W|EPC: Golden Pass LNG Project Update – Q423

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W|EPC: Freeport LNG Train 4 – Project Update Q123

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W|EPC: Qatar LNG North Field Expansion – Baseline Report Q221

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W|EPC Risks: Venture Global – Keeping An Eye On Pile Design Changes

W|EPC Risks: Venture Global – Calcasieu Pass LNG – Keeping An Eye On Pile Design Changes

Key Takeaways:
• An engineering design change at Calcasieu Pass (CPLNG) required additional piling and out of sequence construction activities.
• Meaningful engineering changes during construction & fabrication can undermine the benefits of modularization, by creating cost overruns and delays.
• No Related Delays Are Visible Yet. However, we should get a better view of the actual impact as Calcasieu enters the mechanical phases of fabrication and construction – where the ramification of errors or changes becomes more evident.

Keeping An Eye Out For Material Quantity Growth. On May 22nd, 2020, CPLNG requested FERC approve eight (8) additional piles in the Pre-Treatment Common Pipe Rack 27X (PTC27X) area due to changes in the pipe stress data. Pipe stress calculations are developed to ensure the piping design and layout can support the expansions and contractions caused by processing hydrocarbons. Pipe stress data is one of the most important elementsin determining the piping layout, structural steel design, material quantities needed for the CPLNG modules, and pile layout.

The PTC27X pile construction design was previously submitted to FERC on December 30, 2019 and approved for construction on January 31, 2020. PTC27X piling submittal timeline:

• Original Submittal to FERC: 12/30/19
• FERC Approved: 1/31/20
• Revised Submittal to FERC: 5/22/20
• FERC Approved: 6/4/20

Was Module Engineering For PTC27X Finally Completed Last Month? On May 22, 2020 CPLNG requested FERC approve the PTC27X pipe rack foundations and steel construction. We believe the final PTC27X pipe rack module engineering is now complete, subject to FERC Approval. The PTC27X modules were designed per….continued

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EPC Risks: Energy Transfer (ET) Capital Project Monitor – Q220

W|EPC: Energy Transfer (ET) Capital Project Monitor – Q220

• Energy Transfer (ET) Q220 Capital Project Monitor: Key Takeaways (slide 2)
• Energy Transfer Capital Budget Overview (slide 3)
• Energy Transfer: NGL Fractionation History (slide 5)
• Tale of the Tape: ETvs. EPD (slide 6)
• Mariner East 2X (slide 8)
• Orbit Ethane Export Terminal(slide 9)
• Lone Star Express Pipeline (slide 11)
• Lake Charles LNG: Fighting Yesterday’s War? (slides 13-20)

Key Takeaways:
1. Does ET’s Frac 8 Have a Cost Advantage over EPD’s Frac 12?
2. Energy Transfer’s NGL BPD Frac Costs Keep Falling
3. Budget Cuts, COVID-19 Impact, & Schedule Delays
4. Lake Charles LNG – Fighting Yesterday’s War?

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Southern Company (SO): Vogtle Nuclear Project Q220 Quarterly Monitor

Southern Company (SO) Q2 Vogtle Nuclear Project Monitor – Key Highlights:

• Vogtle Expansion: 6-Years Late…And ~$13-$16 Billion Over Budget? (Slides 2-5)
• How Much Will SO Be On The Hook For? (Slides 3-6)
• Something’s Gotta Give: Key Commissioning Milestones Appear Crammed Together To Avoid ROE Reductions (Slides 6-8)
• Cost Projections Were Already Ramping…Before COVID-19 (Slides 9-12)
• Cost Prudency Reviews – A Make Or Break For Stakeholders?…. (Slides 13-19)

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• Quarterly Deep Dive Into Southern Company’s (SO) $27B Vogtle Nuclear Expansion. Southern Company (SO), is the largest owner of the Vogtle Nuclear Facility, via the 46% held by its wholly-owned subsidiary Georgia Power.
  • Vogtle has two active units (Units 1-2), which have been in-service since 1987-89. A two unit expansion (Units 3-4) was approved in 2009
  • Units 3 & 4 were originally expected to be in-service in 2016-17 and cost a combined ~$14B, the expansion project is now 6-7 years behind schedule, with costs rising to ~$27B….and potentially higher (slides 3-6).
  • Hence, the premise of adding a W|EPC Quarterly Vogtle Project Monitor to our Utility & Energy research platform: Digging into those cost overruns – particularly the bulging EPC costs, to get a more accurate and detailed view of the potential headwind for project stakeholders and SO shareholders.

Regulatory Background: Vogtle is regulated by the Georgia Public Service Commission (GPSC). GPSC’s primary role is to protect rate payers & determine if project costs can be justifiably passed-through via utility rates. In the quarters that follow we’ll venture to aggregate, analyze, and interpret cost overruns through the lens of GPSC, to put together a thoughtful estimate of what cost overruns will eventually land with SO shareholders.

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