Canada Archives - Webber Research
banner

W|EPC: Future Of Transportation – Ranking & Evaluating Alternative Fuels – H2 ∙ BEV ∙ Methanol ∙ CNG Hybrid ∙ Ethanol ∙ Ammonia ∙ Diesel ∙ Biofuels

If you’re a current Webber Research subscriber you access this presentation via our Client Login above. If you’re not yet a subscriber, please contact us at inf[email protected] for access information.

 

Alternative Fuel Analysis…Will History Repeat Itself?

In 1992 & 2005, the Department of Energy (DOE) created & amended the Energy Policy Act (EPA) that addressed fuel research and tax benefits for vehicle manufacturing.

Battery Electric Vehicles (BEV), Hydrogen (H2), Hybrids, Biofuels, Ethanol and Methanol were analyzed in 2005, but vehicle manufacturers supported gasoline hybrid vehicles due to technology and production constraints.

Since then, fuel cell technology and global, federal, & state emission guidelines have accelerated innovation and the market is now actively deciding transportation alternatives.

Small Vehicle Applications

BEV have taken a leading role in the small vehicle category with minimal competition from Hydrogen.

Hydrogen’s price, lack of infrastructure, and safety concerns highlight the risk associated with new fuel applications; however, Methanol may have an opportunity to fill this role.

The Roland Gumpert Nathalie markets an impressive range and methanol costs are comparative to BEV, but the $450k price tag limits it’s applications until manufacturing scales up to reduce cost. 

Mid-Sized Vehicles and Truck Applications

Fuel energy density becomes a larger role as the size of a vehicle increases.

Fuel storage capacity, energy density, and vehicle efficiency play a large role in the range and cost for a vehicle.

Semi-Truck Range Is A Gating Issue For Future Fuels

New Semi-Truck concepts are ranging from shorter applications (<300 miles) to the long-haul market (>600 mile/day).

Daimler eCascadia seems to make sense for shorter applications and Hyliion’s Compressed Natural Gas (CNG) hybrid semi will likely apply well to long haul trades, if the marketing is as good as advertised.

 

W|EPC: Future Of Transportation – Ranking & Evaluating Alternative Fuels – H2 ∙ BEV ∙ Methanol ∙ CNG Hybrid ∙ Ethanol ∙ Ammonia ∙ Diesel ∙ Biofuels

Read More

W|EPC: Enterprise (EPD) PDH-2 Q420 Project Monitor & Satellite Image Review

Key Takeaways: Enterprise (EPD) PDH-2 Q420 Project Monitor & Satellite Image Review

EPD PDH 2 – Project Delay Analysis.  In Q220, EPD announced a 3-month schedule slip (from Q123 to Q223), potentially limiting future change orders (i.e. cost escalation) related to COVID impact (based on typical EPC contract FM concepts).To reduce the COVID delay to only 3 months, we believe EPD implemented a schedule recovery plan that accelerated/compressed back-end construction activities to meet a Q423 COD forecast. (pgs. 10 – 13). We’ve independently estimated PDH 2’s slippage based on Q420 aerial project site images, with details found within our note… (pages 4 – 7).

Enterprise’s First ESG Guidance… : On October 28, 2020, EPD released their approach to ESG. In the report, EPD touts they are the largest Midstream producer of Hydrogen. With the addition of PDH2, Enterprise would increase their Hydrogen production by 140k tons/year, and we estimate ~150MW of electricity by incorporating fuel cells in their Mont Belvieu, TX facility.

Companies like SK are working with fuel cell manufacturers to integrate high temperature Solid Oxide Fuel Cells (SOFC) into PDH units to use the hydrogen produced to reduce operating costs….this could help EPD’s ESG potential.

