Presentation for the award-winning paper of the same name, presented in Power-Gen Asia 2013 by Kari Punnonen, Area BDM, Oil & Gas Business, Wärtsilä Power Plants. Download the paper at: http://www.wartsila.com/file/Wartsila/en/1278537230339a1267106724867-Small_and_Medium_size_LNG_for_Power_Production_KPunnonen.pdf

1. Power Gen Asia 2-4 October 2013
Small and Medium Size LNG
for Power Generation
• KARI PUNNONEN
• AREA BDM, OIL&GAS BUSINESS, MIDDLE-EAST, ASIA &
AUSTRALIA
• WÄRTSILÄ FINLAND OY
1
© Wärtsilä 13 January 2014 K. Punnonen

2. FOR INFORMATIONAL PURPOSES ONLY
DISCLAIMER
Disclaimer
2
This document is provided for informational purposes only and may not be
incorporated into any agreement. The information and conclusions in this document
are based upon calculations (including software built-in assumptions), observations,
assumptions, publicly available competitor information, and other information obtained
by Wärtsilä or provided to Wärtsilä by its customers, prospective customers or other
third parties (the ”information”) and is not intended to substitute independent
evaluation. No representation or warranty of any kind is made in respect of any such
information. Wärtsilä expressly disclaims any responsibility for, and does not
guarantee, the correctness or the completeness of the information. The calculations
and assumptions included in the information do not necessarily take into account all
the factors that could be relevant.
Nothing in this document shall be construed as a guarantee or warranty of the
performance of any Wärtsilä equipment or installation or the savings or other benefits
that could be achieved by using Wärtsilä technology, equipment or installations instead
of any or other technology.
All the information contained herein is confidential and may contain Wärtsilä’s
proprietary information and shall not be distributed to any third parties without
Wärtsilä’s prior written consent.
© Wärtsilä 13 January 2014 K. Punnonen

3. SMALL AND MEDIUM SIZE LNG
AGENDA:
1. Company Profile
2. LNG Supply Chain
3. LNG Terminal with Power Plant
4. LNG Based Feasibility
3
© Wärtsilä 13 January 2014 K. Punnonen

4. It’s Time for LNG
4 © Wärtsilä
13 January 2014 K. Punnonen

5. Wärtsilä Corporation
19,000 professionals
Power Solutions for
Power Generation
Marine/
offshore
Ship
Power
• Listed in Helsinki
• 4.9 billion € turnover (2012)
5
© Wärtsilä 13 January 2014 K. Punnonen
Power
Plants
Services

6. Installed base – Wärtsilä Powering the world*
Europe:
Output: 12,1 GW
Plants: 1793
Engines: 3361
Asia:
Output: 18,7 GW
Plants: 1645
Engines: 3627
Americas:
Output: 11,3 GW
Plants: 395
Engines: 1342
Total: 53,7 GW
Plants: 4689
Engines: 10584
Countries: 169
Africa & Middle East:
Output: 11,9 GW
Plants: 856
Engines: 2254
Industrial self-generation
Flexible baseload
Grid stability & peaking
Oil & gas
* On-shore Power Plants
December 2012
6
© Wärtsilä
30 April 2013
POWER PLANTS 2013

7. Wärtsilä Hamworthy Gas Excellence
Your perfect match
– WÄRTSILÄ is a global leader in complete lifecycle power solutions for the marine and
energy markets. In addition to being a world class engine manufacturer and supplier,
Wärtsilä is also a recognized EPC contractor in the power generation sector with extensive
references for turn key delivery of onshore power plants and floating power barges.
– HAMWORTHY OIL & GAS SYSTEMS was a leading designer, developer and manufacturer
of advanced gas handling systems for onshore, marine and offshore applications.
Hamworthy has patented LNG technology within LNG liquefaction and is a recognized
provider of technology and systems for various LNG applications worldwide.
– With Hamworthy now being an integrated part of Wärtsilä the two companies’ extensive
project execution experience and technology portfolios are combined into a seamless and
fully accountable one stop shop for complete small and mid scale LNG production facilities.

