XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

TECHNOLOGY SELECTION FOR LIQUEFIED NATURAL GAS (LNG) ON BASELOAD PLANTS Luis Castillo*, Rosa Nadales, Camilo González, Carlos A. Dorao* y Alfredo Viloria (*) Norwegian University of Science and Technology (NTNU), Trondheim, Norway Gas Technical Management (EPMG), PDVSA Intevep, Apdo 76343, Caracas 1070-A, Venezuela E-mail: [email protected], [email protected], [email protected]

ABSTRACT LNG can be an important alternative for the monetization of the large reserves of offshore natural gas in Venezuela (about 26 TCF). For this reason, a new LNG project is being considered for supplying natural gas to the international market. LNG projects demands a high initial investment due to the high complexity and large range of technologies involved. Currently, there are several technologies available for the liquefaction of natural gas, but selecting a particular technology is not a simple task. In this work, different selection criterion for selecting base load LNG technologies are discussed and organized into a quantitative matrix for making decisions.

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

INTRODUCTION Background The Liquefied Natural Gas (LNG) is natural gas in liquid state at atmospheric pressure and temperatures around minus 161 ° C. The volume is reduced a factor 600 times compared to the standard conditions, which allows large volumes of LNG to be transported by sea in refrigerated ships. In the last decades the world-wide LNG market has growth significantly allowing business opportunities associated with shortterm contracts, i.e. spot market, constituting LNG in an important commodity. LNG plants have been designed for high capacities, base load plant, exceeding 150 million cubic feet per day (MCFD) of natural gas. The designs of large capacity LNG plants are focused mainly on the exploitation of vast natural gas fields and towards the construction of major facilities; in order to take advantage of economies of scale. The main design criteria in these plants have aimed at minimizing both capital costs and energy consumption. These two objectives can be satisfied by optimizing the efficiency of the plant, which can be translated into a reduction of investment costs in hardware and an increase in LNG production (Perez, 2009). Different technologies for liquefying natural gas have been developed, being the most used the technologies of two and three cycles of cooling, with cascade or propane pre-cooling plus mixed refrigerants schemes. At present, there are two major technology licensors which have dominated the LNG market for years. It has resulted in high investment costs for these projects associated with the small group of qualified engineering firms and the lack of competitiveness. The increase in construction costs, materials and engineering services had caused that most of the proposed projects have been delayed and some cancelled. In order to face up this situation, some licensors have optimized their processes, while new players are emerging with technological innovations in this area (Chabrelie, 2007 and Perez, 2009).

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

This work focused on reviewing the main LNG technologies commercially available and a selection criterion is presented which is organized into a quantitative matrix for making decisions. Current situation in base load LNG plants The total capacity of operational base load LNG plants was just more than 250 Million Tonnes per Annum (MTPA) in 2009, and plants for more than 80 MTPA are currently under construction (Corkhill, 2009 and Petrotecnia, 2009). Currently, there are more than 20 plants of liquefaction of natural gas in operation around the world, accounting for more than 90 trains with capacities between 1 and 7,8 MTPA. These plants are distributed in 17 countries grouped into three main regions: (1) The Pacific Basin: with 95,3 MTPA of installed capacity, which includes trade from Indonesia, Malaysia, Australia, Brunei, USA and Russia , (2) The Atlantic Basin: with 78,7 MTPA of installed capacity, which includes trade from Algeria, Nigeria, Trinidad and Tobago, Egypt, Libya, Equatorial Guinea and Norway, and (3) The Middle East Basin: with 77,5 MTPA in installed capacity, which includes trade from Qatar, Abu Dhabi, Oman and Yemen (Flower, 2008). Table 1 shows the main LNG projects announced in the world and different liquefaction technologies to use.

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

Table 1. Major Project LNG announced Plant

Country

Start up Year

Nominal capacity (MTPA)

Number of Trains

Proposed technology

Pluto LNG

Australia

2010

8.6

2

Shell C3-MR

EG LNG T2

Equatorial Guinea

2012

4.4

1

POCP

NIOC LNG

Iran

2010 +

10.0

2

Linde-Statoil MFC

Persian LNG

Iran

2011

16.0

2

Shell DMR

Pars LNG

Iran

2011 +

10.0

2

Axens Liquefin

NLNG SevenPlus

Nigeria

2010

8.4

1

Shell PMR

Brass LNG

Nigeria

2011

10.0

2

POCP

Atlantic LNG T5

Trinidad and Tobago

2010 +

5.2

1

POCP

Qatar Gas 3&4

Qatar

2010 +

7.8

2

APCI AP-X

Peru LNG

Peru

2010

4.0

1

APCI C3-MR

Angola LNG

Angola

2012

5.2

1

POCP

Venezuela LNG

Venezuela

2014 +

14.1

3

PDVSA-Linde MFC3

Fewer projects announced have final investment decision (FID). However, if all of them will become a reality, the global liquefaction capacity would increase from 255,7 MTPA in 2009 to about 306,3 MTPA (about 20%) for 2020. State of the art of base load LNG technologies Liquefaction technologies of two and three cooling cycles are mainly used mainly due to energy efficiency and low equipment sizing compared to the technologies of one cooling cycle. Table 2 presents the licensors and currently available liquefaction technologies (in brackets) according to the number of cooling cycles and refrigerants used.