Project Timeline Catch Up – Risks & Benefits: A schedule recovery plan can be costly and is not guaranteed to succeed. PDH 2 schedule recovery risks/benefits include: Risks – An EPC lump sum contractor (S&B) compresses the schedule & may cause inefficient construction & cost escalation. Benefits – The COVID delay started before site prep and avoided a de-staffing of the project. Based on limited on-site progress, S&B likely hasn’t spent much of their field budget & may have available contingency to support acceleration costs/inefficiencies.

W|EPC’s estimated timeline shows site labor and progress can support pulling activities back to Q223 with a probability of success of…. (pgs. 10-13)

W|EPC: Enterprise (EPD) PDH-2 Q420 Project Monitor & Satellite Image Review

For access information, please email us at [email protected], or our institutional sales at [email protected]

Read More

W|EPC: Southern Company (SO) – Q420 Vogtle Project Monitor – Key Decisions That Could Haunt Cost Prudency

Key Takeaways: Vogtle Q420 Monitor – Key Decisions That Could Haunt Cost Prudency

Who Will Be Getting Stuck With +$2.1B In Cost Overruns? Once Vogtle Unit 4 reaches “fuel load”, Georgia Power/Southern Company (GP/SO) can request a cost prudency determination to push their portion of cost overruns (~$2.1B) into recoverable utility rates. (Page 4)

Regulators will determine cost prudency based on project data, testimony, and a simple question: What should a reasonable manager have done at the time of the decision? (Page 5)

We expect that process to be heavily scrutinized considering the scale of the overruns, and, in our opinion, some questionable GP/SO decisions. (Pages 4-5)

Decisions That Could Haunt GP/SO’s Prudency. We believe there’s a case to be made that multiple GP/SO management decisions ran contrary to industry standards, potentially contributing to ($) billions in cost overruns, including

  • A failure to either include or implement multiple EPC contract……(Page 7)
  • For the first 4-years of the project, GP/SO used only…..(Page 23)
  • In 2017, it appears GP/SO did not validate critical underlying EPC…..(Pages 9- 10)

Analyzing 12-Years Of GP & SO Testimony… (Pages 20 & 23)

Please join us for our next Client Call at 12pm EST on Monday 10/26, to review our Vogtle Project Monitor. Please reach out to us for access details.

Table Of Contents:

  • Key Takeaways – Page 2
  • Who Owns $2.1B In Cost Overruns? – Page 3
  • Georgia Public Service Commission 2018 Order – Page 4
  • Cost Prudency Definition & Process – Page 5
  • Decisions That Could Haunt GP/SO
  • LSTK Contract Mismanagement  – Page 7
  • Bankruptcy – Parent Company Guarantee Settlement – Page 8
  • Estimate to Complete  – Page 9
  • Transition from EPC LSTK to T&M – Page 10
  • QRA – Cost Page 11
  • QRA – Schedule – Page 12
  • GP Testimony & W|EPC Analysis (2009 to 2017
  • EPC Contract Overview – Page 14
  • October 2009 – Page 15
  • October 2010 – Page 16
  • April 2011 – Page 17
  • November 2012 – Page 18
  • June 2013 – Page 19
  • October 2014 – Page 20
  • October 2015 Page 21
  • December 2015 – Settlement of LD’s Page 22
  • December 2015 – Revised EPC Contract – Page 23
  • October 2016 Page 25
  • April 2017 Page 26

W|EPC: Southern Company (SO) – Q420 Vogtle Project Monitor – Key Decisions That Could Haunt Cost Prudency

For access information, please email us at [email protected], or our institutional sales at [email protected]

Read More

W|EPC: LNG Canada – Updated Satellite Image Analysis & Construction Progress – Q420 Project Monitor

 Shell ∙ Fluor ∙ Mitsubishi ∙ PetroChina ∙ PETRONAS ∙ KOGAS

Table Of Contents:

