1. Grid Logistics
Asian Opportunity For
LNG Deliveries By CATBs
The following material represents confidential trade secrets, technical
specifications, business processes and strategies of Grid Logistics LLC.
2. • Cryogenic articulated tug barge (CATB)
• LNG delivery by barge rather than pipeline or ship
• Reduces risk of stranded investment in fixed LNG assets
• Deployable quickly
• Near-term prospects in Japan, Indonesia and China
Concepts Underlying Business Opportunity
4. JAVA
124 million
SUMATRA
45 million
BORNEO
16 million
SULAWESI
16 MILLION
BALI
3 million
LOMBOK
3 MILLION
PAPUA
6 MILLION
MADURA
3 million
Indonesia
An Archipelago of 17,508 Islands - 6,000 inhabited
5. Indonesia exported 780,000 bpd in 1996.
Eight years later, Indonesia was a net oil importer.
The World Bank last year estimated that Indonesia's total
direct subsidies for fuel and the oil-burning electricity
industry cost more than $16 Billion a year
– 23% more than government spending on law and order,
health and education combined.
The removal of the subsidies is highly unlikely,
given that previous cuts have led to social unrest.
Drivers Creating Indonesian Opportunity
6. PGN operates 3,100 miles of natural gas distribution and
transmission lines, comprising nine regional networks. The
networks have limited inter-connectivity, which has restrained
growth of gas consumption. PGN is having new gas pipelines to
improve its Integrated Gas Transportation System (IGTS).
The IGTS is designed to eventually link the islands of Sumatra,
Java, and Kalimantan via a 2,600-mile pipeline. The World Bank,
Asian Development Bank, and PGN are jointly financing the
project.
Drivers Creating Indonesian Opportunity
7. Drivers Creating Indonesian Opportunity
Pipeline expansion will still leave many regions of
Indonesia un-served by natural gas
8. Drivers Creating Indonesian Opportunity
The undersea
topography of Indonesia
is not well suited to
pipeline construction
between Islands. For
many regions, pipelines
are either technically
infeasible or too costly.
9. Indonesia’s state electricity firm PT PLN plans to build
11,000 megawatts of natural gas-fired power plants by
2019 at a cost of $15 Billion US to reduce its dependence
on oil.
Drivers Creating Indonesian Opportunity
10. Indonesia’s state electricity firm PT PLN plans to build 11,000 megawatts of
natural gas-fired power plants by 2019 at a cost of $15 Billion US to reduce its
dependence on oil.
PLN currently operates 5,233 power plants across the
country with a combined capacity of 24,960 megawatts.
Only 22 percent of them, or 1,151 units with a combined
capacity of 9,800 megawatts, use natural gas.
Drivers Creating Indonesian Opportunity
11. Indonesia’s state electricity firm PT PLN plans to build 11,000 megawatts of
natural gas-fired power plants by 2019 at a cost of $15 Billion US to reduce its
dependence on oil.
PLN currently operates 5,233 power plants across the country with a combined
capacity of 24,960 megawatts. Only 22 percent of them, or 1,151 units with a
combined capacity of 9,800 megawatts, use natural gas.
PLN is unsure whether the planned power plants would
receive enough gas supply due to LNG export
commitments. Current gas supply is only 45% of its
actual needs.
Drivers Creating Indonesian Opportunity
12. Power Generation Costs in Indonesia
Oil 25¢ / kwh
Geothermal 9¢ / kwh
Natural Gas 5¢ / kwh
Coal 4¢ / kwh
Source: Indonesia’s state electricity firm PT PLN -2011
13. Indonesia is the 3rd largest LNG exporter in the world
BONTANG A-H
LNG EXPORT PLANT
(in decline)
TANGGUH
LNG EXPORT PLANT
(new)
ARUN
LNG EXPORT PLANT
(in decline)
Indonesian LNG Plants
Indonesia is the 3rd largest LNG exporter in the world
DONGGI-SENORO
LNG EXPORT PLANT
(planned)
MALUKA
LNG EXPORT PLANT
(planned))
14. Indonesian LNG Plants
BONTANG A-H
LNG EXPORT PLANT
(in decline)
TANGGUH
LNG EXPORT PLANT
(new)
ARUN
LNG EXPORT PLANT
(in decline)
WEST JAVA
LNG REGAS PLANT
(Proposed)
EAST JAVA
LNG REGAS PLANT
(Proposed)
NORTH SUMATRA
LNG REGAS PLANT
(Future)
Indonesian LNG Plants
DONGGI-SENORO
LNG EXPORT PLANT
(planned)
MALUKA
LNG EXPORT PLANT
(planned))
15. The PT Perusahaan Gas Negara (PGN) LNG terminal
plan has budgeted $1.7 billion for three small LNG
regasification terminals, to come on line between
2011 and 2014. The projects may entail either
Floating Storage and Regasification Units (FRSUs) or
permanent terminals and would also require LNG ships to
supply the terminals.
