SPE 120745

Economics of LNG Projects

Faleh T. Al- Saadoon and Abel U Nsa

Texas A&M U.-Kingsville, Kingsville, Texas

Copyright 2009, Society of Petroleum Engineers

This paper was prepared for presentation at the 2009 SPE Production and Operations Symposium held in Oklahoma City, Oklahoma, USA, 48 April 2009.
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Abstract

The economic viability of a liquefied natural gas (LNG) project is evaluated using
industry-wide data. The range of expenditure figures (both capital and operating)
obtained from the literature is synchronized into a unit energy basis across the value
chain liquefaction, shipping and re-gasification.
A Base Case is adopted based on a single train of 4.2 million metric ton per annum
(MMTPA) capacity for a round-trip distance of 6200 miles (from Nigeria to the U.S. Gulf
Coast), taking one (1) month round-trip voyage. It is assumed that the plant requires a 4year construction period and it operates for 350 days a year in evaluating the economics
of the project.
Two measures of profitability are used in assessing the economic viability of the
LNG project, namely rate of return (ROR) and undiscounted pay-out-time (POT). A Base
Case is performed using a Base Case Capital Expenditure (Base Case CAPEX), 15%
discount rate and 3.00$/MMBtu raw gas price. In addition, sensitivity analyses are
carried out on CAPEX (using -20%, -10%, Base Case CAPEX, +10%, and +20%), on
discount rates (using 10%, 15%, 20% and 25%), on raw gas prices (using 1.00, 2.00,
3.00, 4.00, and 5.00$/MMBtu) and on overall operating expenditures (OPEX) ranging
between 4.7% and 14.7% of CAPEX.
The pay-out-times for the various scenarios considered at discount rates of 10, 15,
20 and 25% are 7.82, 5.18, 3.68 and 2.76 years after startup/commissioning, respectively.
The break-even prices range between 3.00$/MMBtu (at Base Case CAPEX less
20%, 10% discount rate and 1.00$/MMBtu raw gas price) and 12.10$/MMBtu (at Base

Case CAPEX plus 20%, 25% discount rate and 5.00$/MMBtu raw gas price). The
corresponding mark-ups range between 2.00 and 7.15$/MMBtu, respectively.
The break-even and mark-up prices increase linearly with increasing raw gas prices
yielding slopes of 1.17 and 0.17, respectively. These relationships hold true with all 100
cases considered in the sensitivity analysis.
A general survey of LNG liquefaction processes is also included.

Introduction
LNG is one of the monetization options for natural gas; others include pipeline and the
gas-to-liquid (GTL) option. The preferred option is determined mainly by its proximity
to the (consuming) market and by its location.
The pipeline option involves the construction of a large diameter low/high pressure
pipeline to transport the pipeline quality natural gas to the market. The GTL option
involves the conversion of natural gas into a stable liquid using the Fischer-Tropsch (FT)
process and then transporting the refined products (diesel and naphtha) by conventional
means to the market.
The LNG option involves the physical conversion of the natural gas into liquid using
cryogenic (low temperature) conditions, transporting the LNG to the market by specially
designed ocean-going tankers and then re-gasifying the LNG into gas.
The pipeline option becomes less viable as the distance between the source and the
market increases and/or the resource environment becomes harsher. It is obvious from
Figure 1 that the cost of the pipeline option is higher than the LNG option when the
distance is in excess of 2200 miles (over 3500 km) in an onshore environment and in
excess of about 850 miles (about 1300 km) in an offshore environment (Rowe 2004).
In addition to the long distance, difficult terrains as well as stranded gas development
also play a major role in adopting the LNG option. The focus of this work is on the
Economics of LNG Projects.

Figure1 - Gas Transportation Cost (Rowe 2004)

LNG Value Chain

A conventional LNG project involves bringing together four (sometimes five)
interdependent activities to connect the gas producer to the end user in what is called the
LNG value/supply chain. These activities consist of: exploration and production (E&P),
gas gathering (i.e. trunk lines), liquefaction, shipping and re-gasification. The gas
transmission/gas gathering phase by means of trunk lines to deliver the produced gas

from the remote fields to the liquefaction plant is sometimes lumped with the (E&P)
phase to reduce the value chain to four.
I. Exploration and Production
This is the primary link in the value chain which involves all development activities exploration, drilling/ completion, field development, etc, prior to the liquefaction process.
The proven reserve base must be sufficient to support the project. The delivery of 1
million tones of LNG per annum for 20 years is equivalent to about 1 TCF (28 BCM) of
natural gas. After taking into account the gas consumed and lost in the LNG supply
chain (generally between 10% and 15%) and the reserve that must be left in the field at
the end of the project life to maintain production at the plateau level, a world-scale LNG
project with a capacity of around 8 MMTPA (sufficient for two large trains), requires a
minimum of around 10 TCF (280 BCM) of proven gas reserves (Flower 2004).
Another important economic consideration is to minimize process shutdowns when
associated gas fields are used as project backups. Gas composition is another major
consideration as revenues could also be generated from the natural gas liquids (NGL)
extracted during the liquefaction process.
II. LNG Liquefaction
The liquefaction process typically follows a three-step process: removal of impurities and
recovery of natural gas liquids (NGLs), liquefaction of methane via refrigeration,
movement of the LNG to storage and finally to the tanker.
III. Shipping
LNG Tankers provide the link between the seller and the buyer. These are double-walled
special purpose vessels designed and insulated to prevent rupture in case of an accident
during ocean transportation. The LNG is kept at a cryogenic temperature of -2560F
(1600C) and atmospheric pressure as a result of the insulation around the tanks.
Approximately 0.1% to 0.15% of the cargo boils off each day and in the process helps to
keep the temperature of the remaining cargo stable.

