Yamal LNG Project overview - astu.org

GASTECH, London October, 2012

Yamal LNG

Project overview

Gleb Luxemburg CEO, Yamal LNG

1

This presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue or the solicitation of an

offer to buy or acquire securities of the Company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment

activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be

relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this

presentation has not been independently verified. The information in this presentation is subject to verification, completion and change

without notice and neither the Company is under any obligation to update or keep current the information contained herein.

Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its respective

members, directors, officers or employees nor any other person accepts any liability whatsoever (in negligence or otherwise) for any

loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.

This presentation and the information contained herein does not constitute and should not be construed as an offer to sell or the

solicitation of an offer to buy securities in the United States as defined in Regulation S under the US Securities Act of 1933 (the

"Securities Act"). Any securities of the Company may not be offered or sold in the United States absent registration or an exemption

from registration under the Securities Act. The Company has not registered and does not intend to register any portion of the Offering

in the United States or to conduct a public offering of securities in the United States.

This presentation does not constitute a public offering or an advertisement of securities in the Russian Federation and does not

constitute an offer or a proposal to make offers or to acquire any securities in the Russian Federation.

This presentation contains "forward-looking statements" which include all statements other than statements of historical fact. Such

forward-looking statements can often be identified by words such as "plans," "expects," "intends," "estimates," "will," "may," "continue,"

"should" and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important

factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be

materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such

forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and

the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and

uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-

looking statements speak only as at the date as of which they are made, and none of the Company or any of its respective agents,

employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking

statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events,

conditions or circumstances on which any such statements are based. The information and opinions contained in this presentation are

provided as at the date of this presentation and are subject to change without notice.

Yamal LNG Disclaimer

Yamal LNG Project | London | October 10, 2012

Project overview

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Concept, surveys, pre-FEED (done)

FEED (completed, optimization ongoing), State permits

Final Investment Decision (FID)

Early works, EPC

LNG plant startup by trains

Pilot LNG project on the Yamal Peninsula,

Russia

• Onshore field / 2P gas reserves 879 BCM

• 16.5 mtpa of LNG (3 trains)

• 1 mmt of gas condensate

• LNG plant and port at Sabetta

• Sponsors – NOVATEK (80%) and TOTAL

(20%)

• Supported by Russian government

Yamal LNG

Yamal LNG Project | London | October 10, 2012 2

3

Yamal Peninsula

• The Yamal Peninsula is located in the north of Western Siberia and

is bordered by the Kara Sea to the west and by the Gulf of Ob to the

east

• Its administrative center is Yar-Sale and the Peninsula has a total

population of 16,100 inhabitants

• The Yamal territory is located in the tundra zone. The peninsula

consists of mostly permafrost soil - permafrost depths to 300-500

meters

• The Peninsula’s relief is characterized as smooth with altitude

variations of less than 90 m. Average altitude is approximately 50

meters above sea level

• Long-lasting ice cover (about 300 days a year). Swamps and lakes

cover over 60% of the territory


Yamal LNG

-30

-25

-20

-15

-10

-5

0

5

10

15

I II III IV V VI VII VIII IX X XI XII

Polar day

Average annual temperature -9°С

Polar Night

°С

http://upload.wikimedia.org/wikipedia/commons/6/65/Russian_Federation_(orthographic_projection).svg

Well pads LNG Plant

Port & MOF

Construction

Camp

Air Strip

Project Site Overview

10 km

• One field based

integrated project

• Close proximity of gas

production facilities to

LNG plant

• Integrated gas

treatment and

liquefaction facility

• Well prepared field

infrastructure

Operation camp

Yamal LNG


5

Geology and field development

6П75Р

94Р

157Р

115Р

98Р

93Р

1П

72Р

79П

4Р

114Р

110

87Р

2П

80П

113Р

91Р

117Р

3Р

100Р

112Р

82Р

76Р

109Р

7Р

108Р

3.1

21Р

2322Р

2321П

5П

90Р

118Р

101Р

84Р

116Р

81Р

106Р

10Р

86Р

88Р

11Р

8Р

83Р

85Р

89Р

14Р

119Р

71Р

2324Р

97Р

73Р

70П

105Р

250 250 500 750 1000 м0

Изготовлено

экземпляров

Инв. № экз.

Приложение

лист , экз.

Масштаб 1 : 100 000

Руководитель договора:

Ответственный исполнитель:

Составил: Еринов В.Г.

Компьютерная

графика:

Ямало-

Ненецкий

автономный

округ

Тюменская

область

ОАО "НОВАТЭК"

ОАО "Ямал СПГ"

2011 г.

