moving natural gas across oceans - · pdf filemethane and volatile hydrocarbons. for more...

50 Oilfield Review

Moving Natural Gas Across OceansS. Andrew McIntoshBP Trinidad and TobagoPort of Spain, Trinidad

Peter G. NobleJim RockwellConocoPhillipsHouston, Texas, USA

Carl D. RamlakhanAtlantic LNG Company of Trinidad and TobagoPoint Fortin, Trinidad

For help in preparation of this article, thanks to Michelle Foss,University of Texas, Austin; and Patricia Ganase, Atlantic LNG,Point Fortin, Trinidad.Coselle is a mark of Sea NG Corporation. Invar is a mark ofImphy Alloys. Moss is a mark of Moss Maritime. OptimizedCascade is a mark of ConocoPhillips.

Significant natural gas reserves are located in remote areas that lack a local market

and where pipeline transport may not be economical. Increasingly, that gas is

converted to the liquid phase and sent to import terminals around the globe. Liquefied

natural gas is at the forefront of growth in low-emission, clean-energy sources.

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Summer 2008 51

Natural gas has come a long way since 390 BCE,when the Chinese used it in the manufacture ofsalt. In the 2,400 years since then, its scope hasexpanded substantially—from simple saltproduction to transport across oceans in theform of liquefied natural gas (LNG). In the past100 years, the use of natural gas has grown froma local fuel to a regional resource and is nowpoised to become a global commodity.

Although the early Chinese, Romans andGreeks made limited use of gas as an energysource, wider use did not occur until about 1800with the introduction of town gas derived fromcoal for lighting.1 Demand for natural gas grewduring the early part of the 20th century, but itsuse remained primarily local until soon afterWorld War II. Engineering technology developedat that time was used to construct safe and reliable long-distance pipelines for naturalgas transport.

As natural gas evolved from local to regionaluse, applications expanded from home fuel topetrochemical feedstock to electric power

generation. Gas consumption for power gen era -tion surged during the last 25 years with theintroduction of efficient gas turbines and therecognition of the inherent environmentalbenefits associated with natural gas. Today,electric power generation accounts for morethan half of the growth in gas demand. The USEnergy Information Administration has esti -mated that world gas consumption will grow by70% between 2002 and 2025.2

Although natural gas consumption isexperiencing rapid growth, gas finds have notalways been looked upon favorably by theirdiscoverers. During much of the 20th century,natural gas markets were constrained by lowprices and oversupply. Gas that could not be soldwas flared or reinjected in gasflood projects todisplace oil or maintain reservoir pressure.Those attitudes have changed because ofincreased emphasis on pollution control.

Natural gas is the cleanest burning fossil fuel.Potential emission levels of sulfur, nitrogen andparticulates from natural gas are orders of

magnitude lower than are those from oil or coal.Although refiners and power plants can clean upmuch of the emissions from oil and coal, theyspend significant energy and capital to do so. Inaddition to low pollutant emissions, combustionproducts from natural gas contribute signifi -cantly less greenhouse-gas emissions. Naturalgas combustion emissions of carbon dioxide[CO2] are 40% less than those of oil and 80% lessthan coal, based on energy content.3

In recognition of its favorable emissioncharacteristics, natural gas has been called the“fuel of the future,” and its use is now equivalent

1. The Chinese transported gas in bamboo pipes fromshallow wells to gas-fired brine evaporators for makingsalt. For more information: Kidnay AJ and Parrish WR:Fundamentals of Natural Gas Processing. Boca Raton,Florida, USA: Taylor & Francis Group, 2006.Town gas is a flammable vapor made by heating coalwith steam. It is a mixture of carbon monoxide, hydrogen,methane and volatile hydrocarbons. For more information:http://www.123exp-technology.com/t/03884354486/(accessed June 8, 2008).

2. Tusiani MD and Shearer G: LNG. Tulsa: PennWellPublishing Company, 2007.

3. “Natural Gas and the Environment,” http//www.naturalgas.org/environment/Naturalgas.asp (accessed May 3, 2008).


to coal as an energy source.4 This status must betempered by the disparity between where naturalgas is found and where it is consumed (below).5

On the resource side, 60 to 70% of worldwidenatural gas reserves are in six countries with overhalf of that in Iran and Russia.6 Among consumingareas, the United States and the European Unionaccount for nearly 50% of gas use.7 In addition tothe mismatch between reserve and consumptionlocations, about 60% of reserves are consideredstranded.8 Stranded natural gas reserves have no local market, and transport by pipeline is not economical.

Locations where stranded gas cannot bemoved by pipeline present a limited number ofalternatives. One option is gas-to-liquids (GTL)technology in which natural gas is converted tohigh-quality liquid hydrocarbons by the Fischer-Tropsch reaction.9 The basic chemistry for thisprocess was developed in Germany in the earlypart of the 20th century and has been the focusof significant research to improve the catalystsand reactors used. Although several GTL sitesare in operation, the technology is complex,plants are expensive, and the stranded gasvolumes used as feedstock must be large enoughto justify the capital expenditure.

Another option is marine transport in theform of compressed natural gas (CNG).10 CNG isa solution for connecting small gas reserves withsmall markets over intermediate distances.Although GTL technology and CNG will answerneeds in some markets, currently the most prac -tical solution for moving large volumes of naturalgas over long transoceanic distances is LNG.

The reason for liquefying natural gas issimple. At atmospheric pressure, as natural gasis cooled to form LNG, its volume decreases by afactor of about 600. This decrease in volumemakes it economically attractive to liquefy andtransport gas from large stranded fields todistant consumers. What distinguishes LNG frommost other oilfield liquids is that it is cold—near−160°C [−256°F] at its boiling point and atatmospheric pressure.11 This liquid form ofnatural gas is pumped to specially designedmarine carriers for transport to terminals thatare often thousands of miles away. The chain ofliquefaction plants and import terminals indifferent parts of the globe linked by seagoingtransport is referred to as the LNG value chain.12

The costs related to each part of the valuechain are high, and in the past, LNG projectswere associated only with long-term contracts.13

Higher energy prices are changing the LNGmarket. The emergence of spot trades andmovement of cargos to distant rather than closerimport terminals indicate that LNG has becomea global commodity.14

The focus of this article is LNG—how it isliquefied, transported and stored until it isregasified for the consumer. Examples demon -strate the technology involved at each step in theLNG chain, including steps taken to ensure LNGsafety. Also discussed is the impact of largerliquefaction plants and vessels on the way theindustry views terminal location.

Liquefaction—The First StepLiquefaction has a long history. Although theBritish chemist and physicist Michael Faraday isbest known for his work in electricity, during theearly part of the 19th century he also liquefiednatural gas.15 This work was followed by that ofKarl von Linde and David Boyle who built thefirst practical refrigerators in the 1870s.16 In thelast part of that century, Linde developed aprocess to make commercial quantities of liquidoxygen and nitrogen.

