LNGfortheMiningSector ANewEnergyOptionforYukon

Tuesday,April17th,2012

AlanD.Hatfield,P.E.
BraemarTechnicalServices(Engineering)Inc.
9225KatyFreeway,Suite307 Houston,Texas77024 (713)4676713

WhatisLiquefiedNaturalGas(LNG)?
LiquefiedNaturalGas(LNG)isaclear,

colorless,odorless,nontoxicliquid LNGisnaturalgasthatisrefrigerated andturnstoaliquidat162degrees Celsius. LNGislessthan theweightof water.

LNGProperties&FirstPrinciples
NaturalgasandLNGareprimarily:
Methane Ethane Propane
H H

CH4 C2 H 6 C3 H 8

C
H

WhyLNG?

NaturalGasisliquefiedtoreducethevolume.Atatmospheric pressure,theratioofvolumesofgastotheliquidstateisabout620:1 1GallonofLNGhas60%(1:1.6)ofenergydensityof1gallonof diesel LNGhas300%(3:1)greaterdensitythanCNGonavolumebasis NaturalGasisliquefiedinordertotransportitfromlocations withgas supplytolocationswithnogaspipelinesupply. Allowsforlargestoragecapacity

LNGHandling
ProduceLNGfrompipelinenaturalgasby

automatedrefrigerationprocess. TransportLNGatlowpressureindoublewall vacuumjackettransporttrailers. LNGusedastruckfuel. StoreLNGat162C,at1+atmosphere pressure VaporizeLNGtonaturalgasasneededfor powergenerationorgasdistribution

LNGSafetyRecordHistory

Notnew notunfamiliar
1959 FirstLNGshipbuilt 1965 Firstpeakshavingplant(therearenowover90large utilityandbaseloadLNGfacilitiesinNorthAmerica) 1966 FirstLNGvehicle 1968 FirstimportsintoNorthAmerica 1969 FirstexportsfromNorthAmerica 1971 FirstimportterminalinNorthAmerica,Boston(now 9facilities)

Noreleasefromastoragetank Noreleasefromacargotank

LNGSafetyFundamentals

Asaliquid,LNGisnotflammable. Ignitionandburningrequiresvaporizationandmixture withoxygen(air). LNGvaporisflammable.Thetemperaturenecessary toignitenaturalgasisabout540C.Gasolinerequires only230C. Burningisnotsustainableoutsidetheflammability limits(5%to15%air,above15%thereisnotenough air.Below5%thereisnotenoughfuel.) LNGproducesalazyflame whichburnsmorelikea candleandnotlikegasoline. AnLNGvaporcloudintheatmospherewillnot explode,unlikepropane. LNGisnotshippedorstoredunderhighpressure. LNGisstoredat1620Catlowpressure.

SafetyRegulations

LNGisregulatedbyCanadian StandardCSAZ276for LiquefiedNaturalGas(LNG) Production,Storageand Handling

EnvironmentalBenefitsofLNG
Air Emissions for LNG Compared to Diesel* 100% Reduction in Sulfur Dioxide (SO2) Up to 97 % Reduction in Nitrogen Oxides (NOX) 50% Reduction in Carbon Dioxide (CO2) 91% Reduction of Carbon Monoxide (CO) 89% Reduction in Particulate Matter (PM) 50% Reduction In Volatile Organic Hydrocarbon (VOC)
*USDepartmentofEnergy

LNGUses:Overview

Storage Inventoryfortransportationlogistics Inventoryforshorttermdemandvariation Inventoryforseasonalloads Allowsforrapidwithdrawal Transportation Truck Ship Rail Barge/smallship DisplaceTraditionalGasoline,DieselandPropane PowerGeneration NaturalGasDistribution VehicleFuel

NaturalGasSupplyChain
NaturalGas Production &Treatment

NaturalGas Transmission Pipeline

ComponentstobeDeveloped

NaturalGas Liquefaction

LNGRoad Transportation

LNGReceiving,Storage Power andVaporization Generation&Other GasFiredProcesses

SmallPackagedLNGLiquefaction

Utilities

ElectricalPower Air Water Nitrogen Firewater

LNGRoadTanker Loading LNG PreTreatment NaturalGas Liquefaction LNGStorage LNGTruck Fuel

RemoveWater andCO2 fromNaturalGas

1. Scalable Off the Shelf Technology 2. No Venting or Flaring of Natural Gas During Normal Operations.

NaturalGasSupplyChain
4,100kmLNGsupplychain onewaydrivingdistance

Driving Distances To Potential LNG Receiving Locations From Potential Supply Locations

WatsonLake
513 894 1298

Wolverine
695 1138 1080

Whitehorse CoffeeCreek WCCasino

950 1288 862 1333 1675 744 1308 1650 715

Inuvik

Selwyn
1193 1536 1230

Fort Nelson Driving Distance - Kitimat LNG (km) Eagle Plains

2176 2514 366

LNGReceiving

LNGTruckUnloading LNGStorage Regasification(VaporizeLNGtoNaturalGas)

Simple,Compact,Scalable LowEnergyUse HeatRecoveryfromPowerGenerationforLNGVaporization

HistoricalComparison

FuelVolumeComparisononaBTUBasis

DeliveredCostofLNG?
HypotheticalCostsofLNGSupplyChainvs Diesel

$18.00

AssumptionNotes: 1. Costofdieselassumedas$1.42/literequivalentbasedoncurrentcostaverageinBC 2. NaturalGas$2.50/MMBTU 3. LNGLiquefaction CapitalRecovery,OperatingExpense,ReturnonInvestment$10.00/MMBTU 4. TruckTransportation1,200kilometers CapitalRecovery,OperatingExpense,TruckFuel,ReturnonInvestment$3.00/MMBTU 5. LNGReceiving CapitalRecovery,OperatingExpense,$1.50/MMBTU

Questions?
LNGfortheMiningSector ANewEnergyOptionforYukon
(Foracopyofthispresentation,pleaseleaveyouremailaddress)

ThankYou!
AlanD.Hatfield
BraemarTechnicalServices(Engineering)Inc.
9225KatyFreeway,Suite307 Houston,Texas77024 (713)4676713