pilot lng llc portgalveston-fi… · pilot lng is an energy solutions company, focused on the...
TRANSCRIPT
Pilot LNG LLCCREATING NEW
MARKETS FOR CLEAN ENERGY
Introduction
Pilot LNG is an energy solutions company, focused on the delivery of
Liquefied Natural Gas (LNG) to both new and existing markets by
developing and operating LNG import and LNG fuel/bunkering terminals
and related infrastructure. The company aims to establish LNG terminal
and logistics opportunities worldwide to meet growing natural gas
demand.
Pilot LNG would like to work with the Port of Galveston on the
development of an LNG bunker terminal that will be located on Pelican
Island. The LNG bunker fuel will serve the greater Galveston / Houston
port complex by supplying clean burning LNG to the rapidly expanding
fleet of LNG-fueled vessels.
2
Confidential
Why LNG as a Marine Fuel
3
New international regulations effective January 01, 2020 require the shipping industry to burn fuels with <0.5% Sulphur (SOx)
LNG has much lower emissions than conventional marine fuels
LNG emits zero SOx
LNG has virtually no particulate matter
LNG emits 90% less NOx vs. conventional HFO
LNG as a marine fuel is less costly when compared to low Sulphur fuel oil
Confidential
LNG Marine Fuel Market Depth
Continues to Grow…
4
LNG Fueled Fleet by Vessel Type
• Key opportunity for Galveston
in Cruise Industry
• Additional growth opportunity
within Houston Bay at Port’s of
Texas City & Houston: Tugs,
Ferries, Container Ships,
Offshore Supply Vessels, etc.
Confidential
LNG Marine Fuels…
Cruise Industry Early Adopters
Carnival have selected LNG as their primary fuel
for next generation large ships – 1st in the industry
to do this
Carnival Corp. has ordered 10 LNG powered
cruise ships
Royal Caribbean have equipped eight of their
ships with gas-turbine engines which burn cleaner
fuels and emit less air pollution
5
Source: Carnival Corp. CWC World LNG Summit Dec 2019 & Royal Caribbean
Confidential
Additional Benefits
Galveston will become the first deep water port on the U.S. Gulf
coast to provide LNG bunker services
LNG bunker supply may entice the cruise lines to homeport their
most state-of-the-art cruise ships in Galveston
Reduced emissions will help The Port of Galveston meet its
Green Marine initiatives
LNG bunker fuel in Galveston competes favorably with potential
LNG bunker projects in the Caribbean or Central America
6
Confidential
Port of Galveston
LNG Bunker PortPROJECT OVERVIEW
7
Confidential
LNG Bunker Port
PLNG to develop LNG bunker
facility on Pelican Island
Perform initial due diligence and
fatal flaw analysis
Establish conceptual
engineering & design
Define the permitting and
regulatory process
Utilizing proven technology for
LNG liquefaction and transfer
Conduct stakeholder outreach
and seek community feedback
8
Confidential
Source: Port of Galveston
LNG Bunkering Concept
Port property has limited development opportunities for traditional Port functions – containers, cruise, etc.
As it is a remote location, fits well with LNG development
Traditional LNG facilities i.e. Jax LNG bunkering in Florida are land based, stick-built facilities
High cost per ton making competitiveness challenging
Pilot would utilize proven Floating LNG (FLNG) technology
Similar to “Tango FLNG” unit (see picture lower left) and built by Wison, currently operating in Bahia Blanca, Argentina
FLNG unit can produce 0.5 Mtpa or ~70,000 Mcf/day equivalent
Shipyard based construction lowers costs significantly providing a platform to provide major component of the “terminal” at competitive economics
LNG can be delivered to end-users at significant discount to low sulphur diesel
9
Confidential
Source: Port of Galveston and Wison Offshore & Marine
LNG Bunkering Technology
10
Project: Tango FLNG
System: Floating gas liquefaction and storage unit
Status: Successful gas trial in Sep 2016, at Wison’sNantong Shipyard, delivered in Jan 2017. Currently operating in Argentina (Bahia Blanca)
for YPF
Description Length 144m (474 ft.) * Breath 32m (105 ft.) *
Depth 20m (66 ft.)
Design Draft: 5.4m (18 ft.)
