© Gastech 2005

Gastech 2005

Bilbao Exhibition Centre, Bilbao, Spain

14th-17th March 2005

Monetising the Smaller Gas Reserves – Niche LNG Technology for Mid-Scale LNG Applications

by

Joe T. Verghese ABB Lummus Global Inc.

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Introduction The robust forecasts for the growth of LNG over the next decade have generated significant momentum in the intensive planning and development of a number of baseload LNG projects. These baseload projects focus on the exploitation of relatively large gas reserves, typically 5 TCF+. However, a significant portion of the potentially exploitable gas reserves today is stranded gas. The pressure to bring these stranded reserves (estimated to be in the region of 4000 TCF) to the market is compelling. Energy demand in the next two decades is expected to increase by 50 percent or more driven by the engine of economic growth. In parallel, the global demand for clean energy (natural gas and renewables) is anticipated to grow faster than the overall demand for fossil fuels (including coal and oil). Gas represents a less carbon intensive fuel than coal or oil with less sulphur dioxides, nitrogen oxides, particulate matter and carbon dioxide emissions. As a result, the energy mix is getting lighter with gas now accounting for 25 percent of primary energy consumption (Figure 1.0). The monetisation of stranded gas where reserve volumes are 0.5 to 3 TCF is therefore receiving increasing attention. The development of these smaller reserves is critically dependent on enabling technologies, their relative maturity and cost effectiveness in application. The scale of gas reserves, distance to markets, and supply volatility will all determine the optimum technology invoked for each application. Mid-scale LNG, CNG, Fischer Tropsch GTL, Methanol, Gas to Wire, Gas to Solids are some examples of technologies proposed for such applications. This paper will explore the role of mid-scale LNG technologies, such as ABB Lummus Global’s NicheLNGSM process, in profitably exploiting these smaller gas plays. Technology Overview NicheLNG technology is a proprietary suite of elegantly simple, process schemes, specifically tuned to mid-scale LNG production from the smaller, stranded gas, and associated gas reserves. NicheLNG technology (Figure 2.0) is premised on well proven equipment (turboexpanders, plate fin exchangers, compression) and is uniquely configured for small-scale and mid-scale applications, with LNG liquefaction typically in the 0.5 – 1.5 million tonnes per annum capacity range. It is a turbo-expander based process employing an all gas phase (methane/nitrogen dual expansion) circuit. The process is very versatile and flexible for stranded gas and associated gas applications in that it is simple, safe and reliable to operate, and has low equipment count. This inherent simplicity, and resulting reduced footprint ensure that the Operator can significantly benefit through applying modular construction strategies in the implementation phase. Likewise, the plant simplicity also results in minimum operator and maintenance profile during plant operations. The process can be deployed either onshore or offshore, and can be configured in a range of train capacities (typically 75 MMScfd each). The technology can be applied to either associated or non-associated gas production from the field. The rapid enhancement of plant capacity by the addition of extra trains is a particularly attractive feature of the process configuration. The paper overviews the technology, and also the progress achieved in an intensive ABB technology development program focused on migrating the technology offshore (NicheLNG OffshoreSM). The paper extracts conclusions from the work carried out on the NicheLNG Offshore technology, including evaluation of critical issues such as LNG storage, product off-loading and plant marinisation. The technology offers robust economics for both onshore and offshore deployment cases, driven significantly by the low cost of the NicheLNG facility. These economics further highlight the fitness of this technology for monetising the operator’s smaller gas assets. Small and Mid-Scale Gas Assets NicheLNG technology as noted earlier has been developed to provide a profitable exploitation route for stranded gas. Stranded Gas represents a formidable resource. Whilst estimates from experts vary, some estimates suggest that 4,000 TCF or more could be stranded in fields worldwide.

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This opportunity includes:

• Non-associated gas – i.e. gas fields remote from markets and pipeline infrastructure. • Associated gas – i.e. gas produced from crude oil production operations but where quantities are sub-economic

for transport to market e.g. re-injected gas, • And finally, associated gas flared from mature oil production operations.

Stranded Non-Associated Gas There are several reasons why non-associated gas reserves remain stranded even when reserve size is substantial. These include:

• The absence of pipeline infrastructure to transport the gas to viable market. The economics of pipelines are clearly dependent on distances to markets with attractive and stable price regimes.

• Non-associated gas reserves can also remain unexploited due to the presence of substantial contaminants e.g. CO2 & H2S, which require extensive treating.

• Gas reserves can be located in areas of high political or geographic risk. Stranded Associated Gas Similarly, the following are barriers to monetisation of associated gas:

• Production volumes are deemed sub-economic, which implies; • High Capex for gas capture and export. • Or volatility in production rates and/or relatively short plateau production profile.

