The liquefied natural gas sector has experienced large growth in the last decade and is expected to grow more in the decades to come.
WorleyParsons recently completed a study for the Global CCS Institute to identify the trends in the LNG sector and to make a range of assessments on how these trends may impact on the CCS industry.
At this webinar, Graeme Cox, Principal Consultant from WorleyParsons focused on looking at industry wide and project specific aspects of LNG and relate these to industry wide and project specific aspects of CCS. The cost escalation of LNG projects was explained as well as the impact this may have on the deployment of CCS.
Graeme concluded by identifying opportunities whereby LNG and CCS can be integrated.
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CCS learnings from the LNG sector
1. CCS Learning from the LNG Sector
Webinar – 13 January 2014, 1400-1500 AEDT
2. Webinar Program 2013-14
CCS systems integration (ROAD)
Making the business case for CCS (2Co)
Global Status of CCS: 2013 (Global CCS Institute)
North West Sturgeon Refinery Project overview (North West Redwater Partnership)
Commercial structures for CO2 networks (National Grid)
Whole-chain system modelling for CCS (gCCS)
Pipeline design and operation (ECOFYS)
CCS Learning from the LNG Sector (WorleyParsons)
Progressing onshore storage in Europe (CIUDEN)
The role of export credit agencies, commercial banks and multilateral banks in
funding CCS demonstration projects (Société Générale)
TCEP business case and contracting strategy (Summit Power)
Key social research findings (CSIRO)
ULCOS stakeholder engagement (ArcelorMittal)
Relative permeability guideline (Stanford University)
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4. Steve Henzell
Steve is a Principal Process
Specialist at WorleyParsons.
He has 30 years of experience
in oil and gas facilities
development worldwide.
He has been actively involved
in the advent of the new coal
seam gas to LNG projects in
Queensland
Today, Steve will co-present
the results from a report
WorleyParsons recently
completed for the Institute that
aimed to look at the
developments in the LNG
sector and how they may be
applicable to CCS.
5. Graeme Cox
Graeme is a Principal Process
Specialist at WorleyParsons.
He has 30 years of experience
in petrochemical plant
operations, and petrochemical
and refinery technology and
project development.
He is actively involved in
development of emerging
energy sector technologies,
including carbon capture and
storage.
Today, Graeme will present the
results from a report
WorleyParsons recently
completed for the Institute that
aimed to look at the
developments in the LNG
sector and how they may be
applicable to CCS.
6. CCS Learning from the
LNG Sector
Report for Global CCS Institute
Graeme Cox, Steve Henzell, Yu Bin Chan
Webinar, 13 January, 2014
7. Agenda
OneWay™ Moment
Background and Objectives
LNG Value Chain
Global Status of LNG
CCS Value Chain & Status
Project Implementation Lessons
Technical Lessons
Integration of LNG with CCS
Summary and Conclusions
8. Background and Objectives
CCS proposed to contribute to GHG reduction.
IEA lowest cost scenario: CCS reduces CO2 7-8 GTPA
by 2050 (1/6 of total reduction).
Significant growth rate required to achieve target.
LNG has also experienced significant recent growth.
Global CCS Institute requested analysis of lessons for
CCS from LNG development from inception to current
mature state.
Consider full supply chain, technology development &
maturity, capacity, efficiency, costs, projects, contracting.
Compare to nascent CCS industry to identify lessons,
similarities, contrasts, constraints.
9. OneWay™ Moment
LNG Rapid Phase
Transition Explosion
LNG undergoes “cold explosion” upon
contacting water
No combustion but rapid energy transfer
from warm water to cold LNG
11. LNG Value Chain
LNG Tank
LNG
Loading
Terminal
LNG
LNG
Liquefaction
Liquefacti
Plant
on Plant
Ocean
Transportation
Power
Station
LNG Carrier
(Loading)
Gas
Gas
Processing
Processing
Facilities
Facilities
LNG
Tank
LNG Carrier
(Discharging)
Receiving
Terminal
Pipeline
Regasification
Regasification
Pipeline
Gas Fields
Gas Utilities
12. LNG Value Chain
LNG adds value to Natural
Gas by connecting supplies
with markets, particularly by
allowing efficient transport
over very long distance.
There are multiple,
competitive technology
providers for the core
liquefaction process.
LNG has been applied to
conventional and
unconventional gas sources
and to on-shore and offshore reservoirs.
