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Merlin Associates

Qualification Brochure
TM 2011 by Merlin Associates All Rights Reserved Houston 5625 FM 1960 W Suite 304 Houston, TX 77069 (281) 586-0045 (281) 586-7965 (fax) (713) 298-7816 (mobile) chuck.yost3 (Skype) chuck.yost@merlinassociates.com (email) website: www.merlinassociates.com

Table of Contents MERLIN ASSOCIATES WHO WE ARE .......................................................................................... 1 MERLIN ASSOCIATES TECHNICAL CONSULTANT SERVICES AND INDEPENDENT ENGINEERING SERVICES ............................................................................................................... 2 MERLINS UNIQUE QUALIFICATIONS ............................................................................................ 3 PROJECT EVALUATION AND ANALYSIS METHODOLOGY ........................................................................ 4 1. MERLIN ASSOCIATES LNG COST ESTIMATING MODELTM ................................................................. 5 1.1 General Description ............................................................................................................... 5 1.2 Options .................................................................................................................................. 6 1.2.1 Foundations ..................................................................................................................... 6 1.2.2 Acid Gas Removal System .............................................................................................. 6 1.2.3 Feed Gas Dehydration and Mercury Removal ................................................................. 6 1.2.4 Modular & Offshore Options............................................................................................. 6 1.2.5 Domestic Gas, LPG, and MEG ........................................................................................ 7 1.2.6 LNG, LPG, Condensate Storage Tanks ........................................................................... 7 1.2.7 LNG, Condensate, and LPG Loading Jetty ...................................................................... 7 1.2.8 Refrigerant Compressor Drivers ...................................................................................... 8 1.2.9 Electric Power Generation ............................................................................................... 9 1.2.9 Bulk Materials .................................................................................................................. 9 1.2.10 Labor Cost ..................................................................................................................... 9 1.2.11 Engineering, Procurement & Construction Contractor Costs ........................................ 10 1.2.12 Contingency ................................................................................................................. 10 1.2.13 Sensitivity Options ....................................................................................................... 10 1.3 Model Output ....................................................................................................................... 11 Table I .................................................................................................................................... 11 Table II ................................................................................................................................... 11 Table III .................................................................................................................................. 12 1.4 Current Cost Implications ..................................................................................................... 14 1.5 Unique Aspects of the Merlin LNG Import Terminal Capital Cost Estimating ModelTM .......... 15 2.0 LNG TECHNOLOGY COMPARATIVE STUDIES ............................................................................... 15 3.0 PROJECT IMPLEMENTATION RISK ASSESSMENT .......................................................................... 16 4.0 LNG TECHNOLOGY COURSES .................................................................................................... 17 Agenda LNG Technology and Project Formation Seminar ................................................... 18 I. Overview of LNG Industry .................................................................................................... 18 II. Project Structure and Formation ......................................................................................... 18 1.0 LNG Chain Characteristics .......................................................................................... 18 2.0 Physical and Commercial Chains ................................................................................ 18 3.0 Phases and Segments................................................................................................. 18 4.0 Organizational and Accounting Structures ................................................................... 18 III. Project Management .......................................................................................................... 18 1.0 Project Definition ......................................................................................................... 18 2.0 Project Execution Options ........................................................................................... 18 3.0 Project Engineering Procurement & Construction Contractor Qualifications ................ 18 4.0 EPC Selection ............................................................................................................. 18 5.0 Owners Project Management Team............................................................................ 18 6.0 Project Scheduling ....................................................................................................... 18 7.0 Project Guarantees ...................................................................................................... 18 8.0 Project Performance & Completion Test ...................................................................... 18 IV. Reserves and Upstream Development .............................................................................. 18

1.0 Reserves Characteristics ............................................................................................. 18 2.0 Reserves Requirements .............................................................................................. 18 3.0 Costs of Reserves ....................................................................................................... 18 V. Liquefaction Technology..................................................................................................... 18 1.0 Basic Gas Processing Technology .............................................................................. 18 2.0 Liquefaction Process Selection .................................................................................... 18 3.0 Liquefaction Train Capacity Selection .......................................................................... 18 4.0 Major Equipment ......................................................................................................... 18 5.0 LNG Storage Tank Sizing & Technology Options ........................................................ 18 6.0 Marine Facilities........................................................................................................... 18 7.0 Future Technology Trends ........................................................................................... 18 VI. LNG Shipping .................................................................................................................... 18 1.0 Containment Systems.................................................................................................. 18 2.0 Fleet Sizing .................................................................................................................. 18 3.0 Capital and Operating Costs ........................................................................................ 19 4.0 Future Trends .............................................................................................................. 19 VII. Import Terminal Technology ............................................................................................. 19 1.0 Basic Technology ........................................................................................................ 19 2.0 Vaporization Selection ................................................................................................. 19 3.0 Major Equipment ......................................................................................................... 19 4.0 LNG Storage Tank Sizing & Technology Options ........................................................ 19 5.0 Marine Facilities........................................................................................................... 19 7.0 Future Technology Trends ........................................................................................... 19 VIII. Capital & Operating Expense .......................................................................................... 19 1.0 Methodology ................................................................................................................ 19 2. Liquefaction Plant Capital Cost Variables ...................................................................... 19 3.0 Contingency ................................................................................................................ 19 4.0 Risk Evaluation ............................................................................................................ 19 5.0 Sample Liquefaction Plant Cost Estimate .................................................................... 19 6.0 Sample Import & Regasification Cost Estimate ............................................................ 19 IX. LNG Economics & Pricing ................................................................................................. 19 1.0 Cost of Service Concepts ............................................................................................ 19 2.0 Comparison of Competing Projects ............................................................................. 19 3.0 Netback Pricing ........................................................................................................... 19 4.0 Competitive Issues ...................................................................................................... 19 X. LNG Supply & Demand outlook .......................................................................................... 19 1.0 Pacific Basin Supply & Demand .................................................................................. 19 2.0 Atlantic Basin Supply & Demand ................................................................................. 19 3.0 New Sellers ................................................................................................................. 19 4.0 Emerging Markets ....................................................................................................... 19 5.0 Spot Trading & Primary Characteristics ....................................................................... 19 XI. Financing LNG Projects..................................................................................................... 19 1.0 Equity vs. Project Finance ........................................................................................... 19 2.0 Process Description ..................................................................................................... 19 3.0 Implementation Schedule ............................................................................................ 19 4.0 Risk Identification & Mitigation ..................................................................................... 20 5.0 Ship Finance ............................................................................................................... 20 5.0 MERLIN ASSOCIATES EXPERIENCE AS TECHNICAL CONSULTANT .................................................. 20 INDEPENDENT ENGINEER ............................................................................................................ 26 I. EVALUATION CRITERIA & SPECIFIC RISK ANALYSIS EXECUTION....................................... 27 1. Technical Design Analysis ..................................................................................................... 27

2. Project Management and Systems......................................................................................... 27 3. Project Schedule .................................................................................................................... 28 4. Project Implementation .......................................................................................................... 28 5. Estimated Capital Costs ......................................................................................................... 28 6. Operating and Maintenance Costs ......................................................................................... 29 II. INITIAL PROJECT REVIEW AND RISK ANALYSIS REPORT ................................................... 29 A. Scope of Work ....................................................................................................................... 29 B. Project Documentation Desired for Review in Merlin Home Office ......................................... 29 C. Key Personnel Desired Available for Questions & Answers ................................................... 31 D. Project Risk Analysis Report ................................................................................................. 31 III. ONGOING PROJECT REVIEW AND ANNUAL PROJECT REPORTING ................................. 32 A. Ongoing Project Review ........................................................................................................ 32 B. Annual Project Reporting ....................................................................................................... 33 C. Project Special Reports ......................................................................................................... 33 IV. PROJECT COMPLETION WITNESSING ................................................................................. 33 TECHNICAL & BENCHMARKING STUDIES .................................................................................. 34 1.0 Qualifications and Experience .............................................................................................. 34 1.1 LNG Cost & Competition Report ....................................................................................... 34 1.2 Project Finance Support ................................................................................................... 34 1.3 LNG Project Pre-Feasibility, Feasibility, and Conceptual Studies...................................... 35 1.4 Direct Benchmarking Studies ............................................................................................ 36 1.4.1 Shell Global Solutions, Internationl ........................................................................... 36 1.4.2 Texaco - 2001........................................................................................................... 37 1.4.3 Bechtel International ................................................................................................. 37 1.4.4 Phillips Petroleum Co. .............................................................................................. 37 1.4.5 West Niger Delta Sponsors....................................................................................... 37 1.4.6 Angola LNG Project Sponsors .................................................................................. 37 1.4.7 BP - 2004 ................................................................................................................. 37 1.4.8 BP 2007................................................................................................................. 38 1.4.9 ConocoPhillips Sunrise Project Sponsors ................................................................. 38 1.4.10 ConocoPhillips QatarGas 3 .................................................................................. 38 1.4.11 Brass LNG Project Sponsors .................................................................................. 39 1.4.12 Chevron Energy Technology Company .................................................................. 39 1.5 Technology Evaluation and Selection Studies .................................................................. 39 OWNERS ENGINEER..................................................................................................................... 40 COST OF CONSULTANT SERVICES ............................................................................................. 41 CLIENT LISTING ............................................................................................................................. 44 DOMESTIC & INTERNATIONAL ENERGY COS. ..................................................................................... 44 BANKS & FINANCIAL INSTITUTIONS ................................................................................................... 44 ENGINEERING/CONSULTING AND VENDOR COS. ................................................................................ 45 OTHER ........................................................................................................................................... 45 TECHNICAL PAPERS AND PUBLICATIONS ........................................................................................... 46 RESUMES OF KEY PERSONNEL ........................................................................................................ 48 CHARLES C. YOST, III ..................................................................................................................... 49 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 49 Experience Summary................................................................................................................. 49 Employment ............................................................................................................................... 49 WILLIAM W. LEWIS, P.E. ................................................................................................................. 59 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 59

EXPERIENCE SUMMARY......................................................................................................... 60 PUBLICATIONS ........................................................................................................................ 60 MARIE NAKLIE ................................................................................................................................ 62 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 62 Experience Summary................................................................................................................. 62 WILLIAM P. STEWART...................................................................................................................... 66 EDUCATION and PROFESSIONAL AFFILIATIONS .................................................................. 66 Experience Summary................................................................................................................. 66 PUBLICATIONS ........................................................................................................................ 69 PATENTS: ................................................................................................................................. 71 COMPANY FACTS ....................................................................................................................... 72

Merlin Associates Who We Are


Scope of Services Technology Evaluation Project Risk Assessment Techno-Economic Studies Process Design Services Design/Engineering Assistance Project Management Services Technical Education/Training Programs

Areas of Expertise Offshore/Onshore Oil & Gas Production Offshore/Onshore Gas and Liquid Pipelining Natural Gas Processing Base Load LNG Technology & Production, Shipping, and Import Terminals Independent Power Production Synthetic Fuels Production Fertilizer Manufacture Cryogenic Process Engineering Computerized Capital and Operating Cost Modeling

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Merlin Associates Technical Consultant Services and Independent Engineering Services


Merlin Associates is a process engineering consulting company with extensive experience in the gas production and LNG industries. We have been in business since June 1985. Approximately 45% of our work effort is as third party technical advisors to commercial banks and multi-lateral funding agencies providing project financing to LNG and gas production projects. The remaining 55% is to the major international energy companies, state energy companies, and larger independent energy companies providing consulting services in support of pre-feasibility, feasibility, and conceptual studies evaluating participation in large gas production, pipeline, natural gas liquefaction and re-gasification projects, and independent power production projects. We provide consulting services to our clients from the wellhead to the burner-tip/buss bar covering all aspects of design engineering, cost estimating, project management, scheduling, and construction monitoring for these projects. LNG chain projects are often broken into the segments of production, liquefaction, shipping, import terminal, and end-user (power generation and/or gas distribution). We have extensive detailed experience in all these segments. Merlin Associates has proprietary cost estimating models that provide high accuracy capital and operating cost estimates for each of these segments. Merlin Associates are specialists in consulting engineering for offshore production facilities and pipelines, onshore gas processing plants of various types, and project risk analysis for feasibility and conceptual design evaluation. Our personnel have worked as major participants on offshore production projects in Malaysia, Indonesia, South Africa, U.K. and Norwegian North Sea, Arabian Gulf, Australia, and the Gulf of Mexico. We teach courses in offshore facility design, LNG technology, Project Finance, and project risk analysis. Our services are entirely computer based working primarily from our U.S. offices for worldwide locations. In addition to pure consulting engineering, we offer technical education in several areas. We have developed and taught an LNG Technology course at several client locations and the Topsides Facilities Design Module for the Tension Leg Platform Design course sponsored by the ASME Offshore Mechanics & Arctic Engineering Division as part of the Offshore Technology Conference held annually in Houston. We have an intensive Offshore Process Facility Design Course presented over a 2 week period that we have taught in numerous locations worldwide. We have taught the Fundamentals of Base-Load LNG for Gas Technology Institute numerous times using our own course materials. We have a proprietary course that covers all aspects of the full LNG chain from gas production through the import terminal. We have a proprietary course on Project Finance that we have presented on several occasions. Merlin Associates has participated in numerous projects supporting project financing by commercial and multi-lateral financing agencies. Many of these assignments have included all the segments of the LNG chain while some have involved only a single segment such as the liquefaction facilities. With this broad experience resource Merlin Associates is capable of providing technical consulting services across the full spectrum of energy production, transmission, and end-user industries. This is demonstrated by the variety of projects listed in our personnel resumes.

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Merlins Unique Qualifications


LNG chain projects involve feedgas, pipelines, liquefaction, shipping, regasification, and end-user facilities and are typically extremely capital intensive (US$ 2 - 15 billion). LNG chain projects require a very long period of capital expenditure during the design, procurement, and construction phases (3-5 years) before there is any income, and, due to their large size and complexity, are nearly always multiparticipant projects. It has become very common to use project financing for these projects since their large required investment exceeds the available internal financing of all but the very largest international energy companies. Securities issues are also available as an alternative financing facility for many LNG projects. Most large energy projects have a loan collateral basis that can be evaluated - the recoverable hydrocarbon reserves that will be produced by the project. Due to the very large investment and the large volume of energy reserves that will be processed by the typical LNG project, the project's recoverable hydrocarbon reserve collateral cannot be considered liquid in the normal sense. This leads to a project without a prime source of loan collateral for project financing. The only source of collateral to the investing or financing participant is the firm long term LNG or power sales contract between sellers and buyers although the sales contract must be to buyers that are regarded as very financially sound companies. This type of exposure for both the equity participants and the international financing community traditionally requires conservative project evaluation and risk analysis. A LNG chain project that is not complete (including all the segments) and capable of meeting its sales contract requirements has essentially no value as an asset against the loan. The salvage value of even the best available gas processing/shipping/regasification technology is very low without something to process. The only loan value is essentially the sales revenue generated after the chain begins operation. Although historically this has always been a problem for LNG projects, the problem has become critical since about 1980 for several reasons. The size (and cost) of a world class base load LNG plant has dramatically increased since the industry began in the late 1960's. This is largely a result of utilizing economies of scale through ever larger facilities in order to obtain minimum unit costs. The LNG facility is built of high cost critical new technology components that have tended to have the highest inflation rates although overall inflation rates was very low from 1988 through 2002. Expansion in the LNG industry since 2003 has resulted in shortages of all technical, construction management, and project management resources. The facilities are constructed using mostly the highest skill-level construction workers that are in short supply the world over, their wage rates have tended to increase with the greatest rate of acceleration. The onstream time for all the facilities in the chain is critical to project economic return. All the chain components tend to be extremely conservative in providing redundant backup equipment and this philosophy became extreme during the 1980s.

Newest proven technology and increased automation have been steadily implemented in LNG projects to reduce operating and maintenance costs as well as to improve onstream operating factors. This has tended to increase initial capital investment. Merlin Associates Independent Engineering Services Page No. 3

For all these reasons, the LNG project participants have increasingly used outside third party technical consultants to evaluate project costs, technical risks, project schedule, and efficiency of design. Merlin Associates was, in fact, started to fulfill this demand. Merlin has been the technical consultant to the financing community on most LNG base load grass-roots installations and LNG expansions built since 1983. We have also provided similar services to several of the equity participants on the same projects during this same period. Merlin has also provided consulting services for preliminary feasibility studies for many operating companies considering entry into the LNG business and to several LNG buyers during this period. Merlin is in the unique position of having a very detailed and inclusive LNG capital cost database as a result of providing consulting services to nearly all the existing LNG projects in the areas of efficiency improvement and debottlenecking combined with our work in support of LNG project financing. Most companies who would have this information are either the major energy companies operating the facilities or the very large engineering companies who have provided the detailed engineering for the LNG projects. Neither of these parties is an easy source of cost data to outside parties. The operating companies must protect their competitive positions and will not willingly share expensive information. The engineering companies will provide the services but at a very high price - their equivalently experienced personnel are most efficiently used in directing and managing detailed design of very large projects, not providing consulting services where the major charge is only for their own time. Merlin has detailed cost breakdowns for nearly all the LNG projects installed. We do not provide the actual data from our database but do use it to provide our consulting services to our clients. We carefully and rigorously protect our clients confidential information but are able to provide a valuable service in a timely manner due to being a small and specialized consulting engineering company. We pride ourselves on being very efficient through the use of leading edge computer technology and have the most current process engineering, CAD, mathematical and statistical analysis software programs, and a very large library of standard business software packages. Merlin Associates have equivalent experience and expertise in the areas of offshore and onshore oil and gas production facilities, pipelines, and natural gas processing. Merlin have used imaginative and innovative methods of adapting standard software packages to quickly provide capital cost estimating that is fully backed up and supported down to actual bills of material for our highest quality cost estimates. Merlin has been a leader in developing a consistent methodology for project technical, capital, and schedule risk analysis for LNG projects. This developing methodology has been utilized to develop our proprietary cost estimating models. Merlin has provided benchmark analysis for many clients. In some cases they wished to compare existing projects against each other, in other cases we have developed benchmark studies for a single project using alternative liquefaction technologies.

PROJECT EVALUATION AND ANALYSIS METHODOLOGY


Merlin is available for assistance to any or all of the various parties concerned with the project and can provide this assistance in several ways depending on the particular client's needs. The most common first step is to develop a preliminary Basis of Design (BOD) for the specific project being evaluated. The BODprelim is used to prepare an initial cost estimate and then to perform a series of agreed sensitivity tests to better optimize the BOD. The core element of the Merlin LNG Project Feasibility Study is our proprietary LNG Capital/OperatingTM; LNG ShippingTM; and, LNG Import TerminalTM, and Power Merlin Associates Independent Engineering Services Page No. 4

Generation Cost Estimating ModelsTM. Merlin utilizes a generic cost estimating model for the feed gas production and pipeline segments of the LNG chain.

1. MERLIN ASSOCIATES LNG COST ESTIMATING MODELTM


1.1 General Description Merlin Associates has a large and detailed database of the existing LNG project costs as a result of: previous assignments providing consulting services to the existing LNG project participants; as the Technical Consultant to the financial institutions providing project financing for the existing LNG project participants; and, through Merlins internal development of process design and cost estimating software for LNG projects as well as other oil & gas process industries. This database includes actual purchase order and sub-contract cost detail for many of the existing LNG projects. The core elements of the Merlin LNG Chain Cost Estimating expertise are our proprietary LNG Capital/Operating; LNG Shipping; and, LNG Import Terminal Power Generation Cost Estimating ModelsTM. Merlin Associates has used its continually updated database as the basis for our proprietary LNG Chain Capital Cost Estimating ModelsTM. The input for the Merlin ModelsTM is developed in a relatively short period allowing a high accuracy cost estimate to be provided quickly and at significantly lower cost than the traditional engineering cost estimating model. The models include the actual equipment list for all the projects included in the database. When the model calculates a capital cost estimate the equipment that is appropriate for the specified project is selected. The equipment costs are adjusted to reflect the proper throughput on the basis of various capacity adjustment power factors. The Merlin LNG ModelsTM database includes actual LNG-specific cost data for throughputs of 2.5, 3.0, 3.3, 3.8, 4.2, 4.45, 4.7, 5.3 and 6 million tonnes per annum (Mtpa) train capacities. The new cost estimate is developed by interpolating between the increment of train capacity that is higher and lower than its own rate. This low degree of interpolation is made using Merlin capacity factors that have been verified by many cost estimate cases and supports the high accuracy available from the Merlin ModelTM. Merlin has conducted specific studies of 7.8 Mtpa, 9 Mtpa, and 10.2 Mtpa train sizes for various clients and the data from these studies is incorporated in the model to support cost estimates of larger train sizes. Clearly this data is theoretical, not yet based on actual train cost data, and therefore, subject to a higher level of uncertainty. The standard Merlin ModelTM includes a specific equipment list for the following LNG liquefaction processes: APCI propane precooled multi-component refrigerant process ConocoPhillips Optimized Cascade (COPOC) process Shell Global Solutions International Dual Mixed Refrigerant process Linde Multi-Fluid Cascade (MFC) process APCI AP-X process Lummus/ABB/Randall NicheLNGsm process Black & Veatch Pritchard PRICO II process

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In addition, Merlin has developed special models for the following process: APCI Dual Mixed Refrigerant Process BHPs Compact LNG process

The model cost estimate is based on obtaining worldwide bids for all significant components. Most project host countries maximize their project content provided they can supply technically equivalent items with competitive pricing. The actual equipment costs from the various projects are updated quarterly to a new basis year using the Nelson-Farrar indices, which are published periodically by the Pennwell Publishing Co. to reflect inflationary cost increases for oil and gas equipment and materials in the USA. The capital costs are adjusted to the selected Cost Estimate Date from the Capital Cost Estimate basis year using the Nelson-Farrar calculated escalation factor. Most project host countries maximize their project content provided they can supply technically equivalent items with competitive pricing. Certain equipment components are sized and specified within the capital cost-estimating model. These are the large cost items that are custom designed for every LNG train. 1.2 Options 1.2.1 Foundations The model has the option to include piled foundations by a simple Y/N. 1.2.2 Acid Gas Removal System When required, the model calculates the required acid gas removal contactor size based on gas capacity and determines liquid circulation rates with a check as to which stream has priority in sizing the contactor nearly always gas capacity. The model then sizes all the components of the acid gas removal system (contactor, regenerator, reflux accumulator, overhead condenser, etc.) calculating wall thicknesses, vessel dimensions and weights, cooler exchanger surface, pump capacity and head, motor sizes, etc. This data is then used to determine the costs for each of the components using the database. The model handles DGA, activated MDEA, and Sulfinol. It can be modified to handle others. 1.2.3 Feed Gas Dehydration and Mercury Removal The model calculates the required dehydrator bed sizing, vessel dimensions and weights. The model verifies the required filter and mercury guard bed sizing. With this data, the model determines the cost of the components from the database. 1.2.4 Modular & Offshore Options If the Modular Construction option is selected the model factors costs for the modules that can be used in either offshore or onshore applications. Typically the bulk materials are increased to reflect the additional structural steel of the modules, additional piping connections and valving to allow interconnects between the modules, and additional engineering design time required to separate the equipment into modules. For pure modular construction there are usually additional freight costs associated with sending all the equipment to the fabrication/shipyard and then back to the plant site these are selected specifically at the Freight Cost cell on the input Merlin Associates Independent Engineering Services Page No. 6

data sheet. The modular option assumes a maximum module size of 4,000 tonnes and for a typical 3.5 5 mtpa train size will have 60 80 modules. An LNG project that is estimated using the Modular option is developed on the basis that the Pipe Alleys are constructed as modules and shipped to the plant site. No further modularization is assumed in the generic LNG application. This results in modules with relatively small weight, limited by their shipping physical dimensions. An option is available for maximum modularization wherein the majority of the process equipment is fabricated installed on modules with an assumed maximum weight of 4,000 tonnes. This results in approximately 200 modules per train. Labor rates are developed on a separate spreadsheet for the fabrication/shipyard with potential for expatriate labor and national labor appropriate for the shipyard location. 1.2.5 Domestic Gas, LPG, and MEG The model will handle addition of a Domestic Gas plant that sometimes occurs on foreign locations that have a local demand for domestic gas supply. This plant includes gas conditioning, LPG separation, and compression. The model can be used to generate costs for only an LPG separation plant rather than an LNG plant. The model has the option to include MEG separation, purification, and storage for projects using MEG to prevent hydrate formation in their upstream production facilties. 1.2.6 LNG, LPG, Condensate Storage Tanks The model calculates the storage tank dimensions and weights for Single Containment, Double Containment, and Full Containment options. This includes all the tank shell, roof, and floor components steel and concrete as appropriate, foundation concrete and steel, and insulation volume. The model uses the specified steel weights and concrete volumes with associated labor manhours (adjusted for productivity and local labor rates) to determine the cost components for the site-specific cost estimate. The model then selects the costs from the appropriate technology for use in the model output. 1.2.7 LNG, Condensate, and LPG Loading Jetty The model calculates the steel and concrete for the appropriate jetty based on specified length. The cost model uses a specified steel piled jetty with concrete deck design for all calculations. The model uses the specified steel weights and concrete volumes with associated labor manhours (adjusted for productivity and local labor rates) to determine the cost components for the site-specific cost estimate. The capital costs are adjusted to the selected Cost Estimate Date from the Capital Cost Estimate basis year using the input escalation factor. The model is based on obtaining worldwide bids for all significant components. Most project host countries maximize their project content provided they can supply technically equivalent items with competitive pricing.

