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LNG FUEL SOLUTIONS – LATEST DEVELOPMENTS NEW FRONTIERS IN ENERGY 2012
SEPTEMBER 25, 2012
Agenda
AGENDA • Introduction to Prometheus • Case for LNG • Why it’s sustainable • Latest developments • Opportunities for investors
2
Prometheus Overview
SPECIALIZING IN NATURAL GAS FUEL SUPPLY SOLUTIONS VIA LIQUEFIED NATURAL GAS (LNG)
• Headquarters in Houston, Texas • Predecessor company started 8 years ago
as a Liquefaction technology play • Repositioned in 2008 as vertically
integrated LNG production and supply • Operations throughout US & western
Canada • Named Platts Energy Award Finalists – in
2011 and 2012 • Privately held--Major Shareholders:
− Shell Technology Ventures Fund 1 BV (June, 2009) − Black River Asset Management (September, 2008)
3
We are a pure-play on the Oil – Natural Gas spread
Source EIA.gov
4
Off Pipeline customers make up a sizeable market
Highway 58%
Marine 9%
Heat 7%
Farm 5%
Industrial 4%
Off Highway 3%
Power 3%
Oilfield 2%
Others 4%
USA Oil-Derived Fuel Consumption 2010 Total = 167MM gpd
USA Hydrocarbon Pricing1
($ per MMBtu)
0.00
5.00
10.00
15.00
20.00
25.00
#2 Diesel Wholesale
Propane Wholesale
Natural Gas1
(1) Natural Gas price is Citygate from ’90-’00 and Industrial after 2001
We provide turnkey supply, logistics, equipment & service
Natural Gas In Natural Gas Out
LNG Fueling for: Drilling Rigs
Industrial Boilers
5
Liquefaction Transportation Onsite storage Regasification
6
The key is our portfolio of supply sources
Surety of supply is critical Customer demand is volatile Supply disruptions are commonplace We manage the transportation cost
implications Our robust supply portfolio enables us to
manage through the surprises
The case for LNG
LIQUEFIED NATURAL GAS (LNG) is less costly and cleaner than Diesel and Propane alternatives
• Lower Cost than Diesel and Proppane • Cleaner – lower NOx and Particulate emissions • Reliable – sufficient supply and predictable delivery times • Safe – comparable procedures to industrial gas • Proven – making deliveries today
7
Today’s spread makes LNG the low cost option for industrials
LNG is more cost effective than oil-derived fuels – and more immediate than Pipeline construction projects
8
0
1000
2000
3000
4000
5000
6000
7000
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Diesel
Propane
LNG
Pipeline
Total Cost of Fuel Dollar per Day
LNG Sweet Spot Delivered 300 Mi
Daily Fuel Consumption – Gallons of Diesel Equivalent
$3.40 ULSD Delivered 100mi
$1.60 Propane Delivered 100mi $6.0MM
2-3mi Pipeline$2.80
gas +LDC
It’s sustainable – customer economics hold up into the future
Innovation, access to capital and customer density are the keys
9
Diesel v. LNG – Current Cost Stack Dollar per Diesel Gallon Equivalent
Today: $98 Crude, $2.80 NG
Diesel v. LNG – Future Cost Stack Dollar per Diesel Gallon Equivalent
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Diesel LNG
Storage and Regas
Delivery/Adder
Commodity
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Diesel LNG
Future: $80 Crude, $6.00 NG
20% to Customer 18% to Customer
Source EIA.com
And Natural Gas is a much cleaner alternative
Fuel Switching is the easiest path to achieving emissions control goals
10
Combustion Products NOx – g/bhp-hr
01234567
Diesel (3512C) NG (3516B)0
0.010.020.030.040.050.060.07
Diesel (3512C) NG (3516B)
PM – g/bhp-hr
Source Cat Data Sheets for 1300ekw 3516B and 3512C
Prometheus Deliveries 2008 - 2012
LNG is Reliable and Safe
11
Source : Prometheus logistics system for delivers through June, 2012 Note:*Tracked since January 2009 through 8/31/2012
Reliability maintained while growing deliveries by 225%
Exposure Hours Since Operation* (Employees + Contractors)
754,544
LTIs / Total Recordable Incidents 1/1
STC for 12 Life Saving Rules 1.0
STC for Defensive Driving Course 0.85
Regulatory Violations/Citations 0
Shell Resources and Practices: • Incident Investigation and Reporting • HSSE Auditing • Crisis Management Program • Contractor Management Program • 12 Life saving Rules • Journey Management Program
Safety Record
The Industrial LNG market is entering a phase of rapid growth
12
Prepared for Growth New Markets Opening New Entrants Appearing
• Currently delivering 40-50 kg each day
• Preorder kit to serve anticipating growth
• Opportunity pipeline up 40%+ since June
• Supply network in place to support 4x growth
• Firsts for Prometheus − Dedicated rig in Marcellus − Customers in Canada, NH
and TX − Multi rig/multi year − Temp Power project − Frac engine tests
• New Applications/Inquiries − Bi-Fuel (CAT “DGB”) − Back-up Fuel − Remote Communities
• Linde for equipment and services
• UGI & Centerpoint in LNG supply
• Transgas for transport/logistics in New England
• Equipment manufacturers adding capacity
• Merchant LNG plant developers
Recent Developments
The new entrants validate the opportunity and reduce supply chain risk for buyers – we welcome this healthy competition
We complete by offering a proven solution set
Experience and Learning • Completed over 200 wells using dedicated LNG solutions • Currently supplying
- 9 drilling rigs – under 6 drilling operators - 7 industrial sites
• Strong safety culture and LNG project execution know-how • Delivery reliability (>99.9%) with 225% growth in deliveries • Applied: New Solutions, Commercial Innovation, Supply Market insight
Kit that Fits • Best mix of storage and vaporization capability for each application • Maximize capital efficiency • Interchangeability across applications
Network Density • Build out supply network to reduce delivery radius • Customer aggregation/clustering
Prometheus Energy and its key partners have pioneered and commercially proven the use of LNG as a favorable alternative to distillate fuels
13
Opportunities for Investors
14
Investment Areas O We are looking for….
• Merchant LNG plant projects • Lease Finance
- Customer Assets - Mobile Kit - Transportation
• Cryogenic equipment makers and fabricators
• Engine technology players – APS, GFS & Westport
• New sources to buy liquefaction capacity
• Sites to build new liquefaction facilities
- Clean and compressed gas - Gas Cryo plants - Close to markets - Large Gas users
• Partners to explore creative ways to grow in this marketplace
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