© 2005 by Institute for Energy, Law & Enterprise, University of Houston Law Center. All rights...

© 2005 by Institute for Energy, Law & Enterprise, University of Houston Law Center. All rights reserved. 1

PMRE/BUET & UH IELE WORKSHOP

The Role of LNG, GTL, CNG

Dhaka, Bangladesh. January 9-12, 2005


How Much Natural Gas Is Out There? Proved natural gas reserves at end 2003, ~6000 tcf.

BP Statistical Review of World Energy 2004


Monetizing Global Natural Gas Resources

Global Gas Production,108 tcf 2000

Marketed

Production

86%

Reinjected

11%

Vented,

Flared

3%

Other

14%

14% ~ 15 tcf, does not get to market

WORLD PROVEDRESERVES 2002:

6,000 TCF

NORTH AMERICARESERVES4%

Much of this natural gas is stranded, with no or little domestic demand


Monetizing Global Natural Gas Resources Key Drivers

• Abundance of proved Natural Gas• Huge stranded reserves exist –

countries and companies want to monetize these reserves

• North America and Europe – flat or declining production

• LNG is becoming a cost effective solution



What is CNG, LNG, NGLs, LPG, and GTL?LNG Composition

Others5%

Methane 95%

NGL Composition

Ethane, propane, butane95%

Others5%

LPG Composition

Propane and Butane

95%

Others5%

Typical Natural Gas Composition

Methane82%

Other19%

Ethane

Nitrogen

Pentane

Butane

Propane

Carbon Dioxide



Gas-to-Liquids (GTL)

Source: Deshpande, A & Economides, M.J. – University of Houston


Compressed Natural Gas (CNG)


Natural Gas Composition

Component

Typical (Mole

Percent)

Range (Mole

Percent)

Hydrocarbons

Methane (C1) 92.77 83.74 – 98.22

Ethane (C2) 3.36 0.52 – 7.64

Propane (C3) 1.51 0.18 – 4.74

Iso-Butane (i-C4) 0.41 0.05 – 1.10

Normal Butane (n-C4) 0.47 0.06 – 1.63

Iso-Pentane (i-C5) 0.19 0.03 – 0.50

Normal Pentane (n-C5) 0.13 0.00 – 0.42

Hexane (C6) 0.27 0.09 – 0.78

Inerts Nitrogen (N2) 0.30 0.12 – 0.91

Helium (He) Trace 0.00 - 0.02

Impurities Carbon Dioxide (CO2) 0.59 0.13 - 1.86

Hydrogen Sulfide (H2S) Trace 0.00 - 0.10

Oxygen (O2) Trace 0.00– 3.00

Water (H2O) Trace 0.00 - 0.01

Source: Cheniere


Advantages

• Simplicity• Inexpensive onshore facilities• Can start with very modest transporting

needs• Energy efficient• Can exploit isolated supply sources • Suitable for small demand markets




Scope of the CNG Technology

• Projects using the CNG technology can be successful technically and commercially

• CNG is capable of meeting small market demands and monetizing small supply areas

• Majority of the investment involved with shipping needs, thus, making the assets movable and used in other areas of interests

• CNG can supply gas for distances of 2500 miles cheaper than LNG



Opportunities for CNG Marine TransportVOTRANS™Shifts CNG Paradigm

RA

TE,

mm

scfd

1,000

500

1,500RA

TE,

mm

scfd

1,000

500

1,500

Pipelines LNG

Hydrates

3,0002,0001,0000

Transport Distance, nm3,0002,0001,0000

Transport Distance, nm

CNG

3,0002,0001,0000

Transport Distance, nm4,0003,0002,0001,0000

Transport Distance, nm4,0003,0002,0001,0000

Transport Distance, nm4,000

VOTRANSTM


Transport Costs

•Supply Matched with Demand Centers

•Smaller Demand Centers can be converted to gas

Transport costs range from $1.25-1.75/MMBTU (100-300 MMSCF)



Two technologies for CNG transport a. The Cran & Stennings approach b. The Enersea approach

Example: Consider the transportation of 300 MMscf of gas as CNG– Using the Cran & Stennings approach

• Actual volume of CNG: 1.76x106 ft3

– Using the Enersea approach• Actual Volume of CNG: 1.2x106 ft3



Transportation of the gas

90% of the investment involved is in shipping of the gas.

Loading and unloading is possible and easy with small facilities.