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1.2.8 Refrigerant Compressor Drivers The model specifically handles APCIs Propane Precooled Multi-Component Refrigerant (PMR), ConocoPhillips Optimized Cascade (COPOC), several Dual Mixed Refrigerant (DMR) technologies, the Multi-Fluid Cascade (MFC), the APCI AP-XTM three refrigerant large train (AP-XTM), and the NicheLNGSM dual refrigerant liquefaction processes. Merlin can also provide custom applications by internally modifying the basic model for any other preferred liquefaction process. The input data sheet requires that the type of driver be specified options are for industrial Frame type gas turbines 3, 5C, 5D, 6, 7, 9; aero-derivative gas turbines LM2500, LM2500P, LM2500R, RB211, 6000, Trent; and Steam turbines, or motor drive for each refrigerant cycle. Motor sizes up to 75 MW are available. The model calculates site rating for the selected gas turbine model making adjustment for the average ambient temperature and taking into account: air intake duct pressure drop losses, exhaust duct losses, air compressor degradation between overhauls, gas turbine degradation between overhauls, and reflects the API Design Margin. If Waste Heat Recovery modules are specified the reduction in power due to additional pressure drop losses are also included. Using internally specified power requirements for the specified liquefaction technology for each refrigeration cycle, the model determines the power required vs. the site-adjusted power available from the specified driver. The model will then determine how many of each driver size is needed for each refrigerant cycle. The operator can input helper motor or steam turbine size for each driver and the model will then adjust how many drivers are necessary with the helper motor or steam turbine assistance. The operator has the option to specify combustion air precooling for the gas turbines or not which will increase the site adjusted power available with the appropriate additional capital cost. The operator can also shift some of the Multi-component Refrigerant load of the APCI process to the pre-cooling refrigerant driver to obtain a better overall balance just as is done with the APCI process design. The operator can also shift some of the intermediate level and/or highest level refrigerant (where applicable COPOC, MFC, and NicheLNGSM) load to the pre-cooling refrigerant driver or the low-level driver to obtain an overall better power balance just as is done with the actual licensors design packages. If the End-Flash option is selected the model will calculate the size of compressor driver required to boost the gas back to the fuel gas system. If the NicheLNGSM liquefaction process is selected, the model will calculate the power required for the feedgas booster compressor between the C3+ separation expander plant and the inlet to the liquefaction plant. It will also include costs for the driver, compressor, and associated components sized to support the compressor unit and the expander separation plant. If the Deep Propane Recovery option is selected in order to extract 90%+ of C3+ from the feedgas, [APCI, APX, DMR processes typically only extract about 60-65% as LPG products without this option] the model will include heat exchangers, compander, and booster compressor for the C3+ separation expander plant installed between the feedgas conditioning equipment and the inlet to the cryogenic portion of the liquefaction plant. It will size the driver required and include costs for the driver, compressor, and expander separation plant. Merlin Associates Independent Engineering Services Page No. 8

If the LPG Plant Only option is selected in order to extract 90%+ of C3+ from the feedgas, the model will include all the components for an expander separation plant including booster compressor for the residue gas and a full fractionation plant to support commercial LPG production. It will size the feedgas conditioning plant, expander plant, fractionation system, compressor driver required and include costs for all the facilities. 1.2.9 Electric Power Generation The model allows selection of purchasing electric power rather than generating its own. In this case the model deletes various components specific to the power generation modules but includes the normal transformers and switchgear assuming that 13 KV power is purchased from a local power grid. The model allows selection of full Combined Cycle with large power island using a combination gas turbine-waste heat recovery steam generator (HRSG)-steam turbine power generation, Simple Cycle steam turbine power generation with HRSG on the refrigerant gas turbines, or specification of preferred gas turbine power generators. Based on the specification of preferred power generation option the model contains algorithms to determine the power requirements that will include non-refrigerant plant power demand as well as refrigerant power demand if motor drivers are specified. Using this analysis, the number and size of the power generation components will be determined and costed. There are several options to specify the source of heat recovery for steam generation and process requirements. 1.2.9 Bulk Materials Bulk material costs for other sections of the plant are calculated based on factors against various categories of equipment costs based on actual experience at the most recent LNG projects. 1.2.10 Labor Cost The Merlin LNG Capital Cost Estimate ModelsTM also contain the actual manhours and breakdown of the individual construction subcontracts for labor rates, supervision, indirects, overheads, and profit markup for each of the projects. The manhours and markups are used (after adjustment for throughput differences) to calculate expected construction labor costs. The labor costs are calculated using expected site-specific productivity relative to the US Gulf of Mexico and expected site-specific all-in labor rates. Site-specific labor rates and productivities are obtained from Merlins database of LNG plant costs supplemented by data published in Richardsons International Construction Factors Location Cost Manual. Where available, client supplied site specific data is used to establish local construction labor rates and to make adjustments to the Merlin Associates Capital Cost Estimating Models data. The major variable for LNG project costs is local construction site labor costs and worker productivity. The cost estimate model uses labor rates and productivity as demonstrated on previous and current LNG projects with adjustment to a new project location. The costestimating model uses a work force that includes the normal skilled worker classifications in proportions demonstrated on previous LNG projects all over the world. The direct wage paid to the individual worker for the various crafts is marked up to reflect the subcontractor overhead costs, profits, local site expenses, supervision, consumables, and subcontractor supplied equipment.

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Engineering "factor" algorithms are used to project the liquefaction segment equipment costs based on interpolation from the database of actual plant costs consistent with the specified liquefaction technology, actual site data, and available basis of design data. 1.2.11 Engineering, Procurement & Construction Contractor Costs The model includes an assumed organizational structure for the Home Office and Project Construction Site locations. The organization size is adjusted for the number of trains and whether the project is an Expansion or Grassroots project. The base model includes a historical database of EPC costs for a wide range of alternate contractors and site locations. Home Office and Site efficiencies are automatically adjusted for various liquefaction technologies, Home Office locations, and Construction Site locations. The project can be tailored in several ways including: a base labor rate can be input that will then use algorithms to establish the other labor rates; the efficiency of National EPC members is adjustable; Home Office and Construction Site General Administration and Fee rates are adjustable; various mobilization costs can be tailored for alternative Home Office and Site locations. 1.2.12 Contingency Merlins LNG Capital Cost Estimating ModelTM allows input of a client-specified contingency. Since the model uses largely a database of actual costs for existing or fully committed lumpsum LNG projects, Merlin Associates has demonstrated that the model has an accuracy of at least + 10% of the total onshore project capital cost so long as estimated projects are consistent with the Basis of Design parameters of the existing projects. The model has been updated based on Merlins own engineering analysis and work with the liquefaction licensors for various liquefaction train options and for train sizes up to about 10 Mtpa. Merlin does not recommend a generic level of contingency but will typically use the clients own corporate value. Merlin provides risked contingency calculations for project finance and conceptual design studies based on statistical analysis of the Cost Estimating ModelTM inputs and internal calculations. A typical contingency of 3% to 4% is provided on most of the current projects in progress. Merlin also continually updates the model on the basis of study work for future innovative process designs and potential large train configurations being considered by various project sponsors and by the various liquefaction technology licensors, as well as study work for various clients, and Merlins own internal research. The current Merlin model allows quick evaluation and sizing of the primary refrigerant compressor drivers for many gas turbine alternatives as well as steam turbines and electric motor drivers with all the major liquefaction technologies currently being considered. 1.2.13 Sensitivity Options The model allows for a multiplicity of sensitivity studies about the project BOD including but not limited to the following options: Greenfield project or Expansion project, [the model will not include the cost for various supporting utility and plant infrastructure components when the Expansion option is selected except those actually required for the Expansion project]; type of liquefaction technology; type, quantity, and arrangement of refrigerant compressor drivers;

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type of overall cooling system to be utilized (seawater, freshwater recirculating, or air fin); type of regasification technology to be used on the import terminal model; type, number, and quantity of LNG storage tanks; whether to include LPG extraction, fractionation, storage and loading/unloading; labor sourcing and the impact of expected labor costs and productivity; number and quantity of condensate storage tanks; length of product loading/unloading jetty; complexity and participant makeup of the Project Formation Team; cost of potential supporting infrastructure facilities

These sensitivity studies are conducted quickly and can be used to develop an agreed optimized BOD or a set of BOD that cover the full expected range of implemented project requirements. The models also calculate expected Annual Operating Costs using industry experience factors adjusted by installed capital costs. The models reflect expected operating and maintenance labor costs and productivity on the basis of expected local construction labor costs and productivity. 1.3 Model Output The output from the Merlin LNG Capital Cost Estimating ModelTM is provided in a series of tables. Table I Table I provides the cost by major plant system for specified equipment categories including Columns, Heat Exchangers, Turbines/Compressors, Pumps, Tanks/Vessels, and Packaged Equipment. These costs are priced on an FOB factory basis and are summed across to provide a total cost by plant system. Table II The first column of Table II has the total equipment costs for each plant system provided in Table I but adjusted for Material Related Expenses. Material Related Expenses include Host Country Import Duty (0.00%); Third Party Inspection (0.67%); Vendor Assistance (0.01%), and Freight (12+%). When the modular option is selected the model adds freight costs for the additional delivery from the fabrication yard to the project site. The nominal average percentage for each of these categories is provided in parenthesis but the operator has the option of inputting any desired percentage for any category. This percentage is applied to the FOB equipment cost from Table I. Table II then shows the Supply & Erect subcontractor cost for supplied equipment and materials. The model automatically includes the following contracts as Supply and Erect batch plant for concrete and black top used in site preparation, flares and support stacks, product storage tanks, and plant buildings. Small amounts are allocated for miscellaneous small contractors for all the various plant systems. Merlin Associates Independent Engineering Services Page No. 11

Table II then shows the bulk materials supplied free-issue by the EPC contractor to the various subcontractors. These costs are factored from the total equipment costs developed for each of the plant systems. Table II then shows the labor costs for all subcontractors. These costs include the direct labor and site supervision for all subcontractors. The costs use the all-in rate that includes all the sub-contractor costs actual hourly rates by skill, benefits, overhead, small tools, work consumables, subcontractor provided construction equipment, and then project specific costs such as: target incentive/bonuses; travel incentives; travel expense for mobilization and demobilization as well any interim trips; and site living expenses for meals, housing, and travel around the site. These costs are summed across to provide a total cost by plant system. Below the plant systems carried down from Table I, Table II has costs for Plant Buildings; Capital Spares, Chemicals, and Startup Equipment charges for dehydration, acid gas removal, etc that are considered part of Working Capital; Construction Camp Operation and Maintenance these are the costs to operate and maintain the construction camp (if provided) during the construction, commissioning, and startup phases of the project; EPC Site Management and Services that includes the EPC contractors site project management team, subcontractor monitoring and general supervision, etc.; EPC Contractor Home Office and Fees that includes the cost for the home office detailed design and procurement team, overheads, and profits for the contractor. The Plant Buildings are specified in the model and costs calculated based on how many trains and site location. Spares and Chemicals are factored from equipment costs. Construction Camp Operations and Maintenance is a function of the size of the camp as determined by the peak staffing level specified in the input data sheet. EPC home office costs are calculated as described above. EPC site costs are calculated as described above. At the bottom of Table II, the model calculates the total manhours by dividing site labor costs by the All-in rate to give a close approximation of direct labor and supervision manhours. The model also reports direct manhours for the Construction Site and the Shipyard location if a modular option is selected. Table III The first section of Table III shows the Marine and Harbor costs. These are very often done as a separate subcontract(s) and occasionally as a separate EPC contract. They are very site specific and most of the costs have been explained previously. Ship Handling Facilities are project owned and capitalized tugboats necessary to moor and undock the LNG and product carriers. At least three tugboats are normally involved in every mooring and unmooring operation and in addition at least one spare is provided. At least one of the tugboats is equipped for full fire-fighting capabilities. Alternatively, a lease arrangement may be used and no capital cost will accrue to the project. The Engineering costs in this category are those specific to the Marine facilities and are factored from them. The next section of Table III shows the non-plant Infrastructure Costs. These include the construction camp, permanent operations camp, and general community infrastructure. The Merlin Associates Independent Engineering Services Page No. 12

construction camp is sized from the peak staffing input. The permanent operations camp is specified on the input data sheet, as are the community infrastructure costs. This total category varies from nothing to more than $200-million. At this point all costs are summed vertically to provide the total Engineering, Procurement, and Construction Contractor cost. The model divides this cost by the design LNG capacity to produce the unit cost US$/tonne of annual LNG capacity for comparison to alternative projects. The remaining category of Table III is Other or Owner costs. The first component shown is Operating Company Project Management Costs. This category accounts for expenses incurred by the Project Owners Special Purpose Company that is set up by the project participants to own, in most cases, and operate the facility. Major costs included in the Owner Cost category are discussed below. Admin & Tech Service, Office and Field Management the Project Management Team (PMT) during project implementation. This is 100% Operator Company expense for their own administrative and technical personnel those people charging directly to the project. It does not include corporate overhead and project monitoring costs by the Participant companies. Outside Services are for the use of various outside technical, engineering, reproduction, transportation, and other supporting services necessary for the Operator Company not justified as full time internal personnel. Fees & Royalties expenses are primarily payments for the use of Participant company technical services and royalty payments for the use of proprietary information/technology from either Participant or outside companies. The model automatically calculates royalty fees for the ConocoPhillips Optimized Cascade process and the activated MDEA process. Vehicles & Temporary Facilities covers Operator temporary offices and storage buildings at the construction site, and vehicles for Operator personnel at all locations during the construction phase.

Owners Project Management Costs are factored based on whether the project has been specified as Complex, Mega Multi-Participant Project (Northwest Shelf, Angola), Simpler Multi-Participant Project (Oman LNG, Nigeria LNG), or Single Participant Project (ELNG, Atlantic LNG). The designator reflects whether decisions are straight forward and how many parties deliberate over them. The next component of Other costs is Capitalized Movables. This is the cost for plant trucks, maintenance equipment, laboratory equipment, furniture, etc. The model has a built-in list for this that is the same for all projects although not a huge amount of money. The next component of Other costs is Pre-Commitment/Pre-Operational Expenses. These are project development and pre-plant startup operational expenses and include pre-feasibility studies, feasibility studies, Front End Engineering Design study, contract negotiations for EPC, marketing, shipping, etc. Some companies capitalize these costs to the specific project when it proceeds others do not. The amount is specified amount on the input data sheet. The next component of Other costs is Construction All Risk Insurance. The current insurance market makes it difficult or impossible for some contractors to obtain this insurance. Most Merlin Associates Independent Engineering Services Page No. 13

projects have determined that it is cheaper for the project company to buy the insurance than to let the EPC furnish it. The cost is calculated as a percentage of the EPC contract value. The next component of Other costs is Pre-Operational Expense. This includes the cost to mobilize, staff, train, develop office space, and develop the initial Project Company Corporate staff and the plant operating and maintenance crew. The cost is calculated as a percentage of the EPC contract cost. The next component of Other costs is Construction Period Local Taxes. A few projects have incurred local taxes. The amount is specified amount on the input data sheet. The next component of Other costs is Royalty Payments for technology licensors. One of the liquefaction licensors charges a substantial royalty. A few of the internal processes use licensed technology. The amount is specified amount on the input data sheet. The last component of Other costs is Startup Expense. Typically, an experienced staff of specialist startup operators and technicians are brought in six months prior to startup and stay on site for three to six months after startup to help deal with the issues common to a new, large, and very complex processing facility. The cost is calculated as a percentage of the EPC contract cost. The Sum of the EPC facilities cost and the Owner related costs provides the Total Project Cost. Merlin Associates does not typically provide contingency in their estimates. If the client wants a specified contingency, it can be put into the Input data sheet and will show up here on the Output report. The Total Project Cost is then totaled vertically to this point. 1.4 Current Cost Implications In addition, Merlin has had several assignments in recent years to assist our clients in understanding the changing LNG cost environment. From about 1995 through 2002 the LNG industry experienced a period of minimal cost escalation 1 to 1.5% annual escalation and even lower in some locations. Beginning in 2002, the demand for equipment and materials used in LNG plants began rapidly increasing. The increase is a result of increasing demand for LNG projects but even more so by the huge economic expansion of developing countries China in particular. This has resulted in material and equipment escalation far in excess of the 1995 2002 period and remains on an ever-increasing growth rate. Specific to LNG project demand, manufacturers and fabricators supporting the LNG industry apparently began approaching their installed capacity at about this same time. Delivery times for long-lead equipment items have been increasing since about January 2003. A few of the manufacturers have increased their capacity such that this is not a continuing problem; however, many of them have not been able to increase their capacity as fast as demand has grown. Further exacerbating this problem is the exchange rate between the US$ and the Euro. Historically, LNG projects were implemented on almost a 100% US$ contractual basis regardless of their site location or sourcing of equipment and other resources. Beginning in 2003, the US$ began declining against the Euro. Compressors, gas turbines, alloy pressure vessels, and many types of heat exchanger are typically supplied by Euro based manufacturers. Today the typical LNG project has a sigMerlin Associates Independent Engineering Services Page No. 14

nificant portion of its expenditures on the basis of the Euro. The US$ is often used for a majority of the remaining contract expenditures with a minority of expenditures split between Far East and host country denominations. This changing split in project expenditures has resulted in a significant increase in LNG project costs historically estimated on a 100% US$ basis. Beginning in about January 2003, the demand for other LNG project resources particularly EPC home office skilled labor and construction site management labor began to exceed the then available supply. This demand is currently continuing to increase faster than new supplies have developed. The end result of this rapidly changing scenario is that project costs are currently experiencing 9 12% annual escalation. EPC demand caused escalation is more than that. A project trying to be completed during the period 2008 2012 falls into what Merlin categorizes as extreme high EPC demand. The single major factor triggering this phenomenon is the Qatari scheduled implementation of six 7.8 Mtpa projects every 9 months for a period of about 3 4 years. It is important to understand that on a project with a 4 year execution schedule AFTER final investment decision will experience as much as a 50% increase in money-of-the-day project costs compared to projects that are currently starting up. 1.5 Unique Aspects of the Merlin LNG Import Terminal Capital Cost Estimating ModelTM Capital cost data for specific LNG import terminals included in the Merlin LNG Import Terminal Capital Cost Estimating ModelTM database have been updated to reflect current costs for LNG storage tanks, unloading systems, relief and blowdown systems, and utility systems derived from LNG liquefaction plant projects using similar/identical equipment and from the few actual LNG Import terminal projects which have been implemented in the recent past. LNG import terminals, because of their location and dependency on gas sendout demand pattern are even more site and project specific than liquefaction plants. The Merlin LNG Import Terminal Capital Cost Estimating ModelTM is based on a design philosophy typical for a major international energy company being installed in Europe or the US and in emerging energy markets of developing countries, typically supplying a large electric power generation plant. It does not reflect the highly conservative basis of design used for Japanese import terminals with their unique safety, security of supply, environmental, and demand characteristics. Estimating methodology is similar to that used in the liquefaction model. A project specific equipment list is developed using appropriate capacity and escalation factors. Bulk material costs are calculated from factors against related equipment costs based on actual installation cost data. Labor manhours are developed on a US Gulf of Mexico basis and labor costs calculated based on expected site productivities relative to the US Gulf of Mexico and site specific all-in labor rates. The model results have been demonstrated to be within + 10% of lump-sum cost estimates prepared by engineering-procurement-construction contractors using the same basis of design characteristics.