8. Wärtsilä Oil & Gas Systems
Products and Organization from Wärtsilä Oil & Gas Systems
LPG
LPG cargo handling systems
Cargo heaters & vaporizers
Reliquefaction & cooling plants
Ship- and cargo tank design
LNG
BOG reliquefaction plants
Gas Recovery
Separation Technology
Aftermarket
VOC recovery systems
Separator design
Complete site support services
LNG regasification plants
Zero Flare solutions
VIEC /VIEC-LW internals
Project life time support
Small scale LNG plants
HC blanket gas and recovery
Interface level and profilers
Training
LNG fuel gas systems
Flare gas recovery and ignition
Compact separation

9. How to get LNG? – Conventional LNG supply chain
Gas
exploration
9
Liquifaction
Large
scale
shipping
© Wärtsilä 13 January 2014 K. Punnonen
Hub
Evaporat
ion
Pipeline
End user
(NG)

10. LARGE SCALE
Large Scale LNG
• Intercontinental transport
• Millions of tons per year
• LNG Terminal feeding into
pipeline system
• Providing a commodity
Jetty capable of offloading ships
from 35,000 m3
to 145,000 m3
• Single containment tank
(160,000 m3)
• 125 MMSCFD Regas and
Sendout

11. How to get LNG? – Mid and Small Size LNG
Gas
exploration
Liquifaction
Large
scale
shipping
Evaporat
ion
Pipeline
End user
(NG)
Small
scale
shipping
Mid
scale
storage
Evaporation
End user
(NG)
Truck
transport
Hub
Small
scale
storage
Ship
bunkering
11
© Wärtsilä 13 January 2014 K. Punnonen
Evaporation
End user
(NG)

12. From Large Size to Small Size
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© Wärtsilä 13 January 2014 K. Punnonen

13. Small Size LNG Carrier
• Typical small size LNG carrier. The vessel is often a combined gas and
chemical carrier – 5 800 / 10 000 cbm.
Small Size LNG
•Regional supply
•Directly to end-users
•Providing an energy solution
previously not available
10,000 m3 Multigas Carrier
Source: Norgas
Small Size LNG Harbour
•LNG Carrier loading
•Road tanker loading
Source: Knutsen
13
© Wärtsilä 13 January 2014 K. Punnonen

14. LNG Recieving Terminal – Power Plant
“Does it make sense to invest into a Single
Purpose LNG Receiving Terminal - as a
fuel system for a Power Plant?”
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© Wärtsilä 13 January 2014 K. Punnonen

15. LNG Based Power Plant
A Feasibility Analyze was done to evaluate this
question. The results are presented here:
Natural Gas has become the fuel of preference and is
expected to pass coal within a decade or so…
15
© Wärtsilä 13 January 2014 K. Punnonen

16. Power Plant – Technical Solution
 Power Output
 Fuel Consumption
 LNG Consumption
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© Wärtsilä
30 April 2013
POWER PLANTS 2013

17. Wärtsilä Power Plant – Technical Solution
Chosen Power Plant Characteristics for the study
Power Output
Fuel Consumption
• Single Cycle, gas engine 9MW and 18 MW
• Net Power at Step-Up Trafo: 50, 100, 300 MW
• Outgoing Voltage: 110 kV
• Fuel: LNG (Natural Gas)
• Generator set efficiency: 46%
• Own electrical consumption: 4 MW at 400V
• Plan Net Electrical Efficiency: 43,1 - 44,5%
Operational Profile
Ambient Conditions
• Average ambient temp: 29 C (min. 10 C, max. 40C)
• Height above sea level: max. 100 m
• Methane number 80
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© Wärtsilä 13 January 2014 K. Punnonen
• Annual Running Hours: 7000
• Plant average load: 80%
• Utilization factor: 64%

18. Power Plant Configuration
Plant Size
50 MWe
100 MWe
300 MWe
Prime Mover
6X20V34SG
12X20V34SG
18X20V50SG
Plant Net Output
@site conditions
53 MWe
106 MWe
304 Mwe
Net Electrical Eff.
Net Heat Rate
43,1%
8271 kJ/kWhe
43,2%
8250 kJ/kWhe
44,5%
8013 kJ/kWhe
Plant Size
100 MWe
300 MWe
LNG cons/day
18
50 MWe
511 m3
1022 m3
2840 m3
© Wärtsilä 13 January 2014 K. Punnonen

19. LNG consumption by power plant (base load)
100MW plant
100% utilization
0.14 Million Ton/year (MTPA)
0.31Millon m3/year
19
300MW plant
100% utilization
0.41 Million Ton/year (MTPA)
0.94 Million m3/year
© Wärtsilä 13 January 2014 K. Punnonen

20. Wärtsilä 300 MW power plant based on W50SG
© Wärtsilä 2011

21. LNG Recieving Terminal – Technical Solution
 LNG Carrier Capacity
 Storage Tank Capacity
 Re-Gasification Process
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© Wärtsilä 13 January 2014 K. Punnonen

