The document discusses the costs and technologies associated with the liquefied natural gas (LNG) chain, including exploration, production, liquefaction, shipping, and regasification. Key advancements highlighted include increased train capacities for liquefaction, improved compressor efficiencies, and new transportation methods like ship-to-ship transfer. To sustain LNG market growth amidst rising natural gas demand, future technologies must enhance cost-effectiveness in compressor efficiency and offshore regasification.

1. LNG Technology
By Laura Donnelly
Energy Technology and Policy
November 25, 2008

2. Capital and Operating Costs
of LNG ‘chain’
Exploration & Treatment & Shipping Storage & Distribution
Production Liquifaction Regasification & Marketing
15-20% 30-45% 10-30% 15-25%

3. LIQUEFACTION
• Cool Gas to -260oF
• 1/600th
of gaseous volume
• 30-45% LNG ‘chain’ costs
• Costs driven by:
– Train number and capacity
– Compressor drive efficiency
• New Technology: Offshore Production
Darwin Liquefaction Facility
http://content.edgar-online.com/edgar_conv_img/2007/03/30/0000950152-07-
002894_L25400AL2540013.JPG

4. Train Size
• Train capacity has grown an average of 3
million tons/year
• Facilities with capacities of 7.8 and 9.6 million
tons/yr will come on stream soon (Qatar and
Russia)
• Increasing train capacity, as opposed to # of
trains, can reduce costs by 25%

5. Compressor Drive Efficiency
• Gas Turbine Improvements
– Increase in efficiency from 28% to 40% in last 40yrs
– Decrease in fuel consumption (i.e. cost) by 60-70%
• Aeroderivative Turbines
– Advantages: increase thermal efficiency by 25% and total plant
efficiency by 3%, less downtime to replace
– Disadvantages: expensive, high maintenance
– Currently, industrial gas turbines are used to drive the
compressors
• Electric Drive Alternative
– Use of smaller turbines in a combine cycle power plant to
produce electricity to run liquefaction plant
– Improve efficiency, cut emissions

6. Offshore
Liquefaction
Floating Production Storage
and Offloading (FPSO)
http://braxtonlng.com/LNGFPSOs.aspx

7. TRANSPORTATION
• LNG shipped in large vessels with cryogenic
tanks
• 10-30% LNG ‘chain’ costs
• Costs driven by:
– Vessel capacity
– Tanker Propulsion
• New Technology: Ship-to-Ship Transfer (STS)

8. Vessel Capacity
• First LNG tankers: 27,400 cubic meters (cu m)
• In 2007, vessels averaged 266,000 cu m
• Decrease in costs by 45% from early 1990’s
due to increase in vessel capacity
• Limitations: restrictions on import vessel size,
maximum capacity of regasification
equipment

9. Tanker Propulsion
• Boil-off gas (~0.15%/day)
– Vent to atmosphere
– Burned
– Reliquefied
• Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine

10. Tanker Propulsion
• Boil-off gas (~0.15%/day)
– Vent to atmosphere
– Burned
– Reliquefied
• Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine

11. Tanker Propulsion
• Boil-off gas (~0.15%/day)
– Vent to atmosphere
– Burned
– Reliquefied
• Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine

12. Tanker Propulsion
• Boil-off gas (~0.15%/day)
– Vent to atmosphere
– Burned
– Reliquefied
• Three Propulsion Options:
1. Steam Turbine
2. Dual-fuel diesel engine (DFDE)
3. Heavy fuel diesel engine

13. Ship-to-Ship Transfer
• Emergence of Offshore regasification and liquefaction
• New vessels may now have capability to transfer or
receive loads
http://www.thedigitalship.com/powerpoints/norship05/lng/Trym%20Tveitnes,%20HOEGH.pdf

14. REGASIFICATION
• Facility costs can range from $100 million for a
small plant to $2 billion for state-of-the-art
‘greenfield’ plant (usually found in Japan)
• Costs driven by
– Storage
– Gas Composition Control
• New Technology: Offshore Regasification

15. Storage
• 1/3 plant capital costs
• Storage capacity dictates volume of gas plant can
handle
• Can usually only process 70-75% capacity load
• Increasing storage can increased capital costs 10-20%
EIA, Global LNG Status and Outlook 2003

16. Composition Control
• Composition of gas delivered to regasification plant
can vary significantly depending on source
• Compounds, such as propane, butane and ethane, can
often be left in the LNG in order to reduce liquefaction
costs
• These compounds raise the heating value (HHV) of the
gas, which many countries do not have the
infrastructure or equipment to handle, the US included
• Industrial equipment accounts for 60% of natural gas
use, and is typically the most sensitive to natural gas
quality

17. Composition Control
• Technologies to reduce the HHV
– Injection of inert gas (usually Nitrogen) into vaporized gas
• Can increase end-user NOx emissions
• Restrictions placed on amount of inert gas that can be present
in fuel
• Increase in capital and operating expenditures to run injection
process, with no increase in value of fuel
– Natural Gas Liquids Recovery (NGLR)
• Remove the mid-range (propane, butane, ethane) compounds
before or after regasification
• Profit from petrochemical sales > profit from high HHV when
present in gas

18. Offshore Regasification
• US to build two Offshore plants, one already under
construction
• Floating Storage and Regasification Unit (FSRU)

19. Conclusions
• To keep the LNG market growing and meet
increasing natural gas demands, it is most important
for future technology to address:
– Compressor Efficiency
– Ship-to-Ship transfer
– Offshore Regasification
• Increasing cost effectiveness will allow companies to
produce gas in harsher environments to help meet
demands (deep sea, artic conditions)

20. Questions?

21. US Natural Gas Imports Projected to 2030
(Pipeline vs. LNG)
Energy Information Administration, Annual Energy Outlook 2006

22. LNG demand as of 2003
Source: Gas Techology Institute, IEA 2003 Natural Gas Information

23. LNG Demand in 2025
EIA International Energy Outlook 2004

24. Why is demand increasing?
• Increased installation of Combine Cycle power
plants for increased efficiencies
• Environmental concerns: Natural gas is
‘cleaner’ than petroleum and coal
• Worries over the abundance of conventional
fuel supplies: natural gas reserves to last 30yrs
longer than oil

25. Wartsila Diesel, 2008
Liquefaction Terminals

26. Wartsila Diesel, 2008
Regasification Terminals

27. Regasification Plant in Sabine, TX
to receive LNG from Qatar (2009)
ExxonMobile Corporation: Form 8-K, current report

28. Federal Energy Regulatory Commission