The LNG storage business and associated costsEnagás Gas Assets General Management
About Enagásand its LNG capacities
New LNG terminalsOnshore vs Offshore
LNG storage &associated costs
Index
2
Leader in natural gas and LNG infrastructures
Major International player as a result of our technological expertise, gas infrastructure construction skills, highly effective operations and maintenance programs and sound financial structure.
A midstreamcompany
SEPIFree Float
95%
5%
Ownership structure
3
45 years’ experience
Technical Manager of Spain's Gas System
European Union-accredited independent TSO
Top natural gas transmission companyin Spain
PRESENT
1969 20161988Huelva LNG Terminal
1989Cartagena LNG Terminal
1993I.P. Larrau
1996I.P. Tarifa
2003Bilbao LNG Terminal
2006Sagunto LNG Terminal
2007Mugardos LNG Terminal
2011I.P. Almería
Barcelona LNG Terminal
The development of the Spanish gas system is based on LNG.
2006I.P. Irún
4
LNG Terminal
Underground Storage
Infrastructure of other operators
Pipeline
A worldwide reference with more than 45 years’ experience
PAST FUTURE
Enagás across the world
MexicoTLA Altamira LNG TerminalSoto La Marina Compressor StationMorelos Pipeline
PeruTransportadora de Gas del Perú (TgP)Compañía Operadora de Gas del Amazonas (Coga)South Peru Gas Pipeline
ChileGNL Quintero LNG Terminal
Greece, Albania and ItalyTrans Adriatic Pipeline (TAP)
Spain6 LNG terminals (+2 in development)~11.000 km high pressure pipelines3 underground storage facilities
SwedenSwedegas
5
Enagás LNG capacities
Barcelona LNG TerminalStorage: 760,000 m3 GNLUnloading: 267,000 m3 GNLReloading ratio: 3,500 m3/ h
Huelva LNG TerminalStorage: 619,500 m3 GNLUnloading: 173,400 m3 GNLReloading ratio: 3,690 m3/ h
Cartagena LNG TerminalStorage: 587,000 m3 GNLUnloading: 267,000 m3 GNLReloading ratio: 3,500 m3/ h
El Musel LNG Terminal Storage: 300,000 m3 GNLUnloading: 267,000 m3 GNLReloading ratio: 6,000 m3/ h
Bilbao LNG Terminal (40%)Storage: 450,000 m3 GNLUnloading: 267,000 m3 GNLReloading ratio: 3,000 m3/ h
Sagunto LNG TerminalStorage: 600,000 m3 GNLUnloading: 266,000 m3 GNLReloading ratio: 3,000 m3/ h
2 3
6
55
4
6
TOTAL CAPACITY worldwide
• LNG storage 3,950,500 m³ (Includes 634,000 m³ in Mex/Chi)
• Regasification: 8,675,000 m³(n)/h (Includes 1,425,000 m³/h in Mex/Chi)
7
Spain:• 4 LNG terminals 100% owned
� 2,266,500 m3 LNG storage capacity
� 5,450,000 m3(n)/h regasification capacity
• 2 partially owned LNG terminals� 1,050,000 m3 LNG storage capacity
� 1,800,000 m3(n)/h regasification capacity
Capacity Flexibility Technology Development
Since 1969, more than…• 10,000 downloadings• 500,000 trucks loaded• 260 Reloadings (gassing up &
cooling down included)
1970: First truck loading operation
1997: First reloading operation
2012: First full Qmax download at Barcelona LNG Terminal
2014: 60% of the loading operationswordwide in Spain
• Renewable power generation: � 8.7 MW in LNG Terminals
� 4.4 MW in Transmission networkinfrastructures
Around 20%-30% of the total energyconsumption
• Integration with industrial processesof partnersIntegration with a CCGT process at Cartagena LNG Terminal and coldrecovery for industrial use at Barcelona LNG Terminal
TOTAL CAPACITY in Spain
• 3,316,500 m³ LNG storage capacity
• 7,250,000 m³(n)/h regasification capacity
A worldwide reference with more than 45 years’ experience
LNG Trading Hubs
60active operatorsand more than
100registered
LNG HUB
LNG HUB
LNG HUB
LNG HUB
LNG HUB
LNG HUB
8
TWh %
PVB 144 33%
Mugardos 11 3%
BBG 60 14%
Sagunto 63 14%
Barcelona 99 23%
Cartagena 9 2%
Huelva 47 11%
Total LNG 288 66%UGS 6 2%
Total 438 100%
2015
• LNG liquidity• Third Party Access• Free capacities
The flexible LNG terminal concept
Regasification1
Parking3
Trucking1
Small scaling3
Bunkering4
Re-export1
Transhipment2
Traditional services
Small scale
Big scale
LNG Railroad2
9
COST
UPstream
TIME
SMALL (+1-3% CAPEX)
SHORT(1–3 years)
MIDstream
LONG
DOWNstream
HUGEHIGH
MEDIUM
PLAYERS(impact)