CNG Cargo Containment System


CNG Application

• For distances up to 2500 miles, CNG appears more attractive than LNG

• Major advantage in terms of market entry

• Much less capital deployed in country

• Up to 2 Bcf on a ship• Ideal for limited supply, limited

consuming markets


What Is LNG?

LNG is natural gas that has been cooled that it condenses to a liquid

• Temperature -256oF (-161oC) • Atmospheric pressure.• Volume is reduced 600 times• Thus economical to transport

locally and between continents in specially designed ocean vessels

• Liquefaction technology makes natural gas available throughout the world

Natural Gas

LNG


What Is LNG?

• LNG is liquid form of the natural gas used for cooking, heating and power generation.

• The liquefaction process removes almost all “contaminants”

• LNG must meet higher and lower limits on energy content

• LNG composition has traditionally been set by markets in Japan, South Korea, and Taiwan

• LNG also is used in the U.S. as an alternative fuel for public transportation systems.

Typical LNG Composition

Others5%

Methane 95%

Source Methane Ethane Propane Butane Nitrogen

Alaska 99.72 0.06 0.0005 0.0005 0.20

Algeria 86.98 9.35 2.33 0.63 0.71

Baltimore Gas & Electric 93.32 4.65 0.84 0.18 1.01

New York City 98.00 1.40 0.40 0.10 0.10

San Diego Gas & Electric 92.00 6.00 1.00 - 1.00

Source: Liquid Methane Fuel Characterization and Safety Assessment Report . Cryogenic Fuels. Inc. Report No. CFI-1600, Dec. 1991

LNG COMPOSITION (Mole Percent)


5%

15%

100%

Over-RichWill not burn

Flammable

Too Lean - Will not burnLower Flammability Limit (LFL)

Upper Flammability Limit (UFL)

5%

15%

100%

Over-RichWill not burn

Flammable

Too Lean - Will not burnLower Flammability Limit (LFL)

Upper Flammability Limit (UFL)

Flammable Range for LNG (Methane)

LNG Properties

Density

3.9ppg (Water 8.3ppg) LNG floats on water.

Flammability range

5 – 15%.


Comparison of Properties of Liquid Fuels

LNG Liquefied Petroleum Gas (LPG)

Gasoline Fuel Oil

Toxic No No Yes Yes

Carcinogenic No No Yes Yes

Flammable Vapor Yes Yes Yes Yes

Form Vapor Clouds Yes Yes Yes No

Asphyxiant Yes, but in a vapor cloud Yes, same As LNG No No

Extreme Cold Temperature Yes Yes, if refrigerated No No

Other health hazards None None Eye irritant, narcosis, nausea, others.

Same as gasoline

Flash point oF -306 -156 -50 140

Boiling point oF -256 -44 90 400

Flammability Range in air %

5-15 2.1-9.5 1.3-6 N/A

Stored Pressure Atmospheric Pressurized (atmospheric if refrigerated)

Atmospheric Atmospheric

Behavior if spilled Evaporates, forming visible “clouds”. Portions of cloud could be flammable or explosive under certain conditions.

Evaporates, forming vapor clouds which could be flammable or explosive under certain conditions.

Evaporates, forms flammable pool; environmental clean up required.

Same as gasoline

Source: Lewis, William W., Lewis, James P, Outtrim, Patricia A., PTL: LNG Facilities - The Real Risk, AiChE Meeting, New Orleans, April 2003 as modified by industry sources.


Fuel Autoignition Temperature, oF

LNG (primarily methane) 1004

LPG 850-950

Ethanol 793

Methanol 867

Gasoline 495

Diesel Fuel Approx. 600

Source: New York Energy Planning Board, Report on issues regarding the existing New York Liquefied Natural Gas Moratorium, November 1998

Auto Ignition Temperature of Liquid Fuels


General LNG Production Process

HeatExchangers

GasTreatmentRefrigerant

Compression

LNGShips

PipelineFeed Gas

-259 F

LNG Storage

• Pentanes and heavier• Condensates• Impurities

-Carbon Dioxide-Mercury-Hydrogen Sulfide-Water-Nitrogen

Heat expelled to water or air

Source: Cheniere


5 64321

Dock-1

Dock-2Dock-3

HGFE

A

D

BC

LPG Tanks

LNG Plant SiteBontang Indonesia

With 8 trains running, the

capacity of the plant has

reached 22.25 MMT/year

LNG, 1 MMT/year LPG and

10 MMbbl/year

condensates.

