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TRANSCRIPT
Frontier Natural ResourcesEnergy Innovations For Today’s Economy
Tim Miller
Engineering Manager
The Bottom Line
Natural gas is better than diesel
Cheaper, Cleaner, Local
With LNG, we can deliver cheap natural gas to PA customers
PA is a prime location for LNG plants
Cheap gas supply
Under-served market
PA LNG benefits ALL industries in our state
With our business model, we can deliver LNG at long-term, fixed prices
Not dependent upon NYMEX prices
Frontier Natural Resources, Inc.
Independent natural gas producer
Based in Bellefonte, PA
Marcellus assets in central PA
Small-scale LNG producer
LNG plant operating in Northern PA
Producing about 5000 gal/day LNG
What is LNG?
Liquefied Natural Gas
Methane (natural gas) cooled down to -260 °F
Cryogenic liquid
Methane becomes 600 times smaller in liquid form than in gas form
Higher energy density than CNG (compressed natural gas)
Allows natural gas to be transported via truck/trailer
Great option for areas where there are pipeline bottlenecks or pipeline
is not available
Provides natural gas options for fuel consumers without pipeline
availability
The Need For LNG
Cost Savings
The current rack price for diesel in PA is about $1.70/gal
This equates to $12.20/mmBTU
Natural gas wellhead price is around $3.00/mmBTU
LNG wholesale prices in PA are around $6.00/mmBTU
Natural gas is substantially cheaper than diesel, even with liquefaction
costs included
Environmentally Friendly
Cleaner burning
Fewer CO2 emissions
No contamination if spilled
Availability
Market Challenges
Limited LNG supply
UGI LNG plant in Temple, PA – primarily used for peak shaving
Nearest merchant plants in Indiana and Massachusetts
Market is still developing
Additional supply will help encourage market
Our LNG Facility
Mansfield, PA
Produce about 5000 gal/day of LNG
600 MCF/D of feedstock gas, of which 70% makes it to market
Further optimization will improve fuel efficiency
Purchase gas from Tenaska Resources
Dresser-Rand LNGo Plant
Process
Treat gas – mole sieve to strip out water vapor, carbon dioxide
Compress
Cool – expansion process to create rapid cooling to -260 F
Storage – LNG is stored in a vacuum insulated cryogenic tank
Power – process is powered by an 800 KW natural gas generator
Our Market
Wholesale distributers – Clean Energy, Blue Roads
Asphalt plants
Oil and gas – drilling rigs, frac fleets
Mining – rock quarries, coal mines
Manufacturing – paper mills, etc.
Transportation
Any business that burns diesel or fuel oil
Our Competitive Advantage
Cheap feedstock gas
Wellhead gas prices in Northern PA are discounted by as much as 25%
compared with NYMEX due to oversupply and pipeline bottlenecks
Feedstock gas in Northern PA is significantly cheaper than other regions
Market proximity
Nearest LNG merchant plants in Indianapolis and Boston
Over 350 miles from Pennsylvania
Reduced transportation costs
Our LNG is Cheaper and Closer!
Our Future Advantage
We own Marcellus wells and acreage in central PA
Plan to expand our LNG production by building another plant on
our own wells
Summer 2017
Gas is substantially cheaper to us
Lifting costs = $0.60 to $1.00 per MCF
Gas cost is not dependent upon NYMEX price
Steady OPEX over time
We can offer long-term, fixed-price supply contracts to our
customers!
