The Top Public Companies for an Energy Transition

This data-file compiles all of our insights into publicly listed companies and their edge in the energy transition: commercialising economic technologies that advance the world towards ‘net zero’ CO2 by 2050.

Each insight is a differentiated conclusion, derived from a specific piece of research, data-analysis or modelling on the TSE web portal; summarized alongside links to our work. Next, the data-file ranks each insight according to its economic implications, technical readiness, its ability to accelerate the energy transition and the edge it confers on the company in question.

Each company can then be assessed by adding up the number of differentiated insights that feature in our work, and the average ‘score’ of each insight. The file is intended as a summary of our differentiated views on each company.

The screen is updated monthly. At the latest update, in February-2021, it contains 200 differentiated views on 100 public companies.

LNG in the energy transition: rewriting history?

A vast new up-cycle for LNG is in the offing, to meet energy transition goals, by displacing coal and improving industrial efficiency. 2024-25 LNG markets could by 100MTpa under-supplied, taking prices above $9/mcf. But at the same time, emerging technologies are re-shaping the industry, so well-run greenfield projects may resist the cost over-runs that marred the last cycle. This 18-page note outlines who might benefit and how.

LNG liquefaction: what challenges and opportunities?

This data-file tracks patent progress into LNG liquefaction plants from 2020, by reviewing forty recent patent filings from leading companies in the industry (integrated oil companies and service providers).

We reach three key conclusions:  (1) LNG capex costs should not be overly fixated upon, as they can come at the expense of higher opex and emissions intensities. (2) The next generation of modular plants offer a step-change from the first generation. (3) And new process technologies are helping to improve efficiency across different LNG process units and their fabrication.

The full data-file spells out our conclusions,  with details on each of the underlying patents, a review of companies filing LNG patents in 2020.

LNG liquefaction: the economics?

This model captures the economics for a typical LNG liquefaction project, breaking down IRRs and NPVs as a function of key input-variables.

The InputsOutputs tab allows you to flex key variables such as: LNG sales price, Capex/tpa, Opex/mcf, Utilization, Thermal Efficiency, LNG shipping distance, LNG tanker rates, and liquids cuts. A detailed capex breakdown is also provided (below).

A base LNG case project is likely to earn a c10% real, unlevered IRR at $7.5/mcf. The economics are most sensitive to gas pricing and capex; and somewhat less sensitive to the other variables.

LNG plant footprints: compaction costs?

This data file tabulates the acreage footprints and peak worker counts at c20 recent LNG projects. It is interesting how these variables are likely to change over time, to lower costs and due to COVID.

International LNG occupies c50-acres per MTpa and 1,000 peak workers per MTpa of capacity. This means that largest facilities can have over 20,000 workers on site at any one time, which will be challenging amidst COVID.

US LNG projects have been smaller, at c30-acres per MTpa, as high-quality input gas requires less pre-processing; and worker counts are as much as 4x lower, due to phased, modular construction designs (see below).

FLNG is c20x more compact than typical international projects but and has the highest density of workers. Modules which typically have large exclusion zones are congested. This will require extremely cautious operation. It could impact economics, through higher costs and lower up-times.

In principle, smaller plants should achieve cost advantages over larger plants. To reap these benefits, we are excited by novel “liquefaction” technologies, which are also tabulated in the file.

Alternative truck fuels: how economic?

This data-file compares different trucking fuels — diesel, CNG, LNG, LPG and Hydrogen — across 35 variables. Most important are the economics, which are fully modelled, in the 2020s in the US, in the 2020s in Europe and incorporating deflation in the 2040s.

Hydrogen still screens as an expensive alternative. We estimate full cycle freight costs will be c30% higher for hydrogen vehicles than diesels in Europe, and as much as 2x higher in the US. The data-file contains a breakdown of hydrogen truck concepts and their operating parameters.

Natural Gas can be close to competitive. On an energy-equivalent basis, $3/mcf gas is 4x more economical than $3/gal diesel. However, the advantages are offset by higher vehicle costs, operational costs and logistical costs. Mild environmental positives of gas are also offset by mild operational challenges.

The Top Technologies in Energy

What are the top technologies to transform the global energy industry and the world? This data-file summarises where we have conducted differentiated analysis, across c90 technologies (and counting).

For each technology, we summarise the opportunity in two-lines. Then we score its economic impact, its technical maturity (TRL), and the depth of our work to-date. The output is a ranking of the top technologies, by category; and a “cost curve” for the total costs to decarbonise global energy.

Download this data-file and you will also receive updates for a year, as we add more technologies; and we will also be happy to dig into any technologies you would like to see added to the list.

LNG: deep disruptions?

The last oil industry crisis, in 2014-16, slowed down LNG project progress, setting the stage for 20-60MTpa of under-supply in 2021-23. The current COVID-crisis could cause a further 15-45MTpa of supply-disruptions, after looking line-by-line through our database of 120 projects. The result is a potential 100MTpa shortfall in 2024-26. This is negative for energy transition, but positive for LNG incumbents.

Shell: the future of LNG plants?

Shell is revolutionizing LNG project design, based on reviewing 40 of the company’s gas-focused patents from 2019. The innovations can lower LNG facilities’ capex by 70% and opex by 50%; conferring a $4bn NPV and 4% IRR advantage over industry standard greenfields. Smaller-scale LNG, modular LNG and highly digitized facilities are particularly abetted. This note reviews Shell’s operational improvements, revolutionary greenfield concepts, and their economic consequences.

European Natural Gas Demand Model

This model estimates European gas demand in the 2020s, as a function of a dozen input assumptions, which you can flex. They include: renewables’ growth, the rise of electric vehicles, the phase out of coal and nuclear, industrial activity, efficiency gains, LNG-transport fuel and hydrogen.

Our conclusion is that European gas demand will likely grow at its fastest pace since the early-2000s, largely driven by the electricity sector.

The data-file also contains granular data, decomposing gas demand across 8 major categories, plus 13 industrial segments, going back to 1990 (albeit some of the latest data-points are lagged).

Please download the model to run your own scenarios…