Main Pass Energy Hub™
Approved Deepwater Natural Gas Port
Marine Technology Society
Houston, TX
May 24, 2007
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
1
Location
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
2
McMoRan Exploration
McMoRan Exploration Co. (MMR)
McMoRan Oil & Gas LLC
Freeport-McMoRan Energy LLC
MPEH™
Freeport-McMoRan’s natural resources companies have a long history of global
operations dating back to early 1900s.
Headquarters located in New Orleans, Louisiana.
Record of success in finding and developing complex, world-class projects.
ƒ Freeport has owned and operated major offshore facilities since 1958
ƒ Main Pass facilities – previously permitted as a sulphur mine and oil and gas
production and processing facility
ƒ Received MARAD approval for MPEH™ on January 3, 2007
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
3
US LNG Demand-Supply
35
30
Net Imports
TCF Per Year
25
Consumption
20
Supply
15
10
5
Source: Energy Information Agency AEO 2005
0
1960
1970
1980
History
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
1990
2000
2010
2025
Projections
4
U.S. Production vs. Consumption
ƒ Actual demand is cyclical and exceeds supply during certain
periods of time and in certain regions of the U.S.
Historical US Supply Demand Profile
90.00
80.00
70.00
Bcf/day
60.00
50.00
40.00
30.00
20.00
Dry Gas Production
Pipeline Imports
LNG MPORTS
Total Demand
10.00
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
Jan-90
0.00
5
LNG – Production to Market Flow Schematic & Chain Valuation
FLOW
Natural Gas
1,060 to 1,150
Btu/scf
Liquefaction
(Convert to LNG)
1,060 to 1,150 Btu/scf
LNG to U.S.
LNG Regas at
MPEH™
1,060 to 1,150 Btu/scf
Natural Gas
1,060 to 1,150
Btu/scf
1,075 Btu/scf
U.S.
Pipeline Grid
1,075 Btu/scf
Condensate
Ethane, Propane &
Butane Gases
Removed to
Reduce Btu
Content
Well
Typical LNG Chain Cost
$/MMbtu
E&P
Liquefaction
Shipping
$.50
$2.00
$1.00
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
Ter. Regas
$0.50
Total
$4.00
p/l to Mkt
HH – NY $1.50
HH – FL $0.50
6
Conventional vs. Integrated Storage
Gas Conditioning
Conventional
Regas Facility
Gas Storage
1.0 bcf/d
Distribution to Consumers
Main Pass Energy Hub™
Regas
1 bcf/d
Gas
Conditioning
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
Gas
Cavern
Storage
3.1 bcf/d Peak
7
Project Advantages
ƒ Key processes and systems are combined into one facility.
ƒ LNG surface storage
ƒ Conventional vaporization
ƒ On-site gas conditioning
ƒ Integrated, high capacity salt cavern gas storage
ƒ Premium pipeline header to tie into premium U.S. gas markets
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
8
MPEH™ Technical Specifications
Terminal Capacity
• Annual LNG Throughput Capacity
350 Bcf
• LNG Surface Storage Capacity
• Liquid
• Vapor Equivalent
• Salt Cavern Storage Capacity
145,000 cm
3.1 Bcf
28 Bcf
Terminal Deliverability
• LNG Vaporizer (max)
• Cavern Storage (max)
• Peak Deliverability
1.6 Bcf/day
1.5 Bcf/day
3.1 Bcf/day
•12 Hr offload capability
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
9
MPEH™ Pipeline Deliveries
Mississippi
3.1 Bcfd Takeaway
8 Pipeline Connects
with Broad / Liquid
Market Access
Alabama
Transco
Florida Gas
Gulf South
Gulfstream
Texas Eastern
Henry Hub
Southern Natural
Louisiana
2.0 Bcfd
0.5 Bcfd
Tennessee
Columbia Gulf
Main Pass
Energy Hub TM
0.5 Bcfd
Optimal location east of constraints
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
10
Major Pipeline Networks Served
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
11
Project Timing
ƒ License application deemed complete in mid 2004.