Gas Reserve Size and Technology Envelope The size of the stranded gas reserve is a key determinant of the technology employed. Figure 3.0 correlates reserves potential of gas fields with the application band for baseload LNG and for a range of alternative technologies. The threshold of commerciality for baseload LNG projects is typically a gas reserve of 5 TCF+. Below this reserves level (and down to 0.5 TCF), technologies such as GTL, NicheLNG, CNG etc can enable profitable exploitation and delivery of gas to the market. NicheLNG is breakthrough technology which achieves a paradigm shift through a lower investment footprint, mid-scale capacity envelope and modular configuration. The technology significantly eases the commercial rigidities that currently characterise the development of baseload LNG projects. NicheLNG Process Randall Gas Technologies, the gas processing group of ABB Lummus Global, has developed a suite of mid-scale LNG processes based on turbo-expander technology. The process development and optimisation phase represents some five years of focused effort, with the initial patent filings recorded as early as in January 1997. The patents covering the processes of current interest were granted in July 2002 by the US Patent Office (Patent no. 6,412,302 B1). Process Configuration The process (1) is based on the liquefaction of gas employing two independent refrigerant cycles, one methane, and the other nitrogen. A key operational characteristic of this process is that the refrigerants are always in gas phase, thus simplifying the process through the elimination of refrigerant receivers, drums separators etc, as commonly found in classical refrigeration systems. Most conventional liquefaction processes involve a large liquid volume of hydrocarbon refrigerant, which represents a significant fire/explosion risk. This is of particular concern in an offshore environment. The NicheLNG process offers inherently lower risk. The methane cycle contributes refrigeration in the region of -100oF (-73oC) to –150oF (-101oC), while the nitrogen cycle is key in the low temperature region –200oF (-129oC) to –265o F (-165oC). Each cycle operates as follows: gas at around 1000 psig (70 bar) and 100oF (38oC) enters a brazed aluminium heat exchanger, LNG exchanger, where it is cooled before being expanded to about 200 psig, with the use of a turboexpander. Due to the isentropic expansion, the temperature of the gas drops and work is extracted from this process. The cold gas is now reintroduced to the LNG exchanger, where part of the refrigeration gained is absorbed by the gas being liquefied, and by the refrigerant gas. The warmed gas is sent to a booster compressor that is driven by the

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turboexpander, where its pressure is raised to about 250 psig (17.2 bar) – 300 psig (20.7 bar). The refrigerant gases are then cooled and sent to final compression to raise their pressure to about 1000 psig (70 bar) to reinitiate the cycle. System Components The process employs independent methane and nitrogen refrigeration cycles. Turboexpanders, rather than J-T expansion valves, are used in both refrigeration cycles, with energy of expansion recovered in expander-driven booster compressors. The energy recovered represents a process efficiency credit relative to J-T expansion LNG processes. Standard frame-sized turboexpanders, typical of the gas industry, are utilised. As described, this process is very simple in its configuration as one brazed aluminium exchanger, two expanders and one compressor train (driven either by a gas turbine or an electric driver) are the components of the liquefaction step. All these components have had extensive and demonstrated experience in gas processing facilities in similar conditions. The Process Flow Schematic (Figure 4.0) depicts the NicheLNG process. All major equipment items are shown on the diagram, thus illustrating the simplicity and compactness of the process. Net refrigeration horsepower is provided by gas turbine driven compression. In the current technology studies, a GE LM 2500 gas turbine is selected to drive both the methane and nitrogen refrigeration compressors needed for each train of 75 MMSCFD. The selection of this tandem arrangement results in a favourable Capex, and in a compact plot layout. Inlet gas is cooled and condensed against refrigerant in plate-fin exchangers, housed in a cold box. This type of exchanger is compact, requiring a relatively small plot area. Plate-fin exchangers economically achieve close approach temperatures needed for attainment of high thermodynamic efficiency. The exchangers/cold boxes are typical of plate-fin exchangers and cold boxes commonly used in the gas industry. For the present application, refrigeration heat of compression is rejected via a once-through sea water system. Titanium-tube shell and tube exchangers are employed. On a project-specific basis, a circulating cooling water system or air fin exchangers could be used instead. Two 100 percent boil-off compressors are provided, which are sized to service both the process and LNG storage needs. The units are reciprocating “labyrinth type” machines with a proven LNG service history. Utility/support facilities include instrument air, cooling water, fire water system, HP flare/vent system, nitrogen generator, LP flare/vent system, fuel gas system, power generation, in addition to LNG storage and LPG storage. Cycle Efficiencies Thermodynamically speaking, the LNG Dual Turbo-expander Cycle (or NicheLNG) is as efficient as the most advanced mixed-refrigerant cycles. However, the efficiency of the first turbo-expanders was very low, typically in the range of 60 percent to 70 percent. Expander efficiencies are currently at 85+ percent. This enhanced efficiency provides the opportunity for applying this technology to the LNG business. This process is able to reach very low specific energy levels, between 12.7 and 16.5 kW/ton-day LNG. Turndown The turndown of the rotating equipment will generally set liquefaction train’s turndown capability. Each train is limited to 70 percent in turndown, a value that is dependent on the expander flexibility. However, as there are three trains, the facility could be turned down to less than 25 percent. Process Advantages The advantages of the process are:

• Simplicity when compared with conventional alternatives. • Adaptability to handle different quality of feedstocks by changing the relative flowrates of refrigerants. • Nitrogen and methane refrigerants are always in gas phase, which eliminates refrigerant inventory and

separators for their handling, with the corresponding impact in safety on the facility. • Heat transfer occurs in gas phase and dense phase, thus simplifying the construction of the exchangers, and

reducing the size of the combined heat exchanger.

