Development of a LNG Bunkering Industry for the Caribbean

18 November 2020

Presenter: Mr. Arden Rodriguez

MTCC Caribbean Virtual Webinar

The National Gas Company of Trinidad and Tobago Limited (NGC) has agreed to make this presentation to the

attendees of this event. NGC makes no representation as to the accuracy of the information contained herein and

advises that no reliance should be placed on that information. The information in this presentation is based primarily on

publicly available sources, which NGC is not responsible for preparing or verifying.

The information provided shall not be binding on NGC, its shareholders, board of directors, employees and/or agents,

and has no legal effect and in no circumstances shall the contents be relied upon for any reason whatsoever. No

responsibility is accepted by or on behalf of NGC, its shareholders, board of directors, employees and/or agents for any

decisions made by the recipients of such information pursuant to receipt of the information nor shall NGC be

responsible for any direct or indirect consequences as a result of any reliance on the information being provided by

NGC herein.

DISCLAIMER

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• The NGC Group & National Energy

• National Energy Focus Areas

• LNG For Industry & Cleaner Marine Fuels

Content

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01ABOUT NATIONAL ENERGY

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Mandate:NGC is the sole purchaser, transporter and seller of natural gas in Trinidad and Tobago’s natural gas-based energy sector.

NGC Group (as of Dec 2018):Total Group Asset Value: US$6.37 billionAnnual Revenue: US$2.35 billion

NGC owns and operates:4.4 BCF pipeline network comprising 1000 km of off-shore and on-shore pipelines and above ground installations

The Cross-Island Pipeline (CIP) at 56”, at the time of its commissioning in 2005, was the largest diameter pipeline in the Western Hemisphere

Mandate:Natural gas processing, NGL aggregation, fractionating and marketing

Facilities Include:3 cryogenic natural gas processing plants - 1.95 bcf2 fractionation plants - 70,000 barrels / day6 product storage tanks - 1,250,000 barrels2 product loading docks (54,000 & 22,000 cbm)

A 56Km natural gas liquids (“NGLs”) pipeline between Atlantic LNG (“ALNG”) at Point Fortin to the Point Lisasprocessing facilities

Mandate:Promotion and development of new energy-based downstream industries; operation of marine and other infrastructural assets to facilitate gas-based activities

Point Lisas:Liquid & Dry Bulk6 Terminals; 9 BerthsBerths: 405m

Brighton Port: Storage Yard307m dock with turning basis

Union Estate: Heavy & Light downstream gas-based Industries

Port of Galeota: Logistics Port

Mandate:To accelerate and expand the use of Compressed Natural Gas (CNG) as a major, alternative, transportation fuel in Trinidad and Tobago

CNG Network14 operating stations 17 total by year end3 Convertors (1 pending)

Private Sector • US$50M investment in local CNG

industry to date• 13 OEM Brands

THE NGC GROUP OF COMPANIES

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NATIONAL ENERGY: COMPANY PROFILE

MandateConceptualization, promotion, development and facilitation of new energy-based downstream

industries; operation of marine and other infrastructural assets to facilitate gas-based activities

Se

rvic

es

• Project development

• Project appraisal & evaluation

• Facilitation of negotiations between investors

and state agencies

• Feasibility studies

• Provision of site and related infrastructure

• Provision of marine services

• Development & operation of industrial estates

and ports

Structure

NGCNATIONAL

ENERGY

Business & Infrastructure

Development

Commercial Operations

La Brea Industrial Estate

Union Industrial Estate

Under Development:

Pt. Lisas North

Pt. Lisas South and East

6 Savonetta Piers

ISCOTT Dock

Port of Brighton

Port of Galeota

Estates Ports

Vision

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02AREAS OF FOCUS ATNATIONAL ENERGY

