SAFER, SMARTER, GREENER DNV GL © Graham Nott 18 October 2018 OIL & GAS From LNG Mega-trains to mid-sized modular units: 1 An exploration of the investment risks in today’s LNG export terminals Graham Nott
DNV GL © 18 October 2018 SAFER, SMARTER, GREENERDNV GL ©
Graham Nott
18 October 2018
OIL & GAS
From LNG Mega-trains to mid-sized modular units:
1
An exploration of the investment risks in today’s LNG export
terminals
Graham Nott
DNV GL © 18 October 2018
Introduction
2
DNV GL © 18 October 2018
Some rules of thumb
▪ 1 SCF LNG ~ 600 SCG Natural gas
▪ 1 MMTPA ~ 140 MMSCFD
▪ 1 MMTPA ~ 35 MW
▪ 1 TCF ~ 0.8 MMTPA for 20 years
▪ Liquefaction losses are typically ~ 8% for base load LNG plants
3
DNV GL © 18 October 2018
Historical background
4
DNV GL © 18 October 2018
Significant events in the history of natural gas liquefaction
▪ 1959 – First international LNG trade (Lake Charles, LA to Canvey Island, UK) – 5000 m3 LNGC
▪ 1964 – Compagnie Algerienne du Methane Ltd (CAMEL) GL4Z LNG plant at Arzew commissioned and ships
first gas.
– 3 trains of 17,000 BBL/day (3 x 415,000 Tonne/year ~ 2.2 MMTPA)
– Pritchard Cascade process (C3/C2=/C1), steam turbine compressor drivers
– Total investment cost $89 Million, delivered LNG cost $0.76/MMBTU
▪ 1969 – Atlantic Richfield Oil Company (ARCO) Kenai LNG plant commissioned
– 1 train of 1.23 MMTPA
– Predecessor of Conoco Phillips Optimised Cascade Process, built by Bechtel.
– First use of gas turbine compressor drivers (6 x Frame 5)
– Total investment cost $ 200 Million, delivered LNG cost $0.52/MMBTU
▪ 1971 – Exxon Marsa El Brega LNG plant commissioned:
– 4 trains each of 0.8 MMTPA
– First Air Products Single Mixed Refrigerant technology and use of Coil Wound Heat Exchanger
5
DNV GL © 18 October 2018
Significant events in the history of natural gas liquefaction
▪ 1972 – Brunei LNG (LUMUT) plant commissioned
– Initially 4 x 0.925 MMTPA (3.7 MMTPA) later expanded to 5 x 1.3 MMTPA
– First use of propane pre-cooled mixed refrigerant process (C3-MR)
▪ 1999 – Atlantic LNG Train 1 commissioned
– Strategic move by BG to reintroduce competition
▪ 2005 – SEGAS Damietta Commissioned
– First use of C3SplitMR to balance power between gas turbines and maximise LNG production at 5 MMTPA
– Compressor drivers using 2 x GE 7EA industrial gas turbines
▪ 2006 – Darwin LNG
– First use of Aeroderivative gas turbine technology with 6 x GE LM2500 to achieve 3.7 MMTPA
▪ 2009 – QatarGas II
– First AP-X project using 3 x GE Frame 9 gas turbines to achieve 7.8 MMTPA/train
▪ 2017 – Wheatstone LNG
– First use of LM6000 Aeroderivative gas turbine technology to achieve 4.5 MMTPA
6
DNV GL © 18 October 2018
Growth in LNG single train capacity
7
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Tra
in c
apacity (
MM
TPA)
Train capacity increased
as developers sough
economy of scale
The Qatari AP-X
plants marked the
end of the quest for
ever larger train
capacityMid scale isn’t new;
for a decade a 1 - 2
MMTPA train was
standard
DNV GL © 18 October 2018
Economy of scale
Advantages Disadvantages
8
▪ Single train, single equipment
▪ Avoids complexity and potential flow mal-distribution
▪ Low equipment count offers less lost time to
equipment failure and risk of loss of containment
▪ A single train can be optimised
▪ Larger equipment becomes increasingly difficult to
transport
▪ Foundations and ground works become increasingly
expensive
▪ Limited pool of suppliers