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Offshore Application

The NicheLNG process is well suited for production of LNG on floating, production storage and off-loading (FPSO) vessels or barge mounted. To re-capitulate, the main features, which enable deployment of the process on an FPSO or barge, are:

• Process simplicity • Reduced plot area • Modularisation • Safe and simple operation • No refrigerant inventory • No motion impact • Equipment reliability

In recent years, the development of an offshore solution for LNG has been evaluated by a number of technology proprietors including Shell, ExxonMobil and BHP. In the main, such examination has related to baseload LNG units. ABB’s NicheLNG Offshore Technology Program Phase 1 Technology Program

ABB launched a major technology initiative in early 2003 aimed at understanding, and resolving the challenges of deploying NicheLNG technology offshore, specifically on an FPSO. The objective of the 2003 program or Phase 1 was to establish the feasibility of deploying turbo-expander based technology on an FPSO, and thereafter marinising the facilities. The program was also aimed at developing a full concept design of the facilities needed, and to establish the current status of component technologies such as LNG storage and off-loading. The Phase 1 studies culminated in the definition of an NicheLNG Offshore concept and layout, which validated a fit for purpose, safe, and cost effective system for the production of LNG from stranded gas. Extensive economic modelling was carried out on benchmark cases, both for regional and international markets. This economic analysis demonstrated that the NicheLNG Offshore facilities could produce and deliver LNG to target market destinations at prices which were competitive with prevailing market prices. Phase 2 Technology Program Based on the success of the Phase 1 studies, ABB launched a follow-up Phase 2 program, aimed at systematically addressing technology critical elements in order to move the technology to ‘market ready’ status. This phase also sought to put into place a clear strategy for the maturation of technology components still in the development domain.

The Phase 2 work plan includes an extensive program of Motion and Mooring analysis to clearly establish the motion envelopes. These studies are key to ensuring the performance of topsides systems, and the safety of off-loading operations. Such analysis recognises the implications of coupled motion behaviour of the NicheLNG Offshore vessel and the trade carrier during off-loading operations. The identification of hazards and risks, and their mitigation are an intrinsic feature of the program. Thus the program seeks to ensure that risks created by the concept are comparable to, and compliant with existing marine/offshore practice. A life cycle approach is applied to all aspects including vessel and topsides design, cargo handling systems, off-loading systems, marine operations etc. In order to provide our clients with a third party endorsement of the “fitness for purpose”, and intrinsic safety merits of the concept, ABB Lummus Global is currently engaged in the process of seeking “Approval in Principle” classification for the NicheLNG Offshore technology from ABS, the Classification Society. Offshore Development Scenarios Figure 5.0 shows a typical development scenario for an offshore application. The feedstock, which is associated gas from an oil development (Oil FPSO) is transferred to the NicheLNG Offshore facility (NicheLNG FPSO) for front end treatment, liquefaction and storage. The principal product (LNG) is periodically shipped from the FPSO employing LNG trade carriers. Depending on the feed gas composition, some LPG could also be stripped from the feed gas to achieve the High Heating Value (HHV) specification required for the LNG. This LPG would also be shipped, albeit at a relatively lower frequency, by LPG trade carriers.

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Non-associated gas fields with reserves in the range 0.5 to 3 TCF, which are greater than 100 – 125 miles (160 – 200 kms) offshore could also be economically exploited utilising the NicheLNG Offshore technology. The export of gas by pipeline to shore over such distances imposes an investment burden that may render the subsequent onshore processing of gas uneconomic. Technology Program Design Basis Although a range of feed gas compositions can be accommodated, a representative associated gas composition, as shown in Table 1.0, was adopted as the basis for configuring the process facilities, and for executing the necessary process simulations.

Table 1.0

Feed Gas Composition

Component Mole % Methane 78.66 Ethane 8.04 Propane 3.92 Iso-butane 0.63 n-Butane 1.64 Iso-pentane 0.38 n-Pentane 0.47 n-Hexane+ 0.48 H2O 0.21 H2S <4 ppm CO2 5.34 N2 0.21 Hg Trace

The feed gas is routed to the LNG FPSO to arrive at the facility at 1,000 psig (70 bar). The process facilities consist of two distinct processing blocks, viz the Feed Preparation Section and the LNG Liquefaction section (Figure 6.0). The purpose of the Feed Preparation Section is to treat, dehydrate and condition the gas, to a quality which is required for LNG Liquefaction. The specifications achieved for the gas routed to the LNG Liquefaction Section are as follows: Component Specification Limits

Carbon Dioxide < 50 ppmv Hydrogen Sulphide < 4 ppm Total Sulphur (H2S & CO2 +organic sulphur) < 20 ppmv Water < 0.5 ppmv Mercury < 0.01 micrograms/Nm3 Butanes 2% max Pentanes 0.1% max BTX Not detected

Metocean parameters The basis of the technology development program is a notional offshore location in South East Asia, some 160 kms from landfall. Although a moderately benign environment has been selected for the study, the concept and virtually all technology elements are equally applicable for the more severe environments, such as Gulf of Mexico, and the North Sea. The technology exception, where further development work is needed for the latter environments, is the LNG off-loading technology. This is dealt with later in this paper.