Expansion of Natural Gas

Industry

Emerging Power & Marine

Solutions

Renewable Energy and

Energy Efficiency

Energy Intensive Industries

International Technical Services

Expansion of Port & Estate Infrastructure

Project Areas Under

Development

SUPPORTING NEW ENERGY SCENARIOS

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Caribbean Sea

Gulf of

Paria

Chaguaramas

-Chagterms

Galeota Port

Point Lisas

- Savonetta Pier

- ISCOTT dock

- Towage

Point-a-Pierre

Point Fortin

La Brea

- Union Industrial

Estate

- LABIDCO

- Brighton Port

Port-of-Spain

From Galeota @ 12 knots 22.6 hrs

From La Brea @ 12 knots 30.0 hrs

From Pt. Lisas @ 12 knots

30.8 hrs

National Energy offers an integrated platform of marine services from multiple locations which includes management and operation of three (3) strategically located industrial ports

Vessel Support Services:❑Local & regional

harbor towage

❑Anchor-handling

❑Tug & Barge cargo transportation

❑Rig relocation

❑Load-out operations

❑Rig standby operations

❑Pipe laying towage support and seismic survey vessel support

❑Firefighting capabilities

❑Crew transport

Collaborate with National Helicopter Services Limited

Partnership Arrangement with international provider for use of vessels to service local & regional markets

CURACAO• Established an NGC Group

Office in Guyana

• Market Services from Companies within the Group

• Advance Strategic Cooperation Initiatives between Guyana and Trinidad & Tobago

Guyana Initiative

MARINE SUPPORT SERVICES FOR

ENERGY & INFRASTRUCTURE PROJECTS

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03LNG FOR INDUSTRY &

CLEANER MARINE FUELS

LNG’S INCREASING IMPORTANCE IN THE REGIONAL ENERGY MIX

Growing supply competition creates

opportunities for the Caribbean

region

T&T is expanding its offering to small/micro

LNG to the region

In 2018, roughly 20% or 2.23 MMT of T&T’s LNG exports went to Jamaica, Dominican Republic & Puerto Rico. US LNG

LNG is poised for growth as competition

makes natural gas a cheaper power

generation option

T&T LNG

C.A. LNG

8th Largest LNG Exporter

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MICRO LNG EXPANSION &

ALTERNATIVE MARINE FUELS

Caribbean Sea

Gulf of

Paria

Chaguaramas

-Chagterms

Galeota Port

Point Lisas

- Savonetta Pier

- ISCOTT dock

- Towage

Point-a-Pierre

Point Fortin

La Brea

- Union Industrial

Estate

- LABIDCO

- Brighton Port

Port-of-Spain

LNG BUNKERING

LNG BUNKERING

MICRO LNG EXPORT

MICRO LNG EXPORT

LNG BUNKERING

• LNG (large scale and micro scale)

important to regional energy mix

(Jamaica, DR, Puerto Rico,

Barbados and Guyana).

• T&T currently exploring supplying

micro LNG to selected islands

Co

llab

ora

tio

n o

ver

Co

mp

etit

ion

IMO 2020 & ALTERNATIVE MARINE FUEL BUNKERING IN T&T

SHIPPING TRENDS FROM THE ONSET OF IMO 2020

Source: Bunkerspot, The Loadstar, Drewry

Shipowners struggling with cost and

availability of low sulfur fuel

Low sulfur fuel at US$200/tonne

premium to fuel oil

Singapore – 29 of 45 licensed bunker fuel

suppliers have 0.5% S fuel available now

Reports of delays due to unavailability of compliant fuel (e.g. East Coast of India)

Expectation of smaller ports having more

difficulty in compliant fuel procurement

Ocean carriers expected to add US$11 billion in additional fuel

expenses in 2020

Can result in slow steaming, blank sailing,

and off-hiring

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AS AN ALTERNATIVE FUEL, LNG IS PREFERRED FOR ADDRESSING SULFUR LIMIT

Source: Advisian 202014

Fuel T&T Perspective Global Status Advantages Disadvantages Recommendation

LNG Supply: Existing production; Infrastructure: no small-scale infrastructure developed

