project presentation · 2019-09-13 · confidentialpropertyof gnl québec inc. 2019. all right...

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Project presentation

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Confidential Property of GNL Québec Inc. 2019. All right reserved- 2by

Disclaimer

•The material contained in this presentation is intended to be general background information on the Énergie Saguenay Project being developed by GNL Québec Inc., a wholly owned subsidiary of GNL Québec Limited Partnership.

•The information is supplied in summary form and is therefore not necessarily complete. Also, it is not intended that it be relied upon by investors or potential investors, who should consider seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs.

•The material contained in this presentation may include information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information.

•Any financial information or forward-looking statements contained in this presentation are purely illustrative and should not be relied upon without independent verification.

Executive summary


Énergie Saguenay project

BRIEFLY


What is the Énergie Saguenay project?


The initiators: a complementary and world class shareholder


What is natural gas?

Natural gas comes from the slow decomposition of organic residues trapped under the surface of the earth

Natural gas has been used for decades, in Quebec and elsewhere in the world, safely and efficiently:

• Cooking food• Heating schools and public buildings• In the context of industrial processes requiring a large and controllable source of heat


What is natural gas liquefaction?

1. Receipt of natural gas by gas pipeline

2. Gas treatment

3. Gas liquefaction by giant refrigerators

• Cooled to about -162°C

• Volume reduced by about 600 times

4. LNG storage on site prior to export

5. LNG lines to the jetty

6. LNG Shipping to world markets


What is LNG ?

Once cooled to

-162˚C, gas becomes

liquid and its volume

is reduced by 600

times

LNG ISNATURAL GAS COOLED AT -162 ˚C

GAS LIQUID


Unique properties of LNG

Does not igniteeasily

Non explosive

Lighter than water

Not stored under pressure

Non toxic

Odorless


Overall Project Schedule

Environmentaland social studies

Public consultations

SEIA filing

Construction phase

Commissioning

Operations

Continuous exchange and consultation mechanisms


Unrivaled access to low-cost North American gas, coupledwith proximity to Atlantic Basin LNG markets

Best Access to Lowest Cost Gas : • Excellent access to diverse, low-cost gas from

Western Canada

• Significant excess pipeline capacity available from Western Canada

• AECO trading at Significant Discount to HH

Proximity to Europe : • 40% closer to Europe than US Gulf Coast

• Well positioned to serve LNG demand in the Atlantic Basin, India and the Middle East

Énergie Saguenay

Marcellus & Utica

Henry Hub

Dawn Hub


The most unique LNG asset in North America

Hydroelectricity Advantage• 550MW energy block secured

• Significantly lower OPEX/CAPEX

• Hedge against natural gas price increases

Low Cost, Low Risk• Competitive EPC CAPEX

• Existing local infrastructure

• Available skilled labor

Cold Weather / Electricity• 10-15% improvements in thermal efficiency, plant

capacity and CAPEX/OPEX, and GHG reductions

Lowest GHG Emissions• 85% less CO2 than existing & proposed plants.

• Global GHG reductions

Sustainable Energy Project• Local economic spinoffs

• Global GHG reductions

• Compact plant footprint leading to reduced environmental impact

• Shorter shipping distances

Province Familiar with LNG• 2 import terminals approved

• 1 existing LNG facility in Montreal

GNL

Global natural gas and LNG markets


Global electricity production by source

EVOLUTION OF GLOBAL ELECTRICITY PRODUCTION

BY ENERGY SOURCE (%)

Natural gas

Nuclear

Hydraulic

Others

Coal

Oil


Long term market trends favor GNL Québec project

Fight against emissions in Asia

Several Asian countries are reducing their reliance on coal and increasing their gas/LNG import to reduce their emissions (e.g. China is creating the world’s largest carbon market).

European energy sources

Diversity of Supply

Europe expects to import 85%of its gas consumed as domestic production falls and EU countries stop consuming coal and nuclear energy.

Energy security is a critical issue for many Asian and European countries – and Canada is viewed as a stable, reliable partner with strong rule of law, and a commitment to combatting climate change.


