Liquid NIUGINI Gas Project Positioned for Success in Papua New Guinea 15 th Annual Asia Upstream LNG conference Henry Aldorf President Pacific LNG Operations PTE.LTD April 21, 2010
Pacific LNG 100% owned by Strictly Private & Confidential Clarion Finanz AG. Pacific LNG owns : • ~ 20% of Elk Antelope fields • 47.5% of Liquid Niugini Gas • Major Shareholder of InterOil
Equatorial Guinea Alba Blue Print for PNG Elk Antelope Acquired 2002 First Cargo 2007 Condensate >60,000 B/D LPG Gross >20,000 B/D Gross Methanol >20,000 BOE/D LNG Gross 75,000 BOE/D Total Gross >175,000 BOE/D Gross Maximizing value through the value chain
EGLNG Train 1 : SIX Months Early and Under Budget Delivery and Cost Performance Commit long lead FID & signed EPC Feed gas introduction equipment contract 2003 2004 2005 2006 2007 Agreements signed All long lead equipment First LNG cargo with EG Government on site Capital Cost / mmtpa of LNG Output EG LNG Train 1 Capital LNG Project to EPC Contract EG LNG T1 Capital for ELNG T1-2 EPC Award to First LNG Expansion Capacity Egyptian LNG ALNG T1-3 Atlantic LNG ALNG T1 Oman RasGas ELNG T1 Oman RasGas Qatargas Nigeria Nigeria Qatargas 0 2 4 6 8 10 12 14 16 18 0 50 100 150 200 250 300 350 400 450 $ MM/MMTPA Years Source: BG, Marathon internal estimates
EGLNG & Liquid Niugini Gas share more than just the name Guinea • Liquids driving the LNG development - allows early cash flow and increases Financing Options • Low marginal gas costs • Strong Alignment with the PNG Government • Favourable tax treatment • Strong Alignment among the Partners • Brown Field LNG Project • Off the Shelf Liquefaction Plants • Close to the premium Asian Markets • High BTU Gas • Similar Management Team Some Market Voices said “Right project wrong Company” They will be proven wrong again!
Liquid Niugini Advantages vs. EGLNG • The Elk/Antelope Gas Condensate resource is much larger : 8.2TCF vs. EGLNG „s. 5.5 TCF Gross gas resource with only 3TCF available for Train I • Upstream Tax and Royalty system • Onshore Development with highly productive Wells resulting in the lowest regional gas cost • Highly prospective Exploration Acreage in a Proven Basin • Multi Train Development with Economies of Scale, not dependant on foreign resource • The Fiscal Stabilization Agreement with the PNG Government signed upfront – (LNG Project Agreement) • PNG is on the LNG Map with Exxon Project • PNG has a Credit Rating
Project Agreement On 23 December 2009, the PNG National Government signed the Project Agreement with Liquid Niugini Gas for the construction of an LNG Plant(s) in PNG The agreement secures the fiscal terms for a 20 year period, which include a 30% company tax rate and certain exemptions applicable to large scale projects of this nature The agreement also provides for a up to 20.5% ownership stake to be held by the Government of Papua New Guinea's nominee, Petromin PNG Holdings Limited A further 2% ownership stake will be taken by landowners directly affected by the plant
Disadvantages vs. EGLNG • Higher EPC Pricing for Equipment and Pipelines but : • Liquefaction pricing have come down recently from >$ 1000/ mt - $650 to $500/mt • Hydrocarbon prices especially liquids are much higher now • No Australian Labour constraints