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

Table 2. Liquefaction technology licensors by the number of cycles and refrigerants N ° of cycles

Pure

REFRIGERANTS Pure+Mixed

1

-

-

APCI (SMR) Black & Veath (PRICO II) BHP (cLNG)

2

-

Shell (C3-MR) APCI (C3-MR) Shell (PMR)

Shell (DMR) Axens-IFP (Liquefin)

3

Conoco Phillips (POCP)

APCI (AP-X)

Statoil-Linde (MFC)

Mixed

The current market of LNG technologies has been dominated by Air Products Chemical Inc. (APCI) with nearly 80% of installed trains and Conoco Phillips (POCP) with 10%. However, in recent years (2008) Statoil-Linde alliance ventured into this industry with its technological innovation MFC, with a plant being installed and operating in Snøhvit, Norway. Meanwhile, Shell has put its version of the C3-MR technology, and more recently (2009) has begun operation of 2 trains of 4.8 MTPA each with its new DMR technology, implemented in Russia. The following section presents a brief review on the main liquefaction technologies employed at present. a. Technologies of two refrigeration cycles Propane precooling + mixed refrigerants (C3-MR) This technology is licensed by Shell and APCI, and is applicable for plant capacities in the range from 4.5 to 5.5 MTPA. The stage of pre-cooling is done with propane using type heat exchanger core in kettle or aluminium plates. These heat exchangers are ideal for pure refrigerants, given its reliability and lower power consumption. The liquefaction stage is carried out in a vertical spiral type heat exchanger with a refrigerant mixture composed of propane, ethane and methane. Figure 1 shows the schematic of process for this technology (see legend at the bottom).

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

Figure 1. Typical process diagram C3-MR Double mixed refrigerant (DMR) Shell companies, APCI and Axens-IFP alliance license this type of process. This technology is very flexible which can operate with plate exchangers or spiral type in both vertical and refrigeration cycles using the full power of the turbine installed allowing balance the process. Figure 2 shows the outline of the DMR process licensed from Shell (Guerrero, 2006).

Figure 2. Typical process diagram Shell DMR In the case of technology-IFP Axens Liquefin of heat exchanger pre-cooling and liquefaction are configured in the same equipment (cold box) reducing the

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

requirement in the physical space. This technology is applicable to large capacity plants in the range of 5 to 8 MTPA. A new project using this technology has to be developed in Iran. Parallel Mixed Refrigerant (PMR) This technology is licensed by Shell, and uses vertical coil type exchangers pointing liquefaction trains of large capacity exceeding 5 MTPA, offering maximum capacity trains up to 12 MTPA (Pek, 2004). This technology harnesses the full power of the turbine at the stage of pre-cooling and has a higher availability as liquefaction units out of service can be produced up to 60% capacity of liquefaction train. b. Technologies three cycles of cooling Phillips Optimized Cascade (POCP) This process licensed by Conoco Phillips use pure refrigerants (methane, ethane / ethylene and propane) in plate exchangers, being the open methane cycle to reduce the requirement for recipients. Among the features of this process are the proper energy balance, the use of more efficient compression stages and the reduction achieved in the investment costs associated with services. Figure 3 shows a typical pattern for this process.

Figure 3. Typical process diagram POCP

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

Mixed refrigerant cascade (MFC) This technology combines in the liquefaction process two types of exchangers: finned plate for pre-cooling and liquefying spiral vertical and sub-cooling. Current studies point to the application of this technology in offshore environments, for plants of large capacities in the range of 5 to 8 MTPA. In the Figure 4 shows the scheme of this technology (Guerrero, 2006).

Figure 4. Typical process diagram MFC Statoil-Linde Propane mixed refrigerant and nitrogen (AP-X) This technology is licensed by APCI, and allows the construction of liquefaction trains of large capacity 5 to 8 MTPA, without the addition of compressors in parallel. Can be constructed from a plant of the type C3-MR and DMR as a choice for future expansion, facilities were provided for the extension of the train.

