Jairam G LNG

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???