Predator Oil & Gas : FSRUP Regulatory and Environmental Checklist

Predator LNG Ireland Ltd

FSRUP Regulatory and Environmental Checklist Filename: 501002690004 Predator LNG IrelandSLR Ref No: 501.00269.0004

July 2020

Executive Summary

As the volume of LNG produced and consumed around the world continues to expand at a rapid pace, floating storage and regasification units (FSRUs) unlock access to the global LNG market for new importing markets at a fraction of the cost and time required for the construction of an onshore LNG import terminal. Predator plans to develop a Floating Regasification and Storage Unit Project (FSRUP) for Ireland. Because this is the first project of its kind in Ireland the appropriate route through the planning and permitting process is not clearly defined by the regulator at this stage. Furthermore, the relevant Irish legislation governing the planning, consenting, development and operation of the FSRUP is changing with the planned enactment of the Marine Planning and Development Management Bill (MPDM) in Q3 2021.

To inform consultation with key stakeholders, including regulatory bodies, SLR reviewed the current and proposed marine planning framework, investigated the permitting process and timeline for historical offshore projects, and consulted with some key parties who are engaged in developing the National Marine Planning Framework. This report provides a regulatory and environmental checklist and estimated realistic timetable for approvals and makes recommendations to progress the permitting process for Predator's FSRUP.

The FSRUP has elements of offshore gas storage, offshore physical mooring structures, ship to ship LNG transfer, offshore pipeline transportation, and onshore AGI at Inch. Eighteen relevant Irish legal Acts, one European Directive and eight international treaties governing the planning, consenting, development and operation of the project were identified.

The FSRUP planning and regulatory consent timeline will be driven by two primary issues, the timetable for decommissioning of the Kinsale area infrastructure and the enactment of the MPDM Bill(Figure 1.

Figure 1 FSRUP Regulatory & Environmental Timeline

A two step approach is recommended(Figure 2). Before entering the planning and consent process the first step is to establish with An Bord Pleanála the strategic status of the FSRUP with respect to national policy and public perception and demonstrate that the residual HSE risk levels of the FSRUP are as low as reasonably practicable (ALARP). The environmental and regulatory permitting process will be dictated by the strategic status of the project. The new MPDM Act is likely to raise the regulatory compliance bar for projects such as the FSRUP. Obtaining some consents under the existing regime would help to establish the strategic status of the FSRUP and place it on the map for marine spatial planning.

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Predator LNG Ireland Ltd

FSRUP Regulatory and Environmental Checklist Filename: 501002690004 Predator LNG IrelandSLR Ref No: 501.00269.0004

July 2020

In order to establish the strategic status of the FSRUP we recommend the following:

• • Apply for a foreshore licence for site investigation within the 12 nautical mile limit to ensure that the total FSRUP project area is recorded in the context of National Marine Planning Framework, spatial designation (Marine Atlas).

• • Apply to ABP for Strategic Infrastructure status - this will require EIAR/NIS/AA and CRU Safety Case

• • Establish ownership of 24" export pipeline and third party access rights

• • Make a PPL application for pipeline survey and site survey outside 12 nautical miles

A significant amount of documentation, such as the environmental impact assessment reports and the safety case, should be prepared under the existing regime in the knowledge that they can be updated for submission under the new MPDM regime in 2021.

Figure 2 Regulatory & Environmental Flowchart

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Predator LNG Ireland Ltd

FSRUP Regulatory and Environmental Checklist Filename: 501002690004 Predator LNG IrelandSLR Ref No: 501.00269.0004

July 2020

Introduction

As the volume of LNG produced and consumed around the world continues to expand at a rapid pace, floating storage and regasification units (FSRUs) unlock access to the global LNG market for new importing markets at a fraction of the cost and time required for the construction of an onshore LNG import terminal. Predator plans to develop a Floating Storage and Regasification Unit Project (FSRUP) for Ireland, following the execution of confidentiality agreements with a global supplier of LNG and an owner of LNG regasification vessels. Predator has also executed a confidentiality agreement with one potential purchaser of gas. SLR Environmental Consulting (Ireland) Limited has been appointed as regulatory, planning and environmental advisors to Predator LNG Ireland Limited to advance Predator's FSRUP solution for Ireland.

In advance of consultation with key stakeholders, including regulatory bodies, a regulatory and environmental checklist and estimated realistic timetable for approvals is required. SLR reviewed the current and proposed marine planning framework, investigated the permitting process and timeline for historical offshore projects, consulted with some key parties who are engaged in developing the National Marine Planning Framework and make recommendations in this report to progress the permitting process for Predator's FSRUP.

