Nima Gtl Icb Presentation Akwa Ibom New 1

8/7/2019 Nima Gtl Icb Presentation Akwa Ibom New 1

1/16

NIMA ENERGY LIQUEFIED PETROLEUM GASAND GAS-TO-LIQUIDS (LPG/GTL) PROJECT

IN AKWA IBOM STATE, NIGERIAINTRODUCTORY PROJECT PROPOSAL

April, 2008


2/16

The Project

NIMA Energy is setting up an LPG/GTL facility adjacent to and east of the Exxon-Mobil Qua Iboe Terminal on the coast of Akwa Ibom State.

Under consideration are two plants:

Facility with EPC cost of $470 million Requires 150Million scf gas per day; yielding

600 tonnes/day LPG 10000 boe/d liquids, made up of

- 334 boe/hr diesel- 83 boe/hr naphtha

77 megawatts of electricity

Facility with EPC cost of $620 million

Requires 200Million scf gas per day; yielding 1000 tonnes/day LPG

17000 boe/day liquids, made up of- 564 boe/hr diesel- 149 boe/hr naphtha

86 megawatts of electricity


3/16

The Project Promoters

The promoters consist of experienced professionals andentrepreneurs with diverse background in oil and gas

exploitation, banking, finance, engineering and construction,

including

1. Owners: NIMA Energy

2. Consultants Kragha & Associates: Technical and overall co-ordination

International/Nigerian bank: Financial arranger


4/16

The Rationale National gas reserves 180 trillion scf. with total potential of 600 trillion scf.

Comprehensive gas policy now in place

Gas exploitation unbundled from crude

Incentives and tax holiday in place;

Equitable access to gas by non-asset owners (third parties)

Directive to end flaring by 2008

Plan to generate same revenue from gas as oil by 2010

Significant marginal field operators with no effective gas plans

Increasing global energy demand from China, India and Korea

Unmet local energy demand and importation dependence

Soaring global energy prices

Increased capacity of Nigerian financial institutions


5/16

The Technology

LPG is recovered from the gas stripping plant of the gas gathering system.

Gas to Liquids technology is a refining process, based upon the conversion of gasinto diesel and naphtha. In the process electricity is generated. from the plantstream. The process which employs a catalyst is proprietary and patented under theFischer- Tropsch Technology. Several oil majors have developed their own versionsof the process which are proprietary, and very few are available commercially.

Listed are the leading GTL companies

SYNFUELS

EXXON MOBIL SHELL

CHEVRON-SASOL SYNTROLEUM

RENTECH INTEVEP


6/16

The Technology Contd For this project, NIMA has chosen the Rentech Technology. NIMA will be working with

* Jacobs Engineering Consulting out of the UK as its technical partners for Design,Construction and Operations. The production technology is proprietary, and Jacobs hasexclusive right to the deployment of the Rentech Technology.

Jacobs will provide all the technical details and the production output for the proposedplants, which are being used for the financial projections.

Jacobs design is based upon two production modules, one with a capacity for 10,000 bpd

and the other with a capacity of 17,000 bpd. They will provide a warranty on the processand technical integrity of the plant.

The financial analysis has considered both modules, which will also help for futureexpansion

Discussions have also been held with Synfuels and Syntroleum

The oil majors keep their technology for their own use only.

* Details about Jacobs qualifications and experience are in a separate file


7/16

The Products & Market

The output from the processes are

Diesel LPG Naphtha Electricity

The main and focused revenue earners are diesel and LPG Global demand for diesel 35 million bpd growing at 5-7% per year

Current local consumption of diesel at 17 million lpd up to 20 million LPD in 2 years 4 Local refineries producing at 25% capacity 18 licensees for crude oil based refineries revoked in March 2007 Significant drop in LPG consumption to .82kg per capita. Consumption potential 4kg per

capita. Over 5OO,000 mt per year required locally.4 refineries produce less than 80,000mt per year Unmet local energy demand and importation dependence

Only one local GTL Refinery. Chevron-Sasol $1,3 billion facility in Escravos, to be completedin 2008.

Once project feasibility is concluded we are confident of securing long term contract offtakers.

Project location close to export terminal to serve both domestic and offshore markets


8/16

Development Strategy

In consideration of mitigating against gas flaring at first oil by the marginal fields

cluster operators, following is envisaged development plan.

Gas gathering and stripping system with LPG extractor

Prior to GTL plant commissioning use dry gas for electricity generation

After GTL plant commissioning

- use dry gas for liquids production

- use steam for electricity generation

A convertible electricity generator would be cost effective for the switch from (dry)

gas fuel to steam


9/16

Financing plan

Project fund of $620 million through equity funding, loan financing orcombination of both;

From FDI and local banks

OR

FDI, with Nigerian bank guarantees

As of date, arranger to raise both senior and subordinated debt on behalf of theproject has been secured. The transaction structuring, development of aninformation memorandum and financial model is in progress.


