IFC FSRU Siting Report : In Synch With DOE

The IFC FSRU siting report supports the viability, technical solutions and forecasts of our

project

The now completed IFC FSRU siting report for Vietnam provides a number of important data points that support the viability, technical solutions and economic forecasts that DOE has established for Bac Lieu project.

These can be summarized in the following categories :

i. Metocean Data

The metocean data from COWI is a very close match to the data series that DOE used from Moffatt & Nichol in our original analysis, with a 95% correlation. This validates the DOE assumptions embedded in the models.

ii. Configuration

COWI has proposed a very similar configuration for the floating storage solution. Spread mooring for the FSRU with an MBM for the LNGC. As a preliminary step DOE has assumed an FSU + SRP configuration for the floating storage that achieves the same goal albeit with cost advantages to the DOE solution. The tower transfer system proposed by COWI has no project history. The alternative ATS solution in the DOE proposal is similar to an existing transfer facility used by Connect LNG. The final configuration for the project will, however, be subject to a third-party Concept Study (see below).

iii. Economics : Capex, Opex & LCOE

The capex and opex assumptions closely match the DOE assumptions. Our figures are USD150m (excluding the FSU) and 1% for opex plus a daily charter on the Moss-type FSU of USD65,000 (USD24m annualized).

The costs projected by IFC / COWI and DOE on an Levelized Cost of Energy (“LCOE”) basis are very similar in structure. DOE LCOE is 7.9% - 8.6% lower. DOE is currently estimating its FIT / LCOE at USD 78 / MWh whilst COWI / IFC in their final project (February 2019) estimates USD 84.7 - 85.4. The difference is mainly due to fuel charge where DOE assumes USD 9 / MMbtu which is 5.2 - 7.2% lower than the IFC / COWI estimates of USD 9.5 - 9.7 / MMbtu.

This is due to various factors (i.e. LNG ex-ship costs, economies of scale, pipeline length etc.). The 3000MW Bac Lieu project is double the size of the IFC / COWI estimates based on 1500MW which has the benefit of economies of scale. It should also be noted that the IFC / COWI initial draft report on December 2018 estimated LCOE of USD 79.5 - 80.3 / MWh was very close to DOE’s assumptions which have not changed during the period (changes subject to concept study post-IRC). We explain the high-level differences in detail in this analysis (see “3.iv. LCOE”)

For the full analysis (including section 3.iv.LCOE) please contact us at DOE@DeltaOE.com