Mini terminals in the Caribbean - Gas &...

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


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 Prepared by GasEner, SRL 4


Cost of Fuel Delivered (MMBTU), $15.48



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



The Islands Market


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)


The Economic Impact


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


The tip of the iceberg

How big is the Iceberg?


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



One example: Dominica


Norway

Roseau Dock, Dominica


Cost of the Terminal


Case in

Poin

t: DO

MIN

ICA


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


7 daysMonthly, 5,000 m3

1 dayMonthly

4,000 m3





1 dayMonthly

4,000 m3


Flexible hoses, no Jetty to unload, small crew




1 dayMonthly

4,000 m3


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?


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


Key Parties

05/2010 Prepared by Federico A. Martinez 17

What do we need?


Access for Small LNG Ships (<40,000 m3)

Not a charity case


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?


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


mailto:[email protected]

http://www.promarketdr.com/







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Mini terminals in the Caribbean - Gas &...

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