52 Oilfield Review

> Natural gas reserves and consumption. The largest natural gas reserves are primarily located in the Russian Federation and the Middle East. TheRussian Federation has proven reserves of 44.7 trillion m3 [1,577 Tcf], while reserves in Iran, Qatar, Saudi Arabia, the UAE and the USA total 72.6 trillion m3

[2,563 Tcf]. Smaller but still significant reserves are found in Iraq, Nigeria, Venezuela, Algeria and Indonesia. These proven reserves equal 21.1 trillion m3

[745 Tcf], while the remaining global reserves of 39 trillion m3 [1,377 Tcf] are spread across 42 countries. The largest natural gas consumer is the UnitedStates at 653 billion m3/yr [23.1 Tcf/yr] followed by the Russian Federation at 439 billion m3/yr [15.5 Tcf/yr] and Iran at 112 billion m3/yr [3.9 Tcf/yr].

Iraq Iran

SaudiArabia

UAE

Canada

USA

Venezuela

UK Germany

Italy

Algeria

Nigeria

Russia

JapanChina

Indonesia

Qatar

Proven natural gas reserves,

5 trillion m3

Annual natural gas consumption,

70 billion m3


Summer 2008 53

The work of these early pioneers in gas lique -faction led to an interest in liquefying natural gasas a method for storing it compactly. The firstLNG facility was constructed in 1912 in WestVirginia, USA, and the first commercial plant wasbuilt in Cleveland, Ohio, USA, in 1941.17 EarlyLNG plants such as the Cleveland facility wereused for peak shaving. Utilities use peak shavingto supplement the supply of natural gas duringperiods of high demand.18 During periods of lowdemand, the LNG reserves are replenished.

Liquefaction plants built to process gas fromstranded natural gas reserves are termed

baseload plants and now constitute the bulk ofLNG capacity. One of the first baseload plantswas built in 1969 by ConocoPhillips at Kenai,Alaska, USA, to process natural gas from fields atCook Inlet. LNG from this plant is still beingexported to the Japanese power market.

Since construction of the Kenai plant, LNGliquefaction capacity has grown steadily, but notalways smoothly. Plans generated during the oilcrises of the 1970s were abandoned during theglutted markets of the 1980s. The currentbackdrop of high prices, tight supply and desirefor clean fuels has spurred growth in LNG

liquefaction capacity. In the past decade,capacity has doubled from 86 million tonUK/yr[94.8 million tonUS/yr] to about 183 milliontonUK/yr [201.7 million tonUS/yr], andliquefaction plants can be found in all parts ofthe world (above).19

Despite their cost and complexity, lique -faction plants are simply large refrigerators, andrefrigeration is at the heart of the LNGliquefaction process. Enough heat must beremoved from the natural gas to take it fromambient conditions to about −160ºC. In a closed-loop refrigeration process, a refrigerant

4. Fesharaki F, Wu K and Banaszak S: “Natural Gas: TheFuel of the Future in Asia,” http://www.eastwestcenter.org/fileadmin/stored/pdfs/api044.pdf (accessed June 9, 2008).Makogon YF and Holditch SA: “Gas Hydrates as aResource and a Mechanism for Transmission,” paperSPE 77334, presented at the SPE Annual TechnicalConference and Exhibition, San Antonio, Texas,September 29−October 2, 2002.

5. “Statistical Review of World Energy 2008”,http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622 (accessed July 11, 2008).

6. The six countries are Russia, Iran, Qatar, Saudi Arabia,the UAE and the USA. For more information: Kidnay andParrish, reference 1.

7. “International Energy Outlook 2007,” http:www.eia.doe.gov/oiaf/ieo/nat_gas.html (accessed May 21, 2008).

8. “A Dynamic Global Gas Market,” Oilfield Review 15, no. 3(Autumn 2003): 4−7.

9. “Turning Natural Gas to Liquid,” Oilfield Review 15, no. 3(Autumn 2003): 32−37.

10. Stenning S and Mackey T: “CNG Opens New Markets,”Fundamentals of the Global LNG Industry. London:Petroleum Economist (2007): 67−68.

11. The normal boiling point of pure methane is −162°C[−259°F]. Pipeline gas destined for LNG production mustbe treated to remove impurities that might freeze duringliquefaction. Residual amounts of hydrocarbons andother gases remaining after pretreatment leave LNGwith a boiling point slightly above that of pure methane.For more information: http://encyclopedia.airliquide.com/Encyclopedia.asp?GasID=41 (accessed June 11, 2006).

12. Tusiani and Shearer, reference 2.13. The total cost for all components in the LNG chain (gas

reserve development, liquefaction, vessels and importterminal) is about US $4 to 6 billion.

14. Davis A and Gold R: “Surge in Natural-Gas Price Stokedby New Global Trade,” The Wall Street Journal CCLI,no. 91, April 18, 2008.

15. “Brief History of LNG,” http://www.beg.utexas.edu/energyecon/lng/LNG_Introduction_06.php (accessedMay 16, 2008).

16. “Karl von Linde Biography (1842−1934),” http://www.madehow.com/31inventorbios/31/Karl-von-Linde.html(accessed May 15, 2008).

17. Foss MM: “Introduction to LNG,” http://www.beg.utexas.edu/energyecon/lng/Documents/CEE_Introduction_To_LNG-Final.pdf (accessed May 4, 2008).

18. Peak-shaving LNG plants combine three elements—liquefaction, storage and regasification. In 2004, the USAhad 59 peak-shaving plants. For more information:Kidnay and Parrish, reference 1.

19. Chabrelie MF: “LNG, The Way Ahead,” Fundamentals ofthe Global LNG Industry. London: Petroleum Economist(2007): 10–14.

> LNG liquefaction plants. Baseload liquefaction plants are found on every continent except Antarctica and cluster in regions with large stranded gasreserves—North Africa, the Middle East and Australasia. There are 20 baseload LNG liquefaction plants in operation with four of those undergoingexpansion. Six baseload plants are in the construction phase. Plants at Snǿhvit in Norway and Sakhalin in Russia illustrate a trend toward operation inharsh, arctic environments.

In operation

Under construction

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com pound is used to cool a natural gas or someother fluid.20 The refrigerant must pass throughseveral stages before returning to the startingpoint and beginning the process again. Thesestages are called refrigeration cycles and aremost often illustrated on Mollier charts.21 Sincerefrigeration is invariably accompanied by alarge energy input, cycles for industrial refri -geration try to approach the ideal Carnot cycle asclosely as equipment and operating procedureswill allow.22 Many oilfield operations use a simplevapor refrigeration cycle with Joule-Thomsonexpansion (below).23

While the Joule-Thomson cycle is mostappropriate for simple refrigeration tasks, it hassometimes been used to produce LNG commer -cially. For example, an isolated utility nearVancouver, British Columbia, Canada, built a smallLNG plant 64 km [40 mi] away to supply fuel forpower generation.24 Trucks moved LNG betweenthe two facilities. At the plant, the inlet gas wascompressed to 20.7 MPa [3,000 psi] beforeundergoing two stages of irreversible Joule-

Thomson expansion—first to 2.1 MPa [300 psi],then to a final gauge pressure of 0.07 MPa [10 psi]to produce LNG. For this small facility, the designsimplicity of the Joule-Thomson expansion out -weighed the thermo dynamic inefficiency of anirreversible process. In contrast, current commer -cial LNG plants seek to minimize the temperaturedifference between the natural gas being cooledand the refrigerant. This is accom plished bytailoring the refrigerant and employing more thanone stage. These considerations overwhelm anydesign simplicity in the Joule-Thomson expansion.

