LNG INDEX SAIPEM TODAY 4 SAIPEM ENGINEERING & CONSTRUCTION 6 LIQUEFIED NATURAL GAS 8 SAIPEM EXPERIENCE IN LNG 10 ACCESS TO LNG TECHNOLOGIES 16 COMMERCIAL EXPERIENCE 18 NATURAL GAS LIQUEFACTION 20 LNG REGASIFICATION 38 LNG TANKS 54 3 SAIPEM TODAY SAIPEM TODAY IS A WORLD LEADER IN THE GLOBAL SUPPLY OF ENGINEERING, PROCUREMENT, PROJECT MANAGEMENT, CONSTRUCTION AND DRILLING SERVICES WITH DISTINCTIVE CAPABILITIES IN THE DESIGN AND EXECUTION OF LARGE-SCALE OFFSHORE AND ONSHORE PROJECTS. Saipem has a strong bias towards oil and gas frontiers, namely activities in harsh and remote areas, in deep waters as well as in extremely cold and hot environments, applying significant technological competences in many diverse fields such as gas monetization and heavy oil exploitation. Saipem is organized in two Business Units: Engineering & Construction and Drilling. 4 5 SAIPEM ENGINEERING & CONSTRUCTION FOLLOWING AN AGGRESSIVE GROWTH STRATEGY, WHICH INCLUDED IN THE LAST DECADE THE ACQUISITION OF MANY CONSTRUCTION, TECHNOLOGY AND ENGINEERING COMPANIES, MOST PROMINENTLY OF SNAMPROGETTI, BOUYGUES OFFSHORE, SOFRESID AND MOSS MARITIME, SAIPEM HAS BECOME ONE OF THE WORLD LARGEST AND MOST COMPLETE ENGINEERING AND CONSTRUCTION COMPANIES IN THE GLOBAL OIL AND GAS MARKETS, ONSHORE AND OFFSHORE. 6 SAIPEM ENGINEERING & CONSTRUCTION Ever since its initial steps in the fifties and numerous project execution installation; also revamps, upgradings, as the construction division of Snam, centres around the globe, and with maintenance, decommissionings, the pipeline company of the Eni Group yearly revenues exceeding 10 billion €/y; reclamations and decontaminations. in Italy, Saipem has pursued all held together by outstanding project a systematic growth strategy, based management skills. Saipem today operates in virtually every on the development of internal assets, world market, often in remote locations expertise and skilled resources, as well Through the involvement of our global with harsh environmental conditions as on the acquisition of other players EP(I)C hubs in Milan, Rome and Fano and challenging logistics, leveraging with their own asset bases, such as (Italy), Paris (France) and Chennai on its proven experience across the Micoperi in late eighties, and many (India), which operate in connection most significant product lines in the others. with a growing number of medium size oil and gas production onshore, and smaller regional engineering offshore, in deepwater; gas and oil In the last decade, Saipem has and project execution centres transportation via offshore and onshore continued its growth by acquiring employing altogether over 7,000 pipeline systems; midstream, refining, Bouygues Offshore and Sofresid in engineers, Saipem balances high chemicals, power generation from fossil France, Moss Maritime in Norway, IDPE project execution quality with a as well as from renewable sources; in India and Snamprogetti in Italy, competitive cost and - most importantly environmental industries, maritime and by carrying out a multibillion - with a major emphasis on local works and infrastructure. investment program into the expansion know-how and content. of its offshore construction and drilling This new series, therefore, outlines fleets. Since the year 2000, Saipem’s This well-integrated multicenter Saipem’s integrated references market capitalization has grown more approach provides a consistent design in engineering and construction than sixfold and its revenues tenfold.(*) and robust execution philosophy markets offshore and onshore, on all our projects worldwide. according to individual business The organizational integration of Top priority is provided throughout and technology lines. this considerable asset base, namely to all HSEQ aspects. the network of engineering centres, fabrication and support yards in several Saipem therefore offers a complete continents as well as the offshore range of project definition construction fleet, has been completed and execution services, offshore gradually over the years - most recently and onshore, particularly for with the creation of a unified Business the complex “mega-projects” required Unit Engineering & Construction, by the market today: from feasibility an entity with over 30,000 employees and conceptual studies to complex (excluding corporate and BU Drilling integrated solutions combining design, staff) from over 100 nationalities, engineering, procurement, field with over 60 permanent establishments construction, fabrication and offshore (*) Until Dec. 31, 2010 7 LIQUEFIED NATURAL GAS IF THE 20TH CENTURY WAS PROBABLY “THE CENTURY OF OIL”, THE 21ST CENTURY COULD EASILY BECOME “THE CENTURY OF GAS”. INDEED, NATURAL GAS, A CLEAN BURNING FUEL, WITH RELATIVELY PLENTIFUL RESERVES, EVER MORE EASILY