STORAGE : LNG : 4 x 95,000 m3 + 2 x 125,000 m3

LPG : 5 X 40,000 m3

Cond. : 10,000 m3 + 12,000 m3

LNG

BADAK

Sources: Ministry of Energy and Mineral Resources of the Republic of Indonesia


Brief History of LNGEMERGENCE• 1941 – First commercial LNG production• 1964 – Algeria first commercial LNG export

facility • Spawned all US receiving terminals and

several European counterparts• 1969 – Kenai USA starts supply to Japan• 1970 – Libya starts supply to Italy

DEVELOPMENT• 1972-1990 – Development of Far Eastern

LNG trade• Brunei, Indonesia, Abu Dhabi, Malaysia,

Australia start production• Korea, Taiwan, USA join Japan as

importers

GROWTH• 1996 – Qatar starts production• 1999 - Trinidad starts production• 2000 – Nigeria starts production

British Gas Canvey Island LNG TerminalA World First Import Terminal


LNG VS PIPELINE

• The distance over which natural gas must be transported increases, usage of LNG has economic advantages over usage of pipelines.

• Liquefying natural gas and shipping it becomes cheaper than transporting natural gas in offshore pipelines for distances of more than 700 miles or in onshore pipelines for distances greater than 2,200 miles.


Why LNG Now?Growing Global LNG Demand

Pipeline

74%

LNG

26%

Source: BP Statistical Review of World Energy June 2003

Natural Gas Trade Movement2002

7% per year growth (1992-2002)

Growth in LNG Demand

-

1,000

2,000

3,000

4,000

5,000

6,000

1970 1980 1990 1992 1994 1996 1998 2000 2002

bc

f

Japan South Korea Taiwan France Spain USAItaly Belgium Turkey Greece Portugal UK

Source: Cedigaz, BP Statistical Review of World Energy June 2003

LNG is about 6% of worldwide natural gas consumption and about 94% of natural gas consumption in Japan.


Global LNG Imports by Basin• In 2002 there are 43 terminals

with a capacity of over 280 million tonnes, 24 of the terminals are in Japan.

• Inter-regional LNG trade is expected to increase six fold over the next 30 years.

• Most of the increase in LNG trade would be in the Atlantic basin, which will overtake the pacific basin in volume.

• Importing countries will need to add almost 660 million tonnes of new regasification capacity.

Global LNG IMPORTERSYear 2002

Japan48%

South Korea 16%

Taiwan5%

France8%

Spain8%Other

31%USA5%Italy

4%

Turkey4%

Belgium2%

Greece0%

Portugal0%

Pacific Basin Atlantic Basin

Source: World Energy Investment Outlook, IEA, Nov. 2003.


Global LNG Imports

Japan 23

Importing CountryExistingPlanned

Japan 23Japan 24

Importing CountryExistingPlanned


Global LNG Exports

Source: BP Statistics, ,World Energy Investment Outlook, IEA, Nov. 2003.

There are currently 16 liquefaction plants with 70 trains in operation worldwide

0

20

40

60

80

100

120

140

160

1970 1975 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Bil

lio

n c

u.

m

Indonesia Algeria Malaysia Qatar

Australia Brunei Oman Nigeria

UAE Trinidad & Tobago USA Libya

Global LNG Exporters2002

Indonesia23%

Malaysia14%

Qatar12%

Australia7%

Brunei6%

UAE5%

Other27%

Algeria18%

Oman5%USA

1%

Nigeria5%

Trinidad & Tobago

4%Libya0%

Pacific Basin Atlantic Basin


LNG Liquefaction FacilitiesThe LNG industry could be poised for dramatic growth

30

• LNG supply growing• Multiple LNG supply

proposals announced• Long term LNG supply

outlook robust

Global LNG Supply

Source: Cedigaz, NPC

ExistingUnder ConstructionProposed


LNG Liquefaction Facilities

More than 60% of the equity is owned by state companies; in some cases in joint ventures with major oil and gas producers

1.4

2.0

2.0

2.2

2.6

3.0

3.0

3.4

3.4

3.8

4.4

4.6

4.7

4.7

8.9

9.1

10.0

17.0

23.3

0 5 10 15 20 25

BHP

Unocal

Mitsui

Vico

Nippon Oil Corporation (NOC)

BP

Nigeria National Petroleum Company

Omani State

Brunei Government

Abu Dhabi National Oil Company (ADNOC)

Total

Japan Indonesia LNG Company (JILCO)

Exxonmobil

Mitsibushi

Qatar Petroleum

Shell

Petronas

Pertamina

Sonatract

mpta

State Owned

61%

Oil Companies

23%

Others16%

Liquefaction Capacity

Source EIA


• Almost all existing liquefaction projects have announced expansions: Trinidad, Nigeria, Qatar, Oman, Malaysia, Brunei, Indonesia, Australia. Expect most of these to be built. Would raise worldwide total capacity by over 40% to approximately 184 million tons per annum.

