Design Considerations for Your Next, Small-Scale LNG Project

Design Considerations for Your Next, Small-Scale LNG Project Robert R. Huebel Santiago, Chile Oct. 28-29, 2015 A World of Solutions 0

Safe Harbor Statement This presentation contains forward-looking statements regarding CB&I and represents our expectations and beliefs concerning future events. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forwardlooking statements involve known and unknown risks and uncertainties. When considering any statements that are predictive in nature, depend upon or refer to future events or conditions, or use or contain words, terms, phrases, or expressions such as achieve, forecast, plan, propose, strategy, envision, hope, will, continue, potential, expect, believe, anticipate, project, estimate, predict, intend, should, could, may, might, or similar forward-looking statements, we refer you to the cautionary statements concerning risk factors and Forward-Looking Statements described under Risk Factors in Item 1A of our Annual Report filed on Form 10-K filed with the SEC for the year ended December 31, 2014, and any updates to those risk factors or Forward-Looking Statements included in our subsequent Quarterly Reports on Form 10-Q filed with the SEC, which cautionary statements are incorporated herein by reference.

A World of Solutions 2 Presentation Overview Introduction Definition of Small Scale LNG Small Scale Applications Typical Small Scale Project Peak Shaver Project Design Considerations Typical Project Economics Wrap Up & Summary

CB&I Overview Founded in 1889 Listed on NYSE Full Service Technology & EPC Company Focused on Energy Infrastructure Oil & Gas Refining Petrochemicals Power 60 Offices & 54,000 Employees Worldwide Exemplary Safety Record 3

Recent South America Experience Project Description Location Comp GNL Quintero SA LNG Import Terminal Chile 2010 Peru LNG LNG Liquefaction/Export Peru 2010 Pluspetrol Peru Camisea Gas Plant Tr #5 Peru 2012 Refineria de Cartegena Refinery Expansion Colombia 2015

CB&I LNG Experience

CB&I LNG Experience Long Heritage in LNG Industry (50+ Years) Experience Includes Base Load Liquefaction Export Terminals Import Terminals Storage Regasification Small Scale Scope includes: Expansions Revamps Grassroots FEEDs Turnkey EPC 6

CB&I LNG Firsts Canvey Island, UK Designed and constructed the world s first double wall LNG storage tanks on Canvey Island and in Lake Charles in 1958 Designed and constructed world s first peakshaving plant in 1965 Pine Needle, USA Designed and constructed the first marine LNG storage and distribution terminal in the United States in 1971 Das Island, UAE Designed and built world s first full containment 9% Ni steel and concrete LNG storage tanks in 1986 Built the largest LNG peakshaving plant in southeastern US in 1999 7

Recent Experience Base Load Liquefaction & Export Peru LNG Location: Peru Capacity: 4.45 mtpa Scope: EPC Status: In Operation Freeport LNG Location: USA Capacity: 13.2 mtpa (3 trains) Scope: EPC Status: In Progress Cameron LNG Location: USA Capacity: 13.5 mtpa (3 trains) Scope: EPC Status: In Progress Mozambique LNG Location: MozambiqueCapacity: 12 mtpa (2 trains) Scope: FEED Status: In Progress Golden Pass LNG Location: USA Capacity: 15.6 mtpa (3 trains) Scope: FEED Status: In Progress Goldboro LNG Location: Canada Capacity: 10.0 mtpa (2 trains) Scope: FEED Status: In Progress Rio Grande LNG Location: USA Capacity: 13.5 mtpa (3trains) Scope: FEED Status: In Progress 8

What Is Small Scale LNG? Onshore Baseload FLNG Small Scale 4.0 6.0 mtpa/train 1.0 4.0 mtpa Less than 0.5 mtpa 10

Small Scale LNG Applications Peak Shaving Backup fuel Stranded Gas Development Satellite Gas Distribution Virtual Pipeline Off grid communities Mine Sites Drilling Rigs Power Generation Transportation Marine Containerships Ferries Tugboats Heavy Haul Trucks Locomotives Buses 11

Example of Small Scale LNG - Peak Shaver PURPOSE: OPERATORS: Liquefy NG during off peak periods, for use at later high demand peak periods (backup fuel) Pipelines, Electric Utilities, Industrial Customers (Refineries, Petrochemical, etc) PLANT: FEEDSTOCK: Memphis Light, Tennessee, USA Pipeline Gas CAPACITY: Liquefaction : 5.5 MMSCFD (0.04 mtpa) Vaporization: 100 MMSCFD FACILITY DESCRIPTION: The plant includes: Pretreatment Liquefaction system LNG Storage - 290,000 barrel (28,000m 3 ) Sendout and vaporization system Truck unloading/loading station Fire protection and all plant ancillary facilities

Small Scale LNG - Peak Shaver

Typical Block Flow Diagram Small Scale LNG PEAK SHAVING FACILITY TAILGAS TAILGAS COMPRESSOR SENDOUT TAILGAS HEAVIES REGEN CO2 VENT NATURAL GAS PIPELINE METERING FEED PRETREATMENT CLEAN GAS LIQUEFACTION LNG FEED GAS REGEN GAS BOILOFF BOILOFF STORAGE VAPORIZED GAS SENDOUT LNG BLOCK FLOW DIAGRAM 14