LNG liquefaction plants are large, complexprocessing facilities. These plants include threeseparate areas—feed-gas cleanup, liquefactionand storage plus vessel loading. Because of theextremely low temperatures present in LNGproduction, typical pipeline gas must undergoextensive cleanup before liquefaction. Impurityremoval in an LNG plant is designed to addressthree potential problems.25 First, contaminantssuch as water and carbon dioxide are aggres -sively removed to prevent freezing during

liquefaction, which would plug lines and otherequipment. Secondly, nitrogen can raise thepotential for stratification in LNG tanks, and itsconcentration is typically reduced to less than1 mol%. Finally, mercury is removed to a levelbelow 0.01 µg/m3. Higher levels of mercurycorrode the aluminum in liquefaction heatexchangers, ultimately causing failure.

Following cleanup, the treated natural gasenters the liquefaction section of the plant.Design of liquefaction processing is driven by adesire to approach the ideal Carnot-engineefficiency. That efficiency of 100% occurs whenthe process is entirely reversible and the coolingcurve of the material being refrigerated and theheating curve of the refrigerant correspond toone another exactly.26 Although this level ofefficiency can be achieved only for an ideal case,current LNG plants have made significantprogress in approaching it. Keys to the efficiencyof these plants are found in three areas—refrigerants, compressors and heat exchangers.

Today’s LNG plants offer two generalrefrigerant alternatives—mixed refrigerant andpure-component cascade.27 For example, the C3-MR process—developed by Air Products &Chemicals—uses propane and a multi componentrefrigerant to liquefy treated natural gas to LNGin two refrigerant cycles. An alternative tech -nology—the ConocoPhillips Optimized Cascadeprocess—includes three pure-component refrig -erant cycles to progressively cool and liquefy thenatural gas (next page). Each approach hasadvantages and disadvantages, and the ultimatechoice depends heavily on customer and siterequirements. In 2006, about 80% of worldwideLNG capacity employed the mixed refrigerantprocess, with the remaining 20% using pure-component cascade liquefaction.

If liquefaction is the heart of the LNGprocess, then compression and the associatedgas turbine drivers provide the muscle. Bothcentrifugal and axial compressors are used tocompress the refrigerant.28 Mixed-refrigerantcompressors must handle high capacities at lowtemperatures and often use axial compressors.On the other hand, the ethylene refrigerant—used in the ConocoPhillips cascade process—might require a centrifugal compressor.Compressor type and design depend on theparticular refrigerant and service. Centrifugalcompressor efficiency for LNG plants built in the1970s was nearly 70%. Current efficiencies forcentrifugal compressors in the same service are80% or greater.29 In current plants, thesecompressors are driven by gas turbines, and LNG

54 Oilfield Review

> Vapor refrigeration cycle. A common use of Joule-Thomson expansion in the oil industry is thesingle-stage propane refrigeration cycle. This cycle has four components—compressor, condenser,expansion valve and evaporator. Operation of this system consists of four steps that can be visualizedon a propane Mollier pressure-enthalpy diagram. The cycle begins at Point A with propane as asaturated vapor at atmospheric pressure and −40°C [−40°F]. The propane vapor is compressed to anabsolute pressure of 1.62 MPa [235 psi] and 93°C [200°F] at Point B. Condensation of the vapor fromPoint B at constant pressure to a 49°C [120°F] saturated liquid at Point C takes place by heatexchange with an external coolant—typically air. The propane liquid at Point C is expanded through aJoule-Thomson valve arriving at Point D as liquid-vapor mix at −40°C and atmospheric pressure. Thefinal step takes the propane liquid-vapor mix at Point D through an evaporator where it loses its latentheat by cooling an external stream. The propane ends where it began, as a saturated vapor at Point A.

Pres

sure

, psi

Enthalpy, Btu/lbm

–100 –50 0 50 100 150 200 250 300 350

100

200

80

60

40

20

10

8

6

4

2

1

400

600

800

1,000

AD

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Sat

urat

ed li

quid

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urat

ed v

apor

Critical point

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20. Refrigerants vary depending on the nature of the systembeing cooled. Propane is widely used as a refrigerant inoilfield applications, while various hydrofluorocarboncompounds are used as living-space refrigerants.

21. “Mollier Charts,” http://www.chemicalogic.com/mollier/default.htm (accessed June 26, 2008).

22. The Carnot cycle for a heat engine consists of fourstages (two isothermal and two adiabatic). Since all ofthe processes in a Carnot cycle are reversible, there isno change in entropy, making it the most efficient cycle.Thermodynamic cycles—such as the Carnot cycle—thatcan only be approached but never actually realized areoften termed “ideal” cycles. For more information:http://hyperphysics.phy-astr.gsu.edu/hbase/thermo/carnot.html (accessed June 10, 2008).

23. In a Joule-Thomson expansion, a refrigerant isirreversibly expanded through an orifice or throttlingvalve. For more information: Kidnay and Parrish,reference 1.Smith JM and Van Ness HC: Introduction to ChemicalEngineering Thermodynamics. New York City: McGraw-Hill Company, 1975.

24. Blakely R: “Remote Areas of Canada Can Now BeServed by Trucked LNG,” Oil & Gas Journal 66, no. 1(January 1968): 60−62.

25. Kidnay and Parrish, reference 1.Tusiani and Shearer, reference 2.

> LNG liquefaction process alternatives. LNG may be liquefied using amulticomponent refrigerant in a single cycle or using several purecomponents in a cascade arrangement. The multicomponent or mixedrefrigerant approach is typified by the Air Products & Chemicals C3-MRprocess (top left ). Dry, treated natural gas is precooled to about −30°C[−22°F] by propane to remove liquid propane and other natural gas liquids.The precooled gas is sent to the main cryogenic heat exchanger where it is condensed and then flashed to produce LNG at −160°C. After heatexchange to produce LNG, the mixed refrigerant—typically nitrogen,methane, ethane, propane, butane and pentane—is sent to compression to complete the cycle. This process can achieve an average approach—

the temperature difference between refrigerant and material beingcooled—of about 8.3°C [15°F] (top right ). The ConocoPhillips OptimizedCascade process uses three separate pure-component refrigerant cyclesto produce LNG (bottom left ). Similar to the mixed refrigerant process, thecascade process first uses a propane refrigerant loop to remove naturalgas liquids from the treated natural gas. That material is then subjected totwo more refrigerant cycles—ethylene and methane—that produce theresulting LNG. Each refrigerant loop consists of independent compressors,expansion valves, condensers and evaporators. This process can achievean average approach of about 6.7°C [12°F] (bottom right ).