“A FEW MORE”(over the whole downstream)
THE WORLD!(but local)
FEW(spot)
Energy Efficiency Operational ExcellenceMIDstream facilities have the capability to be the
best player for maximize the competitiveness of
GN into the value chain
10
60%
18%
7%
6%
4%3% 1%1%
Re-exports loaded by reloading country in 2014 (6.4 Mt)
Spain, 67
Belgium, 23
France, 10
Netherlands, 9
Portugal, 7
South Korea, 3
USA, 1
Brazil, 2
Nº Vessels
Big Scale Logistics: Reloadings
Source: Web EnagásIncluding reloading and coool-down operations
8.091
22.697
31.802
60.185
15.500
2011 2012 2013 2014 2015
x2,8
x1,9
x1,4x0,3
Spanish Reloadings (GWh & Nº Vessels)
524224 70 25
Source: International Group of Liquefied Natural Gas Importers
11
28%
16%
8%18%
5%
6%
4%
6%5% 4%
Spain, 24
Belgium, 12
France, 6
Netherlands, 15
Portugal, 5
South Korea, 4
USA, 4
India, 4
Singapore, 3
United Kingdom, 3
Nº VesselsRe-exports loaded by reloading country in 2015 (6.4 Mt)
Small Scale LNG Logistic Model
12
REGASIFICATION SATELLITE PLANTS LOCATION
1,067 Satellite Plants
~34,400LNG trucks loaded per year
International leader in LNG truck loading
• Destinations: more than 59 across Europe (France, Italy, Portugal, Switzerland, Macedonia)
• Demand coverage: 1,400 GWh/year
±12 LNG cargoes
About Enagásand its LNG capacities
New LNG terminalsOnshore vs Offshore
Index
LNG storage & associated costs
13
LNG Import Terminal Configurations: Technical Description
* Site selection depends on navigational safety, port infrastructure and marine operations.
Configuration* LNG Storage Jetty Onshore Facility Pipeline Regasification
Onshore
Regasification
Terminal
Full LNG
containment tank
180,000 m³
Single berth
Onshore
regasification
terminal
Onshore
pipelineOnshore
FSRUFRSU
173,000 m³Single or dual berth +
Breakwater not required
Onshore
regasification
facility
Subsea pipeline FSRU
FSU + Offshore
Regasification
FSU
173,000 m³ەSingle or dual berth +
Breakwater not required
Onshore
regasification
facility
Subsea pipeline Offshore
(Jetty based)
FSU + Onshore
Regasification
FSU
173,000 m³Single or dual berth +
Breakwater not required
Onshore
regasification
terminal
Cryogenic piping
over the trestleOnshore
14
CONFIGURATION PROS CONS OTHERS RECOMMENDATION
OnshoreRegasification
Terminal
• Expandable flexibility• Higher levels of availability
(99,5%)• Well proven tenchnology• Excellent safety record• Qualified local labor force• Insulation efficiency (0,05%)• Lower costs for long term
solutions (lower OPEX)
• Land and port facilities required• Social acceptance
• Requires long-term investment
• More adequateto handle withlong term natural gas supplygrowth
More recommended forLONG TERM PROJECTS
FSRU
and
FSU + Off/On shore regasification
• Less visual impact• Leasing alternative• Land not required• Able to be located close to
final consumption points ifport infrastructure is available
• Lower costs forshort/medium termsolutions (lower CAPEX)
• Allow rapid fuel switching
• Not easily expandable• Less proven technology• Less space between relevant
equipments• Face meteorological conditions• Crew management• Higher O&M costs• Periodical inspection (4 years)• Insulation efficiency (0,15%)• Limitations in storage and send
out capacity
• Fast-track solution
• Port availability required
• Temporalysolution until theonshoreregasificationterminal is built
More recommended forSHORT TERM
PROJECTS except in case of exceptionalconditions (SoS or
environmentalconditions)
LNG Import Terminal Configurations: Pros & Cons
15
0
200
400
600
800
1.000
1.200
1.400
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Total Cost (USD M.)
years
Cost comparison On shore Terminal vs FSRUs alternat ives
on shore terminal
FSRU (construction)
FSRU (leasing)
Cost comparison of the alternatives
• Between 0 and 8/10 years ���� most profitable option FSRU leasing
• From 10 years ���� most profitable option On shore terminal
• FSRU construction is not in any case the most favorable option
Break even point: 8-10 years
16
Source: IGU.
