Western Interstate Energy Board/ CREPC Meeting: Western Interstate Energy Board/ CREPC Meeting North American Natural Gas Market Assessment LNG market assumptions by Jim Fore and Jairam Gopal Natural Gas Office California Energy Commission April 19, 2005


LNG Evaluation : LNG Evaluation Current LNG Markets LNG Value Chain Exploration and Production Liquefaction Transportation Regasification Current Estimates Indicate LNG can be Delivered to the U.S. East Coast at $2.50 to $3.50/Mcf


Current LNG Markets: Current LNG Markets 2002 - LNG Market World Market 5,370 Billion Cubic Feet (Bcf) United States Imported 228 Bcf 12 Exporting Countries Trinidad, Algeria, Libya, Qatar, United Arab Emirates, Oman, United States, Australia, Brunei, Indonesia,and Malaysia 12 Importing Countries United States, Puerto Rico, Belgium, France, Greece, Italy, Portugal, Spain, Turkey, Japan, South Korea, Taiwan


LNG Supply Chain Evaluation: LNG Supply Chain Evaluation Exploration and Production


World Natural Gas Resources: World Natural Gas Resources


Natural Gas Well Field Development Cost: Natural Gas Well Field Development Cost


Production Cost – Based on Volume and Producing Formation Depth: Production Cost – Based on Volume and Producing Formation Depth


LNG Evaluation: LNG Evaluation Liquefaction


LNG Liquefaction Regions: LNG Liquefaction Regions Alaska South America West Coast South America East Coast Norway North Africa West Africa Middle East Australia Russia Asia Pacific


LNG Liquefaction Capacity – Billion Cubic Feet: LNG Liquefaction Capacity – Billion Cubic Feet Source: Energy Information Administration / The Global Liquefied Natural Gas Market: Status and Outlook


LNG Evaluation: LNG Evaluation Transportation


LNG Tanker Costs: LNG Tanker Costs


LNG Evaluation: LNG Evaluation Regasification


Regasifiction Terminals- Examples: Regasifiction Terminals- Examples Sempra Cameron -$700 Million/1.5 Billion cubic feet per day (Bcf/d) ChevronTexaco Port Pelican -$800 Million/1.6 Bcf/d BHP Billiton Cabrillo Deepwater Port - $600 Million/1.5 Bcf/d


U. S. LNG Supply Evaluation: U. S. LNG Supply Evaluation LNG Cost Inputs for the Western Evaluation of the Natural Gas Market


LNG Evaluation: LNG Evaluation Range of the Natural Gas Cost for LNG Landed on the East Coast could be $2.00/Mcf to $4.70/Mcf Range of the Natural Gas Cost for LNG Landed on the West Coast could be $2.50 to $5.60/Mcf


Comments: Comments


12 Exporting Countries: 12 Exporting Countries


12 Importing Countries: 12 Importing Countries


Slide20: United States Natural Gas Imports - 2003


Percent of World Proved Natural Gas Reserves – 2002 – 5,502 Trillion Cubic Feet: Percent of World Proved Natural Gas Reserves – 2002 – 5,502 Trillion Cubic Feet


Reserve to Production Ratio: Reserve to Production Ratio


Decline Construction Cost: Decline Construction Cost Source: The Commercialization of LNG Markets, Fundamentals of the Global LNG Industry 2001


LNG Regasification Terminals - North America: LNG Regasification Terminals - North America U. S. Gulf Coast Southern California/ Baja California Mexico U. S. Northeast/ Canada U. S. Southwest/ Bahamas


LNG Evaluation - Natural Gas Cost: LNG Evaluation - Natural Gas Cost Assume a Natural Gas Cost of $0.50/Mcf to $1.00/Mcf


LNG Evaluation – Liquefaction Facilities: LNG Evaluation – Liquefaction Facilities Capacity Based on Operating 340 Days/Year Processing Loss at 9% Greenfield $280MM/Ton Expansion $160MM/Ton Replacement Capital at 12% of Original Capital Operating Cost 5% of Original Capital Credit for Natural Gas Liquids


LNG Evaluation - Tanker Transportation: LNG Evaluation - Tanker Transportation Tanker Capacity 135,000 Cubic Meters Day Rate of $75,000 / Day Travel Speed 20 Knots Days in Service 330 Days/Year Port Time per Trip 2 Days Boil Off 0.2 Percent per Day of Travel


LNG Evaluation - Regasification Terminals: LNG Evaluation - Regasification Terminals Capacity Based on Operating 340 Days/Year Processing Loss at 2.5% Greenfield $75MM/Ton Expansion $45MM/Ton Replacement Capital at 12% of Original Capital Operating Cost 4% of Original Capital


Questions???: Questions???