IV. Re-gasification
Receiving terminals provide facilities to return the liquefied natural gas to it gaseous
state. This is achieved by pumping the LNG at atmospheric pressure to a double-walled
storage tank, until when needed. After which the LNG is further pumped at higher
pressure through various receiving terminal components where it is warmed in a
controlled environment by passage through pipes heated by direct-fired heaters, or
through pipes that are in heated water. The re-gasified natural gas is then regulated for
pressure and finally sent into distribution pipelines for consumption.
Liquefaction Technologies
The liquefaction section of the LNG plant is the most significant section of the plant and
account for about 30 40% of the capital cost of the overall plant. Key equipment items
include the compressors used to circulate the refrigerants, the compressor drivers and the

heat exchangers used to cool and liquefy the gas and exchange heat between the
refrigerants. (Shukri 2004).
The liquefaction process is the transfer of sensible and latent heat and is achieved by
staged mechanical refrigeration, and compressing/expanding the gas, using turboexpanders. The basic principles for cooling and liquefying the gas using refrigerants
involve matching as closely as possible the cooling/heating curves of the process gas and
that of the refrigerant. These principles result in a more efficient thermodynamic process
requiring less power per unit of LNG produced and they apply to all liquefaction
processes.
Figure 2 presents a typical cooling curve for a liquefaction process showing three
cooling zones: a pre-cooling zone, followed by a liquefaction zone and finally subcooling zone. All of these zones are characterized by having different curve slopes, or
specific heats, along the process. All of the LNG processes are designed by trying to
approach the cooling curve of the gas being liquefied, by using the specially mixed multicomponent refrigerants (MR) that will match the cooling curve at different zones/stages
of the liquefaction process to achieve high refrigeration efficiency and thereby reduce
energy consumption (Mokhatab, et al 2006).

Figure 2 - Typical Natural Gas/ Refrigerant Cooling Curve (Mokhatab et al, 2006)

Licensed Process Technologies

Various licensed liquefaction processes have been developed and used extensively
around the world with the major differences in the plants being the refrigeration cycles
involved. Some of the companies involved in the development and licensing of LNG
liquefaction technology include Air Products & Chemicals Int. (APCI), Conoco-Philips,
Marathon-Philips, Black& Veach, Shell and Linde-Statoil.
Table 1 provides a summary of some of the competing technologies used by various
companies. The total number of base load LNG liquefaction trains running and under
construction amounted to about 66 and 17, respectively. (as of Nov. 2004) in about 19
LNG liquefaction plants. It is also very evident from Table 1 that the APCI Propane Precooled Mixed Refrigerant (C3MR or PPMR) is the most dominant accounting for about

77% of the total number of trains running and under construction, followed by the
Conoco-Phillips Optimized Cascade process accounting for about 9%.
Table 2 provides a summary of the advantages and disadvantages of the various
components and fluid refrigerants used in the various LNG liquefaction processes. It
should be noted that the APCI process utilizes a small diameter wound tube bundles heat
exchangers (to provide very close temperature approaches), a mixed refrigerant (a
mixture of nitrogen, methane, ethane and propane), centrifugal compressors (for high
pressure stage) and axial compressors (for low pressure stage). In the Phillips Optimized
Cascade LNG Process (POCLP), aluminum and core-in-kettle heat exchangers, pure
refrigerants (propane, ethylene and methane) and many compressors/turbine packages are
used.
Economics of LNG Projects.
I. Capital Expenditures (CAPEX):
The CAPEX of LNG projects is estimated to be between $1.32/MMBtu and
$7.21/MMBtu depending on several factors, including type of technology used,
greenfield or expansion projects, shipping distance between the liquefaction plant and regasification facility, economies of scale, learning curve improvement, and local
infrastructure availability.
In contrast, published data on the CAPEX of LNG projects shows a range of
$200/TPA ($3.35/MMBtu) for BPs project in Trinidad to > $850 /TPA
($16.35/MMBtu). The latter reference (and thereby the CAPEX figure of $850/TPA) is
dismissed as being an outlier (zealous) effort to magnify the potential benefit of
compressed natural gas (CNG) over LNG (Subero et al. 2004)
Patel (Patel 2005) provided realistic CAPEX data for the following LNG projects:
Qatargas, Nigeria LNG, Atlantic LNG, Rasgas and Oman LNG as being 375, 275, 230,
210, 200 $/TPA ( $7.21, $5.29, $4.23, $4.03, $3.85/MMBtu). Jenson (Jensen 2004) also
quantifies the impact of shipping distances on the CAPEX for LNG projects in Trinidad,
Nigeria and Qatar as being $2.00, $2.50 and $2.00/MMBtu respectively.
Similarly, (Coyle et al, 2003) cited references from Merlin Associates that estimated
the costs of recent LNG plants to be in the range of 200 to 400 $/tonne/year (3.85 to 7.69
$/MMBtu/year). They also provided costs figures contributed by the individual value
chains to include: 1.5 to $2.0/MMBtu (liquefaction), 0.5 to $1.2/MMBtu (shipping) and
0.3 to $0.4/MMBtu (re-gasification).
II. Annual Operating Expenditures (OPEX):
Liquefaction fuel, re-gasification fuels and tanker boil-off contribute significantly to the
operating cost of the LNG projects. It should be noted that value is added to the gas as it
goes from one value chain to the other, another major influence is the location of the
buyer and the seller, (Kellas 2003), reported shipping costs to the US or Europe to range
between $0.6/MMBtu and $1.75/MMBtu for existing and potential Latin American,
African and Middle Eastern LNG projects. Data tables for Approximate Spot LNG
freight rates from Commercials Services Company have also been generated with voyage
distance as major contributor to the costs; factors used are: tanker size (138,000 cm),
speed (19 knots), rate $29,000 per day and boil-off (0.15% per day).

