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Bahamas LNG Receiving Terminal and Pipeline

This document outlines the criteria for constructing the next LNG terminal serving the U.S. gas market, highlighting why the Bahamas meets these criteria. The facility description includes details on the onshore terminal in Freeport, Grand Bahama, the pipeline specifications, and the target onstream date. The spread analysis and project status are also discussed, emphasizing recent developments and key drivers in the Bahamas and Florida. It underscores the importance of securing government support, site selection, basis capture, permitting processes, and the need for timely actions in a competitive landscape.

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Bahamas LNG Receiving Terminal and Pipeline

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  1. BahamasLNG Receiving Terminal and Pipeline Enron Global Markets November 20, 2000

  2. Why The Bahamas? • Criteria for the next LNG Terminal to be constructed to serve the U.S. gas market: • Ability to use the facility as a means to create a lucrative commodity trade that can be marked to market. • Should feed into the downstream end of a major gas transmission system • Opportunity to capture basis. • Should access a market with a growing natural gas demand and limited incremental pipeline capacity. • Creates a beneficial competitive situation for the LNG terminal. • Need large tract of land for terminal site and adjacent deep water. • Leverage markets where Enron has a strong position. • Ability to control capacity • The Bahamas LNG Terminal meets all these criteria

  3. Facility Description • On shore terminal - Freeport, Grand Bahama • Initially build two 160,000 m3 LNG storage tanks • Initial sendout to deliver 400 mmscfd at 2200 psig • Ship unloading at 10,000 m3/hr • Marine berth • Designed to accept world class LNG ships • Subsea pipeline • 24”, approximately 90 miles • 2200 psig • Designed to land in Port Everglades and tie into FGT system lateral or directly into FP&L Power Plants • Target Onstream - Q3/4 2004

  4. Spread Analysis Long Term Henry Hub Swap $3.64/MMBtu LNG Delivered to Market $3.05 Spread $0.59Upside:P/L Charge from HH to South Florida = $0.70/MMBtu

  5. Project Status • Recent focus on securing land option for the terminal site. • Land option secured Nov. 17 for up to 85 acres of land on the island of Grand Bahama near the Freeport Harbor. • Physical due diligence on site to begin immediately (60 days to complete) • Preliminary permit activity underway. • Plan to accelerate but need to work out FGT’s role (if any) on the project. • ROW investigations initiated in Florida

  6. Key Drivers Bahamas • Need to get Bahamian Government on our side. • Prime Minister has been made aware of the project on an informal basis. • Freeport is the most logical site for an LNG terminal in the Bahamas - we need to make sure the Bahamian Government agrees. Florida • Structuring - work to capture basis between Henry Hub and South Florida. • Capturing $0.50/MMBtu of basis would be worth about $70 MM/year • Florida pipeline permits will likely be on the critical path until construction begins. • Is it a FERC regulated pipeline or not? Timing • Need to move fast to preempt competition • Other terminals and pipeline projects (e.g. Buccaneer). • Can’t get too far out in front of potential LNG suppliers’ timing.

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