There is strong political pressure for the projects
to lower subsidy costs
Drivers Creating Indonesian Opportunity
16. Use Cryogenic Articulated Barges (CATBs)
in lieu of regasification terminals
and LNG ships
A ‘Cryogenic Articulated Tug and Barge’ (CATB) unit, with the
tug engaged in the notch of the barge, is secured on each side
of the barge notch. This positive connection allows the tug to
pitch but not roll, enabling the tug and barge to behave and
handle in much the same manner as a ship, with added
advantages of increased speed, improved fuel economy and
good handling characteristics.
A More Cost Effective and Flexible Plan
18. • Insulation optimized for boil-
off rate, cost, produce-ability
and load bearing capability
• Maximum use of panel line
construction techniques
• Geometry supports automated
welding processes
Confidential Material of Grid Logistics
LNG CATB – Containment
Independent Self-Supporting Cargo Tanks
19. • Incorporated in a double-hulled barge, the 5,000 cubic meter
welded insulated tanks provide enhanced levels of safety relative to
LNG ships. The much smaller quantity of transported LNG also
reduces collateral damage from any potential (but highly unlikely)
maritime incident (whether accidental or deliberate).
Confidential Material of Grid Logistics
LNG CATB – Containment
Independent Self-Supporting Cargo Tanks
20. • On-board regasification equipment or land based regasification
using:
• Waste heat from power plant or
• Closed loop seawater “Bishop” process or
• Cascading water process
Lowering fuel usage for regasification from 3% to 1%
Confidential Material of Grid Logistics
LNG CATB
Regasification Options
21. A CATB is estimated to cost $50 million
$35 million for the barge & $15 million for the tug.
Fewer tugs are required than barges.
Using 3 CATBs for each project would cost $375 million.
If additional infrastructure costs were as high as $325
(very unlikely) the total investment would be $700 million.
$1 billion less than the existing budget for PGN’s plan
Confidential Material of Grid Logistics
A More Cost Effective and Flexible Plan
22. Scenarios:
1) As markets grow, the economics of pipeline delivery or
larger vessels may improve. CATBs are then
redeployed to other islands
2) Market declines, and CATBs are redeployed
3) Market evolves slowly, CATBs remain cost effective
Confidential Material of Grid Logistics
A More Cost Effective and Flexible Plan
24. Japan LNG Imports
Drivers Creating Japanese Opportunity
2008 2009 2010 2020
69.3 64.5 70.0 >100
Expected decline in nuclear power will lead to
substantial increases in LNG use for power
generation, well beyond the expectations in growth a
year ago.
26. Re-gas facilities are expensive ($750-$1,000 million), fixed
assets that cannot be moved and have value only if
their markets offer attractive net-backs
CATBs can contribute the same economic value to LNG
suppliers at lower capex (~$100-$400 million) and
provide geographic and scalable flexibility
Characteristics of Attractive Markets for
CATBs
27. Barges offer the flexibility to quickly move LNG
to markets that experience basis blow-outs
(e.g. South Korea during cold winter)
Net-backs enhanced in markets in which gas
pipeline capacity is constrained and/or
prohibitively expensive to expand
Characteristics of Attractive Markets for
CATBs
28. Markets must provide for favorable regulatory
and political treatment:
• By-pass of pipeline tariffs
• Light-handed regulation of direct
connections
Characteristics of Attractive Markets for
CATBs
29. Articulated Barges Provide an Enhanced Netback
Compared to Pipeline Tariffs
PA
NJ
NY
ME
MA
CT
VT
NH
RI
NB
NS
Nova Scotia to Gloucester
Barge Cost: $0.31
Netback Benefit: $0.76
FSU to Long Island
Barge Cost: $0.09
Netback Benefit: $0.56
Canaport to Gloucester
Barge Cost: $0.24
Netback Benefit: $0.79
These comparisons understate the full benefit of moving spot LNG cargoes to LDCs
when seasonal basis blow-outs occur.
Confidential Material of Grid Logistics
30. # OF DAYS TO OFFLOAD BARGE
ONE WAY TRAVEL DISTANCES
GENERAL ECONOMICS
31. $0
$5
$10
$15
$20
$25
$30
54 108 216 323 431
$perm
3
80 161 322 805 1,609
COSTS FOR SELECTED DISTANCES AND DAYS
TO OFFLOAD BARGES
One way kilometers per trip
MMSCFD Off-loading Barge
ANNUAL AVERAGE CATB TRANSPORTATION COSTS
Confidential Material of Grid Logistics
32. $0.00
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
54 108 216 323 431
$perMcf
50 100 200 500 1,000
COSTS FOR SELECTED DISTANCES AND DAYS
TO OFFLOAD BARGES
One way mileage per trip
MMSCFD Off-loading Barge
ANNUAL AVERAGE CATB TRANSPORTATION COSTS
Confidential Material of Grid Logistics
