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: nadalesd@pdvsa.com, gonzalezc@pdvsa.com, viloriaa@pdvsa.com

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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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 short-
term 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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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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Table 1. Major Project LNG announced

Nominal
Number Proposed
Plant Country Start up Year capacity
of Trains technology
(MTPA)
Pluto LNG Australia 2010 8.6 2 Shell C3-MR
Equatorial
EG LNG T2 2012 4.4 1 POCP
Guinea
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

Trinidad and
Atlantic LNG T5 2010 + 5.2 1 POCP
Tobago
Qatar Gas
Qatar 2010 + 7.8 2 APCI AP-X
3&4
Peru LNG Peru 2010 4.0 1 APCI C3-MR

Angola LNG Angola 2012 5.2 1 POCP

PDVSA-Linde
Venezuela LNG Venezuela 2014 + 14.1 3
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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Table 2. Liquefaction technology licensors by the number of cycles and refrigerants

REFRIGERANTS
N ° of cycles Pure Pure+Mixed Mixed
APCI (SMR)
1 - - Black & Veath (PRICO II)
BHP (cLNG)

Shell (C3-MR)
Shell (DMR)
2 - APCI (C3-MR)
Axens-IFP (Liquefin)
Shell (PMR)

3 Conoco Phillips (POCP) APCI (AP-X) Statoil-Linde (MFC)

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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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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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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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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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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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

PARAMETER SUBPARAMETERS
1 Economic 1.1 Investment costs
1.2 Operating costs
2 Constructability 2.1 Expandability plant
2.2 Area required per train
3 Maturity 3.1 Years of operation
3.2 Maximum capacity per train set
3.3 Installed capacity
3.4 Maximum capacity per train planned
4 Technical 4.1 Cryogenic heat exchanger type
4.2 Compressor Type / actuator
4.3 Specific Power
4.4 Refrigerant type
4.5 Number. refrigeration cycle
4.6 Availability of refrigerant
5 CO2 Emissions -- --
6 Flexibility gas composition -- --
7 Operability / Maintainability -- --
8 Commercial flexibility of the licensor -- --
9 Domestic Preferences
9.1 National Content
9.2 Sustainable Development

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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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Table 4. Scale of assessment and assignment of weights to the parameters

No. PARAMETERS WEIGHT SCALE OF ASSESSMENT
(%) 1 2 3
1 Economics 15
More than 230 between 225 and Minor than 225
1.1 Investment costs 0,60
US$/TPA 230 US$/TPA US$/TPA
More than 8 between 7 and 8 Minor than 7
1.2 Operating costs 0,40
US$/TPA US$/TPA US$/TPA
Standarization 1,00
2 Constructability 10
2.1 Expandability plant 0,80 Low Medium High
2 betwen 28000 and 2
2.2 Area required per train 0,20 More than 32000 m 2 Minor than 28000 m
32000 m
Standarization 1,00
3 Maturity 25
3.1 Years of operation 0,30 Less than 5 between 5 and 10 More than 10
Minor than 4 between 4 and 7 More than 7
3.2 Maximum capacity per train set 0,20
MTPA MTPA MTPA
Minor than 10 between 10 and 50 More than 50
3.3 Installed capacity 0,30
MTPA MTPA MTPA
Minor than 4 between 4 and 8 More than 8
3.4 Maximum capacity per train planned 0,20
MTPA MTPA MTPA
Standarization 1,00
4 Technical 15
Kettle or PFHE,
Kettle or PFHE,
4.1 Cryogenic heat exchanger type 0,35 Only SWHE combined with
or combinations
SWHE
Centrifugal or Axial/
Centrifugal/ Frame
4.2 Compressor Type / actuator 0,30 Centrifugal/Frame 5 Frame 6 o 7 or eletric
6 or 7
motor
More than between 12 and 14
4.3 Specific Power 0,05 Minor than 12 Kw/TPD
14Kw/TPD Kw/TPD
4.4 Refrigerant type 0,15 Pure Pure + Mixed Mixed

4.5 Number. refrigeration cycle 0,05 3 2 1

Some require
4.6 Availability of refrigerant 0,10 All require import Available on site
import
Standarization 1,00
between 0,30 and
More than 0,30 Minor than 0,28
5 CO2 Emissions 5 0,28 MT CO2/MT
MT CO2/MT LNG MT CO2/MT LNG
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
Some equipment
All will be
can be
9.1 National Content 0,40 All will be imported manufactured in the
manufactured in the
country
country
Considered,
9.2 Sustainable Development 0,60 Not considered Included as a premise
but premise without
Standarization 1,00
TOTAL 100

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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. PARAMETERS WEIGHT Technology 1 ... N Technology

(%) SCORE TOTAL SCORE TOTAL SCORE TOTAL

1 Economic 15 1.0 15 2.0 30

1.1 Investment Costs 0.60 1.0 9 ... ... 2.0 18
1.2 Operating Costs 0.40 1.0 6 ... ... 2.0 12
Standarization 1.00 ... ...
2 Constructability 10 2.6 26 2.0 20
2.1 Expandability plant 0.80 3.0 24 ... ... 2.0 16
Area required per
2.2 0.20 1.0 2 ... ... 2.0 4
train
... ... ... ... ... ... ... ...
TOTALS 100 250 ... .... .... 160

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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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.158-
163. 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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