mini terminals in the caribbean - gas &...
TRANSCRIPT
LNG Mini terminals in the Caribbean
Prepared by
Federico A. [email protected]
Copyright: Federico A. Martinez, May 2010
The rationale• In the Caribbean area there are dozens of
inhabited islands that does not benefit from natural gas, because there is:
– No infrastructure to store and use
– No transport to deliver the LNG
• The traditional large LNG terminal is not viable in most islands-countries
• Almost 100% of the electricity in the islands is produce burning diesel or fuel oil
8/2009 2Prepared by GasEner, SRL
Copyright: Federico A. Martinez, May 2010
Why Natural Gas?• Current electricity prices range from US$0.24 to US$0.41 x kWh
• Most generation in the islands is based on #6 and #2 fuel
• Natural gas costs 40% to 20% less than #6 or #2 fuel
• Existing gensets can be converted to Dual Fuel (70/30) or substituted by natural gas-fired engines
• Nearby LNG supply from Trinidad (Part of CARICOM), or some intermediate storage
• LNG reshipping from Puerto Rico or the Dominican Republic terminals
• Pollution from HFO & Diesel is under attack
• The national grid in most island-countries has been deregulated
– 2.0 MW customers are leaving the grid for self generation
– As consequence the national grid keeps the smaller customers increasing the cost of making business
8/2009 3Prepared by GasEner, SRL
Copyright: Federico A. Martinez, May 2010
8/2009 Prepared by GasEner, SRL 4
Copyright: Federico A. Martinez, May 2010
Cost of Fuel Delivered (MMBTU), $15.48
Cost of Fuel Delivered (MMBTU), $22.77
Cost of Fuel Delivered (MMBTU), $11.25
Fuel Cost x KWh, HFO, $0.1239
Fuel Cost x KWh, Diesel, $0.1822
Fuel Cost x KWh, Natgas, $0.0900
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$0.0000
$0.0200
$0.0400
$0.0600
$0.0800
$0.1000
$0.1200
$0.1400
$0.1600
$0.1800
$0.2000
HFO Diesel Natgas
Co
st o
f Fu
el x
MM
BTU
Fue
l Co
st x
kW
h
Fuel Cost x kWh(Assuming 8,000 BTU x kWh)
Cost of Fuel Delivered (MMBTU)
Fuel Cost x KWh
The Caribbean Market
Source: “Electric Sector Reform” Joel Huggins, CARICOM Energy Meeting, ept 9, 2008
8/2009 5Prepared by GasEner, SRL
Copyright: Federico A. Martinez, May 2010
The Islands Market
8/2009 6Prepared by GasEner, SRL
Guadaloupe, Les Saintes, Marie Gallante, Saint
Martin, Saint Barhelemy, 235 mW
All major island within the Commonwealth,
except Inagua & Grand Bahama, 227 mW
Barbados, 157 mW
Aruba, 123 mW
Bermuda, 117 mW
Curacao, 113 mW
Grand Cayman, 79 mW
