project overview - shell · project decision by ministers decision (45 days) certificate...
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1 Copyright of LNG Canada
Project Overview
Andy Calitz, CEO LNG Canada
Updated June 2015 Unres t r i c ted
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Cautionary note
June 2015 Unres t r i c ted
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves.
Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources
are consistent with the Society of Petroleum Engineers 2P and 2C definitions.
Organic: Our use of the term Organic includes SEC proved oil and gas reserves excluding changes resulting from acquisitions, divestments and year-average pricing
impact.
Resources plays: our use of the term ‘resources plays’ refers to tight, shale and coal bed methane oil and gas acreage.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal
Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us”
and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by
identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies over which
Royal Dutch Shell plc either directly or indirectly has control. Companies over which Shell has joint control are generally referred to as “joint ventures” and companies
over which Shell has significant influence but neither control nor joint control are referred to as “associates”. In this presentation, joint ventures and associates may
also be referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by
Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements
other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations
that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties tha t could cause actual results,
performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements
concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts,
projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’,
‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and
phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those
expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes
in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition;
(g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and
completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and
regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l)
political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of
projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are
expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking
statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2014 (available at
www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be
considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, September 15, 2015. Neither Royal Dutch Shell plc nor any
of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information.
In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.
We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from
including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website
www.sec.gov.
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About LNG Canada
Shell, PetroChina, Mitsubishi
Corporation, and KOGAS
are working together to
design, build and operate
LNG Canada – a proposed
natural gas liquefaction plant
and marine terminal export
facility near Kitimat, B.C.
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LNG Canada is a powerful joint venture
• Global leader in LNG since 1964, operating about one quarter of the world’s
LNG vessels
• 10 LNG projects in 9 countries in operation, with 2 new projects under
construction
• Japan’s largest trading company and handles about 34% of Japan’s LNG imports
• Successfully built a portfolio of LNG export investments across Australia,
Indonesia, Malaysia, Brunei, Oman , Russia and North America
• South Korea’s principle LNG provider; operates 4 LNG import terminals
• Involved in various LNG projects: Australia, Indonesia, Middle East
and LNG Canada
• Diversified into LNG trading, LNG terminal construction, operations
and management
• China’s largest oil and gas producer and supplier
• Involved in 4 LNG projects: Australia, Russia, East Africa, LNG Canada
June 2015
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19 PROPOSED LNG EXPORTS PROJECTS IN WESTERN CANADA (as of March 2015)
Grassy Point LNG
Aurora LNG
Prince Rupert LNG
Discovery LNG
Woodfibre LNG
Kitsault LNG
Stewart Energy
WCCLNG
Tilbury LNG
Steelhead LNG
Watson Island LNG
Triton LNG
Cedar LNG
LNG Canada
Pacific NorthwestLNG
BC LNG
Kitimat LNG
Orca LNG
New Times LNG
June 2015
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Proposed facility:
• Two 6.5 mtpa LNG
processing units or
“trains”
• Expandable to four trains
with a total capacity of
approximately 26 mtpa
• Estimated peak
construction workforce:
approximately 7,500
• Estimated operational
workforce: approximately
300-450 people in first
phase, and up to 450-800
should the full project be
built
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Key project elements
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• LNG facility – natural gas
receiving and treatment
facilities
• Liquefaction facilities
• Office and maintenance
facilities
• Pipeline to transfer LNG
from the facility to the
marine terminal
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Key project elements
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• Marine terminal with
a wharf that can
accommodate and load
LNG ships, and a barge-
unloading ramp
• Temporary worker
accommodation village
and temporary laydown
and assembly
areas will be constructed
• The project will be located
on approximately 400
hectares of privately
owned land, already
zoned for industrial use
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Key project elements
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With its deep protected
harbour, Kitimat is a natural
choice for an LNG terminal.
The Douglas Channel
provides a deep-water,
wide, sheltered and ice-free
shipping route throughout
the year.
June 2015
Project location
Proposed LNG
Canada Facility Site
Existing Rio Tinto
Alcan Site
Existing RTA East
(formerly EuroCan)
Wharf – proposed
LNG Canada
marine terminal
Proposed Coastal
GasLink pipeline
Current Site
Unres t r i c ted
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Site looking north
LNG Facility
Town of Kitimat
Haul Road
Marine Wharf
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LNG Canada is a four train project (With two trains in the first phase)
T4
T3
T2 T1
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Safety is critical to LNG Canada’s ability to deliver energy responsibly, and one
of our core values.
