For personal use only - ASX2012/11/28 · FEED Not known 2015 $1.5B Not known Southern Cross LNG...

Queensland CSG to LNG opportunities

Brisbane, November 28th 2012

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Resources | Energy | Industrial | Infrastructure | Property | Defence 2

Agenda

1) Queensland’s CSG to LNG market opportunity for the Transfield Services Group

John Bidwell, General Manager Queensland

� Current and planned CSG to LNG projects

� TSE’s position across the CSG value chain

� Sizing the CAPEX and OPEX opportunities

2) Engineering and construction

Jim McGreevy, EGM, Engineering and Construction

� Business unit and risk management overview

� Market focus

� QGC contract in JV with Clough

3) Easternwell

Darren Greer, COO, Easternwell

Ian Baldwin, CFO, Easternwell

� Rig fleet and minerals market update

� Energy business: operations, market niche, market outlook For

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Queensland market – John Bidwell

�Current and planned CSG to LNG projects

�TSE’s position across the CSG value chain

�Sizing the CAPEX and OPEX opportunities

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The Bowen/Surat Basins are rivalled only by the offshore Carnarvon Basins for gas Reserves

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CSG to LNG Project Opportunities in Queensland

Approximately $60Bn of committed spend, and a further $15Bn+ awaiting FID

Project Partners Capacity Status FID First LNG Capex Sales agreements

Queensland Curtis

LNG (QCLNG)

BG-93.75%

CNOOC-5%

Tokyo Gas-1.25%

8.5MTA (2 trains

with 3rd expected to

be sanctioned)

FID 2010 2014-2015 $15-$20 B CNOOC 3.6MTPA, Tokyo Gas

1.2MTPA, Singapore up to

3.0MTPA, Chile 1.7MTPA and

Chubu Electric 0.4MTPA

Gladstone LNG

(GLNG)

Santos-30%

Petronas-27.5%

Total SA-27.5%

Kogas-15%

7.8MTA (2 trains) FID 2011 2015-2016 $16.0-

$18.5B

Petronas 3.5MTPA and Kogas

3.5MTPA

Australian Pacific

LNG (APLNG)

Conoco Phillips-37.5%

Origin Energy-37.5%

Sinopec-25%

9.0MTA (1 train) 2nd

train will be

sanctioned 2Q 2012

FID 2011 2015 $ 20.0B Sinopec (7.6MTPA)

Kensai Electric (1.0MTPA)

Arrow Energy LNG

(Formerly Shell

Australia LNG

(“SALNG”))

CS CSG Australia JV

(Shell-50%

PetroChina-50%)

8.0MTA (2 trains

with 3rd expected to

be sanctioned)

FEED for plant.

FEED for

upstream

expected late

2012

Late 2013 >2017 $15.0B 100% Shell and PetroChina

Fisherman’s Landing

LNGLNG Ltd 80.10%

CNPC (PetroChina

subsidiary) 19.90%

3.0MTPA (2 trains) FEED Not known 2013 $1.60B None concluded but China

Huanqui Contracting and

Engineering Corporation (part

of CNOOC) are interested in

purchasing 3.0MTPS

Abbots Point LNG

ProjectEnergy World Corporation 2.0MTA (4 modular

500,000 MTPA

trains)

FEED Not known 2015 $1.5B Not known

Southern Cross LNG

(SCLNG)LNG Impel 2.1-5.1 MTA (2 LNG

trains between 0.7-

1.7 MTA)

Pre-FEED Not known Not known $3–5B Not known

Sun LNG Sojitz 0.5-1.0MTA Not known Not known Not known Not known Not known

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Transfield Services’ business across the CSG Value Chain

Upstream – optimisation of coal seam gas resource,

production of CSG into HP pipeline.

• Drilling and well servicing• Maintenance & Operations• Capital Works & refurbishment• Shut downs• Water & Power• Facilities Management

Midstream – high pressure gas to Curtis Island and associated

LNG Plant and load out facilities.

• Maintenance & Operations

• Capital work & refurbishment

• Shut - downs

• Facilities Management

Downstream –LNG loaded on

water, sales and distribution to

markets.