ƒ March 2006 received final EIS from MARAD/USCG
ƒ May 5, 2006 LA Governor vetoed use of “open loop” vaporization
ƒ MPEH DWP “closed loop” vaporization “Amended” Application
submitted 5/31/06
ƒ USCG/MARAD published “closed loop” EA 9/19/06
ƒ MARAD favorable Record Of Decision issued 1/3/07
ƒ Continuing to progress commercialization of project.
ƒ Existing structures allow a 40 month design and construction schedule.
ƒ In advanced discussions with certain LNG suppliers.
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
12
Shipping Lanes and Gas Pipelines
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
13
Access Route from Shipping Lane
ay
airw
ty F
Safe
tlet
Ou
ulf 0
r G .20
ive 166
s. R FR
Mis 33 C
50'
60
'
to
ass
th P
Sou
'
70
'
80
'
0'
90 10
5'
12
0'
15
5'
17
Main Pass
Energy Hub™
Recommended
LNG Carrier Access Route
'
200
0'
30
MAIN PASS DEEPWATER NATURAL GAS PORT – CARRIER ACCESS
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
14
Carrier Access Circuit from Shipping Lane
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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Current Configuration
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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Location Advantages
ƒ
Location:
ƒ Federal waters
ƒ 210-foot (64 m) water depth
ƒ 38 miles (61 km) east of Venice, Louisiana
ƒ 16 miles (26 km) east of the mouth of the Mississippi River
ƒ
Near existing pipeline infrastructure
ƒ
Deepwater access for ships
ƒ
Near shipping lanes
ƒ
2-mile (3.2 km) diameter salt dome capable of accommodating numerous caverns
having an estimated storage potential of +500 million barrels (80 MM m3)
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
17
Liquefied Natural Gas (LNG) Processing System
NGL Pipeline to Venice
Gas Conditioning
Plant
Gas Pipelines:
•To South Pass Block-55
•To Main Pass Block-298
•To Main Pass Block-164
and on to Coden, AL and
other interconnect
locations
LNG Vaporization
(SCV’s)
LNG
Surface Storage
LNG Vaporization
WHR
Comp
Dehydration
3 NG Caverns
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
18
FACILITY LAYOUT
Soft BerthTM
(Patent Pending)
Storage Platforms 5 & 6
LNG Storage
CARRIER
Platform No.3
LNG Vaporization and
Power Generation
Platform No.1
LNG Offloading,
LNG Vaporization and
Gas Conditioning Facilities
BS-Y7
Quarters, Shop
Warehouse
Storage
Caverns
ne
eli
p
i
"P
36
to
.
AL
,
n
de
Co
16" Pip
eline t
oM
ne
20" Pipeli
Platform No.2
Gas Storage Systems
Compression
P298
to SP55
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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Soft Berth™ - Compliant Mooring System
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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Design Advantages of Soft Berth™
ƒ Steel Structures
ƒ Complies with existing platforms
ƒ Designed to survive Cat 5 Hurricane
ƒ 210-foot Water Depth
ƒ Sufficient depth to permit use of tuned moorings
ƒ Adequate keel clearance for LNG carriers
ƒ Reduces blockage effects
ƒ Eliminates ground effects
ƒ Compliant Berths
ƒ Reduces environmental concerns during berthing of LNG
carriers
ƒ Greatly reduces loads between LNG carriers and berth
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
21
Soft Berth™ Load
Wave Induced Loads on LNGC
4,000
3,500
Sway (kips/ft amplitude)
3,000
2,500
2,000
Beam Seas Excitation Force on LNGC
Beam Seas Inertia Load by LNGC (including added mass)
1,500
Difference between Excitation and Inertia Load in Beam Seas
1,000
500
0
7
8
9
10
11
12
13
14
Wave Period (sec)
Wind
0.8%
1.5%
95.5%
Slow Drift
1.3%
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
Mean Drift
0.9%
Current
1s t order Wave
22
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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Plan Configuration
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
24
Key Points
ƒ Berth structures are compliant.