2.0 LNG TECHNOLOGY COMPARATIVE STUDIES


Merlin has provided process engineering studies and cost estimating benchmarking studies to all the major LNG liquefaction process licensors. These study efforts have been to provide independent review of the competing liquefaction processes to the licensors in support of their ongoing optimization efforts. As a result of these studies and the work that Merlin has done in support of project finance of many of the existing and ongoing LNG projects, we have developed a broad and very detailed database of the Merlin Associates Independent Engineering Services Page No. 15

technical aspects of many of the LNG processes. We have used this database to support studies for many clients in their selection of the most appropriate LNG liquefaction process for their potential projects. Merlins efforts in this area vary. The most detailed approach is involves developing a fully detailed process simulation for the potential project for each of the process technologies of interest with associated capital cost estimate. Alternatively we provide energy and material balance information for the envelope around the liquefaction unit and develop only enough information to specify major equipment components that are used to develop the detailed cost estimates.

3.0 PROJECT IMPLEMENTATION RISK ASSESSMENT


Merlin commonly evaluates projects utilizing risk assessment criteria. Merlin assesses the likely outcome due to various failure scenarios of the project execution plan. The Operator and Prime Contractor usually place emphasis on achieving on-time and under-cost completion and do not always provide contingency planning until a crisis develops. The project execution plan as agreed between Operator and Prime Contractor is usually realistic for the specified assumptions but is probably neither optimistic nor overly pessimistic. It is most often described as a plan with a 50% probability of being achieved within budget and schedule - it also has a 50% probability of exceeding the cost estimate and not being completed on time if it has truly been developed with this philosophy. In addition to cost and schedule variance, the other major project risk exposure is confidence in reliability and capacity of the project facility. Merlin has a unique history and reputation for providing both technical risk analysis and standard project risk analysis. Technical risk analysis includes detailed review of the process technology, the specific hardware to be used, and the overall project implementation planning. Merlin Associates will provide a set of risk criteria or a band of predicted outcomes. The basis of Merlin's risk analysis is development of an independent capital cost estimate using Merlin's proprietary Capital Cost Estimators. Merlins proprietary project schedule is linked to the capital cost estimator. Merlin has developed and maintained a summary level project schedule for each of the LNG chain segments utilizing only sufficient activities to determine project duration, critical path activities, and sufficient activities to allow detailed capital cost estimating. The summary level project schedule will typically have 400-600 activities depending on whether the full feedgas system is included or not. The Merlin summary level project schedule with the Merlin capital cost estimate predicts expenditure phasing on monthly and annual time periods. The capital cost estimate with the associated project schedule is the Merlin deterministic capital cost estimate. This detailed estimate is summarized to 30-50 major cost categories for probability analysis. Statistical probability analysis for the costs and schedule is done using the @Risk program with Latin Hypercube random sampling of all the assigned probability distributions. We use triangular probability distributions and take into account the affects of cost/schedule variables that have internal dependencies with other cost/schedule variables. A typical probability analysis requires from 750 to 1500 iterations in order to produce smooth probability curves. Although the full spectrum of project probabilities are developed, Merlin typically report the Mean nonexceedance probability data (usually similar to the project's 50% probability data); the 75% non-exceedance probability data (sometimes called "Most Likely"); and the 95% non-exceedance probability data (often called the "Worst Case Scenario"). The Merlin 75% probability data is a prediction of project outcomes assuming industry average problems, engineering judgment of additional project costs for the site-specific location to resolve these problems, and adjustment for known site-specific problems. The 95% probability data assumes a higher frequency and duration of problem occurrences. Merlin Associates Independent Engineering Services Page No. 16

The complete risk analysis method is justified for the financing community on all LNG grass roots chain projects and most expansion projects. It is frequently justified for many of the equity participants who often do not have internal technical expertise in LNG technology and an up-to-date database of LNG project costs. Use of a third party consultant jointly by the LNG sellers and buyers is useful to eliminate internal disagreements and can greatly assist in reaching agreement on the actual details of the final sales agreement. Most LNG projects are multi-participant projects where an independent third party used jointly by all parties can be very helpful in avoiding internal conflicts.

4.0 LNG TECHNOLOGY COURSES


Merlin Associates presents LNG technology and formation courses directly and on sub-contract. A typical agenda for an LNG technology seminar is shown below. The course is normally presented completely by Merlin personnel although occasionally outside experts are also used.

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Agenda LNG Technology and Project Formation Seminar I. Overview of LNG Industry II. Project Structure and Formation 1.0 LNG Chain Characteristics 2.0 Physical and Commercial Chains 3.0 Phases and Segments 4.0 Organizational and Accounting Structures III. Project Management 1.0 Project Definition 2.0 Project Execution Options 3.0 Project Engineering Procurement & Construction Contractor Qualifications 4.0 EPC Selection 5.0 Owners Project Management Team 6.0 Project Scheduling 7.0 Project Guarantees 8.0 Project Performance & Completion Test IV. Reserves and Upstream Development 1.0 Reserves Characteristics 2.0 Reserves Requirements 3.0 Costs of Reserves V. Liquefaction Technology 1.0 Basic Gas Processing Technology 2.0 Liquefaction Process Selection 3.0 Liquefaction Train Capacity Selection 4.0 Major Equipment 5.0 LNG Storage Tank Sizing & Technology Options 6.0 Marine Facilities 7.0 Future Technology Trends VI. LNG Shipping 1.0 Containment Systems 2.0 Fleet Sizing Merlin Associates Independent Engineering Services Page No. 18

3.0 Capital and Operating Costs 4.0 Future Trends VII. Import Terminal Technology 1.0 Basic Technology 2.0 Vaporization Selection 3.0 Major Equipment 4.0 LNG Storage Tank Sizing & Technology Options 5.0 Marine Facilities 7.0 Future Technology Trends VIII. Capital & Operating Expense 1.0 Methodology 2. Liquefaction Plant Capital Cost Variables 3.0 Contingency 4.0 Risk Evaluation 5.0 Sample Liquefaction Plant Cost Estimate 6.0 Sample Import & Regasification Cost Estimate IX. LNG Economics & Pricing 1.0 Cost of Service Concepts 2.0 Comparison of Competing Projects 3.0 Netback Pricing 4.0 Competitive Issues X. LNG Supply & Demand outlook 1.0 Pacific Basin Supply & Demand 2.0 Atlantic Basin Supply & Demand 3.0 New Sellers 4.0 Emerging Markets 5.0 Spot Trading & Primary Characteristics XI. Financing LNG Projects 1.0 Equity vs. Project Finance 2.0 Process Description 3.0 Implementation Schedule Merlin Associates Independent Engineering Services Page No. 19

4.0 Risk Identification & Mitigation 5.0 Ship Finance Merlin also provides specific seminars on Project Finance (3 4 days), Gas Processing, and LNG Technology Selection.

5.0 MERLIN ASSOCIATES EXPERIENCE AS TECHNICAL CONSULTANT


Merlin Associates has provided Technical Consulting services for most of the major international energy companies of the world and many of the national energy companies. This work has been performed on nearly every potential LNG Export and Import Project considered. A brief listing of the LNG Export and Import projects Merlin has worked on are shown below:

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Project No. 900105

Project Location Canada USA Sao Paulo, Brazil United Kingdom Italy Portugal Germany Japan Finland Yugoslavia India Korea Taiwan Sao Paulo, Brazil India & China West Coast, India East Coast, Malaysia Sao Paulo, Brazil Barcelona, Spain East Coast, Italy Izmir, Turkey Ashquelon, Israel Izmir, Turkey Hong Kong, China Generic Hong Kong, China Hong Kong, China Hong Kong/Shanghai Karachi, Pakistan Sines, Portugal Ennore, India Generic Generic Ennore, India Generic Fortaleza, Brazil Gujarat Pipavav, India Pecem, Brazil Sines, Portugal Guandong, China Dabhol, India Tuntex, Taiwan China - Guangdong India - Hazira Turkey - Izmir Spain - El Ferrol Brazil - Sao Paulo Columbia Bahamas, Freeport USA & Mexico Shenzen, China

Full listing of LNG Import Terminal Experience of Merlin Associates Client Name Type of Work LNG Cost & Competition Study-1st Ed. Full capital, Operating & Maintenance cost estimates Sold to general industry 2, 4, 6, and 8 million tonnes/year options Co-Authored with Poten & Partners Cost of Service calculations

920801 941103 950102 950104 950504 950602 950603 950604 950605 950902 951002 951101 951103 960101 960104 960406 960501 960503 960703 961002 970502 970903 971002 980203 980701 980702 981002 981003 991003 950307

Nova Corp/Techno Plan/Tenneco Amoco Amoco YTL Amoco Amoco Amoco Amoco Amoco Amoco Amoco Exxon Arco Arco Exxon VICO/Lasmo CIR, Inc Texaco Enron Mobil Tamil Nadu Industrial Dev Corp Mobil Texaco Texaco Texaco Texaco Enron IDBI/Enron Arco LNG Cost & Competition Study-2nd Ed. Sold to general industry Co-Authored with Poten & Partners

Feasibility Study Feasibility Study-Comparison multi-supply/import options Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Organization/staffing study BOD for FEED Prelim FEED Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Develop Cost Est Model Develop Cost Est Model Engr Spec, SPA, Developer Selection Expand Cost Est Model Feasibility Study Feasibility Study Feasibility Study Feasibility Study Feasibility Study Proj Finance, Indep Engineer Indep Engr, Due Diligence for Investor Full capital, Operating & Maintenance cost estimates 2 million tonnes/year and 4 million tonnes/year Cost of Service calculations

000603 010701 010901 020204

Ryder-Scott/EcoPetrol Enron Chevron-Texaco Guangdong LNG Project Owners

Feasibility Study Feasibility Study Feasibility Study Due Diligence Study for Project Owners & ABN AMRO

Year Performed 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1991-1992 1992 1994 1995 1995 1995 1995 1995 1995 1995 1995 1995 1995 1995 1996 1996 1996 1996 1996 1996 1996 1997, 1998 1997 1997 1998 1998 1998 1998 1998 1999 1999 1999 1999 1999 1999 2000 2001 2001 2002

LNG Import Terminal Work Experience 1 of 2 Merlin Associates Independent Engineering Services Page No. 21

Project No. 020302 030102 030403 031102 040302 040702 040703 050103 050202 050307 060501 071203

Project Location Lazaro Cardenas, Mexico Freeport LNG Import Terminal Cost Estimate Manatee Import Terminal, Florida, USA Sears Island Maine, USA, LNG Import Terminal Freeport LNG Import Terminal Port Lavaca Import Terminal Import Terminal Standards & Regulations St John's, Nova Scotia, Canada-Canaport LNG Import Terminal Bear Head LNG Import Terminal, Canada Pakistan LNG Import Terminal Isle of Grain Import Terminal Cost Estimate - Poten Lithuanian LNG Import Terminal - SAIC

Full listing of LNG Import Terminal Experience of Merlin Associates Client Name Type of Work Tractebel International Project Definition Study Freeport LNG, Freeport, TX, USA Provide Independent Cost Estimate for FERC filing Manatee LNG Import Co. LLC Provide Feasibility Study for Project Formation Process Manatee LNG Import Co. LLC Provide Feasibility Study for Project Formation Process Royal Bank Scotland, ConocoPhillips Indep Engr, Due Diligence for Lender CrossTex Energy Inc. Indep Engr, Due Diligence for Investor State of California Technical Advisor Irving Oil & Repsol Provide Advisory Consulting Services to Develop Basis of Design for Import Terminal and support Owner during FEED study Anadarko Petroleum Co Indep Engr, Due Diligence for Investor Sui Southern Gas Co Ltd. Develop Basis of Design for FEED study RFP EON Ruhrgas Provide Third Party Capital Cost Estimate SAIC Develop Basis of Design for FEED study RFP

Year Perfo 2002 2003 2003/20 2003/20 2004/20 2003/20 2005/20 2005/20

2005/20 2005/20 2006 2008

LNG Import Terminal Work Experience 2 of 2

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Project No. 85001 890301 900104 900602 900701 901001 901101 910501 910801 911201 911202 920601 920602 920605 920701 920703 930102 930301 930302 930401 930501 930503 930601 930801 930802 931001 940201 940401 940501 940503 940504 940702 940706 940802 941002 941101 941201 950105 950301 950302 950303 950305 950306 950307 950401 950403 950404 950501 950502 950503 950703 950802 950901 951003 951102 951201 960102 960103 960104 960105 960203 960302 960401 960402 960404 960502 960601 960602 960701 960901 961003

Full listing of LNG Export Project Experience of Merlin Associates Project Location Client Name Australia's North West Shelf Woodside Petroleum Ltd. Kvaerner Floating LNG Cost Est Kvaerner Engr Kangean Island LNG Study ARCO-Indonesia F Train PT Badak - Ind Cost Est Pertamina/VICO Malaysia LNG Petronas Kenai Alaska LNG State of Alaska Sakhalin LNG Tokyo Gas F Train PT Badak Proj Fin Pertamina NWS LNG Capacity Increase Woodside Petroleum Ltd. NLNG Project Review IFC/NLNG F Train-Long Term Retainer Pertamina Gorgon Project Texaco Trinidad - Atlantic LNG British Gas Venezuelan LNG Inquiry Exxon Malaysia LNG Occidental Sakhalin II LNG Marathon Netherlands Gasunie, NV GasUnie, NV MLNG Phase II - Tech Audit Petronas Scarborough LNG Study Exxon Cristobal Colon Study Exxon LNG Study Phase II Amoco PNG Cape Possession LNG Study Exxon Gorgon Integration Evaluation Texaco Alaskan LNG Study Exxon, Arco, BP Natuna LNG Study Exxon Cristobal Colon LNG Lagoven, PdVsa Sakhalin Project Capex Est Exxon Yemen Capex Estimate Exxon Trinidad Project - Atlantic LNG Amoco Competitive Pacific LNG Study Chevron PT Badak G Train 3rd Party Est Pertamina A/FE LNG Study GasUnie, NV APCI Owners Seminar Presentation APCI Trinidad LNG Project Texaco Max LNG Train Size Study Exxon, Amoco Multiple Project LNG Cost Analysis Exxon Gorgon Proj Risk Analysis Texaco Gorgon/Natuna Project Competitive Analys Texaco Pipeline vs LNG Study Brown & Root Engineer Gorgon Pricing Strategy Texaco LNG Competitive Project Analysis Texaco LNG Project Comparisn Arco Alaska LNG Supply & Demand Study Amoco C & C Study, 2nd Edition LNG Industry Trinidad LNG Cost Est Phillips Pet Co. PT Badak G Train Expansion Petronas/Credit Lyonnais Natuna/Arun Act Cost Data Amoco Cristobal Colon Cost Est Shell Sakhalin LNG Operating Exp Amoco Oil & Gas Jrnl - LNG Economics LNG Industry Timor Sea LNG Study Hardy Pet, Oryx, etc Oman LNG Prelim Project Study Oman LNG, Chase Gorgon Competitive Analysis Exxon LNG Proj Sched Milestone Data Exxon One Train Economies of Scale Enron LNG Oper/Maint Study Atlantic LNG Trinidad Bid Analysis Exxon APCI Cost Reduction Study Exxon China LNG Competitive Study Exxon LNG Seminar Texaco G Train Project Monitoring Petronas Qatar Material Bal Study Enron Board of Directors Presentation Oryx Calibrate & Adjust Cost Model Exxon Oman LNG Project OLNG/ABN AMRO Natuna FEED Contract Strategy Exxon Qatar LNG Capex Est. Enron DME/LNG COS Amoco Amazon LNG Tenneco Develop Capex Model Mobil H Train Project Review Pertamina

Type of Work Year Performed Indep. Engr 1985-1992 Tech Consult 1989 Tech Consult 1990-91 Tech Consult 1990 Owners Engr 1990-91 Expert Witness 1990-91 Tech Consult 1990 Indep. Engr 1991-93 Indep. Engr 1991 Indep. Engr 1991-92 Indep. Engr 1991-93 Tech Consult 1992 Tech Consult 1992 Tech Consult 1992 Tech Consult 1992 Tech Consult 1992 Tech Consult 1993 Indep. Engr 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993-1996 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1993 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Indep. Engr 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1994 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1997-1999 Tech Consult 1995 Indep. Engr 1995-1998 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995-1996 Indep. Engr 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1995 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Indep. Engr 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Indep. Engr 1996-2001 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Tech Consult 1996 Indep. Engr 1996

LNG Export Project Work Experience 1 of 3 Merlin Associates Independent Engineering Services Page No. 23

Project No. 961005 961202 970301 970303 970701 970803 971202 971203 981003 981201 990501 990602 990801 991102 000102 000301 000303 000602 001002 010101 010202 010203 010504 010603 010902 010903 011001 011201 020202 020203 020402 020502 020503 021001 021202 021203 021204 030101 030301 030401 030701 030705 030803 030901 031001 031101 031201 031203 031205 040103 040201 040203 040301 040504 040604 040705 041101 041102 041103 041104 041104 050101 050106 050301 050302 050304 050305 050503 050601 050901 050902

Full listing of LNG Export Project Experience of Merlin Associates Project Location Client Name Bayu-Undan Audit Consultancy PPCo, BHP, Hardy, et al Natuna SCSA Cost Review Exxon Norwegian LNG Saga Petroleum PRICO II LNG Third Party Audit Pritchard-Black & Veatch OLNG Bond Issue Chase/OLNG Small LNG Proj Economics Poten & Partners Tangguh 3rd Prty Cost Est ARCO Pertamina-H Train Monitoring Pertamina/Fuji Bank Dabhol Phase II Financing-Indian Banks IDBI Tangguh Optimization ARCO Tangguh FEED/EPC Contracts ARCO LNG Course Texaco LNG Ship Project Finance NLNG/CSFB Badak LNG Reliab & Enhancemnt Pertamina/Fuji Bank Venezuela LNG Project Enron Floating LNG Third Party Review ExxonMobil LNG Proj Cost Benchmarking Shell Darwin LNG Project Evaluation TEPCO Tangguh Owner Estimate BP/Pertamina LNG Cost Analysis - Benchmark 2010 Shell CSFB NLNG Ship 10 Finance NLNG/CSFB Camisea LNG Chain Pre-Feas Study Hunt Oil Corp OLNG Refinance OLNG/Bk Tokyo-Mitsub LNG Cost & Competition 2002 LNG Industry NLNGPlus Project Finance NLNG, Credit Lyonnais, Citibank, et al Bolivia/Chile LNG Benchmark Repsol/BG/BP/Bechtel Camisea Owner's Engineer Hunt Oil Corp Brass LNG Benchmark Phillips, Agip, NNPC Egyptian LNG Project Finance BG, Edison, EGPC - SocGen West Niger Delta Cost Sensitivity ExxonMobil, Conoco, Chevron, NNPC Amazon/Green LNG Petrobras NLNG Ship 11 - 14 Finance NLNG/Fortis Bank Venezuela Deltana LNG Technology Study PDVSA/INTEVEP Equatorial Guinea LNG Technology Study Marathon Oil Co. Qatar LNG Technology Study Qatar Petroleum Tangguh Owner's Estimate Update BP/Pertamina NLNG Train 4 & 5 Monitoring NLNG, Credit Lyonnais, Citibank, et al GTI - Project Finance Course - Beijing US Trade Agency, Gas Tech Institute EOG Resources, Inc. - ALNG Train 4 EOG Resources Angola Benchmarking Study - BP/CT/EM Angola LNG Project Team Qalhat LNG Independent Engineer Government of Oman, OLNG Equatorial Guinea Third Party Cost Estimate Marathon Oil Co. Tangguh Large Train Prelim Cost Est BP/Pertamina ELNG Train 2 Independent Technical Consultant BG, Petronas, EGPC - Calyon et al Benchmark Study BP Donggi LNG Project US Market Price Study Medco, Pertamina, BP-Migas Angola LNG Owner's Estimate Angola LNG Project Team Algeria-Expert Witness for Lawsuit Sonatrach OLNG Replacement Cost Update OLNG Tangguh EPC Contract Price Escalation Study BP Algeria-GL1Z MCHE Failure/Replacement Study Sonatrach ELNG Train 1 - Construction Monitoring BG, Petronas, EGPC - Calyon et al QGas II Technology Study Marubeni Camisea LNG Due Diligence Evaluation Burlington Resources Sunrise LNG Benchmark Study ConocoPhillips OLNG/Qalhat Combined Replacement Cost OLNG and MOG of Oman AIChE Spring Meeting Presentation - LNG Costs American Institute of Chemical Engineers QGas III - Schedule Benchmark Study ConocoPhillips QatarGas 3 - Benchmark Cost ConocoPhillips MFC Technology Benchmark Study Statoil Snhvit Capital Cost Benchmark Study Statoil BOD Upgrade for Shtokmanovskoye Hydro Oil & Gas Company IQPC Conference Presentation-LNG Costs IQPC Brass LNG Project Benchmark & Optimization Brass LNG Project Sponsors Asian LNG Supplies - Singapore-LNG Costs Conference Company Peru Camisea Capital Cost Update Hunt Oil Corp GTI Base Load LNG Course - Sep 26 - 30, 2005 Houston Gas Technology Institute Qgas 3 - Capex Analogs for COP AFE approval ConocoPhillips AP-X vs. SGSI P-MR Technology Selection NLNG LLC ELNG Train 2 - Construction Monitoring BG, Petronas, EGPC - Calyon et al EMR vs. AP-X Technology Evaluation NNPC and ExxonMobil

Type of Work Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Indep. Engr Indep. Engr Tech Consult Tech Consult Tech Consult Indep. Engr Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Indep. Engr Tech Consult Indep. Engr Tech Consult Owners Engr Tech Consult Indep. Engr Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult

Year Performed 1996 1996 1997 1997 1997 1997 1997 1997 1998 1998 1999 1999 1999 1999-2002 2000 2000 2000 2000 2000-2002 2001 2001 2001 2001-2002 2001-2002 2002 2001-2002 2001-2006 2002 2002/2005 2002 2002/2003 2002/2003 2002 2002 2002/2003 2002/2003 2002/2005 2003 2003 2003 2003/2007 2003 2003 2004 2004 2003/04 2004/05 2004/05 2004 2003/04 2004 2004/05 2004 2004/05 2004 2004 2005 2004 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005 2005/07 2005

LNG Export Project Work Experience 2 of 3 Merlin Associates Independent Engineering Services Page No. 24