• No involvement

CSG to LNGCSG to LNG

Transfield ServicesTransfield Services

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25%

$5.0-5.5Bn15%

$2.5-$3.0Bn

50%

$8.0-$10.0Bn

Estimated CSG to LNG CAPEX spend across the value chain(Using CSG Proponents announced $20.0Bn total, less, owners costs of 10% or $2.0Bn)

Energy Quest Report: Australian Coal Seam Gas 2011:

from Well to Wharf (Aug, 2011) , estimated the costs of

the QCLNG plant to be $10.2Bn, and GLNG $8.8Bn

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~$250M/yr(Doesn’t include energy or well work-over costs)

~$45M/yr ~$250-$300M/yr(100% costs ~ $1.00/GJ or >$470M/yr)

Estimated CSG to LNG OPEX spend across the value chain(Estimated operating costs for a 8.4MTPA, ~470PJ/a, CSG to LNG business, are based on industry “rules-of-thumb.”)

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Contract wins in Queensland’s CSG to LNG market

November 2012, Opex, Transfield Services 100%

� $200m over 5 years with a 2 year expansion option

� Maintenance and operations services to QGC’s upstream CSG assets including processing plants, compression stations, approximately 2,000 operational gas wells and connecting infrastructure

� Revenue has potential to increase across the lift of the contract as project investment increases

October 2012, Capex , Transfield Services in 50:50 JV with Clough Limited

� $80m estimated value, commenced October 2012

� Early site civil works and front end planning work for the construction phase of compression facilities in central Queensland for QGC’s Queensland Curtis Liquefied Natural Gas (QCLNG) Project

� Subject to mutual agreement work may extend to include construction and fabrication of 8 field compression stations and 2 central processing plants.

November 2011, QGC 191 Well program, Transfield Services 100%

� Operating (legacy) well head inspections and maintenance

April 2011, QGC Well servicing, Easternwell 100%

� $80m for 4 rigs on a 3yr + 1 + 1 contract

� Well completion and ongoing well servicing activities

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Australian Shale Gas Basins – the next big opportunity?

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MBA Petroleum Consultants, Shale Gas Atlas of Australia

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© Transfield Services Ltd 2012. This document is the property of Transfield Services Ltd (ABN 69 000 484 417). This document must not be copied or reproduced in any way whatsoever, and

must not be passed on to any third party without the written authority from Transfield Services Ltd. Other Transfield Services Group companies are, however, licensed to use this document.

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E & C – Jim McGreevy

�Business unit and risk management overview

�Market focus

�QGC contract in 50/50 JV with Clough

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Resources | Energy | Industrial | Infrastructure | Property | Defence © Transfield Services Limited

� Consulted: Functional group or individual that must be consulted in relation to a

transaction and who may recommend the conditions to be met in relation to the

transaction.

� Reviewer: The committee or individual with responsibility for reviewing and

approving a transaction; the reviewer will oversee whether opportunities, risks

and recommended conditions have been addressed.

� Approver: The authorised employee who ultimately approves a transaction and

executes any documents necessary to complete the transaction.

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DELEGATED AUTHORITY

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�SRCs at various levels of the business have been established to review risk

profiles for opportunities.

�A Gate Review process for managing TSE’s opportunity (tender) lifecycle is in

place, which includes a comprehensive and staged assessment of each tender

including strategic, financial, operational, legal, insurance and risk assessments.

�The opportunity (tender) lifecycle is comprised of the following stage gate

reviews:

STRATEGIC REVIEW COMMITTEES (SRC)

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PROJECT RISKS

� All design and construction work is undertaken by the Engineering & Construction (E&C) group which is led by an

experienced construction executive. Appropriately skilled personnel are appointed to manage construction

projects.

� The construction risk appetite requires capped liability for ground conditions, time and cost associated with

weather events, latent conditions and damages. Risk is largely passed on to pre-qualified subcontractors with

appropriate insurance.

� Comprehensive monthly project reviews are undertaken for all projects,

time/cost/programme/safety/environment/KPI/ reviewed and change management closely reviewed.

� During project delivery, risk profile reviews are completed as part of the gate reviews that are undertaken at each

stage in the project lifecycle. (Risk Reviews are conducted by teams independent of Project Team.)

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COMMERCIAL RISKS

� A legal review is undertaken on all contracts. Pre bid.

� A comprehensive “Contract Risk Allocation guide” outlines Transfield Services preferred

and acceptable positions on key contract liabilities.