ƒ Only second order environmental loads between ship and berth.
ƒ Berths free to move due to first order loads.
ƒ Berths designed for 160,000 m3 carrier.
ƒ Can be upgraded for 250,000 m3 carriers.
ƒ Long-term data history indicates weather and sea conditions allow
95% operability for offloading ships.
Soft Berth™ – Patent Pending
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
25
BERTH OPERABILITY DESIGN APPROACH
ƒ Objective – high availability/operability
ƒ Determine MP 299 predominate seas
ƒ Design berth to accommodate LNGCs in predominate
MP 299 seas
ƒ Confirm design model including operability in marine
basin tests
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
26
NDBC Buoy Near MPEH™
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
From National Data Buoy Center web site at www.ndbc.noaa.gov
27
MPEH™ Proximity to NDBC Buoy
MPEHTM 29.30N 88.77W
NDBC Station 42040
29.21N 88.20W
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
28
Validity of Buoy Data at MPEH™
MPEH™
~38 miles
214 ft Depth
Buoy
42040
780 ft Depth
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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NDBC Buoy Data
PARAMETER
RANGE
FREQ.
DESCRIPTION
WIND DIR.
0 to 360
1.0
Hz
8 min
Ten-minute
average
wind
direction. 1.0 deg
+/- 10.0 deg
WIND SPEED
0 to 62 m/s 1.0
Hz
8 min
0.1 m/s
Ten-minute
average
wind
speed values.
+/- 1.0 m/s
WIND GUST
0 to 82 m/s 5-second
1.0 Hz
5 secgust during 0.1
+/- 1.0 m/s
Maximum
peak
them/s
measurement
hour.
WAVE HEIGHT
0 to 35 m height
2.56 Hz
20 min one-third
0.1 of
m the waves
+/- 0.2
m
Average
of the highest
during
a 20
minute sampling period.
WAVE PERIOD
0 to 30 sec period
2.56 Hz
20 min one-third
1.0 sec
+/- 1observed
second
Average
of the highest
of the waves
during a 20 minute sampling period.
WAVE DIR.
0 to 360wave 2.56
Hz
20 min
0.1the
deg highest+/-one-third
10 deg
Mean
direction
corresponding
to
of the
waves observed during a 20 minute sampling period.
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
AVG. PERIOD
RESOLUTION
ACCURACY
From National Data Buoy Center web site at www.ndbc.noaa.gov
30
Wind and Wave Probability Distribution
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
31
Weather Data – 8 years
1996
1997
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
1998
1999
2000
2001
2002
2003
32
Weather Data – 1 year
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
33
Weather Data – 3 Months
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
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Weather Data – 2 Weeks
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
35
Tasks and Durations
Task # Condition
1
2
3
4
5
6
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
Ingress
Berthing
Connect Unloading Arm
Unloading (up to "Stoppage of Cargo
Transfer)
Normal Disconnect of Unloading Arm and
Mooring & Berthing lines/Tugs Moving
LNGC off Berth
Egress
Total (Excluding W.O.W.)
Duration
(hrs)
1.0
1.5
1.0
13.0
3.0
0.5
20.0
36
Operability Study
Percent operability is based on the following assumptions:
• Berth design availability sea conditions
•Berth: 6.6’ (2m) seas, 25 knot winds
•Stay on berth: 8’ (2.4m) seas, 35 knot winds
• 1.0bcf/day base vaporizing rate, 72-hr arrival schedule
• No down time due to equipment maintenance, repair, or failure
(i.e., equipment is always operable at rated capacity)
• 8 years of weather data are used to compare environmental and
system response operating limits based on the task being attempted
in a sequential, hour-by-hour basis from Jan 01, 1996 to Dec 31,
2003
Conclusion: 95%+ operability achieved including times when
Tropical Revolving Storms are present in the Gulf of Mexico, this
study considers all weather data over the eight year period.