Heren LNG Markets has also estimated the shipping cost from Bonny, Nigeria and
Lake Charles, USA to be $1.15/ MMBtu. In contrast, (Coyle et al, 2003) provided fuel
loss as percentage of the feed gas across the value chain to be between 8 10% for
liquefaction, 2 2.5% for re-gasification while shipping depends on the distance traveled.
However, (Avellanet et al, 1998) reported LNG costs to be 7% of the cumulative
investment.
Jensen (personal communication) estimates the liquefaction OPEX to be
$0.2/MMBtu and 9% fuel consumption (raw gas), the shipping OPEX to be 3.6% of
CAPEX and 0.17% boil-off per day (LNG) and re-gasification OPEX to be 2.5% of
CAPEX and a fuel consumption of 2.5% of LNG.
III. Net Cash Flow (NCF) of LNG Projects:
The two measures used to assess the economic viability and profitability of LNG projects
are rate of return (ROR) and undiscounted pay-out time (POT). ROR is the discount rate
at which the net present value is equal to zero. The undiscounted POT is the time
required in years, after the commissioning (start-up) of the project, to pay back the
undiscounted initial investment.
Discount rates of 10, 15, 20 and 25% along with raw gas prices of $1, $2, $3, $4 and
$5/MMBtu are used to determine the break-even prices and subsequently the markup
rates for the various parameters evaluated.
The following parameters are assumed in the analysis of an LNG project:

LNG plant is located in Nigeria

Re-gasification plant is located on the US Gulf Coast (USGC)
350 days of plant operation per year (i.e. a Stream Factor of 96%)
4 years construction period
25 years plant life (after start-up)
12 trips is made a year between Nigeria and the USGC (i.e. one-month round trip
voyage)
Discount rates of 10, 15, 20 and 25%
Raw gas prices of 1, 2, 3, 4 and $5/MMBtu

The CAPEX and OPEX of the Base Case are determined using Jensons estimates
(personal communication) and are as follows:

Liquefaction:
CAPEX: $350 million, for infrastructure (Greenfield facility), plus $250
per ton of capacity for a train size of 4.2 MMTPA
OPEX: $0.20/MMBtu and fuel consumption of 9% of raw gas
Shipping:
CAPEX: $180 million for 135,000 cubic meter tanker,
OPEX 3.6% of CAPEX and 0.17% of boil-off (LNG) per day
Re-gasification:
CAPEX: $575 million for 850 MMCF/day facility,
OPEX:2.5% of CAPEX and fuel consumption of 2.5% of LNG

The Base Case also assumes a raw gas price of $3/MMBtu and a discount rate of 15%.
Calculations of the break-even prices, POT and markup rates are also made by varying
the Base Case data as follows:
10% increase in Base Case CAPEX
20% increase in Base Case CAPEX
10% decrease in Base Case CAPEX
20% decrease in Base Case CAPEX
IV. Sensitivity Analysis:
The Base Case data collated is unitized in energy terms on an annual MMBtu basis by
using the appropriate conversions:

Liquefaction CAPEX :
Base Case CAPEX is based on a $350 million for infra-structure plus $250.00 per
metric ton for a train of 4.2 MMTPA.
(350 * 106 ) + (250 * 4.2 * 106 )
= $6.41 / MMBtu based on a capacity of 4.2 MMTPA.
4.2 * 106 * 52
Where 1 ton 52 MMBtu
Shipping CAPEX:
Base Case CAPEX is based on a $180 million for 135,000 cubic meter capacity
tanker making 12 round-trip voyages per year.
(180 * 106 )
= $4.65 / MMBtu
135000 * 12 * 23.9
Where 1 cubic meter = 23.9 MMBtu
Re-gasification CAPEX:
Base Case CAPEX is based on a $575 million for an 850MMCF/day facility.
(575 *10 6 )
= $1.76 / MMBtu
1.1* 850000 * 350
Where one (1) Standard Cubic Foot (CF) = 1100 Btu
The break-even price of gas is the minimum price at which the gas must be sold to make
the LNG project profitable. It is equal to the summation of the raw gas price, OPEX and
amortized CAPEX. The markup rate of gas = value added to the raw gas as it goes
through the value chains liquefaction, shipping and re-gasification. It is equal to the
difference between the selling price of gas and raw gas price.
Table 3 presents the detailed NCF analysis for the Base Case at a discount rate of
15% and a raw gas price of 3.00$/MMBtu, showing a break-even price of $6.57/MMBtu
(i.e. a markup of $3.57/MMBtu) and a POT of 5.18 years after start-up.
Table 4 summarizes the pay-out-time (POT) as only a function of the discount rates
since it (POT) is independent of the raw gas price. Thus, at discount rates of 10, 15, 20

and 25%, the undiscounted POT are 7.82, 5.18, 3.68 and 2.76 years respectively after the
startup of the plant.
Table 5 presents a summary of the sensitivity runs on the break-even (minimum)
prices at various CAPEX/OPEX, discount rates, and raw gas prices. The break-even
prices range between 3.00$/MMBtu (at Base Case CAPEX less 20%, 10% discount rate
and 1.00$/MMBtu raw gas price) and 12.15$/MMBtu (at Base Case CAPEX plus 20%,
25% discount rate and 5.00$/MMBtu raw gas price), yielding an over-all average of
7.17$/MMBtu. The corresponding mark-ups range between 2.00 and 7.15$/MMBtu,
respectively.
Figure 3 presents the break-even and mark-up prices as a function of raw gas prices
at Base Case CAPEX and 15% discount rate. It is very evident that both (break-even and
mark-up prices) increase linearly with increasing raw gas prices yielding slopes of 1.17
and 0.17, respectively. These relationships hold true with all 100 cases considered in the
sensitivity analysis.
(Basis: Base Case CAPEX and 15% Discount Rate)
10

