26 LNG INDUSTRY AUTUMN 2005 www.lngindustry.com

A round the world, countries that have large amounts ofstranded natural gas are building liquefaction termi-nals to ship liquefied natural gas (LNG) to growing

markets in Europe, Asia and North America. Currently inNorth America, five regasification terminals have thecapacity to import 4.2 billion ft3/d of natural gas. In the USAalone, natural gas demand is expected to increase by1.5%/y between 2003 - 2025, reaching 30.7 trillion ft3/y in2025. During the same period, natural gas production in theUSA is expected to grow at only 0.6%/y, reaching 21.8 tril-lion ft3/y by 2025, leaving a significant shortfall. To bridgethe widening gap, the USA is expected to increase LNGimports to 8.9 trillion ft3 by 20251. As a result, the percent-age of the US natural gas supply provided by LNG is pro-jected to increase from just over 2% in 2003 to more than20% in 2025.

However, before LNG imports can grow to the levelrequired in 2025, the regasification capacity in NorthAmerica needs to increase significantly. Numerous projectshave been proposed to regulatory authorities throughoutNorth America to meet this growing need. At the beginningof July 2005, 13 regasification projects had been approvedin the USA, two projects in Canada, and three more by thegovernment of Mexico. In addition to the 18 approved LNGprojects, 21 additional proposals were pending approval2.Many more projects are currently in the planning stages,but it is unknown how many of these facilities will actuallybe built or where they will be sited. As the regulatory

process continues its evaluation of these proposals, thedemand for natural gas in North America today continues togrow.

H i s t o r y o f L N G imp o r t s i n t o N o r t hAme r i c aThe UK became the first country to receive a shipment ofLNG when a converted World War II freighter carried anLNG cargo from Lake Charles, Louisiana, in the USA toCanvey Island in the UK. Then in 1964, the UK beganimporting LNG from Algeria. Following this success, otherimport and export terminals were built around the world,including four import terminals in the continental USA andone export terminal in Alaska. Until 2005, when the first off-shore facility commenced operations in the Gulf of Mexico,North America still only had these four import terminals, allof which were built between 1971 and 1980. These termi-nals had a combined peak capacity of 1.2 trillion ft3/y andbaseload capacity of 880 billion ft3/y. Following 1979, whenpeak loads were imported into these facilities, import vol-umes declined dramatically. The terminals were eithermothballed or underutilised for most of the next twodecades. In 1999, the opening of an LNG liquefaction plantin Trinidad and Tobago, along with growing demand for nat-ural gas in North America, triggered a resurgence of inter-est in these terminals. Terminals that had been mothballedwere reactivated and expansion projects were planned. As

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they were expansions to existing facilities, these pro-jects were on a faster track to obtain the necessaryapprovals and reach completion well in advance ofmost of the greenfield projects that began to hitdrawing boards throughout North America. This arti-cle profiles one of these projects: the Elba Islandexpansion project.

T h e E l b a I s l a n d e x pa n s i o n p r o j e c tThe location of the Elba Island terminal is well situ-ated as a hub to markets in the Southeast region ofthe USA. Most of the LNG currently received at theterminal is exported from Trinidad and Tobago. Byincreasing sendout and storage capacity, the termi-nal will have additional flexibility in maintaining asteady flow of natural gas as LNG is regasified andsent into the main pipeline system. In addition tomeeting the supply needs of the rapidly growingnatural gas demand in the Southeast, Elba Island’simports can also play a key role in providing naturalgas to the mid Atlantic, Northeast and Midwest USmarkets through its access to the interstate pipelinegrid.

The Elba Island facility is located nearSavannah, Georgia. The terminal is unique in itslocation on a private 840 acre island in theSavannah River, 15 miles before the river flows intothe Atlantic Ocean. LNG ships can access the ter-minal via a deepwater channel that extends from theocean to the Port of Savannah. The facility is ownedby Southern LNG, a business unit of El PasoCorporation. Access to the island is restricted by a

private bridge and the highest level of security ismaintained.

The Elba Island expansion project, currentlyunder construction, will increase both the storagecapacity and the send out rate of the current importterminal. The current terminal has a baseloadcapacity of 446 million ft3/d and a peak sendoutcapacity of 675 million ft3/d. The facility also has 4 billion ft3 of storage capacity. The expansion pro-ject will increase baseload capacity by 360 million ft3/dto reach a total baseload capacity of just over 800 million ft3/d. Peakload capacity is beingincreased by 540 million ft3/d to 1215 million ft3/d.Storage capacity is being increased by approxi-mately 80%, adding 3.3 billion ft3 to reach a totalstorage capacity of 7.3 billion ft3. The expansion pro-ject, which was awarded on a lump sum turnkeybasis to CB&I in June 2003, is scheduled to be com-pleted by the end of 2005.

In addition to the storage tank and the sendoutsystem, the scope of the project includes additionalboil off compression and recondensing capacity, twoLNG ship unloading stations and related civil,mechanical, electrical, control, instrumentation andinsulation works. The expansion project includes tie-ins to the existing facilities. Using the lump sumturnkey approach eliminates the hand offs andredundancies that often occur when multiple con-tractors are engaged on the same project.The resultis an integrated project with consistent, safe and reli-able performance.

An area of the island was excavated to createroom off the river for new docking facilities, creatinga more flexible transit passage on the Savannah

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River.The facilities can hold two ships at once and will max-imise safety and security while the cargo is unloaded.