Natural gas plays an important role in global energy mix

History Forecast

Oil

Coal

Natural Gas

Renewables

Nuclear

30 %

26 %

22 %

16 %

6 %

Source : EIA May 2016

33%

28 %

22 %

12 %

5 %


Natural gas plays an important role in global energy mix

Primary energy consumption by fuel CO2 emissions

Gt of CO2

Renew

Hydro

Nuclear

Coal

Natural gas

Oil

Billion Toe

Source : BP 2019


LNG positioned as an important part of an additional 150 bcf/d growth in global demand for natural gas

Growth by sector and region (2017-2040)Demand per sector

Source : BP 2019


Potential new sources of LNG Supply

LNG IMPORT

LNG EXPORT

LNG EXPORT (future)


Global LNG demand projected to be 470 mtpa in 2030 fueled by Asia and Niche Markets growth

• Natural gas is an environmentally preferred source of energy available in large quantity

• LNG demand doubling over the next 20 years, largely driven by Asia-Pacific

• LNG buyers seek:• Competitive pricing• Diversification of supply• Lower risk projects • Project credibility & certainty of outcome• Potentially, vertical project integration 0

100

200

300

400

500

600

2000 2005 2010 2015 2020 2025 2030 2035

mm

tpa

Japan South Korea Taiwan China India South East Asia Europe South America Others

~5% CAGR

Source Wood Mackenzie


Rapid growth in number of countries importing LNG

Widening gap between LNG import & export capacity, with 50 countries anticipated to import LNG by 2025.

Many new import countries are in the Atlantic Basin.

SOURCE: Poten and Partners


New FIDs will be required to meet growing demand

1 22017-2020Growing demand absorbing expected LNG oversupply

2021-2023End of oversupply and tightening of supply-demand equilibrium

Post 2023Supply shortage leading to increasing LNG prices (80+ mtpaby 2025; 130+ mtpa by 2030 )(1)

3

Emerging LNG supply-demand gap

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

MT

Year of Investment Decision

Historical FIDs Needed for High Demand

Investment in Liquefaction Capacity

Source : Shell 2019 LNG Outlook

North American gas supply and transportation


Canada’s AECO gas trades at a significant discount to US Henry Hub gas

Canadian natural gas prices are expected to remain discounted for the long-term, pending new market opportunities

SOURCE: Historical Data through Q2 2019: Platts; Forward Curves: ICE


2003: Canadian infrastructure used at capacity with high level of export to Northeast US/Canada

• High volume of Canadian natural gas being exported to US at a high price

• Limited excess pipeline capacity from Western Canada to Ontario/Quebec/Northeast US

Total capacity : 7 bcf/d Énergie Saguenay

SOURCE: rbnenergy.com and transcanada


2020: Significant excess pipeline capacity in the Canadian Mainline system

• Significant available pipeline capacity from Western Canada to eastern Ontario, with most of the mainline fully depreciated by 2020

• Significant Canadian Supply from new low-cost sources (e.g. Montney, Duvernay)

• Marcellus continues to offer more supply to Northeast US and Quebec/OntarioTotal capacity : 7 bcf/d

SOURCE: rbnenergy.com and transcanada

Énergie Saguenay


Gazoduq Inc. is developing a new natural gas transmission line from Ontario and Quebec

SOURCE: web site : gazoduq.com

Énergie Saguenay project overview


Available, reliable and renewable low-cost electricity

• Massive hydroelectricity production (Churchill Falls, James Bay) converges towards the Saguenay Region

• Project requirements (550 MW) can be met by Hydro-Québec’s available surplus power (4GW)

• Enables use of electric motor drives and greatly reduces GHG emissions at liquefaction plant

• Long-term hydroelectricity cost certainty and stability

Énergie Saguenay


Valuable existing infrastructure and local skilled labor

• 250,000+ people (surrounding region)

• Significant skilled labor (from local mining & forestry industry/projects)

• Available housing & amenities (no camps)

Grande Anse Marine Terminal (at site)

Bagotville Airport(18 km from site)

)

IntermodalRail Yard (at site)

Gas Pipelineright-of-way

(10 km from site)

Major Highway to Quebec City

(4-lane dual carriage way)

735 kV substation(40 km from site)

