SPE International - LNG - Whats Happening and Why
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Transcript of SPE International - LNG - Whats Happening and Why
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SPE DISTINGUISHED LECTURER SERIESis funded principally
through a grant of the
SPE FOUNDATIONThe Society gratefully acknowledges
those companies that support the programby allowing their professionals
to participate as Lecturers.
And special thanks to The American Institute of Mining, Metallurgical,and Petroleum Engineers (AIME) for their contribution to the program.
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LNG Whats Happening and Why!
John Morgan
John M. Campbell & Company
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2005 Air Products & Chemicals, Inc. All Rights Reserved
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$5 Billion Entry Fee
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LNGNGL
Methane
Ethane
Propane
Butane
Pentane +
LPG
96%
3%
1%
0.1%
LPG Liquid Petroleum GasNGL Natural Gas LiquidsLNG Liquid Natural Gas
WHAT IS LNG
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Example LNG Properties-162oC [-235oF] at atmospheric pressure
Rich Leannitrogen 0.3 0.5methane 88.7 97.5ethane 8.0 1.5propane 2.0 0.5butanes 1.0 -
approx. kg/m3 465 435
CV (higher) MJ/m3 42 38.5
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An LNG Export Terminal with Multiple Expansions - Bontang, Indonesia
2004 LNG Journal & Reproduced with Permission
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The Basic LNG Chain
LNG Production
Shipping
LNG Reception
Gas Utilization
Gas Production
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Natural GasTransportation Options
5000
1000
500
100
50
MM
scfd
0 1000 2000 3000 4000 5000
Distance to market, km
Pipeline
Uneconomic
Electricity
Gas-to-liquids
LNG
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Nominal GasTransportation Efficiency
Ref. OG&J (May 15, 2000), p.64
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Historical Developmentof LNG Trade Last 25 Years
Projects grow from less than 1 mta to 4-6 mta New supplies to Japan,
first imports to Korea, 1987, and Taiwan, 1990
Late 1990s present Slower growth in Asian LNG demand economic upsets Growth in LNG demand in Europe, USA and Caribbean New supply projects in Atlantic Basin and Middle East Todays LNG trade
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LNG Industry Growth
Source: CERA, CEDIGAZ
0.005.00
10.0015.0020.0025.0030.0035.0040.0045.00
1964
1966
1968
1970
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Asia Europe United States
5.5%/y
r
Historical
Projected
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Demand is Met from DiverseSources of Supply
2005 Source NPC
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LNG Imports Are Needed,but Face Obstacles
2005 Source NPC
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The Basic LNG Chain
LNG Production
Shipping
LNG Reception
Gas Utilization
Gas Production
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The Contract Chain
1. Exploration licenses, production-sharing contracts2. Gas sales to LNG Producer3. LNG production joint venture agreement4. Condensate/LPG production and sale5. Government and local authority agreements6. LNG sale and purchase agreement
between LNG producer and LNG buyers
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2005 LNG Journal & Reproduced with Permission
Gas Production PlatformNorth Rankin A North-West Shelf Project, Australia
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The Basic LNG Chain
LNG Production
Shipping
LNG Reception
Gas Utilization
Gas Production
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General SchematicGas Liquefaction Terminal
2005 LNG Journal & Reproduced with Permission
Pre-cooling and
LPG Separation
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Contaminants
Whats in gas (besides light hydrocarbons)?
H2O CO2 H2S
S He N2 Cl Hg As
Waxes Asphaltenes etc.
Sand Dinosaur Dust
Lubricants Corrosion Inhibitors
Mystery Stuff, etc.
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Mixed Refrigerant
LNG Process
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2005 Air Products & Chemicals, Inc. All Rights Reserved
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MCR Heat Exchanger Tube Bundle Fabrication
2005 Air Products & Chemicals, Inc. All Rights Reserved
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Overview of LNG ProductionFacilities Technologies
Established Technologies ConocoPhillips (Optimized Cascade) APCI (Propane Precooled)
New Process Technologies APCI (AP-X) Linde (MFC) Shell (PMR) IFP (Liquefin)
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ConocoPhillips Optimized LNG Process
Courtesy ConocoPhillips Petroleum Company
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2003 Atlantic LNG All Rights Reserved
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Overview of LNG ProductionFacilities Trends
Larger facilities Bigger Trains Bigger Turbines
Reduce Environmental Impact CO2
Produced with gas Developed by turbines
NOx Marine Environment
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Typical Project ScheduleGreenfield LNG Export Project
Year 0 1 2 3 4 5 6 7 8 9 10
study drilling and appraisal design construction
selection acquisition, approvals prepn.