Small Scale LNG Project Design Considerations A World of Solutions

Design Considerations Major Influences on Project Economics CAPEX OPEX Reliability Operability Profitability 16

Feedstock Pipeline Gas Use existing infrastructure Closer to users/consumers Already some degree of pretreatment Specifications may be very broad Raw Gas Often stranded/remote Limited infrastructure Farther from users/consumers May require more pretreatment 17

LNG Product Specifications No Universal LNG Specifications Dependent Upon Ultimate Use Peak Shavers Typically feed gas is pipeline quality Regas produces essentially same quality Transportation Locomotives, heavy haul, buses Typical spec in USA 97% C 1 Marine 1% C 2 2% N 2 (max) No HHCs No oils, particulates Constant quality High methane number 18

Liquefaction Technology Selection Single Mixed Refrigeration (SMR) Nitrogen, methane, ethylene, propane, pentane, and others as required Pre-Cooled Option Turboexpander Cycles Turboexpander Cycle + Precooling Dual Expansion Cycles Pre-Cooled Dual Expansion Cycles Nitrogen Proprietary or Open Art 19

Technology Selection SMR vs Turboexpander SMR Expander Applicability for Small Scale LNG High Pressure Feed Gas Flexibility for Feed Gas Composition Changes Efficiency Ease of StartUp/Operability CAPEX OPEX 20

Pretreatment Removal of Contaminants CO 2 H 2 S HHCs (C 4 +, BTEX, etc) H 2 O HG Process Options Amines Molecular Sieve 21

Site Selection Land Requirements Relatively small 5 15 acres Process Area Less than 5 acres Overall Requirements Usually Set By Infrastructure Storage Flare Truck Loading Office/Warehouse 22

Utilities Conversion of Natural Gas to LNG Requires Significant Energy Electric Power Grid On Site Power Generation Key Consumer: Refrigerant Compression Fuel Gas Key Consumers: Pretreatment Refrigerant Compressor Cooling Medium Air Seawater Freshwater 23

LNG Storage Capacity Key CAPEX Driver Higher capacities will favor field erected API tanks Single containment Double containment Full containment Lower capacities will favor shop fabricated vessels Spheres are sometimes an option, either field erected or shop fabricated Storage volume will be dependent upon LNG production Reliability of feedstock Reliability of utilities Logistics of LNG product distribution 24

Refrigerant Compressor Selection Key Decision Parameter Affecting CAPEX OPEX Primary Utility Consumer Reliability Operability Maintenance Turndown Drivers Electric motor Gas turbines Gas Engines Compressors Centrifugal Reciprocating 25

Refrigerant Compressor Selection With Electric Motor Drivers Approximately 95% - 98% of feed gas energy content converted to LNG With Gas Turbine Drivers Approximately 80% - 88% of feed gas energy content converted to LNG Factors Affecting Feed gas conditions: composition, pressure, temperature Plant capacity Site conditions Contaminants CO 2 N 2 26

Standard or Custom Design Available in Standard capacities 50,000 gpd 100,000 gpd 200,000 gpd 400,000 gpd 1,000,000 gpd Industry Standard Specifications Benefits Often available for lower costs, since engineering costs have already been capitalized Schedule may be reduced, depending upon overall critical path Negatives Customer may purchase more plant that he needs May not meet local/customer requirements/specifications Reduced optionality Consideration for local maintenance/service 27

Degree of Modularization Small scale LNG projects typically modularize well Small diameter piping Small equipment Adequate space for operations/maintenance Sizes suitable for road transport, 25 100 mt Standardization of designs Benefits of Modularization Include Improved Safety Better Quality Shorter Schedules Lower Cost Reduced Project Risks Site Labor Weather

Other Considerations Boiloff Gas System Fuel Tail Gas Control & Safety Systems Degree of Automation Staffing Truck Loading Number of Spots Hours of Operation Other Utilities/Offsites Flare/Vent System Firewater Instrument Air/N 2 Buildings Administration Warehouse 29

Other Considerations Regulatory Requirements Design Codes Local Regulations Environmental (Air & Water) Owner Design Standards (if any) Owner Life Cycle Requirements Plant Life IRR, ROC, Hurdle Rate Owner Preference For Vendors & Suppliers Class of equipment Pipeline Contractual Requirements Site Specific Issues Local Community Seismic 30

Schedule Typical Schedule 18 24 months ARO Modular Construction Standard Design Critical Path Storage Refrigerant Compression 31

In Summary NG use is expanding worldwide beyond traditional applications Small Scale LNG may be a viable option for many of these new applications Marine Heavy Haul Transportation Benefits of LNG compared to diesel or heavy bunker fuel may include Lower emissions Competitive or lower cost Project design considerations, typically made in early phase of development will have a significant impact on project viability & economics Development of Small Scale LNG Projects require close cooperation between Owner & Plant Designer to arrive at most optimum solution 33

Questions? Ignacio Bincaz CONTACT ICBincaz@cbi.com Office: +1 832 513 1236 Mobile: +1 713 254 7923 A World of Solutions 34