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CCS learnings from the LNG sector

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The liquefied natural gas sector has experienced large growth in the last decade and is expected to grow more in the decades to come. …

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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  • 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) http://www.globalccsinstitute.com/get-involved/webinars
  • 3. QUESTIONS  We will collect questions during the presentation.  Your MC will pose these questions to the presenter after the presentation.  Please submit your questions directly into the GoToWebinar control panel. The webinar will start shortly.
  • 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
  • 10. LNG Rapid Phase Transition Source http://www.youtube.com/watch?v=h-EY82cVKuA
  • 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.
  • 16. Global LNG Trade Source: Developed from GIIGNL report, “The LNG Industry in 2012”
  • 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. 
  • 18. LNG Liquefaction Development Share Independents National Oil Companies Iran/Iraq War First Oil Crisis International Oil Companies
  • 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.
  • 21. CCS Value Chain Source: WorleyParsons, CO2CRC (www.co2crc.com.au)
  • 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.
  • 28. Industry Development Timeline Doubled demand 1992-2003 First commercial LNG First international shipment Doubled demand 1983-1992 Doubled demand 2003-2012 International export trade starts Current demand 240 MTPA Doubling demand 2012-2030 LNG 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 CCS CO2 for EOR in USA Permian Sleipner CCS in saline aquifer Current CCS 25 MTPA Doubling CCS 2012-2020 40 times CCS growth 2020-2030 3.5 times CCS growth 2030-2050
  • 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. 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.
  • 38. Backup APCI C3MR LNG Liquefaction Process
  • 39. Backup ConocoPhillips Optimized Cascade LNG Liquefaction Process
  • 40. Backup Statoil / Linde Mixed Fluid Cascade Process
  • 41. Backup Shell DMR LNG Liquefaction Process
  • 42. QUESTIONS / DISCUSSION Please submit your questions in English directly into the GoToWebinar control panel. The webinar will start shortly.
  • 43. Please submit any feedback to: webinar@globalccsinstitute.com A copy of the report can be accessed here: http://www.globalccsinstitute.com/publications/ccs-learning-lngsector-report-global-ccs-institute