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The key metocean parameters adopted for the study are shown in Table 2.0.

Table 2.0

Metocean ParametersKikeh Block K

Water Depth = 4,265 ft (1,300 m) 54321

1-year Envent10-year Envents100-year Envents 1-yr Wave1-yr Wave10-yr Wave10-yr Wave100-yr Wave1-yr Wind1-yr Wind10-yr Wind10-yr Wind100-yr Wind

1-yr Current10-yr Current1-yr Current100-yr Current10-yr CurrentNormal Reduced Design Reduced Design Design Design

OperatingExtremeExtremeExtremeExtremeJonswapJonswapJonswapJonswapJonswapWave

33333 GammaOmniOmniOmniOmniOmni Direction15.715.717.717.719.0(ft) Significant wave ht (Hs)

9.8,11.9,14.69.8,11.9,14.610.5,12.7,14.710.5,12.7,14.711.5,12.9,14.3(s) Spectral peak period (Tp)29.929.933.533.536.1(ft) Maximum wave ht15.715.717.717.719.0(ft) Maximum crest ht3.73.73.73.73.7(ft)Highest design water level-4.2-4.2-4.2-4.2-4.2(ft)Lowest design water level2.02.02.02.02.0(ft)Subsidence

NormalNormalNormalNormalNormalCurrent ProfileVelDepthVelDepthVelDepthVelDepthVelDepth(ft/s)(ft)(ft/s)(ft)(ft/s)(ft)(ft/s)(ft)(ft/s)(ft)3.9404.1703.9404.3604.1701.67-4271.90-4271.67-4272.10-4271.90-4271.15-8531.25-8531.15-8531.35-8531.25-8530.95-12801.18-12800.95-12801.31-12801.18-12800.92-17061.12-17060.92-17061.15-17061.12-17061.25-21331.51-21331.25-21331.74-21331.51-21331.25-25591.51-25591.25-25591.74-25591.51-25591.25-29861.51-29861.25-29861.74-29861.51-29861.25-34121.51-34121.25-34121.74-34121.51-34121.25-38391.51-38391.25-38391.74-38391.51-38391.25mud1.51mud1.25mud1.74mud1.51mud

OmniOmniOmniOmniOmni DirectionNPDNPDNPDNPDNPD(ft/s)Wind58.158.171.271.273.8 1 hour @ +33' elevationOmniOmniOmniOmniOmni Direction

Note:1. Jonswap spectrum and Gamma=3.0 are assumed by ABB.2. Subsidence 2.0 ft is assumed by ABB.3. Colinear condition of wind, wave and current assumed for all cases

The FPSO Concept The LNG FPSO will be a new purpose built vessel and will be classed according to marine standards for offshore LNG facilities. The LNG FPSO will be a non-self-propelled vessel with accommodations located on the bow. The LNG FPSO will be stationary moored with a cantilevered external turret system. Stern thrust will be installed for heading control during off-loading. Station Keeping The mooring system for the FPSO is an external turret secured to the sea-floor by nine taut mooring legs laid out in a radial configuration in groups of 3 x 3. The mooring system is designed to withstand the following:

• 100 year environmental condition • a shuttle LNG tanker of 100,000m3 capacity moored side-by-side in an Hs = 3.5m sea-state. • A shuttle tanker of 150,000m3 capacity moored in tandem in an Hs = 5.5m sea-state.

The motion of the FPSO was analysed under operating and severe storm conditions. This established that the FPSO is capable of operating with a maximum combined roll and pitch of 5° single amplitude or less. Hull Selection The FPSO will be designed and built to comply with the following criteria:

• The FPSO, Accommodation, Hull, Hull systems and Mooring systems to be in accordance with recognized marine standards and certified by a recognized classification society (ABS, DNV, BV, etc).

• The unit will have potential to stay on site for at least 20 years without dry-docking (subject to regular Class surveys and approvals).

• The facility access for underwater water inspection in lieu of dry-docking, including ability to maintain sea chests, sea valves and stern thrusters with minimum or no diver support.

• Vessel lines and configuration which will result in minimum heave and roll motions.

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The FPSO shall comply with the relevant rules and regulations including:

• ABS rules and requirements(2) to satisfy the notation: A1 F(LNG) PLSO – Floating LNG Terminal with Gas Processing and Liquefaction, Storage and off-loading. Alternatively DNV, BV or Lloyd’s class with the same standard or equivalent notations.

• Maritime Regulations and flag state requirements (if required) • Solas, IMO, SIGTTO, OCIMF, NFPA etc.