Project No. 051003 051101 051102 060101 060102 060202 060302 060304 060403 060404 060601 060602 060702 060801 060802 060902 060903 061001 061003 061201 070101 070102 070301 070302 070501 070601 070701 070702 070703 070901 070902 071003 071101 071102 071103 071104 071201 071202 071204 071205

Full listing of LNG Export Project Experience of Merlin Associates Project Location Client Name Shtokman LNG Technology Selection Shtokman Project Sponsors Bechtel LNG Project Benchmarking Bechtel International Brass LNG Independent Engineer Brass LNG Project Sponsors/Calyon OC Landfill Methane Recvy/LNG Plant Safety Review State of California Qalhat LNG Performance Testing Qalhat LNG/Bank of Tokyo Mitsubishi/Calyon Author Project Finance Chapter for Book Gas Technology Institute/Poten Brass LNG FEED Capex Analysis Brass LNG Project Sponsors Shtokman Benchmark Shtokman Project Sponsors Sonatrach Skikda KBR Proposal Benchmark Sonatrach EM - Equatorial Guinea Train 2 Benchmark ExxonMobil Randall Gas Technology Niche LNG Risk Evaluation Randall/ABB GTI - LNG Baseload Course - Houston, October 2006 Gas Technology Institute OK LNG Project Independent Engineer OK LNG Project Sponsors/RBS Tangguh LNG Phase II Capex Update Tangguh LNG Project Sponsors OLNG/QLNG Replacement Cost - Insurance Update Qalhat LNG/Bank of Tokyo Mitsubishi/Calyon EGLNG Opex Benchmark Study EGLNG Project Sponsors Gorgon Owners Estimate Gorgon Project Sponsors BP LNG Costing Escalation/Update BP NLNG - Bond Refinance NLNG Project Sponsors GTI - LNG Baseload Course - various locations Gas Technology Institute ELNG Insurance Update BG, Petronas, EGPC - Calyon et al Cost & Competition Report - JV with Poten LNG Industry Independent Technical Consultant - Peru LNG Project IDB, IFC, USExIm, KExIm, et al, PLNG Sponsors Private presentation on LNG Technology - XinAo Group Ltd XinAo Group Benchmark PNG LNG - BG - Group BG DSLNG Project FID Support Studies-Mitsubishi Mitsubishi Masela Floating LNG Technology Selection Study - INPEX Masela Floating LNG Project Sponsors Cost & Schedule Benchmark Study - Chevron Energy Chevron Energy Poten/Petoro LNG vs. Pipeline Study - Norway Coast Petoro Gladstone LNG - Santos; Advisory to Board of Directors Santos Alaska Gas Utilization - LNG Option Evaluation - Risk Resolution, LLC State of Alaska NLNG Train 7+ Impact Review vs. T 1 - 5 Lenders & NLNG Project Sponsors GTI - LNG Baseload Course - Houston, October 2007 Gas Technology Institute Chevron-Angola Benchmark EPC costs to finalize contract Angola LNG Project Sponsors Donggi SLNG Owners Estimate-Mitsubishi Donggi Project Sponsors Noble Energy - EG T2 Capex/Opex Noble Energy GTI Baseload LNG Course - May 2008 Baltimore Gas Technology Institute GTI Baseload LNG Course - Nov 2008 Gas Technology Institute PLNG Process Simulation of Complete Chain IDB, IFC, USExIm, KExIm, et al, PLNG Sponsors Floating LNG Cost Study - Exmar, Inc Exmar, Inc

Type of Work Tech Consult Tech Consult Indep. Engr Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Indep. Engr Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Tech Consult Indep. Engr Tech Consult

Year Performed 2006 2006 2006/09 2006 2005/06 2006 2006 2006 2006/07 2006 2006 2006 2006/09 2006 2006 2006 2006/07 2006/07 2006/08 2006/07 2006/07 2008 2007/11 2007 2007 2007 2007 2007/08 2007 2007 2007/08 2008 2007 2007/08 2007/08 2007/08 2008 2008 2008 2008

LNG Export Project Work Experience 3 of 3

Merlin Associates Independent Engineering Services Page No. 25

Independent Engineer
Merlin Associates has a long history of providing Independent Engineer services in support of project financed energy projects throughout the world. Merlin has provided these services beginning in 1984 for the Northwest Shelf Project in West Australia. Since that time we have provided similar services for approximately 75% of the LNG projects implemented since 1985 and several non-LNG projects. Specifically Merlin has supported project financing for the following LNG Projects: Australias Northwest Shelf LNG Project 1984-1994. Malaysia LNG Project Dua (Two) 1992-1996 Pertaminas P. T. Badak F Train Expansion 1991-1993 Pertaminas P. T. Badak G Train Expansion 1994-1998 Oman LNG Project 1995-2001 (Trains 1 & 2 at Sur, Oman) Pertaminas P.T. Badak H Train Expansion 1998-2000 Dabhol Power Company Phase II LNG Import Terminal 1998-1999 (Indian bank portion only) NLNG LNG Ship Nos. 8 & 9 purchase - 1999 Pertaminas Badak LNG Reliability & Enhancement Project 1999-2004 NLNG LNG Ship 10 purchase 2001 Nigeria LNG Plus Project Finance 2002 (NLNG Trains 4 & 5) NLNG LNG Ship Nos. 11, 12, 13, & 14 2002 Egyptian LNG Project 2002-2008 (Train 1) Qalhat LNG Project 2003-2007 (Third train at Sur, Oman) Egyptian LNG Project 2003-2008 (Train 2) Freeport LNG Import Terminal 2004-2011+ Brass LNG Project 2006-2011+ OK LNG Project 2006-2011+ Peru LNG Project 2007 2011+ NLNG 7+ - 2007 - 2008 A typical scope of work for Merlin Associates as Independent Engineer in support of Project Financing is shown below. This scope of work includes most of the possible options which we have been requested to provide. Not all projects have included all of these services. Merlin Associates will audit the proposed project facility in order to support the decision-making process for the various banks participating or considering participating in financing the project. The audit is performed as an Independent Engineer with no Merlin involvement in the outcome of the analysis or in the actual project work. The result of the audit will be to provide a written report explaining the findings of the audit. Frequently Merlin makes presentations of the results to the Lead Bank, The Arranging Bank Group, and/or participates in Syndication meetings to other potentially interested banks at various locations around the world. Definitions: EPC Engineering, Procurement, Construction contractor company designated as the Prime Contractor for project implementation.

Merlin Associates Independent Engineering Services Page No. 26

Independent Engineer Engineering company that will provide an independent Technical, Financial, Project Management, and Project Implementation review of the potential project. Lead Bank this can be the Lead Bank, a designated Lead Technical Bank from the Arranging Bank group, Agent Bank, or any coordinating financial institution designated by the Lead Bank. Merlin Associates Merlin Owner/Company the party(ies) seeking to obtain Project Finance.

I. EVALUATION CRITERIA & SPECIFIC RISK ANALYSIS EXECUTION


When performing Independent Engineer services for project financing Merlin Associates performs risk analysis of all the major project implementation activities. These normally include the following areas of risk analysis. 1. Technical Design Analysis Process System All Project Facilities Feedgas production, field processing, gas conditioning, and liquefaction plus supporting utility systems, shipping distances and available shipping capacity, import regasification and power generation facilities with review of local marine facilities. Process Technology utilized in the process and utility systems in all project facilities. Foundation and Support Structure Design For Offshore Feedgas Facilities Pipeline Feedgas Transfer Systems Review of LNG Storage, Loading/Unloading, and Shipping Systems Review of Power Generation systems Review of local site interface issues covering all aspects. Review of Delivery Point Requirements Merlin can simulate the total project operation to evaluate how much excess capacity there is available in each link of the LNG Trade chain. This will provide an indication of potential future expansion capabilities as well as determining how much potential there is to make up delivery short-falls.

2. Project Management and Systems Project management system and major project participant organizations to be used relative to the project execution plan. Key personnel and their experience on similar projects in similar locations. Proposed project staffing levels by operator, project manager, and installation contractor.

Merlin Associates Independent Engineering Services Page No. 27

Proposed short-list of major contractors and sub-contractors if available. Project management definitions, procedures, and systems to be used for progress reporting, cost commitment and expenditure reporting, updating project cost estimates, change orders, and variance trend analysis.

3. Project Schedule Permitting status and requirements. Current status of the basis of design, design engineering schedule and relationship with procurement and construction. Major contractual philosophy, procurement methods, proposed sourcing, procurement scheduling and relationship with engineering, fabrication, and construction. Fabrication location(s), experience history, resource availability, technical competence of supervision and workforce, transportation scheduling. Transportation and offshore installation, construction, and support vessel capabilities and availability, and availability of alternate vessels for the offshore feedgas facility installation. Installation, hook-up, and commissioning scheduling for the offshore feedgas system. Construction location, potential infrastructure requirements during construction and operations. Availability of engineering, construction, and supervision labor resources, major contractor work history, and review of actual contractual agreements. Start-up scheduling. Overall available flexibility and consequences of slippage.

4. Project Implementation Review of the Project Development Plan for the overall project and for each of the LNG Chain Segments for the project. Review of past performance and experience level of each of the major participants in each segment of the LNG Chain Project. Includes both Sponsor side and Contractor/Vendor/Manufacturer side.

5. Estimated Capital Costs The actual potential variance for a project developed 50% probability non-exceedance capital cost budget estimate is primarily a function of the type of contractual agreement used to supply the facility. A lump-sum turn-key contract may have almost zero cost overrun potential, although a significant schedule slippage will usually expose the Operator to additional non-recoverable costs. A typical reimbursable fixed fee contract will usually have from 10 to 25% potential cost overrun variance with 5 to 10% cost under-run potential.

Merlin Associates Independent Engineering Services Page No. 28

Merlins Capital/Operating Cost Estimating ModelsTM produce a high accuracy cost estimate assuming that similar technology and facility throughputs are specified for the new project. The models develop their estimates using actual performance data from existing projects. The model cannot reflect new technology, significant shifts in competitive bidding, or non-traditional implementation planning. The estimate produced provides a high accuracy cost estimate that provides a yardstick against which all significant variances are rigorously analyzed. On the basis of this analysis the variances are either confirmed or projected as suspect. The Merlin cost estimate also reflects the previous analysis of technical design, project management, and predicted implementation planning and schedule. Adjustments are often reflected for additional schedule flexibility, the state of definition of the project basis of design, historical performance of the Operator and proposed major Fabricators and Contractors, as well as previous experience at similar project locations by other projects. 6. Operating and Maintenance Costs Merlin Associates reviews project operator's or technical manager's proposed staffing methods and levels, proposed maintenance programs, and predicted maintenance costs. Merlin Associates Capital Cost Estimators include a data-base of operating costs for various type facilities of many different companies to predict average annual operating costs for proposed new projects. The estimate basis is operation at design throughput conditions. The estimate is based upon historical information from other facilities with the same type of equipment. The estimate is sensitive to basic wage rates, staffing levels, design throughput, environmental operating conditions, age of the facility, how heavily loaded the facility is in relation to its design capacity, and a weighting for technical operating competence and maintenance quality.

II. INITIAL PROJECT REVIEW AND RISK ANALYSIS REPORT


Merlin will analyze the available project documents, drawings, and reports. The Lead Technical Bank will coordinate appropriate meetings with Owner/Company and arrange for the required documentation to be made available in a timely manner to Merlin. It is assumed that Merlin personnel will visit the Owner/Company offices for presentations and question/answer sessions to review the documentation and discuss project planning and philosophies with appropriate Owner/Company Project Management personnel. The following comments apply to all relevant entities to be evaluated and reviewed in the Due Diligence report Upstream, Liquefaction Plant, Common Facilities, other resource supply entities. A. Scope of Work Upon appointment as designated Independent Engineer, Merlin will receive a full scope of work. This is the basis of the Independent Engineers project Audit along with the project documentation listed below. B. Project Documentation Desired for Review in Merlin Home Office Project Basis of Design Project Capital Budget Cost Estimate and underlying assumptions Project Execution Plan Merlin Associates Independent Engineering Services Page No. 29

Project Schedule level III preferred. Project Process & Utility Flow Diagrams we do not typically require P&IDs. The PFDs and UFDs for all the major systems are necessary. Sometimes there are incidental systems that do not have to be made available. Minimum is the Overall Facility Heat & Material Balance envelope around the facility. We prefer to receive the liquefaction area H&MB but sometimes is not available offsite. In that event it will be reviewed (and notes made) during the site visit. Facility Plot Plans Project Organization Charts for Owner/Company Project Team and Major Engineering Contractor for each of their main execution locations. Project Procedures both for construction and operations. Monthly Project Progress Reports for ongoing projects and for the most recently completed operational LNG project. Current Five Year Business plan or other project appropriate documentation providing future Operating cost budget, expansion and minor capital budget planning. Report of current permitting and licensing status and forecast to complete each remaining permit/license. History of previous actual project Construction Performance to date & Capital Cost Allocation To Major Accounts, i.e., Engineered Equipment, Bulk Materials, Material Related Expenses (Ocean and Inland Freight, Customs Duty, Vendor Engr., Third Party Inspection), Erections SubContractors, Supply & Erect Sub-Contractors, Prime Contractor, Any Owner Overhead Costs that will also be included in the project. History of previous actual Operations Performance for all relevant entities. Processing performance, operating costs (if relevant), downtime actual vs. planned, future planning. Shipping history. History of any off-specification performance. Staffing, national vs. expatriate, HSE data. Environmental Impact Assessment report for existing and future projects. The Executive Summary may be enough but will assess during site visit. Project Financial Model and any supporting discussion of assumptions and options being considered. If appropriate and available for the Due Diligence Scope of Work Project Agreements EPC Contract Technical Advisor Agreement Construction Services Agreement Operating Agreement Gas Sales Agreement Merlin Associates Independent Engineering Services Page No. 30

LNG Sales and Purchase Agreement(s) Shipping Agreements where relevant to our scope of work Common/Shared Facilities Agreement(s) Agreements for non-project supplied resources electric power, cooling water, etc. Land-lease agreements (where appropriate) Where the project EPC contract is not yet awarded a review of the qualified EPC contractors and the current status of the proposal/award process. Usually it is most efficient if the documentation can be shipped to Merlin offices prior to the visit to the Owner/Company project offices. C. Key Personnel Desired Available for Questions & Answers 1. Owner/Company and EPC Project Managers. 2. Process/Project Engineering Supervisor that is familiar with project design and interface with upstream and downstream facilities. 3. Operations Supervisor familiar with proposed project facility operation. Should be able to review and discuss operating expense system and how the system will be applied to this project. D. Project Risk Analysis Report Merlin will immediately begin preparing the Project Audit/Risk Analysis Report. The report outline will have the following format: I. Introduction II. Executive Summary III. Current Project Status IV. Project Technical Risk Analysis V. Project Capital Cost VI. Project Schedule VII. Project Operating Costs The Introduction will define Merlin's basis of analysis. The Executive Summary and Current Project Status sections are believed to be self-explanatory. The Project Technical Risk Analysis section will review the project design compared to current technology, existing facilities, and comment on any significant differences. The project design and integration with downstream facilities will be reviewed for safety, adequacy, operability, maintainability, constructability, and reasonable capital and operating costs.

Merlin Associates Independent Engineering Services Page No. 31

Merlin does not have the current Basis of Design or the description of total facilities that will be installed under this project financing. Upon receipt of the full Independent Engineers project scope of work, a full project terms of reference will be agreed between Lead Bank and Merlin. The Project Capital Cost section will analyze Owner/Company capital cost estimate in comparison to similar most-recent projects and present Merlin's 75% Probable and 95% Probable NonExceedance cost estimates in comparison. The estimate data will be presented in the following format (assuming this is consistent with already developed project reporting formats) with appropriate discussion. Owner/Company Estimate Engineered Equipment Bulk Materials Material Related Expenses Erection Sub-Contractors Supply & Erect Sub-Contractors Prime Engineering Contractor Total The project cash flow profile for Capital Investment expenditures will be provided in this section of the report for both Owner/Company and Merlin's 75% Probability Non Exceedance Cost Estimate. Merlin's methodology of capital cost analysis and calculation of Probable Non- Exceedance cost estimates is based on using Merlins proprietary Capital cost estimating modelsTM with Microsoft Project and Excel software package the major project activities. The probability analysis is performed on the summarized cost accounts using @Risk for Project and @Risk for Excel. The Project Schedule section will provide Owner/Company expected major milestone achievement dates versus Merlin's expected 75% and 95% Probability dates. The Project Operating Cost section will provide Merlin commentary on the Owner/Company provided Operating cost data with reference to comparable costs at other existing facilities. The Merlin's Project Risk Analysis Report will be on the order of 50 100 pages. Merlin 75% Merlin 95%

III. ONGOING PROJECT REVIEW AND ANNUAL PROJECT REPORTING


Merlin has typically provided ongoing project review and monitoring services to the financing institutions during construction, commissioning, startup, and operation until conclusion of a satisfactory Completion Test. A. Ongoing Project Review Ongoing project review comprises Merlin reviewing various monthly and special project progress reports sent from Owner/Company directly to Merlin. Merlin reviews the reports immediately upon receipt but only reports significant issues that may impact project cost or completion schedule to Lead Bank. Merlin Associates Independent Engineering Services Page No. 32

Merlin will occasionally converse directly with the Owner/Company project liaison person regarding any questions arising from the reports to insure complete understanding. Merlin is essentially continuously available for questions from Banks (or any of the Syndicate Bank Members) with current overall project status. Merlin normally asks that all banks coordinate their contacts through a designated representative bank to avoid confusion and to insure proper communications. B. Annual Project Reporting Merlin typically provides an annual project update to the banks. This can be provided quarterly, semi-annually or annually. Merlin will visit Owner/Company's primary project office approximately thirty days prior to issuing one of these reports for and will then visit the plant construction site after the project review meetings. Merlin will then prepare a project update report that will have the same sections described in the Initial project review. The report will primarily focus on variances from the last report. It is assumed that this report will be approximately 15 pages in length and that 40 total copies will be reproduced and couriered to Agent Banks, Syndicate Bank members, and Owner/Company. C. Project Special Reports It is uncommon for the project basis of design to significantly change or be expanded during the course of execution. In the event that this should occur, Merlin is called upon to review the variance and report on it to the Financing Institutions.

IV. PROJECT COMPLETION WITNESSING


Owner/Company's contract with the prime contractor will specify that the project is complete and accepted upon completion of a satisfactory performance test by the facility. It is common for at least a portion of this testing to be witnessed by the Financing Syndicate Independent Engineer. The entire test usually takes place over several days (or weeks). Merlin normally is present only for one day at design processing rates and receives a copy of the test data for review and then sends a letter of their agreement that the project does perform to specification and has every likelihood of meeting project contract requirements. The Financial Terms and Conditions normally specify various conditions that must be satisfied to meet the Completion Test for conversion from Construction Phase to Long Term Operations Phase. Merlin reviews all specified proof of completion and provides a letter of compliance to the financing institutions.

Merlin Associates Independent Engineering Services Page No. 33

Technical & Benchmarking Studies


1.0 Qualifications and Experience Specific experience and qualifications for LNG Benchmarking experience and methodology include the following: 1.1 LNG Cost & Competition Report Merlin Associates has Co-Authored a study with Poten & Partners called LNG Cost & Competition that is offered to the industry. This study was first issued in 1992 and been updated periodically. The study benchmarks all the currently potential LNG projects at the time of issue with costs for recent actual projects included. The study includes the Upstream, Gas Transmission, Liquefaction, Shipping, and Regasification segments of the LNG chain. The study allows the reader to review costs between competitive projects at the delivery point from each of the LNG chain segments to the subsequent segment. The study provides comparison between projects to major import locations. The analysis is on the basis of Cost of Service defined as the real price per unit output (US$/MMBtu) of LNG/gas that the chain or chain segment must receive (net of condensate and LPG credits) to cover: forward capital and operating costs, sovereign take, and recovery of capital employed at startup including a required after-tax rate of return (hurdle rate). Merlin Associates develops all the capital and operating costs for every segment of the LNG chain for every project presented in this study and shares preparation of the actual report with Poten & Partners. The most recent revision of this study was published in May 2004. 1.2 Project Finance Support Merlin Associates provides due diligence/technical consulting/independent engineer services to the banks in support of project finance. Merlin Associates is the predominant company in the world providing this service and has been mandated in support of Project Finance for: Australias Northwest Shelf LNG Project Trains 1, 2, & 3; Malaysia LNG Dua Project Trains 4, 5, & 6; Australias Wanaea/Cossack FPSO Project; Indonesias P. T. Badak F Train Expansion Project; Indonesias P. T. Badak G Train Expansion Project; Indonesias P. T. Badak H Train Expansion Project; Thailands Tantawan FPSO Project; Indonesias P. T. Badak LNG Reliability and Enhancement Project; Oman LNG Project Trains 1 & 2; Oman LNG Project Refinance Bond Market; Nigeria LNG Project Ships 8 and 9; Dabhol Power Company Phase II LNG Import Terminal; Mexicos Cantarell Nitrogen Project; Nigeria LNG Project Ship 10; Nigeria LNG Project Ships 11, 12, 13, and 14; Nigeria LNG Project Trains 4 and 5; Egyptian LNG Project Train 1; Qalhat LNG Train (3rd Train at Qalhat, Oman); Egyptian LNG Project Train 2; Merlin Associates Independent Engineering Services Page No. 34

Freeport LNG Import Terminal; Brass LNG Project; OKLNG Project; Peru LNG Project; and, NLNG 7+ Project. These assignments have normally included the Upstream, Transmission, Liquefaction, and Shipping Segments for the LNG projects. These assignments are to evaluate the projects to assure the lending institutions that there is no material risk associated with the loan except for the time value of money. In addition to direct risk evaluation, the evaluation includes comparison with all recent, previous LNG projects for implementation schedule, capital cost, operating cost, development plan, technology, equipment and sourcing, and major participants including EPC, Sponsors, Host Country, etc. The report of the project is a detailed discussion of each of these areas essentially a verbal and tabular benchmark. Client contacts involve approximately 60 international banks. We can provide contact information for any specific project desired. 1.3 LNG Project Pre-Feasibility, Feasibility, and Conceptual Studies The Project Finance risk evaluation assignments result in Merlin Associates being provided with the full details of Project Capital and initial five years Operating Costs. Clearly this data is confidential to the Project Sponsors and is never provided to any of our clients. Merlin has used the data to develop very sophisticated cost estimating models for all segments typically project financed in common (in a single deal) of the LNG chain upstream, transmission, liquefaction and shipping. In addition to being used in our work for the lending institutions these models are used in providing pre-feasibility, feasibility, and conceptual design studies for clients considering potential LNG projects. Data gathered from our feasibility work on potential project studies for clients is added to the Merlin database. Merlin has easily expanded the cost estimating model repertoire to include the regasification terminal of the LNG chain due to the fact that the majority of the equipment at an import terminal is the same as that in a liquefaction plant. The Merlin cost estimating models have been calibrated against subsequent LNG projects and we have verified its ability to provide capital cost estimates of + 10% for the individual segments. Merlin has provided pre-feasibility studies for every potential LNG project considered since 1985. Several projects have been evaluated several times as the basis of design has evolved and several of the projects have been evaluated for different project sponsors with different perspectives on the project. Our client contacts involve every major international energy company, most of the national oil companies, and many of the larger independent energy companies. We can provide contact information for any desired energy company. Merlin Associates Independent Engineering Services Page No. 35

1.4 Direct Benchmarking Studies 1.4.1 Shell Global Solutions, Internationl We have provided two (2) specific benchmarking studies for Shell Global Solutions, International. The initial assignment was to develop benchmarking for Oman LNG (OLNG) and Nigeria LNG (NLNG) against the following: o o o o o o o Australia Northwest Shelf (NWS) - Initial 2 train installation and 3rd train expansion Malaysia LNG Dua expansion QatarGas - Initial 2 train installation and 3rd train expansion RasGas Trinidad (Atlantic LNG) P.T/ Badak - F train expansion P.T. Badak - H train expansion

The second assignment was to develop benchmarking that included the same criteria as done originally plus evaluation of thermal efficiencies, emissions, and several other confidential technical metric parameters. o o o o o o Oman LNG (OLNG) - Benchmark standard Nigeria LNG (NLNG) initial 2 train installation Qatargas - initial 2 train installation RasGas initial 2 train installation Trinidad (Atlantic) LNG initial 1 train installation Shell Dual Mixed Refrigerant (DMR) technology based LNG Plant at confidential location and basis of design.

