LNG Projects

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LNG Projects Project Finance by Dr.
Theodore
7th Gas Doha Conference
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Today LNG is a Bridge between World Gas Markets
LNG is becoming the driving force, as estimated
that by 2020 it will account for more than 40
of international trade in gas
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72 fields
14 fields
(5) 16
1 field
(12) 15
16
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LNG supplies come primarily from Qatar, Algeria,
Trinidad, Venezuela, Nigeria, Norway, Oman
Australia
The majority of gas consumed by the leading
Asian markets, Japan, South Korea Taiwan
Source WER 2008, Theodore 2009
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Typically, these locations are in remote areas
that do not have high demand for NG making LNG
a very economically viable alternative
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LNG Chain
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5
9
1
4
6
8
10
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3
C
B
A
LNG value chain represents 4.5 to 7b of
investment from start to finish
It begins with natural gas extraction and is sent
through a pipeline to a liquefaction facility
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LNG projects are highly capital intensive

• Average at least 20-year supply contracts

• Justify the finance requiredto construct all
  the facilities

How Gas Projects can be financed?
Project Finance on the stand-alone project
itself (Cash Flow Collateral /Security over
the project assets) Corporate Finance
the strength of the companys balance sheet (not
effect on sponsors leverage status)
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PF offers a number of advantages for the hosts or
sponsors

• allow sponsors for JV partnership, especially in
• case that they have different credit standing
• allow partnership to sponsors having high
• leverage ratio
• allow sharing risks profits

Project Finance means discipline from all
participants and agreed structure in finance
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GCC Project Spending by Sector (USD billions)
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PF as a collaborative endeavor of different
actors to produce a set of operational
financial objectives
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Economic Recession
Recession can be a medicine for all the economies
(it may hurts when taken, but it brings
long-term cures for a host of ills)

• Recession is always a good point to
  revaluate, to negotiate, to Partner,
  to Diversify, to Insure, to Price, to
  Invest, to Grow
• The big investment challenges comes during
  Recession the big profits after
• Recession also can water the flowers of
  innovation, energy-saving initiatives, making
  investments more efficient (balancing production,
  operation and finance costs)

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Qatar has witnessed steady positive economic
growth, to reach its current position as one of
the strongest economies in the Gulf and
worldwide.
As a largely gas-reliant economy and is
broadening its economic and resource structure
into an international recognized diversified
economy that performing significantly better
than many of its regional peers. Qatar has to
consolidate its position as a regional and world
energy hub, by developing both hard and soft
infrastructure, apply innovative concepts
(education, knowledge, RD) of development and
structure strong bilateral business/trading links
with leader global trading blocs.
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Thank You Visitwww.oilandgasworld.netdrtheo
dore_at_oilandgasworld.net
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