LNG FUELING SYSTEMS AND LOGISTICS

Transcription

1 LNG FUELING SYSTEMS AND LOGISTICS NATURAL GAS POWER FOR SHALE DEVELOPMENT USING NATURAL GAS POWER FOR DRILLING AND HYDRAULIC FRACTURING SEPTEMBER 5, 2013

2 Conceptual, Confidential and Proprietary 1

3 Agenda Introduction to Prometheus Natural Gas Fueling from LNG - Opportunity Drivers - LNG Fueling Logistics - Why LNG Fueled Drilling - Why LNG Fueled Fracturing 2

4 Who is Prometheus Energy? SPECIALIZING IN NATURAL GAS FUEL SUPPLY SOLUTIONS VIA LIQUEFIED NATURAL GAS (LNG) Formed in 2009 predecessor company a liquefaction technology play Headquartered in Houston, Texas Operate today in US & western Canada Offer vertically integrated LNG solutions with a focus in the oil and gas, mining, power and process sectors An on-going, fundamental commitment to Quality, Health, Safety & the Environment Privately held--major Shareholders: - Shell Technology Ventures Fund 1 BV (June, 2009) - Black River Asset Management (September, 2008) 3

5 We bring a turnkey LNG supplychain for remote natural gas LNG Fuel Supply - Transportation - Logistics Natural Gas In LIQUID Natural Gas Out Liquefaction - LNG supply network located throughout North America - Access to 350k gpd capacity Portfolio of Onsite LNG Equipment - LNG storage & regasification Prometheus Energy s Turnkey Solution BUSINESS CONFIDENTIAL LNG Fueling for: Drilling Rigs Frac Spreads Mine Haul Process Heat Power 4

6 Why natural gas? A wide and sustained NG-Diesel spread U.S. Hydrocarbon Pricing--Last 16 Years $ per MMBTU $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- NG v Diesel Spread Spot Propane Spot ULS Diesel Henry Hub Natural Gas Economical spread between diesel and natural gas Diesel $20+/MMbtu NG: <$5/MMbtu Stable Price, now and projected Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Data Source: EIA.gov; National Average Wholesale Pricing for Liquids; National Average U.S. Henry Hub NG Pricing CLEAN ABUNDANT LOCAL Data Source: ANGA 5

7 Our market is established and growing at over 100% per annum Prometheus Growth & Reliability Deliveries 2009 To Date Number of LNG Truckloads per Month Volume to date (lng gal) >51.1 million 1 st Rig J-09 M-09 M-09 J-09 S-09 N-09 J-10 M-10 M-10 J-10 S-10 N-10 J-11 M-11 M-11 J-11 S-11 N-11 J-12 M-12 M-12 J-12 S-12 N-12 J-13 M-13 Delivery Count (Truckloads) >4,800 deliveries Delivery Reliability Rate >99.9% Recent Highlights 15+ active LNG fueled drill sites and 4 active or completed bifuel frac application First turbine powered fracturing pilot in field (Jan) First Canadian rig fueled (Mar) 3 new rig contracts awarded in Mid Continent (May) (operating) 3+ new rigs contracts awarded in Marcellus (June) Supply of 3 bifuel fracturing operations (Q1 Q3) Supported successful drilling of ~500 wells with LNG fuel solution Fueled frac pumps for the completion of over 600 stages Location Eagle ford Marcellus Rockies 6

8 1 LNG Supply Summary (x,000 gpd) 2 Logistics Balancing variable demand with reliable supply LNG Transport Fleet & Logistics Command Center End of 14, >50 LNG road transports x 7 logistics coverage Onsite LNG Storage & Inventory 4 Management Multiple Sources for each Customer - 3 to 5 days onsite storage for heavy burn days. - Daily site visit by tech, inventory reading, communication of key operations, and telemetry Business Confidential 7

9 What does a LNG fueled drilling solution look like? Quantifying the Opportunity Diesel Price is ~$3.50/gal and climbing An all-in delivered turnkey LNG fuel solution is per DGE Assuming an average daily diesel consumption of 1,500 gallons per rig,the savings are $ to $ /day-rig This translates to $ k to $500k in fuel savings per year per rig. Multiply that over a fleet of 5 rigs => $ to $ million per year Conceptual, Confidential and Proprietary 8

10 What does a LNG fueled hydraulic fracturing application look like? Quantifying the Opportunity Diesel Price is ~$3.50/gal and climbing An frac all-in turnkey LNG fuel solution is $ to $ per DGE (cheaper than drilling on DGE basis due to higher fuel consumption) Assuming 80 diesel gal/hr-pump peak, 16 pump spread, 2 hour stages, 5 stages per day = 12,800 diesel gallons per day With an average displacement of 55%, this translates to a displacement of ~7k DGE per frac day. The resulting savings is $_K to $_k per Frac Day Assuming Frac days a year, one would anticipate annual fuel savings of $ to $ million per converted spread. Conceptual, Confidential and Proprietary 9

11 Conclusions NOTICE the Dancing Bear! Safety: Success Dedication to Safety Practice a culture of safety through maintaining, communicating and implementing its QHSE programs Economics: Success Up to $_ million savings per rig; $ million per frac spread Operational Performance: Success Commercially proven, operationally reliable LNG Supply Network: Success Diverse supply network capable of economically and reliably serving US market BUSINESS CONFIDENTIAL 10

12 Questions?? Mike Fradette Business Development Manager Houston Office (HQ) Prometheus Energy Group, Inc Richmond Ave, Suite 450, Houston, TX (o) Integrated LNG Fuel Solutions BUSINESS CONFIDENTIAL 11