LNG Containment The LNG FPSO hull is based on a double hull steel vessel with a conventional LNG storage containment. The LNG process facilities can be deployed on LNG tankers which offer ample deck space, where process facilities can be located. Three principal LNG tanker configurations are currently available in the market. Typical profiles are illustrated in Figure 7.0. As can be seen, the ‘Moss’ type storage tank with its storage spheres extending above deck level renders it less suitable for deployment of the LNG process facilities. The IHI SPB type storage tank (Figure 8.0) provides a structurally robust LNG containment system wholly accommodated within the hull, and beneath a conventional flat deck. This flat deck is optimum for placement of support stools on which the topsides process modules can be installed. The membrane type containment results in an inclined deck configuration. The membrane type containment also suffers from a further disadvantage. This arises from propensity of tanks to induce product sloshing due to vessel motions. As the LNG storage will be progressively filling with product, it will often have slack tanks. The inventory in these partially filled tanks is vulnerable to sloshing. Sloshing can generate high dynamic loads and impact pressures, which can impair the containment system, the hull and the pump tower in the tank. The IHI SPB tanks are inherently superior to the membrane type tanks with respect to sloshing of the LNG in partially filled tanks. Sloshing is a concern specific to LNG storage in an FPSO, where the storage tanks will see varying levels of fill, unlike trade carriers which sail with either a full or empty cargo. Figure 9.0 show the outline arrangement for the LNG FPSO vessel, which has 170,000m3 for LNG storage and 35,000m3 of LPG storage. The LPG/LNG FPSO is turret moored at the bow of the vessel with off-loading from the stern. The ship is configured for following number of cargo tanks (Figure 10.0):

• Four (4) individual LNG cargo tanks • Two (2) individual LPG storage tanks

Two LPG storage tanks are required in order to maintain production during the inspection and maintenance surveys of the LPG storage tank. The FPSO will be subject to periodic surveys (after construction) for maintenance of its classification status. LNG Cargo System Design Basis The ship shall be designed, constructed and equipped to carry LNG of a minimum of – 163°C and density of 500 kg/m3 at near atmospheric pressure. The LNG cargo system shall be able to receive, store and export the produced LNG. The LNG will be stored at near atmospheric pressure in fully refrigerated cargo tanks. In order to maintain the LNG cargoes at the near atmospheric pressure, the vessel will be equipped with a LNG boil-off return system. Total volume of cargo tanks at 98% 135,000 m3 Number of cargo tanks 4 Minimum design temperature -275°F (-170°C) Density, cargo LNG 500 kg/m3

LPG Cargo System Design Basis The LPG cargo system shall be able to receive, store and export Liquefied Petroleum Gas (LPG). The LPG will be stored at near atmospheric pressure in full refrigerated cargo tanks. In order to maintain LPG cargo at the near atmospheric pressure, a LPG boil-off re-liquefaction plant will be provided. The primary means of transferring LPG will be through a single floating hose.

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Total volume of cargo tanks 35,000 m3 Number of cargo tanks 2 Minimum product temperature -51°F (-46°C) Maximum product density 0.61 kg/m3 Topsides The topside modules/pancakes will be mounted on support stools on the vessel deck. The hull builder will install the foundations with special attention to local and global hull flexure. The hull shall be designed and reinforced to support the deck mounted process facilities with a preliminary estimated dry weight circa 15,000 tonnes. The overall plot dimensions of the plant (inclusive of the front end preparation section are as follows:

• Length: 150m • Width: 45 m • Weight: 15,000 tonnes

The vessel will have a single continuous deck from bow to stern. The deck design will be designed to ensure full integrity of cargo in view of topsides operation. Resilience to Motions ABB’s technology program has focused particular attention on the design of the topsides systems. Thus, global analysis, and motion and mooring analysis has been carried out to define the envelope of motions for the FPSO. From this analysis, the relevant motion characteristics has been evaluated by process specialists to tune the specifications of the equipment, such as fractionators, in order to ensure that the system will still provide the necessary performance with no degradation of product quality or deterioration in throughput. An example of the motion analysis output is shown in Table 3.0. This table records the significant motions analysed on the FPSO at different levels above the deck. From this data, the topsides designer can appropriately specify equipment, piping and structural systems to ensure that there is no impairment in functional performance or loss of integrity.

Table 3.0

FPSO Significant Motions

135 DegreeSig. Peak Vertical Vertical Vertical Longit . Longit . Longit . Trans. Trans. Trans.

Wave Ht. Period Displ. Vel. Acc. Displ. Vel. Acc. Displ. Vel. Acc.(ft) (s) (ft) (ft/s) (ft/s2) (ft) (ft/s) (ft/s2) (ft) (ft/s) (ft/s2)

19.0 14.3 6.97 2.89 1.25 4.48 1.83 0.78 4.35 1.78 0.7619.0 12.9 4.88 2.19 1.04 3.06 1.34 0.61 2.94 1.29 0.6019.0 11.5 3.15 1.59 0.86 1.82 0.87 0.45 1.81 0.90 0.4917.7 14.7 7.03 2.86 1.21 4.55 1.83 0.76 4.43 1.78 0.7417.7 12.7 4.28 1.94 0.93 2.66 1.18 0.55 2.56 1.14 0.5417.7 10.5 2.44 1.41 0.84 1.22 0.67 0.40 1.37 0.79 0.4815.7 14.6 6.12 2.50 1.07 3.95 1.59 0.67 3.85 1.55 0.6515.7 11.9 2.93 1.41 0.73 1.76 0.81 0.40 1.71 0.81 0.4115.7 9.8 1.94 1.19 0.75 0.91 0.55 0.35 1.09 0.68 0.43