9
8

7
6
Break-even Price
5
($/MMBtu)

3
Mark-up Price
($/MMBtu)

3
2

1
0

0
0

Raw Gas Price ($/MMBtu)

Markup Price
Break Even Price

Figure 3 A Trend of Break-even and Mark-up Price with Respect to the Raw
Gas Price.
Table 6 10 depicts the OPEX values as a percentage of the CAPEX for each
activity of the LNG value chain for five (5) cases including the Base Case CAPEX, plus
10%, plus 20%, minus 10% and minus 20%, respectively. The over-all OPEX range for
the Base Case CAPEX is between 5.47% (using 10% discount rate and 1.00$/MMBtu

raw gas price) and 12.03$/MMBtu (using 25% discount rate and 5.00$/MMBtu raw gas
price), yielding an average of 8.75%. The overall OPEX values for all cases considered
range between 4.69% (using the Base Case CAPEX plus 20%, 10% discount rate and
1.00$/MMBtu raw gas price) and 14.65% of CAPEX (using Base Case CAPEX minus
20%, 25% discount rate and 5.00$/MMBtu raw gas price), yielding an over-all average of
8.93%.
Conclusions
The economic viability of a liquefied natural gas project is determined by the
CAPEX, OPEX, discount rate, and raw gas price. The mark-up rate (to cover both OPEX
& CAPEX) ranges from 2.00 to 7.15$/MMBtu for the range of economic parameters
being evaluated. The mark-up price increases linearly with increasing raw gas prices
yielding a slope of 0.17. This relationship holds true with all 100 cases considered in the
sensitivity analysis.
The corresponding undiscounted POT ranges between 2.76 and 7.82 years after
commissioning and start-up.
Besides, in view of the various scenarios being considered for the viability of LNG
projects, it is evident that low gas prices will favor LNG projects with respect to the
break-even and markup prices. On the other hand, stranded natural gas especially
associated gas in regions with zero flare policy such as Nigeria, will make an ideal source
for LNG Liquefaction plants. With current crude prices hovering around $100/bbl (first
quarter 2008), LNG projects will provide a viable option in natural gas monetization.

References
1. Al-Saadoon, F. T., Economics of GTL Plants, SPE Hydrocarbon Economics
and Evaluation Symposium, Dallas, April 3-5, 2005.
2. Avellanet, R. A., Thomas, C.P. and Robertson, E.P. Options for Alaska North
Slope Natural Gas Utilization, SPE, Western Regional Meeting, Alaska, May
22nd 24th, 1996.
3. Barclay, M. and Denton, N., Selecting Offshore LNG Processes, LNG Journal,
October, 2005, pg. 34 35.
4. Flower, A., LNG Today, The Energy Publishing Network Gas Strategies, 2004
Edition.
5. Heren LNG Markets, March 23, 2007.
6. Jensen, T. T., U.S. Reliance on International Liquefied Natural Gas Supply, A
Policy Paper prepared for the National Commission on Energy Policy, February,
2004.
7. Kellas, G., Comparison of LNG Contractual Framework and Fiscal Systems,
SPE Hydrocarbon Economics and Evaluation Symposium, Dallas, April 5-8,
2003.
8. Mokhatab, S. and Economides, M. J., Onshore LNG Production Process
Selection, SPE, ATC&E, San Antonio, Texas, 2006.
9. Patel, B., Gas Monetization: A techno-Economic Comparison of GTL and LNG
7th World Congress of Chemical Engineering, 2005
10. Rowe, D. LNG Market Overview, the Oxford Princeton Programme, March 14,
2004.
11. Shukri, T., LNG Technology Selection, Hydrocarbon Engineering February,
2004.
12. Subero, G., Sun, K., Deshpande, A., Mclaughlin, J. Economides, M. J., A
Comparative Study of Sea-going Natural Gas Transport, SPE Annual Technical
Conference and Exhibition, Houston, Texas, September 26-29, 2004.
13. Yost, C and Dinapoli, R., Benchmarking Study Compares LNG Plant Costs.

Table1 - LNG Trains by Liquefaction Processes (M. Backlay and N. Denton, 2005)
Licensor

Liquefaction
Process

Running

Number of Trains
Under
Planned
Construction

Startup
Year

%
of
Market

APCI

Propane Pre-cooled MR (PPMR)

55

1972

77%

Conoco-Phillips

Optimized Cascade

1999

9%

APCI

Single Refrigerant MR

1970s

5%

Marathon/Phillips

Classic Cascade

1969

1%

Teal Dual Pressure MR

1%

Prico Single Stage MR

2%

MR Processes (C3MR & Dual-MR)

2005

4%

Linde-Statoil

Mixed-fluid Cascade

2006

1%

APCI

AP-X Process

Black & Veach

Shell

2007/2008

0%

Note: % of Market based on percentage of total trains running and under construction (As of Nov. 2004)

Table 2 LNG Liquefaction Technology Selection Parameters (Shukri 2004)

Technology selection items
Spiral wound exchanger
PFHE (Plate Fin Heat
Exchanger)
Axial compressors
Large gas turbine

Pros
Flexible Operation
Competitive vendors
available, Lower pressure,
drop and temperature
differences
High efficiency
Proven, efficient and cost
effective

Large motor drivers

Efficient, flexible & more

available

Mixed refrigerant process

Simpler compression system.