• Additional countries have announced planned and prospective greenfield liquefaction plants (as of April 2001): Angola, Australia, Egypt, Indonesia, Iran, Nigeria, Norway, Papua New Guinea, Russia, U.S. (North Slope), Venezuela, Yemen.

LNG Supply: Summary


World LNG Imports and Export

2003 (Billion Cubic Feet)

Source: BP Statistical Review World Energy 2004


Atlantic Basin LNG Supply and Demand

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Supply (2001) Demand (2001) Supply (2010) Demand (2010)

Bcf

/yr

Middle East

Venezuela

Angola

Egypt

Trinidad

Nigeria

Algeria

New Markets

Europe

United States

Source: Pace Global Energy Services


LNG costs are declining.Natural gas can be economically produced and delivered to the U.S. as LNG in a price range of about $2.50 - $3.50/MMBtu depending largely on shipping cost.

LNG COSTS ARE DECLINING

Does not include feedstock prices

2.5

1.8

0.5 0.1

0.1

0

0.5

1

1.5

2

2.5

1980's Liquefaction Shipping Regasification and Storage

2000's

$/MMBTU

Sources: El Paso

How Much Does LNG Cost?


LNG Project Costs Will Continue Dropping

0

100

200

300

400

500

600

700

800

mid 1990 2002 2010 2030

$/to

nn

e o

f ca

pac

ity

Liquefaction Shipping Shipping Regasification and StorageSource : IEA


Typical LNG Value Chain

EXPLORATION &

PRODUCTION

LIQUEFACTION

SHIPPINGREGASIFICATIO

N& STORAGE

$1.0 - $2.5 billion

$1.5 – 2.0 billion

$0.8 - $2.3 billion

$0.5 - $1.0 billion

$0.5-$1.0/MMBtu$0.8-$1.20/

MMBtu$0.4-$1.0/

MMBtu$0.3-$0.5/MMBtu

TOTAL = $3.7 - $7.8 billion or $2.00 - $3.70/MMBTU

Sources: Industry

Greatest variability is in upstream feedstock for liquefaction and shipping distance.


Current LNG Cost Competitiveness

Source: Marcy Darsey et al, Liquefied Natural Gas, Exploring Energy, Inc.’s Future with a Developing Field, UH Law Center, 2004


Liquefaction Costs Transformed

0

100

200

300

400

500

600

700

1990 1995 1999 Trinidad 00 Future LNG

$ per tonne of capacity

Source: BP


LNG Greenfield Liquefaction Costs

0

100

200

300

400

500

Qatargas Nigeria LNG Atlantic LNG Rasgas,Qatar

Oman LNG

$/t

py

1 11 1 2

Source: OGJ


World LNG Outlook Liquefaction Facilities

0

50

100

150

200

250

300

350

400

mid1990

2002 2010 2030$/tonne

Liquefaction

Source: IEA

Liquefaction Cost is Dropping

Technology improvement, higher capacity plants,

improved economies of scale

Source: ALNGSource: ALNG


LNG Shipping

166 existing LNG ships, as of Nov 2004 with 105 on order. The fleet size needs to increase by 3-4 times to meet the projected growth in trade by 2030. LNG ships built 1965 - Oct 2004

02468

10121416

1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004

Ship

s b

uilt

each

Source: EL PASO &

LNG OneWorld, /www.lngoneworld.com/

Source: NLNG


Major Natural Gas Trade Movements

BP Statistical Review of World Energy 2004


New Trade Routes Are Emerging

Existing Trade Prospective Trade

Existing Trade Prospective Trade

Source: Iwata, Makoto, Mitsui O.S.K. Lines, Ltd., LNG Transportation, LNG Ministerial Summit, Washington D.C., 2003


LNG Shipping Costs

LNG carrier (125-138,000 cu.m) newbuilding prices

0

100

200

300

199019911992 1993199419951996 199719981999 2001200220032004

$M

Source: LNGOneWorld 2001©

Source: LNG OneWorld, /www.lngoneworld.com/


World LNG OutlookShipping

0

50

100

150

200

250

mid1990

2002 2010 2030

$/tonne

Shipping

Source: IEA

Shipping Cost is Dropping

Competition between shipyards, technology

improvement, higher capacity ships, improved economies of

scale


Cost of Transport to the Eastern U.S.**Based on Cove Point, MD LNG Import Terminal.