22. LNG Consumption at max. and average loads
Plant Size
50 MWe
100 MWe
300 MWe
Power Plant Consumption,
max. load
511 m3/day
1022 m3/day
2840 m3/day
Additional Gas Take-Off, max.
Load
701 m3/day
1360 m3/day
1754 m3/day
Total Gas Consumption, max.
load
1212 m3/day
2382 m3/day
4593 m3/day
Total Gas Consumption,
average load
677 m3/day
1311 m3/day
2604 m3/day
Plant Size
50 MWe
100 MWe
300 MWe
Annual Consumption,
Average load
247.000 m3
478.000 m3
950.000 m3

23. Terminal optimization
• The most important parameter when optimizing the terminal is the LNG supply.
The ship size will determine the cargo that will be received. Shipping time and
needed weather margins will determine the time between cargos. But also
available HUB slots and costs need to be considered.
• The average consumption requirement will determine the slope of the volume
curves and thus the needed re-gasification capacities.
Volume
• Heel Requirement is for safe-guarding the cry-temperature in the LNG tank at all
times
Ship
cargo
Total storage
volume
Shipping time
Incl. loading and unloading
Emergency
Inventory
Heel requirement
Time
23
© Wärtsilä 13 January 2014 K. Punnonen

24. LNG Carrier Capacity Determination
Main Parameters for carrier capacity determination:
 Transportation Distance: 1500 NM
 LNG Carrier average speed: 15 Knots
 LNG Tank sizes as defined
Carrier Capacity
 Gas consumption as defined
Plant
No Gas
With Gas
 For average capacity
Size
Off-Take
Off-Take
50 MWe
6000 m3
13.000 m3
100 MWe
12.000 m3
30.000 m3
300 MWe
35.000 m3
52.000 m3

25. LNG Storage Tank Capacity Determination
Main Parameters for storage tank capacity determination:
 Safety inventory: 7 days
 Heel requirement: 10%
LNG-Tank Capacity
 Shipping information as defined
 Gas consumption as defined
Plant
No Gas
With Gas
Size
Off-Take
Off-Take
 For average gas consumption
50 MWe
10.000 m3
25.000 m3
100 MWe
20.000 m3
45.000 m3
300 MWe
57.000 m3
90.000 m3

26. Re-Gasification Low Pressure System
LNG Re-Gasification Process to deliver Low Pressure Gas:
 Low pressure consumer, i.e. Power Plant
 Atmospheric full containment tank
 Delivery Pressure @10 bar(g)
 Boil Off Gas fed into low pressure gas supply system
 Heating media for re-gas: ambient air, sea water of hot water/steam
 Dimenioned for max. gas consumption
13.1.2014

27. Re-Gasification High Pressure System
LNG Re-Gasification Process to deliver Low and High Pressure Gas:
 Low pressure, 10 bar(g), High pressure to NG pipeline, 50 bar(g)
 Atmospheric full containment tank
 Boil Off Gas fed into low pressure gas supply system
 Heating media for re-gas: ambient air, sea water of hot water/steam
 Dimenioned for max. gas consumption
BOG Heater
To Engines
Excessive BOG
Compressor
Regas Phase 1
Natural BOG
Compressor
HP-pump LNG Vaporizer
LNG
To Gas Grid
Blowdown to
Vent/Flare
Regas Phase 2
Loading Arms 5000 m3/h each
BOG
LNG Supply
Vapor Return
Pump
13.1.2014
LNG Tank

28. Re-Gasification High Pressure System
REGASIFICATION SYSTEMS
Heating media: Seawater
Intermediate: Propane, phase-change
Petronas Melaka
Re-Gas Capacity 3*221 t/h
Pressure: 70 bar
Sea Water Heating
Dry Weight 945 tons
Heating media: Steam
Intermediate: Water/Glycol

29. LNG Recieving Terminal – Power Plant
29
© Wärtsilä 13 January 2014 K. Punnonen

30. LNG Feasibility Analyze – STEP 1
STEP-1
LNG FOB-Price
At Main Hub
US$/MMBtu
STEP-2
Distribution Gas
Price as fuel Cost
US$/MMBtu
13 January 2014
LNG
Transportation
LNG Receiving
Terminal
LNG
Re-Gasification
”Terminal Effect” on gas price
-transportation cost
-investment cost
-operation and maintenance cost
Distribution Gas
Price: US$/MMBtu
Power Plant
energy
conversion
Conversion Cost
-fuel cost
-investment cost
-O&M cost
Sales Power Tariff
US$/MWh

