YEMEN LNG PROJECT UPDATE AVANCEMENT DU PROJET GNL DU YEMEN

Transcription

1 YEMEN LNG PROJECT UPDATE AVANCEMENT DU PROJET GNL DU YEMEN Mr. Jean-Paul Azalbert General Manager Dr. Khaled Muhsin Deputy General Manager Mr. Giovanni Santarsiere Deputy General Manager Mr. Philippe Hillaireaud Project Manager Mr. Mohamed AL Madani Deputy Project Manager Yemen LNG Company Ltd. Sana a Branch: P.O. Box 15347, Sana a Republic of Yemen ABSTRACT The paper presents an update of the situation of the Yemen LNG Project which has been substantially reengineered in year 1999 to reduce cost and increase capacity and for which Call for Tenders for the pipelines and plant EPC have been sent end April 2000 with answer received in the fall. RESUME La communication présente une mise à jour de la situation du Projet Yemen LNG qui a été l objet d une révision profonde en 1999 pour réduire les coûts et augmenter la capacité. Les appels d offres pour les contrats EPC des gazoducs et de l usine ont été lancés fin avril 2000 et les réponses reçues à l automne. Project mailing address : TotalFinaElf Yemen Lng Project Tour Michelet (Le Monge) Paris La Défense Cedex, France PS3-Sp.1

2 YEMEN LNG PROJECT UPDATE INTRODUCTION YEMEN LNG COMPANY LTD (YLNG) was created in 1995 to process gas coming from the Marib block fields inland Yemen and to sell LNG for a period of 25 years. The company will transport the feed gas from existing field production facilities to a grassroots LNG Plant on the Gulf of Aden, and deliver feed gas for domestic use in the Sana a area. A Board of Directors with directors representing all shareholders manages the Company. The Chairman of the Board is H.E. the Minister of Oil and Mineral Resources of the Republic of Yemen (MOMR). The Company is run by a General Manager and two Deputies and is staffed by personnel seconded from all Shareholders. Shareholders Committees carry out technical activities related to marketing, shipping, and financing. PROJECT OUTLINE PROJECT OUTLINE MMscfd - 14" km Nom. 5.3 Mt/y Design 6.2 Mt/y The YLNG Project includes : The LNG plant located in Bal-Haf on the Gulf of Aden Coast, approximately 160 km West of Al-Mukkala, 320 km South East of the gas producing field of Marib and 450 PS3-Sp.2

3 km East of Aden. The site selected is an ideal location to export LNG to India, Asia and also Mediterranean countries. A network of gas pipelines including a main gas line linking the producing fields in Marib area to Bal-Haf and a spur line bringing gas into Sana a. As will be explained later all upstream facilities are already in place, and this constitutes a decisive competitive advantage for this project. SHAREHOLDERS YLNG current shareholders are: % TotalFinaElf Yemen LNG LTD [TYLNG](lead shareholder ) YEMEN GAS COMPANY [YGC] YEMEN HUNT LNG COMPANY LLC. [YHLNG] EXXON YEMEN LNG COMPANY LTD [EYLNG] SK CORPORATION (formerly YUKONG) [SK] HYUNDAI CORPORATION SHAREHOLDERS 21% 36% HYUNDAI CORPORATION 5% 15.11% 8.38% 14.51% STRUCTURE In January 1997, the MOMR, YEMEN Gas Company and TOTALFINAELF in conjunction with ExxonMobil, Hunt, and SK Corporation, signed a set of Agreements defining the project contractual framework and involving the Yemen Government, Marib Production Sharing Agreement participants, Upstream operators, YLNG and its shareholders. PS3-Sp.3