135 DegreeSig. Peak Vertical Vertical Vertical Longit . Longit . Longit . Trans. Trans. Trans.

Wave Ht. Period Displ. Vel. Acc. Displ. Vel. Acc. Displ. Vel. Acc.(ft) (s) (ft) (ft/s) (ft/s2) (ft) (ft/s) (ft/s2) (ft) (ft/s) (ft/s2)

19.0 14.3 6.97 2.89 1.25 2.19 1.04 0.56 5.03 2.26 1.0419.0 12.9 4.88 2.19 1.04 2.13 1.15 0.66 4.03 1.88 0.9019.0 11.5 3.15 1.59 0.86 2.32 1.34 0.80 2.66 1.34 0.7017.7 14.7 7.03 2.86 1.21 2.16 0.98 0.51 4.57 2.04 0.9317.7 12.7 4.28 1.94 0.93 2.01 1.10 0.63 3.53 1.66 0.8017.7 10.5 2.44 1.41 0.84 2.04 1.23 0.77 2.00 1.10 0.6315.7 14.6 6.12 2.50 1.07 1.88 0.86 0.46 4.09 1.83 0.8315.7 11.9 2.93 1.41 0.73 1.89 1.07 0.63 2.43 1.18 0.6015.7 9.8 1.94 1.19 0.75 1.61 1.02 0.67 1.42 0.83 0.50

Significant Motion (double amplitude at FPSO COG)

Significant Motion (double amplitude at 30’ above deck)

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Topside Process Plant Layout The plant layout on the vessel topside (Figure 11.0) is based on maximising intrinsic safety, providing a logical line-up of equipment and piping runs, and ensuring ample access for plant operations and maintenance. The utility equipment is located next to the Accommodation module to allow for buffer zone between the gas processing facilities, and the areas of personnel presence. Escape routes are provided from all hazardous areas of the facility and the facilities representing the highest hazard are located furthest from the Accommodation module. Since the vessel is a turret-moored vessel and generally the direction of the vessel will head into the wind, the Accommodation module and the helideck will be located upwind of the process. Blast walls will be provided to shield the Accommodation and Control Room areas, and also between some of the hazardous process areas. The vent and flare stack will be located on the stern of the vessel away from the process area. Where off-loading is arranged in a tandem configuration on the extreme stern of the vessel, the flare stack will be relatively close to the off-loading equipment. Flare radiation calculations must be performed to verify the incident radiation levels in the off-loading area are acceptable. Possible radiation and plume effects on the LNG carrier will also be considered in such analysis. Life rafts will be provided in several areas around the facilities, whilst lifeboats will be provided next to the Accommodation Module. As a minimum, dual escape paths are provided from all areas of the facilities. LNG Off-loading Offshore A critical feature of an FPSO based offshore LNG scheme is the off-loading of LNG from the storage tanks in the FPSO to the trade carrier. This arises from both the independent and the coupled motion characteristics of the two vessels moored in close proximity. Several factors impinge on the choice of technology for this operation:

• Maintenance of minimum safety separation required for the two vessels, for avoidance of collision. • The integrity of the LNG transfer employing loading arm or cryogenic hoses. • The reliability of the overall system of mooring and fluid transfer, to ensure impact of downtime in such

operations is minimised. A reliable and safe off-loading system is very critical to achieving high on-stream operations for the field. The following parameters are considered as key to off-loading technology selection:

• Safety • Reliability • Cost and mechanical/structural complexity • Technology qualification status • Extent of modifications required to trade carriers

Depending on the sea-state prevalent in the province where the FPSO is deployed, two alternative mooring positions may be applied:

• Side-by-side • Tandem

The side-by-side solution replicates the arrangement seen at the shore terminals. But the tandem off-loading arrangement is considered more appropriate for severe sea-states. Technology proprietors claim that tandem off-loading can operate in sea-states with Hs = 5.5m. Ship to ship LNG off-loading has not been performed to date, but several technologies are in an advanced stage in their development. Developments in off-loading technology have pursued two distinct paths.

• Adaptation of the LNG off-loading loading arm concepts, widely proven in the context of shore-side LNG off-loading.

• Development of the cryogenic loading hose, either in an aerial configuration or a free floating configuration. In general, the motion characteristics generated by two vessels in a coupled configuration require a relatively high degree of complexity in ensuring the integrity of fluid transfer employing loading arms (especially in severe sea states). The development of the cryogenic hose concept has made striking progress with advanced testing of the hose currently in progress with several technology developers. It is anticipated that initial deployments of this technology possibly targeted for a ‘market ready’ status by end 2005, will employ an aerial configuration, where the hose will still require the mooring of the two vessels in close proximity. The medium term goal is to achieve the deployment of a floating cryogenic hose concept. The latter will (a) materially simplify the off-loading concept and (b) will minimise the motion

© Gastech 2005 Verghese 11

inter-action between two vessels. This development has to be viewed in the context of a two-year development horizon to attain market ready status. ABB has, in the context of its NicheLNG Offshore program, closely monitored the technology progress by vendors of this critical piece of technology, and evaluated the integration of this technology for LNG off-loading. The following is a brief summary of the key players, and their offerings:

• SBM has developed the SYMO concept(3) based on the Soft Yoke mooring system already used on conventional FPSO’s. LNG transfer can be achieved either by flexible cryogenic hose or specially designed loading arms.

