Chief Executive Officer
INTRODUCTION TO KRYOPAK
K. B. Kennedy, the organizer, and owner of K. B. Kennedy Engineering Company, worked as a Project Manager for the J. F. Pritchard Company. It was with the Pritchard Co. that first involvement with LNG began in 1957. Pritchard received the contract to perform engineering services for a liquefaction plant from Continental Oil using the cascade process. This process was essentially the same as noted in Perry's Chemical Engineering, Handbook, 1950 Edition. This system required three levels of refrigeration and three refrigerants.
INVENTIONS & PATENTS: A NEW LNG PLANT PROCESS.
We had the first ASME Sec. VIII, Division 1, pressure-vessel code-shop in the state. We had our own pipeline construction and operating crew, a sizable engineering staff and were building plants for our own account with our own operating company, Capitan Energy. The shop incorporated as Kenweld. We entered a joint venture with SPS as Chala Cryogenics covering several plants.
In 1982 we entered into an agreement with Beech Aircraft, Alternative Energy Division, for design and construction of packaged LNG plants. At this time it was evident LPG and gas prices were falling quite rapidly. We opted to sell our plants and contracts and to concentrate on LNG package construction. We sold the White Ranch plant to Mapco and took a three year operating contract. In mid 1986 it became obvious Beech Aircraft was not going to sell any plants for LNG production. We opted to liquidate K. B. Kennedy Engineering with all technologies developed becoming the property of K. B. Kennedy.
JOINT VENTURE: KRYOPAK, INC. & SALOF REFRIGERATION.
Kennedy returned to the Kansas City area and set up a relationship with George Salof on a joint venture basis. It became obvious that LNG was the fuel of the future and why not now. Bids submitted to Bechtel eastern Division for a turnkey 10 MMscfd plant in Rhode Island, to Bechtel International for a barge mounted 15 MMscfd plant in Mozambique and to McClousky, former president of Distrigas, for a 10 MMscfd plant in New England with Canadian gas. None of these plants were built.
We submitted a bid to Burlington Northern for 15 MMscfd plant in Lincoln, Nebraska. We rebid the plant to build and operate on a throughput basis with a guaranteed take or pay. This occurred because of a proposed joint venture agreement with Linde, a Division of Union Carbide. It soon became obvious Burlington Northern Railway was not ready for a plant. Roy Adkins organized Cryogenic Fuels Inc. (CFI) after beech's abandonment of their Alternative Fuels Division. CFI, a fine organization put together by Roy, Bill Rutherford and Jack Shafer, approached us to continue the agreement we had with Beech with CFI. We agreed to do this. KRYOPAK and CFI entered into a sales agreement wherein they were to represent us in sales on a commission basis with a limited agency agreement, non-exclusive.
RANGE OF LNG PLANTS: US & WORLDWIDE
KRYOPAK needed an experienced, competent fabricator. Salof Refrigeration, who had performed work for us in the past was a good choice. George Salof and Kennedy incorporated KRYOPAK in Kansas. We let CFI represent us in sales. In the meantime we have perfected our technology, reestablished our contacts with suppliers, and have a fairly representative range of plants available. As no plants are being built in the states, we have been operating outside the country, particularly, Australia, Indonesia, Norway and Chile. We have had a good response from these foreign groups involving plants ranging is size from 19 MMscfd upward to very large sizes. All, except two, are for base load. One, in Chile, for LNG fueled mine vehicles. The other is in Oslo, Norway Biogas (landfill) for motor fuel. We are presently proposing a 2,000,000 tonne per year plant for Shell Gas Limited with up to 600,000 gallons per day of LPG extraction.
The CFI organization broke up and reorganized with only two of the principal players remaining. Their organization has turned into a consulting group and our aims are no longer similar. Plants kept getting smaller and smaller down to a point where an expander technology was impractical. We do not believe it is in our interest to take consulting contracts and have repeatedly rejected offers from CFI to participate. We have pursued contracts on our own with good results. Approximately three months ago we decided to evaluate the LNG business in the states to determine why it was not booming. A summary of our findings follows later in this paper.
|United Asia Oil and Kryopak
It is with great anticipation to incorporate Raphael Pumpelly's [Pumpelly History Here] United Asia Oil group in Asia together with previously mentioned locomotive groups.