A partial review of the second study was provided in the Oil and Gas Journal issue of April 14, 2003. In addition to the pure benchmarking aspects of this study Shell was interested in calibrating the Merlin liquefaction cost estimating model against their estimate for the DMR option. The goal of the second study was to isolate technology comparisons for each project. This study involved true benchmarking in that the projects to be studied had cost accounts irrelevant to the benchmarking goals deleted or adjusted to the same common basis such that only the areas of interest were compared to each other. In comparison to other companies who provide benchmarking studies, the Merlin advantage is that we provide LNG specific benchmarking. The results are compared for projects of similar size, similar technology although we can isolate this, and generally similar project implementation schedules. The site specific costs can be isolated as well as particular project participant impacts. Merlin Associates Independent Engineering Services Page No. 36

LNG projects largely moved to lump sum EPC contract implementation in the early 1990s. Projects implemented on lump sum contracts do not show many project costs within a particular EPC contract. The EPC contractor considers many of these costs to be proprietary and part of their economic advantage over other contractors. The only way these costs can be isolated is through use of the Merlin Cost Estimating Model. We have attached a copy of the Merlin Cost Estimating Model Input data sheet and the Capital Cost estimate output data sheet for the liquefaction segment to show the level of detail which is used to provide a breakdown of lump sum EPC costs. 1.4.2 Texaco - 2001 US LNG Import Terminal Projects. The study was a comparison of the existing US LNG import terminals, 14 potential North American LNG projects and two potential LNG projects in Europe. The study was prepared in support of their Global Gas Planning programs. 1.4.3 Bechtel International Merlin Associates was contracted to provide a benchmark of the Pacific LNG project using Propane Pre-Cooled Multi-Component refrigerant technology vs. the Phillips Optimized Cascade Process. The study involved using the Merlin Associates Capital Cost Estimator for both processes with a common basis of design. The outputs for both cases were presented in a comparative format for both Capital and Operating costs. 1.4.4 Phillips Petroleum Co. Merlin Associates was contracted to provide a third party cost estimate for the potential Nigeria Brass LNG Project using Propane Pre-Cooled Multi-Component refrigerant technology vs. the Phillips Optimized Cascade Process. The study involved using the Merlin Associates Capital Cost Estimator for both processes with a common basis of design. The outputs for both cases were presented in a comparative format for both Capital and Operating costs. 1.4.5 West Niger Delta Sponsors Merlin Associates was contracted to provide a third party review of the Pre-Feasibility Study Capital Cost Estimate as prepared by Foster-Wheeler against actual costs for the Nigeria LNG Project. This study used indexing of the NLNG costs to protect confidentiality of the data and provided a comparative format of the full project cost estimate including EPC contract and Owner costs. 1.4.6 Angola LNG Project Sponsors Merlin provided a benchmark study covering for upstream production, export projects, import terminal projects, and LNG shipping. The specific export projects included: Egyptian LNG; Spanish-Egyptian Gas LNG; Nigeria LNG Train 1 2; NLNG T 3; NLNG T 4 5; Oman LNG T 1-2; QatarGas T 1 3; RasGas T 1 2; Atlantic LNG T -1; ALNG T 2 3; ALNG T -4; Equatorial Guinea LNG; Tangguh LNG T 1 2, Deltana LNG, and Angola LNG. The study involved using the Merlin Associates Capital Cost Estimator with the actual basis of design for each project. The outputs were presented in a comparative format for both Capital and Operating costs. 1.4.7 BP - 2004 Merlin provided a benchmark study covering export projects and import terminal projects for BP corporate cost estimating department. The specific export projects included: Egyptian LNG T -1; Spanish-Egyptian Gas LNG; Nigeria LNG Train 1 2; Merlin Associates Independent Engineering Services Page No. 37

NLNG T 3; NLNG T 4 5; QatarGas T 1 3; Malaysia LNG Tiga; and Gorgon LNG. The study involved using the Merlin Associates Capital Cost Estimator with the actual basis of design for each project. The outputs were presented in a comparative format for both Capital and Operating costs as well as a technical comparison. BP had a goal of being able to benchmark their LNG capital cost estimating model. 1.4.8 BP 2007 BP E&P Technology (BP) requested Merlin Associates (Merlin) to provide detailed capital cost estimates for four generic LNG export projects using the Merlin Associates LNG Capital Cost Estimating Model (Merlin LNG Model). The four cost estimates were to a basis of design similar to the six 7.8 mtpa trains currently under construction by QatarGas and RasGas II at Ras Laffan, Qatar. These projects are the first LNG export plants to use AP-X tm liquefaction technology licensed by Air Products and Chemicals Inc. (APCI). The four cost estimate cases have essentially the same basis of design with only a single design variation to differentiate between the cases and the cost estimate results. Each case is for a single train with an LNG production capacity of 7.8 mtpa based on 340 days of operation per year. All of the cases use a Mid-East location, which establishes the same labor rates and labor productivities for the four cost estimates. The AP-X tm Base case is a cost estimate for a single-train, 7.8 mtpa LNG export plant, with a lean feed gas being preprocessed to recover NGLs. The AP-X tm Expansion case is identical to the AP-X tm Base case except that as an expansion, the LNG jetty and LNG storage are not required and only incremental utilities are required. The LPG Recovery case is the same as the AP-X tm Base case except that the feed stream is not preprocessed for NGL recovery upstream of the LNG plant. Instead, the NGLs are recovered and fractionated within the LNG train and additional process equipment necessary for the recovery, fractionation, storage and loading of the LPG products is included in the cost estimate. Finally, the APCI P-MR case uses propane precooled mixed refrigerant (P-MR) liquefaction technology, instead of the AP-X tm liquefaction technology. 1.4.9 ConocoPhillips Sunrise Project Sponsors Merlin provided a benchmark study covering export projects for the ConocoPhillips Sunrise Project. The specific export projects included: Tangguh LNG; Sakhalin II LNG; Northwest Shelf T 4; Gorgon LNG; and the Sunrise LNG project. The study involved using the Merlin Associates Capital Cost Estimator with the actual basis of design for each project. The outputs were presented in a comparative format for both Capital and Operating costs as well as a technical comparison. COP had a goal of being able to benchmark their new large train LNG project using COP technology from a technical and cost aspect. 1.4.10 ConocoPhillips QatarGas 3 Merlin provided a benchmark study covering export projects for the ConocoPhillips QatarGas 3 Project. The specific export projects included: Sakhalin II LNG; RasGas T 3 5; Nigeria LNG T 4-5; Qalhat LNG, and the QatarGas 3 LNG project. The study involved using the Merlin Associates Capital Cost Estimator with the actual basis of design for each project. The outputs were presented in a comparative format for both Capital and Operating costs as well as a technical comparison. COP had a goal of being able to benchmark their new large train LNG project from a technical and cost aspect.

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1.4.11 Brass LNG Project Sponsors Merlin provided a benchmark study covering export projects for the Brass LNG Project Sponsors. The specific export projects included: Nigeria LNG T 1-2; Oman LNG, Egyptian LNG T 1 -2; and the Brass LNG project. The study involved using the Merlin Associates Capital Cost Estimator with the actual basis of design for each project. The outputs were presented in a comparative format for both Capital and Operating costs as well as a technical comparison. The project is reviewing their comparative parameters in support of making an FID decision by mid 2006 and a major comparison is a benchmark for their LNG project from a technical and cost aspect. 1.4.12 Chevron Energy Technology Company Merlin has prepared a series of benchmark studies for Chevron over the years. The studies involved using the Merlin Associates Capital Cost Estimator with the actual basis of design for each project. The outputs were presented in a comparative format for both Capital and Operating costs as well as a technical comparison. The studies reviewed their comparative parameters in support of making FID decisions on projects under consideration at the time. Projects reviewed include: 1. Shtokman, Darwin, and Snhvit LNG Comparison 2006 2. LNG Cost & Schedule Benchmark Study - 2008 Angola, Northwest Shelf Train 4, Northwest Shelf Train 5, Darwin, Gorgon, Pluto, Egyptian LNG, Equatorial Guinea, Tangguh, Malaysia LNG Tiga, Nigeria LNG 3, Nigeria LNG 4&5, Nigeria LNG 6, Brass LNG, Olokola LNG, Snhvit, Oman, Qalhat, Peru, RasGas 4, RasGas 5, RasGas 6, QatarGas 3, QatarGas 4, and Sakhalin II 3. LNG Cost & Schedule Benchmark Study 2010 Northwest Shelf Train 4, Northwest Shelf Train 5, Darwin, Gladstone, Ichthys, Pluto, Prelude, Queensland Curtis, Wheatstone, Egyptian LNG, Equatorial Guinea, Tangguh, Malaysia LNG Tiga, Nigeria LNG 3, Nigeria LNG 4&5, Nigeria LNG 6, Nigeria LNG 7, Brass LNG, Olokola LNG, Snhvit, Oman, Qalhat, Papua New Guinea, Peru, RasGas 4, RasGas 5, RasGas 6, RasGas 7, QatarGas 3, QatarGas 4, Atlantic 1, Atlantic 2 & 3, Atlantic 4, Yemen, and Sakhalin II 1.5 Technology Evaluation and Selection Studies Merlins involvement with LNG projects using all the available liquefaction technologies and assignments to assist the liquefaction licensors evaluate their unique cost impacts has developed a unique experience and database of technical information. We are able to utilize this database in assisting clients to understand the unique attractions that each technology has for their potential LNG project. The liquefaction section of the LNG plant is a relatively small (~15% maximum) portion of the overall capital cost and consequently there is usually not much difference in project capital cost between liquefaction technologies. We have found that no single liquefaction technology is uniquely the best application on the basis of cost, thermal efficiency, etc for every LNG project, however, depending on gas composition, throughput and various project specific parameters one particular technology may be optimum for a particular project. We have provided assistance to many projects in evaluating the options between the liquefaction technologies. Merlin Associates Independent Engineering Services Page No. 39

Owners Engineer
Merlin Associates will act as Owners Engineer. In this situation Merlin provides the technical expertise and project management skills on behalf of project owner. Typical services provided include: Preparation of Pre-Feasibility Study Preparation of Request For Proposal for Front End Engineering Design Selection of FEED contractor Preparation of EPC invitation to bid documentation Selection of qualified bidders Assist in selection of preferred contractor Assist in negotiation of contract terms Monitor contractor performance to contract terms engineering, procurement, and construction Review and approve engineering drawings, specifications, and documentation Oversee project performance testing Merlins participation as Owners Engineer is typically for only one segment of a LNG project chain, however, this can be expanded depending on the Owners participation. We have acted as Owners Engineer for: BP supporting implementation of the Tangguh LNG Project in Indonesia; Hunt Oil Corporation supporting implementation of the Peru LNG Project in Peru; and, Angola Project Sponsors supporting implementation of the Angola LNG Project in Angola.

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COST OF CONSULTANT SERVICES


Merlin will provide their services on either a reimbursable basis (using our current Schedule of Rates) or on a lump sum basis for a specified scope of work with the approved project basis of design, or on some mixture of these. Frequently the initial work is on a lump sum basis and future work that cannot yet be fully defined will be on a reimbursable basis.

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Merlin Associates
Engineering & Strategic Planning Consulting Services Offshore Oil & Gas Production - Natural Gas Development - LNG Technology Offices: Houston, Texas (Headquarters) Atlanta, Georgia Merlin Associates is an engineering consulting organization offering specialized expertise in oil and gas production and development to energy companies worldwide. The company was formed in 1985 to provide client companies single-source expertise formerly available only from large Engineering-Procurement-Construction firms. Scope of Merlin Associates services include: Technology Evaluation Benchmarking Comparisons Project Risk Assessment Techno-Economic Studies Process Design Services Project Management Services Technical Education Programs As an outgrowth of its core competencies in project costing and technical evaluation, Merlin Associates has developed strategic and business planning capabilities for large gas development projects. Services can be provided in the areas of: Competitive Project Evaluation Project Formation Phase Risk Analysis Merlin Associates utilize state-of-the-art computer capabilities in the areas of process simulation, facilities design, preparation of engineering drawings, cost estimation and schedule development, and financial analysis to provide services in a cost and time effective manner. Consulting activities are organized around a nucleus of broadly experienced senior staff members of proven ability. Specific fields of Merlin Associates consulting expertise include: Offshore/Onshore Oil & Gas Production Offshore/Onshore Gas & Liquids Pipeline Transmission Natural Gas Development Base Load LNG Technology & Production Natural Gas Based Fertilizer Manufacture Alternative Fuels Supply Merlin Associates Clients include: Project participants and financing institutions needing assistance in evaluating project economics, evaluating project development alternatives, forming a project structure, and auditing of the engineering, procurement, and construction phases of large project implementation. Financial and investment institutions and agencies seeking third party analysis of the technological, implementation, cost, and schedule risks which might adversely impact the financeability of large capital intensive energy projects. Operating companies and government agencies lacking the specialized engineering and technical experience to properly define and evaluate many of todays technically sophisticated energy projects. Recent examples of Merlin Associates experience include: MAJOR THIRD PARTY ADVISORY SERVICES - PROJECT FINANCE Northwest Shelf Gas Development and LNG Project - Western Australia. Client: Woodside Petroleum Ltd. and The Chase Manhattan Bank N.A. acting as lead technical bank for 60 bank lending syndicate. Total project commitment: US$ 12+ billion. Wanaea/Cossack Floating Production, Storage & Offloading (FPSO) Project - Offshore Western Australia. Client: Woodside Petroleum Ltd. and The Chase Manhattan Bank N.A. acting as lead technical bank for 60 bank lending syndicate. Total project commitment: US$ 540 million. Sixth Train Expansion - P.T. Badaks Bontang LNG Plant, Indonesia. Client: Pertamina and The Chase Manhattan Bank N.A. and The Mitsubishi Bank lead banking group. Total project commitment: US$ 750 million. NLNG Project - Nigeria. Feed gas delivery system, LNG plant facilities, infrastructure and LNG shipping. Client: NLNG and the International Finance Corp./World Bank. Total project commitment: US$ 4.5 billion. MLNG Dua Project - Bintulu, Malaysia. Client: Petronas and The Industrial Bank of Japan, Barclays Bank, The Bank of Tokyo, Morgan Guaranty Trust Co., Malayan Banking, and The Mitsubishi Bank as lead banking group. Total project commitment: US$ 2.2 billion. Seventh Train Expansion - P.T. Badaks Bontang LNG Plant, Indonesia. Client: Pertamina and The Long Term Credit Bank of Japan, Fuji Bank, and Credit Lyonnais. Total project commitment: US$ 920 million. OLNG Project - Oman. Feedgas delivery system, LNG plant facilities, infrastructure. Client: OLNG, ABN AMRO, Banque Indosuez, Bank of Tokyo-Mitsubishi, CitiBank, Gulf International Bank, Korea Exchange Bank, NatWest, and four Export-Credit Agencies. Total project commitment: US$ 2 billion. Tantawan FPSO Project Floating Production, Storage & Offloading (FPSO) Project Offshore Thailand. Client: SBM, Inc. and The Chase Manhattan Bank N.A. acting as lead technical bank for bank lending syndicate. Total project commitment: US$ 130 million. Ennore LNG Import/Regasification/Power Generation project, Chennai, India. Client CRISIL Advisory Services and Tamil Nadu Industrial Development Corp. Prepare and evaluate Technical Bids, provide consulting for preparation and evaluation of Financial Bids by four pre-qualified bidding consortium for 5 million tonne/year LNG project. Cantarell Nitrogen Injection Project Clients Citibank, Japanese Export-Import Bank. Installation of very large Nitrogen production plant, transmission lines, and connection to offshore injection facilities Gulf of Campeche, Mexico. Project valuation US$ 1 billion. Nigeria LNG Credit Suisse First Boston as lead arranger for Project Finance of LNG Ships 8 and 9 in 1999,Credit Suisse First Boston as lead arranger for Ship 10 in 2001, Fortis Bank as lead arranger for Ships 11, 12, 13, and 14 in 2003. Nigeria LNGPlus two train expansion - Crdit Lyonnais, Citibank, BNP Paribas, Mediocredito Centrale, and West LB. Project valuation US$ 2 billion. Guangdong LNG Import Terminal Multinational company Owner and ABN AMRO as financial advisor retained Merlin to provide due

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diligence review of three potential LNG suppliers to Chinese import and regasification project. Egyptian LNG One train LNG Project BG Intl, Petronas, and Egyptian General Petroleum Corp, financial advisor Socit Gnrale. Project valuation US$ 1.3 billion. Second train assigned later. Qalhat LNG One train LNG Expansion Project Govt. of Oman, Shell, Union Fenosa, Total, Mitsubishi, Mitsui, Partex, Itochu, KOLNG, financial advisor CitiGroup. Project valuation US$ 700 million. Freeport LNG Import Terminal 1.75 Bscf, Freeport, ConocoPhillips, financial advisor Royal Bank Scotland. Project valuation US$ 900 million. Peru LNG One train LNG project Hunt Oil, SK Corporation, Marubeni Corporation, and Repsol YPF S.A.; financial advisor Socit Gnrale. IDB, IFC, Ex-Im, KEx-Im, SACE. Project valuation US$ 3.5 billion. DETAILED LNG PROJECT DESIGN/COST EVALUATION STUDIES Grass roots LNG plant proposed for Kangean Island, Indonesia including marine and harbor development and permanent project infrastructure. Grass roots LNG plant proposed for Western Australia utilizing Gorgon offshore feed gas reserves. SAMPLE OF LNG PROJECT CAPITAL COST ESTIMATE FEASIBILITY STUDIES Qatar/North Field Gas Development and LNG Project. Offshore gas production, onshore liquefaction facilities, and shipping requirements. Various clients. Sakhalin Island LNG Project. Offshore gas production, onshore treating and transmission pipeline, gas liquefaction facilities and shipping. Various clients. Gorgon LNG Project - Western Australia. Liquefaction, storage, and shipping facilities. Various clients. Scarborough LNG Project - Western Australia. Liquefaction and shipping facilities. Mariscal Sucre LNG Project - Venezuela. Liquefaction and shipping facilities. Various clients. Papua New Guinea LNG Project. Liquefaction facilities at various locations. Various clients. Yemen LNG Project. Liquefaction facilities. Natuna LNG Project - Indonesia. Offshore production, treating, and transmission pipeline, onshore liquefaction facilities, and shipping. Various clients. Sines, Portugal, Sao Paulo, Brazil, and various locations in China/India/Mexico LNG Import Terminal. Jetty, storage, and regasification facilities. Various clients. LNG Technology Study Technological advances and costs for future large train projects various clients. Benchmark studies of capital and operating life cycle costs for LNG projects at various locations. Isolated acid gas treatment costs and alternative liquefaction technologies. Benchmark studies of capital and operating life cycle costs for LNG projects using APCI propane pre-cooled multicomponent liquefaction cycle compared to Phillips Optimized Cascade Process at Nigerias Brass LNG, Bolivias Pacific LNG, and various other locations.