31. LNG ”Terminal Effect”
FOB LNG
Purchase
LNG
Transportation
LNG
Storage
LNG ReGasification
Power Plant
Power Sales
STEP 1
LNG transportation
•Own LNG carrier operation
•Out-sourced Carrier operation to
third party
•Transportation through LNG
provider
•All In Cost by LNG provider is
considered. Depends according
to LNG volume
31
© Wärtsilä 13 January 2014 K. Punnonen
Terminal Investment
•Tank and main process
•Re-gasification process
•Other: land, on-shore and offshore infrastructure
•Working Capital, LNG tied in
vessel and storage tank
•Considered as total investment
Terminal O&M
•Operational Man Power
•Maintenance Man Power
•Spare parts and Material for
maintenance
•Typical estimation 1-2% of the
investment in annual bases

32. LNG ”Terminal Effect”
Back-Ground
Investment Fundaments for Terminal
•Existing harbour facilities available next to the Terminal and Power Plant sites – no maritime or off-shore works
•Project Life time for evaluation and gas price calculations: 25 years
•Weighted average cost of capital: 10%
•On top of the power plant gas consumption, additional gas Off-Take was considered as in a similar magnitude as
the power plant itself. Gas delivered to Off-Takers via 50 bar pipeline system
•LNG average inventory Working Capital between 3 to 22 M€ depending on the project capacity
Terminal Effect Constituents
LNG transportation
Terminal Investment
Terminal O&M
•All in cost by LNG provider is
considered. Gas price increase due
to transportation.
•Total Investment effect on gas
price:
•Operational cost relatively
insensitive for Terminal size
•Maintenance cost follows the size
Effect on Gas Price (US$/MMBtu)
All in Transportation Cost (US$/MMBTU) :
•50 MW – 2,14 US$/MMBtu
•100 MW – 1,85 US$/MMBtu
•300 MW – 1,43 US$/MMBtu
32
© Wärtsilä 13 January 2014 K. Punnonen
Plant Size No-Off-Take
•50 MW
4,09
•100 MW
2,28
•300 MW
1,60
With Off-Take
2,04
1,47
1,34
Effect on Gas Price (US$/MMBtu)
Plant Size No-Off-Take
•50 MW
1,57
•100 MW
1,05
•300 MW
0,47
With Off-Take
0,76
0,52
0,33

33. LNG ”Terminal Effect”
Terminal Effect - $/MMBtu
Plant Size
No Gas
Off-Take
With Gas
Off-Take
50 MWe
7,80
4,94
100 MWe
5,18
3,85
300 MWe
3,50
3,1
9
8
$/MMBtu
Terminal Effect
7
6
5
4
3
Terminal Related
Transportation
2
1
0
50 MW No 50 MW
Off-Take with OffTake
33
© Wärtsilä 13 January 2014 K. Punnonen
100 MW
No OffTake
100 MW
with OffTake
300 MW
No OffTake
300 MW
with OffTake

34. ”Distribution Gas Price”
Plant Size
50 MWe
100 MWe
300 MWe
LNG Consumption
247.000 m3
478.000 m3
950.000 m3
LNG FOB Price- $/MMBtu
Plant Size
50 MWe
17,82
16,39
15,68
300 MWe
14,97
LNG FOB-Prices
negotiated based on
estimated annual
LNG consumption
17,11
100 MWe
30
No Gas
Off-Take
14,25
US$/MMBtu
25
With Gas
Off-Take
Distribution Gas Price
20
15
10
Terminal related
Capex&Opex
Transportaiton
5
0
50 MW
No OffTake
50 MW 100 MW 100 MW 300 MW 300 MW
with Off- No Off- with Off- No Off- with OffTake
Take
Take
Take
Take
FOB Price
34
© Wärtsilä 13 January 2014 K. Punnonen

35. LNG Feasibility Analyze – STEP 2
STEP-1
LNG FOB-Price
At Main Hub
US$/MMBtu
STEP-2
Distribution Gas
Price as fuel Cost
US$/MMBtu
13 January 2014
LNG
Transportation
LNG Receiving
Terminal
LNG
Re-Gasification
”Terminal Effect” on gas price
-transportation cost
-investment cost
-operation and maintenance cost
Distribution Gas
Price: US$/MMBtu
Power Plant
energy
conversion
Conversion Cost
-fuel cost
-investment cost
-O&M cost
Sales Power Tariff
US$/MWh