300 vessels worldwide use; developing in major markets for scale

Experience in adoption and growing; build-out of world infrastructure; will be attractive compared to traditional fuels and scrubbers

Cost of infrastructure (cryogenic fluid); does not solve long-term GHG issues

Time is now for adoption –market ready and addresses current IMO Regs

Methanol Supply: Existing production; Infrastructure: no small-scale infrastructure developed

Only tankers transporting methanol make use of fuel on world-scale

Technology is relatively mature; fuel is less volatile and easier to handle than LNG

Market is immature; user experience is challenged1; does not solve long-term GHG issues

Need IGF ratification; likely more local use will result2

Ammonia Supply: Existing production; Infrastructure: none

No international operations Low Market is immature; High toxicity and flammability compare with alternatives

Consider for long-term future development

Hydrogen Supply: none for bunkering scale. Technology immature

Pilot projects - No commercial operations

Best solution for GHG emissions as a fuel

Technology and Market are immature (10 – 20 years uptake)

Monitor maturity of technology

Bio-fuels Supply: none for bunkering; semi-maturetech.

Multiple pilots “Drop-in” fuel; technology semi-mature

Wide fuel cost range, immature market & availability

Monitor fuel costs developments

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WORLD’S LNG BUNKERING ACTIVITY IS STILL CENTRALIZED IN EUROPE

Advisian

World Activity in LNG Bunkering Infrastructure and LNG-Fueled Vessels

Sources: DNV-GL

1. LNG bunkering infrastructure limited in Americas relative to Europe

2. Rising tide of LNG lifts all ships:• Americas participation seek to

grow• Less competition – seek swaps

OPERATING LNG BUNKERING STATIONS IN NORTH, CENTRAL AMERICA AND THE CARIBBEAN

• Two more stations are in development / discussion to potentially serve the Caribbean LNG bunkering market

Advisian

JAXPORT

Operating LNG bunkering stations

Legend

Operating large-scale LNG export terminals1Atlantic LNG

Sabine Pass

In development LNG bunkering stations

Under discussion LNG bunkering stations

Port Fourchon

Port Canaveral

Elba Island

Freeport LNG

Corpus Christi LNG

Cameroon FLNG

Costa Norte LNG facility

Note 3

TX

LA

GA

FL

Panama

T&T

D.R.Jamaica

Sources: DNV-GL; Notes: 1. U.S. has over 100 small scale LNG facilities (not included in the map, other than the bunkering station); 2. Does not include LNG projects under

construction and/or recently approved projects 3. Location is undecided 16

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VIEW ON ALTERNATIVE FUEL VESSELS IN OPERATION AND UNDER DEVELOPMENT

World Alternative Fuel Vessel Count – In Operation and On Order (July 2019)

Source: DNV-GL

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LNG BUNKER DEMAND ESTIMATED TO GROW TO 1.7 MTPY IN 2040 FOR RELEVANT CARIBBEAN / SOUTH AMERICAN AREA

Advisian

Relevant Caribbean Area1 Bunker Fuel and LNG Bunker Fuel Estimation, 2010 – 2040

61

763

1,197

1,742

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

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10,000

15,000

20,000

25,000

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LNG

mar

ine

bu

nke

r, k

iloto

nn

es

Mar

ine

bu

nke

r, k

iloto

nn

es

Total bunker fuel LNG bunker fuel

Actual Estimated LNG CAGRs:2020-30: 28.8%2030-35: 4.6%2035-40: 3.8%2020-40: 18.3%

Source: Advisian analysis of previous references; Note 1: region includes Mexico through Central America, Colombia to Suriname, and Caribbean islands

Fuel consumers using contracts to hedge against rising future fuel prices; in shipping sellers like long-term contracts; consumers prefer buying spot

Carriers & terminal operators are partnering to secure funding, and minimize market uncertainty.