MULTI-CLIENT STUDIES AND REPORTS In addition to single client studies, Merlin Associates has performed several studies under the sponsorship of groups of companies. Examples of Merlin Associates multi-client studies include: PC-Based Generic LNG Cost Estimating Model. Development and Industry Plant Cost Comparison. Developed detailed US Gulf Coast Based Generic Cost Estimating Model which can be used with appropriate adjustments to provide site specific capital cost estimates and project implementation schedules at any location. Similar model developed for LNG import terminals. LNG Project Gas Supply Study. Developed capital investment and operating costs for offshore production and delivery of feed gas to LNG plants at three hypothetical locations - Venezuela, Western Australia, and Natuna Island, Indonesia. Merlin Associates collaborated with Poten & Partners, Inc. in preparation of the report New LNG Trades: Costs and Competition. Published in 1992 and 1999 the report is available for purchase by interested parties. It provides total project capital investment and operating cost estimates of competitive project comparisons for potential new LNG projects on a cost-of-service basis. Revised edition planned for publication in late 2002. STRATEGIC PLANNING STUDIES Participant in joint venture for major international oil company to develop a strategic analysis of the LNG project formation process including both the physical facilities and the business and commercial relationships integral to the entire LNG supply chain. The study also developed a competitive analysis of future LNG projects using Cost Of Service and Netback methodology in financial and project economic evaluation models appropriate for analysis of long term integrated gas supply projects. Developed comprehensive business implementation plan for LNG supply chain and Independent Power Production projects for major international oil company into the Pacific Rim. Developed basic contracting strategy study for Basic Design Contractor and the EPC Contractor for potential LNG projects various projects and participants. TECHNICAL EDUCATION PROGRAMS Merlin Associates offer technical education programs in several areas of engineering design, project management, and project risk evaluation. Recent efforts include seminars on Project Finance - 4 day comprehensive presentation for multiple clients in Beijing, China. LNG Technology and Economics for several major oil companies, Fundamentals of Base-Load LNG numerous times for GTI and several clients onsite, a course on Topsides Facility Design presented at several Houston Offshore Technology Conferences, and a presentation on Project Management Analysis of Large Projects for a major New York bank. Intensive 10 day Offshore Process Facility Design courses have been taught at various locations worldwide. For further information on Merlin Associates contact: Charles C. Yost, President/General Partner/Founder Merlin Associates P.O. Box 692188 5625 FM 1960 W, Suite 304 Houston, TX 77269-2188 Houston, TX 77069 (281) 586-0045; (281) 586-7965 (Fax) (713) 298-7816 (GSM mobile) chuck.yost@merlinassociates.com Robert N. DiNapoli, Vice President/Partner/Founder-Retired

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Client Listing
DOMESTIC & INTERNATIONAL ENERGY COS.
AGIP Amoco Corporation Amoco Exploration & Production AMPOLEX, Ltd. Angola LNG Project ARCO China Inc. ARCO International Oil & Gas Co. B. C. Hydro and Power Authority BHP Petroleum BOC Gases BP British Gas Co. Brunei Shell Petroleum Chevron Corporation Chevron Research & Technology Co. ChevronTexaco ConocoPhillips Dubai Gas Co. Dubai Petroleum Co. Elf Aquitaine (Production) CLEAG Enron International Enron Engineering & Construction Co. EOG Resources Exxon Co. International Exxon Production & Research Co Exxon Co. USA ExxonMobil Esso Australia Ltd. Freeport LNG LLC Gas Research Institute Gas Unie Hardy Petroleum Corp. R. M. Huffington, Inc. (Huffco) Hunt Oil Company Inpex Sahul Institute of Gas Technology Itochu Korea Gas Lagoven Manatee LNG Import Co. LLC Marathon Oil Corporation Marubeni Corporation Mitsubishi Mitsui Monenco Ltd. Mobil Nigerian LNG Co. Sultanate of Oman Oman LNG LLC Oryx Energy Co. Osaka Gas Co., Ltd. P. T. Badak Parker & Parsley Inter. Petroleum Partex Pertamina Petrobras Petro-Canada Ltd. Petronas Petroz N. L. Phillips Petroleum Corporation Qatar Petroleum Saga Petroleum, a.s. Santos Ltd. Shell International Oil Products State of Alaska Statoil SOEKOR Tamil Nadu Industrial Development Corp. Teikoku Oil Co. Ltd. Tenneco Gas Group Texaco Brasil S.A. Texaco Inc. Texaco Global Gas & Power Tokyo Gas Co., Ltd. Total Trans Canada Pipeline Co. Tricentrol VICO Westcoast Energy Woodside Petroleum Ltd.

BANKS & FINANCIAL INSTITUTIONS


ABN AMRO Banque Indosuez Barclays Bank BNP Paribas Calyon The Chase Manhattan Bank Co. Citibank Citicorp Securities, Inc. CitiGroup Credit Agricole Indosuez

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Credit Suisse First Boston Credit Information Services of India Ltd. (CRISIL) CRISIL Advisory Services Credit Lyonnais Deutsche Morgan Grenfell Export Credit Agencies of US, UK, Italy, & Netherlands The Fuji Bank Inter-American Development Bank International Finance Corporation Industrial Development Bank of India Japan Bank of International Cooperation (JBIC) Long Term Credit Bank of Japan Malayan Banking The Mitsubishi Bank Morgan Guaranty Trust Co. NatWest Bank Royal Bank of Scotland Servizi Assicurativi del Commercio Estero (SACE) Socit Gnrale Bank of Taiwan Bank of Tokyo-Mitsubishi World Bank US Ex-Im Korea Ex-Im Inter-American Development Bank

OTHER
U. S. Department of Energy United States Trade Development Agency

ENGINEERING/CONSULTING AND VENDOR COS.


ABB Lummus Global Air Products and Chemicals, Inc. Bechtel Corporation C. F. Braun Black & Veatch Pritchard Brown & Root Co. BW/IP International Cooper Cameron Excel-Tec H. J. Gruy and Assoc., Inc. IHI Japan Steel Works Kvaerner Engineering a.s. Moss Rosenberg Verft, a.s. Poten & Partners, Inc. Snam Taylor Forge Engineered Systems Technoplan - Brazil United Technologies Corp. Williams Bros. Engineering Co.

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TECHNICAL PAPERS AND PUBLICATIONS


Authored or co-authored by Merlin Associates Principals "High Purity Products from an Air Separation Plant" Co-authored, Presented at the 1969 Cryogenics Engineering Conference. Published in Vol. 14, Advances in Cryogenic Engineering. "Ethane and LPG Recovery in LNG Plants" Hydrocarbon Processing, April 1970. "Pick LNG Gas Pre-Treat with Care" Hydrocarbon Processing, December 1970. "Design Needs for Base-load LNG Storage, Regasification" Oil & Gas Journal, October 22, 1973 "Prospects Good for LNG Cold Recovery" Oil & gas Journal, March 21, 1973 "Estimating Costs for Base-load LNG Plants" Oil & Gas Journal, November 17, 1975 "Trends in Base-load LNG Plants" Hydrocarbon Processing, December, 1975 "Costs are Estimated for LNG Terminals" Oil & Gas Journal, March 13, 1978 "LNG Peakshaving Plants Require Careful Cost Estimation" Pipeline & Gas Journal, May 1978 "Light Weight Gas Turbine Drivers-Newest Trend in LNG Plant Design" Co-authored, Presented at 1980 ASME Gas Turbine Conference New Orleans. La. (Paper No. 80-GT-169) Advanced Control at Wycons Ammonia Plant Authored and presented at November 1979 AIChE National Convention, San Francisco, CA and published in Chemical Engineering Progress, April 1980 "Gas Turbines Prove Effective as Drivers for LNG Plants" Oil & Gas Journal, August 4, 1980 "LNG Costs Reflect Changes in Economy and Technology" Oil & gas Journal, April 4, 1983 "Economics of LNG projects" Oil & Gas Journal, February 20, 1984 "Evolution in LNG Projects Costs and Estimation Techniques for New Projects", Presented at LNG 8 Conference, Los Angeles, CA, June 1986 "A Generic Cost Model for Estimating LNG Plant Capital Costs" Coauthored, Presented at Symposium on Liquefied Natural Gas AICHE Meeting, Houston, Texas, April 1991 Industrial Products Handbook, Vols. 1 & 2, Marcel Dekker, Inc., (1994) Contributing Author LNG Project Formation, Presented at Fifth Air Products & Chemicals, Inc. LNG Owners Conference, Hershey, PA, September 1994. Strategic Evaluation Central to LNG Project Formation, Co-Authored, Oil & Gas Journal, July 3, 1995. LNG Plant Costs Present and Future Trends, Accepted for presentation/publication at LNG 12 Conference, Perth, WA, Australia, May 1998.

Articles authored by M. M. Naklie:

Merlin Associates Papers & Publications Page No. 46

Evaluation Supports Floating LNG Safety, by M. Naklie, J. Harms, and Soo Cheong San World Oil, November 1999 The Feasibility of LNG Production and Storage Offshore, by Dr. C. M. Harper, J. M. Brandstorp, J. Harms, & M. M. Naklie, DNV Publication, 1999 Mobils Floating LNG Plant, by M. Naklie LNG 12, Session 2, May 1998 Floating LNG: Faster Construction and a Longer Life, by M. Naklie Petroleum Economists Fundamentals of the Global LNG Industry, March 1998 Design Advanced For Large-scale, Economic, Floating LNG Plant, by M. M. Naklie Oil & Gas Journal, June 30, 1997 Radiation Scanning Aids Tower Diagnosis at Arun LNG Plant, by M. M. Naklie, L. Pless, T. P. Gurning, and M. Ilyasak Oil & Gas Journal, March 26, 1990 Indonesia's Arun LPG plant production is unique in Far East markets, by M.M. Naklie, D. P. Penick, L.A. Denton, and I. Kartiyoso Oil & Gas Journal, August 3, 1987

Merlin Associates Papers & Publications Page No. 47

RESUMES OF KEY PERSONNEL


Personal background is provided in detail by the attached resume for C. C. Yost. Briefly, Mr. Yost has a BSChE from Iowa State University (1965) and an MBA with highest honors from the University of Wyoming (1978). He has worked for Phillips Petroleum Co., Wycon Chemical Co., and several engineering design companies. His experience has included design, construction, and operation of oil and natural gas production facilities onshore and offshore, natural gasoline plants, natural gas based fertilizer plants, cryogenic gaseous and liquid helium plants, alternate fuels and feedstock projects, and liquefied natural gas plants during his professional experience at locations all over the world. Mr. Yost is also author and teacher of several LNG technology courses, offshore facility engineering design schools, project finance courses, and is based in Houston, Texas. Merlin Associates employs additional specialist personnel on an as-needed basis. Typically there are 5 10 professional technical personnel on our staff with the level dependent on the work load and the type of technical expertise required. Merlin Associates headquarters and main office is located at 5625 FM 1960 West, Suite 304, Houston, TX 77069. We have an additional office in Atlanta.

Resumes of Principals
Page No. 48

CHARLES C. YOST, III


EDUCATION and PROFESSIONAL AFFILIATIONS IOWA STATE UNIVERSITY - B.Sc., Chemical Engineering, 1965 UNIVERSITY OF WYOMING - MBA with Honors, 1978 Member: American Institute of Chemical Engineers, Society of Petroleum Engineers, American Petroleum Institute, and Gas Processor's Association. Nationality: Born/citizen of USA Experience Summary He has worked for Phillips Petroleum Co., Wycon Chemical Co., and several engineering design companies. He is a founding principal of Merlin Associates started in 1985. His experience has included design, construction, and operation of oil and natural gas production facilities onshore and offshore, natural gasoline plants, natural gas based fertilizer plants, cryogenic gaseous and liquid helium plants, alternate fuels and feedstock projects, and liquefied natural gas plants during his professional experience at locations all over the world. He has been involved with design, construction and operation of hydrocarbon pipelines (liquid and gas) for offshore and onshore locations ranging from desert locations, 5,000 m elevation in mountainous terrain, to 1500 m depths in offshore applications. Mr. Yost is considered a world expert on LNG technology, LNG capital cost estimating, and project management. Mr. Yost is also author and teacher of several LNG technology courses, offshore facility engineering design schools, specialty topsides design courses for offshore floating facilities, project finance courses, and is based in Houston, Texas. Employment 1985 to present Merlin Associates, Houston Founder and General Partner, President and Sr. Consulting Engineer; responsible for management and administration of the company. Works as project manager and process engineer on various projects. S. H. Landes, Inc., Houston

1982 - 1984

1980 - 1981 Engineering Manager; responsible for administration of Engineering Department. Worked as systems engineer, project manager, process engineer, project engineer and safety engineer providing services such as process flow diagrams, equipment and line sizing, computer control system design and specification, feasibility and conceptual design studies, preparation of cause and effect diagrams and logic diagrams. Author and teacher of S.H.L. Inc. Production Engineering Design school and Offshore Drilling and Facilities school. 1981 - 1982 Atlantia Engineering Company, Houston

Chief Process Engineer; responsible for Process and Instrument design, specification and selection for offshore production processing platforms. 1974 - 1980 Wycon Chemical Company, Cheyenne, Wyoming

1971 - 1973 VP Manufacturing, Plant Manager, Oper. Manager, Maintenance Mgr. and Manager of Technical Services. Full product line nitrogen fertilizer manufacturing from natural gas. 1973 - 1974 Ball-Reid Engineers, Inc., Oklahoma City

Chuck Yost Merlin Associates - 01/12/12 Page 49

Chief Process Engineer and Project Manager; provided process engineering and project engineering services for gas sweetening, natural gas liquids extraction plants and offshore oil production pipeline and gas separation facilities. 1965 - 1971 Phillips Petroleum Co., Borger, Tx. & Elkhart, Ks.

Plant Supervisor and Regional Staff Process Engr.; provided supervisory and process engineering services to numerous natural gas liquids extraction plants. 1963 - 1964 Power Service Corporation, Des Moines, IA.

Jr. Engineer on coal fired power plant construction. Professional Work EXPERIENCE Example of major projects in which Mr. Yost has had substantial involvement include: Wheatstone LNG Project - Project Manager to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractor bid. Provided Owners Estimate for final negotiation stage with EPC contractor. Queensland Curtis LNG Project Owners Estimate Project Manager to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractor bid. Provided OE for EPC contractors utilizing ConocoPhillips Optimized Cascade Process. Papua New Guinea LNG Project Owners Estimate Project Manager to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractor. Provided dual OE for competing FEEDs from two EPC contractors utilizing C3MR liquefaction technology and ConocoPhillips Optimized Cascade Process, respectively. Conceptual design studies for second phase expansion project after selection of APCI C3MR liquefaction technology. Peru LNG Project Project Manager supporting obtaining project finance of the LNG Project located at Melchorita, Peru. Ongoing responsibility to monitor construction of the feedgas pipeline, single train 4.4 mtpa liquefaction plant, harbor, loading dock, and two 130,000 m3 single containment storage tanks. Startup in mid-2010. Cameroon Floating vs. Onshore LNG Project Conceptual Design Study Project Manager to develop conceptual design study of Floating vs. Onshore development options for 2.5 mtpa LNG project. Included process flow diagrams, heat and material balances, layouts, Class 3 capital and operating cost estimates. Masela Floating LNG Project Project Manager supporting third party evaluation of technology selection for 10 mtpa LNG project. Startup in 2012. Mitsubishi & Pertamina Gorgon LNG Project Owners Estimate Project Manager to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractor for the EPC reimbursable bid. Provided OE for EPC contractor utilizing C3MR liquefaction Process. Brass LNG Project Project Manager supporting obtaining project finance of the Brass LNG Project located at Brass, Nigeria. Ongoing responsibility to monitor construction of the feedgas gathering systems, pipeline, 2 train 10 mtpa liquefaction plant, harbor, loading dock, and two 185,000 m3 full containment storage tanks. Startup in mid-2011. OKLNG Project Project Manager supporting obtaining project finance of the OK LNG Project located at Olokola, Nigeria. Ongoing responsibility to monitor construction of the feedgas gathering systems, pipeline, 2 train 11 mtpa liquefaction plant, harbor, loading dock, and two 200,000 m3 full containment storage tanks. Startup in mid-2011. Chuck Yost Merlin Associates - 01/12/12 Page 50

Shtokmanovskoye LNG Project Technology Selection Project Manager and Sr. Process/Cost Engineer. Evaluation and recommendation of preferred liquefaction technology for project implementation of APCI P-MR, ConocoPhillips Optimized Cascade, and Linde Multi-Fluid-Cascade processes. Develop analytical methodology, review analysis by Sr. Process Consulting Engineers, prepare capital cost estimates for various alternative technology proposals and technical options. For Shtokman LNG Project Management Team. Angola LNG Project Owners Estimate Project manager to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractors for the lump sum bid. Provided dual OE for competing FEEDs from two EPC contractors utilizing C3MR liquefaction technology and ConocoPhillips Optimized Cascade Process, respectively. Ongoing participation to provide updated cost estimate during marketing negotiations and assisted with lump-sum evaluation and EPC contract price negotiation. SSGC Pakistan LNG Import Terminal Project Manager and Sr. Process/Cost Engineer. Prepare basis of design with supporting conceptual studies that will be used for RFP for FEED studies for the terminal. Evaluate and recommend preferred option for three alternative sites, preferred vaporization and LNG storage tank technology and sizing. For Sui Southern Gas Co. Ltd. Nigeria Bonny Island Technology Evaluation Project Manager and Sr. Process/Cost Engineer. Evaluation of EM developed Enhanced Mixed Refrigerant liquefaction technology in comparison to APCI technology. Develop analytical methodology, review analysis by Sr. Process Consulting Engineers, prepare capital cost estimates for various alternative technology proposals and technical options. For ExxonMobil and NNPC. Nigeria LNG Technology Evaluation Project Manager and Sr. Process/Cost Engineer. Evaluation of Shell Global Solutions International developed Propane Mixed Refrigerant liquefaction technology in comparison to APCI AP-X technology for NLNG Train 7. Develop analytical methodology, review analysis by Sr. Process Consulting Engineers, prepare capital cost estimates for various alternative technology proposals and technical options. For NLNG and NNPC. Bearhead LNG Import Terminal Project Manager and Sr. Consulting Engineer. Review project basis of design and FEED study deliverables to provide preliminary Lenders risk analysis in support of developing project finance for the project. For Anadarko and Royal Bank of Scotland. Shtokmanovskoye LNG Project Project Manager and Sr. Process/Cost Engineer. Develop basis of design with technology recommendations for Front End Engineering Design request for proposal. Provide ongoing technical consulting advisory services to Hydro Oil and Gas Company. Snhvit Project Cost Benchmarking Study Project Manager and Sr. Process/Cost Engineer. Develop benchmark of Snhvit Project against competing LNG projects of the same time period. Assist Statoil management with analysis of Snhvit Project costs. Multi Fluid Cascade Process Technology Benchmark Project Manager. Develop technology benchmark of MFC process against competing APCI large train technology (AP-X) for 10 Mtpa train installed in Qatar. Assist Statoil and Linde with marketing MFC technology. Canaport LNG Import Terminal Project Manager. Supporting development of request for proposal for FEED and EPC contracts. Support project sponsor in obtaining national permits for the project. Provide technical consulting to Irving Oil in their negotiations with their project partner Repsol. Freeport LNG Import Terminal Sr. Process Engineer supporting project analysis for obtaining project finance of the LNG import terminal located on Quintana Island near Freeport, Texas. Ongoing responsibility to monitor construction of the terminal harbor, unloading dock, vacuum jacketed Chuck Yost Merlin Associates - 01/12/12 Page 51

transfer piping, two 130,000 m3 full containment storage tanks, and recirculating indirect vaporization system utilizing air tower heat source. Startup in mid-2008. Several LNG Project Benchmark Studies Project Manager for benchmark comparison study of LNG Export and Import Projects capital costs, annual operating costs, comparative process and utility system costs, labor costs and productivity, site impacts, and comparison of technology impacts. Studies of Large Train Technology Requirements Project manager of studies to evaluate compressor driver power requirements, issues related to new technology applications, thermal efficiency optimization, capital and operating costs. Sears Island LNG Import Terminal Project Manager to develop feasibility study for LNG Import Terminal to be located on Sears Island, Maine, USA. Preliminary layout, process flow diagram, sensitivity studies to determine appropriate size and quantity of LNG storage tanks, vaporizers, capital and operating costs, and interface with gas buyer. Provide technical support for FERC filing. Sears Island LNG Import LLC. LNG Legal Settlement Project manager to provide analysis of Mediterranean countrys LNG complex production, storage and loading capacity over an extended period in support of legal settlement regarding buyer who did not take delivery. Providing expert witness testimony for the country to tribunal deciding settlement. Qalhat LNG Project manager and process engineer working as Independent Engineer for Financial Advisor and Government of Oman for implementation of the Qalhat LNG Project (third train at Oman LNG Plant) providing project technical, execution, and capital risk analysis for initial financing and construction monitoring. Study on Technological Advances and Cost Associated with Gas Utilization in the LNG Industry Study of LNG technology development, cost trends, and projection of expected costs. Qatar Petroleum. Manatee LNG Import Terminal Project Manager to develop feasibility study for LNG Import Terminal to be located near Port of Tampa Bay, Florida, USA. Preliminary layout, process flow diagram, sensitivity studies to determine appropriate size and quantity of LNG storage tanks, vaporizers, capital and operating costs, and interface with gas buyer. Provide technical support for FERC filing. Manatee LNG Import LLC. Equatorial Guinea LNG Project - Marathon Oil Co. Project Manager, Sr. Consulting Engineer to develop feasibility study of alternative LNG liquefaction processes and alternative liquefaction train sizes. Compare various liquefaction technologies with alternative project structures in support of Project Formation efforts. Develop independent Cost Estimate to support sole source EPC contract negotiation. PDVSA/Intevep LNG Technology Study Project Manager, and Sr. Consulting Engineer for Offshore applications to develop LNG Technology and Cost Comparison study for alternative liquefaction processes and to study onshore versus offshore LNG facility installation. Petrobras Green LNG Project Project Manager, Sr. Consulting Engineer to solicit three EPC contractors to provide preliminary project design study for alternative LNG liquefaction technologies. Provide preliminary LNG technology study to determine which LNG liquefaction processes will be reviewed during the Conceptual Design Study Phase. Manage the EPC contractors during their Conceptual Design Study Phase. Develop RFP for future FEED phase after recommending which LNG liquefaction process should be used. Project involves floating LNG installation in the Amazon River basin with two import terminal locations within Brazil. Chuck Yost Merlin Associates - 01/12/12 Page 52