Grand Bahama, 73 mW
Belize, 67 mW
St. Lucia, 50 mW
St. Maarten, Saba St. Eustaius, 49 mW
Brits Virgin Islands, 27 mW
Grenada, Carriaccu, Petit Marinique, 26 mW
St. Vincent & Grenadines, 19 mW
Dominica, 15 mW
Anguila, 13 mW
0 mW 50 mW 100 mW 150 mW 200 mW 250 mW
Demand (MW)
Copyright: Federico A. Martinez, May 2010
The Economic Impact
8/2009 Prepared by GasEner, SRL 7
Country DemandYear consumption in MMBTU (Base case)
Savings (base US$3.00 x MMBTU)
Baseline 8,000 BTU $3.00Guadaloupe, Les Saintes, Marie Gallante, Saint Martin, Saint Barhelemy 235 mW 13,175,040 MMBTU $39,525,120All major island within the Commonwealth, except Inagua & Grand Bahama 227 mW 12,732,134 MMBTU $38,196,403Barbados 157 mW 8,802,048 MMBTU $26,406,144Aruba 123 mW 6,901,478 MMBTU $20,704,435Bermuda 117 mW 6,570,701 MMBTU $19,712,102Curacao 113 mW 6,318,413 MMBTU $18,955,238Grand Cayman 79 mW 4,429,056 MMBTU $13,287,168Grand Bahama 73 mW 4,103,885 MMBTU $12,311,654Belize 67 mW 3,733,862 MMBTU $11,201,587St. Lucia 50 mW 2,791,987 MMBTU $8,375,962St. Maarten, Saba St. Eustaius 49 mW 2,752,742 MMBTU $8,258,227Brits Virgin Islands 27 mW 1,524,941 MMBTU $4,574,822Grenada, Carriaccu, Petit Marinique 26 mW 1,440,845 MMBTU $4,322,534St. Vincent & Grenadines 19 mW 1,076,429 MMBTU $3,229,286Dominica 15 mW 812,928 MMBTU $2,438,784Anguila 13 mW 728,832 MMBTU $2,186,496Totals 77,895,322 MMBTU $233,685,965In M3 0f LNG 3,440,388 m3
The Target Market for LNG = 100,000 m3 per month
Islands Demand (MW)Potential for conversion MW m3 Storage
Trinidad y TobagoGuadeloupe, Les Saintes, Marie Galante,
Saint Martin, Saint Barthelemy 235 MW 30.0% 71 MW 16,597 m3All major island within the Commonwealth,
except Inagua & Grand Bahamas 227 MW 20.0% 46 MW 11,065 m3
Barbados 157 MW 25.0% 40 MW 9,835 m3
Aruba 123 MW 20.0% 25 MW 6,147 m3
Bermuda 117 MW 20.0% 24 MW 6,147 m3
Curacao 113 MW 20.0% 23 MW 5,532 m3
Grand Cayman 79 MW 40.0% 32 MW 7,991 m3
Grand Bahama 73 MW 25.0% 19 MW 4,918 m3
Belize 67 MW 40.0% 27 MW 6,762 m3
St. Lucia 50 MW 30.0% 15 MW 3,688 m3
St. Maarten, Saba St. Eustaius 49 MW 50.0% 25 MW 6,147 m3
Brits Virgin Islands 27 MW 50.0% 14 MW 3,688 m3
Grenada, Carracci, Petit Martinique 26 MW 25.0% 7 MW 1,844 m3
St. Vincent & Grenadines 19 MW 50.0% 10 MW 2,459 m3
Dominica 15 MW 100.0% 15 MW 3,688 m3
Anguilla 13 MW 50.0% 7 MW 1,844 m3
Gran Total 1,398.4 mW 28.8% 400 mW 98,352 m38/2009 8Prepby GasEner, SRL
Copyright: Federico A. Martinez, May 2010
The tip of the iceberg
How big is the Iceberg?