In 1981 one of our engineers met with Mr. Pumpelly and began a mutual interest in natural gas fueled locomotive engines just beginning with Energy Conversions Inc. in Tacoma Washington and Northern States Power in Minnesota where our engineer lived.
By 1982 Burlington Northern Railroad became interested in the Northern States Power Companies dual fueled project and ten years later LNG locomotives were running coal from Wyoming into Minnesota. By 1990, Kryopak's interest in mining corporations grew to over 102 major North American corporations. We held a LNG Business Meeting in 1991 to explain why Kryopak's LNG is less than $0.20 per gallon.
In 1991, George Salof, Ken Kennedy and
Charlie Bartholomew met with Mr. Pumpelly in his Los Angeles office.
Raphael Pumpelly's LNG vehicle fuel plant for a concession (1969-1997 largest undrilled structure in Asia) never materialized because lack of interest in Thailand's locomotive use and natural gas power generation from the property. However, his family's 130 year interests in Central Asia look more promising.
A dedicated locomotive project
An entire $500 million LNG locomotive project is
guaranteed by combining, gas availability, U.A.0. investors, competent worldwide
oil and gas operators in the group, appropriate returns on investment from
railroads, and the efficiency of Kryopak's LNG plant.
This case is based on United Asia Oil operating control of gas volume (350 Bcf), pressure & composition over 10 years into a Kryopak LNG plant from a dedicated concession.
Our experience understanding both mining and locomotive
needs together with numerous trips to corporate headquarters, and field locations,
leave us with the opinion where gas availability (low priced) and unavailable
diesel (or higher priced) exist, LNG will repay all costs.
Time for recovery of investment depends on variables such as fuel price differential (great in Asia), unit vehicle cost and delivery (all costs in) and profit to all parties involved. 5020 references generated for this Asian project alone say $2,000 US per hour will be saved by the Ministry of Rail on 200, MP1200-G switchers and 30, 3400 horsepower road locomotives from just one 120,000 gpd LNG plant.
We were impressed with Asian official presentations
here in the U.S. in June and think both mining and petroleum industries will
benefit from this exposure.
We think railroads like the performance of the MP 1200 G switchers and the GM-EMD 40-2's.
It is also possible to incorporate LNG into the large mining equipment. Newmont in particular comes to mind, as they were the first mining company to set aside moneys for 2,000 horsepower LNG haul trucks. The first 1200 horsepower mining trucks were converted by United States Steel in 1967 on iron ore mines in Northern Minnesota.
It has always been Kryopak's intention to work LNG vehicle fuel with coordination in high fuel users.
Switcher Locomotives produce at the rate of four
(4) per month.
Kryopak's LNG plant (120,000 gallons per day) will be up and running sixteen (16) months from project start in U.S. to production of LNG fuel.
GM-EMD dual fuel, diesel, and LNG (3400 horsepower) locomotives produced at the rate of two (2) per month.
Sixty four (64) switchers and thirty (30) road locomotives can be on location at start up of Kryopak LNG operations in sixteen (16) months.
Thirty-four (34) months after LNG plant startup, one hundred and thirty six (136) more switchers will be operating off the LNG plant, bringing locomotive operations total to 200 switchers and 30 road locomotives.
United Asia Oil dedicates three hundred and fifty billion cubic feet of gas to this sized locomotive project, at an agreeable gas purchase value: the railroad agrees to purchase the LNG, at an agreeable price.
A $500,000,000 USD project will proceed, funding arranged by us.
Currently, we have 40 Requests for Quotes out on Kryopak's LNG processes on 4 continents, several Islands, floating production storage off-loading platforms, barge platforms, and several Regasification LNG plants for the Largest LNG carriers- June 2003
|Prepared by Charlie Bartholomew mailto:firstname.lastname@example.org|