Mee t i n g t h e s c h e d u l eDue to the growing demand for natural gas in NorthAmerica, meeting the schedule for this project is critical.One of the key ways to achieve this is for the owner andcontractor to work together to develop ways to complete theproject safely and reliably on an accelerated schedule. InApril 2003, two months before the final contract was signed,Southern LNG gave CB&I early release of engineering sothat design work on the tank and mechanical processescould begin even as the final contract was being prepared.In July 2003, as the engineering work continued, CB&Imoved onsite and began excavation for the tank foundation.Throughout the project, parallel work was carried out when-ever possible, always carefully coordinated so that sched-ule savings could be realised at every opportunity.

Some other ways of saving time included: using CB&I’spatented Automated Ultrasonic Testing (UT) system to per-form weld examinations for the tank’s inner shell; takingadvantage of its global procurement capabilities; use oflocal crews; and teamwork with Southern LNG to identifyand resolve issues that could impede the schedule.

UT weld examinationsThe inner shell of an LNG storage tank is usually con-structed from 9% nickel steel, a material that remains duc-tile at cryogenic temperatures. To construct the inner shell,large plates of 9% nickel steel are welded together. Thesewelds are inspected using a nondestructive examinationtechnique to determine if the welds are acceptable. ForLNG tanks, radiographic examination is the nondestructivemethod typically used to inspect inner tank vertical and hor-izontal shell weld seams and, until recently, the onlymethod that met code requirements. Austenitic materialshave a structure that tends to scatter sound waves, whichcauses distortions that interfere with ultrasonic results.Recent advances in ultrasonic technology (UT), however,have made it possible to develop a semi automatedprocess designed specifically for the purpose of inspectingaustenitic welds, allowing UT to be used as an alternativeto radiographic examination.

UT weld inspection has advantages over radiography inthe three critical areas of construction: safety, schedule andquality. Safety is improved because UT eliminates the radi-ation hazards associated with radiography. Schedule andquality are improved as UT provides ‘real time’ results. TheUT inspection can commence as soon as the welding iscompleted and cooled, whereas radiographic inspectiondoes not generally occur until a second shift comes in dur-ing the evening or weekends, due to safety concerns for thecrew. Once a radiographic examination is performed, thefilm must be developed and then analysed. The results ofthe UT process are immediate. If any weld issues surface,they can be addressed immediately.

In the USA, the NFPA 59A code for LNG facilities andthe Federal LNG facility standard, 49CFR Part 193, require100% nondestructive examination of horizontal and verticalinner tank shell weld seams for LNG tanks. Using the UTprocess for the Elba Island project helped the project stayon schedule and, at the same time, reliably verify the qual-ity of each weld seam. The welding crew achieved a 99.6%acceptance rate for all inner shell welds.

Global procurementEquipment and supplies were purchased from globalsources to keep this project on schedule. Having the

Figure 1. The Elba Island expansion project.

Figure 2. A portion of the island was excavated toprovide space for two new docks that would belocated off the river.

Figure 3. Due to its ability to remain ductile atcryogenic temperatures, 9% nickel steel is used toconstruct the inner shell of the LNG storage tankon Elba Island.

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resources to locate the necessary materials and equipmentand the logistical expertise to ensure on time delivery wereessential to the success of this project. Of particular impor-tance was the purchase of sufficient 9% nickel to build theinner shell. This material, which was purchased in Japan, isbecoming critically short in supply, and delays or supplyshortfalls can impede LNG project schedules. Equipment forthis project was purchased throughout the world, such as theship unloading arms purchased in Germany, valves from Italyand the compressors from Japan. All material and equipmentdelivery is carefully coordinated to arrive as needed for thephased implementation of the construction schedule.

Local crewsCrews that are familiar with and comfortable in their sur-roundings can greatly help to expedite a fast track project.The majority of the systems and mechanical crews on theElba project were local to the Georgia area and, as a result,were able to quickly mobilise onsite. The CB&I model is touse direct hire labour instead of subcontractors, and selfperform as much of the work as practical. This approachgives greater control over the safety, quality and scheduleof projects. Long term employment opportunities are pro-vided to employees who remain with the company andmove from project to project, thus transferring knowledgeand experience. Ongoing training and safety programmeskeep employee skills tuned. This combination of factorshelped keep the Elba Island project on schedule withoutcompromising either safe work practices or the quality ofthe build.

Addressing potential schedule impedimentsSolutions for problems encountered were jointly sought,found and implemented. One situation unique to this project

was the poor soil conditions and resulting substantial set-tlement of structures. The tank, in particular, had to bedesigned and constructed to allow for the settlement. Anelevated pile foundation was designed for this project. Pre-auguring was required for every pile before it could beinstalled due to the soil. A total of 1600 piles were installedunder the tank, creating a foundation suitable to support atank with 7.3 billion ft3 of LNG in the conditions on theisland.

T h e L N G s o l u t i o nTo date, all major project milestones have been achievedand the project remains on schedule as the final year ofthe construction activity draws to a conclusion. Electricalpower was installed in 2003, the roof of the tank was airraised in October 2004 and by January 2005, all the majorpieces of equipment were in place, tested and commis-sioned. This project, one of many that will increase theamount of LNG that can be imported into North America,is leading the way to provide a solution, not just for NorthAmerica, where energy is needed, but also for countriesthat have abundant supplies of natural gas without accessto a traditional market via a pipeline grid. As this projectreaches its end, LNG is becoming the critical link in pro-viding a global solution to energy supply/demand imbal-ances around the world.

R e f e r e n c e s1. US Energy Information Administration Annual Energy Outlook,

2005.2. Federal Energy Regulatory Commission website, July 2005.3. US Energy Information Administration, The Global Liquefied Natural

Gas Markets: Status and Outlook, December 2003. ____________�

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