Cost-Efficient SMR PRICO FLNG Technology
William Breckenridge, Vice President - India Oil & Gas Business Manager, Black & Veatch Consulting Private Ltd,

Floating LNG terminals are being hailed by many as a low-cost revolution in meeting growing gas demands. The number of oil and gas discoveries has steadily increased, but immense financial overheads have reduced their potential for exploitation, creating opportunities for floating LNG terminals - effectively one-stop offshore shops for low-cost liquefaction. Black & Veatch, which has been involved in many of the world’s LNG facilities, developed the PRICO® single-mixed refrigerant process for LNG that covers a broad range of LNG plant capacities. William Breckenridge, Vice President - India Oil & Gas Business Manager, Black & Veatch Consulting Private Ltd, details the company's SMR PRICO technology during Oil & Gas Expo 2014. Excerpts:

Global demand for LNG is about 250 MMPTA. Various forecasts have predicted that the demand will gain momentum with rise from 360 MMTPA to 460 MMTPA by 2020. Global imports of LNG are dominated by Asian markets like Japan, Taiwan, India, Korea, and China, constituting two third of the world demand. However, Europe markets being stagnant, they are not the major drivers for global LNG demand. LNG market is definitely continuing to grow and there is a need for more liquefaction projects. North America right now imports a very small amount of gas and expects to achieve self-sufficiency very soon. One of wild cards for demands in global LNG is development of transportation fuel and LNG will be utilised for transportation fuel.

LNG Market in India
Swelling population and economic growth have been driving factors for rise in demand for oil and gas. Geopolitical issues pose a serious threat to smooth supply of gas. Around 80 per cent of the country’s energy needs are fulfilled through imports due to lack of indigenous production in the country. LNG has emerged as a leading factor for satiating rising demand in India. Today, imported natural gas meets approximately 30 per cent of the natural gas domestic consumption. As per estimates, by 2020, India is likely to emerge as the third largest importer of LNG in the world.

Right now, the current LNG import capacity of India is 20 MMTPA. Petronet Dahej, Petronet Kochi, Shell Hazira & Dabhol are four LNG operating stations in India. It is projected that LNG import capacity is to be augmented by 50 MMTPA to 70 MMTPA by 2020. One of the challenges that India is likely to face in near future is the development of infrastructure. It is essential to build new terminals and development of new pipeline systems for moving the gas around so that it can reach final consumers. Price of natural gas/LNG is going to be big driver and help projects to be economical. There are many import land based terminals and FSRUs being planned for Indian market now.

LNG Market Drivers
Qatar is the largest supplier of LNG around the world making third of the world's largest LNG supplier. Middle East makes up for 8 per cent of LNG supplies in world and Australia is a big contributor to global LNG supplies. Currently, the global liquefaction facility stands at 280 MMTPA and the current global demand of LNG is about 250 MMPTA, which indicates almost complete utilisation of global liquefaction capacity. Australia is equipped with proper infrastructure for LNG facilities. So, several LNG projects are in progress in Australia. But, LNG projects in Australia have been challenged by project cost and delays. These challenges have led to think about some other alternative developments.

Currently North America has excess of gas driven by shale gas development. Shale Gas in USA is now trading at USD 3/4 mmbtu. But, there are doubts that whether this gas will be sustainable at USD 3 mmbtu in US markets. In US, many existing import terminals have been re-permitted to export gas. There are also many other liquefaction projects in development stage for carrying pipeline gas from US and exporting it to the other regions of the world. The challenge with North America is that markets in Asia and North America are quiet distant and even though the gas is cheap, shipping cost of this gas becomes like land based.

Base Load LNG Challenges
Base load LNG projects make up the majority of supply. The cost of building base load LNG projects is casual. These projects typically require massive gas fields to sustain them for 20 to 25 years of design life. So, these projects are limited to major international global companies which are capable of supplying LNG in the market. Though small gas producers have mechanism to get LNG to the market economically, infrastructure development for building liquefaction facility and large infrastructure development cost associated with them make these projects unviable. The challenges that the industry is facing right now, are lengthy project schedules, high cost, and economies of scale. These factors have really stretched limits of these base load projects upward, requiring billions of dollars investments. These projects require large gas fields with proven reserves that are diminishing. So, gas supplies don't have huge untapped resources. In such a scenario, FLNGs are the most feasible option for the global LNG markets.