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
37
Maritime Research Institute, Netherlands
Marine Basin Model Test Results
ƒ Basin model testing at Marin confirmed computer design models.
ƒ Marin is a recognized as a world leader in marine model testing.
ƒ Scale model tests confirmed a more than adequate operating
weather window for Soft BerthTM .
ƒ Testing of a critical element – the Carrier motions relative to the
allowable operating envelope of the Unloading Arms – confirmed
a large window of operability.
ƒ Soft BerthTM performed as expected under both maximum
operating and hurricane conditions.
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
38
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
39
Platform No.1 Elevation Looking North
Submerged
Combustion
Vaporizers (5)
DeNOx Unit (5)
NGL Pipeline
Pumps (3)
LNG
Unloading
Arms (4)
H.P. Sendout Pumps (8)
Demethanizer
Columns (2)
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
40
Platform No.3
Upper Deck Elevation
Gas Turbine
Generators (3)
DeNOx Unit (3)
Electrochlor
Units
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
Submerged
Combustion
Vaporizers (3)
Nitrogen
Generators
Air Compression
Emergency
Generator
41
Platform No. 2 – Elevation Looking North
Glycol
Regeneration
Gas Turbine
Compressors
Drill Rig
Seawater Leach
Pumps
Glycol
Contactors
PLATFORM NO.2
ELEVATION LOOKING NORTH
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
42
LNG Storage Platforms – Perspective View
SPB LNG STORAGE TANKS
100'H x 120'W x 75'L
(3 PER PLATFORM)
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
STORAGE PLATFORMS
PERSPECTIVE VIEW
43
Salt Cavern: Geologic Overview
Surface
Caprock
Salt Dome
Gas Cavern
ƒ
ƒ
ƒ
ƒ
Wells drilled into the dome 4,000 feet
Water circulated into the well
Salt cavern is leached as water “melts” away salt near the well bore
Gas is injected at high pressures
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
44
Salt Dome Storage Cavern Development 101
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
45
Salt Caverns
U.S. Salt Cavern Storage Sites
U.S. Natural Gas Salt Cavern Storage
Seneca Lake
Avoca
Southwest Wyoming
Morton
Yaggy
Lacey
Red Lake
Tioga
Copper Eagle
Kiowa
Chiles Dome
Pine Prairie
Saltville
Desert Crossing
Copiah
Liberty
Eminence
Starks
Bethel
Petal
Houston Energy Cntr
McIntosh
Salado
Southern Pines
Waha
Richton
Moss Bluff
Bedded Salt – Operational
North Dayton
Hattiesburg
Bedded Salt – Proposed
Bedded Salt – Dead
Salt Dome– Operational
TM
Boling
MPEH
Markham
Salt Dome - Dead
Jefferson Island
Clemens
© 2006 Freeport-McMoRan Energy LLC
Magnolia
Hackberry
Stratton Ridge
Main Pass Energy Hub™
Sorrento
Spindletop
Salt Dome– Proposed
Napoleonville
Egan
Grand Bayou
46
Cavern Design
Main Pass Energy Hub™
Salt Dome Storage Potential
Initial Gas Storage Cavern
2-Mile (3.2 km) Diameter Salt Dome
Capacity: 39 caverns: 10.7 MM bbls (1.7 MM m³) / 9.3 bcf (263 MM m³) each
Total Volume: 417 MM bbls (66 MM m³) / 363 bcf (10.3 bm³)
142
299
300
20 in. (51 cm) Final Cemented Salt Casing
24 in. (61 cm) First Cemented Salt Casing
298
30 in. (76 cm) Caprock Casing
Ed
(Ap
ge
pro
of
x2
Mil Salt
D
es
(3.2 ome
Km
)D
ia.)
Category
36 in. (91 cm) Drive Pipe
M.S.L. 0ft.