Adjusting composition allows
process matching
Potential higher availability
with parallel compression

Pure component Cascade

process
Air cooling (compared to sea
water cooling)
Fluid medium heating
(compared to steam)
Larger train capacity

Lower cooling system CAPEX

Eliminates the need for steam
generation & water treatment
Lower specific costs (CAPEX
per tonne LNG)

Cons
Proprietary/more expensive
Require careful design to
ensure good 2-phase flow
distribution in multiple
exchanger configurations
Suitable only at high flow rates
Less reliable/ strict
maintenance cycle/ more
complicated control/ fixed
speed
Untried in LNG at speeds
needed/require large power
plants
More complex operation.
More equipment and
complicated compression
system
Less efficient process/ higher
operating costs
Higher reboiler costs
Some equipment/ processes
may require further
development

Table 3 Detailed NCF Analysis of the Base Case at 15% Discount Rate (Basis: $3/MMBtu)

0.00
0.00
0.00
0.00
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71
4.71

0.00
0.00
0.00
0.00
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42
0.42

0.00
0.00
0.00
0.00
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03
6.03

CDNCF

n
0.00
0.00
0.00
0.00
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27
0.27

DNCF
0.00
0.00
0.00
0.00
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20

0.15
-2.98
-2.59
-2.26
-1.96
1.32
1.15
1.00
0.87
0.75
0.66
0.57
0.50
0.43
0.37
0.33
0.28
0.25
0.21
0.19
0.16
0.14
0.12
0.11
0.09
0.08
0.07
0.06
0.05
0.05

-2.98
-5.58
-7.84
-9.80
-8.48
-7.33
-6.34
-5.47
-4.72
-4.06
-3.49
-3.00
-2.57
-2.19
-1.86
-1.58
-1.33
-1.12
-0.93
-0.77
-0.63
-0.51
-0.40
-0.31
-0.23
-0.16
-0.10
-0.05
0.00

CNCF

0.00
0.00
0.00
0.00
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05

NCF

0.00
0.00
0.00
0.00
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15

Break Even Price

Total OPEX

0.00
0.00
0.00
0.00
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18
0.18

Miscellaneous

0.00
0.00
0.00
0.00
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24
0.24

Re-gas. OPEX
Fuel Cost

0.00
0.00
0.00
0.00
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47
0.47

Cost at Destination

0.00
0.00
0.00
0.00
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20
0.20

Total

0.00
0.00
0.00
0.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00

Misc.

-0.44
-0.44
-0.44
-0.44
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340
0.340

Shipping OPEX
Boil Off

Re-gasification

-1.16
-1.16
-1.16
-1.16
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896
0.896

Added Value to gas going to

tankers

Tankers

-1.60
-1.60
-1.60
-1.60
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236
1.236

Total OPEX

Liquefaction
Year
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
21.00
22.00
23.00
24.00
25.00
26.00
27.00
28.00
29.00

Liquefaction
OPEX
Liq. Over-heads

Unit Cost of Raw Gas

-3.20
-3.20
-3.20
-3.20
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47

CAPEX

Fuel Cost

Total

U. S. $/MMBtu

0.00
0.00
0.00
0.00
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57
6.57

-3.20
-3.20
-3.20
-3.20
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47
2.47

-3.20
-6.40
-9.60
-12.80
-10.33
-7.86
-5.38
-2.91
-0.44
2.03
4.50
6.98
9.45
11.92
14.39
16.86
19.34
21.81
24.28
26.75
29.22
31.70
34.17
36.64
39.11
41.58
44.06
46.53
49.00

0.50
1.50
2.50
3.50
4.50
5.50
6.50
7.50
8.50
9.50
10.50
11.50
12.50
13.50
14.50
15.50
16.50
17.50
18.50
19.50
20.50
21.50
22.50
23.50
24.50
25.50
26.50
27.50
28.50

Table 4 - Pay-out-time (POT) as a Function of Discount Rate

Discount Rate, %

POT, years after start-up

10

7.82

15

5.18

20

3.68

25

2.76

Table 5 Break-even Prices as a Function of Discount Rates, Raw Gas Costs, CAPEX and OPEX

(BREAK-EVEN (MINIMUM) GAS PRICES

CAPEX, U.S. $/MMBtu

%
Disc.