▪ Equipment becomes bespoke
▪ Time to market
Case 1 Case 2 Case 3 Case 4
Configuration 1 x 5 MMTPA 2 x 2.5 MMTPA 1 x 3 MMTPA 2 x 1.5 MMTPA
Drivers 2 x Frame 7+ 20 MW
4 x Frame 5 2 x Frame 7 3 x Frame 5
Relative LNG Cost 100% 117% 122% 142%
Source - Gastech 2008; LNG TECHNOLOGY FOR THE COMMERCIALLY MINDED – THE NEXT CHAPTER by Charles Durr, Christopher Caswell & Heinz Kotzsot
DNV GL © 18 October 2018
Construction cost pressures
9
DNV GL © 18 October 2018
LNG Plant Cost
10
Source: Oxford Institute for Energy Studies, LNG Plant Cost Escalation by Brian Songhurst
DNV GL © 18 October 2018
LNG Plant Costs (influence of infrastructure)
11
Source: Oxford Institute for Energy Studies, LNG Plant Cost Escalation by Brian Songhurst
DNV GL © 18 October 2018
Market forces
12
DNV GL © 18 October 2018
Increasing liquidity in LNG markets
13
DNV GL © 18 October 2018
Recent permitted and planned USA LNG projects
14
DNV GL © 18 October 2018
Recent approved or operational US LNG projects
15
FERC STATUS Project Name Location Gas flow Phase 1 Phase 2 Licensor Technology
Operation Sabine Pass Liquefaction Sabine Pass, LA 1.40 BCFD 4 x 4.5 MMTPA 1 x 4.5 MMTPA Conono Phillips Optimized Cascade
Operation Dominion Cove Point LNG Calvert County, MD Air Products C3-MR
Construction Southern LNG Elba Island, GA 0.35 BCFD 6 x 0.25 MMTPA 4 x 0.25 MMTPA Shell MMLS
Construction Cameron LNG Hackberry, LA 2.1 BCFD 3 x 5 MMTPA Air Products C3-MR
Construction Freeport LNG Freeport, TX 2.14 BCFD Air Products C3-MR
Construction Cheniere Corpus Christi LNG Stage 1 Corpus Christi, TX 2.14 BCFD 2 x 4.5 MMTPA Conono Phillips Optimized Cascade
Approved Southern Union Lake Charles LNG Lake Charles, LA 2.20 BCFD Air Products C3-MR
Approved Magnolia LNG Lake Charles, LA 1.08 BCFD 4 x 2 MMTPA LNG Limited OSMR
Approved Cameron LNG Hackberry, LA 1.41 BCFD Air Products C3-MR
Approved Exxon Mobil Golden Pass LNG Sabine Pass, LA 2.10 BCFD 3 x 5.5 MMTPA Air Products C3-MR
Source – FERC project list with additional data collated by author from FERC filing and developers websites
DNV GL © 18 October 2018
Pending and pre-filing US LNG projects
16
FERC STATUS Project Name Location Gas flow Phase 1 Phase 2 Licensor Technology
Pending Gulf LNG Liquefaction Pascagoula, MS 1.5 BCFD 1 x 5 MMTPA 1 x 5 MMTPA
Pending Venture Global Calcasieu Pass Cameron Parish, LA 1.41 BCFD 9 x 1.252 MMTPA GE SMR
Pending Texas LNG Brownsville, TX 0.55 BCFD 1 x 2 MMTPA 1 x 2 MMTPA Air Products
Pending Rio Grande LNG - NextDecade Brownsville, TX 3.6 BCFD 6 x 4.5 MMTPA Air Products C3-MR
Pending Annova LNG Brownsville, TX 0.9 BCFD 6 x 1 MMTPA Black & Veatch PRICO SMR
Pending Port Arthur LNG Port Arthur, TX 1.86 BCFD 2 x 6.75 Air Products C3-MR
Pending Eagle LNG Partners Jacksonville, FL 0.132 BCFD 3 x 0.33 MMTPA Chart IPSMR
Pending Venture Global Plaquemines Plaquemines, LA 3.4 BCFD 9 x 1.252 MMTPA9 x 1.252 MMTPA GE SMR
Pending Driftwood LNG (Tellurian) Calcascieu Parish, LA 4.0 BCFD 11 x 1.38 MMTPA 4 x 1.38 MMTPA Chart IPSMR
Pending Alaska Gasline Nikiski, AK 2.63 BCFD 3 x 6.5 MMTPA 3 x 6.5 MMTPA Air Products C3-MR
Pending Freeport LNg Dev. Freeport, TX 0.72 BCFD Air Products C3-MR
Pending Jordan Cove Coos Bay, OR 1.08 BCFD 5 x 1.56 MMTPA Black & Veatch PRICO SMR
Pending Cheniere Corpus Christi LNG Stage 2 Corpus Christi, TX 1.86 BCFD 1 x 4.5 MMTPA Conono Phillips Optimized Cascade
Pre-filing Commonwealth LNG Cameron Parish, LA 1.18 BCFD 8 x 1.1 MMTPA