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

METHODOLOGY AND RESULTS The selection of a particular technology is a critical step in any LNG project. The chosen technology constitutes a key element which will determine the development of the project. The present work discusses a criterion for selecting a LNG base load technology based on a ranking matrix. The first step in this work was to identify a possible scenario for LNG production. The scenario determines the range of the applicability of the technology. The second step was to identify and classify the available technologies. The last step was to perform a technical analysis in order to identify the main parameters that should be considerate for selecting a particular technology. Scenario for LNG production A generic case is considered which can be a possible scenario for the construction of a LNG plant in Venezuela. The LNG plant might supply the international energy market once domestic demand is satisfied. The production capacity might be around 9.4 MTPA, with 2 trains of the 4.7 MTPA each. The commercially available technologies capable of processing the established capacity were indentified and discussed in the first part of the article. Available Technologies All the technologies mentioned in this paper can be included in the assessment, due to capacity that they can handle. Technical Analysis The classification of the technologies was based on the approach suggested by Coll, 2008. A decision matrix was constructed in order to evaluate the proposal technologies by the following procedure:

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

1.- Identify of the mains parameters of each technology The main parameters were gathered from the public available information. In particular, the focus was on parameters that directly affect the minimization of investment costs and maximizing efficiency of LNG production. These parameters will determine a general criterion for designing of LNG plants on a large scale (Perez, 2009). A number of 20 parameters were identified, which were grouped according to their nature in 9 primary parameters with their corresponding sub-parameters. The final benchmark for the LNG technologies is shown in Table 3: Table 3. Parameters for evaluation of technologies for LNG projects 1

PARAMETER Economic

2

Constructability

3

Maturity

4

Technical

5 6 7 8 9

CO2 Emissions Flexibility gas composition Operability / Maintainability Commercial flexibility of the licensor Domestic Preferences

SUBPARAMETERS 1.1 1.2

Investment costs Operating costs

2.1 2.2 3.1 3.2 3.3 3.4 4.1 4.2 4.3 4.4 4.5 4.6 -----

Expandability plant Area required per train Years of operation Maximum capacity per train set Installed capacity Maximum capacity per train planned Cryogenic heat exchanger type Compressor Type / actuator Specific Power Refrigerant type Number. refrigeration cycle Availability of refrigerant -----

9.1 9.2

National Content Sustainable Development

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

2.- Quantification of the parameters For the assessment phase and grading many scales can be employed. For simplicity, a rating scale of 0 to 3 was used where 3 represents the best value. The allocation of scores to the respective parameters and sub-parameters for each of the liquefaction technologies was realized by using the public and available information gathered. The weighting stage involves two steps: the construction of the matrix and the weighting to each parameters and sub-parameters. The weights consider the priorities established at the beginning of each particular LNG project. Note that several parameters could have equal priority within this classification. For assigning the weights there are different methods. In this case the method of distribution of points (Anderson, 2002) was used. This technique consists in distributing 100 points among the different parameters, so that the points allocated reflect the relative importance within the classification. Table 4 presents the rating scale (according to information collected for different technologies) and the allocation of weights for each of the parameters selected for this case study.

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

Table 4. Scale of assessment and assignment of weights to the parameters No.

PARAMETERS

WEIGHT (%)

