September 2009 - FLEX LNG

Pareto Seminar Presentation
September 2009

Where Do We Stand Today
Commercial status
Financing Strategy and Summary

FLEX LNG Producer
– Key facts
Classification
DNV
Overall (riser to offloading) Fuel
Shrinkage: Approx. 10 %
Maintenance
20 years on-station maintenance
Turret
Internal Submerged Turret Production
system (STP) from APL
Liquefaction Capacity:
1.7-2.0 mtpa LNG
Accomodation
150 POB (regular + temporary)
LNG Storage Capacity : up to 185,000 m 3
Condensate/LPG Storage: up to 50 000 m 3
Feed Gas: Approx. 250 – 300 mmscf/day
Image courtesy to Samsung Heavy Industries
3

Key Design Principles For The Generic LNG Producer
Maximize production capacity within the
constraints of a standard ship building
hull size and standard equipment sizes
Cost optimization
Principle
Dimensions
Length:
Beam:
FLEX LNG
Producer
336 m
50 m
Q-FLEX/MAX
LNG Carrier
315-345 m
50-55 m
Standardisation of generic topsides and
field specific topsides on dedicated
modules to achieve high field specific
adaptability to accommodate wide range
of project and client requirements
Fast tracking
Generic
plant
Field
specific
Maximum use of proven and robust
technologies and simplify the design by
removing unnecessary complexity
Minimize risk
FPSO LNG Shipping Onshore LNG
Combining the best of – LNG Shipping &
Offshore Production & Onshore
liquefaction
Commitment to safety – implement the
industry’s best safety practices
4

LNG Containment Technology
– SPB tank technology the only safe and reliable option for FLNG
SPB Containment
Excellent track record from operation in the
harshest LNG trade since 1993
Maximized flat deck space for topside
Self supporting tanks allows for in-situ
inspection and maint. without dry-docking
The only containment system with all features
required for safe and reliable offshore LNG
Production
Sloshing Free
Tank System
Inspection and
Maintenance Access
SPB Tank Technology Superior for LNG Production
Spherical
No filling restrictions
On-site inspection
& Maintenance
Limited deck-space
Membrane
Filling restrictions
On-site inspection
& Maintenance
Flat deck-space
2-Row Membrane
Filling restrictions
On-site inspection
& Maintenance
Flat deck-space
SPB
No filling restrictions
On-site inspection
& Maintenance
Flat deck-space
5

Maturity of Design
- The industry’s most mature FLNG concept
Engineering and Design
Generic FEED completed 1Q 2009
Approx 300.000 engineering hours invested in the
development of the generic LNGP concept
5 x Field Specific FEED/Pre-FEEDs undertaken for real field
cases
HAZIDs, HAZOPs, RAM, FMECA, SIL, etc
Class Approval and Safety
Approval in Principle obtained from class in August 2007
Detailed plan approval nearly completed
Formal Safety Assessment completed
RISKs well below acceptance criteria of DNV
ALARP design documented
Equipment Design and Fabrication
Major topside equipment for topside has been procured
Main Compressors, incl gas turbine drives
Turbo Expanders
Cold Boxes
BOG compressors
Majority of hull equipment has also been ordered
Technology Qualification
6
3rd party verification of novel technology
• Motion sensitive equipment verification program
Full string testing of major rotating equipment
Side by side model testing program
SPB mock-up construction
At shore liquefaction test prior to sail away
6

Project Execution
- Strong EPCIC framework is in place
Single contract
Lumpsum, turnkey
EPCIC (incl. on-site)
Successful partnership with Samsung Heavy
Industries
Clear legal responsibilities
Close collaboration together with financial
and legal advisors in order to ensure
commercial structures that together with
the EPCIC framework will result in bankable
projects
FLEX LNG
Single EPCIC
contract
Samsung Heavy Industries
Umbrella Contract
Topsides
Hull
EPCIC contract signed with SHI 18 th
September 2008
7

Project Execution
World leading partners
Strong FLEX LNG organisation
A strong team of approx. 45 people from
different backgrounds and core disciplines:
Technical/project execution
Pre-ops
Upstream and subsea
Business development
Corporate functions
In-house specialists for all key disciplines
for concept development, engineering
control, project management and project
control
Subsea competency to ensure compatibility
and efficient interface cooperation with
upstream development and organisation
Experienced pre-ops contractor involved in
preparation of O&M philosophies and
operability and maintainability analysis
work
8