Pre-filing Port Fourchon LNG La Fourche Parish, LA 0.65 BCFD
Development Cheniere Corpus Christi LNG Stage 3 Corpus Christi, TX 1.86 BCFD 7 x 1.4 MMTPA
Development Galveston Bay LNG Texas City, TX 3 x 5.5 MMTPA
Source – FERC project list with additional data collated by author from FERC filing and developers websites
DNV GL © 18 October 2018
Mid-scale LNG technology suppliers
17
DNV GL © 18 October 2018
Black & Veatch PRICO®
18
Source – Black & Veatch website
DNV GL © 18 October 2018
LNG Limited OSMR®
19
Source – LNG Ltd website, 2015 OSMR® Conference Paper
DNV GL © 18 October 2018
Chart Energy and Chemicals IPSMR® process
20
Source – Gastech 2018. “Benefits of Mid-Scale LNG” by Scott Mossberg (Bechtel) and Douglas Ducote (Chart Energy & Chemicals)
DNV GL © 18 October 2018
GE (SALOF)
21
Source – GE publicity materials.
DNV GL © 18 October 2018
Technical observations
▪ Mid-scale LNG LNG processes tend to:
– Use Brazed Aluminium Heat Exchangers (BAHX) over Coil Wound Heat Exchangers
– Use Aeroderivative over Industrial gas turbines
– Incorporate a higher element of modularisation and pre-assembly
– Use simpler processes with less refrigerant pressure stages
22
DNV GL © 18 October 2018
Process efficiency
23
DNV GL © 18 October 2018
Key factors influencing process efficiency
▪ Aeroderivative gas turbine drivers have a higher efficiency
compared to industrial G-T’s
▪ Compressor polytropic efficiency has increased significantly
over the past decades but generally larger compressors have
higher efficiency
▪ Mid scale processes are more simple and do not offer
multiple stages of refrigerant evaporation pressure and
therefore some irreversible work is lost
(i.e. Chart IPSMR 3 stages c.f. COP OCP 3/2/3)
▪ BAHX gives an order of magnitude increase in MCHE area
and therefore allows close temperature approaches
▪ Historically little of the heat in the G-T exhaust has been
captured
▪ Aeroderivative G-T’s are more adversely affected by ambient
temperature than industrial G-T’s
▪ End flash expander
▪ Air recirculation
24
33.3
36.3 36.537.7
41.1 41.243.0
44.1
28.8
36.0
29.4
33.3 33.034.6
Gas turbine efficiency in mechanical drive
Source – GE publicity materials.
DNV GL © 18 October 2018
Air recirculation and layout
25
Source – UNDERSTANDING OF HOT AIR RECIRCULATION PHENOMENA IN AIR-COOLED BASE LOAD LNG PLANT, Siti Farhana Bt M Shaari Malaysia LNG Sdn Bhd .
DNV GL © 18 October 2018
Compressor driver
26
DNV GL © 18 October 2018
Key factors influencing compressor driver selection
▪ Two shaft machines (i.e. Frame 5 and aero-derivatives) allow operating flexibility for compressor
re-start after settle out and allow more shaft power to be used in the process (or more
turndown).
▪ Electric drivers offer high availability but power must be produced somewhere and fuel gas might
be in surplus
– Industry confident that 95 – 100 MWe drivers are feasible (cf large generators)
– Freeport LNG in construction (3 x 5.1 MMTPA each with 3 x 75 MWe drivers)
▪ Aero-derivative G-T’s might be changed out in 2 days compared to 5 days for industrial gas
turbines.
▪ Aero-derivative G-T’s are more sensitive to loss of power at higher ambient temperatures.
27
DNV GL © 18 October 2018
G-T inlet air cooling
28
Source: Gastech 2018: Debottlenecking; Getting the Most Out of Your LNG Plant Christopher Ott, Lead Process Engineer, Air Products and Chemicals, Inc.
