Escolar Documentos
Profissional Documentos
Cultura Documentos
Working Committee Contribution, 22nd World Gas Conference, Tokyo 2003 Ad Smaal, Shell Global Solutions Int., The Netherlands
Abstract
The production of Liquefied Natural Gas (LNG) is of importance to the international gas community, as over 20% of cross-border gas trade is in the form of LNG. This paper discusses LNG market and technological developments up to 2010. In 2002, about 111 million tons per annum (Mtpa) of LNG was traded worldwide. As demand for LNG is growing, especially in the Atlantic Basin, LNG trade is expected to grow at a pace of 5 to 7 % per annum; global LNG trade is expected to reach around 190 Mtpa in 2010. Continuous pressure to reduce the cost of LNG has resulted in lower unit costs of carriers and plants; but technological innovation will be crucial to further lower the cost of upstream gas production and liquefaction plants. Liquefaction plants typically have multiple trains, with integrated gas treating and liquefaction facilities in each train. The liquefaction process and the maximum size of key equipment usually determine train size. Cooperation of technology providers and equipment vendors has resulted in larger train sizes, from about 0.4 Mtpa for the first liquefaction trains in Algeria to 3.9 Mtpa for the LNG trains recently started up in Malaysia. As a result, the specific cost of liquefaction plants has dropped significantly over the past few decades whilst efficiency has improved. As an example, the LNG plant of Oman LNG has an efficiency of around 92% and a specific capital expenditure around 200 $/ ton per annum, which is of the order of 50% of the specific costs of the earliest plants. The pressure to reduce LNG production costs will continue. Technical innovations in liquefaction processes and upstream gas production are needed to achieve this. An innovative approach to remote offshore gas is a floating LNG plant, a concept saving on upstream pipeline transport and onshore development costs. For onshore plants, application of electric motors as compressor drivers allows higher availability of the liquefaction process. Electrical drivers also have the advantage of high efficiency, when power is supplied by a combined cycle power station. Parallel line-up of key equipment allows standardization and more cost effective supply from a wider vendor base. Designs based on three large gasturbines (e.g. GE-7) achieve train sizes of around 7 Mtpa. Developments in liquids extraction will increase flexibility for producing different grades of LNG heating value to suit different markets. As there will not be one concept that meets all requirements, the challenge will be to offer robust and flexible designs for train sizes between 3 and 7 Mtpa. LNG technology has developed over the past decades mostly by capitalizing on economy of scale. But in the future, LNG plants will be more diverse, both in size and technology. LNG technology providers and contractors will increasingly have to rely on a flexible portfolio of processes, drivers and plant sizes to achieve fit for purpose solutions.
Introduction
In the past thirty years, liquefaction has played an increasingly important role in the international trade of natural gas. For gas reserves that are remote from mature gas markets, liquefaction is often the only solution for gas monetization. From a humble beginning in 1964, liquefied natural gas (LNG) has become a significant factor in the transport of gas: in 2002, around 22 % of internationally traded gas was transported in the form of LNG. The LNG market has gone through a period of turmoil and rapid growth in the last few years. The total global trade of LNG in 1995 was 70 million tons, but global trade had increased to 111 million tons in 2002, a growth rate of over 7% per year. The immediate future of LNG trade can be understood from this trend, but not by linear extrapolation. Although the past decade has been characterized by significant development of the existing propane-MR technology, designs of future plants are likely based on a variety of processes. The purpose of this paper is to give an overview of the most likely developments in liquefaction technology for the coming few years. In the first part of this paper, the current global LNG market and expected growth in trade is described. In the second part, the past development of LNG plant technology is discussed, followed by a discussion of proposed improvements of large-scale liquefaction technology. The conclusions are summarized at the end of the paper.
Algerian gas, and abundant availability of gas in the Middle East and Nigeria will feed a steadily growing stream of gas and LNG to Europe. Demand growth for LNG will be especially strong in South Western Europe: Russian pipeline supplies to this part of Europe are less competitive in view of the large distance. Algeria will remain an important supplier, potentially also by swapping supplies from Trinidad. But Nigeria and again Qatar will increase their exported LNG volumes. The Qatari government has made public their plans for export schemes to Italy and the United Kingdom, thus it appears certain that part of Qatars new capacity will be diverted west. Egypt is emerging as a new exporter on the Mediterranean side of the Suez Canal. USA The United States market is changing insofar the growth of domestic production fails to keep up with the growth of gas demand. This situation has resulted in a seasonbound increase of the natural gas price in the US, thus creating a favorable price environment for LNG. However, permit processes for LNG terminals can be lengthy, which may temper growth beyond expansion of existing terminal facilities. Due to its vicinity, Trinidad will be the initial beneficiary from LNG demand growth in the US market. However, new market entries such as Venezuela on the East coast and Russia on the West coast - given recent progress with West coast LNG terminals may also supply the US market.