• FMC Loading Systems provides conventional Chiksan® Marine Loading Arms for side-by-side off-loading and a

tandem solution using the FMC Boom to Tanker loading system. This concept utilizes a duplex yoke mooring system and LNG is transferred through LNG Chiksan loading arms in a pantograph arrangement from a boom.

• The OCL group(4) (Framo and Seaflex) has developed a tandem stern to bow system using cranes and the

CryoDyn flexible pipe transfer system. • BHP Billiton, BPP and Dantec(5) have developed a cryogenic flexible hose concept for LNG transfer. This flexible

hose has a working pressure of upto 20 bar, and a bending radius of less than two metres for a 16 inch bore size.

• KSB, Technip and Eurodim(6) have developed the Amplitude-LNG Loading System using a cryogenic flexible hose.

The fourth phase of a Joint industry Project (JIP) will see the manufacture of a 50 metre length cryogenic pipe, and its extended testing, which will include pumping LNG through it under simulated offshore conditions.

• Senior Flexonics, IMPaC Offshore Engineering, Germanischer Lloyd(6), supported by Exxon-Mobil have developed

a 20 inch bore cryogenic flexible hose with a 6 metre bending radius.

• Bluewater has developed a tandem concept and a variation of conventional side-by-side off-loading. The tandem concept utilizes a self-positioning unit, which maintains station just off the side shell of the LNG carrier. LNG transfer is performed by use of flexible loading hoses or conventional loading arms.

• Several other technology suppliers have also developed innovative concepts for both side-by-side and tandem

off-loading concepts, or LNG import terminals. This list includes, among others, Remora Technology, APL and Connex.

Safety Assessments In general, the major hazards resulting from releases of flammable material can be controlled by suitable design. Therefore, effective measures can be taken to reduce the consequences of events that could compromise the integrity of the FPSO to an acceptable level. This will have a fundamental impact on the layout of the LNG FPSO and safety must be taken into account at the concept stage of the design process. In addition, LNG FPSO introduces some areas of innovative technology. Special attention has been focused on these areas in the safety evaluations undertaken. Likewise, events/scenarios which have the potential to damage the tanks have also been carefully scrutinised. Hazard Sources The main areas with potential for hazard can be summarized as follows:

• The storage of LNG in proximity of process equipment and accommodation

• Tank damage/Loss of Primary Liquid Containment due to:

− Escalation of process events (fire, explosions, dropped objects) − Tank integrity − Collisions − Hull damage, flooding and stability

• Release of cryogenic liquid

© Gastech 2005 Verghese 12

• LNG offloading/cargo transfer in open sea - This risk can be minimized by providing a good station keeping capability, reliable offloading equipment, safe integration of the two vessels during offloading and installation of shutdown and emergency systems/procedures.

• Sloshing loads inside the cargo tanks - The selected containment system for LNG must accept all filling levels

without liquid sloshing damage. In addition to the main safety issues described above, several other scenarios have been evaluated in Hazids and Risk Review sessions. Whilst most of these scenarios have similarities to a typical oil producing FPSO, some are unique to LNG facilities.

• Riser/turret failure

• Loss of station keeping

• Fire & Explosion

• Loss of:

− Any critical component in the process system − Electrical power

• Loss of essential Utility & Safety Systems

• Subsea hydrocarbon release

• Blowdown and flaring

• Helicopter crashes

• Occupational risks: slips, trips, falls, dropped loads etc

• Damage to the primary structure due to; extreme weather, impact/collision, dropped objects, helicopter collision, exposure to unsuitably cold temperature, exposure to high radiant heat

• Release of flammable or toxic gas to the atmosphere or inside an enclosed space • Roll Over (thermodynamic instability due to LNG stratification) • Spillage of LNG onto water (e.g. during offloading) creates vaporization rates so high that physical explosions,

Rapid Phase Transitions (RPT), can occur. These RPT’s can generate air and underwater blast pressures which could damage adjacent equipment /vessels and produce severe but localized damage.

The above potential hazard sources have been systematically evaluated in joint Hazids conducted with The American Bureau of Shipping. The recommendations arising from these Hazids are being incorporated into the design of the system, and in the further refinement of operations and maintenance philosophies. Safety Features The NicheLNG Offshore technology has several intrinsic merits:

• It offers a low equipment count compared to conventional LNG processes, thus minimising hydrocarbon inventories, number of piping connections, and space occupancy on the FPSO deck.

• It has a low space occupancy on the deck (the FPS vessel size being dictated by the storage requirements). This

enables a safer layout to be configured, with ample access and maintenance areas.

• It does not employ liquid refrigerants, leading to the elimination of on-board refrigerant storage with commensurate mitigation of risk.

• Due to the simplicity of its process configuration, the facilities can be modularised and standardised to a high

degree, further reducing hazard potential.

