Scoping Study Highlights Chad Liquefied Natural Gas (LNG) Project

Transcription

1 Scoping Study Highlights Chad Liquefied Natural Gas (LNG) Project CHAD LNG PROJECT SCOPING STUDY HIGHLIGHTS A long-term significant Investment Prefeasibility study to begin to evaluate the project optimisations, resource and expansions CASETRA Limited and its central Africa regional bureaux is pleased to announced that the scoping study demonstrate the company s planned LNG Project in the republic of Chad which will provide significant longterm cash- flow for a modest capital outlay. Disclaimer This presentation includes forward-looking statements, based on information and assumptions we know now. They are subject to risks and uncertainties, many of which are outside our control. Actual results may differ from the forward-looking statements in this document. For example, our results will be affected by: general economic conditions; future capital requirements and our ability to raise that capital; exploration and development risks; operational risks; personnel risks; regulatory risks; environmental risks. The information in this document does not take into account investment objectives, further suggestions or particular needs. It does not contain personal advice but information from our studies and various agencies in this presentation. Pre feasibility study remains the best way of confirming definite and/or more accurate resources details. Page 1

2 CASETRA Limited holds 100% Chad LNG development rights for this Project and proposes development of natural gas activities in Chad with high certainty. Competent Agencies The information in this report that relates to Exploration Results, Resources and Natural Gas Reserves is based on information compiled by (BRMG), (UNDP) (BRMG), and independent consultants (in regard to Natural Gas Claim) all with sufficient experience that is relevant to the style of mineralisation and types of deposit under consideration and consent to inclusion of the information in this report in the form and context in which it appears on international data qualify as Competent Persons and agencies as defined in the Edition of the world Known Natural Gas Reserves Code for reporting of Exploration Results, of Known Natural Gas Reserves and Deposits. The company CASETRA Limited is an Australian based company with representatives throughout Central Africa since The Company is currently developing integrated Mining projects in the region to enhance the mining sector through investment initiatives and project development. The Republic of Chad Chad is a landlocked country in north-central Africa, with a total area of 1,284 sq Km and sq Km in land. Its neighbours are Niger, Libya, Sudan, the Central African Republic, Cameroon, and Nigeria. Lake Chad, from which the country gets its name, lies on the western border with Niger and Nigeria. In the north of the country is a desert that runs into the Sahara (Sahara Desert). With land boundaries of 5,968 Km with Cameroon, 1,094 Km with Libya, 1,055Km with Central Africa Republic, 1,197 Km, Niger, 1,175 Km, with Sudan 1,360 Km and Nigeria 87 Km, the past decade have seen Chad relatively entertaining good relationship with its neighbours which in turns promotes peace and stability in the region and encourage investment. Page 2

3 Divided onto 14 regions, with a population less than 11 million, the country cultural diversity is high of its population. With over 200 ethnic groups, 51% Muslin, Christian % and 12% animists; predominantly French speaking Arabic is also known as one of the country s official language. Project Details Chad LNG project scoping study was designed to assess the viability of resources and processing in the potential zone and processing rates ranging from one to three million tonnes per annum were investigated to assess the project s optimal scale. Further processing and exploration upside potential will be assessed during the prefeasibility study to refine the project s operating and capital cost profile with key conclusions from the scoping study such as: Project Key parameters: Prefeasibility study Drilling of Indicated Resource and deposits Initial 15 year deposit life at a 1-3mt pa processing rate Initial project specific capital cost of A$2.8 billion 1200km pipeline construction to the Kribi port in Cameroon The scoping study confirms that the project has the potential to provide a steady long-term investment returns stream and secure additional prospective exploration and development projects. We believe optimisations as part of the prefeasibility study particularly the processing operating costs can provide an even more robust project. Optimisations of the current project in resource delineation and operating improvements as followed: (a) Evaluating the potential for natural gas within the existing deposit (b) Upside potential from resource drilling and resource definition. (c) Evaluating alternative leaching methods and technologies these elements will be studied in the prefeasibility study Chad Oil and Gas: Exploration for oil and gas began in the 1960s in the Chad Basin, with the first oil discovery being made in Fifteen years later the Sedigui deposit, in the Kanem Basin, was discovered by a consortium controlled by Esso, with Shell and Elf as partners. The Sedigui deposit has estimated reserves in the order of 150 Mbbl and is currently being developed by the Société d Etudé et d Exploition de la Raffinerie du Chad (SEERAT). In 2005 Sedigui has shown some interest and was expected to be on stream later that year. The government holds a 51% interest in SEERAT, along with Esso 18.4%, Shell 18.4% and Elf 12.3%. Crude oil will be exported through a new 1,200km pipeline which crosses Cameroon to the newly constructed terminal at the Atlantic port of Kribi. Extensive exploration has also been conducted in the Doba and Doseo Basins in southern Chad where reserves were first discovered in 1989 by Conoco. The Esso, Shell and Elf consortium identified oil deposits in the Lower and Upper Cretaceous detrital sediments of the Doba Basin and its eastern extension, the Doseo Basin. Preliminary geophysics and drilling tests have indicated reserves amounting to 500 Mt of oil and 510,000 million cubic metres (c m) of natural gas. Further evaluation is under way in order to Page 3