Egyptian LNG Project Trains 1 & 2 Project Manager for Downstream Technical Consultant due diligence review of LNG Project in support of obtaining project finance. Project manager, process engineer to provide third party technical risk assessment, capital and operating cost estimates, and compliance with safety and environmental requirements for the LNG Project natural gas Liquefaction facilities and Storage and loading facilities. Guangdong LNG Import Terminal Project Project Manager for Due Diligence review of potential LNG Suppliers to the Guangdong LNG Import Terminal Project for China National Offshore Oil Corporation, multiple other Chinese participants, and BP Global Investments Ltd. West Niger Delta Cost Sensitivity Study Project Engineer to develop cost sensitivity study for WND LNG project to ExxonMobil, Conoco, Chevron-Texaco, and Nigeria National Petroleum Co located at mouth of Escravos River in Niger Delta, Rivers State, Nigeria. Brass LNG Project Project Manager and cost analyst technical and capital cost review for benchmark study of using APCI vs. Phillips Optimized Cascade liquefaction process for the potential Brass LNG Project located in the Niger Delta, Rivers State, Nigeria to the Sponsors Phillips Oil Co, Agip, and Nigeria National Petroleum Co. Nigeria LNG Plus Project Finance - Project manager and process engineer working as Independent Engineer for the Technical Bank for the Arranging Banks for implementation of the Nigeria LNG Plant Project Finance (Trains 4 and 5) providing project technical, execution, and capital risk analysis for financing and construction monitoring. Sponsors Shell Oil Nigeria, Total Elf Fina, Agip, and Nigeria National Petroleum Co. Repsol/Bechtel Project Manager to produce capital cost, basis of design criteria for potential Bolivian/Chile LNG project. Two train sizes using APCI technology as basis to allow Bechtel to develop benchmark analysis against Phillips Optimized Cascade technology. Oman LNG Refinance Project manager for updating reports on Oman project in support of obtaining refinance of the project. Chevron/Texaco study of competitive North American LNG Import Terminals Project manager to develop benchmark analysis of expansion costs existing and capital costs for potential LNG import terminals supporting LNG into the USA. Hunt Oil Co. Camisea LNG Project FEED Study LNG Consultant and Owners Engineer to Hunt CLNG FEED study team located in Contractors Office during Front End Engineering Design Study. Enron Bahamas LNG Import Terminal Project manager to develop capital cost estimate for LNG import terminal to be located at Freeport, Bahamas with pipeline to Florida. Hunt Oil Co. Camisea LNG Project Pre-feasibility study Project Manager developing comprehensive pre-feasibility study to evaluate progressing implementing LNG project in Peru and import terminal in western Mexico. Evaluated various locations, prepared process flow diagrams, heat and material balance, detailed cost estimates. Prepared RFP for FEED contractors and assisting in selection of FEED contractor. Shell Global Solutions International Project Manager to develop detailed benchmarking analysis of 6 recent LNG project capital costs and environmental impact. Nigeria LNG Ship Project Finance Independent Engineer for CSFB in support of obtaining project finance for Phase II LNG ship 10. Project manager, process engineer to provide third party technical risk assessment, capital and operating cost estimates, and compliance with safety and Chuck Yost Merlin Associates - 01/12/12 Page 53

environmental requirements for the Nigeria LNG Project Upstream Production facilities and natural gas Liquefaction, Storage and loading facilities BP/Pertamina Tangguh LNG Project Owners Estimate Project manager to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractors for the lump sum bid. Ongoing participation to provide updated cost estimate during marketing negotiations and assisted with lump-sum evaluation and EPC contract price negotiation. Bayu-Undan Gas Recycle Project & Darwin LNG Project Provide third party project review of basis of design, project development plan, capital and operating costs for LNG buyer interested in potential equity participation. Ecopetrol Provide preliminary project capital and operating cost estimate to install LNG importing terminal in northeast Colombia as alternate energy source for gas grid. Pertamina The Mitsubishi Corp., ABN AMRO, Bank Mandiri (Persero), Bank of Tokyo-Mitsubishi, Ltd., Credit Lyonnais, Fuji Bank Ltd., Industrial Bank of Japan, Ltd., The Sanwa Bank Ltd., and Socit Gnrale - Project Manager and Process Engineer for Technical Consultant to banking syndicate for Bontang LNG Reliability and Enhancement project financing at P. T. Badak LNG Plant providing project Technical, Execution, and Capital Risk Analysis for initial financing and construction monitoring. Nigeria LNG Ship Project Finance Independent Engineer for CSFB in support of obtaining project finance for Phase II LNG ships 8 & 9. Project manager, process engineer to provide third party technical risk assessment, capital and operating cost estimates, and compliance with safety and environmental requirements for the Nigeria LNG Project Upstream Production facilities and natural gas Liquefaction, Storage and loading facilities Dabhol Power Company, Enron, Industrial Development Bank of India Independent Engineer for Indian Bank financing of Phase II Dabhol LNG Import Terminal Project. Project Manager, process engineer to provide third party technical risk assessment of project in support of project financing. Texaco Brasil S. A. Project Manager, cost estimator, process engineer assisting Texaco to prepare a proposal for an LNG Import Terminal including LPG storage and Power Generation Plant to be installed near Fortaleza, State of Ceara, Brazil. Tamil Nadu Industrial Development Corp LNG Import Terminal Project to be installed at Port of Ennore, Chennai, India. LNG Expert Consultant to state government in developing RFP, Technical and Commercial Bid Evaluation, assisted negotiation of agreement between Tamil Nadu Electricity Board and successful developer. Pertamina/The Bank of Taiwan, Banque Indosuez, The Chase Manhattan Bank, Fuji Bank Ltd., and The Long Term Credit Bank of Japan- Project Manager and Process Engineer for Technical Consultant to banking syndicate for H Train expansion financing at P. T. Badak LNG Plant providing project Technical, Execution, and Capital Risk Analysis for initial financing and construction monitoring. Now providing ongoing monitoring of project implementation until project completion. Saga Petroleum a.s. Process engineer, cost estimator, Conceptual process design and cost estimate of project to liquefy and transport gas as LNG from offshore northern Norway to US and European markets. Study included assessment of impact of new technology on project capital investment. ARCO China, Inc. Process Engineer, cost estimator, comprehensive technical review and development of capital and operating costs of facility options for the import of LNG into China. The Chuck Yost Merlin Associates - 01/12/12 Page 54

study developed a phased installation of facilities to meet forecast increases in both base load and peak gas demand. Pritchard, Black & Veatch, Inc. Process Engineer, market study and third party technical evaluation of revised PRICO II all-mixed-refrigerant, liquefaction process and comparative analysis with competing liquefaction technologies. Oman LNG, ABN AMRO, Banque Indosuez, Bank of Tokyo-Mitsubishi, Citibank, Gulf International Bank, Korea Exchange Bank, NatWest, and Four Export Credit Agencies Arranging Banks and Chase Manhattan as Financial Advisor Project manager and process engineer working as Independent Engineer for Financial Advisor and then the Technical Bank for the Arranging Banks for implementation of the Oman LNG Plant providing project technical, execution, and capital risk analysis for initial financing and construction monitoring. Also supporting Bond Offering for 25% of project financing. Providing ongoing monitoring of project implementation through project completion and acceptance testing. SBM, Inc. Chase Manhattan Bank Project Manager, process engineer for Project Technical, Execution, and Capital Risk Analysis to install Tantawan Project Floating Production Storage, and Offshore loading facility offshore Thailand. Construction monitoring, startup and completion testing. Hardy Petroleum, Oryx Energy, Phillips Petroleum Co., BHP Petroleum, Inpex Sahul, Ltd., Petroz, Santos, and Emet Project Manager and Process Engineer. Provide competitive analysis of Timor Sea LNG Project against potential competing LNG projects for entry into the LNG market. Existing LNG project analysis, assessment of potential new LNG technology with capital and operating cost estimates for liquefaction and shipping segments. Provide project management over Stone & Webster in third party analysis of competing onshore and offshore LNG liquefaction options. Texaco, Inc. - Process Engineer, develop Competitive Study of Potential Future LNG Projects. Rutherford-Moran Petroleum Co. - Project Manager, Process Engineer, Gulf of Thailand, Project Technical, Execution, and Capital Risk Analysis to install R-M/Pogo Producing Co. Tantawan Project Floating Production Storage, and Offshore loading facility. Amoco Corporation, - Project Manager/Process Engineer Develop capital cost estimate and prefeasibility design for LNG import terminals in Turkey, Israel, and Brazil. Amoco Corporation, Project Manager, Sr. Consulting Engineer to develop Amoco Corporation LNG Business Development plan. Developing 15 year business development plan establishing a new division in Amoco with goal of becoming major Gas/LNG energy supplier in the Pacific Rim. Study included developing written business plan with supporting organization chart, budget, market forecast, supply forecast, and strategic planning of selected business opportunities. Project is proceeding exactly as planned. Pertamina/Credit Lyonnais and The Long Term Credit Bank of Japan- Project Manager and Process Engineer for Technical Consultant to banking syndicate for G Train expansion financing at P.T. Badak LNG Plant providing project Technical, Execution, and Capital Risk Analysis for initial financing and construction monitoring. Provided ongoing monitoring of project implementation until project completion. Texaco, Inc. - Process Engineer, develop in-depth analysis of potential Trinidad LNG project. Amoco Corporation, Project Manager for joint venture project with Poten & Partners, Inc. to provide strategic consulting services to Amoco including technology transfer seminars. The goals of the study were to develop detailed understanding of the LNG business, to characterize the business risks of LNG, develop recommended economic evaluation methods and computer models Chuck Yost Merlin Associates - 01/12/12 Page 55

that specifically support evaluation of segmented business chains of projects that are long lived and very capital intensive. Make presentations to Amoco Strategic Planning & Management Committees as part of Corporate Strategic Planning decision process. Exxon Production Research Co., Esso Australia, Ltd., Exxon Company International - Project Manager and process engineer to provide Screening Studies for Yemen LNG Project, Scarborough LNG Project, Papua New Guinea and Cristobal Colon LNG Projects. Provide preliminary process analysis, heat and material balance for project utilizing unique feed gases and potential high seismic locations. Petronas, J. P. Morgan Securities, Barclays, Industrial Bank of Japan - Project Manager and Process Engineer for Technical Consultant to banking syndicate for MLNG Dua three train expansion financing at Malaysian LNG Plant providing project Technical, Execution, and Capital Risk Analysis for initial loan and construction phase monitoring. Texaco, Inc. - Project Manager, Gorgon LNG Project Site Specific Feasibility Study for installation of grass-roots LNG facility near Karratha, Western Australia. Provide heat and material balance, plot plans, study of potential integration with existing Northwest Shelf LNG project, capital and operating cost estimates. Pertamina/Chase Manhattan Bank and Mitsubishi Bank - Project Manager and Process Engineer for Technical Consultant to banking syndicate for F Train expansion financing at P.T. Badak LNG Plant providing project Technical, Execution, and Capital Risk Analysis for initial financing and construction monitoring. International Finance Corporation/Shell Gas International - Process Engineer for Project Technical, Execution, and Capital Risk Analysis to install grass-roots LNG project in Nigeria. Eventual assistance in obtaining project financing. Woodside Petroleum Ltd. - Project Manager, Process Engineer for Project Technical, Execution, and Capital Risk Analysis to install Wanaea/Cossack Floating Production Storage, and Offshore loading facility offshore Western Australia. ARCO International Oil & Gas - Project Manager, Process Engineer for feasibility study of installing grass-roots LNG facility at Kangean Island, Indonesia. Provided process flow diagrams, material balance, plot plans, and 10-15% cost estimate for plant facility, marine/harbor requirements, supporting infrastructure, and required engineering, procurement, construction structure covering grass roots installation of LNG facility in remote jungle island. Developed evaluation for three different plant sizes. AMPOL Exploration, Ltd., ARCO International Oil & Gas, British Gas Co., ELF (CLEAG), Exxon Production Research Co., Marathon Oil Corporation, Osaka Gas Co., Saga Petroleum a.s., Snam, Tenneco Gas Pipeline Group, Tokyo Gas Company, Ltd., TransCanada Pipeline Co., - Project Manager, Process Engineer/Co-Author of Computerized Generic Base Load LNG Facility Cost Estimate Study of 10-15% accuracy. Grass roots installation of eight different LNG plant facility options covering the plant facility and engineering, procurement, construction contractor using U.S. rates and productivities for easy transportability to other sites. Estimate included costs for transportation ships and receiving terminals. Woodside Petroleum, Ltd. - Project Manager, Process Engineering consultant to Banking Syndicate providing loan for Northwest Shelf LNG Project - Phase III: construction of second and third offshore production platforms, pipelines, third LNG train of grass roots LNG facility to provide another 2 million tonnes per year of LNG to Japan.; Provide Project Engineering/Management and Process Engineering consulting services for new early production projects being undertaken in the same area not necessarily related to the LNG project. Chuck Yost Merlin Associates - 01/12/12 Page 56

Conoco Norway/Mosvold/Tentech/Chase Manhattan Bank - North Sea Heidrun Project for northern Norwegian North Sea. Feasibility studies of development including onshore and offshore pipelines and fixed production systems vs. floating production systems. Woodside Petroleum, Ltd. - Project Manager, Process Engineering consultant to Banking Syndicate providing loan for Australian Northwest Shelf LNG Project - Phase II, construction of offshore production platform, pipeline, harbor and shipping facilities, first two trains of grass roots LNG facility to provide 4 million tonnes per year of LNG to Japan. North West Pipeline Corporation feasibility study of high CO2 content gas gathering and compression system in Western Wyoming. Separation, dehydration, gathering system optimization, pipeline specification and compressor selection. R.A.K. (United Arab Emirates) - Taylor Forge Engineering Systems - Slug catcher design for 125 MMSCFD and 25 MBOPD. Process and Project Engineer. Shell Oil Co., Exxon Production Malaysia Inc., Superior Oil Co., Petronas Carigali (National Oil Co. of Malaysia), Teikoku Oil Company (Imperial Oil Co. of Japan), Morgan Guaranty Bank, Soekor (National Oil Co. of South Africa) - Houston, Tx; Kuala Lumpur, Malaysia; Capetown, RSA; New York, NY ; Tokyo, Japan; London, England - Taught numerous project management, process engineering, and pipeline design schools. Schools included courses developed by the client companies and those authored by Mr. Yost. Petroleum Authority of Thailand - 600 MMSCFD and 9000 BOPD pipeline and slug catcher design. Process and Project Engineer. Dubai Natural Gas Co. - Offshore Compression and Quarters Platform - ACP in the SW Fateh complex and analysis of the interconnecting pipeline systems. Process and Fire/Safety Engineer. Petronas Carigali - Malaysian Duyong Project of six offshore gas and condensate production facilities. Process and Fire/Safety Engineer; Project Engineer. Teikoku Oil Company - Minami-Nagaoka, Japan 35 MMSCFD natural gas production plant feasibility and conceptual design. Process and Project Engineer. Brunei Shell Petroleum Co. - Champion 7 Project of six major and three minor platforms providing 250 MMSCFD of compressed, dehydrated gas-lift gas, 10,000 BOPD, and 50,000 BPD water injection. Systems/Fire & Safety/Process Engineer/Project Engineer. Wycon Chemical Co. - Waste Water treating facility, clean-up of contaminated soils and ground water at plant site. Major expansions and energy optimization conversions to ammonia, nitric acid, ammonium nitrate, urea and UAN solutions plants. Convert ammonia plant to computer control. Colorado Interstate Gas Company - Installation of ammonium thiosulfate plant as tail gas cleanup unit on Claus sulfur plant in Western Wyoming. Process and Project Engineer. Naftagas - 200 MMSCFD turboexpander natural gas liquids extraction plant. Gas gathering system and transmission lines for residue sales to Yugoslavian utility systems and installation of back-up system from U.S.S.R. Process & Project Engineer. Exxon Chemical Co. - 25 MMSCFD MEA sweetening and TEG dehydration plant in Baton Rouge. Process and Project Engr. Phillips Petroleum Co. - 70 MMSCFD cryogenic natural gas liquids extraction plant, in Southwest Kansas for grade "A" helium gas extraction and purification, and helium liquefaction plant. Field Project Engineer and Plant Supervisor. Chuck Yost Merlin Associates - 01/12/12 Page 57

Phillips Petroleum Co. - propane refrigeration unit on large lean oil absorption natural gasoline plant in Texas Panhandle. Process/Project Engineer. Phillips Petroleum Co. - analysis of gas gathering systems for 25 gas processing plants in the Texas and Oklahoma Panhandle Area, residue gas sales transmission lines to various gas transmission companies, and projects to increase capacity. Phillips Petroleum Co. - analysis of LPG gathering and transmission system from 25 gas processing plants in the Texas and Oklahoma Panhandle Area to refinery. Mr. Yost is author and teacher of several offshore and onshore production facilities process engineering design schools which he has presented at numerous locations world-wide. He has been on the faculty for several GTI schools on natural gas processing and Base Load LNG projects. Mr. Yost is the author and has presented a detailed course on Project (non-recourse) Finance at several locations and for multiple clients worldwide.

Chuck Yost Merlin Associates - 01/12/12 Page 58

WILLIAM W. LEWIS, P.E.


Bill works on a part-time contractor basis for Merlin Associates out of his Houston location. EDUCATION and PROFESSIONAL AFFILIATIONS Registered Professional Engineer, Texas No. 91466 New Hampshire University - B.Sc., Chemical Engineering - 1969 Member: American Institute of Chemical Engineers (Elected Fellow 1993), Construction Industry Institute Nationality: Born/citizen of USA Employment 2004 to present on various projects. 1999 - 2004 Merlin Associates, Houston Sr. Consulting Engineer; Works as project manager and process engineer Project Technical Liaison Associates, Inc.

Vice President & Principal Consultant; Worked as systems engineer, project manager, process engineer, project engineer and safety engineer providing services such as project management, project control, cost estimating, scheduling, process flow diagrams, equipment and line sizing, computer control system design and specification, and feasibility and conceptual design studies. 1987 - 1999 Black & Veatch Pritchard, Incorporated

Manager of BVPI Global LNG Business Unit. Created and implemented overall marketing strategy of PRICO II LNG liquefaction process. Formed, led, structured and negotiated contracting alliances with other engineering contracting companies. Supported client feasibility and conceptual design studies, particularly in technology selection. Member of Black and Veatch, Inc. Strategy Committee reporting to the Chairman. Created, started, and developed B&VPI Houston Office. 1982 1987 Avondale Industries (Shipyard) Vice President Avondale Construction Management, Inc. Vice President responsible for diversification of shipyard based company into modular fabricator for waste recycling facilities, electric power generation including hydroelectric, P&L responsibility for modular construction of skids and equipment modules for oil, chemical, power industries, and industrial pipe and other industrial fabrication. 1978 1982 C. F. Braun & Company

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Principal Sales Engineer- Sales and business development of engineering and construction in the chemical, petrochemical, and refining industries. Provided technical consulting to the petrochemical industry. 1969 1978 Stone & Webster Engineering Corporation

Sr. Process Engineer. Process manager for new and retrofit of ethylene and other domestic plants with domestic and international assignments. EXPERIENCE SUMMARY Major projects in which Mr. Lewis has had substantial involvement with Merlin Associates include: Papua New Guinea LNG Project Owners Estimate Project Engineer to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractor for the EPC reimbursable bid. Provided dual OE for competing FEEDs from two EPC contractors utilizing C3MR liquefaction technology and ConocoPhillips Optimized Cascade Process, respectively. Brass LNG Project Process Engineer supporting obtaining project finance of the Brass LNG Project located at Brass, Nigeria. Ongoing responsibility to monitor construction of the feedgas gathering systems, pipeline, 2 train 10 mtpa liquefaction plant, harbor, loading dock, and two 185,000 m3 full containment storage tanks. Startup in mid-2011. SSGC Pakistan LNG Import Terminal Sr. Process/Cost Engineer. Prepare basis of design with supporting conceptual studies that will be used for RFP for FEED studies for the terminal. Evaluate and recommend preferred option for three alternative sites, preferred vaporization and LNG storage tank technology and sizing. For Sui Southern Gas Co. Ltd. Orange County Landfill Methane Recovery/LNG Production Safety Review Sr. Process Engineer. Review basis of design materials and permit application documents for compliance with safety and regulatory agency requirements. For Orange County Environmental Authority. Freeport LNG Import Terminal Sr. Process Engineer supporting project analysis for obtaining project finance of the LNG import terminal located on Quintana Island near Freeport, Texas. Ongoing responsibility to monitor construction of the terminal harbor, unloading dock, vacuum jacketed transfer piping, two 130,000 m3 full containment storage tanks, and recirculating indirect vaporization system utilizing air tower heat source. Startup in late 2007. Canaport LNG Import Terminal Sr. Process Engineer supporting development of request for proposal for FEED and EPC contracts. Provide technical consulting to Irving Oil in their negotiations with their project partner Repsol. PUBLICATIONS Mr. Lewis is author of numerous technical and professional articles and presentations including: Modularized Construction and Barge Mounted Process Plants I and II, Symposium at the Spring National Meeting of the American Institute of Chemical Engineers, 3/83 Houston, TX -, Session Chair (I) Vice Chair (II) Modular Construction -- Why Shipyards? William W. Lewis and Richard F. Brunner Avondale Shipyards, New Orleans, Louisiana - Presented at the Spring National Meeting of the AIChE, March 1983 Bill Lewis Merlin Associates - 01/12/12 Page 60

Modularized Construction and Barge Mounted Process Plants I and II, Symposium at the Spring National Meeting of AIChE March 1984 WK Anaheim California, Session Chairman Modularized Construction and Barge Mounted Process Plants, Symposium at the Spring National Meeting of AIChE March 1985, Houston, Texas, Session Chairman The Application of Shipyards Modular Construction Techniques to Other Industrial Projects, C. P. Boudreaux, W. W. Lewis and E. E. Smith - Presented at the Spring National Meeting of AIChE, March 1985 Modular Techniques in Shipbuilding Applied to Process Projects, William. W. Lewis, Avondale Shipyards, Inc. Presented at the 1985 Engineering and Construction Contracting Conf. (ECC) , San Francisco, CA, 9/85 The Application of Shipyards Modular Construction Techniques to Other Industrial Projects, Clifford P. Boudreaux, William W. Lewis and Edwin E. Smith - Energy Progress, September 1986 New Realities of Modular Construction, J. M. Duty Jr., D Fisher, WW Lewis - Hydrocarbon Processing 12/93 Hydrocarbon Value Chain: Now Electricity - W. W. Lewis, Black & Veatch Pritchard and D. C. Gray, Black & Veatch LLP - Hydrocarbon Processing, November 1997 The Small/Midscale LNG Plant, William W. Lewis, Black & Veatch Pritchard, Inc. - Presented at "Commercial Developments in LNG Projects and Markets," London March 1998 LNG Developments far the Design of Compact Liquefaction Facilities, WW Lewis, S Hoffart and B Price, Black & Veatch Pritchard, Inc. The European Applied Research Conference on Natural Gas 1999 ("Eurogas 99,") Bochum, Germany, May 1999 LNG The Real Risks, William W. Lewis, James P. Lewis and Patricia A. Outtrim, PTL Associates Inc. Presented at CGhashemch 2002, Doha, October 2002 LNG Facilities - The Real Risks, William W, Lewis, James P. Lewis and Patricia A. Outtrim, PTL Associates Inc. LNG Journal, January 2003 LNG Security Reality & Practical Approaches, William W. Lewis, James P. Lewis and Patricia A. Outtrim, PTL Associates Inc. Presented at SRI LNG Conference. Houston, Texas , January 2003 LNG The Real Risks, William W. Lewis, James P. Lewis and Patricia A. Outtrim, PTL Associates Inc. Presented at AlChE Spring Meeting, New Orleans, Louisiana April 2003.