Less 20% of Base Case CAPEX

Less 10% of Base Case CAPEX

Base Case

Plus 10 % of Base Case CAPEX

Plus 20% of Base Case CAPEX

10%

3.00

4.17

5.35

6.52

7.70

3.17

4.34

5.52

6.69

7.87

3.34

4.52

5.69

6.86

8.04

3.51

4.69

5.86

7.04

8.21

3.68

4.86

6.03

7.21

8.38

15%

3.70

4.87

6.05

7.22

8.40

3.96

5.13

6.31

7.48

8.66

4.22

5.39

6.57

7.74

8.91

4.48

5.65

6.82

8.00

9.17

4.73

5.91

7.08

8.26

9.43

20%

4.54

5.71

6.89

8.06

9.23

4.90

6.08

7.25

8.42

9.60

5.26

6.44

7.61

8.79

9.96

5.63

6.80

7.98

9.15

10.33

5.99

7.17

8.34

9.51

10.69

25%

5.51

6.68

7.86

9.03

10.21

5.99

7.17

8.34

9.52

10.69

6.48

7.65

8.83

10.00

11.18

6.96

8.14

9.31

10.49

11.66

7.45

8.62

9.80

10.97

12.15

Table 6 OPEX as % of Base Case CAPEX at Various Discount Rates and Raw Gas Costs

U.S.
$/MM
Btu

US $/MM Btu

15.00

Total

Liquefaction

Shipping

Re-gasification

Total

Liquefaction

Shipping

Re-gasification

Overall

10.00

Re-gasification

Raw Gas
Cost

OPEX AS % of CAPEX

Shipping

Discount
Rate
%

OPEX

Liquefaction

CA PEX

6.40

4.64

1.76

12.80

0.29

0.29

0.12

0.70

4.53

6.25

6.82

5.47

3.34

Breakeven
Price

6.40

4.64

1.76

12.80

0.29

0.31

0.14

0.74

4.53

6.68

7.95

5.78

4.22

20.00

6.40

4.64

1.76

12.80

0.29

0.34

0.16

0.79

4.53

7.33

9.09

6.17

5.26

25.00

6.40

4.64

1.76

12.80

0.29

0.37

0.19

0.85

4.53

7.97

10.80

6.64

6.48

10.00

6.40

4.64

1.76

12.80

0.38

0.35

0.15

0.88

5.94

7.54

8.52

6.88

4.52

15.00

6.40

4.64

1.76

12.80

0.38

0.37

0.17

0.92

5.94

7.97

9.66

7.19

5.39

20.00

6.40

4.64

1.76

12.80

0.38

0.39

0.19

0.96

5.94

8.41

10.80

7.50

6.44

25.00

6.40

4.64

1.76

12.80

0.38

0.42

0.22

1.02

5.94

9.05

12.50

7.97

7.65

10.00

6.40

4.64

1.76

12.80

0.47

0.40

0.18

1.05

7.34

8.62

10.23

8.20

5.69

15.00

1.00

2.00

6.40

4.64

1.76

12.80

0.47

0.42

0.20

1.09

7.34

9.05

11.36

8.52

6.57

20.00

6.40

4.64

1.76

12.80

0.47

0.45

0.22

1.14

7.34

9.70

12.50

8.91

7.61

25.00

6.40

4.64

1.76

12.80

0.47

0.48

0.25

1.20

7.34

10.34

14.20

9.38

8.83

10.00

6.40

4.64

1.76

12.80

0.56

0.46

0.21

1.23

8.75

9.91

11.93

9.61

6.86

15.00

6.40

4.64

1.76

12.80

0.56

0.48

0.23

1.27

8.75

10.34

13.07

9.92

7.74

20.00

6.40

4.64

1.76

12.80

0.56

0.51

0.25

1.32

8.75

10.99

14.20

10.31

8.79

25.00

6.40

4.64

1.76

12.80

0.56

0.53

0.28

1.37

8.75

11.42

15.91

10.70

10.00

10.00

6.40

4.64

1.76

12.80

0.65

0.51

0.24

1.40

10.16

10.99

13.64

10.94

8.04

15.00

3.00

4.00

6.40

4.64

1.76

12.80

0.65

0.54

0.26

1.45

10.16

11.64

14.77

11.33

8.91

20.00

6.40

4.64

1.76

12.80

0.65

0.56

0.28

1.49

10.16

12.07

15.91

11.64

9.96

25.00

6.40

4.64

1.76

12.80

0.65

0.59

0.30

1.54

10.16

12.72

17.05

12.03

11.18

5.00

Table 7 OPEX as % of Base Case CAPEX (plus 10%) at Various Discount Rates and Raw Gas Costs

