Capital and Operating Costs of LNG chain Exploration &
Treatment & Shipping Storage & Distribution Production
Liquifaction Regasification & Marketing 15-20% 30-45% 10-30%
15-25%
Slide 3
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
Slide 4
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%
Slide 5
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
Slide 6
Offshore Liquefaction Floating Production Storage and
Offloading (FPSO) http://braxtonlng.com/LNGFPSOs.aspx
Slide 7
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)
Slide 8
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
Slide 9
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
Slide 10
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
Slide 11
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
Slide 12
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
Slide 13
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
Slide 14
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
Slide 15
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
Slide 16
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
Slide 17
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
Slide 18
Offshore Regasification US to build two Offshore plants, one
already under construction Floating Storage and Regasification Unit
(FSRU)
Slide 19
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)
Slide 20
Questions?
Slide 21
US Natural Gas Imports Projected to 2030 (Pipeline vs. LNG)
Energy Information Administration, Annual Energy Outlook 2006
Slide 22
LNG demand as of 2003 Source: Gas Techology Institute, IEA 2003
Natural Gas Information
Slide 23
LNG Demand in 2025 EIA International Energy Outlook 2004
Slide 24
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
Slide 25
Wartsila Diesel, 2008 Liquefaction Terminals
Slide 26
Wartsila Diesel, 2008 Regasification Terminals
Slide 27
Regasification Plant in Sabine, TX to receive LNG from Qatar
(2009) ExxonMobile Corporation: Form 8-K, current report