Through the development and application of liquefaction technology, standard and modular plant solutions are overcoming the economies of scale, traditionally associated only with world-scale facilities, giving rise to the concept of small- and mid-scale LNG enabling environmentally friendly natural gas to be a source of energy, fuel and valuable export commodity.
Definition of small- and mid-scale LNG: Although the terms small-scale LNG and mid-scale LNG have been adopted into common industry parlance, there is no universal definition of liquefaction capacities to denote either, or indeed a fixed point at which the cross-over between the two occurs, hence a definition based on plant characteristics is perhaps more useful.
In terms of economic cost and the time-scale of building a plant, standardization sits at the opposite end of the spectrum to the custom design of base-load LNG plants, and somewhere in between lies modularization. If these traits are aligned with the generic descriptors of LNG plant sizes, then:
Standard Plant Concept for Small-Scale LNG: The market for small scale LNG facilities covers the LNG virtual pipeline (delivering LNG to remote areas not covered by the pipeline grid), using shale reserves to supply fuel for high horsepower applications, such as drilling, mining and other civil projects, the transportation demands of trucking, marine and rail plus power generation.
The standard plant concept consists of maximizing equipment with an essentially fixed mechanical design for a portfolio of capacities. At the specified nominal capacities, key pieces of equipment are designed once with those designs replicated on an ongoing basis. The concept is applied to the pre-treatment, liquefaction, refrigeration, storage and truck loading sections of the plant.
The principal driver for project success is bringing gas to market quickly with LNG production proven to begin within 15 to 18 months of contract execution. Plants typically use a nitrogen cycle liquefaction process and are also simple to operate.
Modular Plant Concept for Mid-Scale LNG: Recent data has shown baseload LNG project costs are upwards of $1000/ton and in some instances, well above that mark. Their development and construction requires many multiple billions in financing as well as many years of planning, permitting and construction. Additionally, signing long-term off-take contracts, securing a gas supply and finding sufficient construction labor, all add to the project complexities and overall risks. Once built, there’s an operational risk with a single train facility that an upset or failure may cause a complete stoppage of all LNG production.
In contrast, the mid-scale LNG answer is to use multiple, smaller, identical modular LNG trains that allow clients to scale their project, and costs, with market conditions. As examples, if feed gas supply resources are not fully developed, clients can start small and proceed with the additional LNG trains as feed gas supply comes on line. If sufficient off-takers are not available, or ready to commit, clients can serve the off-takers that are ready and expand plant capacity as LNG demand grows. If multiple billions in financing are not available, clients can start with a smaller facility and expand as they sell out LNG and secure more funding.
Each single liquefaction module is typically engineered to deliver between 900,000 to 2,700,000 gallons of LNG per day. Additionally, modular solutions are quicker to market and thus generate revenue faster for stakeholders.
Deployment of standard and modular plant designs significantly reduces overall time to production and provides lower cost and earlier recognition of revenues.
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