1

Economics

1.1

Investment costs

1.2

Operating costs

2.1 2.2

0,60 0,40

Constructability

1,00 10

Expandability plant

0,80

Area required per train

0,20 Standarization

3 3.1

1

2

3

More than 230 US$/TPA More than 8 US$/TPA

between 225 and 230 US$/TPA between 7 and 8 US$/TPA

Minor than 225 US$/TPA Minor than 7 US$/TPA

15

Standarization 2

SCALE OF ASSESSMENT

Maturity

1,00 25

Years of operation

0,30

3.2

Maximum capacity per train set

0,20

3.3

Installed capacity

0,30

3.4

Maximum capacity per train planned

0,20

Standarization

Low More than 32000 m

2

Medium

High

betwen 28000 and 2 32000 m

Minor than 28000 m

Less than 5

between 5 and 10

More than 10

Minor than 4 MTPA Minor than 10 MTPA Minor than 4 MTPA

between 4 and 7 MTPA between 10 and 50 MTPA between 4 and 8 MTPA

More than 7 MTPA More than 50 MTPA More than 8 MTPA

2

Technical

1,00 15

4.1

Cryogenic heat exchanger type

0,35

Only SWHE

Kettle or PFHE, combined with SWHE

Kettle or PFHE, or combinations

4.2

Compressor Type / actuator

0,30

Centrifugal/Frame 5

Centrifugal/ Frame 6 or 7

Centrifugal or Axial/ Frame 6 o 7 or eletric motor

4.3

Specific Power

0,05

More than 14Kw/TPD

between 12 and 14 Kw/TPD

Minor than 12 Kw/TPD

4.4

Refrigerant type

0,15

Pure

Pure + Mixed

Mixed

4.5

Number. refrigeration cycle

0,05

3

2

1

All require import

Some require import

Available on site

4

4.6

Availability of refrigerant

0,10 Standarization

1,00

5

CO2 Emissions

5

More than 0,30 MT CO2/MT LNG

between 0,30 and 0,28 MT CO2/MT LNG

Minor than 0,28 MT CO2/MT LNG

6

Flexibility gas composition

5

Pure

Pure +Mixed

Mixed

7

Operability / Maintainability

5

Complex

Medium

Simple

8

Commercial flexibility of the licensor

5

Low

Medium

High

9

Domestic Preferences

15

9.1

National Content

0,40

All will be imported

Some equipment can be manufactured in the country

All will be manufactured in the country

9.2

Sustainable Development

0,60

Not considered

Considered, but premise without

Included as a premise

Standarization

1,00

TOTAL

100

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

After assigning weights to each parameter and sub-parameters, and defining the appropriate rating, the technologies can be ranked according to the resulting score from the weighted sum of the different parameters measured at the decision matrix. This technique is useful for quick viewing of the strengths and weaknesses of each technology, while allowing comparisons between the options assessed. Table 5 summarizes the results of the decision matrix applied to the case study raised (for reasons of confidentiality does not show the identification of technologies placed as an example). Table 5. Example of results for technology assessment No.

1 1.1 1.2 2 2.1 2.2 ...

PARAMETERS

Economic Investment Costs Operating Costs Standarization Constructability Expandability plant Area required per train ... TOTALS

WEIGHT

Technology 1

...

(%)

SCORE

TOTAL

15

1.0

15

0.60 0.40 1.00

1.0 1.0

9 6

10

2.6

26

0.80

3.0

24

...

0.20

1.0

2

...

...

100

SCORE

N Technology SCORE

TOTAL

2.0

30

2.0 2.0

18 12

2.0

20

...

2.0

16

...

...

2.0

4

...

...

...

250

...

....

....

160

... ... ...

TOTAL

... ... ...

...

From the total results, the best alternatives for the case study can be obtained. It is noteworthy that the selection of technologies should be made based on the particular characteristics of each project or study case raised. As a general rule, it is possible to say that each project has individual priorities, where the selection criteria may change according to the design basis established for each case. Consequently, the weight assigned into the decision matrix can change depending of the case.

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XIX International Gas Convention AVPG 2010, May 24th - 26th Caracas, Venezuela

CONCLUSIONS Currently, there are different technological options with potential to be applied in future LNG developments in Venezuela. These alternative technologies are mainly made up of two and three cycles of cooling, with schemes either cascading process or more pre-cooling with propane + mixed refrigerants. The decision-making methods are useful for preliminary evaluation of technologies. However, the selection of the liquefaction natural gas technology most appropriate depends on the priorities and conditions of each project. LEGEND For Figures 1 to 4. (1): main heat exchanger. (2): Compressor. (3): secondary heat exchangers. (4): gas-liquid separators. REFERENCES ANDERSON, Barry F.: The Three Secrets of Wise Decision Making. Portland, 2002 COLL, Roberto; Carbón, Eduardo; Delgado, Jesús: Technology Evaluation Methodology for Stranded Gas Monetization Options. 19th WPC, 29th June - 3rd July, Madrid, 2008. CHABRELIE, Marie F. LNG, the way ahead. En: Fundamentals of the Global LNG Industry, pp.10-14. Londres: Petroleum Economist, 2007. CORKHILL, Mike. LNG Carrier Fleet Surges as Trade Stagnates. En: IGU. pp.158163. 2009

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FLOWER, Andy y David Ledesma. LNG Pricing in the Americas. Curso: Fundamentals of the Base Load LNG: Markets, Technology and Economics. EMCO Trainning C.A:Puerto La Cruz, Noviembre de 2008. GUERRERO, Ramiro A. y otros. Processes of liquefied natural gas-state of the art. Caracas: Universidad Simón Bolívar, 2006 NEXANT. LNG: The Expanding Horizons of Licuefaction Technology and Project Execution Strategies. Houston: Nexant, 2007. PEK B., y otros. Large capacity LNG plant development. LNG 14, 2004 PEREZ; Silvia y Diez, Rocío. Opportunities of monetising natural gas reserves using small to medium scale lng technologies. REPSOL, 2009. PETROTECNIA. El Gas Natural Licuado y la actualidad de su industria. En: Petrotecnia, pp. 46-54. 2009

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