. • Demonstrating

that

Small

Scale

LNG

vessels can load in a large scale LNG terminal (Dalian is a QMAX capable LNG terminal)

First Small Scale LNG Logistics in China • Nov

2014

:

We

performed

the

commissioning of the CNPC Hainan LNG terminal in China. Norgas Innovation carried the first commercial cargo to the CNPC Hainan LNG terminal from Dalian LNG terminal. • May 2015 : Three consecutive voyages to fill the CNPC Hainan cargo tanks, transporting LNG from Dalian LNG terminal.

• Sep 2015: Loaded LNG in Petronas’ Bintulu terminal and discharged in CNPC Hainan for three consecutive voyages on COA basis

Dubai’s Gas Up & Cool Down Services for Conventional LNG Carriers • In cooperation with Dubai Supply Authority (DUSUP) we are providing LNG

gassing

Services

to

up,

Cooling

down

conventional

LNG

vessels, as well as LNG bunkering, at Dubai. • In Sep 2014 Norgas carried out first ever reloading of Small Scale LNG carrier from an FSRU. This was carried out at Dubai, where our vessel Norgas Unikum loaded LNG from the FSRU Golar Freeze.

Dubai’s Gas Up & Cool Down Services for Conventional LNG Carriers • During the same operation, Norgas Unikum carried out gassing up and cooling down of the LNG

vessel

Explorer and then provided LNG bunker to the vessel, successfully. • This niche business can be developed in all locations in proximity to Drydocks or major shipping lanes, with a LNG supply source.

1. The IM Skaugen Group of Companies 2. Small Scale LNG – Market Opportunities 3. Innovative SSLNG Logistics Solutions

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Small Scale LNG incentives are becoming stronger  Gas where there is no gas - Stranded customers – too small or too far away from pipelines and currently using other expensive fuels like diesel and fuel oil.  Gas where it is needed yesterday - Developing countries - where speed of getting clean energy supply in place will impact economic growth  Gas when it is needed in its liquid form and with lower emissions – Transportation market  Gas when emission legislation makes conventional fuels too expensive – ECAs  Gas when there is short-term fluctuations in demand – peak demand

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Focus areas for Small scale LNG development • • •

ECA zone as of 1 Jan 2015 Import terminals ready for re-loads Additional smaller re-distribution terminals being built

• •

NWE

•

Growing energy demand and push for lower emissions Regional imbalances for LNG supply Infrastructure for LNG in place and growing

China Indonesia & Philipines

USG/ Carribean • • • •

ECA zone as of 1 Jan 2015 Export terminals coming online Carribbean prime area for devlopment Africa of SSLNG solutions for power • Growing energy Close proximity of abundant Shale gas demand • Lack of infrastructure • Need of floating solutions to support power plaants

India •

• •

Growing energy demand and lowering of fuel subsidies Lack of pipeline infrastructure Import terminals ready for re-loads

• •

•

Growing energy demand Archipelago of islands where pipeline access is unreachable Requirement of small peaker power plants to manage fluctuating demand 12

LNG Price : Low prices are triggering SSLNG Growth

Sources: Fearnleys,

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Cheap US LNG Price: What you see is not what you get

Cost estimates in USD/MMBTU

US LNG DES Europe US gas

US liquefaction

2-3

Shipping to Europe

=(5.57.5)

+(0.5 1)

+(33.5)

US LNG DES Asia

Shipping to Asia

=(6 – 8)

+(1.7- 2)

Sources: Fearnleys, EIA, Bloomberg, SSY, internal estimates

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Gas, distributed as LNG, is becoming a cost effective fuel alternative to diesel, especially as fuel and electricity subsidies are removed

Cost estimates in USD/MMBTU 250MW power plant, 900nm from LNG source, one MG10K

LNG DES Asia

The difference between LNG @ 9-12 USD/MMBTU and Diesel @ 16-18 USD/MMBTU for a 200MW power plant is about

=6-7

Re-load charge

+1-1.5

LNG DES customer

=9-12

SS LNG shipping

+1-2

Customer terminal

+1-1.5

USD 70 M per year in potential fuel cost savings…….. and in addition, -25% lower CO2 emissions - higher engine efficiencies - Possibility to use cold energy for further efficiency

Sources: Bloomberg, internal estimates

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1. The IM Skaugen Group of Companies 2. Small Scale LNG – Market Opportunities 3. Innovative SSLNG Logistics Solutions