Throughput Liquefaction: 72 Mmscf/d (≈ 0.5mtpa)
Storage: 16,100m3 (Type-C tank)
Hull: permanently-moored, non-propelled
Design Barge: Wison
Liquefaction technology: Single Mixed
Refrigerant (SMR)
Storage and Cargo Handling: TGE
Contract Type: Turnkey EPCICSource: Wison Offshore & Marine
Confidential
LNG Bunkering Project Structure
11
Gas Supply:
• Intrastate pipelines in the
Katy/Houston Ship Channel
• Opportunity to purchase a
delivered to terminal gas
supply including commodity
& pipeline transport
• 3rd party can take supply
risk and toll through facility,
or…
• Project can buy gas supply
and then bundle terminal
fee to provide LNG fuel
price to end users
LNG Barge & Distribution:
• Potential but no current
commitment to consider
distribution/logistics – likely 3rd
parties to take on this role
• LNG barge logistics to
provide “delivered Ex-Ship”
to end-users such as the
cruise industry in Port of
Galveston
FLNG Unit:
• FLNG unit built and floated
into site as the marine
component of the terminal
• FLNG unit will be owned
and operated by Pilot LNG
• Pilot will either provide LNG
bunker fuel to customers ex-
wharf or delivered to LNG
fueled vessels by ship-to-
ship transfer
Terminal/Fixed Infrastructure:
• The site to be leased from
Port of Galveston under
long-term lease agreement
• Land-based component of
the facility to have a small
footprint minimizing any
potential environmental
impacts
• Fixed infrastructure on
Pelican Island to be leased
owned and operated by
Pilot LNG
Confidential
Mar Q1 2021 FID
LNG Bunker Port: Development Schedule
12
Phase 2• Identify Stakeholders and Adjacent Landowners• Prepare and Issue Agency Pre-Application Consultation Letters• Hold Pre-Application meetings with regulatory agencies
Phase 3• Begin WSA Process and draft Preliminary WSA• Perform environmental and cultural surveys if required (based on agency consultation)• Prepare EA to support Permit Applications and Regulatory Compliance
Phase 4• Draft and Submit Permit Applications and Consultations Requests• File Public Notices• Submit Preliminary WSA and hold WSA Workshops• Submit Follow On WSA
Phase 5• Answer Agency Data Requests• Respond to Permit Public Commits• Receive and Review Draft Permit Conditions
Phase 6• Receive Letter Of Recommendation• Receive Permits (Construction Permits and Clearance Letters)• Perform Mitigation (if required, can be done at FID or during construction)• Request Notice to Proceed to Construction
Phase 1• Execute site agreement with Port of Galveston• Prepare Permitting Roadmap (Part of the Critical Issues Analysis)
Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
◆ Jan Q1 2020
◆ Early Q2 2020
◆ June Q2 2020
◆ Mar Q1 2020
◆ Nov Q4 2020
◆
Phase #1: Agreement with Port & Reg road map.
Phase #2: Completed conceptual Eng., desk top Env. &
Reg. Outreach
Will have engaged regulatory agencies in discussions
related to concept and opportunity.
Phase #3: Will have engaged marine industry,
logistics & end-users in discussions related to
concept and commercial opportunity.
Commercial: Post Phase #2 – engage with
marine industry
Commercial: Phase 4 – Term Sheets and/or
binding agreements
Commercial: Phase 5 & 6 – Binding SPAs or TUAs
under negotiation (with CP’s)
Confidential
Key Strategic Partners
Wison
FLNG Basis of Design
FLNG FEED (Front End Engineering & Design)
FLNG EPCIC (Engineering, Procurement, Construction, Installation, & Commissioning)
EXP Environmental Services Inc.
Regulatory and Permitting
CH-IV / Clough
Land-based fixed infrastructure including marine jetty & topsides Basis of Design, FEED, and EPCIC
Energy Transfer Partners / Houston Pipeline Co.
Gas pipeline infrastructure
13
Confidential
Houston/Galveston LNG Marine Fuel
Market
Internationally, the cruise industry is one of the early adopters in the LNG marine fuel space
Cruise Industry in the Port of Galveston
Currently ~300 port calls per year and growing
Assume 50% of the cruise vessels will be fueled by LNG by 2023 = 50% of the FLNG capacity
Significant growth in LNG fueled vessels is forecast and shipowners adjust to meet strict emissions regulations
Container Vessels (lower right) – TOTE currently have two running from Jacksonville, FL to Puerto Rico
Oil Tankers – Shell has ordered 10 LNG fueled Aframaxtankers
Car Carriers – Volkswagen has ordered LNG fueled car carriers
Cargo Vessels, tugs, ferries, etc.
14
Confidential
What is LNG?LNG SAFETY, FACTS &
MISCONCEPTIONS
15
Confidential
What Is LNG?
16
• LNG is an odorless, non-toxic and non-corrosive liquid
• LNG is not stored under high-pressure, is not flammable and is not explosive
• LNG has been safely and securely shipped around the world for more than 50 years
• LNG does not pose a contamination risk
At which point it becomes a liquid, reducing its volume by a factor of more than 600.