study concept design FEED EPC - construction
study shipping arrangements ship building
Upstream
Terminal Site
LNG Plant
Shipping
& Evaluation study negotiations -j.v. evaluation first LNGexports
Project Structure
analysis marketing, sales agreementsMarkets
Financingadvice and analysis securing financing
2000 LNG Journal All Rights Reserved
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Photo Courtesy of CB&I All Rights Reserved
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The Basic LNG Chain
Shipping
LNG Production
LNG Reception
Gas Utilization
Gas Production
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1959 The Methane Pioneer
2004 LNG Journal & Reproduced with Permission
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Partial Loading of LNG Cargoes
Photo Courtesy of ABS
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The Basic LNG Chain
LNG Reception
LNG Production
Shipping
Gas Utilization
Gas Production
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Reduce Environmental Impact Reduce CO2
Inject Produced CO2 Install most efficient drivers
Cogeneration Larger Turbines Electric Motor Drivers
Reduce NOx Install Clean-burn technology
Effect on Marine Environment Use of air coolers
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Negishi Terminal, Japan : Single Containment Tanks (background) Inground Tanks (foreground)
2002 LNG Journal & Reproduced with Permission
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Costs in an LNG Project
Gas Gathering US$ 1 1.5 billion
Liquefaction (1 train) US$ 1 1.5 billion
Ships 5 @ $180 m US$ 0.9 billion
Regasification US$ 0.5 billion
TOTAL US$ 3.4 4.4 billion
Could easily reach $5,000,000,000
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The Basic LNG Chain
Gas Utilization
LNG Production
Shipping
LNG Reception
Gas Production
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Seasonal Demand PatternEurope & North America
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Gas Markets
Residential & Commercial Heating demand highly seasonal (low load factor) No fuel switching capabilities
Industrial Fuel for factories, chemical plants, steel mills, etc. Power generation for factories, chemical plants,
steel mills, etc. Chemical feedstock ammonia, methanol, GTL High load factor Fuel switching capability
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Power Generation Combined cycle most popular
GT + waste heat boiler Eff.~55% Low CO2 emissions
7 8 tonnes/MW compared to25 27 tonnes/MW for coal
Higher load factor than residential & commercial
Quick response to demand swings Summer demand higher than winter (A/C) Fuel switching capability
Gas Markets
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Gas-Fired Electric Power Generation
2002 GE All Rights Reserved
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GE GAS TURBINESH-Technology
400-480 MW combined cycle output
Firing at 2600F, 1430C
23:1 compressor, 18 stages4 stage turbine
60% combined cycle efficiency
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Example Heating Values
36 38 40 42 44 46 48 50
UK
USA - Florida
Japan Power Plant
MJ/m3Adapted from: Bramoulle, Morin and Capelle, LNG Quality and Market FlexibilityChallenges and Solutions, LNG 14, Doha, Qatar 2004
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Commercial Trends Continued downward pressure on LNG costs More competition, more risk-taking. Global supply
strategies Building ships/terminals in advance of firm supply/sales
contracts. Merchant facilities Increasing power generation market Regional market trends
Asia. Liberalization of existing markets. India. China. Europe. Open access. Market related prices.
LNG and pipeline supplies. Americas. USA more terminals? Price volatility. Central/South America.
Market niches: small-scale supply projects, reception, satellites.
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LNG Whats Happening and Why!
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UK Gas Supply and Demand
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South-East Asia to
Australia to Japan
Middle East to Japan (1977), Korea, Taiwan & Europe
Japan, Korea & Taiwan
Middle East, S-E. Asia and Australia to USA
USA (Alaska) to Japan
Nigeria to Europe
Trinidad to USA & Spain
Algeria to USA USA (Alaska) to Japan
Libya to Spain
(1969)
& Europe (1964)
(1972) (1987) (1990)
(1989)
(1999)
(1999)
2005 LNG Journal & Reproduced with Permission
World LNG Trade
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Some of Todays Challenges in LNG..Many
Permits for US Imports
Crews for LNG Carriers
LNG quality variations
Security
Materials and Staffing
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LNG Whats Happening and Why!
John Morgan
John M. Campbell & Company
WHAT IS LNGExample LNG Properties-162oC [-235oF] at atmospheric pressureAn LNG Export Terminal with Multiple Expansions - Bontang, IndonesiaThe Basic LNG ChainNatural GasTransportation OptionsNominal GasTransportation EfficiencyHistorical Developmentof LNG Trade Last 25 YearsLNG Industry GrowthDemand is Met from DiverseSources of SupplyLNG Imports Are Needed,but Face ObstaclesThe Basic LNG ChainThe Contract ChainThe Basic LNG ChainContaminantsMixed Refrigerant LNG ProcessOverview of LNG ProductionFacilities TechnologiesConocoPhillips Optimized LNG ProcessOverview of LNG ProductionFacilities TrendsTypical Project ScheduleGreenfield LNG Export Project The Basic LNG Chain1959 The Methane PioneerPartial Loading of LNG CargoesThe Basic LNG ChainReduce Environmental ImpactNegishi Terminal, Japan : Single Containment Tanks (background) Inground Tanks (foreground)The Basic LNG ChainSeasonal Demand PatternEurope & North AmericaGas MarketsGas MarketsExample Heating ValuesCommercial TrendsUK Gas Supply and DemandWorld LNG TradeSome of Todays Challenges in LNG..Many