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Innovation: Key to SSLNG success Indian Market have two unique characteristics: 1. Unavailability of Capex 2. Reluctance of customers to commit to long term contracts SSLNG projects are able to manage these challenges through innovation:    

Innovation in Vessel Designs Innovation in distribution network Innovation in receiving facilities Innovation in Contracts 17

Multi-gas SSLNG vessels: Flexibility is the essence

Multiple height manifolds

Re- Liquefaction plant: BOG flexibility

Type C Tanks: Pressure Flexibility

Cargo Flexibility

Using exisisting LNG terminals as SSLNG Hubs • With the CAPEX component covered by the terminals’ conventional LNG role, facilities, provide a “ready to use” and cost-effective source of LNG supply.

Image courtesy : http://www.synergymarinegroup.com/archives/2192

• New generation SSLNG vessels are designed to load from such large conventional terminals • The spot - priced LNG volumes can be redistributed into smaller ports around the world thereby satisfying the demand of small scale consumers in the market.

Endless oppurtunities with exisiting LNG terminals

Bontang, Indonesia as SSLNG hub

Bintulu, Malaysia as SSLNG hub

LNG Terminals not available: LNG FSRU as hub • Most of the present day LNG FSRU’s are able to re-load LNG. • Modern SSLNG vessels are designed to load from such floating facilities. • They can import LNG directly into their FSRU and redistribute LNG from the FSRUs.

SSLNG vessel loading from Golar Freeze FSRU in Dubai

• SSLNG vessels can load LNG from the FSRU and transport LNG to the LNG receivers. • This also increases the utilization of the FSRU.

Lampung FSRU as a Hub

Loading from FSRU not possible : Loading LNG Via STS • In some cases the location of the LNG receivers is too far and thus is not economical to transport LNG from the FSRU • In such cases, LNG Supply can be made using Shipto-Ship transfer. • A conventional LNG vessel bringing the LNG cargo to Large Scale LNG terminals and enroute, at a location close to receiver’s premises SSLNG vessels can lighter the LNG from larger vessel and supply to the receivers terminal. • Same conventional LNG vessels can either act as a hub for a number of receivers or a single drop on its way to a large scale LNG delivery.

Flexible LNG Reciving Facility Solution

Small Scale FSRU Solution for Receiving facility

Near Shore Gravity Based LNG Terminal solution

Source : SENER, HiLOAD, Gravifloat

No Receving terminal Infrastructure : Eazy LNG Truck Solution • Some consumers in Asia have immediate demand for LNG, but there are no receiving terminal infrastructure. • Building a receiving terminal infrastructure including Jetty, loading arms, storage, re-gas could involve time as well as huge capital investment. • Until this basic infrastructure is ready, a direct discharge to trucks solution can be deployed to provide prompt LNG to the customer. • SSLNG vessels can berth alongside any normal jetty and then can discharge directly into LNG trucks or LNG ISO Containers. • These Trucks /ISO containers can then take the LNG to end-consumers’ premises and discharge LNG.

Domestic Loading

LNG DES Asia

SS LNG shipping Re-load

LNG DES customer “Eazy LNG Truck”

No Receving terminal Infrastructure : Regas Barge option • Some LNG receivers may have insufficient space at its premises for receiving LNG through truck, or its located in a very congested area where the road network does not allow turnaround of trucks. • The receiver can build up a Gas pipeline and while awaiting construction of the terminal Jetty , storage and regas. , it can utilize the ReGas Barge option. • In this option a LNG vessel is at anchor and has a barge alongside mounted with regas equipment onboard. The LNG vessel pumps LNG to the barge which regassifies the LNG and directly connects it to receivers gas pipeline. • Once the other infrastructure is ready , the barge connection can be removed and the vessel and the barge can be used elsewhere. Source : Cryogas,

Keppel

Innovation in Contracts: Flexible Contracting

• Fixed amount of time every month basis the volumes to be shipped • Spot availability (shipping companies to include LNG Change of Grade requirements as a matter of course) • Seasonal Time Charter requirements 27

Small Scale LNG Solutions provide Low. Capex , innovative solutions which can be implemented in very quick time. What we need is a strong determination to proceed towards utilizing a cheaper , more efficient and cleaner fuel Source

LNG!!!!

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THANK YOU........... Alcides- The four-masted barque

Contact details : Saunak Rai Mob.: +65 96605586 [email protected] NORGAS CARRIERS PRIVATE LIMITED

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