U.S.
$/MM
Btu

US $/MM Btu

15.00

Total

Liquefaction

Shipping

Re-gasification

Total

Liquefaction

Shipping

Re-gasification

Overall

10.00

Re-gasification

Raw Gas
Cost

Shipping

Discount
Rate
%

OPEX AS % of CAPEX

OPEX

Liquefaction

CA PEX

7.04

5.12

1.92

14.08

0.29

0.30

0.13

0.72

4.12

5.86

6.77

5.11

3.51

Breakeven
Price

7.04

5.12

1.92

14.08

0.29

0.32

0.15

0.76

4.12

6.25

7.81

5.40

4.48

20.00

7.04

5.12

1.92

14.08

0.29

0.35

0.17

0.81

4.12

6.84

8.85

5.75

5.63

25.00

7.04

5.12

1.92

14.08

0.29

0.38

0.20

0.87

4.12

7.42

10.42

6.18

6.96

1.00

10.00

7.04

5.12

1.92

14.08

0.38

0.35

0.16

0.89

5.40

6.84

8.33

6.32

4.69

15.00

7.04

5.12

1.92

14.08

0.38

0.37

0.18

0.93

5.40

7.23

9.38

6.61

5.65

20.00

7.04

5.12

1.92

14.08

0.38

0.40

0.20

0.98

5.40

7.81

10.42

6.96

6.80

25.00

7.04

5.12

1.92

14.08

0.38

0.44

0.23

1.05

5.40

8.59

11.98

7.46

8.14

10.00

7.04

5.12

1.92

14.08

0.47

0.41

0.18

1.06

6.68

8.01

9.38

7.53

5.86

15.00

2.00

7.04

5.12

1.92

14.08

0.47

0.43

0.21

1.11

6.68

8.40

10.94

7.88

6.82

20.00

7.04

5.12

1.92

14.08

0.47

0.46

0.23

1.16

6.68

8.98

11.98

8.24

7.98

25.00

7.04

5.12

1.92

14.08

0.47

0.49

0.26

1.22

6.68

9.57

13.54

8.66

9.31

3.00

10.00

7.04

5.12

1.92

14.08

0.56

0.46

0.21

1.23

7.95

8.98

10.94

8.74

7.04

15.00

7.04

5.12

1.92

14.08

0.56

0.49

0.23

1.28

7.95

9.57

11.98

9.09

8.00

20.00

7.04

5.12

1.92

14.08

0.56

0.51

0.26

1.33

7.95

9.96

13.54

9.45

9.15

25.00

7.04

5.12

1.92

14.08

0.56

0.55

0.29

1.40

7.95

10.74

15.10

9.94

10.49

10.00

7.04

5.12

1.92

14.08

0.65

0.52

0.24

1.41

9.23

10.16

12.50

10.01

8.21

15.00

4.00

7.04

5.12

1.92

14.08

0.65

0.54

0.26

1.45

9.23

10.55

13.54

10.30

9.17

20.00

7.04

5.12

1.92

14.08

0.65

0.57

0.29

1.51

9.23

11.13

15.10

10.72

10.33

25.00

7.04

5.12

1.92

14.08

0.65

0.60

0.32

1.57

9.23

11.72

16.67

11.15

11.66

5.00

Table 8 OPEX as % of Base Case CAPEX (plus 20%) at Various Discount Rates and Raw Gas Costs

U.S.
$/MM
Btu

US $/MM Btu
OPEX

Liquefaction

Shipping

Re-gasification

Overall

0.29

0.30

0.13

0.72

3.78

5.40

6.13

4.69

3.68

15.36

0.29

0.33

0.15

0.77

3.78

5.94

7.08

5.01

4.73

7.68

5.56

2.12

15.36

0.29

0.36

0.18

0.83

3.78

6.47

8.49

5.40

5.99

7.68

5.56

2.12

15.36

0.29

0.39

0.21

0.89

3.78

7.01

9.91

5.79

7.45

1.00

25.00

Total

15.36

2.12

20.00

Re-gasification

2.12

5.56

Shipping

Liquefaction

5.56

7.68

Shipping

7.68

15.00

Raw Gas
Cost

Liquefaction

Total

OPEX AS % of CAPEX

10.00

Discount
Rate
%

Re-gasification

CA PEX

Breakeven
Price

10.00

7.68

5.56

2.12

15.36

0.38

0.36

0.16

0.90

4.95

6.47

7.55

5.86

4.86

15.00

7.68

5.56

2.12

15.36

0.38

0.38

0.18

0.94

4.95

6.83

8.49

6.12

5.91
7.17

20.00

2.00

7.68

5.56

2.12

15.36

0.38

0.41

0.21

1.00

4.95

7.37

9.91

6.51

25.00

7.68

5.56

2.12

15.36

0.38

0.45

0.24

1.07

4.95

8.09

11.32

6.97

8.62

10.00

7.68

5.56

2.12

15.36

0.47

0.41

0.19

1.07

6.12

7.37

8.96

6.97

6.03

7.68

5.56

2.12

15.36

0.47

0.44

0.21

1.12

6.12

7.91

9.91

7.29

7.08

7.68

5.56

2.12

15.36

0.47

0.47

0.24

1.18

6.12

8.45

11.32

7.68

8.34

25.00

7.68

5.56

2.12

15.36

0.47

0.50

0.27

1.24

6.12

8.99

12.74

8.07

9.80

10.00

7.68

5.56

2.12

15.36

0.56

0.47

0.22

1.25

7.29

8.45

10.38

8.14

7.21

7.68

5.56

2.12

15.36

0.56

0.49

0.24

1.29

7.29

8.81

11.32

8.40

8.26

7.68

5.56

2.12

15.36

0.56

0.52

0.27

1.35

7.29

9.35

12.74

8.79

9.51

25.00

7.68

5.56

2.12

15.36

0.56

0.56

0.30

1.42

7.29

10.07

14.15

9.24

10.97

10.00

7.68

5.56

2.12

15.36

0.65

0.52

0.25

1.42

8.46

9.35

11.79

9.24

8.38

15.00

7.68

5.56

2.12

15.36

0.65

0.55

0.27

1.47

8.46

9.89

12.74

9.57

9.43

7.68

5.56

2.12

15.36

0.65

0.58

0.29

1.52

8.46

10.43

13.68

9.90

10.69

7.68

5.56

2.12

15.36

0.65

0.61

0.33

1.59

8.46

10.97

15.57

10.35

12.15

15.00
20.00

15.00
20.00

20.00
25.00

3.00

4.00

5.00

Table 9 OPEX as % of Base Case CAPEX (minus 10%) at Various Discount Rates and Raw Gas Costs