Floating Liquefied Natural Gas Projects
Floating liquefaction facilities have a number of advantages over land based facilities. These projects can typically build in less than three years, whereas base load LNG projects are taking around four to five years for development. The capital cost for developing FLNG projects is significantly low. FLNG projects can be built in controlled environments like shipyards and carefully managed. They can bring solutions to stranded gas. Lot of gas around the world is currently in flared stage associated gas with well production with the volume destructed to be produced economically. Floating LNG is the relatively new concept. Black and Veatch are currently executing Shell project, Petronas project, and Examar project, which are currently in construction phase.

Black & Veatch's Examar project is expected to be operational by first quarter of 2015. There are many projects under various stages of development . A typical FLNG project takes around eighteen months to two years for the process of developing project fieldwork. After that the owner can take the final investment decision. Once that decision is made, then the project can proceed rapidly on two and half years cycle which is much quicker than base load project.

While taking into consideration Floating LNG projects, Black & Veatch has categorised these projects into ship based projects and barge LNG project. In ship based LNG projects, the liquefaction facility can be built on dockside of ships and ship can produce LNG in offshore or open environment with capacity typically in the range of 2 to 4 MMTPA.

Barge LNG concept is designed for open wharfs. These projects are cheaper to build and have shorter schedule. These projects are typically of smaller capacities around 0.5 MMTPA to 2.8 MMTPA.

Black & Veatch has been working on the development FLNG concept since 1990s with development of standard designs for barge solution and Ship based designs. Such offshore floating LNG (FLNG) production facilities reduce the capital expenditure (capex) per ton of LNG produced compared to base load LNG terminals, whose capex is generally higher. The cost reduction is largely due to the elimination of base load facilities and long, under-sea pipelines, which are required for base load LNG production terminals.

Black and Veatch's technology has been vetted for various organisations like DNV, BV, ABS etc. The first step in designing LNG barge is just like the liquefaction technology. The criterion for ship based project is much different from traditional launcher project. These projects are very simple to maintain and build as compared to the onshore LNG projects. They also have the ability to handle changing feed gas composition. One of the important aspects of ship based LNG project is that they can be remobilised to an entirely different gas field.

SMR PRICO Technology
FLNG also carry some unique challenges with regard to operational demands and feedstock variability. A solution to these challenges is Black & Veatch's PRICO liquefaction technology, which contains the elements required to meet the needs of offshore LNG producers. Operational flexibility—specifically, the ability of PRICO single mixed-refrigerant (SMR ) units to handle a wide range of gas pressures, compositions and production rates—provides owners with a wide range of feed gas options and commercial flexibility. Similarly, a low equipment count results in a smaller footprint and lighter weight, both of which are valuable in the offshore market, where footprint is limited and where weight drives costs and schedule.

The SMR process is the workhorse of the LNG industry and is used in the vast majority of liquefaction installations. This process depends on a single mixed-refrigerant system to perform liquefaction. After treatment, the feed gas is totally liquefied. Only a small amount of flash gas is produced, as the LNG is let down to storage. LNG yields of over 98 per cent are typical, and because the system uses a mixture of refrigerant components and can be tailored to the specific application, it is the most flexible of all the liquefaction systems.

The technology can be designed to fit the available utility systems with choices in air or water for interstage cooling, as well as a choice among motor, gas turbine or steam turbine drivers. This flexibility allows the owner to select the best options for its specific application. The proprietary SMR liquefaction plants have been designed in a wide range of capacities, from 0.1 million tons per year (MMtpy) to 1.5 MMtpy in a single train. When larger production rates or operational flexibility for capacities are required, multiple trains can be used to provide the design that best fits the client's needs and commercial requirements.