15 KM

6 KM


Unique site location enables reduced, competitive CAPEX/OPEX

• Sheltered, year-round deepwater port

• Access to reliable, low-cost hydropower

• Excellent existing infrastructure

• Available industrial land remote to

population

• Superior plant efficiency due to low

ambient temperatures

• Available skilled labor

• Saguenay region familiar with large

projects


Preliminary view of Énergie Saguenay facilities planned in 2015

Grande-Anse Terminal

Preliminary view of 2015


The plant and its main components – 2019

1. Receipt of natural gas by gas pipeline

2. Auxiliary systems

3. Pre-treatment and gas liquefaction by electric compressors:

- Removal of incompatible elements

- Cooled to about -162 ° C

- Reduced volume of about 600 times

4. Flares used during maintenance periods or in abnormal situations

5. LNG storage on site prior to export

6. Transportation of LNG to maritime infrastructure and loading of tankers for transport to world markets

1

2

3

4

5

6

Improved preliminary view afterdiscussions with communities

Marine transportation


Ships designed to ensure safe transportation

Modern equipments

Double wall

Isolated LNG storage areas with stringent monitoring


3 TO 4 SHIPS PER WEEK

MAXIMUM LENGTHOF A LIQUEFIED NATURAL GAS SHIP compared to other vessels on the Saguenay


Navigation on the Saguenay River

SAGUENAY RIVER

Approximatelyless than 5

ships a week

NORTHERN CHANNEL OF THE ST-

LAWRENCE RIVER

Approximately 25 ships

a day


The Corporation of Pilotes du Bas-St-Laurent for increased security

The CPBSL has for primary mission to ensure, in the public interest, the safeconduct of shipsbetween Quebecand Les Escoumins, including the Saguenay River

Social acceptability


Transparent and upstream consultation mechanism

FOLLOW UP COMMITTEE WITH INNUS FIRST NATIONS

ObjectiveDiscuss issues and concerns associated with the project that are specific to the Innus First Nations

Composition• GNL Québec • Community representatives of:

PessamitEssipitMashteuiatsh

ADVISORY COMMITTEE FOR THE LNG TERMINAL

ObjectiveDiscuss issues and concerns associated with the industrial installations in Port Saguenay

Composition• Facilitator• GNL Quebec • representatives from:

• Municipalities• Citizens• First Nations (observers)• Tourism groups• Environmental groups• Social and economic groups

EXPANDED ADVISORY COMMITTEE FOR MARINE TRANSPORTATION

ObjectiveDiscuss issues and concerns associated with marine transportation

Composition• Advisory committee for the LNG terminal

members• Representatives interested by marine

transportation:• Municipalities bordering the

fjord• Fjord users – Tourism• Fjord users – Autorities• Environnemental groups–

Water management• Industry and development


Strong cooperation and support from First Nations

Collaboration Agreement signed on 26 mai 2015

Follow-up committee with GNLQ and the 3 followinginnu communities:

- Mashteuiatsh- Essipit- Pessamit

More than 20 meetings held to date


Many more consultation activities

From 2014 to 2019 – hundreds of stakeholders were informed and consulted about the project

• Meetings with immediate neighbors

• Meetings with more than 40 marine stakeholders, including fjord users and municipalities along it’s south and north shore

• Participation in consultation activities of the ZIP Saguenay-Charlevoix and ministerial authorities

• Dozens of meetings with political representatives, socio-economic, environmental, public authorities, scientists, etc.

• Work committee with Parc Aventure Cap Jaseux


Main concerns raised by the community

Issues Main concerns

Economic spinoffsInvolvement of local businesses, enhancement of the regional workforce, investors in the project, opportunities for collaboration and socio-economic benefits for First Nations

Marine transport Increase in maritime traffic, cohabitation with other users, Saguenay-St-Lawrence marine park, aquatic fauna, potential impact on the activities of Innu businesses

Harmonious cohabitation Integration with the landscape, cohabitation with recreational-tourist activities, noise, smells and light

Environmental impact GHG emissions, agricultural lands, terrestrial ecosystems, shale gas and site rehabilitation

Health and safety Risks to the health of the population and workers (inhalation, fire, spill) Potential Risks Associated with the Transportation of Natural Gas (Pipeline) or LNG (Tankers)

Construction Nuisance during construction

Project rationale Project purpose and options / alternatives of the project


A transparent approach to developing the project with the community

In addition to the advisory committees, GNL Québec has implemented other methods for the public to get informed on it’s project:

• Tools

o Blog

o Emails

o Postal letters

o Web site

o Facebook Page

o Phone calls

o Press releases

o Newspapers/radio/publicities

• Mechanisms

o Information and consultation activities with stakeholders

o Public consultations

o Work Tables

o Community liaison office

• Ressources

o Employees dedicated to community relations

Phone : + 1 418-412-4993

Email : [email protected]

Contact us

project presentation · 2019-09-13 · confidentialpropertyof gnl québec inc. 2019. all right...

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