New LNG terminalsOnshore vs Offshore
LNG storage & associated costs
Index
About Enagásand its LNG capacities
17
Storage & associated costs
Imbalances
Losses
Unloading16,988 € per Ship
35 €/GWh
LNG Storage 32,4 €/GWh/d
Reloading176,841 € per Ship
1,563 €/GWh
Small scale relaoding
87,978 € per Ship
521 €/GWh
TARIFFS
18
Port Costs
Imbalances Summary
EXCESS LNG DEFICIT LNG
Based on total contracted Regasification Capacity (LN G Truck loading + Regasification capacity)
Maximum LNG stock allowed:• If (15 x total contracted regasification capacity) < 300 GWh � 300 GWh• If (15 x total contracted regasification capacity) > 300 GWh � 30-day
moving average LNG stocks in all terminals = (15 x contracted regasification capacity)
Minimum LNG stock allowed: 0 kWh
If LNG stock in excess ≤ (4 x total daily contracted capacity) � Daily invoice of (2.5 x LNG Storage tariff) Daily invoice of (Quantity less than zero x 10%
Gas Reference Price)If LNG stock in excess > (4 x total daily contracted capacity) � Daily invoice of (10 x LNG Storage tariff)
� LNG Storage Tariff: 32,4 €/GWh/day (0,01234 $/MMBtu/day) as per regulation Orden IET/2446/2013.
� The Gas Reference Price is calculated as an arithmetic mean of the gas price in the Henry Hub and the National Balancing Point, using the methodology
established in article 9.6.6 of the NGTS.
19
• UNBUNDLING OF SERVICES UNDER RD984
Losses
RELOADING
No reloading losses undernormal operation
conditions
UNLOADING
0.005% of theunloaded LNG
FUEL GAS
Covered by Terminal Operator: Efficiengy
20
21
Conclusion
Propuesta
PLAN de MEJORA 2016
Enagás understands its role as logistics solution providerand aims to improve LNG competitiveness.
LNG storage costs are currently settled for the traditionalservice of regasification. To develop bunkering and storagebusinesses, market needs:
� Unbundling of storage services .
� Modifying storage imbalances for capacitiesdedicated to storage.
New LNG FSU storage could be needed in some cases to further develop bunkering services.
Thanks for your attention
LNG terminals in the Mediterranean Sea
DOCKS: 1 LS 1 SS: 2,000 / 266,000 m3 LNG
STORAGE: 760,000 m3 LNG / 6 Tanks
REGASIFICATION: 1,950,000 m3 (n)/h (544.3 GWh/d)
LNG TRUCK LOADING: 3 bays, 50 trucks/day
LNG METHANE TANKER LOADING: Max. 3,500 m3/h
Barcelona
See one more LNG terminal in the Mediterranean Sea on next slide
TRANSSHIPMENT: Available
DOCKS: 1 LS 1 SS: 7,500 / 266,000 m3 LNG
STORAGE: 587,000 m3 LNG / 5 Tanks
REGASIFICATION: 1,350,000 m3 (n)/h (376.8 GWh/d)
LNG TRUCK LOADING: 3 bays, 50 trucks/day
LNG METHANE TANKER LOADING: Max. 3,500 m3/h
Cartagena
TRANSSHIPMENT: Available
LNG terminals in the Mediterranean SeaSee two more LNG terminals in the Mediterranean Sea on previous slide
DOCKS: 1 LS: 30,000 / 266,000 m3 LNG
STORAGE: 600,000 m3 LNG / 4 Tanks
REGASIFICATION: 1,000,000 m3 (n)/h
LNG TRUCK LOADING: 2 bays, 40 trucks/day
LNG METHANE TANKER LOADING: Max. 3,000 m3/h
Sagunto
TRANSSHIPMENT: Available
LNG Terminals in the Cantabrian Sea
DOCKS: 1 LS: 65,000 / 266,000 m3 LNG
STORAGE: 300,000 m3 LNG / 2 Tanks
REGASIFICATION: 800,000 m3 (n)/h (223 GWh/d)
LNG TRUCK LOADING: 2 bays, 50 trucks/day
LNG METHANE TANKER LOADING: Max. 6,000 m3/h
El Musel
TRANSSHIPMENT: Available
DOCKS: 1 LS: 7,500 / 270,000 m3 LNG
STORAGE: 450,000 m3 LNG / 3 Tanks
REGASIFICATION: 800,000 m3 (n)/h (223 GWh/d)
LNG TRUCK LOADING: 1 bay, 15 trucks/day
LNG METHANE TANKER LOADING: Max. 3,000 m3/h
Bilbao
TRANSSHIPMENT: Available
LNG Terminals in the Atlantic Sea
DOCKS: 1 LS: 7,500 / 175,000 m3 LNG
STORAGE: 619,500 m3 LNG / 5 Tanks
REGASIFICATION: 1,350,000 m3 (n)/h (376.8 GWh/d)
LNG TRUCK LOADING: 3 bays, 50 trucks/day
LNG METHANE TANKER LOADING: Max. 3,700 m3/h
Huelva
TRANSSHIPMENT: Available