A New Approach to Value Creation

 

Focus on discovered but stranded gas resources

We do not take exploration risks.  All of the gas resources that we target to commercialise have wells already drilled and gas in place confirmed.

 

Deploy our predetermined low-cost small FLNG project

Gas resource owners conventionally spend considerable time and cost evaluating an extensive range of development alternatives to optimise monetisation value for their gas resources.  While this process and associated cost can be justified for gas resources with large volumes of recoverable hydrocarbon, small to mid-size stranded gas resources require a different process and more cost minimal approach for monetisation.

Rather than developing a bespoke project for such gas resources, we will deploy a pre-determined ~1.2 million tons per annum FLNG vessel development project to gas resources that fit this development.  By doing so, we minimise engineering time and cost required for monetisation.

 

Adopt a target breakeven LNG price to deliver resilient FLNG projects

Transborders Energy's Generic FLNG Solution is predicated on achieving a breakeven LNG price (Freight On Board; FOB) of USD 6.5 / MMBtu and on serving traditional Asian LNG markets.  This positions Transborders Energy's projects in the 2nd quartile[1] of cost competitiveness among all existing, under construction and proposed LNG projects worldwide.  This ensures that Transborders Energy remains resilient and profitable among its peers in a low commodity price environment.

Technical engineering for each of our FLNG project and the associated cost estimate and schedule are developed through the exclusive partnerships that Transborders Energy has established with TechnipFMC (for EPCI of FLNG and Subsea Umbilicals Riser Flowlines (SURF) scopes) and Add Energy (for EPCI of wells scope).  Through these partnerships Transborders Energy apply stringent cost targets and defined minimal project functional objectives for the progression of engineering to ensure that the cost targets can be achieved while maintaining facility integrity.  

[1] Projects in the 1st quartile are typically fully amortised and have significant cost advantages that new projects cannot likely achieve.  

 

Focus on ≈ 500 + BCF EUR “sweet spots” that fits our lifecycle economics

Transborders Energy’s focus is on developing gas resources that have an Expected Ultimate Recovery (EUR) sweet spot of over 500 Billion Cubic Feet (BCF) and that can be produced via three to seven wells (subject to water depth, well complexity etc.).  This minimises the number of development wells required to underpin Transborders Energy’s FLNG vessel, and helps to achieve its stringent cost targets.

Transborders Energy is in discussion with gas resource owners on assets that likely contain significantly more recoverable gas than 500 BCF.  Transborders Energy’s proposals have been well received by such owners due to Transborders Energy’s low-cost small scale concept and capability to accelerate resource commercialisation.  This allows for cashflow and return to be generated early, and for utilisation of this cash for subsequent appraisal (if needed) and development activities.  It also provides access to dynamic information on reservoir performance to facilitate better informed subsequent investment decisions.  It is intended that the broader resource is developed later to enhance value, with the option to also monetise gas from surrounding resources.

 

Implement innovative partnering, financing and commercial structures to deliver low lifecycle cost FLNG projects

Once Transborders Energy confirms fit between its concept and a target gas resource, Transborders Energy works with its exclusive partners TechnipFMC and Add Energy to progressively delivery its FLNG development concept.  Transborders Energy also actively facilitates discussion and alignment among LNG buyers, EPCI and O&M partners, investors and other key stakeholders to enable innovative partnering, project development and financing for delivering low lifecycle cost FLNG projects.  

 

Differentiate LNG offtake value proposition to LNG buyers

Our industry assessment has identified gaps in value as perceived by LNG buyers that the current LNG projects are not appropriately addressing and that will allow TBE to differentiate from peer LNG projects. 

Transborders Energy categorises these gaps into:

(1) Value drivers that require sellers to achieve step-changes in CAPEX / OPEX / commercial creativity

  • LNG Price Advantage
  • Up / down quantity tolerances against the annual contractual volumes, and other supply flexibilities

(2) Value drivers that require precedent setting considerations

  • Non-oil or henry hub indexed price
  • LNG resale / profit share
  • Business collaboration

Transborders Energy will utilise its expertise and network in LNG trading and procurement to prioritise the value drivers based on the specific needs of its prospective LNG buyers. 

For value drivers that require Transborders Energy to “achieve step-change in CAPEX / OPEX / commercial creativity,” Transborders Energy will deliver these by utilising its low-cost project delivery, innovative partnering / commercial structures and LNG sales expertise to minimise requirements for making its project bankable, and to enhance LNG supply flexibility / upside value creation.

For value propositions that require Transborders Energy to consider “precedent setting,” Transborders Energy can set any of these precedents since Transborders Energy is a new player in the market. 

Transborders Energy will utilise these as differentiators from its peer LNG projects to supply LNG on competitive and / or flexible terms, and to secure LNG offtake contracts. 

 

Deliver our Generic FLNG Solution on a range of discovered but stranded gas resources

Through due diligence that has been conducted by Transborders Energy and its strategic partners on a several of discovered but stranded gas resources, Transborders has confirmed that its pre-determined FLNG development concept can technically cater to a range of such gas resources.  

Transborders Energy's Generic FLNG Solution therefore can be applied to a range of discovered but stranded gas resources that fit this solution.