Deepwater Operations: Successful realization of gas liquefaction projects in Southeast Asia

David Wood, David Wood & Associates; and Saeid Mokhatab, Contributing Editor, LNG

The Asian market for LNG continues to be the most important LNG market worldwide, with significant demand growth forecast in China, Japan, Korea and Taiwan over the next decade. The development of a Singapore LNG gas hub (due onstream in 2013) is also likely to change the dynamics of Asia’s short-term LNG market. Gas liquefaction projects linked to deepwater and/or distal offshore field developments in a number of Southeast Asian countries are best placed geographically to satisfy much of the predicted demand growth of this market. These projects include recent deepwater discoveries offshore Sarawak, Malaysia, and offshore Brunei, the Masela project offshore Indonesia and the Sunrise project in the joint petroleum development zone between Timor Leste and Australia. The latter two projects are likely to involve floating liquefaction facilities.

Southeast Asia projects will face strong competition from liquefaction projects under development in Australia, Papua New Guinea and Eastern Russia and high-capacity/low-cost supplies from Qatar. In addition to their close proximity to Asian LNG customers, new Southeast Asian liquefaction plants will need to demonstrate high standards of technical efficiency and reliability to overcome this competition. To do so, they must focus on three key areas that influence the successful realization of new LNG projects: process technology, project management and operational efficiency.

PROCESS TECHNOLOGY

Most liquefaction plants evolve into multiple production trains, which refrigerate the gas to cryogenic temperatures. Existing land-based liquefaction plants are dominated by Air Product’s Propane Pre-cooled Multi-component Refrigerant (C3MR) process, with the large trains in Qatar using an expansion of this (i.e., AP-X). The ConocoPhillips Optimized Cascade process is used in 10 trains in five countries. Multi-fluid cascade processes are used in Norway (Linde) and Russia (Sakhalin 2, Shell technology). Floating plants (FLNG) in planning (e.g., Australia, Indonesia and Brazil) will use new technologies, with the first likely to be built in Southeast Asia.

Choice of process technologies, capacity options and the availability of proven drivers, compressors and heat exchangers from several different vendors provide cost competition and trends toward higher efficiency.

Among the key technology issues that influence project cost, Frames 7 and 9 refrigeration compressor drivers are used for larger trains with aero-derivative gas turbines (lighter and higher thermal efficiency) likely for FLNG developments. Electric motor drives also offer potential efficiency gains for large future onshore plants. Other technology issues are long-term licensing of liquefaction process technologies; the ability to increase overall thermal efficiency by recovering waste heat for process use; the cost and environmental benefits of cooling with air versus seawater; added costs arising from the need to remove acid gas contaminants or capture and reinject CO2; thermal efficiency reductions due to hot climates; and cost reductions arising from standard “off the shelf” designs, especially coupled with incentivized engineering, procurement and construction contracts. In addition, the depth of natural gas liquid (NGL) extraction depends on available markets and liquid petroleum gas (LPG) handling capacities. NGL can be extracted using a simple scrub column or a more efficient turbo-expander.

PROJECT MANAGEMENT

Gas liquefaction plant designs must integrate with upstream gas supply and downstream storage and export facilities to optimize construction projects.

Upstream gas supply considerations include optimization of feed gas landing pressure (higher pressures lead to higher facilities costs but are required for higher plant capacities) and optimization of NGL extraction (high NGL output provides increased revenue but adds complexity, costs and safety risks).

Downstream facilities considerations include the definition of LNG and LPG storage tanks, marine loading and export facilities. Tank sizes, designs and spacing are determined by plant capacities and local regulations. Jetty, breakwater and channel dredging requirements are determined by local port and climatic conditions. Another downstream consideration is availability of land and marine loading areas for future expansions (i.e., subsequent liquefaction trains).

Sound procurement strategies can help to reduce cost inflation risks by hedging against price inflation of materials during design and construction; establishing long-term supplier relationships for long-lead-time items; pre-qualifying suppliers to meet acceptable specification standards; fabrication of key modules in locations with minimal risk of labor disputes; and advanced planning of hookup, commissioning and hazop testing. Plant operators should be involved in a plant’s detailed design and trained early.

OPERATIONAL EFFICIENCY

Initial liquefaction operations aim to achieve or exceed a plant’s nameplate production rate on a sustained basis. An operability management plan (OMP) should help to ensure maximum plant availability and minimum number and duration of maintenance outages over a plant’s life. This is accomplished by clear definition of:

• Normal operations, quality and safety management systems

• First-start and black-start operations

• Shutdown operations (emergency and planned)

• Continuous development of plant simulators for training

• Maintenance requirements (including high-volume consumables)

• Maintenance management and training systems

• Materials handling

• Energy efficiency

• Risk management and contingency planning

• Emissions limits and controls

• Emergency response plans and coordination with emergency services

• Security management plan

• Abandonment and decommissioning plan.

A clearly defined and systematic approach to equipment sparing, reliability, availability and maintainability (RAM) is also crucial for plants to successfully maintain and improve operating performance over their lifecycle. Condition monitoring of critical rotating machinery is essential, as this is where some of the most frequent and costly maintenance interventions are likely to occur.

Installation of advanced non-linear process controls can help debottleneck existing plants. Rejuvenating old facilities by installing new technology can be an economically attractive alternative to decommissioning and plant replacement, with lower costs and shorter project schedules than the building of new greenfield plants.

Robust and reliable plant operation throughout the lifetime of the project is necessary in order to secure buyers willing to entertain the long-term LNG supply contracts.

Experience to be gained over the next few years from the FLNG plants yet to be constructed for deployment in Southeast Asia is likely to provide the gas liquefaction industry generally with some new insights and challenges concerning plant optimization and operating efficiency.