200 180 160 140 Export (Mtpa) 120 100 80 60 40 20 0 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year
Venezuela Russia Norway Egypt Oman Nigeria Trinidad Qatar Australia Malaysia Indonesia UAE Brunei Libya USA Algeria
Figure 1. Past and expected LNG exports 2002 is considered a year of relatively slow growth in global LNG trade, with an increased in traded volume of barely 4%. Nonetheless, the longer-term outlook for LNG looks robust, and an annual trade growth of 5 to 7 % is expected. Keeping in mind that no one can predict the future, above considerations lead to an export scenario as indicated in Figure 1. Recent newcomers such as Qatar, Trinidad and 3
Nigeria will evolve into major exporters alongside the traditional large scale LNG exporters Algeria, Indonesia and Malaysia. As plants in Egypt and Norway are also under construction, it is clear that a myriad of new LNG expansions will enter the market in the coming decade. A trend concurrent to this demand growth is that the cost of new-built LNG carriers has decreased significantly over the last decade, in line with the specific cost reduction of LNG export plants. The price of a 140,000 m3 carrier was approximately 200 million US$ in the early nineties, but has dropped to around 150 million US$ now. These trends mean that on the one hand, many new and larger LNG trains will have to be built; the challenge will be to reduce costs of liquefaction trains by both further economy of scale and genuine reduction of process costs. Continuing development and innovation of liquefaction technology will be crucial to realize this. But first the past development of LNG trains will be discussed in the next section.
However, costs are not the only driver. The restriction on CO2 production under the Kyoto protocol has made efficiency a second driver for considering new process options. The Oman LNG plant was built with a specific capital expenditure of 200 $/ton, but the plant was also designed for a high energy efficiency of 92%. All these developments have led to the current state of the art in LNG technology, which is the two-cycle propane-MR process. The 4 Mtpa LNG train currently in operation in Shell-advised Malaysia Tiga, is considered to be the currently existing size benchmark. The LNG trains in Shell-advised Oman LNG are thought to be the leading example of cost and energy efficiency. Innovation in liquefaction process and technology will be judged against these benchmarks of size, cost and efficiency, but also operability and reliability will be important parameters. Two areas can be identified where major improvements are possible: better integration of the various elements of the LNG value chain, and using large scale processes and new technology in LNG production plant design and implementation.
Another possibility is to overcome size limits of key equipment by constructing part of the refrigeration cycles in parallel. Although this increases equipment count, it also decreases the size of equipment and thus stimulates competition between equipment vendors: the largest size equipment can usually only be produced by one vendor. This GameChanger concept allows a plant size of 5.3 Mtpa, and significant cost savings. The GameChanger design also introduced electrical motors to drive the refrigeration cycle compressors. In certain situations, electrical motors are a more reliable and less bulky driver than Frame 7 gas turbines. The needed electricity will be generated by a gas turbine-driven power plant. As the redundancy of an additional gas turbine is needed to ensure reliable power generation (n + 1 concept), maintenance schedules can be reduced by servicing gas turbines one by one, not disturbing production. In short, electrical drive improves the availability of an LNG plant. 50 MW electrical motors are already available for direct drive applications and electric motor vendors are currently working on 65 MW electrical drivers. Before 2010, a 75 MW electrical motor, the equivalent power output of a Frame 7 gas turbine, will undoubtedly be developed. Electrical drive may also offer several schedule benefits, as the power plant and the liquefaction plant can be constructed separately. The EPC phase of a greenfield LNG plant takes on average 39 months from Final Investment Decision to Start up, while brownfield projects can be much faster. For a GameChanger plant a reduced schedule is possible due to the ease of installing smaller equipment. A new level of efficiency can also be realized via electric drive as the required power can be produced in a combined cycle power plant.
C3/MR
Specific Capex ($/tpa) 200
DMR
New liquefaction trains will not only have to be cost effective, but also flexible. As the American market will be a major market for growth, LNG producers will have to face the challenge of producing LNG to a lower specification of heating value. As a consequence, solutions have been developed in order to produce LNG with a reduced heating value. In a LNG production plant, deeper LPG extraction has been developed, while inert blend-in is a possible solution for LNG import terminals. It is clear that the drive to lower costs will continue via many different routes. As large trains are not appropriate in every market situation, solution providers will have to be able to offer LNG plant sizes ranging from 3 to 7 Mtpa. As indicated in Figure 2, Shell aims to maintain a portfolio of operable LNG plant solutions based on various different processes and covering the capacity range of 3-7 Mtpa. Rather than becoming standardized technology, a variety of LNG processes will play a role in liquefaction in the years to come.
Conclusion
Current trends suggest that international trade of LNG trade is set to grow by 5 to 7 % per annum until 2010. This would mean a global trade of LNG of around 190 million tons in 2010. Recent newcomers such as Qatar, Nigeria and Trinidad will grow into major exporters, but a myriad of other new exporters will also enter the market. The past decade was characterized by a strong decrease in the cost of carriers and increasing economy of scale for LNG plants. Strong innovation in upstream development and liquefaction process will be needed to achieve further reduction of costs. The past three decades have caused the two-cycle propane-MR process to become the workhorse of the industry. The latest completed propane-MR LNG trains show that liquefaction trains can be built up to 4 Mtpa, at a specific cost of 200 $/tpa and an energy efficiency of 92%. As the two-cycle propane MR process runs into equipment constraints, several important innovations are needed to increase capacity and/or bring costs down. Better conceptual alignment of tasks between upstream and downstream may bring total costs down in the supply chain. An example of closer upstream / downstream integration is floating LNG. Alternative processes based on mixed refrigerants or multiple cycles are being developed. Electric motors in the range of 50 to 75 MW are becoming alternative drivers for refrigeration cycle compressors. Electric drivers supplied from a combined cycle power plant will significantly lower CO2 emissions. As an alternative to scale increase, GameChanger methodology can bring cost down by stimulating competition and increasing availability. As a wider variety of liquefaction processes and train sizes becomes available, both offshore and onshore, a portfolio of LNG solutions crystallizes that covers the entire range of 3 to 7 Mtpa per train.