Where Do We Stand Today
Commercial status
Financing Strategy and Summary

Strong Long-Term Prospects For LNG
- The emergence of China and India is changing the landscape
Recent months have seen a number
of LNG offtake deals being
concluded
Primary focus on projects in the
Australasia region (Australia, PNG)
which are preferable to the key
offtakers
Chinese companies have secured
nearly 9 MTPA of new LNG supply
during the period
Offtake Deals 2009
Project Supplier Offtaker Tenor Volume
Gorgon LNG Project ExxonMobil PetroChina 20 yrs 3.25 mtpa
Gorgon LNG Project ExxonMobil Petronet 20 yrs 1.5 mtpa
Kitimat LNG Kitimat LNG Gas Natural 20 yrs 1.6mtpa
PNG LNG ExxonMobil Tokyo Electric Power, Long term 4.3mtpa
Osaka Gas, Taiwanese
Power Company
PNG LNG ExxonMobil Sinopec Long term 2mtpa
Gladstone LNG Project Santos Ltd. Petronas 20 yrs 2mtpa
Queensland Curtis LNG BG CNOOC 20yrs 3.6mtpa
Pricing is generally confidential, however, reported contract value from Gorgon offtake
highlight that transactions are being done at oil price parity:
PetroChina: USD 41bn over 20 years (3.25 MTPA) equates to nearly USD 13/MMBTU
Petronet: USD 21bn over 20 years (1.5 MTPA) equates to more than USD 13/MMBTU
10

Key Applications For an LNG FPSO
Small stranded offshore
non-associated gas fields
Associated gas projects
Onshore gas fields
Provide a feasible
development concept for
small stranded offshore gas
fields with 1-2 tcf of
reserves
Provide a viable alternative
for large scale associated
gas flaring or reinjection
projects (eg in West Africa,
Gulf of Mexico)
Offer a cheaper, quicker,
and less complex solution
for onshore gas fields (e.g.
Papua New Guinea, CBM
projects in Australia)
Pipeline gas
Locate LNG FPSO alongside
a jetty. Liquefy gas taken
from existing pipeline
infrastructure (e.g. the
domestic pipeline grid)
Early production/cash flow
Large gas field – staged
developments
Deepwater gas fields/long
tie-back distances
Provide an early production
system for large offshore
gas fields
Lead time to first cash flow
can typically be cut by 50%
Accelerate production and
provide lower production
cost per ton for large
developed gas fields that
have liquefaction capacity
constraints
Reduce CAPEX for
deepwater offshore gas
fields and longer tieback
distances
11

The Minza Project
- Promising opportunity for a JV project
FLEX LNG has signed an agreement to buy
Minza Oil & Gas which holds a 100%
ownership of JPDA 06-101A in the Timor Sea
Acreage and Field Location
The acreage was previously held by Shell who
drilled a discovery well in October 1998. Minza
secured acreage in 2006
3 rd party evaluations suggest that field could
hold in excess of 1TCF of recoverable
resources
However, the field will require additional
appraisal drilling to prove-up estimates
12

The Minza Project
- Development timeline: Target FID by year-end 2010
FLEX has initiated a farm-out process to
select a partner that will fund the required
appraisal drilling programme
Anita 2D Survey: “BOS Atlantic”
Expect that 3-4 wells will be needed to reach
P90 estimates of 1.2TCF of recoverable
resources
Water depth of 60-100 metres
Anita 2D seismic study started 24 August
and is expected to be interpreted by end-
November
Timeline:
Data room:
Established
Target partner selection: Year-end 2009
Target drilling: 2H 2010
Target FID: Year-end 2010
13

Where Do We Stand Today
Commercial status
Financing Strategy and Summary

Financing Strategy
- Getting the structure right is vital to secure debt finance
Large part of the industry seems to have overlooked the challenges of financing floating LNG
production projects
FLNG cannot be financed in similar fashion as oil FPSOs or traditional ship financing:
Significantly longer lead time
Huge capital commitment
New Technology / unproven concept
Together with Societe Generale, FLEX LNG has spent significant time and effort working with
key sources of debt financing in order to ensure their comfort with financing an LNG FPSO:
Commercial banks: LNG/Offshore/Shipping
Export Credit Agencies: KEXIM/JBIC/Eksportfinans
Others: Intra-governmental agencies
K-Line as largest shareholder a significant benefit with respect to financing from sources such
as JBIC
15

Understanding of FLNG Financing is Crucial for Success
FLEX LNG has been working closely with financial advisors for 2 years to
optimally structure all aspects of the project
EPCIC contract / managing new technology risk
Commercial framework / interface between upstream, FLNG and LNG offtaker
Insurance
SG has confirmed to both FLEX LNG and potential clients / partners that the
EPCIC contract developed together with SHI is financeable in today’s market
16

FLEX LNG – Unmatched Leader in Floating Liquefaction
Fully negotiated and signed turnkey EPCIC contract where the world’s best yard
takes new technology risk
Financeable EPCIC contract and unmatched visibility of cost and schedule
Access to the SPB LNG containment system – the industry’s preferred LNG
containment system
The world’s only organisation that is dedicated to floating liquefaction
FLEX LNG’s first mover advantage is today greater than it was 6-12 months ago
17

Leading the Liquefaction Revolution
From 2012 Onwards This is Going to Become a Familiar Sight
The LNP Producer – A generic design with great adaptability
Wouter Pastoor