Introducing

QUE$TOR™ LNG
Regasification
An integrated software system leveraging
regional cost data for design and cost
estimation of LNG facilities

A Web seminar presented by Candida Scott,

Sr. Director of Cost and Economics, IHS
Energy
 Welcome
• Welcome to our first LNG Web seminar

Copyright © 2006 IHS Inc. All Rights Reserved. 2

 Candida Scott

• Senior Product Director, Economics and

Consulting Division, IHS
• Joined IHS Houston office in 1999
• Chartered mechanical engineer
• More than 20 years in the oil and gas industry
• Extensive international experience
• Member of the IMechE and the Society of
Petroleum Engineers
• Earned a BSc in mechanical engineering from
Leicester University

Copyright © 2006 IHS Inc. All Rights Reserved. 3

 Presentation Agenda
Review cost challenges
• Determine overall effect
• Review LNG systems and cost breakdowns
• Short demonstration of QUE$TOR LNG Regasification

• But firstly why LNG?

Copyright © 2006 IHS Inc. All Rights Reserved. 4

U.S. and Canadian Gas
Productive Capacity and Potential Demand

80
78
76 Potential Demand
Including Net
74 Exports to Mexico
Bcf 72
per
Day 70
68
66
64 Productive
62 Capacity

60
1995 1997 1999 2001 2003 2005 2007 2009 2011

Source: Cambridge Energy Research Associates.

41002-16
052005
Copyright © 2006 IHS Inc. All Rights Reserved. 5
LNG Regasification Facilities in North America:
Existing and Proposed (January 2006)

Prince Rupert

Kitimat
Canaport
Northern Star Gros
Cacouna Bear Head
Astoria
Rabaska Strait of Canso
Port
Quoddy Bay Keltic Petrochemical
Westward
Jordan Downeast Calais LNG
Cove Broadwater Everett Battery Rock
Ocean Way Long Crown Landing Neptune
Clearwater Port Beach Sparrow’s Point Northeast Gateway
Creole Trail Weavers Cove
Cabrillo Port Energia Keyspan LNG
Sabine Cove Point
Rosarito Costa Azul Galveston Lake Elba Philadelphia
Coronado Islands Charles Island Gas Works RFP
Port Arthur Cameron Compass Port
Sonora Pacific
Freeport Pascagoula
Calhoun LNG TORP LNG
Corpus Christi
Main Pass Energy Hub
Tidelands Energy Bahamas
Altamira Bridge
Existing Manzanillo Vermilion Port Pelican
179
Proposed Lazaro
Gulf Beacon Port Source: Cambridge Energy Research Associates.
Cardenas
Approved Landing 40302-3_0120

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 Cost Study Challenges
• Building rigorous cost and technical models on a global scale
• Building in flexibility of product specifications
• Tracking and monitoring costs
• Long construction cycles
• Tracking regional variances – cost and technical
• Building components for lifecycle
• Regasification
• Liquefaction
• Shipping
• Three areas of review
• Market impacts
• Location requirements
• Technical specifications

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Market Elements

Raw materials:
Steel
Copper
Nickel
Gypsum

Global
Drivers
Oil O&G Resources:
Equipment: Skilled construction labor
Vessels Price Skilled Design teams
O &G equipment Drivers Resources Project management

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 Location Challenges
• LNG specification - BTU/Wobbe Index
• Near to the coast – dredging/reclaim?
• Environmentally sensitive
• Different locations requirements for dredging disposal
• Layout requirements (land required)
• Ecological requirements – heating seawater
• Near to gas infrastructure (delivery, or receiving)
• LNG storage - above or below ground

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 Technical Choices
• Processing required to meet specification
• Liquefaction system
• Regasification system
• Types of storage tanks
• Amount of dredging, or reclamation
• Size of tankers dictates - slips/jetties, loading/offloading arms
• Harbor, or seawalls requirements
• Plant layout hazardous/non hazardous
• Equipment choices
• Infrastructure required

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Project Cost Estimation Impact
Stage Phase

Pre-Project Project Post

Project
Front End Pre- Commission
Screening Feasibility
Engineering Design Design, Procurement, Construction Commission & Operate
Conceptual
Exploration
Economic Engineering
Basic Engineering Detailed Engineering
Activities