Natural gas is converted to LNG by super-cooling it to -260° F
Confidential
Common Myths & Misconceptions
17
LNG is explosive
LNG facilities smell
LNG projects are rubberstamped by the government & agencies
The proposed LNG terminal is too close to communities to be safe
LNG vessels will shut down the channel for days at a time
LNG facilities will destroy the local environment and poison the air
LNG facilities will ruin the tourism industry
LNG as a liquid is non-flammable and non-explosive
Unlike oil refineries and complex chemical facilities, LNG terminals do not put out noxious or malodorous emissions
US LNG projects undergo an extremely rigorous review process ensuring safety and environmental responsibility
In the unlikely event of an incident, any potential significant impacts would be contained onsite, as required by regulation
Channel operations would continue mostly unaltered with safety and security procedures controlled by the Coast Guard
The agency environmental review process ensures that projects meet or exceed all environmental requirements
LNG projects must meet or exceed all air quality requirements, which are in place to protect the public health and environment
In ports around the world, LNG terminals coexist with thriving tourism and local industries In fact LNG is becoming the fuel of choice for the Cruise Industry
Confidential
Who is Pilot
LNG?PILOT TEAM & EXPERIENCE
18
Confidential
Management Team: Experienced &
Proven Track Record
Jonathan Cook:
Co-founder of Excelerate Energy in
2003 and served as the company’s
Chief Operating Officer. Jon managed
the development of Excelerate
Energy’s portfolio of successful floating
storage and regasification unit (FSRU)
projects, expanding the company’s
fleet to nine (9) FSRUs and growing
EBITDA to roughly $300 million. He was
responsible for building the company
from start-up with four employees to a
fully operational entity with almost 100
employees. Responsibilities included
FSRU project development including
complex contract negotiations, fleet
operations, project level insurance
coverage, regulatory compliance and
corporate operations.
Nicolas Tirogalas:
Nicolas has significant experience
in corporate finance and mergers
and acquisitions structuring as well
as strategic planning including over
20 years’ experience in the energy
and commodities sectors and has
managed the start-up and
implementation of an LNG/LPG
shipping company into operation
with five operational LNG carriers
and four LPG carriers under
construction. Nicolas was
responsible for the day to day
operations and financial
performance of the company as
well as the financing of the fleet.
Shaun Davison:Shaun has a proven track record
originating successful LNG projects
across the value chain including
several FSRU projects while at
Excelerate Energy and NextDecade.
FSRU projects include Argentina, Israel,
Pakistan, Ireland, UK, Bangladesh. LNG
export project development includes
Brownville, TX, Texas City, TX, Port
Lavaca, TX. Shaun has 25 years’
experience in the energy industry, with
expertise in the natural gas value
chain: pipelines, underground storage,
US and global markets, LNG terminals
and LNG shipping. Proven abilities in
strategic planning, project
management and business
development.
19
Confidential
Previous Experience: Ground Breaking
Energy Companies
20
Skills Across the Gas/LNG Value Chain, including FSRUs/Regas
NextDecade Corporation
• Members of the start up & origination team
• Raised ~$85MM in Private Equity funding in May 2015
• Took NextDecade public in July 2017 for ~$1 Billion valuation
• Instrumental members in the Rio Grande LNG and Inisfree LNG projects
Floating Regasification Vessels
• Eight (9) new build Floating Regasification
& Storage (FSRU) vessels built at DSME
Floating Regas Terminals
1. Gulf Gateway, USA
2. Northeast Gateway, USA
3. Aguirre GasPort, Puerto Rico
4. Teesside GasPort, UK
5. Mina al Ahmadi, Kuwait
6. Hadera Gateway, Israel
7. Port Qasim GasPort, Pakistan
8. Moheshkhali LNG, Bangladesh
9. Jebel Ali, Dubai
10.Inisfree LNG, Ireland*
Land Based Regasification Terminals
• Cove Point LNG, USA
• Elba Island LNG, USA
Liquefaction Terminals
• Rio Grande LNG, TX, USA*
*Under Development
Previous Employers LNG Terminals Recent Experience: NextDecade, Rio Grande LNG, Inisfree LNG
Inisfree LNG
• Origination & Early Development of Inisfree LNG in Cork Harbor with Port of Cork and Gas Networks Ireland
• 3 Mtpa LNG import project
• Commercial HOA executed with Asian LNG portfolio company
Rio Grande LNG
• Development of $20 Billion South Texas LNG liquefaction project, Rio Grande LNG and supporting 140 mile Rio Bravo pipeline
• Led the US Regulatory & Permitting process with final EIS in May 2019
Confidential
Management Team:
Experienced & Proven Track Record
21
Bahia Blanca (Argentina), first FSRU in South America Teesside Gasport (UK), first FSRU terminal in Europe
Hadera Gateway (Offshore Israel) Engro Elengy Gasport (Pakistan)GNL Escobar - Argentina
Northeast Gateway - USA
21
Confidential
Memorandum of Understanding
Pilot LNG and the Port of Galveston - Memorandum of Understanding
Defines the framework on how the parties will proceed with initial project due diligence and for the negotiation of a long-term lease agreement
Due Diligence includes:
Project feasibility and fatal flaw analysis
Definition of regulatory and permitting process
Develop conceptual engineering and basis of design
Stakeholder outreach
Commercial validation
22
Confidential
Contact: Shaun Davison – Chief Development OfficerPilot LNG, LLC
Email: [email protected] Call: +1.832.415.6659
23
Confidential