$-

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

Saudi

Arabia

Qatar

Iran

Oman

Yemen

Angola

Equat

orial

Guin

ea

Egypt

Nigeria

Russia

- Bar

ents

Norway

(Sno

hvit)

Algeria

Venez

uela

Trinid

ad

$/M

MB

tu

Mid East W. & N. Africa

Source: Pace Global Energy Services


Likely market arbitrage players

Broadly equidistant from US and European markets

Much closer to US markets

Likely cargo / trade swap players

Much closer to European markets

Shipping opportunities

Arbitrage and swap opportunities

0

2,000

4,000

6,000

8,000

10,000

AtlanticLNG

Venezuela EgyptianLNG

Algeria NigeriaLNG

AngolaLNG

SnohvitLNG

Nau

tica

l m

iles

Barcelona

LakeCharles

Source : BG

LNG Value Chain

Source: BG


0

1

2

3

4

5

6

7

8

'95 '96 '97 '98 '99 '00 '01 '02 '03

LNG Spot Cargo - Volume

5 fold increase from 1998

Sources : Clarkson Research Studies, LNG Trade & Transport, 2003, BP

Volume of LNG Spot Cargo

MTPA

Spot Trading isincreasing rapidly

Source: Iwata, Makoto, Mitsui O.S.K. Lines, Ltd., LNG Transportation, LNG Ministerial Summit, Washington D.C., 2003


World LNG Outlook Storage and Regasification Facilities

0

20

40

60

80

100

120

140

mid1990

2002 2010 2030$/tonne

Regasification and Storage

Source: IEA

Storage and Regasification Cost is Dropping

Larger capacity plants, improved economies of

scale


Offshore Storage & Regasification Terminals

Proposed Cabrillo Port FSRU (Floating Storage and Re-gasification Unit), Oxnard, CA.

Source: BHP Proposed ChevronTexaco Port Pelican Project, offshore Louisiana - Gravity-based structure

Source - ChevronTexaco


Energy Bridge (Shuttle and LNG Regasification System), Excelerate, Offshore LA.

The Energy Bridge is a regasification vessel and a buoy system that delivers natural gas into offshore pipelines.

35+Meters

35+35+MetersMeters

SubseaSubseaManifoldManifold

Docking BuoyDocking Buoyand Riserand Riser

Subsea Subsea PipelinePipeline

10 to 12 Miles (Dependent on Water Depth)10 to 12 Miles (Dependent on Water Depth)10 to 12 Miles (Dependent on Water Depth)

LNG Regas.LNG Regas.VesselVessel

Source: El Paso


Main Pass Energy HubCavern-based LNG Receiving Facility

McMoran, LA.

The Bishop Process • receive LNG directly from an offshore tanker,• pressurize and warm it to 40oF, • Inject the resulting natural gas into underground salt caverns for storage.• effectively eliminate the need to build expensive above-ground cryogenic

storage tanks

Source: Conversion Gas Import http://www.conversiongas.com/html/bishop_processtm.html


LNG Supply IssuesLNG Interchangeability

LNG HHV Relative to Typical Pipeline Tariff Range

1065 1098 1132 1142 1143 1168

0

200

400

600

800

1000

1200

1400

Trinidad Algeria Qatar Abu Dhabi Nigeria Oman

Source: WGL

HH

V, B

tu/scf HHV min - 970

HHV max - 1150

Scheduling coordination, blending, and inert gas injection could result in consistency of gas product and easily overcome interchangeability concerns.



• What are they?• GTL technology converts natural gas into

hydrocarbon liquids and promises to complement LNG in transporting remote natural gas to distant markets in the absence of existing pipelines.

• Impetus for the GTL technology: Clean fuel obtained as product and easy transportation



• GTL processes convert the gas into hydrocarbon liquids.

