2. The discovery and rapid proliferation of shale gas basins in
North America is driving up natural gas supplies but …
North American Shale Gas Basins U.S. Natural Gas Supply
(Trillion Cubic Feet Per Year)
25.1
23.4
21.3
19.2
2000 2010 2020p 2030p
Shale Gas Other
Source: U.S. Department of Energy; EIA Annual Energy Outlook 2011
1
3. … Depressing gas prices and altering oil-gas price parity
leading to new interest in gas utilization and conversion
U.S. Natural Gas and Oil Prices
(Nominal Price, U.S. $ / BOE)
Recent Market Themes
$181
Oil and gas at Oil and gas out Gas substituting coal for power
price parity of price parity
LNG importers considering
conversion to export terminals
$119
Chemical companies planning
Gas price, new crackers in shale basins
$/MM Btu
$76
$9.68
$54 $7.19 Producers exploring gas
$50 $5.18 conversion to fuels / chemicals
$4.43 $40
$29
$25
Efforts to promote natural gas-
based transportation
2005 2010 2020p 2035p
Gas Oil
Source: EIA Annual Energy Outlook 2011
2
4. This multi-client study has benchmarked a number of options
to utilize, convert, and monetize natural gas and …
Gas Utilization Options Gas Conversion Processes
Natural
Electricity Gas
Oxygen
Syngas
LNG
Fischer
Methanol Hydrogen
Tropsch
Natural
Chemicals
Gas
Diesel Gasoline Ammonia
Liquid Fuels Naphtha DME Refineries
Jet Fuel Olefins Fuel Cells
Transportation
Transportation fuels
Chemicals
3
5. … Addressed key questions to deliver several actionable
insights for various stakeholders …
Representative Study Questions Deliverable Insights
What happens to LNG Markets Costs / Economics
LNG imports?
Forecast supply and Estimate capex / opex
Will U.S. export shale gas? demand of gas, NGLs,
and products Benchmark options
based on IRR, NPV,
Will GTL be used to convert
gas to gasoline and diesel? Evaluate supply and markets, and risks
Liquid Fuels demand impacts
(GTL) Are hydrogen or DME Discuss key business
feasible?
Assess impacts in models
multiple scenarios
How much NGL supply can Evaluate key scenarios
Chemicals be absorbed for chemicals?
and NGLs Which markets will U.S.
chemical resurgence serve? Competitive Activity Technology
How much coal will gas Gather competitive Review technologies to
replace to produce power? intelligence to review convert gas into LNG,
Power market developments GTL (gasoline, diesel)
Will carbon policy have a and chemicals
role?
Assess regulatory
issues Discuss leading
Can we shift to a CNG-based technology licensors
transportation infrastructure? Evaluate CNG market
Transportation Profile emerging gas
What are key CNG penetration for
signposts? transportation utilization technologies
4
6. … Including economics of various gas monetization options
at different scales and locations in North America
Gas Monetization Options and Plant Capacities
Feed LNG GTL MTG
MM cfd MM tpa bpd bpd
100 N/A ~10,000 ~10,000
500 3.8 ~54,000 ~54,000
1,000 7.6 ~100,000 ~100,000
Gas Monetization Plant Locations
Location LNG GTL MTG
U.S. East
Coast
U.S. Gulf
Coast
Rockies
Western
Canada
5
7. In addition, all recent project proposals, technology
development, and other competitive activity is profiled
Areas of Competitive Activity
1
Liquefied Proposals for over 10 plants across North America
Natural Conversion of import terminals
Gas (LNG) New export terminals
2
Gas to Liquids Proposals for 4 projects across North America
(GTL) / Methanol New GTL and MTG projects
to Gasoline (MTG) Technology development efforts
3
Proposals for ~10 NGL and ethane pipelines
Midstream
Proposals for 17 new fractionators
4
Proposals for 4 ethane crackers
Petrochemical
New ethane crackers
Crackers
Revamp or expansion of existing crackers
5
Natural Gas Efforts to promote natural gas-based transportation
Vehicles (NGVs) Fleet conversions to use natural gas as a fuel
CONFIDENTIAL 6
8. The “Table of Contents” reflects the study’s structured and
comprehensive scope of work …
1 Executive Summary Methanol to DME / Gasoline
Technology and licensors review
6 Product demand and pricing
Introduction Cost and economic analyses
Purpose and objectives Recent competitive / market developments
2 Deliverables and benefits
Study team and methodology Natural Gas Liquids (NGLs) Utilization
Supply, demand, and pricing outlook
7 Review of cross-basin infrastructure
Overview of Natural Gas Industry Recent competitive / market developments
Gas supply, sources, and outlook
3 Gas demand, user segments, and outlook Natural Gas Vehicles (NGVs)
Imports, exports, and supply-demand gaps Fleet size and growth assessment
8 Impact on natural gas consumption
Infrastructure costs and market development
Liquefied Natural Gas (LNG)
Technology and licensors review Gas Demand Scenarios
4 Product demand and pricing Sector-wise gas assessment
Cost and economic analyses 9 Growth scenarios for gas demand