100

0

–100

–200

–3000 20 40 60 80 100

Enthalpy change, %

Gas being liquified

Refrigerant

100

0

–100

–200

–3000 20 40 60 80 100

Enthalpy change, %

Gas being liquified

Refrigerant

Heavy

Compressor

Mixed refrigerant

Expander

Propane

Air-fin heatexchanger

Separator

Compressor Turbine Compressor Compressor Turbine


Light

LNG

Heavy-component removal

Natural gas liquids

Trea

ted

natu

ral g

as

Plant fuel

LNG

Air Products C3-MR Mixed-Refrigerant Process

EthylenePropane


Air-fin heatexchanger Plant fuel


LNG

Trea

ted

natu

ral g

as

Methane

Natural gas liquids

LNG

Vapors fromvessel loading

ConocoPhillips Optimized Cascade Process

Compressors Turbines TurbinesCompressors Compressors Turbines

Heavy-component removal

26. These curves are often called duty curves and plottemperature versus enthalpy (heat content). For more information: Ransbarger W: “A Fresh Look atProcess Efficiency,” LNG Industry (Spring 2007),http://lnglicensing.conocophillips.com/publications/index.htm (accessed July 26, 2008).

27. Although there are several variants, the majority ofmixed refrigerant LNG plants use the Air Products &Chemicals technology. Similarly, ConocoPhillipstechnology dominates use of pure-component cascade.

28. “Liquefied Natural Gas—Enhanced Solutions for LNGPlants,” http://www.geoilandgas.com/businesses/ge_oilandgas/en/downloads/liquified_natural_gas.pdf(accessed June 13, 2008).

29. Ransbarger, reference 26.


production capacity is directly related to thepower that these turbines can deliver. A plantbuilt in 2000 might use gas turbine units thatenabled LNG production of 3.3 million tonUK/yr[3.7 million tonUS/yr], while current large gasturbines are associated with capacities of almost7.8 million tonUK/yr [8.6 million tonUS/yr].30 Likecompressors, the turbines used in LNG plantshave seen an increase in cycle efficiency—from28 to 40% during the last 30 to 40 years.

The final key to efficient natural gas lique -faction is effective heat transfer. Specializedheat transfer equipment ensures that thetemperature difference between refrigerant and

the natural gas being cooled is minimized. Mostof the heat transfer equipment used in currentLNG liquefaction plants has grown out of otherefforts in the cryogenics industry. Generally,three types of specialized heat exchangers areused in LNG refrigeration circuits—plate-fin,spiral-wound and core-in-kettle.31

Aluminum plate-fin exchangers—used in thecascade process—consist of alternating layers offins and plates enclosed in a rectangular vesselshell.32 Compared with comparable carbon orstainless-steel equipment, plate-fin exchangersare 20% of the size and 10% of the weight. Incontrast, a spiral-wound exchanger is the

primary heat exchange device used to produceLNG in the mixed refrigerant process.33 Small-diameter tubing is wound around a central coreand this tube assembly is inserted in a pressurevessel shell (below left). Both the cascade andmixed refrigerant processes may use the thirdtype of exchanger—core-in-kettle. This exchangeris usually used in propane heat exchange andconsists of a plate and fin-type block placed withina large horizontal cylindrical shell.34

It is typical for LNG plants to have multipleprocessing lines, or trains, for liquefying naturalgas. This allows for the planned expansion of thefacility. The output from single or multiple trainsis sent to insulated storage tanks nearby wherethe LNG remains until a vessel arrives for loadingand shipment to distant terminals.35

Caribbean Gas Moves GloballyThe LNG plant at Point Fortin, Trinidad, uses themodern liquefaction technology described above.Large natural gas reserves lie offshore theCaribbean island of Trinidad, and over the past50 years this gas has been used for electricitygeneration, methanol and ammonia production—and now LNG export. The Atlantic LNG Companyof Trinidad and Tobago was formed in 1995 todevelop an LNG plant at Point Fortin.36

The Atlantic plant at Point Fortin wasconstructed on 838,000 m2 [207 acres] ofreclaimed land to process gas from offshore gasfields southeast and north of Trinidad (next page,top left). The plant began operation in 1999 witha capacity of 3.0 million tonUK/yr [3.3 milliontonUS/yr] of LNG and 950 m3/d [6,000 bbl/d] ofnatural gas liquids. Following the success of theinitial operation, expansion projects werelaunched in 2000 and 2002 to increase the plantcapacity from one to four trains capable ofproducing a total of 14.8 million tonUK/yr[16.3 million tonUS/yr] of LNG and up to3,820 m3/d [24,000 bbl/d] of natural gas liquids.37

In 2007, Atlantic LNG Company had the seventhlargest LNG production capacity in the world andwas the largest supplier of LNG to the USA (nextpage, top right). In the past, most of thecompany’s product moved to import terminals inthe USA, but that is changing. Because of highergas prices in Europe, significant productshipments are now sent to terminals in Spain. Asa consequence, Atlantic LNG Company is playinga key role in Atlantic basin gas pricing.38

All Atlantic LNG trains at Point Fortin usethe ConocoPhillips Optimized Cascade process.When the first train was built in 1999, it was the

56 Oilfield Review

> Spiral-wound and plate-fin heat exchangers. Mixed refrigerant liquefaction uses a spiral or coil-wound design (left ) as the main cryogenic heat exchanger. In this device, small-diameter tubes arewrapped around a center core—called the mandrel—in alternating directions. In the design shown,the fluid in the tubes enters at the bottom and moves upflow before leaving at the top. The stream onthe vessel side passes downflow over the tubes yielding counterflow heat exchange between thefluids. Each tube terminates in tube sheets that are part of the cylindrical shell. For LNG service, an all-aluminum design is typical, and heat transfer surface/volume ratios of 50 to 150 m2/m3 [15.2 to45.6 ft2/ft3] can be achieved. In contrast, plate-fin exchangers (right ) are typically used in cascadeliquefaction. A plate-fin exchanger uses layers of corrugated sheets or fins separated by metal plates.Hot and cold streams flow through alternating layers, and heat is transferred from the fin of one layerto the separating plate and then to the set of fins in the next layer—and finally to the other fluid.These exchangers are made as an all-brazed and welded pressure vessel with no mechanical joints.Similar to spiral-wound exchangers, plate-fin units in LNG service are typically aluminum and are verycompact—surface/volume ratios of 300 to 1,000 m2/m3 [91.5 to 305 ft2/ft3] can be achieved.

Tube stream out

Tube stream in

Vesselstream out

Vesselstream in

Mandrel

Fins

Parting sheets

Stream A in

Stream B out


Summer 2008 57

first single-train baseload plant built in the prior30 years.39 That first train and all subsequenttrain designs at the Point Fortin plant use threepure-component refrigeration cycles—propane,ethylene and methane. Heat exchange in therefrigeration units is carried out by plate-fin

exchangers and large gas turbines drive thecompressors. Each LNG train at Point Fortin hasparallel pairs of gas turbines and compressors.This allows each train to continue to functioneven with the loss of an individual compressor or turbine.40

Following liquefaction, the LNG produced atPoint Fortin is sent to storage tanks to awaitshipment by marine transport.41 The marinejetties at Point Fortin can accommodate LNGvessels up to 145,000 m3 [912,000 bbl], asignificant increase compared with the firstmarine LNG shipment of 50 years ago.

30. “Liquefied Natural Gas,” http://www.geoilandgas.com/businesses/ge_oilandgas/en/downloads/liquified_natural_gas.pdf (accessed June 11, 2008).

31. LNG plants may also use air-fin and shell and tubeexchangers, which are common in the oil field and inrefining. These exchangers are not discussed in this article.