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Light Vehicles30%
Heavy Vehicles16%
Utilities & Industry
37%
Other7%
Domestic10%
Fuel Used by Destination (2006)
Source: Ministry of Commerce of the Dominican Republic (www.seic.gov.do)
First Stage Target Market
The Challenges
• Cost of Mini Terminal = $2,500 to $3,000 x m3
• Widespread territory with no LNG delivery
• Financing $300+ MM in this economy is a major task
8/2009 Prepared by GasEner, SRL 10
Copyright: Federico A. Martinez, May 2010
One example: Dominica
8/2009 Prepared by GasEner, SRL 11
Norway
Roseau Dock, Dominica
Copyright: Federico A. Martinez, May 2010
Cost of the Terminal
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Case in
Poin
t: DO
MIN
ICA
Copyright: Federico A. Martinez, May 2010
Dominica Monthly LNG Demand = 3,000 m3
Chart Mini TerminalStandard Tanks 683 m3 5
Price of Tanks (ARO) € 717,895 € 3,589,474
Exchange Rate $1.400 $4,666,316
Transport, Civil Works, Commissioning 45% $3,817,895
Terminal Price (Excludes Marine Works) $8,484,211
Marine Works $2,000,000
Total Investment $10,484,211
Savings x Year (based on US$3.00 x MMBTU) $2,438,784
Years to repay 4.3
Widespread Territory
8/2009 Prepared by GasEner, SRL 13
7 daysMonthly, 5,000 m3
1 dayMonthly
4,000 m3
Copyright: Federico A. Martinez, May 2010
Widespread Territory
8/2009 Prepared by GasEner, SRL 14
7 daysMonthly, 5,000 m3
1 dayMonthly
4,000 m3
Copyright: Federico A. Martinez, May 2010
Flexible hoses, no Jetty to unload, small crew
Widespread Territory
8/2009 Prepared by GasEner, SRL 15
7 daysMonthly, 5,000 m3
1 dayMonthly
4,000 m3
Copyright: Federico A. Martinez, May 2010
0 m3
10,000 m3
20,000 m3
30,000 m3
40,000 m3
50,000 m3
60,000 m3
70,000 m3
80,000 m3
90,000 m3
100,000 m3
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
0 m3
9,835 m3
24,588 m3
59,011 m3
88,517 m3
93,434 m3
0 m3
40,000 m3 40,000 m3 40,000 m3 40,000 m3 40,000 m3
Monthly Demand in m3 LNG
San Felipe
Why should World Bank, Inter American Development Bank, etc. be interested in
financing the project?
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A Case for the Environment
Green House Gas (GHG) Emission Reduction MW
Base case (Diesel) GHG Emission
LNG Case GHG Emission Reduction
Tons of CO2 x MWNorm Euro I, 2005) 4.0 kg x MWh 1.8 kg x MWhPower Projects (400 MW-All Projects) 3,153,600 MWh 12,614 MT CO2 5,645 MT CO2 -55.25%Carbon FinancialInstruments $17.00 $118,481
Copyright: Federico A. Martinez, May 2010
What do we need?
05/2010 Prepared by Federico A. Martinez 18
Access for Small LNG Ships (<40,000 m3)
Not a charity case
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Assumes US$0.25 x MMBTU Loading Fee asSmall LNG Premium
Only San Felipe San Felipe + ProjectsInvestment ($25,000,000) ($25,000,000)Year 1 $2,716,972 $3,385,021 Year 2 $2,716,972 $4,387,094 Year 3 $2,716,972 $6,725,266 Year 4 $2,716,972 $8,729,413 Year 5 $2,716,972 $9,063,438 Year 6 $2,716,972 $9,063,438 Year 7 $2,716,972 $9,063,438 Year 8 $2,716,972 $9,063,438 Year 9 $2,716,972 $9,063,438 Year 10 $2,716,972 $9,063,438 IRR 2% 23%
FAQ
•Current importers of fuel, the utility, bothWho is going to buy the LNG?
•The same customers importing #2 and #6 fuel nowWho is going to pay for the
LNG?
•GasEner can BOT the mini terminals for current fuel importers or BOO with a utility PPA
Who is going to build the mini terminals?
•The same companies selling LNG todayWho would sell the LNG?
•An SPV is organized to develop it. Who is developing the project?
•GasEner + Chart IndustriesWho is going to provide O&M
to the project?
•We hope NGC will seize the opportunityWho is going to build the jetty
for small LNG?
05/2010 Prepared by Federico A. Martinez 20
8/2009 Prepared by Promarket, S. A. 21
For more information Contact:
Federico A. Martinez, Promarket, Inc. / GasEner, [email protected]
Of. +1 (809) 533-9416, Mob. +1 (809) 399-0794www.promarketdr.com
Claus Emmer, LNG System Sales Manager, Chart [email protected]
+1 (612) 387-4235
Amato Spagnoletti, VP Sales, Chart [email protected]
+1 (800) 400-4683
Copyright: Federico A. Martinez, May 2010