DNV GL © 18 October 2018
Availability
29
DNV GL © 18 October 2018
Key factors influencing plant availability
▪ Gas turbine scheduled inspection and maintenance
▪ Effective heavy ends removal and MCHE tolerance
– Dilemma of lean gas
– Full scrub column v’s pre-cooling section with separator
▪ Common pre-treatment
▪ SIMOPS
▪ Gas nomination and supply
▪ Variable frequency drives and deNOX
30
DNV GL © 18 October 2018
Darwin LNG
31
Source: AERODERIVATIVE GAS TURBINE DRIVERS FOR THE CONOCOPHILLIPS OPTIMIZED CASCADESM LNG PROCESS— WORLD’S FIRST APPLICATION AND
FUTURE POTENTIAL
Cyrus B. Meher-Homji, PE. Bechtel Corporation
DNV GL © 18 October 2018
Venture Global Calcasieu Pass LNG
32
Source – NextDecade website
DNV GL © 18 October 2018
Modularisation
33
DNV GL © 18 October 2018
Modular LNG plant construction
▪ Example modular LNG plants
– Sakhalin
– North West Shelf Train 5
– Pluto
– Gorgon
– Snohvit
– Yamal
– Curtis Island (Australia)
34
Source – KBR website
DNV GL © 18 October 2018
Key factors affecting modularisation strategy
▪ Remoteness of site
▪ Competitiveness of local work force
– Costs of establishing camp
▪ Completeness of design
▪ Foundation loads / costs
▪ Seismic v’s transport loads
▪ Structural steel content
35
Source – NextDecade website
DNV GL © 18 October 2018
Module growth and congestion
On-Shore LNG Plant FLNG
36
▪ Footprint growth of onshore LNG plant reported by
JGC
– Project A – 20%
– Project B – 21%
– Project C – 14%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Co
nge
stio
n D
en
sity
(m
/m3)
Module ID
Feed Congestion
Initial Congestion
Final Congestion
Source – DNV GL collected data
DNV GL © 18 October 2018
SIMOPS and Safety
37
DNV GL © 18 October 2018
Key safety considerations
▪ Smaller inventories but greater spill frequencies
▪ Smaller propane surge drum size
▪ Maintenance – lifting over live plant
▪ Construction of adjacent units
▪ Maintain safety gaps and separation (DDT), avoid
growth and congestion
▪ Flare sizing requirements (common failure)
▪ Possibility to reduce setback distance
38
DNV GL © 18 October 2018
Layout and plot size
39
DNV GL © 18 October 2018
Mid scale modular LNG claims to be competitive on plot size
40
Conoco Phillips ‘Two in one concept’
Sabine Pass – 78,000 m2 / 4.5 = 17,500 m2/MMTPA
= 6.4 m2/TPD
Air Products C3SplitMR
Damietta – 44,000 m2 / 5.0 = 8,800 m2/MMTPA
= 3.3 m2/TPD
Source – Conoco Phillips publicity materials
DNV GL © 18 October 2018
Driftwood LNG ‘Four in one’ concept
41
Source – Tellurian website
DNV GL © 18 October 2018
Economics
42
DNV GL © 18 October 2018
Key project cost implications
▪ First phase must bear infrastructure costs
– Jetty (>$50,000/m)
– Breakwater / dredging ($100 MM)
– LNG tanks (>$ 90 MM for 200K m3)
▪ Standard equipment and machinery
▪ But potentially faster to market
43
DNV GL © 18 October 2018
Summary
44
DNV GL © 18 October 2018
Summary
▪ Modular mid sized LNG plant is not new
– But there are few reference plants for the ‘new’ technology licensors at this scale
– There are dangers in an over-reliance on modularisation and off-site construction
– The process cycles are not as optimised as ‘classical’ C3MR / Optimised Cascade processes,
however the use of aero-derivative gas turbines and inlet air cooling level the field
– ‘Other’ factors can drive plant availability in the real world
– SIMOPS should be central to the layout and development plan
45
DNV GL © 18 October 2018
SAFER, SMARTER, GREENER
www.dnvgl.com
The trademarks DNV GL®, DNV®, the Horizon Graphic and Det Norske Veritas®
are the properties of companies in the Det Norske Veritas group. All rights reserved.
Thank you for your interest.
46
+44 7805 783889