Our HSE Objectives
• Goal Zero: no harm to people, no uncontrolled releases to the environment
• Life Saving Rules
• Respect and care for people and the environment
• Engaged, committed, and lead by example
• Clear expectations for staff and contractors
• Communicate openly and honestly
• Learning organisation
• Accountable, share information, celebrate success
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Health, Safety, and Environment is integral to everything we do in LNG Canada
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Proposed shipping route (aminated version)
Kitimat
Proposed
project site PORCHER ISLAND
TRIPLE ISLAND
PILOT STATION
KITKATLA
HECATE STRAIGHT
BANKS ISLAND
PRINCIPE CHANNEL
HARTLEY BAY
DOUGLAS CHANNEL
TERRACE
KITAMAAT
VILLAGE
PRINCE RUPERT
METLAKATLA VILLAGE
LAX KW’ALAAMS KITSUMKALUM
KITSELAS
* Map is for illustrative purposes only
LNG from Kitimat would
travel down Douglas
Channel and then north
through Principe Channel
where it will connect into
the existing commercial
shipping routes.
50 mi
50 km
June 2015 Unres t r i c ted
HAIDA GWAII
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Joint Venture Partners will transport own LNG to Asia
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Each Joint Venture Partner will bring their own gas through the Coastal GasLink Pipeline
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LNG will be transported in large, specially designed ships with double hulls – one
layer forms the normal hull of the ship, while a second layer forms an inner hull as
an added safety measure.
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LNG ships
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• LNG ships would travel
from near Triple Island
through Principe and
Douglas Channels to
Kitimat Arm.
• At full build-out, the
project would expect
between 170 and 350
LNG ships to visit the
terminal annually.
June 2015 Unres t r i c ted
LNG ships
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We have designed the
project to be one of the
world's best performing LNG
facilities in terms of
greenhouse gas emissions
June 2015 Unres t r i c ted
Helping B.C. acheive the cleanest LNG
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• National Energy Board Export
License (approved Feb. 2013)
• Environmental Assessment –
LNG facility, marine terminal
and shipping activities
(approved Jun. 2015)
• B.C. Oil and Gas Commission
LNG facility permit (submitted
Feb. 2015)
• Transport Canada TERMPOL
review (submitted Feb. 2015)
• Disposal at Sea Permit
(submitted Mar. 2015)
• Fisheries Act Authorization
(underway)
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Regulatory review process
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Environmental assessment (EA) scope
The following major project
components were in scope
for the EA for LNG Canada:
The LNG
facility
The marine
terminal
Supporting
infrastructure
and facilities
Environmental and socio economic aspects covered in the EA included:
Environmental effects
(air quality, noise, vegetation,
wildlife, fisheries, marine
mammals, etc.)
Heritage effects Health effects Social effects Economic
effects
Shipping /
marine traffic
First Nations
interests
Environmental
effects of
accidents /
malfunctions
Cumulative
effects
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B.C. Environmental Assessment process
Project Description
Determination that
project is
reviewable
(Section 10 Order)
Scope and
process for review
determined
(Section 10 Order)
Application
information
requirements
PUBLIC
COMMENT
PERIOD
Application
evaluated for
completeness
(30 days)
Application
review
PUBLIC
COMMENT
PERIOD
Assessment
report
Application Review Stage
(180 days)
Project decision
by Ministers
Decision
(45 days)
Certificate
Issued-project
authorized to
proceed to
permitting stage
Certificate
returned-project
cannot proceed
Further
assesment
required
Approved
Not Approved
Application
prepared and
submitted
Pre-Application Stage
(no timeline)
WORKING GROUP REVIEW
FIRST NATIONS AND COMMUNITY ENGAGEMENT
We are here
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Project timeline
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CFSW LNG Constructors is a powerful plant construction contractor
June 2015
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A variety of key stakeholder groups
LNG Canada
Government JV Partners FEED
contractor
NGOs
Labour/Unions
Public
Emergency
Responders
Media
Opinion Leaders
Trade
Associations
Business
Partners
Academics First Nations Investors
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Secured land for project
(February 2014)
Creation of LNG Canada
Joint Venture
(April 2014)
Selection of TransCanada
to build and operate Coastal
GasLink
(June 2012)
National Energy Board Export
License secured
(February 2013)
LNG Canada filed an Application
for Environmental Assessment
(EA) Certificate and Coastal
GasLink has received its EAC
(October 2014)
Selection of CFSW LNG
Constructors for FEED
(May 2014)
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We have completed nine milestones
June 2015
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LNG Canada received approval
of Environmental Assessment
(EA) and EA Certificate (June
2015)
Signed a power supply
agreement with BC Hydro
(November 2014)
Signed agreement with GE
Oil & Gas for gas turbine
and compressor technology
(December 2014)
Unres t r i c ted
We have completed nine milestones
June 2015