Studies Studies
Procurement Test & Pre-
Commission Commission
Construction

Control Estimate Final Estimate

+40 90
Cumulative
Accuracy of total project cost

+ 30 Engineering 80
+30
Progress
+ 20

Engineering Progress, %
70
+20
60
Accuracy, %

+10 + 10
50
0
-5 40
- 10
- 10 30
- 20 - 20 20
- 30
10

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Cost Relationships - Regasification Plant
(% of Overall Plant Cost)

Marine LNG Storage LNG Send Out Utilities Total

Systems Treatment and
Vaporization

Equipment
1 34 2 6 4 46
Bulks
4 5 1 1 3 15
Construction
7 6 4 2 7 25
Design &
Project Mgmt 2 2 2 1 7 15

Total 15 47 8 10 21 100
Basis: Send out – 1 Bcf/day
Marine Slip
USA

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Regasification Capabilities

LNG Supply

LNG Receiving
& Metering

Vapour Handling LNG Storage

Fuel Gas LNG Processing Fractionation

Utilities
• Steam
LNG Pumping NGL Treatment
• Electricity
• Water
• Nitrogen

LNG Vaporisation NGL Storage

Gas Export NGL Export

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Estimating from a Ground-up Methodology
• Build a cost estimating framework by region
• Technical data separate from cost data
• Procurement strategies selection
• Cost structure – applying QUE$TOR methodology
• Equipment by system
• Bulk materials by system
• Prefabrication by equipment and materials
• Construction by equipment, materials and civils
• Design & project management related to systems
• Insurance Technical Unit Cost
X Costs =
algorithms estimate
• Contingency

Technical Cost
geographical geographical
databases databases
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QUE$TOR LNG Regasification
• Additional integral module to QUE$TOR Onshore
• All QUE$TOR regional databases
• Produces CAPEX/OPEX and schedule
• Includes:
• Marine infrastructure jetties, slips and dredging
• Vapourisation - open rack, submerged combustion, intermediate fluid
• Containment tanks single, double, full and membrane
• LNG processing and storage (nitrogen inj. LPG/gasoline)
• Vapour handling
• Civils

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 Program demonstration
• Interactive overview of the program’s capabilities

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What Next? Liquefaction Plants
Feed Gas Supply

Gas Receiving
& Metering

Acid Gas Sulphur

Fuel Gas Removal Recovery

Utilities Dehydration &

Mercury removal Sulphur Disposal
• Steam
• Electricity
• Water
Precooling Fractionation
• Nitrogen

Liquefaction NGL Treatment

Boil-off Gas
LNG Storage NGL Storage
Compression

LNG Loading NGL Shipping / Export

LNG Shipping to Customers

Copyright © 2006 IHS Inc. All Rights Reserved. 17
 Modelling the Black Box
• Modelling and costing of all unit operations with the exception of
the low temperature section accomplished using standard
QUE$TOR routines
• Natural gas liquefaction of alternative processes modelled in
HysysTM process simulation program to provide QUE$TOR
algorithms and technical data:
• Cascade Process Liquefaction
• C3 – MR LNG process
• DMR LNG process
• Hysys output from a converged run determines all the process
variables necessary for the equipment specification

Copyright © 2006 IHS Inc. All Rights Reserved. 18

Summary – LNG Facilities Estimation is Feasible
• Determine geographic requirements
• Define methodology and determine technical algorithms
• Calculate technical parameters distinct from cost
• Break costs down into small enough parts to be gathered
• Technical algorithms sensitive to product specification
• Define impact of the black box onto other systems – processing /
power / utilities / bulks / layout areas
• Identify high impact technical decisions e.g.:
• Spiral wound versus Plate fin cryogenic heat exchangers
• Refrigerant compressors

Copyright © 2006 IHS Inc. All Rights Reserved. 19

 Questions?
If you want to know more:
• Ask questions now
• Email candida.scott@ihsenergy.com
• If you want to know who else from your company attended this
Web seminar, email candida.scott@ihsenergy.com
• Let us know if you would like individual company discussions
• This presentation is available for download immediately after this
session on the post event close-out page

Copyright © 2006 IHS Inc. All Rights Reserved. 20