OPEX AS % of CAPEX
Liquefaction

Shipping

Re-gasification

Overall

0.29

0.29

0.12

0.70

5.03

6.97

7.50

6.08

3.17

11.52

0.29

0.31

0.14

0.74

5.03

7.45

8.75

6.42

3.96

20.00

5.76

4.16

1.60

11.52

0.29

0.33

0.16

0.78

5.03

7.93

10.00

6.77

4.90

25.00

5.76

4.16

1.60

11.52

0.29

0.36

0.18

0.83

5.03

8.65

11.25

7.20

5.99

10.00

5.76

4.16

1.60

11.52

0.38

0.34

0.15

0.87

6.60

8.17

9.38

7.55

4.34

15.00

Total

11.52

1.60

1.00

Re-gasification

1.60

4.16

Shipping

Liquefaction

4.16

5.76

Shipping

5.76

15.00

Raw Gas
Cost

Liquefaction

Total

OPEX

U.S.
$/MM
Btu

10.00

Discount
Rate
%

Re-gasification

US $/MM Btu
CA PEX

Breakeven
Price

5.76

4.16

1.60

11.52

0.38

0.36

0.17

0.91

6.60

8.65

10.63

7.90

5.13

20.00

5.76

4.16

1.60

11.52

0.38

0.39

0.19

0.96

6.60

9.38

11.88

8.33

6.08

25.00

5.76

4.16

1.60

11.52

0.38

0.41

0.21

1.00

6.60

9.86

13.13

8.68

7.17

2.00

10.00

5.76

4.16

1.60

11.52

0.47

0.40

0.18

1.05

8.16

9.62

11.25

9.11

5.52

15.00

5.76

4.16

1.60

11.52

0.47

0.42

0.19

1.08

8.16

10.10

11.88

9.38

6.31

20.00

5.76

4.16

1.60

11.52

0.47

0.44

0.21

1.12

8.16

10.58

13.13

9.72

7.25

25.00

5.76

4.16

1.60

11.52

0.47

0.47

0.24

1.18

8.16

11.30

15.00

10.24

8.34

10.00

5.76

4.16

1.60

11.52

0.56

0.45

0.21

1.22

9.72

10.82

13.13

10.59

6.69

15.00

3.00

5.76

4.16

1.60

11.52

0.56

0.47

0.22

1.25

9.72

11.30

13.75

10.85

7.48

20.00

5.76

4.16

1.60

11.52

0.56

0.50

0.24

1.30

9.72

12.02

15.00

11.28

8.42

25.00

5.76

4.16

1.60

11.52

0.56

0.52

0.27

1.35

9.72

12.50

16.88

11.72

9.52

4.00

10.00

5.76

4.16

1.60

11.52

0.65

0.51

0.24

1.40

11.28

12.26

15.00

12.15

7.87

15.00

5.76

4.16

1.60

11.52

0.65

0.53

0.25

1.43

11.28

12.74

15.63

12.41

8.66

20.00

5.76

4.16

1.60

11.52

0.65

0.55

0.27

1.47

11.28

13.22

16.88

12.76

9.60

25.00

5.76

4.16

1.60

11.52

0.65

0.58

0.29

1.52

11.28

13.94

18.13

13.19

10.69

5.00

Table 10 OPEX as % of Base Case CAPEX (minus 20%) at Various Discount Rates and Raw Gas Costs

U.S.
$/MM
Btu

US $/MM Btu
OPEX AS % of CAPEX

Shipping

Re-gasification

Total

Liquefaction

Shipping

Re-gasification

Total

Liquefaction

Shipping

Re-gasification

Overall

OPEX

Liquefaction

CA PEX

5.12

3.72

1.40

10.24

0.29

0.28

0.12

0.69

5.47

7.53

8.57

6.74

3.00

5.12

3.72

1.40

10.24

0.29

0.30

0.13

0.72

5.86

8.06

9.29

7.03

3.70

20.00

5.12

3.72

1.40

10.24

0.29

0.32

0.15

0.76

6.25

8.60

10.71

7.42

4.54

25.00

5.12

3.72

1.40

10.24

0.29

0.34

0.17

0.80

6.64

9.14

12.14

7.81

5.51

10.00

5.12

3.72

1.40

10.24

0.38

0.34

0.15

0.87

6.64

9.14

10.71

8.50

4.17

15.00

5.12

3.72

1.40

10.24

0.38

0.36

0.16

0.90

7.03

9.68

11.43

8.79

4.87

20.00

5.12

3.72

1.40

10.24

0.38

0.38

0.18

0.94

7.42

10.22

12.86

9.18

5.71

25.00

5.12

3.72

1.40

10.24

0.38

0.40

0.20

0.98

7.81

10.75

14.29

9.57

6.68

10.00

5.12

3.72

1.40

10.24

0.47

0.39

0.17

1.03

7.62

10.48

12.14

10.06

5.35

5.12

3.72

1.40

10.24

0.47

0.41

0.19

1.07

8.01

11.02

13.57

10.45

6.05

20.00

5.12

3.72

1.40

10.24

0.47

0.43

0.21

1.11

8.40

11.56

15.00

10.84

6.89

25.00

5.12

3.72

1.40

10.24

0.47

0.46

0.23

1.16

8.98

12.37

16.43

11.33

7.86

10.00

5.12

3.72

1.40

10.24

0.56

0.45

0.20

1.21

8.79

12.10

14.29

11.82

6.52

15.00

5.12

3.72

1.40

10.24

0.56

0.47

0.22

1.25

9.18

12.63

15.71

12.21

7.22

20.00

5.12

3.72

1.40

10.24

0.56

0.49

0.24

1.29

9.57

13.17

17.14

12.60

8.06

25.00

5.12

3.72

1.40

10.24

0.56

0.51

0.26

1.33

9.96

13.71

18.57

12.99

9.03

10.00

5.12

3.72

1.40

10.24

0.65

0.51

0.23

1.39

9.96

13.71

16.43

13.57

7.70

5.12

3.72

1.40

10.24

0.65

0.52

0.25

1.42

10.16

13.98

17.86

13.87

8.40

20.00

5.12

3.72

1.40

10.24

0.65

0.54

0.26

1.45

10.55

14.52

18.57

14.16

9.23

25.00

5.12

3.72

1.40

10.24

0.65

0.57

0.28

1.50

11.13

15.32

20.00

14.65

10.21

Discount
Rate
%

Raw
Gas
Cost

10.00
15.00

15.00

15.00

1.00

2.00

3.00

4.00

5.00

Breakeven
Price