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MARIE NAKLIE
Marie works on a part-time contractor basis for Merlin Associates out of her Dallas location. EDUCATION and PROFESSIONAL AFFILIATIONS Mississippi State University, Starkville, Mississippi, BS Chemical Engineering, 1972, P. E. registration in Texas; Member: Gas Processors Association, Technical Committee, Chairman, 1999-2000, North Texas Gas Processors Association, Chairman, 1998 Nationality: Born/citizen of USA Marie Naklie is a chemical engineer with 38 years of experience, specializing in LNG, gas processing, and onshore and offshore field operations. During her 28 years with Mobil Oil, she led a multi-discipline team to design a leading-edge floating LNG plant, and is a worldwide expert on floating LNG. She has debottlenecked numerous gas plants and offshore platforms around the world and worked with local engineers to transfer the knowledge. Marie has performed feasibility studies and benchmarking studies for both onshore and offshore liquefaction plants and import terminals, debottlenecked existing LNG plant facilities, and performed pipeline flow assurance studies. For example, she has optimized the design of an offshore production gas field in the Gulf of Thailand, including compression, facilities, and pipeline sizing for present and future reservoir requirements, and she has investigated flow assurance options for a deep water production field in the Timor Sea offshore Australia. She has been Chairman of the Technical Committee of the National Gas Processors Association and Chairman of the North Texas Gas Processors Association. Experience Summary MERLIN ASSOCIATES 2003 to present

Queensland Curtis LNG Project Owners Estimate Project Engineer to develop detailed capital cost estimate with full Work Breakdown Structure as basis for negotiation with EPC contractor bid. Provided OE for EPC contractor utilizing ConocoPhillips Optimized Cascade Process. Peru LNG Project Sr Process Engineer supporting obtaining project finance of the LNG Project located at Melchorita, Peru. Ongoing responsibility to monitor construction of the feedgas pipeline, liquefaction plant, harbor, loading dock, and two 130,000 m3 single containment storage tanks. Startup in mid-2010. OKLNG Project Sr Process Engineer supporting obtaining project finance of the OK LNG Project located at Olokola, Nigeria. Ongoing responsibility to monitor construction of the feedgas gathering systems, pipeline, 2 train 11 mtpa liquefaction plant, harbor, loading dock, and two 200,000 m3 full containment storage tanks. Startup in mid-2011. Shtokmanovskoye LNG Project Technology Selection Sr. Process Engineer. Evaluation and recommendation of preferred liquefaction technology for project implementation of APCI PMR, ConocoPhillips Optimized Cascade, and Linde Multi-Fluid-Cascade processes. Develop technical analysis of licensor proposals and technical options. For Shtokman LNG Project Management Team.

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Shtokmanovskoye LNG Project Sr. Process Engineer. Develop basis of design with technology recommendations for Front End Engineering Design request for proposal. Provide ongoing technical consulting advisory services to Hydro Oil and Gas Company. Freeport LNG Import Terminal Sr. Process Engineer supporting project analysis for obtaining project finance of the LNG import terminal located on Quintana Island near Freeport, Texas. Analysis of technology for harbor, unloading dock, vacuum jacketed transfer piping, two 130,000 m3 full containment storage tanks, and recirculating indirect vaporization system utilizing air tower heat source. Startup in late 2007. Several LNG Project Benchmark Studies Project Manager for benchmark comparison study of LNG Export and Import Projects capital costs, annual operating costs, comparative process and utility system costs, labor costs and productivity, site impacts, and comparison of technology impacts. STANFORD ENGINEERING LTD 2001 to present President, Dallas, Texas) Investigated feasibility of new US onshore / offshore LNG import terminal for U.S. client. Performed all facets of LNG feasibility study for European client, including process simulations, equipment lists, manning, plot plans, costs, and shipping requirements. Performed LNG plant feasibility study with multiple onshore/offshore sensitivities for U.S. client. Led Floating LNG workshop for client's inhouse staff. Assisted client in FERC filing for US onshore import terminal. MOBIL OIL COMPANY 1978-2000 Senior Consultant, Houston, Texas (2000) Developed scheme to reroute 300,000 B/D production in offshore Nigeria, eliminating the need to replace three aging platforms and saving $200 million in capital costs. Worked with national engineers on evaluation of platform capacities, pipeline network analysis, and implementation. Team Leader, Floating LNG, Dallas, Texas (1996-2000) Initiated concept for Floating LNG Plant, promoted idea within Mobil, obtained financing for study, created mull-discipline team, and led team to design unique floating LNG plant. Technology projected to reduce capital costs 25% and permit booking major reserves. Recognized as primary spokesperson and worldwide expert in Floating LNG, resulting in Mobil brand name industry wide. Led Problem Gas Team to evaluate various gas monetization methods for stranded/associated gas worldwide. LNG, CNG, GTL, power, methanol, and carbon black were some methods evaluated. Associate Engineering Advisor (1994-1996) Performed debottlenecking study on a production platform offshore Nigeria, identifying measures to increase capacity from 30,000 to 80,000 B/D. Prepared report as a template for future platform debottlenecking studies, which is now used as a reference by local engineers. Developed troubleshooting course for E&P affiliates and taught course to engineers in US and UK. Marie Naklie Merlin Associates - 01/12/12 Page 63

Team Lead (1992-1994) Team lead over Process, Facilities, and Environmental section. Identified debottlenecking opportunity for offshore production platform in Nigeria and led effort, resulting in capital savings of $70 MM and accelerated production. Performed scoping studies for potential LNG projects in Asia and Middle East. Led treating screening study for California operation. Troubleshooter for stabilizer project in Africa, used radiation scanning, and trained operators, resulting in 20,000 B/D increase. Associate Process Engineering Advisor (1991-1992) Prepared scoping studies for potential LNG projects in Pacific Rim. Utilities Team Leader on revamp of Mobil Engineering Guides. As chairman of the GPA Computer Applications Section for four years, founded the GPA Computer Newsletter, which is still being published today. Senior Process Engineering Advisor (1987-1991) Led debottlenecking effort of Arun LNG Plant in Indonesia, resulting in an increase of 17 cargoes per year at a cost of $50 million and at an accelerated schedule, compared to a new 7th LNG train costing $360 million and yielding 32.5 cargoes per year. Evaluated measurement at both the field and LNG plant to improve field and plant balances. Optimized operation of LNG MCR refrigerant circuit. Initiated a facilities engineering newsletter in 1988 for Mobil E&P engineers (800 circulation). Process Engineering Advisor (1983-1987) Debottlenecked Arun LNG Plant treaters, netting a 15% increase in treating capacity. Trained national engineers. Debottlenecked platforms in offshore Norway. Demonstrated production increase of 10% with no capital investment. Performed flare/relief study resulting in vessel revamps. Associate Process Engineer (1981-1983) Developed deriming procedures for Arun LNG Plant and supported Operations. Taught computer process simulation courses. Provided primary technical service support to LNG plant. Senior Process Engineer, Houston, Texas (1978-1981) Responsible for staff support of five cryogenic and oil absorption gas plants in Texas. Gathered up surplus equipment, designed, and built a stabilization facility producing 10# gasoline at 5000 B/D. OCCIDENTAL PETROLEUM CORPORATION Engineering Auditor, Houston Texas Performed engineering audits of corporate / subsidiary operations, including large phosphate /phosphoric acid plants, ammonia and chlor-alkali plants, and field operations in South America. MOBIL OIL COMPANY, BEAUMONT REFINERY 1972-1977 Operations Supervisor Beaumont, Texas Marie Naklie Merlin Associates - 01/12/12 Page 64 1977-1978

Direct supervision of 30 plant-operating personnel in a 100,000 B/D saturated gas plant. Specific accomplishments include directing activities in controlling and extinguishing fire in an 80,000 B/D feed line avoiding the shutdown of the entire refinery. Also foreman over a sulfuric alkylation unit. Technical Service Engineer Provided technical service support to two reformers, two gas plants, an alkylation unit, a pentane isomerization unit, fluid cat. cracker, hydrogen sulfide plant, catalytic hydrodesulfurization unit, and crude unit. Acted as assistant operator during 3-month strike and 10-day strike.

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WILLIAM P. STEWART
EDUCATION and PROFESSIONAL AFFILIATIONS University of Aston - B. S. (Hons), Civil Engineering, 1972 Cranfield Institute of Technology - M. S., Offshore Structures, 1975 Member: Royal Institution of Naval Architects; Society of Naval Architects and Marine Engineers; American Society of Mechanical Engineers; Society of Petroleum Engineers; Chairman Houston Chapter ASME Offshore Mechanics and Arctic Engineering; Technical Editor for Society of Petroleum Engineers; Member of SNAME Panel OC-1, Stability and Motions. Professional Engineer Registered in the State of Texas, Chartered Engineer Registered in the U.K.. Experience Summary Engineering and analytical expertise with floating and fixed marine structures including: static and dynamic finite analysis; mooring analysis; stability analysis; and hydrodynamic analysis. Experienced in oceanography and applied dynamics of ocean surface waves. Has worked extensively in structural and naval architectural design and design review with very good understanding of Classification Society requirements during design, fabrication, and operation. Experienced project manager over scheduling, design, cost control, procurement, sub-contractor management, and personnel supervision. Experienced expert witness in marine litigation. Experienced in providing replacement costs for insurance policies and settlement cases.
CAREER SUMMARY: Early experience with excavation and massive reinforced concrete foundations for power stations was followed by a period as a bridge engineer, in charge of the construction of several pre-stressed concrete freeway bridges. This was followed by design and construction of an industrial building on a floating concrete raft foundation, plus geotechnical site survey responsibility for a large hospital project. Next came design of large flood prevention and storm drainage schemes, and water supply schemes. Additionally, work in the Royal Naval Dockyard, at Plymouth, led to a unique ship and submarine effluentto-shore drainage system design. Following the above experience, there was a return to university to obtain, in one year, an MSc in offshore structures, with thesis on Dynamic Analysis of Single Point Mooring Systems. Experience with Atkins R&D, in the UK, included extensive research into the hydrodynamic analysis of marine vessels, with many model tests, and full-scale measurement programs. Analysis of many fixed and floating structures, single point moorings, and marine risers, was undertaken before coming to the USA. Also with Atkins, a period of two years was spent in setting up an Anglo-French joint venture company, marketing and applying hydrodynamic and structural software in the offshore industry. During the four years spent with Atkins in the UK, Mr. Stewart set up a scheme in London called OPENING WINDOWS ON ENGINEERING. This scheme involved training other young and exceptionally talented engineering graduates to go into middle and high schools in London. They would explain their work in a carefully planned manner to school children, Sowing the Seeds of Engineering Ambition to these children, thereby encouraging more engineering applicants at Universities and generally raising the standards of engineering graduates. In Houston, application and marketing of advanced computer software for structural, hydrodynamic, and hydrostatic analysis of marine structures and systems were undertaken for Atkins and their clients. Fur-

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ther full-scale data acquisition projects for oil companies and government agencies were designed, implemented, and managed. Additionally, complete management, personnel, and marketing responsibility for the Houston office of Atkins was vested in Mr. Stewart. DnV approached Mr. Stewart in 1983 and requested that he head up their technical services in the Americas. He agreed, and became responsible for all technical work performed in the USA, as well as for marketing and for company development. DnV, or Veritas, is the parent company of Veritec, formed in Houston in 1985. Mr. Stewart was vice president of both Veritas and Veritec in the USA. DnV clients were oil companies, drilling contractors, government agencies, offshore engineering and fabrication companies, naval architects, and other DnV regions in the Americas. Mr. Stewart set up a Training School for the Marine Crews of Floating Offshore Vessels, which has now trained over 5000 personnel, giving them knowledge of buoyancy, stability, mooring, and ballast control, using a full-size control room simulator, which Mr. Stewart designed and built with Atkins in Houston. It is not known how many lives at sea this training has saved. STA was formed at the request of DnV, when they decided to suspend offshore engineering consultancy in the US, after the sudden decline in oil prices in 1986. Since that time STA and DnV have worked together on several projects, with STA acting both as contractor and as client. STA is now well established in structural marine and offshore engineering consultancy. STA specializes in engineering design and analysis studies with emphasis on technical risk analysis, dynamic analysis, and cost forecasting. STA has a wide international client base and excellent analytical resources, including static and dynamic stress analysis, mooring analysis, time series data analysis, accident data bases, capital and operating cost databases, finite element analysis software, mathematical software, and CAD packages. STA has numerous modern PCs that are continuously updated as PC technology moves forward. Other computer equipment includes color laser printers, color plotters and one 36 carriage inkjet plotter. In 1988, STA completed delivery of the world's first Jack-Up Stability Training Simulator for DnV in Houston. Copyright to all software and to the extensive documentation resides with STA. A second Jack-Up Simulator was installed in the Aberdeen Technical College, Scotland, in 1989. STAs jack-up stability/training software is used on the four training simulators built in the UK in the last 12 years, the latest full simulator being for Petrobras in Brazil. STA has upgraded the Diamond Offshore training simulator in Houston with new software, new state-of-the-art displays and new electronics hardware. STA designed the Irish Sea Pioneer, a $60 million jack-up vessel, the worlds largest liftboat and the first liftboat for UK waters. This vessel has operated successfully with more than 140 location moves and jackings in the last ten years. There has been almost no wear in the guide system. STA owns a patent for an Arctic drilling and production platform (ADAPS). STA has a patent application for a new bend stiffener. STA is working on a 2008 patent application Fluid Transfer System for Single Point Moorings. STA is involved with several areas of fundamental research of interest to the offshore industry, including:

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dielectrophoretic strengthening of marine sediments drag anchor embedment geotechnics and geokinetics jack-up spud can - soil structure interaction degradation of marine flexible pipes, umbilicals, and cables new risk assessment methodologies for marine risers and oil/gas/water separators on FPSOs. collision and failure analysis of marine flexible and rigid risers improvement of afloat and elevated stability of liftboats (and jack-ups) mitigation of sloshing in separators with physical modeling in our Houston laboratory, and: slosh mitigation collaborative research with Argonne National Laboratory, and: slosh mitigation collaborative research with Zeta-pdm, England Suction caisson-type anchors for offshore structures New WEC devices for offshore power generation from waves

STA has developed and owns unique computer programs for design and analysis of jack-ups, liftboats, drag embedment anchors, pile anchors, submerged and buoyant cables, and many other structures. STA markets and supports a wide range of computer software. SUMMARY OF CAPABILITIES: Multi-disciplinary engineering evaluation of offshore and marine projects with emphasis on technical, commercial, and other insurable risks. Engineering and analytical expertise with fixed and floating marine structures, including static and dynamic finite element stress analysis, mooring analysis, stability analysis, hydrodynamic analysis, geotechnical design and analysis. Ensuring compliance with a wide range of US and European codes and standards especially pertaining to offshore structures, working with Ship Classification Societies and the US Coast Guard. Forensic evaluation of failed offshore systems especially including complicated cross-sections, such as risers, umbilicals, jack-ups and liftboats, lattice-legs and simple sections such as pure cylinders. Oceanography, hydrodynamics, and the applied dynamics of ocean surface waves. Structural and naval architectural design and design review of offshore and marine structures. Expert in use of OrcaFlex (US Agent for Orcina Software since 1986). Support provided to hundreds of OrcaFlex users. Training courses provided for OrcaFlex. Model, and full-scale, testing of offshore and marine structures, including results interpretation, with practical application of time series data analysis, in the time domain (including probability density functions) and in the frequency domain. Simulation of marine systems and structures with use of simulation and full-scale training simulators to aid in the training of marine personnel, including the use of psychology and stress in training. In-house development and application of wide range of computational tools, including engineering analysis software, commercial evaluation software, and risk assessment software. Provision of expert testimony in coastal, offshore, near-shore and marine litigation. Development of CE Certification Methodology for Machinery Manufacturers, especially outside Europe. Project management, scheduling, cost control, control of subcontractors and direct labor.

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Company management, office administration, financial and budget planning, strategic planning, and personnel management. STA has agents in the UK, Holland, Singapore, Kuala Lumpur, India, Sri Lanka, Dubai and Australia. Preparations and business plan for new BVI company, Ocean Energy Technology, Testing and Training (OET3) to train ocean engineers in the BVI, to test offshore energy devices developed overseas and to develop new devices in the BVI, 2009, in cooperation with the BVI Government.

PUBLICATIONS
"Construction and Operation of an Electrical Groundwater Analog Computer," Prize-winning Undergraduate Thesis, University of Aston in Birmingham, 1972. "The Dynamic Analysis of a Single Buoy Mooring System," MSc Thesis, Cranfield Institute of Technology, 1975. Contributing Author to "Dynamics of Marine Structures," by Atkins Research and Development for UEG, 1977. "Single Point Mooring - An Evolving Science," Dock and Harbour Authority, Part 1, May 1977; Part 2, June 1977. "Basic Wave Theory," presented to the UK Institution of Civil Engineers, Philipps House Course, September 1977. "Full Scale Tug-Barge Experiments," Europort International Maritime Conference, Amsterdam, November 1978. "The Role of the Marine Transport Barge in the Middle East," Seatrade Kuwait Conference, Kuwait, January 1979. "Wave Induced Motions of Marine Deck Cargo Barges with Particular Reference to Roll Damping," BOSS Conference, London, August 1979. "Non-Linear Marine Barge Motion Response," Joint Institution of Structural Engineers and Building Research Station Seminar, "The Use of Physical Scale Models in the Design of Offshore Structures," London, November 1979. "Direct Measurement of Fatigue Damage in Jacket Transportation" (with G. Halliday), International Tug Convention, Amsterdam, 1980. "Single Point Mooring Terminals: A Summary of Selection and Design Methods" (with A. E. Bliault), Royal Institution of Naval Architects, London, April 1980. "Articulated Tower for 1000m Water Depth with Rigid Sea Bed Connection," Society of Petroleum Engineers, Dallas, September 1980. "The Non-Linear Effects of Midship Flare on Motion Response of Drillships" (with S. Hsu), SNAME Texas Section Annual Meeting, Houston, October 1983. "Non-Linear Heave and Pitch Motions of a Modified Tanker for Offshore Production" (with R. Borresen), SNAME Texas Section Annual Meeting, Houston, October 1984. "On-Bottom Stability of Jack-Ups," OTC 5820 (with R. M. White, V. Rapoport, and D. Devoy), Offshore Technology Conference, Houston, May 1989. "Deep Embedment Plate Anchors," OTC 5732 (with D. True and T. Jones), Offshore Technology Conference, Houston, May 1989.

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"Liftboat Elevated Structural Analysis" Paper presented to Texas Section of The Society of Naval Architects and Marine Engineers, August 1990. Flexible Riser Design and Analysis with TLP Applications Lecture presented at OMAE TLP Design Technology Seminar, Houston, 1990. "Observed Storm Stability of Jackup Boats (Liftboats)," OTC 6611 (with V.G. Rapoport and M. Oser), Offshore Technology Conference, Houston, May 1991. "Liftboat Leg Strength Structural Analysis Final Report" Available to the US public through the National Technical Information Service, Springfield, VA 22161, July 1991. "Drag Embedment Anchor Performance Prediction in Soft Soils", OTC 6970, Offshore Technology Conference, Houston, May 1992. Liftboats Unique Versatile Vessels, Proceedings of the Marine Safety Council, Vol. 49, No. 6, US Department of Transportation, US Coast Guard, November-December 1992. "Analytical Model of Wear in Umbilical Armor Wires" (co-authored with Dr. W. Jones) OMAE 1994, Houston, Texas. Vertical Loads on Drag Embedment Anchors (co-authored with T.M. Fulton) OTC 7491, Offshore Technology Conference, Houston, May 1994. Structural Design of a Harsh Environment - 4 Legged Jack-Up Boat, (co-authored with R.E. Spong, B.A. th Stone, and R. Leonard) presented at 5 International Conference, The Jack-Up Platform, City University, London, in September, 1995. Spudcan Fixity: Lessons Learned from the Liftboat Industry, (co-authored with B.A. Stone and J.N. th Brekke) presented at 5 International Conference, The Jack-Up Platform, City University, London, in September, 1997. Enhancing Value in Deepwater Developments, presented at SNAME February 1999 Symposium, Houston, TX. Dynamics of Taught-Leg Synthetic Mooring Systems in Very Deep Water (with Emphasis on Mooring Dynamics and Slow Drift Motions presented at OTRC Conference, 2003 International Symposium, Deepwater Mooring Systems: Concepts, Design, Analysis and Materials, Texas, October, 2003. Caisson Anchor Pile Behavior presented at OTRC Conference, 2003 International Symposium, Deepwater Mooring Systems: Concepts, Design, Analysis and Materials, Texas, October, 2003. Mat-Supported Jack-Up on Soft Clay Seismic Response Determination, 11 International Conference, The Jack-Up Platform, City University, London, in September, 2007. Seismic Time History Response of the Maleo Producer, OTC Paper 19480, 2008, (with Jacob P.). Detailed Geotechnical Investigation Around In-Place Mat Foundation Including T-Bar and CPT Comparisons, OTC Paper No 19580, 2008, (with Audibert, J.M.E., and Neubecker, S.). The Maleo MOPU Project - Project Overview and Keynote Address, OTC Paper No 19581, 2008, (with Ooley, M.) Author and co-author of numerous DnV reports, Atkins reports, and STA reports for external clients, and for internal projects. Also author of several magazine articles including "Practical Aspects of Platform Inspection," Ocean Industry, March 1987; and "First Jack-Up Simulator Will Train Rig Crews," Ocean Industry, May 1988. Developer and Principal Author of STA OFFSHORE DYNAMICS WORKSHOP SERIES, 2006.
th

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PATENTS:
"Arctic Drilling and Production System and Method of Anchoring the Same," application filed February 1987, approved 1988. Riser Buoyancy Clamp, pending (Assigned to Floatation Technologies). Fluid Transfer System for Single Point Mooring (application pending).

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MERLIN ASSOCIATES

COMPANY FACTS
Engineering Consulting Firm Sole proprietorship founded in 1985 Main Office in Houston, Texas Merlin Associates 5625 FM 1960 West Suite 304 Houston, TX 77269-2188

Telephone: (281) 586-0045; Fax: (281) 586-7965; Mobile: (713) 298-7816 Email: chuck.yost@merlinassociates.com Website: merlinassociates.com

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