10/16

FINANCIAL ANALYSISASSUMPTIONS

Base Case

PLANT PLANT A PLANT B

Production Capacity (Bpd) 10,000 17,000

Design Capacity (Scf)/Day 150,000,000 200,000,000

Operating days per Year 330 330

Cost of Feed Stock ($ per Day) 150,000 200,000

Operating Expenses ($ per day) 100,000 150,000

Plant Life (Years) 15 15

Construction Period (Years) 2 2

EPC COST $ 470,000,000 $ 620,000,000


11/16

Production Capacity

Naphtha Production (barrels per hour) 83 149

Diesel Production (barrels per hour) 334 564

LPG (tonnes per day) 600 1000

Electricity Generation (megawatts) 77 86

Product Prices

Diesel Price - $ per barrel 94.58 94.58

Naphtha Price - $ per barrel 60.11 60.11

LPG - ($ per tonne) 900 900

Electricity price$5M peranum $5M per anum


12/16

17,000 BP @ CURRENT MARKET PRICES 10,000 BP @ CURRENT MARKET PRICES

P R OJE C T N P V 1 2, 266, 361 , 87 0 .29 2, 21 9, 948, 959.80 P R OJE C T N P V 9, 7 35, 445, 858.59 1 , 629, 0 0 5, 40 0 .40

P R OJE C T I R R 1 25% 7 7 % P R OJE C T I R R 1 31 % 7 7 %

5YE A R N P V 1 , 1 81 , 996, 496.24 399, 238, 7 58.54 5YE A R N P V 90 8, 20 1 , 7 63.58 30 2, 398, 954.25

5YE A R I R R 98% 54% 5YE A R I R R 99% 54%

7 YE A R N P V 3, 599, 0 40 , 898.82 1 , 1 56, 528, 41 2.1 6 7 YE A R N P V 3, 350 , 0 7 7 , 1 87 .0 8 859, 27 4, 7 34.21

7 YE A R I R R 1 21 % 7 3% 7 YE A R I R R 1 27 % 7 4%

1 0 YE A R N PV 6, 1 61 , 1 1 6, 357 .21 1 , 57 2, 0 66, 348.97 1 0 YE A R N P V 5, 249, 30 7 , 1 42.45 1 , 1 62, 994, 542.88

1 0 YE A R I R R 1 24% 7 6% 1 0 YE A R I R R 1 29.7 9% 7 6.0 0 %

FI N A N C I A LS N P V & I R R

Closing -- balance -- opening Closing - balance -- opening


13/16

17,000 BPD @ 50% REVENUE REDUCTION 10,000 BPD @ 50% REVENUE REDUCTION

P R O JE C T N P V 3, 0 22, 40 6, 1 0 1 .96 289, 1 21 , 67 6.48 P R O JE C T N P V 2, 347 , 27 6, 825 .5 7 1 92, 669, 25 5 .60

P R O JE C T I R R 47 % 23% P R O JE C T I R R 5 0 % 22%

5 YE AR N P V -323, 891 , 993.1 2 -390 , 37 2, 0 80 .1 7 5 YE AR N P V -21 2, 0 23, 7 92.5 8 -284, 989, 984.0 4

5 YE AR I R R -1 8% -31 % 5 YE AR I R R -1 4% -30 %

7 YE AR N P V 233, 21 7 , 67 0 .7 2 -1 5 2, 264, 37 0 .29 7 YE AR N P V 334, 631 , 85 8.7 4 -1 1 4, 331 , 965 .7 4

7 YE AR I R R 25 % 6% 7 YE AR I R R 32% 6%

1 0 YE AR N P V 980 , 7 94, 344.36 20 , 20 9, 866.38 1 0 YE AR N P V 884, 0 62, 0 61 .5 7 8, 5 7 3, 5 45 .85

1 0 YE AR I R R 38% 1 6% 1 0 YE AR I R R 42.63% 1 5 .48%

FI N AN C IALS N P V &I R R

Closing - balance -- openingClosing - balance -- opening


14/16

FINANCIAL SUMMARY

At current market prices project viable with strong cash flows and revenue

generation Positive NPV and strong IRR

Potential limiting factor is the revenue stream. Cost are mainly fixed.

Sensitivity @ 50% reduction in revenue to cushion any fluctuation in prices

No historical correlation between oil and gas price fluctuations. Input is gas.

At 50% reduction NPV & IRR still positive Futures market positive on oil and gas pricing and provides avenue tohedge risk.

Start with the 17,000 bpd module; EPC cost of $620Million

Based upon the above the critical success factor is the ability to raise 7-yearproject finance to support the project and cushion any impact of price

fluctuations and cover the two year construction period.

NB: Due to heavy work load in fabrication yards all over the world,construction period now extends over three years. However, LPGfrom stripping could commence within 24 months fromcommencement of project take off.


15/16

Where we are

Concluded market survey Completed economic business plan Secured financial arranger as of April, 2008, but now need new financier for

$178 million. Identified location, commenced process of land acquisition Put on hold process to obtain regulatory approvals, until gas supply source is

firmed up. Gas supply arrangements dislocated by NNPC Gas Masterplan; aggregator tofacilitate supply.

Arrangement to sign on Jacobs Engineering Limited as technical EPCconsultants, also to obtain process technology rights on hold until gas supplyis firmed up.

NB: Land acquisition, permit to establish plant, gas supply and productsoff-take contracts and contracting of technical consultant will bepursued vigorously and expeditiously once the indicative off andmandate letter the funding arrangements are in place.


16/16

NEXT STEPS

FIRM UP GAS SUPPLY SOURCE(S) AND CONTRACT(S) (THROUGH GASAGGREGATOR).

COMPLETE, FIRM UP AND CONCLUDE FUNDING AND FINANCIALARRANGEMENTS.

ENGAGE JACOBS ENGINEERING LIMITED AS TECHNICAL CONSULTANTS FORCONCEPTUAL DESIGN, FEED, ETC; SIGN ON FOREIGN PRODUCTS OFF-TAKERS,IF NEED BE.

PURSUE AND CONCLUDE LAND ACQUISITION, CONDUCT EIA AND PREPARATORYDEVELOPMENT

FIRMLY APPLY AND OBTAIN PERMIT TO BUILD PLANT

GET ON WITH DETAILED PROJECT DEVELOPMENT ACTIVITIES AND PROGRAMME

Nima Gtl Icb Presentation Akwa Ibom New 1

Documents

Transcript of Nima Gtl Icb Presentation Akwa Ibom New 1