Project Description

Predator's FSRUP for Ireland has several elements. The FSRU acts like a land-based LNG terminal. In addition to transporting LNG, the FSRU has the onboard capability to vaporise LNG and deliver natural gas through specially designed offshore and nearshore receiving facilities. It is envisaged that the proposed FSRU will be permanently moored to a subsea buoy system anchored offshore and linked by a flexible riser to an existing 24" pipeline connected to the Gas Networks Ireland (GNI) entry point at the onshore Inch Terminal. The buoy system will be used as both the mooring mechanism for the FSRU and the conduit through which natural gas is delivered to the subsea pipeline. LNG carriers moor alongside the FSRU to deliver cargos. The FSRU can receive and deliver full or partial loads in order to meet the required needs of the market at any given time. LNG supplies are delivered to the FSRU through periodic transfers from traditional LNG carriers in accordance with established Ship-to-Ship (STS) LNG transfer protocols. The process is composed of a conventional LNG carrier mooring alongside the FSRU and transferring its cargo to the FSRU via flexible cryogenic hoses. The regasification of LNG continues uninterrupted throughout the STS LNG transfer procedure, ensuring a continuous supply of gas to the local market.

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Predator LNG Ireland Ltd

FSRUP Regulatory and Environmental Checklist Filename: 501002690004 Predator LNG IrelandSLR Ref No: 501.00269.0004

July 2020

Figure 3 FSRU Offshore Mooring System and STS (from Excelerate)

The FSRUP will use the existing Petronas 24" export pipeline from the decommissioned Kinsale Head Gas Field that ties directly into the Irish gas transmission network at the onshore Inch Terminal where there is a Gas Networks Ireland (GNI) entry point.

The elements of the FSRUP subject to regulation and permitting are:

• 1. Conventional LNG Carrier

• 2. FSRU

• 3. Subsea buoy system

• 4. 24" export pipeline (existing)

• 5. Inch onshore GNI entry point (existing)

Figure 4 Offshore pipeline and onshore Inch Terminal

The FSRUP has elements of offshore gas storage, offshore physical mooring structures, ship to ship LNG transfer, offshore pipeline transportation, and onshore AGI at Inch.

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Predator LNG Ireland Ltd

FSRUP Regulatory and Environmental Checklist Filename: 501002690004 Predator LNG IrelandSLR Ref No: 501.00269.0004

July 2020

Review of Legal and Regulatory Framework

Gas Networks Ireland and Eirgrid, with oversight by the Department of Communications, Climate Action and

Environment and the Commission for Regulation of Utilities, conducted a study into Ireland's resilience to a long-term gas disruption (Gas Networks Ireland & Eirgrid, 2018). The final report, "Long Term Resilience Study 2018" found that floating LNG is an effective low-cost solution and a preferred mitigation measure to enhance the long term security of gas supply to Ireland as well as providing access to a reliable, secure and diversified worldwide LNG market. The National Marine Planning Framework also recognises that an LNG facility would provide additional security of supply to Ireland in that it would bring diversity to Ireland's gas supply sources and would bring connectivity to the global LNG market (Department of Housing Planning and Local Government , 2019).

Given the FSRUP elements outlined above the relevant Irish legislation governing the planning, consenting, development and operation of the project will be:

• • Petroleum and Other Minerals Development Act, 1960 (the "1960 Act")

• • Gas (Interim) (Regulation) Act 2002 (the "2002 Act"), licences to operate an LNG facility

• • Gas Act 1976 (as amended) (the "1976 Act"), arrangements for taking gas from the storage facility

• • Electricity Regulation Act, 1999 (as amended) (the "1999 Act")) - Gas Safety Framework

• • Energy (Miscellaneous Provisions) Act 2006).

• • Energy (Miscellaneous Provisions) Act 2012 which amended the Electricity Regulations Act 1999

• • Competition Act, 2002 (as amended by the Competition Act, 2006) (the "Competition Act")

• • Petroleum and Other Minerals Development Act, 1960 (the"1960 Act")

• • Foreshore Act 1933 (as amended)

• • Petroleum (Exploration and Extraction) Safety Act 2010 (the "2010 Act")

• • Planning and Development Acts 2000 to 2010 (including Strategic Infrastructure Act 2006)

• • Continental Shelf Act 1968 (as amended)

• • applicable environmental legislation (including implementing legislation giving effect to the EIA Directive and the Habitats Directive).

• • Dumping at Sea Act 1996

• • Arbitration Act 2010

• • Marine Planning and Development Management Bill 2019 (the future MPDM Act: currently at second stage reading in Houses of Oireachtas)

• • Merchant Shipping Act, 1894

• • Mercantile Marine Act, 1955

Ireland (as a member of the European Union) adheres to Europe wide law enacted by the European Union. The main EU directive relevant to the Irish gas industry is the Third Gas Directive which is transposed into Irish law through the European Communities (Internal Market in Natural Gas and Electricity) Regulations 2011 (S.I. 630 of 2011) (the "Regulations"). These regulations give effect to:

• • the Third Gas Directive (save for Articles 3, 41(1)(o) and (q) and Annex I to the Directive); and

• • Articles 3(4), 7(2)(j), 7(2)(k), 26(3), 35(5), 36 and 37 (save or Article 37(n) and (p)), and Article 38, of EU Directive 2009/72/EC concerning common rules for the internal market in electricity.

REMIT, the Regulation on Energy Market Integrity and Transparency, came into force across the EU on 28th December 2011 and provides for an EU-wide market rules and monitoring framework related to wholesale energy markets in electricity and gas. "Implementing Acts" specifying the criteria, format and timing for transaction reporting entered into force in Ireland on 7th January 2015.

The other relevant international treaties governing the projects are listed below:

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