ФОНД ЭКСПЛУАТАЦИОННЫХ СКВАЖИНЮЖНО-ТАМБЕЙСКОГО МЕСТОРОЖДЕНИЯ

1 1 2 км0

Р аспре д е ле ние ф онд а э ксп л уатационны х скваж ин

Ю ТГКМ по кустам .

1 10 ЦК

2 10 ЦК

4 6 ЦК

6 6 ЦК

7 25 ЦК

22 6 ЦК

25 12 ЮВК

26 2 ЦК

29 1 ЦК

30 18 ЮВК

35 10 ЦК

39 17 СВК

40 11 ЦК

41 3 ЦК

42 3 ЦК

43 12 ЦК

44 15 ЦК

45 8 ЦК

46 15 ЮВК

47 27 ЮВК

20 217

куст количество скважин Купол

ЮВК ЦК СВК

1 ПК1 26 0 26 0

2 ХМ1+ХМ2 28 5 20 3

3 ТП1-ТП21

34 7 23 4

4 ТП3-ТП41

33 10 21 2

5 ТП5-ТП122

24 12 10 2

6 ТП130-ТП14-15 19 17 0 2

7 ТП17-ТП191

16 3 13 0

8 ТП20-ТП26 37 17 16 4

217 71 129 17Всегопоместорождению

Объект Пласт Кол-воскважинвтомчисле

8075

8445

8391

8394

8476

8444

8431

8074

8433

80768073

8443

8393

8432

8474

84638462

8392

8072

8442

8071

8441

8451

8464

8472

8471

7431

7074

7075

7443

7444

7445

7441

7442

7451

7071

7072

7073

7471

73027301

7351

6471

6391

5252

5022

5061

5431

5302

5303

5474

5072

5074

5461

5301

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5473

5471

5392

5251

5253

5475

5075

5391

5011

5021

5071

4042

4041

4421

4021

4063

40714441

4431

4291

4451

4303

4302

4472

4471

4461

4462

4253

4251

4252

4392

4221

4351

4352

4401

4403-2

4411

4422

4061

4062-2

4262

4261

4301

4391

3252

3251

3461

34733301

3472

3471

3072

3441

3431

3021

3022

3404

3352

3071

3013

3012

3011

3404-2

3403

3401

3402

3355

3353

3354

3352-2

3351

3225

3224

3223

3221

3222

3391

3392

3394

3393

2251-2

2461

2301

2471

2252

2412-2

2411-2

2014-2

2432-2

2431-2

2071-2

2021-2

2441-2

2072-2

2073-22452-2

2391-2

1061

1062

1441

1402

1401

1421

1043

1041

1403

1012

1013

1021

1022

1431

1433

1432 1071

1073 1453

10721451

1352

1351

1042

1452

К40

К42

К41

К43

К44

К45

К46

К47

Northern dome

Central dome

Southern dome

Sabetta

Geology

• Onshore location, with possible offshore extension in

North-East

• Cretaceous sandstone reservoirs between 900 and

2800m

• Appraised by 58 wells (3 drilled and tested in 2011-2012)

• Field covered by 3D-seismic

Field Development

• Production plateau 27 bcm/year

• Peak condensate production at 1.1 mmt/year in 2020-

2021

• 208 production wells, deviated and horizontalized over

500m

• 2 rigs are mobilized in 2012 to start drilling April 2013

• Wells will be drilled on 19 clusters on 3 domes

Yamal LNG


Yamal LNG LNG Plant main facilities

4 Full Containment

LNG Tanks x 160,000 m3

3 GC Tanks x 50,000 m3

3 LNG Trains x 5.5 Mtpa Gas

preprocessing

Living quarters

Warehouses Power plant

Gas turbines (380 MW)

• Balanced combination of stick-build and modular construction

• Careful attention to foundation design in permafrost environment

• Standard and internationally proved technologies with:

o minimum number of novelties

o aim at minimizing impact on environment

• Proven APCI C3MR process

• BASF Acid Gas removal process

• Mercury removal

• Air Cooled liquefaction process – less

environmental impact

• Full containment Tanks

Flare


7

LNG Plant Modularization Concept

• Modularization (~ 240 modules)

• To be transported by specialized ships

• Modules shall be transported and installed using self-

propelled module trailers (SPMT)

• Heavy cranes application on site will be minimized

• Winterization (adapted for wind, snow and low temperature)

Yamal LNG


8

Yamal LNG


Government facilities

Administrative facilities

(customs office, captain’s office,

federal offices)

Ice protection facilities

Port harbor

Approach channel

Seaway channel

Yamal LNG facilities

Administrative facilities

Berths, jetty, and utility system

6

5

4

3

1

2

3

1

2

2

• Agreements with Rosmorport concluded*

• Allocation of operational responsibilities is agreed between federal and Yamal LNG infrastructure

• Required funds are included in federal budget

(officially approved for 2012-2014)

* FSUE “Rosmorport” is responsible for development of the Russian sea transport infrastructure, maintain federal property in the seaports.