32. Markussen D: “All Heat Exchangers Are Not CreatedEqual,” The Process Engineer (September 2004),http://www.chart-ind.com/literature_library_forall.cfm?maincategory=5 (accessed July 26, 2008).Markussen D: “Hot Technology for Lower Cost LNG,”Hydrocarbon Engineering 10, no. 5 (May 2005): 19–22.Markussen D and Lewis L: “Brazed Aluminum Plate FinHeat Exchangers—Construction, Uses and Advantagesin Cryogenic Refrigeration Systems,” presented at theSpring Meeting of the American Institute of ChemicalEngineers, Atlanta, Georgia, USA, April 10−14, 2005.

33. “Looking Inside…Spiral Wound Versus Plate-Fin HeatExchangers,” http://www.linde-plantcomponents.com/documents/looking_inside_PFHE_SWHE.pdf (accessedJune 15, 2008).

34. Core-in-kettle is a specialized application of plate-fintechnology.

35. LNG storage tanks at the liquefaction plant are similar tothe storage tanks at import terminals. Technology usedin these specialized tanks will be covered in a followingsection on import terminals.

36. Shareholders of Atlantic LNG Company include BP,British Gas, Repsol, Suez LNG and the National GasCompany of Trinidad and Tobago.

37. Trains are parallel production lines for LNG. For moreinformation: Hunter P and Andress D: “Trinidad LNG—The Second Wave,” presented at Gastech 2002, Doha,Qatar, October 13−16, 2002.

Diocee TS, Hunter P, Eaton A and Avidan A: “AtlanticLNG Train 4, The World’s Largest LNG Train,” presentedat LNG 14, Doha, Qatar, March 21−24, 2004.

38. Davis and Gold, reference 14.39. Redding P and Richardson F: “The Trinidad LNG Project–

Back to the Future,” LNG Journal (November−December 1998), http://lnglicensing.conocophillips.com/publications/index.htm (accessed July 26, 2008).

40. Although shutdown of an individual compressor orturbine would significantly reduce LNG productioncapacity, the train would avoid heating to ambientconditions and continue to operate until repairs were made.

41. LNG storage tanks at the liquefaction location are similarto the storage tanks at import terminals. Technologyused in these specialized tanks will be discussed in asubsequent section on import terminals.

> Atlantic LNG Company gas supply. The primary natural gas fieldssoutheast of Trinidad are about 55 km [34 mi] offshore and 110 km [68 mi]from Point Fortin. A complex system of subsea lines brings this gasonshore. For example, three lines —of 122-cm [48-in.], 91-cm [36-in.] and76-cm [30-in.]—take the gas from the Cassia area to Galeota Point andBeachfield onshore. Two 61-cm [24-in.] lines take gas from the Dolphinarea via an intermediate point at Poui to points onshore. Several otherlines connecting fields at Osprey, Teak, Mahogany, Flamboyant, Pelicanand Kiskadee/Banyan to the offshore pipeline system (not shown) roundout the picture. Multiple overland gas lines connect the onshorereceiving facilities with the Point Fortin LNG plant. Gas arrives from thenorthern Hibiscus field through a 61-cm underwater line. The northernfields lie about 32 km [34 mi] offshore and more than 83 km [52 mi] fromPoint Fortin.

A T L A N T I C O C E A N

C A R I B B E A N S E A

TOBAGO

TRINIDAD

Port-of-Spain

PointFortin Galeota

Point

Poui

Cassia

DolphinBeachfield

Hibiscus

200 miles

0 20km

> Atlantic LNG Company shipments. Atlantic ships product to importterminals in the Caribbean, United States and Europe (top left ). LNGimport terminals in the Caribbean include locations in the DominicanRepublic and Puerto Rico. Receiving terminals in the United States arelocated at Everett, Massachusetts; Cove Point, Maryland; Elba Island,Georgia; Gulf Gateway, Louisiana (offshore); and Lake Charles, Louisiana.European LNG shipments are primarily sent to terminals in Spain atBilbao, Huelva and Cartagena. On occasion, Atlantic has also shippedLNG to the UK, Japan and Belgium. The quantity of LNG shipped byAtlantic from Point Fortin (bottom right ) started modestly in 1999 at slightlyunder 2 million tonUK/yr [2.2 million tonUS/yr]. As additional capacity wasadded, these shipments expanded rapidly to nearly 13 million tonUK/yr[14.3 million tonUS/yr] shipped in 2006.

Mill

ion

tons

UK

/yr

14

12

10

8

6

4

2

0

Year

1999

2000

2001

2002

2003

2004

2005

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OtherSpainPuerto RicoUSA


Natural Gas at SeaThe first marine shipment of LNG was carriedaboard the Methane Pioneer in 1959, which hada capacity of only 5,560 m3 [35,000 bbl].42 Thatfirst load of LNG originated in Lake Charles,Louisiana, and was destined for Canvey Island inthe UK. That shipment and those that followed itclearly demonstrated that significant quantitiesof LNG could be safely transported on marinevessels. Since that time, large LNG transportshave become regular visitors to the world’scoastlines. Transports have grown in number,sophistication—and size (above). The numberof new LNG vessels has increased rapidly. In1990, the worldwide fleet numbered 70, whilethe current fleet has 266 carriers with 126vessels on order.43

High growth rate and change are not new tothe 50-year old LNG shipping industry. LNGvessels need a lead time of about four years tobuild and have a high capital cost—about twicethat of a large crude-oil carrier. In the past, LNGvessels were built in accordance with long-termcontracts to carry LNG from a specific lique -faction plant to designated import terminals.With the emergence of high prices for natural gasand spot market volatility, that feature of LNGshipping is changing.44 Liquefaction plantcapacity not tied up by contract is shipped to thelocation with the highest spot prices.

LNG vessel design is guided by severalcriteria that result from the physical charac -teristics of the LNG itself.45 First, the low densityof LNG dictates a large double-hull vessel withwater ballast, a low draft and high freeboard.46

The double hull serves as a safety feature andallows space for the water ballast. Secondly, theextremely low temperature of LNG requires use of special alloys for tank construction. Depending on the tank type, aluminum, stainless-steel and nickel-steel alloys may be used. Next,the high degree of thermal cycling in the onboardstorage tanks requires special care in design ofthe supporting structure. Lastly, because thecarbon steel commonly used in the hull isvulnerable to the extremely low temperatures ofthe LNG, good thermal insulation is required. Insome tank designs, the insulation must also becapable of supporting the cargo weight.