4 define the deposits characteristics. The Erdis Basin was explored for hydrocarbons by the Petropar/SNPA consortium during , but the results have never been released. Chad Natural Gas Reserves: Chad has not natural gas reserve recorded under the world known reserves our sources indicate; they have been recent discovery of potential natural gas in the south of Chad near the Cameroon boarder which confirmed the need for further study. While this project in conjunction with future exploration aimed at first buying raw gas from petroleum companies operating locally, and the next stage on exploration. As LNG market matured, CASETRA's primary focus is ensuring that LNG development proposals are: consistent with good practice, safe; meet stringent environmental standards; benefiting Chad economy and community; and those regulatory approvals are carried out in an efficient and consistent manner. Financials: Costs have decline in the LNG industry in recent years, according to the Gas Technology Institute (GTI), liquefaction costs have decreased 35 to 50 percent over the past ten years, with plant capital costs decreasing from more than US$500 per ton of annual liquefaction capacity to less than US$200 for trains at existing plants. Building costs for LNG tankers have decreased from about US$280 million (nominal) in the mid-1980s to about US$155 million in late Re-gasification terminal costs have also fallen, though costs tend to be sitespecific and can range from US$100 million to more than US$2 billion. LNG projects are among the most expensive energy projects. Accurate data on LNG plant costs are difficult to pinpoint since costs vary widely depending on location and whether a project is Greenfield, i.e., built in a new location, or an expansion of an existing plant. There are four main price components of an LNG project, from the gas field to the receiving terminal: Gas production: from the reservoir to the LNG plant, including gas processing and associated pipelines (15 to 20 percent of costs); Liquefaction Costs: The largest cost component in the LNG value chain is the liquefaction plant, which consists of one or more trains, or production units. LNG plant costs are typically high relative to comparable energy projects for a number of reasons, including remote locations, strict design and safety standards, large amounts of cryogenic material required, and a historic tendency to overdesign to ensure supply security. According to our team, construction of a liquefaction plant that annually produces 195 Bcf (2-4 million tons) of LNG could cost $900 million to $1.5 billion. Roughly half of that amount is for construction and related costs, 30 percent is for equipment, and 20 percent is for bulk materials. The liquefaction trains account for approximately half the costs of operating an LNG plant, storage and loading facilities for 24 percent, utilities 16 percent, and other facilities account for the final 11 percent. An independent consultant estimates that generic liquefaction costs amount major economies of scale have been achieved by increasing the size of liquefaction trains, therefore requiring fewer trains to achieve the same output Other factors driving costs downward include: Page 4

5 Reduction of over-design margins; Larger and fewer storage tanks; Improved technology, e.g., gas turbines, larger axial compressors, multiple compressors, turbines on a single shaft; Improved engineering techniques; and competitive lump-sum bidding Most ships are dedicated to particular LNG projects and are owned by LNG importing and exporting companies or shipping companies. Independent shipping companies own only about a dozen ships in the LNG tanker fleet. LNG shipping costs are determined by the daily charter rate, which is a function of the price of the ship, the cost of financing, and operating costs. There is no set market for LNG tanker rates, as there is for crude oil tanker rates. Charter rates vary widely from as low as US$27,000 per day to as high as US$150,000. Today the average rate for long-term charters is between US$55,000 and US$65,000. LNG shipping costs expressed in dollars per million But are distance- and time-sensitive. Although the average price of purchasing an LNG tanker is difficult to determine, our team estimates that the average price of a 138,000-cubic-meter-ship (which carries 2.9 Bcf of natural gas) in 2004 was US$155 million, down from a peak of US$280 million (nominal) in the mid-1980s not bad. The main factor driving down prices is an increase in the number of shipyards that can build LNG tankers, which enhances competition. Perhaps the most important savings would come from the emergence of a merchant fleet that could precipitate a more active short-term market with flexible trading. A more fuel-efficient propulsion system could also produce economies in transportation costs. Re-gasification Terminal Costs: The costs of building re-gasification or receiving terminals show wide variation and are very sitespecific. An estimated on terminal costs can range from US$100 million for a small terminal to US$2 billion or higher for a state-of-the-art Japanese facility. In Australia, most new terminals are estimated to cost US$200 to US$300 million for a send out capacity from 183 to 365 Bcf (3.8 to 7.7 million tons) per year of natural gas. By far the most expensive items in a terminal are the storage tanks, which can account for one-third to one-half of the entire cost, depending on the kind of tank. The tank type, in turn, is dictated largely by location and local regulatory requirements. Marine facilities are another major cost item, especially if significant dredging of the ship channel is needed, which could add as much as US$100 million to the cost of the terminal. In Australia, the general assumption is that re-gasification will add US$0.30 per million Btu to the price of the imported LNG. Requested budget will be at USD$2.5 billion from start to finish all includes. Page 5

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