LNG Technology

By Laura Donnelly
Energy Technology and Policy
November 25, 2008
Capital and Operating Costs
of LNG chain
Exploration & Treatment & Shipping Storage & Distribution
Production Liquifaction Regasification & Marketing
15-20% 30-45% 10-30% 15-25%
LIQUEFACTION
Cool Gas to -260oF
1/600
th
of gaseous volume
30-45% LNG chain costs
Costs driven by:
Train number and capacity
Compressor drive efficiency
New Technology: Offshore Production
Darwin Liquefaction Facility
http://content.edgar-online.com/edgar_conv_img/2007/03/30/0000950152-07-
002894_L25400AL2540013.JPG

Train Size
Train capacity has grown an average of 3
million tons/year
Facilities with capacities of 7.8 and 9.6 million
tons/yr will come on stream soon (Qatar and
Russia)
Increasing train capacity, as opposed to # of
trains, can reduce costs by 25%
Compressor Drive Efficiency
Gas Turbine Improvements
Increase in efficiency from 28% to 40% in last 40yrs
Decrease in fuel consumption (i.e. cost) by 60-70%
Aeroderivative Turbines
Advantages: increase thermal efficiency by 25% and
total plant efficiency by 3%, less downtime to replace
Disadvantages: expensive, high maintenance
Currently, industrial gas turbines are used to drive the
compressors
Electric Drive Alternative
Use of smaller turbines in a combine cycle power
plant to produce electricity to run liquefaction plant
Improve efficiency, cut emissions
Offshore
Liquefaction
Floating Production Storage
and Offloading (FPSO)
http://braxtonlng.com/LNGFPSOs.aspx
TRANSPORTATION
LNG shipped in large vessels with cryogenic
tanks
10-30% LNG chain costs
Costs driven by:
Vessel capacity
Tanker Propulsion
New Technology: Ship-to-Ship Transfer (STS)
Vessel Capacity
First LNG tankers: 27,400 cubic meters (cu m)
In 2007, vessels averaged 266,000 cu m
Decrease in costs by 45% from early 1990s
due to increase in vessel capacity
Limitations: restrictions on import vessel size,
maximum capacity of regasification
equipment
Tanker Propulsion
Boil-off gas (~0.15%/day)
Vent to atmosphere
Burned
Reliquefied
Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine
Tanker Propulsion
Boil-off gas (~0.15%/day)
Vent to atmosphere
Burned
Reliquefied
Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine
Tanker Propulsion
Boil-off gas (~0.15%/day)
Vent to atmosphere
Burned
Reliquefied
Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine
Tanker Propulsion
Boil-off gas (~0.15%/day)
Vent to atmosphere
Burned
Reliquefied
Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine
Ship-to-Ship Transfer
Emergence of Offshore regasification and liquefaction
New vessels may now have capability to transfer or
receive loads

http://www.thedigitalship.com/powerpoints/norship05/lng/Trym%20Tveitnes,%20HOEGH.pdf
REGASIFICATION
Facility costs can range from $100 million for a
small plant to $2 billion for state-of-the-art
greenfield plant (usually found in Japan)
Costs driven by
Storage
Gas Composition Control
New Technology: Offshore Regasification
Storage
1/3 plant capital costs
Storage capacity dictates volume of gas plant can
handle
Can usually only process 70-75% capacity load
Increasing storage can increased capital costs 10-20%
EIA, Global LNG Status and Outlook 2003
Composition Control
Composition of gas delivered to regasification
plant can vary significantly depending on source
Compounds, such as propane, butane and
ethane, can often be left in the LNG in order to
reduce liquefaction costs
These compounds raise the heating value (HHV)
of the gas, which many countries do not have the
infrastructure or equipment to handle, the US
included
Industrial equipment accounts for 60% of natural
gas use, and is typically the most sensitive to
natural gas quality
Composition Control
Technologies to reduce the HHV
Injection of inert gas (usually Nitrogen) into vaporized
gas
Can increase end-user NOx emissions
Restrictions placed on amount of inert gas that can be
present in fuel
Increase in capital and operating expenditures to run
injection process, with no increase in value of fuel
Natural Gas Liquids Recovery (NGLR)
Remove the mid-range (propane, butane, ethane)
compounds before or after regasification
Profit from petrochemical sales > profit from high HHV when
present in gas

Offshore Regasification
US to build two Offshore plants, one already under
construction
Floating Storage and Regasification Unit (FSRU)
Conclusions
To keep the LNG market growing and meet
increasing natural gas demands, it is most important
for future technology to address:
Compressor Efficiency
Ship-to-Ship transfer
Offshore Regasification
Increasing cost effectiveness will allow companies to
produce gas in harsher environments to help meet
demands (deep sea, artic conditions)
Questions?
US Natural Gas Imports Projected to 2030
(Pipeline vs. LNG)
Energy Information Administration, Annual Energy Outlook 2006
LNG demand as of 2003
Source: Gas Techology Institute, IEA 2003 Natural Gas Information
LNG Demand in 2025
EIA International Energy Outlook 2004
Why is demand increasing?
Increased installation of Combine Cycle power
plants for increased efficiencies
Environmental concerns: Natural gas is
cleaner than petroleum and coal
Worries over the abundance of conventional
fuel supplies: natural gas reserves to last 30yrs
longer than oil
Wartsila Diesel, 2008
Liquefaction Terminals
Wartsila Diesel, 2008
Regasification Terminals
Regasification Plant in Sabine, TX
to receive LNG from Qatar (2009)
ExxonMobile Corporation: Form 8-K, current report
Federal Energy Regulatory Commission