Application of these criteria has resulted inseveral LNG cargo designs with two systems ingeneral use—independent tanks and membranetanks. Independent tanks—such as the MossLNG transport system—are self-supporting anddo not form part of the ship’s hull. Membranetanks—such as those developed by Gaztransportand Technigaz—are supported by the vessel’shull through insulation and use a thin metalmembrane for containment (next page).47

As the trend to larger vessels has accelerated,both containment system designs haveencountered limitations. For independentspherical tanks, the weight and the specializedfacilities needed to construct them have provedto be a problem in some cases. In addition, shipswith spherical tanks pay higher Suez Canal feesthan other LNG ship types.48 On the other hand,membrane systems are susceptible to damagefrom sloshing loads caused by the large free-surface area in the tanks—a situation thatworsens as the vessel size increases. Research onsloshing using tank mock-ups is helping definethe best tank shape to resist this phenomenon.Although both tank containment systems are inwide general use, the membrane system is beingspecified for most of the very large LNG carrierspresently being built.49

While the containment system on LNGvessels continues to be a central area ofresearch, new concepts for vessel propulsionsystems are emerging as the industry focuses onemissions as well as high energy prices.Traditionally, LNG vessels have used steam-turbine propulsion systems that allow easydisposal of cargo boil-off gas.50 The industry hasbegun moving toward dual-fuel diesel engineswith an efficiency of 38 to 40% compared withsteam turbines at 28%.51 Systems with on-boardreliquefaction, combined gas turbine and steamturbine and boil-off gas reinjection are also beingconsidered. All of the new concepts inpropulsion, cargo containment and vessel designare being driven by high delivery costs andenergy prices and the desire to reduce emissions.The fate of one LNG vessel—the Polar Eagle—demonstrates how quickly LNG shipping haschanged in the past 15 years.

The Polar Eagle was built in 1993 at the IHIAichi Works in Nagoya, Japan, by ConocoPhillipsand Marathon Oil Corporation.52 On commis -sioning, the Polar Eagle was 230 m [755 ft] long,had a width of 40 m [131 ft], a gross weight of60,032 tonUK [66,174 tonUS] and carried a crewof 40. Propulsion was by steam turbine poweredby boil-off gas and heavy fuel oil.

This vessel was designed to transport87,500 m3 [550,660 bbl] of LNG in self-supporting,prism-shaped membrane cargo tanks. Unlikeother membrane-type tanks, this tank design canwithstand severe sloshing. For the last 15 years,this vessel transported LNG from theConocoPhillips Kenai LNG liquefaction plant toutility customers in Japan. Despite the fact thatthe vessel was still quite serviceable, the

58 Oilfield Review

> Evolution of LNG carrier capacity. During the last several decades LNGmarine carriers have grown significantly in cargo capacity. Standard-sizevessels of the last quarter of the 20th century had an LNG capacity 25times that of the original Methane Pioneer, and the current ratio is morethan 40. These capacity increases have been driven by a need to reduceshipping costs and to achieve economies of scale in vessel construction.LNG vessel capacity has had three distinct periods. During the earliestperiod—1965 to 1975—LNG carriers had a range of sizes, but were allrelatively small (green outline). Then came a longer period when most ofthe vessels were about 125,000 m3 [787,000 bbl], with gradual growth insize starting in the late 1990s (red outline). Currently, LNG carrier capacityis going through another step change. New super-sized LNG vessels aslarge as 265,000 m3 [1,668,000 bbl] have been built for long-haul service (blue outline).

LNG

car

rier

cap

acit

y, t

hous

and

m3

100

150

200

250

50

0

Delivery year

1965 1975 1985 1995 2005


Summer 2008 59

combination of small size and steam-turbinepropulsion made it uncompetitive on long-haulroutes. Recently, the vessel has been purchasedby Teekay Ltd to help its customers developsmaller gas fields and associated markets.53

Although LNG is an efficient way to bringstranded gas to market, there are combinations ofmarket size, shipping distance and reserve size inwhich neither LNG nor pipelines are economic.For these markets, compressed natural gas(CNG) may be an alternative solution.54 CNGtechnology reduces the volume of the natural gasbut stops short of liquefaction—significantlyreducing costs. One such CNG technology hasbeen developed by Sea NG and is named theCoselle high-pressure gas storage module.55

Coselle technology uses coils of CNG-filled steel

42. Foss, reference 17.43. Greer MN, Richardson AJ and Standström RE: “Large

LNG Ships—The New Generation,” paper IPTC 10703,presented at the International Petroleum TechnologyConference, Doha, Qatar, November 21−23, 2005.Vedernikova O: “LNG Shipping,” http://www.lngship.net/userFiles/2008%20Norton%20Rose.pdf (accessed June 17, 2008).

44. Valsgård S and Kenich A: “All at Sea,” LNG Industry(Spring 2007): 100–104.

45. Ffooks RC and Montagu HE: “LNG Ocean Transportation:Experience and Prospects,” Cryogenics 7, issue 1–4(December 1967): 324−330.

46. Draft is the depth of water required for the ship to float,and freeboard is that part of the ship between the deckand the waterline.

47. Deybach F: “Membrane Technology for Offshore LNG,”paper OTC 15231, presented at the 2003 OffshoreTechnology Conference, Houston, May 5−8, 2003.Kvamsdal R: “Spherical Tank Supported by a VerticalSkirt,” US Patent No. 4,382,524 (May 10, 1983).

48. Suez Canal fees are proportional to the internal volumeof a vessel. Moss LNG carriers have a much higherproportion of unused volume than do membrane carriersand hence pay higher fees.

49. Dabouis B: “Getting Gas to the Consumer,” LNG Industry(Spring 2008): 28−32.

50. LNG stays in the liquid form on marine vessels by auto-refrigeration. In spite of the insulation, enough heat isconducted through the insulated tank wall to causeslight boiling of the LNG. The small amount of gasformed is called the boil-off gas.

51. These engines are powered by diesel fuel or boil-off gas.In addition to the advantage in choice of fuels, dieselengines also have lower NOx emissions. NOx is a genericterm for oxides of nitrogen produced by combustion. Formore information: Kidnay and Parrish, reference 1.

52. “87,500 m3 SPB LNG Carrier Polar Eagle,” http://www.ihi.co.jp/ihimu/images/seihin/pl12_1.pdf (accessed June 17, 2008).

53. “Teekay Builds on Its LNG Service Offering,”http://www.marinelink.com/Story/TeekayBuildsonitsLNGServiceOffering-210674.html (accessed May 9, 2008).

54. One study found that CNG was most suited for transportdistances less than 2,500 km [1,550 miles]. For moreinformation: Economides MJ, Kai S and Subero U:“Compressed Natural Gas (CNG): An Alternative toLiquid Natural Gas (LNG),” paper SPE 92047, presentedat the SPE Asia Pacific Oil and Gas Conference andExhibition, Jakarta, April 5–7, 2005.

55. Stenning D: “CNG Opens New Markets,” Fundamentalsof the Global LNG Industry. London: PetroleumEconomist (2007): 67–68.

> LNG marine containment systems. Although several different marine containment systems for LNGhave been developed, only two systems are in widespread use today. Membrane tanks—found in 50%of the active fleet—use large tanks with a thin metal membrane to contain the LNG (bottom).Membrane tanks are supported by insulation between the metal membrane and ship’s hull. The metalmembrane may be a 35% nickel-steel, controlled-expansion alloy or stainless steel and has a typicalthickness of 0.7 to 1.2 mm [0.028 to 0.047 in.] depending on the metal employed. The insulationbetween the metal membrane and hull usually consists of two layers—plywood boxes filled withperlite or polyurethane foam insulation separated by another metal membrane barrier. The Mosssystem—seen in 47% of the active fleet—uses independent, spherical aluminum tanks to contain theLNG (top). These tanks are supported by a steel skirt and are not part of the hull structure. Mosstanks have three layers—an inner aluminum layer followed by insulation and an outer steel shell. Apipe tower shields inlet and outlet LNG lines.

