Due Diligence for LNG Facility Expansion
A major player in the global LNG business required technical due diligence on the future supply for an LNG facility expansion prior to making a final investment decision.
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Project Highlights
- Facility expansion of ~1.2 Bcf per day
- Future gas supplied from 70+ projects by three independent third party companies
- Due diligence report led to LNG facility expansion approval
Challenges:
A client wanted to understand the potential future gas supply underpinning the proposed expansion of an LNG facility
Limited technical data was available from the third party suppliers, who required their data to be kept confidential from the other suppliers
A variety of potential risks needed to be identified and assessed in a short timeframe
Limited technical data was available from the third party suppliers, who required their data to be kept confidential from the other suppliers
A variety of potential risks needed to be identified and assessed in a short timeframe
Solutions:
Sproule ERCE’s technical experts completed a high-level review of the gas supply plans of the third party suppliers
To address data limitations, Sproule ERCE prepared a detailed questionnaire for the third party suppliers regarding their future projects
Key risks were outlined regarding approval of future development plans, funding for projects, pipeline capacity, availability of supporting data, and regulatory agreements and approvals
Five reports were prepared, including supplier specific reports and a sanitized summary to be shared among the third party suppliers to address confidentiality concerns
To address data limitations, Sproule ERCE prepared a detailed questionnaire for the third party suppliers regarding their future projects
Key risks were outlined regarding approval of future development plans, funding for projects, pipeline capacity, availability of supporting data, and regulatory agreements and approvals
Five reports were prepared, including supplier specific reports and a sanitized summary to be shared among the third party suppliers to address confidentiality concerns
Values:
Sproule ERCE identified projects where further investigation was recommended. The client was able to address the key risks directly with the third party suppliers
Based on Sproule ERCE’s insights, the company gained the assurance they required regarding the future gas supply to approve the facility expansion
The company safeguarded future energy supply for the domestic market and maintained their position as a global LNG supplier
Based on Sproule ERCE’s insights, the company gained the assurance they required regarding the future gas supply to approve the facility expansion
The company safeguarded future energy supply for the domestic market and maintained their position as a global LNG supplier