  • LNG Canada Q4 Monitor: Key Takeaways…………………………..….…Page 2
  • LNG Canada Cost & Schedule Updates
    • Updated Estimates…………………………..……………….….……..Page 4
    • Project Milestones………………………………………………………Page 5
    • Progress Analysis…………………………………………….….….….Page 6
    • Analyzing Fluor’s 27.5% Reported Progress…….…………….……Page 7
    • Project Staffing……………………………………………..……….….Page 8
  • Satellite/Aerial Image Analysis
    • July 2020 Overview………………….…………………….….………Page 10
    • Sep 2020 Site Analysis……………………………………….………Page 11
    • Jul vs. Sep 2020 – LNG Storage Tank…………………………..….Page 12
    • Module Yard Analysis………………………………………………….Page 13

Key Takeaways:

  • Delays At LNG Canada Continue to Build   (Pages 4 – 7, 10 – 13)
    • Fluor reported ~27.5% Engineering, Procurement, Fabrication, & Construction (EPFC) progress in September, vs our current estimate of…
    • We believe Fluor’s 27.5% guidance implies module fabrication progress of ~45%, which is ~9x…
    • Fluor also referenced COVID-related project delays (without getting specific)
    • Our Current Delay Estimate:…..
    • Estimated Probability Of Maintaining Schedule:…..
    • Mind The Gap: There are several potential explanations for such a degree of progress variance
  • Examining Fluor’s Goal of 2,500 On-Site Workers By Dec-20 (Pages 4, 8, 10 – 13)
    • Aerial images suggest meaningful concrete, structural steel, and significant construction activities have yet to start (beyond piling)…
    • Pre-COVID, Fluor’s reported onsite labor was higher than the project’s publicly reported staffing levels, leading to cost overruns (Pages, 4, 8)
    • Limited construction work fronts could constrain Flour’s ability to…
  • Kicking The Can Down The Road… LNG Canada Starting to Resemble Another Fluor/JGC Project… (Pages 4, 8)
    • In 3Q13, CPChem awarded Fluor & JGC a ~$6B EPC contract for an Ethylene Cracker in Texas. ~39-months later, Fluor/JGC announced the project would be over budget. The project was finished in mid-2018 (a year behind its baseline plan).
    • ~23-months after FID, we believe the LNG Canada (JFJV) schedule is slipping and costs are…

W|EPC: LNG Canada – Updated Satellite Image Analysis & Construction Progress – Q420 Project Monitor

 

For access information, please email us at [email protected], or our institutional sales at [email protected]

Read More

LNG Canada Update: Shell, Fluor, JGC, & Force Majeure

  • **March 18 Update………………………………….Page 2
  • Executive Summary…………………………………Page 3
  • COVID-19 Impact……………………………………Page 4
  • EPC Schedule Analysis……………………………..Page 5
  • Site Labor Analysis 6………………………………..Page 6
  • Site Labor EPC Cost Impact……………………….Page 7
  • Conclusions…………………………………………..Page 8

Update: In light of yesterday’s announcement that the Shell-led LNG Canada project was cutting its staffing levels in half over the coming days, we felt it worthwhile to pass along our LNG Canada Update from late February, along with a slide on our updated thoughts. (Page 2)

COVID-19 Impact Updates
1. The World Health Organization (WHO) officially declared COVID-19 a pandemic on 11-Mar-20.
a. JFJV may have a stronger FM claim now that WHO has declared the COVID-19 a pandemic, to the extent that JFJV specifically has “pandemic” or “epidemic” listed as an FM event in their contract.
b. FM Impact of Chinese module fabrication yards…….Page 4

2. On 17-Mar, LNG Canada and JFJV both announced that JFJV’s on-site workforce in Kitimat would be halved in order to increase social distancing and help prevent the spread of COVID-19. Given that the announcement was made jointly between JFJV and LNG Canada – impact on FM/schedule relief.…..Page 5

3.While JFJV did not announce when the site at Kitimat would resume a full workforce, it took “several” weeks for workers to return to JFJV’s Chinese fabrication yards…..Page 5

LNG Canada Planned Vs Foretasted Progress Where Were We In February, and Where Are We Heading Now?…..Pages 5-8


Click here to buy this report
 

 

Read More