LNG Liquefaction vs Demand (Mid Case Scenario) Existing, under construction and possible liquefaction & regasification projects 500.0 Mid Case = existing, under construction and possible liquefaction and regasification projects are built 450.0 400.0 70 MMTPA 350.0 LNG needed Arzew LNG (GL3-Z) QCLNG - Queensland, BG 300.0 PNG LNG Gorgon MTPA GLNG - Curtis Island Angola LNG 250.0 Pluto Qatargas-4 Qatargas-3 200.0 Peru LNG Existing Liquefaction LNG Demand 150.0 100.0 50.0 0.0 2009 2011 2013 2015 2017 2019 2021 2023 2025 LNG supply & demand gap occurs in 2017 (7 MMTPA) increasing to 70 MMTPA by 2020 Source:- Woodmac
LNG Liquefaction vs Demand Woodmac Adjusted Scenario Darwin Expansion 500.0 ELNG 3 Greater Sunrise Peru LNG Expansion 450.0 Wheatstone LNG Libya Additional 400.0 EG LNG 2 Brass LNG Angola Additional 350.0 Yemen LNG Expansion Tangguh Expansion Qatari Megatrain Debottlenecking 300.0 Sakhalin Expansion Prelude LNG Ichthys MTPA 250.0 GLNG Expansion Australia Pacific LNG NLNG Seven Plus 200.0 Marsa El Brega Expansion Damietta 2 Arzew LNG (GL3-Z) 150.0 QCLNG - Queensland, BG PNG LNG Pluto Expansion 100.0 GLNG - Curtis island Gladstone LNG (Fisherman's Landing) Gorgon 50.0 Angola LNG Pluto Qatargas-4 0.0 Qatargas-3 2009 2011 2013 2015 2017 2019 2021 2023 2025 Peru LNG Existing Liquefaction Source:- Woodmac, Marathon
Return (NPV12=0 ) Source: Wood Mackenzie, InterOil data 1. NPV (@ 12%) Breakeven – recovering capex and opex FOB Gas Price necessary to yield 12% FOB Breakeven Price (US$/mmbtu) 10.0 12.0 2.0 4.0 6.0 8.0 - 0.0 ADGAS Qatargas-4 0.4 Arun 0.7 0.7 1. Liquid Niugini Gas 1.1 Atlantic LNG 1 1.4 Bontang 1.5 Qatargas 1.5 Atlantic LNG 2&3 Qalhat LNG 1.7 1.7 Atlantic LNG 4 EG LNG 1.7 1.8 ELNG 2 2.0 Damietta 2.0 ELNG 1 2.0 Darwin 2.1 Brunei LNG 2.2 OLNG 2.4 MLNG Tiga 2.6 Tangguh Brass LNG 2.7 2.9 MLNG Yemen LNG 2.9 3.2 MLNG Dua 3.4 Peru LNG 3.5 North West Shelf 3.6 Angola LNG 5.7 Kenai 6.0 US Shale gas Snohvit 6.1 6.6 QCLNG PNG LNG 7.5 7.7 Pluto Gorgon 8.8 11.2 Sakhalin 2
InterOil Resources Case * 1,600.0 Condensate * Sales Gas 156.5 1,400.0 As at 31 December, 2009 Low Best High 1,200.0 Additional Original Gas-In-Place (tcf) 9.65 11.03 12.54 5.33 tcfe* 1,000.0 mmboe 800.0 ~ 9.12tcfe * Initial Recoverable Raw Gas (tcf) 6.87 9.08 11.04 1,363.3 59.3 600.0 Initial Recoverable Sales Gas 6.19 8.18 9.94 400.0 (tcf) * 571.7 200.0 Initial Recoverable Condensate 117.1 156.5 194.7 (mmbbls) 0.0 31-12-2008 31-12-2009 *Resources are presented on a 2C basis ** 6 mmscf = 1 mboe 1 GLJ certification prepared in accordance with the Canadian Oil & Gas Evaluation Handbook and Canadian Securities Administrators National Instrument 51-101.
Elk/Antelope – Condensate and LNG Q2 -2010 Q3/Q4 -2011 Q3 -2010 2012 Condensate Condensate Stripping Project 2015/2016 LNG First Land LNG (4 mtpa) – Train #1 N Condensate Land Based LNG Elk/Antelope Stripping Plant IOC Refinery Barge Condensate to Napa Napa 13
Elk/Antelope – Full Development LNG First Q2 -2010 Q3/Q4 -2011 2012 Condensate Q3 -2010 Condensate Train 1 Train 2 Train 3 Stripping Project 2015/2016 2017 2017/2018 Land LNG (4 mtpa) - Train 1/2/3 N Condensate Land Based LNG Stripping Plant Elk/Antelope & Condensate Stripping Plant IOC Refinery Barge Condensate to Napa Napa 14
Elk/Antelope – Fixed Floating LNG – 3 MTPA FEED Q3 -2010 2013/2014 1 Year Floating LNG 3 Years First LNG N Fixed Floating LNG 15
The Pacific LNG Vision for the Elk Antelope fields Train I First Cargo 2015 Elk Antelope fields Train2 First Cargo 2016 Condensate 60,000 B/D gross Condensate splitter 100,000 B/D LNG gross Total 75,000 BOE/D LNLNG >210 000 BOE/D gross gross 75,000 BOE/D gross Maximizing value through the value chain An additional train every 9 months up to 4-5 trains
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