Subsidies & port authorities incentives reward and attract more customers

LNG as fuel is still relatively unknown to public, market, & government entities; stakeholder engagement is required.

Carriers agree that LNG bunkering must operate same way as HFO bunkering

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AdvisianSources: Advisian analysis

LESSONS LEARNED FROM ASPIRING LNG BUNKERING PORTS

Ports offering onshore power generation as a way to minimize both emission and in-port carriers’ power expenses

Fuel consumer invests in infrastructure & may pay O&M fees as a way to min. fuel costs; min. risk and CAPEX of terminal operator

Global port authorities have signed MOU aiming for the creation of standards and to lobby for LNG bunkering adoption

Nascent industry - LNG bunkering risks need to be shared between partners

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AdvisianSources: Advisian analysis

LESSONS LEARNED FROM ASPIRING LNG BUNKERING PORTS

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TRINIDAD & TOBAGO ALTERNATIVE BUNKER FUEL SUPPLY PROFILE

Advisian

High impact Moderate impact Low impact or constrained

*Based on suitability for alternative fuel sales

Key

Fuel Sales Parameters

Annual volume sales1: 700,000 tons (10,000 m3)

Vessel calls: 3,500 per year(1,200 over 25k gross tons)

Alternative fuel sales: none as of early 2020

Competitive landscape:

Alternative Fuel Capability

Current: • Large natural gas resource base with existing LNG,

methanol and ammonia production• Both markets to see increased supply from North

American capacity additions

Future:• Feasibility being evaluated by Ministry of Energy

and Energy Industries (MEEI) and NGC / National Energy

Sources: International Bunkering Industry Association, LNG World News; Notes: 1. Based on IBIA 2015

Oil fuel suppliers

LNG capabilities

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Advisian

High impact Moderate impact Low impact or constrained

*Based on suitability for alternative fuel sales

Key

Customer Description

Customer access:• Vessels travelling from the Panama Canal into Gulf

of Paria • Small, neighbouring islands

Customer needs:• Low sulfur fuels for IMO 2020• LNG for power in Puerto Rico, Dominican Republic,

and Jamaica• Jamaica has a mandate to increase to 80%

LNG

Differentiation

Other differentiators:• Local LNG supply from Atlantic LNG – 4 trains at

Point Fortin (~40 nm from Port Spain)• 100,000 m3/day (15 mtpa) capacity

• 7 Methanol plants – 7 mtpa capacity• 10 Ammonia plants ~ 5 mtpa capacity

Relative pricing: Under Consideration

Sources: International Bunkering Industry Association, LNG World News22

TRINIDAD & TOBAGO ALTERNATIVE BUNKER FUEL SUPPLY PROFILE

Proposed phases of hypothetical infrastructure development

Advisian 23

Infrastructure Capital

• CAPEX outlay for truck loading rack, connection to A-LNG storage, fueling ISO station, hoses & boil-off gas recovery

Customer basis

• ISO customers readily available –accessible via POS container port

• Customer incurs cost for staging area at port, owns ISO containers – in charge of land & marine logistics

Infrastructure Capital

• CAPEX outlay for ~13 or 25 truck/trailer combos (depending on customer), cryogenic manifold skid at required at port side

Customer basis

• Customer needs: fill vessel tank up to 1,500 m3

• LNG manifold / trucks staged next to calling vessel while unloading

Infrastructure Capital

• CAPEX outlay for small-scale pumps/piping on existing A-LNG jetty. 4,000 m3 ATB barge with BOG capabilities

Customer basis

• Customer needs: fill vessel tank larger than 1,500 m3

• Conduct remote operations (e.g. Venezuela)

Phase I: Distribution LNG Loading Rack

Phase II: Bunkering Tankers & Manifold

Manifold

Tankers

Phase III: Bunkering Ship to Ship

Push tug

Sources: Advisian, LNG World News, Q-LNG Transport

4 Infrastructure Build In Phases

Thank You