• The main products are Middle distillates like gasoline, kerosene, jet fuel, naphtha and diesel

Source: Economides, M.J. – University of Houston



Reasons for GTL attraction

• Monetizing stranded natural gas• Salvaging associated gas • Meeting environmental specifications • Maintaining pipeline productivity (e.g.,

Alaska pipeline)



• The Fischer-Tropsch synthesis (F-T synthesis) is one the important technologies in GTL.

• The main advantage of the F-T products is the absence of sulphur, nitrogen and complex cyclic hydrocarbons resulting in almost no emissions of sulfur dioxide, nitrous oxides and unburned hydrocarbons.

• For 100 barrels of liquids there is a need for 1 MMscf of gas

Gas to Liquids



Overview of a typical process

Fischer-Tropsch Method



Processes for converting methane


Existing and Emerging Technologies

Company Syngas Fischer-Tropsch Catalyst Plant Size, bpd

Sasol (SPD) ATR(O2) Slurry phase Fe, Co 50,000

180-250 oC, 10-45 atm

Shell (SMDS) POX(O2) Fixed bed Co 50,000

(Non-catalytic) 180-250 oC, 10-45 atm

ExxonMobil ATR(O2) Slurry phase Co >50,000

AGC-21 (Fluidized bed) 180-250 oC,10- 45 atm (“RIM”)

BP SMR Fixed bed Co

Syntroleum ATR(air) Fixed bed Co <10,000 180-250 oC, 10-45 atm

Rentech SR Fixed bed, slurry Fe <5,000


GTL Technology Assessment

Source: GTL Study


GTL Technology Assessment

• All propose mild hydro-isomerization/hydrocracking for product upgrading

• Exxon and Sasol are considering separate upgrading for light fraction (naphtha) and heavy fraction (distillate)

• Shell proposes single stage hydrocracking/isomerization

• Exxon’s patented oxygenate preservation (for enhanced lubricity) and fuel formulation technology could well prove valuable in non-blending fuel markets– Oxygenates improve lubricity of GTL diesel– Benefits in blending markets are doubtful

• Upgrading technology is likely to be modified on a site-by-site basis to extract premium products (waxes, a-olefins, alcohols, lube feedstock)

Source: GTL Study


• Cost of GTL products: $20+ per bbl of oil required for economic returns on GTL project.

• GTL can satisfy different market needs.

GTL Cost



GTL production costs: $20,000-35000/barrel of liquid produced

For 500MMscf/d plant $1.5 billion

CNG: $30-40 million for 500MMscf/d unit.

Ships used for transporting petroleum products can be leased fortransporting the GTL products.

Shipping is a major part of a CNG project

Comparison of CNG and GTL



Comparison of CNG and LNG

Size of investment for a 500MMscf/d plant CNG LNGReserves: Modest LargeProduction cost: MM$30-40 MM$750-2000*Transportation costs: MM$230/ship MM$160/shipUnloading costs: MM$16-20 MM$500-

550Total investment: $1-2 billion** $2-3 billion**

* Depending upon the location of the production site** Depending upon the number of ships used for the transport of the gas.



Price of the gas deliveredLNG value chain per MMBTUExploration and Production: $0.5-1.0/MMBTULiquefaction: $0.8-1.2/ MMBTU.Shipping: $0.4-1.5/ MMBTU*.Regasification and Storage: $0.3-0.5/ MMBTU.$1.00 as netback for the investors

Final price of LNG: $3.00-5.20/MMBTU.

* For transport distances from 1000 miles to 5000 miles




CNG value chain per MMBTUExploration and Production: $0.5-1.0/MMBTUProcessing and transportation: $1.08-3.82/MMBTU*$1.00 as netback to the investor

Final unit price of CNG: $2.58-5.82/MMBTU

* For transport distances from 1000 miles to 5000 miles




Advantages of CNG over LNG• Requirement of lower throughput of gas for a

project• Involvement of lower capital• Ease of deployment … faster implementation of a

project• Ability to access stranded reserves and monetize

them• Majority of the investment is in the shipping,

making the assets movable and reducing the risk involved

DisadvantagesInability to transport large volumes of gas such LNGDisparity in the volume transport hinders commercial

possibility of CNG




Trinidad to GOM

Australia to Baja

Venezuela to GOM

Feedstock gas 0.75 0.75 0.75Liquefication 0.95 0.70

1.65Transportation 0.50 1.20Regasification 0.45 0.45

TOTAL w/ Margin 3.05 3.45 2.40

LNG vs. CNGCNG



Dialogue CNG experience in India

• CNG supply for fleet vehicles established in India

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