Small Scale Gas Field Development Options. Peter Cockcroft 2nd Myanmar Oil & Gas Conference 19 May 2015, ShangriLa Hotel, Yangon

Transcription

1 Small Scale Gas Field Development Options Peter Cockcroft 2nd Myanmar Oil & Gas Conference 19 May 2015, ShangriLa Hotel, Yangon

2 Forward Looking Statement Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ( forwardlooking statements ). Such forward-looking statements are not historical facts that may be identified by their use of words like "plans", "expects", "will", "anticipates", "believes", "intends", "depends", "projects", "estimates" or other words of similar meaning and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Pacific Hunt Energy Pte. Ltd. ( PacHunt or the Company ), or developments in PacHunt s business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions and expectations about future economic conditions and courses of action. All statements that address expectations about projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results are forward-looking statements. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. PacHunt cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. PacHunt also does not guarantee that the assumptions and expectations which form the basis of the forward-looking statements are accurate or will be realised. Forward-looking statements relate to, among other things, changes in the natural resource market; the market focus of PacHunt s revenue mix and margin targets; assets valuation; operational priorities; and PacHunt s strategy for the products and solutions. The risks and uncertainties that may affect forward-looking statements include, among others, general industry and economic conditions, interest rate trends, cost of capital and PacHunt s ability to raise capital, the completion and integration of acquisitions, competition from other companies, the possibility of technical, logistical or planning issues in connection with deployments, the continuous commitment of PacHunt's customers, demand for PacHunt's assets, changes in operating expenses including employee wages, benefits and training, governmental and public policy changes, the continued availability of financing in the amounts and the terms necessary to support future business and other risks detailed from time to time in PacHunt's filings with the applicable regulators. Forward-looking statements are based on management s current plans, resource estimates, production and economic projections, beliefs and opinions, and the Company does not undertake any obligation or assume any responsibility to amend, modify, revise or update any forward-looking statements in the event assumptions related to these plans, estimates, projections, beliefs and opinions change or on the basis of any subsequent developments, information or events, or otherwise. The primary risk of oil and gas exploration lies in the drilling of dry holes or drilling and completing wells which, though productive, do not produce gas and/or oil in sufficient amounts to return the amounts expended and produce a profit. Exploratory drilling involves substantially greater economic risks than development drilling since the percentage of wells completed as producing wells is usually less than in development drilling. While exploration adjacent to or near existing reservoirs may be more likely to result in the discovery of oil and gas than in completely unproven area, exploratory efforts are nevertheless high risk activities. Although the completion of oil and gas wells is, to a certain extent, less risky than drilling for oil and gas, the process of completing an oil or gas well is nevertheless associated with considerable risk. In addition, even if a well is completed as a producer, the well for a variety of reasons may not produce sufficient oil or gas in order to repay the investment in the well. 2

3 Summary Why Myanmar? Why Pacific Hunt? Why Me? Gas Field Development Options Pipeline Power Liquefied Natural Gas (LNG) Gas to Liquids (GTL) Products 3

4 Why Myanmar? 4

5 Let s zoom in Southern part of Myanmar has more gas 5

6 How big is the potential? % of Undiscovered Fields Undiscovered Gas Field Size Distribution Field size up to (Bcfg) Source: USGS 6

7 Unfortunately, relatively small Source: USGS 7

8 Why Pacific Hunt? Pacific Hunt has signed PSCs on two blocks that are initially thought to be gas-prone PSC C1 & PSC H totaling 10.38m acres 8

9 Why me? Signed the first coal plant conversion to gas GSA (Gas Sales Agreement) in 1987 KE5 gas field to Gresik Power Station in East Java, Indonesia In charge of first combined gas field/power station development in Asia (1995) Sengkang gas field and 135MW power plant in South Sulawesi, Indonesia Managing Director of multiple gas field developments in Pakistan ( ) Qadirpur field extension, Kadanwari, Zamzama and Bhit field developments (these fields produce more than 1BCFD) Managing Director of a coal mine methane project in Northern France ( ) 9

10 Barriers that impede gas monetization. Distance to market Ability of the user to pay Size of the gas reserves Price distortion to local subsidies Absence of stable long-term feed gas supply Availability of capital Local bureaucratic rules (e.g. Development plan approvals) 10

11 What can you do with a gas discovery? Do nothing.walk away Squeeze it.compression Chill it LNG Convert it. Fuel or feedstock for Electricity, products 11

12 Gas Monetisation Options Source: Michael Nikolau (University of Houston) 12

13 Pipeline Evacuation Pipelines, in combination with compression, are the simplest method for evacuating Associated Gas to market Ultimate destination is domestic gas grid or power plant. Piped gas could also feed LNG or GTL plant with resultant price upside Land ownership/access rights can be a significant non-technical risk 13

14 LNG Traditionally requiring economies of scale to meet economic hurdles thus requiring significant investment in gas gathering facilities and central gas plant 14

15 Small is beautiful.. Micro LNG (up to 0.05 mtpa) and Mini LNG (0.1 to 0.5 mtpa) are suitable options for monetisation of associated gas Micro and Mini LNG utilise Nitrogen or Single Mixed Refrigerant (SMR) refrigeration technologies LNG can serve as replacement for diesel or LPG in power stations or as transportation fuel in dedicated LNG-fuelled vehicles 15

16 Small Scale LNG Supply Chain 16

17 Small Scale LNG Examples 17

18 Small Scale LNG Examples 4 LNG fueled trucks transporting LNG from the 200tpd LNG plant (about 10 MMCFD) located 20km south of Karratha in Western Australia to 4 gas fired power stations at distances of between 850 1,450km from the LNG plant 18

19 Small Scale LNG Examples LNG Tankers 19

20 LNG or CNG? 20

21 Compressed Natural Gas (CNG) CNG involves compressing natural gas up to 250 bar to reduce the volume before transportation to market by trucks, trains or specialised ships Level of gas processing required is quite low gas must be sufficiently dew-pointed to avoid liquid dropout during compression CNG is stored in a cascade of cylinders referred to as a Gas Transport Module for transportation CNG also used as fuel for the transportation market widely in Pakistan, Iran, Brazil, India, Thailand and Argentina 21

22 CNG is Better for Depot Transport Systems 22

23 Gas to Liquids (GTL) Small-scale GTL plants are not currently field proven technologies in the industry The target product for small-scale GTL is synthetic crude which can be spiked into the main crude stream Application window for small-scale GTL is relatively limited and currently primarily driven by regulatory compliance 23

24 Gas to Liquids (GTL): Gas to Chemicals & Fuels 24

25 Gas to Wire Gas to Wire involves using stranded natural gas to generate electricity for own use or sale to local grid system Gas pre-treatment is minimal but should be examined considering both gas quality and flexibility of gas turbine or engine For extended well testing, power generation equipment can often be rented or leased Transporting by transmission line has greater social benefits than a gas pipeline 25

26 Thaketa 50MW Gas Engines Source: Irrawaddy.org 26

27 Combined Gas Field w/ Power Plant 27

28 Combustion Engine vs Gas Turbine Modularity - enhances flexibility and reliability Startup Time is faster with gas engine Gas turbine uses more water Gas engine needs no compression 28

29 Qualitative Ranking Pipeline New Infrastructure needed Cost Modularity Construction Time Gas Quality Compression Bankability Regional Social Benefits Development Plan Approval Product Price Maintenance Local Labor Availablity Regassification GTW Gas Engine Gas Turbine CNG LNG Small Scale GTL Legend 29

30 Thank You