Steel cover

Steel support skirt

Water ballast

Insulation

Aluminum shellPipe tower

Insulation layers

Metalmembranes


pipe in stackable units on a short-haul transportvessel (below). These vessels operate in a ferry-type system to ensure continual gas delivery.Technology developments in the CNG area mayopen smaller gas markets currently underservedby conventional delivery methods.

End of the ChainThe final link in the LNG delivery chain is theimport terminal. These terminals off-load theLNG from the marine vessel and store it ininsulated tanks until it is ready for regasificationinto the local transmission system. Worldwide,there are 60 LNG import terminals in operation,with 22 others in the construction stage (nextpage, top).56 LNG import terminals can be foundon every continent except Antarctica. About 50%of the terminals are in the Asia-Pacific region.Next in concentration is Western Europe with

nearly 25% of the import terminals. Theremainder are scattered across the globe.Currently, the USA has six terminals, and thehistory of LNG operations there illustrates the cyclical nature of the business during the last 30 years.

Between 1971 and 1980, natural gascompanies built four LNG import terminals inthe USA—Lake Charles, Louisiana; Everett,Massachusetts; Elba Island, Georgia; and CovePoint, Maryland.57 Delivery volume peaked in1979 but thereafter LNG imports rapidlydeclined. The decline was due to two factors—price disputes with Algeria and deregulation ofnatural gas in the USA that led to more USproduction. The terminals at Cove Point and ElbaIsland were mothballed in 1980, and theremaining two terminals experienced low volumein the following years.

In 1999, the convergence of three factorsmade LNG imports into the USA attractive again.First, Atlantic’s LNG plant in Trinidad started up,thereby reducing transportation costs. Secondly,increased natural gas demand was accompaniedby rising prices. Lastly, environmental concernsled to increased use of natural gas in electricpower generation. As a result, LNG importterminals at Elba Island and Cove Pointrestarted in 2001 and 2003, respectively. TheCove Point terminal provides a prime example ofan LNG import facility.

The Cove Point LNG import terminal islocated on the Chesapeake Bay about 120 km[75 miles] south of Baltimore, Maryland. CovePoint has an LNG storage capacity equivalent to221 million m3 [7.8 Bcf] of natural gas and apipeline delivery capacity of 28.3 million m3/d[1.0 Bcf/d]. The terminal connects to threenatural gas pipeline systems—TranscontinentalGas, Columbia Transmission and the Dominiontransmission system.

Operations at the Cove Point terminal aretypical of most LNG import facilities (next page,bottom). LNG vessels arrive from variouslocations, including Trinidad, Nigeria, Norwayand Algeria. LNG is offloaded from the carriers ata platform in Chesapeake Bay, about 4.0 km [2.5miles] offshore. From this platform, the LNG ispumped in insulated piping through anunderground, concrete-lined tunnel to insulated,double-walled storage tanks at the onshoreterminal. As LNG is required for sale, it is pumpedfrom the storage tanks to vaporizers and then intothe gas transmission system. Safety and securityat Cove Point include US Coast Guard supervisionof LNG vessels as they sail through ChesapeakeBay toward the unloading platform. The CoastGuard requires a security zone around the shipand offshore unloading platform—even when novessel is present.

LNG safety has come under increased scrutinysince September 11, 2001. Safety hazards directlyresult from physical properties of the LNG itselfand the resulting gas when vaporized. Thesehazards are cryogenic temperatures, gas-dispersion characteristics and combustibility.Since the industry’s inception in the 1940s, onlyfive accidents have occurred in or aroundliquefaction plants—unfortunately two of thoseresulted in deaths.58 The most seriousliquefaction plant accident occurred in Skikda,Algeria, in January 2004, when a steam boilerexploded, triggering a larger gas-vapor cloudexplosion.59 In addition, there have been two

60 Oilfield Review

> CNG shipping. The heart of the Coselle transport system is a 16-km [9.9-mi] length of 15.2-cm [6-in.]conventional steel pipe coiled into a stackable carousel that can be filled with CNG (bottom). Severalof these carousels can be loaded on a CNG transport vessel (top). (Graphic courtesy of Sea NGCorporation.)

56. “Liquefied Natural Gas Worldwide,” http://www.energy.ca.gov/lng/international.html (accessed May 15, 2008).

57. http://www.dom.com/about/gas-transmission/covepoint/index.jsp (accessed July 23, 2008).

58. “Liquefied Natural Gas Safety,” http://www.energy.ca.gov/lng/safety.html (accessed June 20, 2008).

59. The accident at Skikda killed 27 and injured 56. For moreinformation: http://www.ferc.gov/industries/lng/safety/safety-record.asp (accessed June 20, 2008).

60. A fire started in the tank resulting in a pressure increasethat lifted the concrete dome. The resultant collapsekilled 37.

61. Hightower M, Gritzo L, Luketa-Hanlin A, Covan J,Tieszen S, Wellman G, Irwin M, Kaneshige Melof B,Morrow C and Raglan D: “Guidance on Risk Analysisand Safety Implications of a Large Liquefied Natural Gas(LNG) Spill Over Water,” http://www.ferc.gov/industries/lng/safety/reports/sandia-rep.asp (accessed June 13, 2008).

62. Reference 58.


Summer 2008 61

import terminal accidents that resulted in deaths.The most serious import terminal incidentoccurred in 1973 at Staten Island, New York, USA,when a roof collapsed on an empty storage tank.60

However, these few isolated incidents are incontrast to the remarkably good safety record of

marine LNG transport. In past 40 years, more than80,000 LNG loads have been delivered withoutmajor accidents or safety issues.61

Operators who handle LNG have always hadsafety programs in place, but those programshave taken on greater importance in the last few

years. In 2003 and 2004, at least six major studieswere released that addressed LNG safety andsecurity.62 In addition to covering overall LNGsafety, these studies specifically addressed spillsover water, import terminal sites and quanti -fication of risks. While the LNG industry is

> Global LNG import terminals. Worldwide, there are 60 existing import regasification terminals located either onshore or offshore in 18 countries (green).An additional 22 terminal projects are under construction (red).

Existing terminals

Terminals under construction

> Import terminal components. LNG tankers arrive by marine transport at import terminal unloading platforms onshore or offshore. If the docking facilitiesand associated unloading platform are offshore, the LNG from the vessel is pumped through undersea piping to insulated storage tanks onshore.Insulated steel tanks are commonly used for storage, and they can be configured as single containment, double containment or full containment (fullcontainment shown). These tanks sit on a concrete base and have a 9% nickel-steel alloy inner lining covering outer shells of carbon steel and concrete.The roof of the storage tank is concrete over a suspended deck. As natural gas is required for distribution, it is pumped to a vaporizer. Although LNGstorage tanks are well-insulated, some boil-off always occurs. Boil-off gas can either be reliquefied or sent to the distribution system (not shown).

Vaporizer Pump Tunnel

LNG storagetank

Unloadingplatform

LNG tankerSuspended deckConcrete shell

Carbon-steel outer tankPerlite insulationNickel-steel liningConcrete pad


geographically quite diverse, four safetyelements have emerged that seem to encapsulatecurrent practice. These are primary contain -ment, secondary containment, safeguard systemsand separation distance.63

Primary containment is application of suit -able materials and design to contain LNG.

