Valdez Alaska LNG Summit 13SEP12Good afternoon ladies and gentlemen. I want to thank Bill Walker for inviting me toparticipate in this session of the LNG summit and I would also like to thank Mayor Cobbfor hosting the event. I apologize for not being able to be there. I truly enjoyed my visitto Valdez last year and look forward to the opportunity of future visits.I have been asked to provide my opinions on the concept of placing an LNG liquefactionterminal immediately adjacent to the existing Valdez Marine Terminal (VMT) and also tocomment on some of the potential advantages of having the terminals on essentially thesame site.The primary purpose of liquefying natural gas is to reduce its volume for shipping. Agood example is that one LNG vessel equals 600 vessels full of natural gas.Please direct your attention to the first conceptual site plan that we have prepared. Thisis an overall site plan that includes the docks , VMT and proposed liquefaction terminal.The terminal includes 3 liquefaction trains of approximately 4 million tonnes per year ofLNG. One of the assumptions of this plan is that the pre-treatment of the natural gaswill be done on the North Slope or somewhere along the pipeline before it reaches theterminal. Pre-treatment is required to provide a dry gas free of carbon dioxide and othertrace elements. It also assists in boosting up the pipeline pressure before going toliquefaction. Another major assumption is that due to reduced storage capacityrequirements at the VMT, the current west crude tank farm can be demolished. It is ourunderstanding that these tanks are not currently in active service. This overall site planfalls within the boundaries of what we understand is the current property boundaries ofthe VMT.The liquefaction terminal will require its own reliable source of power generation. Thiscould be accomplished by installing a gas turbine generation plant that is fueled by theincoming natural gas supply. This plant is anticipated to be in the 100+ megawatt rangeand could be located where the existing power plant is currently located (in between theeast and west tank farms). Replacing the existing power plant with an efficient andmodern gas turbine power plant should provide the VMT with a much more cost efficientpower supply system. It is my understanding that the current power plant provides fluegas to the fixed roof crude tanks for blanketing to remove oxygen in the vapor space toeliminate flammable conditions. In the event that floating roofs are not installed in thefixed roof tanks in the future to eliminate the vapor space then a nitrogen generatingfacility could be installed. Blanketing with inert nitrogen gas provides a safe and noncontaminating means of controlling oxygen in the tank vapor space. A nitrogen supplyis also important in the operations and maintenance of the liquefaction facility.
Page 2The large area behind what once was Jackson Point could serve as a constructionstaging area and/or camp area. This area appears to be mostly unused or under-utilized at present. It has been my experience that providing construction logistics andaccess on remote sites is a large schedule and cost item.We have indicated a new LNG dock 6 to the west of existing dock 5. Two docks willmost likely be required for a terminal of this size. 12,000,000 annual tonnes of LNGequals approximately 176 vessels in the 150,000 cubic meter class. The VMT isoperating on 2 crude berths at the current throughputs at dock 5 and dock 4. Existingdock 3 is not in crude service at this time. Existing dock 5 could be reconstructed forLNG service. Existing dock 3 could be placed in crude service to assist the main crudedock at dock 4. We would then have two LNG berths and two crude berths.A major item for comprehensive study in a liquefaction facility is the spacing of thetrains, tanks and other structures. Please direct your attention to the second conceptualsite plan which is a closer view of the onshore facilities. The spacing used in thisconcept is very preliminary but is representative of current liquefaction facilities.The LNG tanks may be placed in the area where the west tank farm is currently located.This will save an enormous amount of civil work and would allow the tank constructionto begin very early in the project.The three liquefactions trains, or units, would be "stair stepped" down the base of themountain. A little more separation between units due to existing topography andgrading may be required in the final design than what we have indicated.The control room would be designed as blast proof and is centrally located. Thebuildings area can be spaced far enough away from the tanks and the trains to satisfysafe distance requirements. There are other items that can be placed on site such asthe nitrogen generation, plant/instrument air system and refrigerant storage.The flare is currently placed on the NW corner to take advantage of the prevailingwinds.Overall, it is my opinion that designing and constructing a liquefaction facility asindicated could provide large cost and schedule savings in the LNG construction andalso be very beneficial to the existing Valdez Marine Terminal.Thank you very much for the opportunity to present this concept to you.Stan LloydLloyd Engineering, Inc. __________________________________________________