Rajeev Nanda, TechnipFMC ETHANE TRANSPORTATION WITH LNG – AN OPTION FOR BALANCING THE GLOBAL SUPPLY AND DEMAND OF ETHANE Rajeev Nanda, George Hu, Sylvain Vovard TechnipFMC Demand for ethane and for ethylene production is growing worldwide while the USA and other LNG producing regions have surplus ethane available. Despite the recent inauguration of refrigerated ethane trading, a low-cost alternate can be considered when the trade is in parallel with LNG. This paper describes a significant market opportunity for transporting ethane with LNG for recovery at the LNG regasification terminal. The paper discusses the economics of transporting ethane with LNG as well as technical challenges in recovery of ethane from LNG. Several different configurations of the regasification terminal and options to minimize changes and cost including TechnipFMC’s Dual Column process (US Patent 7,530,236 B2) are presented. A comparison is made with the primary route of ethane recovery, liquefaction as a pure product & transportation which provides marketing flexibility against which is the cost of dedicated terminals and shipping. The paper also illustrates the impact on LNG liquefaction terminal design.
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ETHANE TRANSPORTATION WITH LNG AN OPTION FOR … · The following scheme (Fig. 3.1) is an illustration of the traditional solution – the Separated Transportation Solution, i.e.
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Rajeev Nanda, TechnipFMC
ETHANE TRANSPORTATION WITH LNG – AN OPTION FOR BALANCING THE GLOBAL SUPPLY AND DEMAND OF ETHANE Rajeev Nanda, George Hu, Sylvain Vovard
TechnipFMC
Demand for ethane and for ethylene production is growing worldwide while the USA and other LNG producing regions have surplus ethane available. Despite the recent inauguration of refrigerated ethane trading, a low-cost alternate can be considered when the trade is in parallel with LNG. This paper describes a significant market opportunity for transporting ethane with LNG for recovery at the LNG regasification terminal.
The paper discusses the economics of transporting ethane with LNG as well as technical challenges in recovery of ethane from LNG. Several different configurations of the regasification terminal and options to minimize changes and cost including TechnipFMC’s Dual Column process (US Patent 7,530,236 B2) are presented.
A comparison is made with the primary route of ethane recovery, liquefaction as a pure product & transportation which provides marketing flexibility against which is the cost of dedicated terminals and shipping.
The paper also illustrates the impact on LNG liquefaction terminal design.
1.0 Introduction
In times of high oil prices ethane from natural gas has traditionally been a cost competitive alternative to naphtha
as the precursor for petrochemicals. Most of the ethane based petrochemical projects in the world are located close
to the source of rich natural gas., A number of major changes have occurred in the past decade:
The rapid growth of North American natural gas production including for LNG export. The low HHV
specifications for natural gas pipelines in the USA have created an ethane surplus far beyond the
requirements of local petrochemical projects where the local market is saturated.
The continued fast growth of LNG production and trade, bringing new possibilities for the coproduction of
ethane in large quantities, often in locations which are remote and where construction costs make the
addition of a petrochemical industry unattractive
Fast growing Asian economies exhibit high ethylene demand and plant construction and operating costs for
world scale ethane based steam crackers that are lower at least when compared to the USA
High oil and therefore naphtha prices means ethane is significantly cheaper than other petrochemical
feedstocks.
The steady decline of ethane availability from oil and gas fields over the years has resulted in shortfalls that
threaten the continued operation of major petrochemical complexes such as Grangemouth, Scotland
These new conditions have driven the petrochemical industry towards new solutions including:
A revival of new petrochemical projects in the USA close to the new source new ethane
International trade of ethane using dedicated ethane liquefaction, shipping and receiving infrastructure.
New ethane based steam crackers in China and India based on imported ethane
Ethane transportation from the US to mature European petrochemical sites.
There is, however, an economical solution to co-transport ethane with LNG, that could supplement indigenous
ethane or pure ethane imports to trigger ethane-based petrochemical projects in the areas with large petrochemical
demand. The market size for ethane transportation solutions is very large globally as illustrated in the subsequent
sections of this paper.
The paper further presents the economic benefits and opportunities for future petrochemical plants to be co-located
with LNG import terminals.
It is also worth mentioning that contracts will have to be structured to deal with the relative commercial complexity
of co-importing ethane with LNG. The authors believe that the economic benefit for doing so will exceed the effort
required for the new commercial arrangement.
Rajeev Nanda, TechnipFMC
2.0 Shortfall of Ethane & Ethane market
There are several opportunities globally for Ethane import where the existing LNG terminals are located close to
the existing petrochemical plants. For example, there are currently 37 petrochemical plants operating within 50
miles radius of existing LNG receiving terminals in South America, Europe, and Asia as illustrated in Figure 2.1
below. This number will increase on expanding the 50 miles radius and also accounting for planned terminals and
the petrochemical plants.
Figure 2.1
Some of the global opportunities for importing ethane with LNG is illustrated in the figures below.
There are several opprotunities in Brazil and Argentina where the LNG regasification terminal is close to the
Petrochemical project as shown in Figure 2.2 below.
Figure 2.2
OPPORTUNITIES
In middle East, as shown in Figure 2.3 there is a potential to make certain petrochemical project mose cost
effective with imported ethane from US.
Figure 2.3
Figure 2.4 illustrates the Petrochemical projects in France, Spain, Portugal, Neitherland and Italy close to the LNG
regas terminal.
Figure.2.4
Several LNG terminals & Petrochemical projects in close proximity of each other in Asia are indicated in Figures
2.4, 2.6 & 2.7 below.
Figure 2.5
Figure 2.6
Figure 2.7
3.0 Solutions to Transport Ethane
In the current market, ethane and LNG are treated as two separate products for obvious reasons: LNG is mainly a
solution for fuel transportation (long distance and overseas), while ethane is mainly used as feedstock for
petrochemical plants. Due to the separation of the two markets, the two products are usually being produced,
transported, and delivered separately.
Separated Transportation Solution
The following scheme (Fig. 3.1) is an illustration of the traditional solution – the Separated Transportation Solution,
i.e. the ethane and LNG is transported separately. In this solution, ethane is separated from natural gas at an early
stage of the value chain and marched to their respective markets independently. Separate pipelines, liquefaction
facilities and export terminals, ship tankers, receiving terminals, and deliver pipelines are built independently for
ethane and LNG.
Figure 3.1 – Separate Value Chains of LNG and Ethane
Note that above scheme is more of a representation of the North American market, where midstream is an
important play in the natural gas value chain. In this market, the ethane extraction usually occurs at the midstream
NGL extraction facility where the midstream players can monetize the ethane as a petrochemical feedstock either
for domestic petrochemical plants or to overseas markets.
In other markets with traditional gas fields (associated or non-associated), the midstream market may not exist and
the NGL extraction will be part of the LNG facility. In this case, the ethane may be required to be extracted from the
natural gas in order to meet the LNG product spec depending on the end user market. If there is no market nearby
for the extracted ethane, the ethane has to be consumed as fuel within the LNG facility or exported as a low
temperature, semi-pressurized product.
Synergized Transportation Solution
As an alternate solution, the two products can be synergized to reduce the overall cost of the natural gas value
chain. Figure 3.2 is an illustration of the Synergized Transportation Solution. In this solution, ethane and LNG are
co-produced and transported together until the receiving terminal, where the ethane is extracted from LNG in a
much later stage of the value chain closer to the end users.