36. LNG Based ”Power Tariff”
FOB LNG
Purchase
LNG
Transportation
LNG
Storage
LNG ReGasification
Power Plant
Power Sales
STEP 2
Power Plant Investment
Power Plant O&M
•EPC cost
•Other up-front costs: land, on-shore
infrastructure, licenses, etc.
•O&M mobilisation costs
•Considered as total investment
36
•Operational Manpower
•Maintenance Manpower
•Spare parts and Material for
maintenance
•Fixed O&M cost
•Variable O&M cost
© Wärtsilä 13 January 2014 K. Punnonen

37. LNG Based ”Power Tariff”
Back-Ground
Investment Fundaments for Power Plant
•Power Plant Site location next to the LNG Terminal
•Gas delivered to plant at 10 bar(g)
•For simplicity; 100% equity financing considered
•Return on Equity (ROE) Target: 15%
•Project Life time for evaluation and power tariff calculations: 25 years
•Running profile: annual running hours 7000h, average load 80%, capacity factor 63,9%
Power Tariff Constituents
Fuel Cost
•Fuel cost for power plant as per the
“Distribution Gas Price”
•Lube oil consumption: 0,3 g/kWh
•Lube oil price: 1 US$/Litre
View of 6 engines modular engine hall
Power Plant
Investment
•EPC part of total Investment (M€)
•50 MW – 880 US$/kW
•100 MW – 850 US$/kW
•300 MW – 845 US$/kW
Sasol New Energy Holdings, South Africa
Power Plant O&M
•Variable O&M cost: 7-9 US$/MWh
•Fixed O&M cost typically between
5 – 10 US$/kW annually
•Fixed insurance cost
•Fixed Administrative costs
O&M Agreement with thousands of MW s

38. Absolute Power Tariffs
US$/MWh
50 MW Power Plant Solution
300
250
200
150
100
50
0
US$/MWh
100 MW Power Plant Solution
250
200
ROE
Fixed O&M Cost
Variable Cost
Fuel Cost
ROE
Fixed O&M Cost
100
Variable Cost
Fuel Cost
50
0
FOB Terminal FOB Terminal
Tariff
Tariff
Tariff
Tariff
No Re-gas
150
FOB Terminal FOB Terminal
Tariff
Tariff
Tariff
Tariff
With Re-gas
No Re-gas
US$/MWh
With Re-gas
300 MW Power Plant Solution
200
150
ROE
100
Fixed O&M Cost
Variable Cost
50
Fuel Cost
0
FOB Terminal FOB Terminal
Tariff
Tariff
Tariff
Tariff
38
© Wärtsilä 13 January 2014 K. Punnonen
No Re-gas
With Re-gas

39. Power Tariffs, Terminal Effect No Re-Gas
Terminal Effect Power Tariffs, No Gas Off-Take
300
US$/MWh
250
200
ROE
Fixed O&M Cost
Variable Cost
Fuel Cost
150
100
50
0
50 MW Plant
100 MW Plant
300 MW Plant
ROE-chart for 300 MW plant,
No Gas Off-Take
-fuel price: 18,5 US$/MMBtu
39
© Wärtsilä 13 January 2014 K. Punnonen
Simple Pay-Back Time
less than 6 years

40. Power Tariffs, Terminal Effect With Re-Gas
Terminal Effect Power Tariffs, With Gas Off-Take
250
US$/MWh
200
ROE
Fixed O&M Cost
Variable Cost
Fuel Cost
150
100
50
0
50 MW Plant
100 MW Plant
300 MW Plant
ROE-chart for 300 MW plant
with Gas Off-Take
-fuel price: 17,4 US$/MMBtu
40
© Wärtsilä 13 January 2014 K. Punnonen
Simple Pay-Back Time
less than 6 years

41. Final Conclusions
Single Purpose Terminal can make
sense
• For remote location LNG can be the only
acceptable fuel. Alternative would be HFO
• LNG Terminal can serve the regional
industry with clean and affordable fuel
• LNG can be a domestic fuel
Terminal economics is case specific
• Each case must be studied indivudually
• LNG FOB-price dominates the
Distribution Gas Price structure
• Additional Gas Off-Take will benefit the
project feasibility
• Difference between the best FOB-price
and Distribution price is around 20%
Gas fired power plant – a natural choice
• For ”Green-Field” power development
LNG is preferable vs. HFO
• Power tariff difference is 37% between
the two extremities
• At its highist the ”Terminal Effect” will
increase the power tariff with around 25%
• At its lowest the ”Terminal Effect” will
increase the power tariff with less than
10%
With right LNG FOB price and power tariff a
Single Purpose LNG Terminal can make sense...
41
© Wärtsilä 13 January 2014 K. Punnonen

42. WARTSILA.COM
Thank You
Smart Power Generation
See us at Stand F2