1

2

1

3

4

5

6

Seaway and approach channels Port facilities, berth and harbor

Port facilities, berth/jetty and harbor

9

Early Stage Facilities of port Sabetta

MOF

(length 160 m, depth 5 m) Universal deep-water berth

(length 223 m, depth 11 m) Universal deep-water berth

(length 250 m, depth12.5 m)

Customs

and administrative building

Storage areas for construction

materials

Yamal LNG

• Port construction in Sabetta is commenced in July

2012

• 1st stage: construction of the berths for offloading big-

size LNG plant process modules. Ready by 2014

navigation

• 2nd stage: LNG and gas condensate loading

jetty. Ready for first LNG in 2016, in 2018 the

port will be operated over its full design

capacity of 18 mln tons


10

Port fleet

• Port fleet: preliminary investigation by AARC

o 1 line ice breaker: 39MW

o 1 port ice breaker: 13MW

o 4 port tugs

• Evaluating LNG fuelled propulsion:

o Gas mode operation in ice

o Bunker tank technology and capacity

o Bunkering station

• Conceptual design exists. Project-specific design and specification will be available in 2012

Yamal LNG


Shipping Arrangements

• Shipping Solution

– Vessels sailing from Sabetta to markets on long term Time

Charter contracts

– Combination of dedicated ice class and conventional LNG

vessels

– Demonstrated navigability:

o Western route: available all year-round

o Northern Sea Route to Asia: available in summer (July to

November)

• ARC7 Ice Class ship (Russian classification) design

– Strong cooperation with the Russian research institute CNIIMF

– Ship specification developed by Aker Arctic

– Confirmation test of the ship model in HSVA (Hamburg)

– 170,000 m3 ship design feasibility validated in Ice Model tests

• Contracting

– Pre-qualification of Shipowners and Shipyards for the ARC7

vessels achieved

– Ice Class shipping:

o Tender with Shipyards: September 2012

o Tender with Shipowners: September 2012

o Selection: by December 2012

o Ice breaking contingent support solutions under studies

with Atomflot

Indicative shipping routes

Yamal LNG


Shipping in Arctic waters

large scale NOVATEKs gas condensate cargoes

71 thousand tons – first large scale condensate shipment in August 2010

through Northern Sea Route on «Baltica» tanker

120 thousand tons of condensate in September 2011. «Vladimir Tikhonov»

tanker sailed in 7 days, 14 knots through the North Sea Route:

• LOA 280.5 m, 50 m width, 16.5 m draft,

• Similar parameters as the designed arctic LNG carriers

The successful large scale

cargo shipments of gas

condensate through NSR

in 2010-2012 have

provided exclusive

valuable information on the

ice conditions and proven

feasibility of utilizing this

sea route to ship LNG and

gas condensate to Asia

Atomic icebreaker «50 let

Pobedy» is providing

assistance on ice passage

to «Vladimir Tikhonov»

tanker at NSR

Yamal LNG

12 Yamal LNG Project | London | October 10, 2012

13

Project on the Move Yamal LNG

Airstrip preliminary works Construction camp Berth reconstruction

Acting heliport

Living quarters construction on piles

Running well

• FEED completed. It’s being using as a basis for Russian proyekt

documentation development. Design documentation package is submitted

for State approvals. FEED optimization ongoing

• Camp and infrastructure construction. Power plant and power grid,

utility networks, Living quarters, fuel storage, warehouses, airstrip

• Early works

o Well pads, roads, LNG plant site backfilling,

o MOF & RoRo construction

o Procurement – piles and LLIs

• 3 exploration wells has been drilled. Field Development optimized (19

well pads instead of 35)

• EPC tender ongoing. December 2012 – EPC contractor selection, detailed

design and OBT start


Challenges and Solutions

Main Challenges Solutions

Site remoteness with limited

access

• Minimizing work at site

• Modularization

• Delivery of modules mainly during summer season

Arctic conditions (permafrost) • Construction on piles to isolate ground from equipments

• Winterization considered design and execution plan

Drilling in Arctic conditions

• Winterized rigs and suitable mud/casing /drilling programs

• Novatek experience in field exploration and development in

Arctic conditions wells drilled in 2011

Complexity and interface

management

• Best world practice (EPC contract)

• Professional management team

• Sponsors support and expertise

Shipping in Arctic conditions

• Ice-class ships developed by the leading industry players for

Arctic conditions

• Availability of Ice breaker support

• Novatek experience: Northern Route recently tested

All technical aspects are known, with reliance on extensive studies, tested technologies

and expertise in similar projects

Yamal LNG


15

Thank you for attention!

Yamal LNG


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Yamal LNG Project overview - astu.org