Recent competitive / market developments Comparison of supply-demand gaps
Competitive Landscape
Gas to Liquids (GTL) Profiles of ~40 project proposals in …
Technology and licensors review
10 … LNG, GTL, and MTG and …
5 Product demand and pricing … Midstream, chemicals, and NGVs
Cost and economic analyses
Recent competitive / market developments 11 Appendix: Methodology & Assumptions
CONFIDENTIAL 7
9. … Executed by a team with top-tier industry and consulting
experience along with deep gas monetization expertise …
Expert Team
Uday Turaga holds a PhD in Fuel Science from Penn State and an Commodity pricing
MBA from UT Austin. Through stints at ExxonMobil, ConocoPhillips, Oil/gas project economics
and Booz, Uday has developed strategy for shale gas operators, Refining / fuels technology
analyzed economics of oil/gas projects, commercialized fuels Technology assessment
technology, and conducted regulatory analysis / scenario planning Project management
Colin McHattie brings technical and commercial oil, gas, and LNG E&P asset management
project initiation and development experience spanning over 30 Project development
years with ConocoPhillips. His contributions spans management, Gas commercialization
business, geoscience, and research roles including serving as Strategic planning
Manager Gas-to-Liquids and Carbon Conversion Technologies. New opportunity/tech assessment
Vis Viswanathan brings 35 years of experience with Akzo-Nobel, Gas and syngas conversion
ConocoPhillips, and Lummus in process development / economics Risk evaluation
and technology evaluation for refining and chemicals. He brings Process economics
deep expertise in gas monetization, including Gas-to-Liquids. He Technology assessment
holds a Ph.D. from University of Minnesota in Chemical Engineering. Process selection
Vishakha Shembekar brings deep expertise in oil and gas,
Natural gas-derived chemicals
chemicals, and renewables with emphasis on chemical industry
Chemical pricing / markets
applications of natural gas. She holds a Ph.D. from the Indian
Technology assessment
Institute of Technology, Mumbai and brings nearly 10 years of
Analytical modeling
experience gained at Cornell, Dow, and Merck.
CONFIDENTIAL 8
10. … Using a robust methodology with findings peer reviewed
by distinguished advisors and Fortune 500 subscribers
Methodological Tools Peer Review / Subscriber Validation
Study Subscribers Including Fortune
500 companies: Subscribers have
reviewed our study and contributed to it
Hypothesis
Driven by providing non-confidential inputs
Primary Secondary
Research Research EPC Company: Leading EPC firm with
expertise in GTL, LNG, and Chemicals
Methods reviewed cost methodology and data
and
Tools
Analytical
LNG Expert: Recently-retired
Technical
Modeling Analysis executive from a leading LNG player
guided the LNG analyses and findings
Value
Chain
Analysis
GTL Expert: Renowned GTL expert
with experience in three majors advised
on the GTL analyses and findings
9
11. In summary, our study is independent, current, and unique,
and will benefit you with actionable deliverables and insights
Supply, demand, price, and market outlook for natural gas and NGLs
Apples-to-apples economic comparison of LNG, GTL, and chemicals
Deliverables Profiles of competitive activity and project plans in gas monetization
Synopses of gas monetization process and technology readiness
Two interim updates, findings workshop, and final report
Cutting-edge market perspectives on natural gas monetization
Independent analysis of investment options around gas monetization
Benefits Appraisal of best-in-class gas monetization processes and technologies
Access to deep industry and top-tier consulting expertise cost-effectively
Participation in a subscriber-driven, interactive, and peer-reviewed study
Operating Companies Corporate Functions Service Providers
Oil / Gas Majors EPC Firms Banks
Audience National Oil Cos. R&D Groups VC Firms
Midstream Firms Strategy Teams PE Investors
E&P Independents Tech. Licensors Governments
Chemical Companies Industry Associations Consulting Firms
10
12. Subscribers can join and participate in this study at a
competitive and cost-effective fee
Fee: U.S. $24,900
Fee is due on sign-up
Final report and
Quote is valid until March 31, 2012 workshop scheduling
available January 2012
Subscription includes following deliverables:
Draft report
Client workshop
Final ~250-page report
Insights / analyses for select client questions
This study and its contents will represent an original effort by ADI Analytics LLC based on
its own research and analyses and published and unpublished information from third
parties. However, ADI Analytics LLC, its owners, and associates neither provide
warranties nor assume liabilities of any kind for the offered reports and consulting
services.