Parameter
Size
Final Cemented
Shoe Depth
Casing
Salt Back
20 in. (51 cm)
4,210 ft. (1283 m)
825 ft. (251 m)
Hanging String
10 3/4 in. (27 cm)
Size
59.8 MMcf,10.7 MM bbls
1.7 MM m³
Diameter 250 ft. (76 m)
Height
1280 ft. (390 m)
Volume
Cavern
Platform No.1
LNG Offloading, Vaporization
and Gas Conditioning
Softberth TM
(Patent Pending)
LNG Surface Storage
Platforms 5 & 6
Volume
Working
Max. Gradient
Gas
@ casing shoe
Max. Wellhead
SIP
9.3 bcf (263 MM m³)
Volume
Min. Gradient
@ casing shoe
Min. Wellhead
SIP
5.3 bcf (150 MM m³)
Base
Gas
Mudline -210 ft. (64 m)
Top of Caprock -1475 ft. (450 m)
Liner
Top of Anhydrite -1675 ft. (511 m)
Top of Salt
-1775 ft. (541 m)
First Cemtd. Salt Casing
Top of Salt + 100 ft. (30 m)
0.85 psi/ft
20 in. (51 cm) Final Cemtd.
Salt Casing
3,200 psig
0.25 psi/ft
893 psig
Casing Shoe
-4210 ft. (1283 m)
Top of Cavern
-4310 ft. (1314 m)
Cavern Development Durations
Platform No.3
LNG Vaporization and
Power Generation
Planned
Gas Storage Caverns
Accommodations
Shop & Warehouse
Platform No.2
Compression, Gas Storage Systems
Platform No.4
0
0
500
200
Feet
1000
400
Meters
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
1500
600
2000
800
General
Months
Engineering/Well Permitting
4
Procurement of leaching equipment
3
Well 1
Drilling
Leaching @ 3500 gpm
Dewater
Total Well 1 (Includes Gen'l)
4
27
4
42
Wells 2 & 3
Drilling
Leaching @ 3500 gpm
Dewater
Total Wells 2 & 3 (Excludes Gen'l)
4
27
4
35
NOTE:
Drilling of wells is consecutive, leaching
commences following drilling completion.
10-3/4 in. (27 cm)
Hanging String
Bottom of Cavern -5590 ft. (1704 m)
47
Scalability of Main Pass Energy Hub
Main Pass Energy Hub™
Salt Dome Storage Potential
2-Mile (3.2 km) Diameter Salt Dome
Capacity: 39 caverns: 10.7 MM bbls (1.7 MM m³) / 9.3 bcf (263 MM m³) each
Total Volume: 417 MM bbls (66 MM m³) / 363 bcf (10.3 bm³)
142
299
300
298
Ed
(A
pp
ge
rox
o
2 M f Sa
lt D
ile
s(
o
3.2 me
Km
)D
ia.
)
Platform No.3
Platform No.1
LNG Offloading, Vaporization, Gas Conditioning
and Power Generation
Softberth TM
(Patent Pending)
LNG Surface Storage Platforms 5 & 6
Accommodations, Shop
& Warehouse
Identical
Identical in
in size
size and
and
storage
storage potential
potential to
to
Mt.
Mt. Belvieu
Belvieu
Expandable
Expandable to
to 360
360
Bcf
Bcf of
of storage
storage
capacity
capacity
Terminal
Terminal expansion
expansion
capacity
capacity
Planned
Gas Storage Caverns
Platform No.2
Compression, Gas Storage Systems
Development
Development cost
cost
advantages
advantages
Platform No.4
0
0
500
200
Feet
1000
400
Meters
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
1500
600
2000
800
48
Facilities
Pipeline Header and Major Interconnections
The MPEH™ LNG terminal will have direct pipeline access to 8 major
interstate pipeline networks serving the Eastern United States markets.
Main Pass Energy Hub™
© 2006 Freeport-McMoRan Energy LLC
49