4 These agreements cover gas development and supply, upstream operations, pipelines and LNG operations and provide a clear set of rules for the project. Two of the agreements were ratified by law in Yemen, in April 1997 establishing all critical terms: Fiscal terms Dedication of reserves Integration of upstream and downstream Control by YLNG of upstream gas operations UPSTREAM Under a Production Sharing Agreement with the MOMR, Yemen Exploration & Production Company the Upstream Operator is currently operating the fields of Block 18, located in the Marib area, approximately 190 km East of Sana a. The gas is processed for LPG extraction and condensate recovery, prior to reinjection, at the production units located at Alif Central Processing Unit and at Kamil Processing Unit. The field reserves of more than 10 TCF have been certified by DeGolyer and MacNaughton. They confirmed that the proven reserves are more than adequate to cover the Project requirements. UPSTREAM 10.2 Tcf Proven Gas Reserves Certified by DGMN Already Developed Dedicated to the Project 9 A total of about MMscfd of gas are currently being produced from 15 fields in the Marib area, most from major fields: Al Raja (condensate gas field), Kamil (oil field), Azal (oil field) and Alif (oil field). Some other smaller gas accumulations, already delineated but as yet not developed, will be put on production at a later stage in accordance with the Upstream Long Term Gas Delivery Plan. Future upstream facilities will be installed and/or modified to meet the LNG project requirement for quality and quantity of feed gas. PS3-Sp.4

5 Yemen Exploration & Production Company production sharing agreement is scheduled to expire in Arrangements are in place to transfer Bock 18 Operatorship to Marib Upstream Services Company (MSC). [This is a joint venture between Yemen Gas Company, (Lead Shareholder, 60%), Yemen Exploration & Production Company (30%) and YLNG (10%)]. PIPELINES The project will include three pipelines traversing widely varied topography and elevations: To feed the two liquefaction train LNG Plant, a 320 km long, 36" diameter Main Line will transport feed gas from Kamil to Bal-Haf at an initial flow rate of approximately 900 MMscfd. Additional flow rate can be obtained with the installation of an intermediate booster compression station. The 26-km long, 20" diameter Transfer Line transports gas between Alif and Kamil through a flat desert area of sand dunes at a flow rate corresponding to the requirements of the two train s LNG plant. The 175 km long, 14" diameter Spur Line will transport, for domestic use, gas from Alif to a delivery point North of Sana a at an initial flow rate of 100 MMscfd and with an ultimate potential flow rate of 250 MMscfd by installing future intermediate compressor stations.. PIPELINES AS SALIF SANA A HUNT PIPELINE AL HUDAYDAH MARIB BLOCK 18 MARIB CPU Spur Line: km Gas Supply to Sana'a 100 MMSCFD Transfer Line 26 km KPU KHARIR PIPELINE MASILA PIPELINE Main Line: km Gas Supply to LNG Plant 900 MMSCFD MUKALLA RED SEA AL MUKHA IBB TA IZZ NIMIR PIPELINE BAL HAF Two-Train LNG Plant Nom. 5.3 Design 6.2 Mt/y Export over 25 years ADEN GULF OF ADEN PS3-Sp.5

6 LNG PLANT The LNG Plant will be constructed on a 50 hectares site adjacent to the sea at Bal-Haf. It will be fully self-supporting, independent of any local infrastructure and will include administrative and maintenance buildings, camp facilities, process facilities, utilities, offsites and a marine terminal. BAL HAF LNG PLANT PROCESS FACILITIES The plant will be constructed with two liquefaction trains in parallel operating at least 335 stream days per year and will have all major process / product handling facilities required. In an effort to optimize design and minimize the unit production costs, the plant will be designed for production of up to 6.15 million metric tons. Plant capacity may be further increased at marginal cost after start up to 6.9 million tons per year by the addition of end flash units.the liquefaction process will use the APCI license and utilize an Optimized Compressor Arrangement whereby part of the mixed refrigerant high pressure compression load is transferred to the propane compressor shaft; The plant will be capable to produce LNG with a higher heating value between and Btu/scf. To support the operation of the LNG Trains, common facilities such as flares, power generation, cooling system, heating system, fuel gas system, nitrogen and compressed air systems etc. will be provided: Direct seawater cooling will be used and low-pressure steam will be used as heating medium. PS3-Sp.6

7 BAL HAF PROCESS FACILITIES 15 MARINE TERMINAL All the components of a self-sufficient LNG marine terminal will be installed, including a turning basin, a service vessel / tug berth and a marine base. A single berth will be installed to accommodate LNG carriers in the / m 3 range. ADEN MUKALLA FUEL STATION NORTH ROCK BLACK BARN CAMP GAS PIPELINE BURN PIT FLARE STORAGE LNG CARRIER GULF OF ADEN WATER INTAKE SEA WATER PUMPING WHARF TRAIN 2 TRAIN 1 UTILITIES ADMINISTRATION WATER OUTFALL PS3-Sp.7