For more info, contact Uday Turaga at +1.832.768.8806 or turaga@adi-analytics.com
CONFIDENTIAL 11
13. ADI Analytics is a boutique energy consulting firm that solves
client problems using a rigorous data-driven approach …
Markets Technology Operations Functions
Oil &
Gas
Exploration Production Refining Distribution
Power &
Mining
Coal Generation Transmission Carbon
Renewables
& Cleantech
Biomass Solar Wind Geothermal
Chemical &
Industrial
Plastics Materials Auto Manufacturing
CONFIDENTIAL 12
14. … Offering services that help clients understand markets,
develop strategy, improve operations, and deploy technology
Conduct in-depth research and Benchmark client capabilities,
analysis to identify new markets or costs, and competitiveness against
Market Competitive
segments, their size, profitability, industry based on public information
Research Benchmarking
growth, competitive landscape, and rigorous modeling and suggest
client fit, and execution strategy improvement ideas
Build valuation models to analyze
Understand technologies including
investments in capital projects,
Investment Technology their business impact, cost, trends,
businesses, or capabilities to
Analysis Assessment competing options, deployment risk,
estimate economic value, ROI,
and commercialization success
NPV, IRR, risks, and other metrics
Advise clients on competencies and Implement programs for ideation,
improving them with organization portfolio development, stage-gate
Business Innovation
and resource alignment to enhance maturation, open innovation, IP
Strategy Strategy
competitiveness, entry barriers, and management, functional excellence,
shareholder value and talent development
Develop and explore carefully
Assess organizational goals and “as
drawn future scenarios to define
Scenario Process is” processes to identify gaps and
medium-, long-term visions and
Planning Design design “to be” processes that fill
pressure-test them through
gaps and achieve target goals
quantitative, analytical models
CONFIDENTIAL 13
15. In recent work, we have supported blue-chip clients on
various business and technical consulting projects
Assessed costs, economics, Select Clients
U.S. Department feasibility, and commercialization
of Energy potential of several renewable U.S. Department of Energy
energy technologies
National Institute of Standards
and Technology
Identified strategic and technical
Upstream needs to establish an unconventional Fortune 100 Oil and Gas Major
Independent business and designed a fit-for- FTSE 100 Oil and Gas Major
purpose organization
Fortune 500 Coal Company
Sized market, growth, and segment Recent IPO Biofuels Start-Up
Venture profitability of the oilfield services
Capital Firm industry as groundwork to build Energy-Focused VC Firm
investment fairway
Ben Franklin Technology Partners
Fortune 500 E&P Company
Energy Supported diversification strategy by
Equipment sizing market and profiling customer Energy Training Services Vendor
Vendor willingness to switch vendors
Asian Chemical Conglomerate
CONFIDENTIAL 14
16. We look forward to working with you
Uday Turaga, Ph.D. Colin McHattie Vis Viswanathan, Ph.D.
+1 (832) 768-8806 +1 (832) 359-5906 +1 (832) 457-6486
turaga@adi-analytics.com mchattie@adi-analytics.com viswanathan@adi-analytics.com
+1 (281) 506-8234
info@adi-analytics.com
www.adi-analytics.com
15