TRANSPORTABLE WITH NEW TECHNOLOGY BREAKTHROUGHS, CONVERTIBLE INTO POWER AND OTHER ENERGY SOURCES WITH CONTINUOUSLY IMPROVING EFFICIENCIES, MIGHT BECOME ONE OF THE MOST EFFICIENT AND READILY USABLE ENERGY SOURCES. According to IEA’s World Energy km away from main markets. Outlook (2009), natural gas had The frontier of economical acceptability satisfied 17% of world’s primary of gas production is therefore energy demand in the 1980s; in 2007, continuously moving farther away. 21%; over the next decades, it is widely expected that this share could grow For a long time, gas transportation by further. pipeline has been the predominant vehicle of gas transmission over short As the local gas reserves in main and long distances. established markets of North America, Europe, Japan and later China and Over the recent decades, however, gas India have shown significant signs of transportation by Liquefied Natural depletion, new reserves have started Gas, hereafter LNG, has steadily gained being exploited in massive quantities in importance, particularly over very in newer gas producing regions, long distances, due to many technical such as Russia, Asia/Pacific, North breakthroughs which have contributed Africa, Middle-East, Latin America, to the reduction or closure of the Canada, etc. comparative cost gap. In addition, gas transmission as LNG offers much For example, already today greater commercial flexibility and is less approximately 60% of EU’s gas dependent on permitting, right-of-way consumption is supplied from non-EU and political issues. sources, a figure destined to rise to over 80% by 2030. Over the recent Today, gas transportation as LNG decades, a significant cost reduction, accounts for about 26% of the due to greater experience and to major interregional gas trade, a figure technological breakthroughs, has made expected to exceed 40% by 2030, with the gas production and transportation LNG cargoes from Qatar reaching the economically feasible over ever longer U.S.A., or from Nigeria to Japan. distances, e.g. today from even 10,000 8 World inter-regional natural gas trade by type 700 42% bcm 600 36% 500 30% 400 24% 300 18% 200 12% 100 6% 0 0% 2000 2007 2015 2030 Pipelines LNG Share of LNG (right axis) Trade between 24 regions modelled by IEA World Energy Outlook (2009). It does not include international trade within each region. 9 SAIPEM EXPERIENCE IN LNG THE CONSTITUENT COMPANIES OF SAIPEM, NAMELY SNAMPROGETTI, BOUYGUES OFFSHORE, SOFRESID AND TECHNIGAZ, EVER SINCE THE EARLY 1960S HAVE STARTED ACCUMULATING SIGNIFICANT EXPERIENCES, KNOW-HOW AND MAJOR REFERENCES IN VARIOUS PROJECTS RELATED TO THE NATURAL GAS DELIVERY CHAIN, FROM PRODUCTION AND PROCESSING TO TRANSPORTATION BY PIPELINE, LIQUEFACTION AND REGASIFICATION.(*) 10 Following the consolidation over the in the ‘70s, and the first LNG years of all these originally separate regasification terminal designed and entities and capabilities into a single built for KOGAS at Pyeong Taek in new and well integrated global 1987 (South Korea). organization, Saipem can perform today a full range of engineering Since those early days, which included and project execution services, from the development and application of preliminary studies to mega-project new technologies, e.g. TealarcTM, a design and construction on an EPC/ precursor to the modern dual mixed LSTK basis, on any project, even the refrigerant system, by Snamprogetti largest one, in the entire natural gas (now Saipem) and Technip, to date processing and transportation chain. Saipem has designed and built: Saipem’s efforts in the LNG liquefaction In the last decade, 9 world-scale and regasification chain started in the base-load natural gas liquefaction 1960’s when it built the Marsa El Brega trains, all currently in operation, for a liquefaction plant in Libya for Esso total capacity of 35 MTPA, as well as Standard Inc. and the Panigaglia LNG in earlier times 2 peak shaving regasification plant in Italy for Snam facilities. Another 4.7 base load S.p.A., two terminals in one of the first MTPA project is currently in design operating LNG chains in the world. and execution. At about the same time, Technigaz Saipem has also carried out many (also Saipem, today) started to front end designs and provided pre- develop its own LNG storage and later EPC services on several projects. regasification technology, with pioneer Some of these are awaiting today membrane LNG tanks delivered the Final Investment Decision, in to Gaz de France in Montoir (France) order to proceed to the EPC phase. (*) Please refer to parallel Saipem brochures “Oil and Gas Production and Processing”, “Onshore Oil and Gas Transportation Systems” and “Marine Works and Terminals”. 11 Since the early 70’s, 11 LNG regasification terminals in different