8 ADMINISTRATIVE AREA This will include the following buildings: administrative building medical center training center maintenance workshop warehouse STORAGE LNG produced will be stored in to two storage tanks at a temperature of 162 degree Celsius The LNG net storage capacity, based on transportation studies, is m 3 in two m 3 tanks. CAMP FACILITIES The camp, located to the West of the LNG Plant will be specifically designed to house the permanent operation and maintenance teams during start up and subsequent operations. It will also be able to accommodate the increased manpower required during periodic plant turn around. YLNG CONTRACTING STRATEGY YLNG Contracting Strategy is designed to fulfill the following objectives: to select Engineering, Procurement, Construction and Commissioning contractors who will provide their specific LNG experience to design, procure, supply, erect and commission fit-for-purpose facilities. to obtain cost effective implementation through competitive bidding. to transfer to selected bidders long lead items directly procured by YLNG. to minimize construction time by pre-procuring long lead items, including site preparation. to facilitate financing by providing to the banking community the comfort of a fixed project cost with sound and capable contractors. PROJECT PLANNING The project will be implemented in three phases: PS3-Sp.8

9 Phase 1 : Phase 2 : Phase 3 : This is the Preliminary Phase, comprising the conceptual design work and the Front End Engineering Design and preparation of the calls for tenders as well as the conclusion of gas sales contracts and financing arrangements. The Construction Phase includes also detailed engineering and procurement phase. It extends from the date on which YLNG notifies the MOMR of its decision to proceed with Phase 2 until Commencement of Commercial Production and shall include all works related to engineering, procurement and construction. The Commercial Production Phase extends from the date of Commencement of Commercial Production, i.e. the date at which the first regular export of LNG occurs, and shall last at least 25 years. OVERALL PLANNING PHASE 1 PHASE 2 PHASE 3 FEASIBILITY STUDY Reserves Certification PROJECT DEFINITION Project status F.E.E.D. Project Launch Ready for start-up BID CYCLE E.P.C. IMPLEMENTATION FINANCING SALES CONTRACT ESTIMATED INVESTMENT START-UP FIRST LOADING 21 Extensive design, optimization, done in 1999, has reduced the overall cost of the Project Construction phase ( Phase 2) to around 2.2 billion US dollars (Q4 1998). This corresponds to a very competitive LNG plant unit cost. EPC costs based on the initial capacity are 215 $/T with an expected decrease to 203 $/t after debottlenecking. A period of approximately 41 months is planned between the launching of Phase 2 and the first shipment and detailed planning work is in progress to optimize this timeline. PS3-Sp.9

10 MARKETING YLNG is currently under discussions with several LNG buyers, both in India and in the Far East. In particular, negotiations are now at an advanced stage with an LNG importer of the West Coast of India. The competitiveness of the project in these markets and the good progress achieved in the commercial discussions give the YLNG sponsors strong confidence that a positive conclusion will be achieved soon. MARKETING PROGRESS Prevailing marketing situation gives strong confidence and motivation to YLNG shareholders In India : Positive developments and competitive situation towards strong Indian terminal projects to be launched in year 2001 Far East : Preliminary discussions are encouraging. The economic situation has improved and LNG demand is increasing. PS3-Sp.10

11 PROJECT STATUS YLNG has launched the call for tenders for project EPC contracts and long lead items, on May 1 st Bid assessments are presently in progress and fabrication slots for the Gas Turbines have been secured. PROJECT STATUS FEED studies completed EPC tenders sent 1/5/ 2000 EPC contract awards early 2001 Ready for production 2004 CONCLUSIONS The Yemen LNG project benefits from several competitive advantages: Middle East location outside the Gulf Well defined, developed, dedicated and certified proven gas reserves Full support of the Government of Yemen Fully integrated Upstream/Downstream project with all agreements in place Liquefaction equity available to buyers Financially and technically strong shareholders with longstanding LNG experience and well established operating records in Yemen It therefore constitutes a competitive and reliable source of supply, well positioned to meet future demand. PS3-Sp.11

12 CONCLUSIONS Upstream gas fields already developed Full support of the Government and people of Yemen Middle East location outside the Strait of Hormuz Liquefaction equity available to buyers PS3-Sp.12