Senior Manager, International Business Development
MAN Energy Solutions SE
14:30 - 15:00
Tuesday, 17 September 2019
T3.1 Value Chain optimization with small scale LNG to power solutions
The “golden age of gas” story which was mainly written by some gulf states like Qatar and the US shale gas finds his way now deep into the global power generating business.
Huge infrastructure projects for the liquefaction of natural gas and the regasification in countries without own natural gas resources open with a tremendous speed nearly on a yearly basis all over the globe.
The global energy landscape is written completely new with the introduction of the flexibility of liquefied natural gas (LNG).
Due to the huge volumes of available LNG, the available infrastructure and logistics, the market for LNG has developed to a strong buyer´s market with huge bargaining power for off-takers.
The usage of so called “hub and spoke” models were LNG is distributed from a larger central terminal to decentralized smaller terminals offers off-takers in the power generating business a huge opportunity in reorganizing their fuel strategy from oil based fuels and coal to cleaner natural gas.
In times were the global initiatives against climate change influences as well investors and developing banks this fuel switch to LNG pays off in many ways.
- LNG is now cheaper due to a new supply and demand structure in many parts of the world than for example heavy fuel oil or diesel, still the dominating fuel which powers developing countries in the emerging markets in South America and Southeast Asia.
- Substituting of high priced and polluting fuels offers this emerging markets an attractive lever to lower their “cost of electricity” and promoting the establishing of local energy intensive businesses.
- LNG and natural gas has also a much better environmental footprint than oil based, or coal fired power generating. This conditions pays-off not only on a balance sheet of a company, it is also a dividend for the global fight against climate change and global warming.
Outline of the Paper
The paper describes on the economical, strategic and technical level the opportunities for stakeholders along the value chain of LNG to power solutions. Ranging from multinationals who supply the LNG to local off-taker and power plant operator.
The paper will give exclusive insights into a 2019 commissioned LNG to Power project and shows business opportunities in the Americas, the Caribbean and Southeast Asia.
In addition the paper delivers a case study on a 150 MW LNG to Power project for the region Americas including all CAPEX and OPEX relevant figures which can be used as a blue print for individual new planned projects to optimize the value of an investor and operator.
For this potential investors and project developers it outlines as well the profitability of small scale LNG to Power solutions based on well-established financial key indicators like equity structure, payback times, project based Internal Rate of Return (IRR) and the discounted cash flows over the project lifetime under today’s market conditions.