Secondary containment ensures that if spillsoccur, they can be contained and isolated.Safeguard systems act to minimize releases andmitigate their effects. Leak detection is oneexample of a safeguard system. Separationdistances relate to safety zones around shippinglanes and land-based installations. These foursafety elements apply across the LNG value chain.

While LNG has attracted some vocal criticswith regard to safety, the industry’s recordspeaks for itself. The need to bring distantnatural gas to local markets ensures that thistechnology will continue to have a significantrole in the energy arena.

62 Oilfield Review

> Darwin LNG. The Darwin LNG plant is located at Wickham Point in northwest Australia (left ). Natural gas for theDarwin plant is supplied from the Bayu-Undan field located between Darwin and East Timor in international waters.Gas wells at Bayu-Undan are in about 80 m [262 ft] of water, and reserves are estimated at 96.3 billion m3 [3.4 Tcf] ofgas and 65.6 million m3 [413 million bbl] of condensate. Gas arrives at the Darwin LNG plant through a 66-cm [26-in.]subsea pipeline.

AUSTRALIA

2000 miles

0 200km

EAST TIMOR

TIMOR

MelvilleIsland

Darwin

Bayu-Undan

AUSTRALIA

63. Foss MM: “LNG Safety and Security,”http://www.beg.utexas.edu/energyecon/lng/documents/CEE_LNG_Safety_and_Security.pdf (accessed May 15, 2008).

64. Yates D and Schuppert C: “The Darwin LNG Project,”presented at LNG 14, Doha, Qatar, March 21−24, 2004.

65. Montgomery T: “Aeroderivative Gas Turbine ProvidesEfficient Power for LNG Processing,” Pipeline & GasJournal (October 2001): 54, 56−57.

66. Kurbanov Y: “Russia to Become Key Player in World LNGover Next 10 Years,” http://www.oilandgaseurasia.com/articles/p/75/article/638/ (accessed July 22, 2008).

67. Terry MC: “Floating Offshore LNG Liquefaction Facility—A Cost Effective Alternative,” paper OTC 2215, presentedat the 7th Annual Offshore Technology Conference,Houston, May 5–8, 1975.

Barden JK: “Offshore LNG Production and StorageSystems,” paper SPE 10428, presented at the SPE Offshore Southeast Asia Show, Singapore,February 9−12, 1982.Faber F, Bliault AE, Resweber LR and Jones PS: “FloatingLNG Solutions from the Drawing Board to Reality,” paperOTC 14100, presented at the 2002 Offshore TechnologyConference, Houston, May 6–9, 2002.Wagner JV and Cone RS: “Floating LNG Concepts,”Proceedings of the 83rd Annual Convention of the TulsaGas Processors Association, 2004.Gervois F, Daniel L, Jestin N and Kyriacou A: “FloatingLNG—A Look at Export and Import Terminals,” paperOTC 17547, presented at the 2005 Offshore TechnologyConference, Houston, May 2–5, 2005.

Foss MM: “Offshore LNG Receiving Terminals,”http://www.beg.utexas.edu/energyecon/lng/documents/CEE-offshore-LNG.pdf (accessed May 15, 2008).

68. “ExxonMobil to Build First Gravity-Based Terminal inItaly,” http://www.poten.com/%5Cattachments%5C052305.pdf (accessed June 22, 2008).Sen CT: “LNG Trade Slows; Projects Advance,”http://www.ogj.com/print_screen.cfm?ARTICLE_ID=231654 (accessed June 22, 2008).

69. Krauss C:”Global Demand Squeezing Natural GasSupply,” http://www.nytimes.com/2008/05/29/business/29gas.html (accessed May 29, 2008).


Summer 2008 63

A Look at the FutureAs the LNG industry looks to the future,opportunities abound for application of newtechnology. At the start of the LNG chain, newliquefaction plants continue to push efficiencyimprovements that drive down operating costs. Agood example is the new ConocoPhillipsOptimized Cascade liquefaction plant at Darwin,Northern Territory, Australia (previous page).Completed in late 2005, the plant shipped its firstload of LNG to Japan in early 2006. At the time ofits startup, the Darwin plant pioneered severalfirsts.64 It was the first plant in the LNG industryto use high-efficiency, aeroderivative gas turbinesfor refrigerant compressor drivers.65 Theseturbines use less fuel, produce more LNG andhave the added benefit of reduced atmosphericCO2 and NOx emissions. It was the first operationto use turbine exhaust to provide heat for severalprocess areas. Finally, loading and vapor lines atthe Darwin plant use vacuum-insulated pipeinstead of conventional insulation.

New liquefaction plants—such as Darwin—are increasingly being built in remote, harshenvironments to move stranded gas to distantconsumers. A prime example of this trend is thelarge LNG plant being built on Sakhalin Island on

the northern Pacific coast of the RussianFederation. This plant is nearing completion andwhen fully operational will account for 5 to 6% ofworld LNG output.66 Buyers in Japan, Korea,Mexico and the United States have signed long-term contracts for LNG from Sakhalin.

Liquefaction plants are not the only part ofthe LNG chain to see improvements—thesetrends are also present in shipping. Shippingimprovements include new tank designs,shallow-draft hulls, twin-propeller carriers andmore efficient propulsion systems. Finally, ice-breaking vessel forms are being considered tobring LNG from stranded gas in arcticenvironments to consumers. All of theseimprovements will enhance and expand thecurrent global LNG shipping network (above).

The last part of the LNG chain—importterminals—may experience the most significanttechnology changes. Large carriers with theirneed for deep channels and berthing facilities—plus safety concerns—make offshore LNGinstallations attractive. The concept of offshoreor floating LNG installations is not new—theyhave been proposed and discussed for more than30 years.67 These proposals not only encompassimport terminals but also cover the entire range

of LNG facilities from liquefaction toregasification. Offshore LNG concepts are finallybeing put into practice with the completion ofthe Porto de Levante import terminal. Thisterminal—located off the Italian coast—willtake LNG from liquefaction plants in Qatar.68

Other offshore projects are in various stages ofplanning, permitting and construction.

Perhaps the most profound change along theLNG chain will involve commercial innovation—not technology. The LNG industry is on the cuspof changing from traditional long-term contractsto an emerging commercial trading model. Theeffects of this change are wrenching, and someearly participants have experienced unantici -pated shifts in demand.69 Even with earlysetbacks in commercial trading ventures, thedriving forces for LNG growth remain in place—and its future seems assured for decades. —DA

> Major LNG shipping routes. LNG from stranded gas reserves in the Middle East, Africa and the Caribbean is shipped to large consumers in Asia, Europeand the USA. Shipments to consumers in Japan and South Korea make up 54% of total marine LNG shipments. Shipments from Qatar to India, Nigeria toSpain and Trinidad and Tobago to the USA account for another 13% of the marine LNG trade. The remaining 33% of LNG transport comprises country-to-country shipments, each less than 8.0 billion m3 [282 Tcf]. These shipments total 73.8 billion m3 [2,606 Tcf] (not shown).

2007 LNG exports, billion m3

2007 LNG imports, billion m3

12.8

8.3 8.3

10.9

8.2

8.6

17.7

18.1

16.1

10.8