� Design risk is within the company’s risk appetite but Board approval is required to take on

process risk.

� There is increased focus on subcontractor management and subcontractors panels are

being established with pre-agreed terms and conditions. (Back to Back with TSA Head

Contract obligation.)

� Estimating Risks are covered by subcontractor pricing and benchmarked against similar

projects internally. Where internal benchmarking is not sufficient independent Cost

Engineers are engaged to independently benchmark.

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COMPLIANCE

� The Code of Business Conduct is an integral part of Transfield Service’s compliance

program.

� Reference guide to minimum appropriate levels of conduct in all Transfield Services

operations globally and prohibits the payment of facilitation payments and bribes,

fraudulent and other unlawful conduct.

� Compliance program is supported by existing company values and policies, programs

and training including in person, DVD and online.

� There is also regular monitoring of compliance by internal audit and an externally

managed Integrity Hotline is available to all employees.

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© Transfield Services Ltd 2012. This document is the property of Transfield Services Ltd (ABN 69 000 484 417). This document must not be copied or reproduced in any way whatsoever, and

must not be passed on to any third party without the written authority from Transfield Services Ltd. Other Transfield Services Group companies are, however, licensed to use this document.

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Easternwell – Darren Greer & Ian Baldwin

�Rig fleet and minerals market update

�Energy business:

� Operations

� Market niche

� Market outlook

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Easternwell rig count

1-Dec-10 30-Jun-11 31-Dec-11 30-Jun-12 31-Oct-12

Remaining

committed

deliveries in FY13

Energy

Drill rigs (JV with Santos) 3 3 3 3 3 -

Well servicing rigs 14 14 14 17 20 1

Minerals 35 41 43 46 46 -

Geotech (3 barges, 11 rigs) 11 11 11 11 11 -

Total 63 69 71 77 80 -

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Easternwell rig delivery schedule

Rig delivery schedule for FY13

2Q 3Q 4Q Total

Well servicing 1 - - 1

Minerals - - -

Rig costs (indicative) - full rig package including ancillary equipment and camps

Advantage Driller * gas $12-14m

Advantage Service * gas $6-$8m

Minerals DR $4.5 million

Hydro $4.5 million

RC $4.5 million

Note: all amounts above relate to full rig packages, including support equipment

*Incorporates Easternwell Proprietary technology

Note: 2Q - Well servicing rig is the 3rd Well Servicing Rig for Chevron on Barrow Island

3Q - Previous Minerals rig commitment for 3Q has been deferred to FY14

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Easternwell - competitors and customers

Customers

CSG Servicing CSG Drilling Conventional Oil &

GasShale

Arrow Yes

Chevron Yes

Origin

QGC Yes Yes

Santos Yes Yes Yes Yes

Beach Yes Yes

Competitors

Drilling Servicing

Ensign Yes No

Savanna Yes Yes

Saxon Yes Yes

Lucas Yes NoFor

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Disclaimer

This presentation is for information purposes only and is a summary only. The content of this presentation is provided as at the

date of this presentation (unless otherwise stated). Reliance should not be placed on information or opinions contained in this

presentation and, subject only to any legal obligation to do so Transfield Services Limited (the “Company”) does not have any

obligation to correct or update content.

This presentation does not and does not purport to contain all information necessary to an investment decision, is not intended as

investment or financial advice and must not be relied upon as such. Any decision to buy or sell securities or other products should

be made only after seeking appropriate financial advice.

This presentation is of a general nature and does not take into consideration the investment objectives, financial situation or

particular needs of any particular investor. Any investment decision should be made solely on the basis of your own enquiries.

Before making an investment in Transfield Services, you should consider whether such an investment is appropriate to your

particular investment objectives, financial situation or needs.

To the maximum extent permitted by law, the Company disclaims all liability (including, without limitation, any liability arising

from fault, negligence or negligent misstatement) for any loss arising from this presentation or reliance on anything contained in

or omitted from it or otherwise arising in connection with this.

All amounts are in Australian Dollars, unless otherwise stated.

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For personal use only - ASX2012/11/28 · FEED Not known 2015 $1.5B Not known Southern Cross LNG...

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Transcript of For personal use only - ASX2012/11/28 · FEED Not known 2015 $1.5B Not known Southern Cross LNG...