Typical
Temperature at atmospheric
-160°C
LNG
pressure
Properties: Density:
450 kg/m3 Density
600
ratio liquid /
gas:
13. LNG Block Flow Diagram
LNG is a complex, multi-unit value
chain but with similar configuration
common to most developments.
Stringent pre-treatment of feed gas
is critical for LNG process
performance.
Refrigeration
Acid Gas to Disposal
Boil Off Gas to Fuel
Multiple Refrigerant Levels
Inlet Chilling
Gas
Conditioning
Treated Gas
LNG
Liquefaction
LNG
LNG Storage
LNG
Loading and
Shipping
NGL
Gas
Reservoir
Production
Fluids
Water to Treatment
Production
Separation
Propane
Propane
Liquid
Flash Gas
NGL
Separation
Butane
Ethane
Butane
LPG Storage
Water to Treatment
Liquid
Conditioning
Stabilised Condensate / Crude
Condensate /
Crude Storage
Condensate / Crude
LNG Storage
&
Regasification
Natural Gas
14. LNG Storage and Transportation
Storage, shipping and regasification are significant
components of overall
value chain.
www.woodside.com.au
15. Global Status of LNG
LNG is > 30% of global
Natural Gas movement.
Gas is > 20% of global
primary energy.
Source: Developed from BP Energy Outlook 2030, January 2013
Both LNG and Natural
Gas are forecast to
continue recent growth.
17. LNG Liquefaction Development
LNG development projects implemented in ‘waves’ with
different characteristics.
National Oil Companies and governments led early
development, major International Oil Companies dominate
current projects, smaller companies are entering.
One-to-one trade and long-term contracts have transitioned to
more diversified supply and off-take and greater short-term
and spot contracts.
19. Key Projects
North American export
Converting LNG import
terminals to export
terminals.
https://api.maps.arcgis.com/apps/StorytellingTextLegend/index.html?
appid=aa7b306e4769400fbc69989d9cbcbea4
Gorgon LNG with CCS
Gorgon joint venture
investing $2 billion in
world's largest commercialscale CO2 injection facility
of 3.4 to 4.1 MTPA.
20. Key Projects
Prelude FLNG
Receive the raw gas, treat
it and feed it to a LNG
facility located on the deck
of the vessel.
LNG and associated byproducts (LPG and
condensate) will be stored
in tanks in the hull of the
vessel.
The vessel will be 488m
long and 74m wide. It will
be the largest floating
offshore facility in the
world.
22. Capture Status
Capture technologies:
Pre-combustion
Post-combustion
Oxyfuel.
LSIPs in execution and
operation dominated by
industrial processing –
capture from natural gas
& synthesis gas.
Source: Global CCS Institute, 2013
23. Storage Status
Main storage potential in deep saline formations and
enhanced oil recovery.
EOR allows positive value of stored CO2.
LSIPs in execution and operation dominated by EOR.
Source: Global CCS Institute, 2013
24. CCS Status
Status and volume of
projects only small
fraction of emissions
reduction targets.
Maturity of CCS now may
be similar to LNG
corresponding maturity in
1960s to 1970s.
Source: Global CCS Institute, 2013
25. Project Implementation Lessons
Early projects tend towards one-to-one supply chain
LNG had limited off-takers for each liquefaction plant
CCS will need to install whole supply chain at once
Commercial drivers – pricing & volume commitments
Production contracts underpinned LNG projects (lately more spot
market trading)
EOR provides commercial basis for some CCS
GHG mitigation benefit not adequately valued and unpredictable
Project bankability and financing
LNG projects are bankable with production contracts and
multiple large supplier / off-taker participation
Without CCS commercial basis (excluding EOR) project finance
is difficult
26. Project Implementation Lessons
Government-led early market development
Governments and NOCs led early LNG market and are still
major participants.
Government policy intervention required to support predictable
CCS market.
Government direct project role would improve CCS project
bankability.
Project partners to spread investment cost load
LNG project investment shared even among largest IOCs/NOCs.
27. Capacity & Project Growth
Individual CCS projects not so costly as LNG projects ($ billions vs. $10s of billions) but total
global target capacity and number of required projects are greater.
29. Cost Escalation
LNG experienced CAPEX escalation (more than
doubling in last decade) and CCS could be susceptible
to similar risk.
