PROJECT EXECUTIVE SUMMARY

PROPOSED DEVELOPMENT OF TURBINE INLET AIR COOLING (TIAC) PLANT ON A BUILD, OWN, OPERATE AND TRANSFER

(BOOT) IN PETRONAS LNG COMPLEX’s NATURAL GAS LIQUEFACTION PLANT, BINTULU, SARAWAK.

This Green project is a WIN-WIN for both the Sponsor and Petronas

INTRODUCTION With reference to the project papers presented by our consortium leaded by Shinryo Malaysia to MNLG PETRONAS on 15 January 2015 at LNG Processing Plant, Bintulu, Sarawak pertaining the abovementioned subject. This proposed Cooling Plant which use Turbine Inlet Air Cooling (TIAC) technology, will increase existing gas turbine performance, and as the result it will increase production of LNG about 10% valued at RM 2.00 billion a year. The advantages of the application of TIAC technology is that it will reduce operating cost by reducing the fuel quantity. In addition, this technology is only uses waste heat generated by the hot turbines as the fuel source, reduce CO2, extend life cycle of equipment and reduce maintenance cost. This is a green project since it use waste heat generated by gas turbines, converting it to steam and finally into chilled water.

Chilled water produced by the TIAC plant is used to cool the gas turbines and also LNG processing system. Presently the LNG cooling system use electric chiller which contribute a high operation cost. The electric chiller will be scrapped upon installation the TIAC plant.

TIAC OPERATION DIAGRAM

This project development is based on Build, Own, Operate and Transfer (BOOT). The Project’s sponsor who will provide the 100% financing will be sought. The Sponsor work as a consortium with Malaysian local partner Tati Pro Energy Sdn. Bhd. as the project management leader to undertake this project as the developer.

The technology is licensed by Shinryo, Corp. Japan. They will undertake the construction through Shinryo Malaysia in consortium with a local Sarawakian Company.

PROJECT SCHEME

Project Summary Location: Petronas MLNG processing plant , Bintulu Land Owner: Petronas MLNG Sdn Bhd Fuel Source: Waste Heat from existing gas turbine Off-taker: Petronas MLNG to purchase chilled water produced by the TIAC plant Approval: Authority approval not applicable(captive use). Project Study: EIA to be complete as addendum. Financial model prepared. Project prelim study issued to Petronas MLNG. Present Production LNG: 14.6 Metric Ton Additional Production : 1.46 metric ton(10% increase) Additional sales of LNG: 2 billion RM/year Chilled water Prdn: 47,500 RT / hr Project IRR equity: 23% ( for 100% equity, 0% debt) Capital cost: 1.069 billion RM OPEX: 59.6 million RM/years Dscr : 1.7 NPV: 75.8million Payback: 3 yrs

Turbine Inlet Air Cooling (TIAC) technology will increase the existing gas turbine performance by cooling its inlet and as the result it will increase production of LNG about 10%. The additional production of LNG by calculation worth of RM2.0 billion per year.

The TIAC technology use waste heat generated by hot turbines as fuel source, converting it into steam using HRSG & then further convert it into chilled water using chillers. The chilled water is then used to cool turbine inlet temperature. TIAC will reduce carbon dioxide emission & extended life cycle of equipment. Therefore, cost of maintenance will also be reduced. TIAC system have others benefit such as it will reduce operating cost by reducing the fuel quantity.

The Technology

Shinryo, having vast experience in power generation using cogeneration technology (see profile), is now moving forward with value added technology TIAC, provides benefit to Petronas MNLG Bintulu LNG processing plants. Shinryo and Tati Pro Energy Sdn Bhd had inked an agreement to develop the TIAC plant and now looking for a Sponsor to fund the project 100%. Shinryo will be the exclusive lead EPCC contractor. Shinryo had constructed several projects of this kind within Asia especially in Thailand airport and processed plant which both works successfully. In line with this proposed project, Petronas via its engineering arm, GTS has been in process of developing the FEED for this proposed project for the past 3 years.

Technology Provider

As the land owner, Petronas will provide land and waste heat from hot turbines as the fuel source for this TIAC plant. Petronas MLNG will pay to the developer for the chilled water used to cool the turbines at an agreed price. Petronas MLNG will get an additional production of LNG valued at RM 2billion per year by selling the LNG derived from increase of performance of the turbines by 10% which is being cooled by the chilled water The good thing for Petronas MLNG is that it get the benefit (additional LNG production) at no cost in building the TIAC plant as it is on BOOT concept. Petronas MLNG will owned the operating plant after handover upon 20 years maturity. This Green project is a WIN-WIN for both the Sponsor and Petronas

MLNG Petronas benefit

The Project sponsor will earn from the selling of chilled water to Petronas MLNG which is produced by the TIAC cooling plant. The chilled water is used to cool the inlet of gas turbines and also be used to cool the LNG cooling system within the processing complex. We as the consortium partners, supported with Shinryo as the technology provider, express our interest (EOI) to develop the project under the concept of Build Own Operate and Transfer (BOOT). Shinryo proposed consortium between Tati Pro Energy Sdn Bhd and Sponsor, whereby Shinryo will be the exclusive lead EPCC contractor. In line with this proposed project, Petronas via its engineering arm, GTS has been in process of developing the FEED for this proposed project. This Green project is a WIN-WIN for both the Sponsor and Petronas

Developer Benefit

This Project will help to intensify the vision of the Sarawak Government to produce more qualified Sarawakian involving in high technology pursuit in oil and gas sector. It helps to spur the economic growth to the State by having this Foreign Direct Investment. It will help to develop more activities for the subcontractors, suppliers and other downstream business in Sarawak. As state government is also a shareholder for MNLG Petronas, It is also at no cost to Sarawak State to develop the TIAC plant as it is on BOOT concept.

State Government Benefit

This Project will be financed by a Sponsor. The investment cost is expected to be about RM1.0 billion and will be returned back by selling the chilled water to MLNG Petronas at an agreed price. Tati Pro Energy who will be the project lead promoter, supported by Shinryo as the technology provider, express our interest (EOI) to develop the project under the concept of Build Own Operate and Transfer (BOOT). Tati Pro Energy Sdn Bhd is looking for private equity funder to fund this niche project, which have IRR equity of 23% on 100% equity funding ( 0% debt)

Financing

Thank You

Prepared by: Dato’ Ir. Hj. Mat Isa Kadir

datohjmatisa@tatiproenergy.com dato.hjmatisa@knm-group.com