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    By: ,

    By: ,

    17th INTERNATIONAL CONFERENCE & EXHIBITION

    ON LIQUEFIED NATURAL GAS (LNG 17)

    Freeport LNG Liquefaction Project

    By: Justin Capouch, CB&I

    April 16, 2013

    17

    th

     INTERNATIONAL CONFERENCE EXHIBITION ON

    LIQUEFIED NATURAL GAS (LNG 17)

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     A World of SolutionsTM 2

    Introduction

    Freeport LNG Regasification Terminal

    Brazoria County, Texas, USA

    2.0 Bcf/day send-out capacity

    Proposed liquefaction terminal

    Will be 2nd LNG export terminal in

    “lower 48” states 

    Export capabilities up to 1.9 Bcf/day

    Approximately 1% of U.S. tradedeficit

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     A World of SolutionsTM 3

    History

    Freeport LNG Regasification Terminal development initiated in the early 2000’s 

    US gas supplies were dwindling

    Large quantities of LNG imports expected by the late 2000’s 

    Freeport engaged a joint venture of Technip, Zachry, and Saipem

    Construction began in 2005 and was completed in 2008

    Commissioning cargo was received and the performance test was performed

    Since then, Freeport’s customers have only used the facility for storage and

    re-export

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     A World of SolutionsTM 4

    Market Conditions

    Natural Gas Production by Source

    (trillion cubic feet)

    Surplus of U.S. natural gas reserves

    because of Shale accessibility The US now has more than 100 years of

    natural gas supply.

    Lower gas prices long term make exporting

    natural gas economically attractive.

    Significant difference between lower US

    gas prices and higher international crudeoil-linked gas prices expected to remain

    long into the future.

    LNG buyers interested in diversifying

    supply and linking price to Henry Hub.

    Freeport LNG proximity to:

    Eagle Ford, Barnett, Haynesville-Bossier

    deposits

    Houston ship channel and Katy trading

    Hubs

    U.S. Natural Gas Pipeline Network,

    2009

    Source: EIA, Office of Oil & Gas, Natural Gas Division, Gas Transportation Information System

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     A World of SolutionsTM 5

    Health Safety & Environment

    Freeport LNG is committed to HSE as a Core Value

    Zero injuries since start up of the facility in 2008Ongoing training to identify and mitigate hazards

    CB&I and Zachry are also committed to HSE as a Core Value

    People and the Environment are our most valuable asset!

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     A World of SolutionsTM 6

    Environmental Challenges

    Concern Mitigation

    Erosion from ship traffic Recycle usable vegetation and replant along

    waterway to decrease erosionDestruction of plants in construction path

    Increased construction traffic

    Work only during limited time frames to

    minimize impact.

    Bussing employees to the island

    Waterway contamination from equipment

    spills

    Diligent equipment maintenance and spill

    prevention procedures

    Plant NoiseDetailed Sound studies to reduce impact of

    louder equipment

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     A World of SolutionsTM 7

    Existing Terminal

    Two full containment 160,000 m3 (1

    million barrels) LNG storage tanks

    Seven vaporizer trains capable of

    delivering 2.0+ Bcf/d of gas to intrastate

    pipeline connections

    Unique ambient air heating system to

    substitute fired heaters during warmweather periods

    State-of-the-art marine dock facility to

    accommodate largest LNG tankers built

    Nine miles of 42-inch pipeline totransport gas to pipeline connections at

    Stratton Ridge

    Underground gas storage cavern at

    Stratton Ridge (4.5 Bcf of working gas)

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     A World of SolutionsTM 8

    Expansion to Liquefaction

    Freeport LNG is well suited to develop a

    liquefaction project.

    A financially strong company with

    proven, experienced operating and

    management organizations.

    Utilization of FLNG’s existinginfrastructure represents an

    advantage of lower capital and

    operating costs compared to a grass

    roots facility.

    The FLNG terminal will be able toreact to domestic and global gas

    market fluctuations to

    import/vaporize or liquefy/export.

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     A World of SolutionsTM 9

    Facilities for Expansion

    Gas Pretreatment

    Liquefaction

    Additional LNG Storage

    2nd LNG Loading berth

    Additional Boil Off Gas Handling

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     A World of SolutionsTM 10

    Pre-Treatment Facility

    Metering

    Inlet Reception

    and Mercury

    Removal

    CompressionAcid Gas

    Removal

    Dehydration Compression

    Feed Gas

    from

    Pipeline

    Treated Gas to

    Liquefaction

    NGL Product to

    Pipeline

    NGL Removal

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     A World of SolutionsTM 11

    Liquefaction

    MAIN CRYOGENIC

    HEAT EXCHANGER

    TREATED

    GAS

    APCI C3MR Liquefaction Process

    1.9 Bcf/d of

    natural gas.

    Three propane

    pre-cooled mixed

    refrigerant trains

    4.4 mtpa

    per Train

    13.2 mtpa in

    aggregate

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     A World of SolutionsTM 12

    Terminal Transition

    Liquefaction technology: AP-C3MR (Air Products – Propane and

    Pre-cooled Mixed Refrigerant)

    Air Cooled, Electric Motor Drive Refrigerant Compressors

    Vessel Traffic: 200 Ships per year

    About 700MW of power

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     A World of SolutionsTM 13

    Challenges – Land Acquisition

    Leased 170 acres adjacent to the current plot

    Purchase of land adjacent to the existing pipeline for

    the pre-treatment facility

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     A World of SolutionsTM 14

    Challenges – Engineering Design

    Soil Conditions on Liquefaction Site Dredge Material Placement Area

    Extensive geotechnical studies performed

    All foundations will require piles

    Potential Storms All facilities designed to withstand a

    category 5 hurricane event

    All facilities grade levels set abovepotential storm surge

    Electrical System Design Working with Center Point

    for robust supply

    75 MW motors Variable speed drives

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     A World of SolutionsTM 15

    Regulatory Status

    Regulatory Agency Review Basis Submission

    Federal Energy Regulatory Commission (FERC) Environmental impact – requiredfor construction

    Department of Energy (DOE) Trade to non-FTA countries

    U.S. Department of Transportation (DOT) Safety, location, traffic

    Other Federal, State and Local agencies Varies

    Source: FERC, Office of Energy Projects 2/21/2013

    North American LNG

    Import/Export

    TerminalsProposed/Potential

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     A World of SolutionsTM 16

    Community Involvement

    Freeport LNG developed a good relationship with the local community

    during the construction of the existing terminal

    Freeport LNG has held

    several open house

    meetings to inform the

    public of its future plans

    and regularly keeps in

    touch with the local

    community elected officials

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     A World of SolutionsTM 17

    Project Status

    Liquefaction tolling agreements for Train 1volumes with Osaka Gas and Chubu Electric

    executed in July 2012

    Liquefaction tolling agreements for Train 2

    volumes with BP executed in February 2013

    Negotiating with potential customers for

    Train 3 volumes

    Completing FEED EPC Execution Plans near completion

     Arranging financing for the first two Trains

    Responding to data requests from FERC

    1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th

    Feed Agreement

    Formal FERC Application

    FEED Completion

    DOE Export Ruling

    EPC Proposal

    FERC Approval

    EPC Notice to Proceed

    Commence Construction

    Train 1 Operation

    2012 2013 2014 2015 2016 2017

    Freeport LNG Liquefaction Project Schedule

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      Future Liquefaction Facility