30. Capacity, Learning Curve, Technology
Technology development and increasing maturity (observed for LNG):
Winning technologies become the ‘preferred’ industry standard.
Capacity growth with technology improvement, promoted by project activity.
Train limits due to key equipment, advances in process and equipment.
Unit costs decrease with increased train capacity.
Multiple parallel trains for overall plant capacity and project phasing.
Much greater energy penalty for CCS than for LNG.
Much greater technology selection variability & risk for CCS than for
LNG.
31. Project Development
Projects developed via stage-gate systems.
LNG projects take up to 10 years or more to select
preferred concept, then 4 – 5 years to define and deliver.
Years from commencement of FEED
-5
-4
-3
-2
-1
0
1
2
3
4
5
Concept Selection short duration
Concept Selection long duration (up to 10+ years)
FEED short duration
FEED long duration
EPC short duration
EPC long duration
32. Technical Lessons
Project site selection definition / drivers
LNG reservoir location is fixed. Site selection refers to LNG
process plant, storage and marine.
CCS capture location is fixed. Site selection refers to injection.
Plant layout drivers
LNG plant layout driven by hazard risks of flammable material.
CCS (capture / compression) driven by integration with source.
Hazards management strategies
CCS hazards very different than LNG.
Containment / dispersion strategies could be adapted.
Modularisation applied to LNG, may be applicable to
CCS.
33. Technical Lessons
Acid Gas Removal Unit similarity / contrasts
LNG Acid Gas Removal Unit similar to pre-combustion capture.
Post-combustion very different – low pressure, very large
volume, oxidising environment – different pre-treatment, solvent
selection, equipment design.
Compression selection broadly similar for LNG
refrigeration and CCS. Driver selection site-specific.
Utilities & infrastructure provision
For new LNG, usually provided in scope of green field project.
Added LNG trains utilise existing facilities, often allowed for in
foundation project.
CCS requires integration with host source facility.
34. Integration of LNG with CCS
CO2 from LNG Acid Gas Removal Unit can be
incorporated into CCS – operational in gas plants for
years.
Capture from gas turbine exhaust more difficult. Postcombustion capture favoured. CO2 concentration is low –
gas firing.
35. Summary and Conclusions
From LNG experience, expectation for CCS:
Early projects have disadvantages of smaller scale, one-to-one
supply chain, set up entire supply chain in single projects.
Later projects have advantage of existing infrastructure, diverse
supply chain, mature technology, learning curve cost reductions.
Project cost escalation due to market constraints can
arise at any stage of industry maturity
CCS deployment for GHG targets requires high project activity.
At same time, LNG (& other industries) also expect high activity.
Risks of market constraints both within and across industries.
36. Summary and Conclusions
Government lead / intervention required to establish
such significant industries
NOCs led LNG industry development, still major participants.
At minimum for CCS, governments must set policy to support
adequate, predictable pricing for GHG mitigation.
Commercial basis required for projects
LNG is demand driven in market competition with other energy
products.
For CCS, only EOR has large scale positive value for CO2.
EOR potential storage volume not sufficient for GHG targets.
Commercial basis needed for GHG reduction to underpin large
volume storage in deep saline formations.
37.
38. DISCLAIMER
This presentation has been prepared by a representative of WorleyParsons for the
“Learnings from the LNG Sector” Webinar.
The presentation contains the professional and personal opinions of the presenter,
which are given in good faith. As such, opinions presented herein may not always
necessarily reflect the position of WorleyParsons as a whole, its officers or executive.
Any forward-looking statements included in this presentation will involve subjective
judgment and analysis and are subject to uncertainties, risks and contingencies—many
of which are outside the control of, and may be unknown to, WorleyParsons.
WorleyParsons and all associated entities and representatives make no representation
or warranty as to the accuracy, reliability or completeness of information in this
document and do not take responsibility for updating any information or correcting any
error or omission that may become apparent after this document has been issued.
To the extent permitted by law, WorleyParsons and its officers, employees, related
bodies and agents disclaim all liability—direct, indirect or consequential (and whether or
not arising out of the negligence, default or lack of care of WorleyParsons and/or any of
its agents)—for any loss or damage suffered by a recipient or other persons arising out
of, or in connection with, any use or reliance on this presentation or information.
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A copy of the report can be accessed here:
http://www.globalccsinstitute.com/publications/ccs-learning-lngsector-report-global-ccs-institute