© Gastech 2005 Verghese 13

Economic Evaluation To provide insight into the economic viability of the NicheLNG FPSO described in this study, an economic analysis algorithm was developed, and this was used to evaluate delivered/regasified LNG prices for a range of economic variables including cost of gas feedstock, distance to markets, processing capacities etc. As an illustration of this economic analysis portfolio, the Cost of Service worksheet is presented in Figure 12.0. This shows the result of a parametric study, produced as a plot of COS as a function of plant size and shipping distance, with other variables being held constant. Project Cost of Service (COS), is the price per unit output ($/MMBtu) of LNG/gas that the chain segment must receive (net of condensate and LPG credits) to cover: forward capital and operating costs, sovereign take, recovery of capital employed at start-up, and inclusive of required after-tax rate of return. In other words, it is the real price of gas/LNG output that sets the segment or chain net present value (NPV) equal to zero at the required rate of return. The basis of the COS evaluation includes the following:

• Delivery point is existing gas transmission network (as regasified LNG) • FPSO assumed to be single point moored, with a 135,000m3 LNG tank • Leased tankers deliver export LNG to market • 15% discounted cash flow internal rate of return (DCFIRR) • 10 year double declining balance depreciation • 38% tax rate • 15 year plant life • Feed Gas Cost : $0.3/MMBU • Storage/Regasification Cost: $0.5/MMBTU

The analysis demonstrates the economic viability of NicheLNG Offshore deployments, for shipment distances that can encompass international markets. The concept becomes significantly attractive for shipment to regional markets (e.g. upto 1500 miles). The analysis also shows the impact on COS of introducing additional trade carriers. It is clear that case specific studies are required to set the economic and facility parameters (market locations, processing capacities, LNG storage, number of trade carriers, etc) that will best optimise the exploitation of any given gas asset. Conclusions This paper has demonstrated the potential of the NicheLNG process and NicheLNG Offshore technology to provide an enabling technology solution for small-scale to mid scale gas assets, in the 0.5 to 3 TCF range. The compact nature and versatility of the NicheLNG process render it particularly suitable for offshore applications on an FPSO. ABB’s NicheLNG Offshore technology program has provided a comprehensive design, and template for such FPSO applications. The definition of the system, and development of design, operations and maintenance philosophies have matured to a level, where ABS is currently assessing the concept for issue of an ‘Approval in Principle’. The ‘Approval in Principle’ will certify that the novel concept design complies with the intent of both ABS rules and International standards (such as IGC), and that risk created by the concept is comparable to existing marine practice. Finally, the detailed economic assessments carried out substantiate that the technology is cost effective, showing that regasified LNG deliveries to both regional and international markets can be achieved at prices which are competitive with prevailing market prices. The offshore deployment, in addition, offers a host of advantages such as elimination of ‘permitting’, avoidance of pipeline transportation to shore, and the potential for re-deployment of the facilities. These features, along with system simplicity and robust economics, make a compelling case for the application of this technology for the exploitation of offshore gas assets.

© Gastech 2005 Verghese 14

References:

1. Foglietta J. “LNG FPSO : Turboexpander Economics Monetising the “Gas Problem” Gas Processors Association, September 2004.

2. “Guide for Building and Classing Offshore LNG Terminals”, American Bureau of Shipping, December 2002. 3. Poldervaart L. et al., SBM “Tandem Mooring LNG Offloading System” Offshore Technology Conference, May

2002. 4. Eide J. et al., The OCL Group “A New Solution for Tandem Offloading of LNG” Offshore Technology

Conference, May 2002. 5. Witz J.A, BPP; Ridolfi M.V. BHP; Hall G.A. Dantec “Offshore LNG Transfer – a new flexible cryogenic hose for

dynamic service” Offshore Technology Conference, May 2004. 6. Cottrill A. “Bend ahead in the offshore journey” Upstream Journal, December 2004.

© Gastech 2005 Verghese 15

Figure 1.0

80

90

100

110

120

‘90 ‘93 ‘96 ‘99

Coal

Oil

Gas

‘02

The Energy Mix

The Energy Mix is getting lighter

Inde

xIn

dex

Gas now 25% of Gas now 25% of Primary Energy Primary Energy ConsumptionConsumption

Nuclear8%

Coal25%

Hydro3%

Oil39%

Natural Gas25%

Figure 3.0

Stranded Gas – Reserves & Technology Equation

1000

700

5003.3

4.6

6.6

0.3 50

FIELDRESERVES

TCF

PRODUCTIONRATE

MMscfd

20 YEAR FIELD LIFE

Niche LNG

GTL

CNG

DMEMethanol

LNG

Figure 5.0

OIL FPSO

NICHELNG FPSO

LPG CARRIER FOR SMALL PARCELS

LNG TRADE CARRIER

LNG

Development Concept – NicheLNG OffshoreSM FPSO

PRODUCT OFFTAKE

Gas Feed Stock

Figure 2.0

ABB LNG Turbo-Expander Technologies

c

c

BAHX

Inlet Gas Stream AfterTreating and Dehydration Expander

Expander Outlet Separator

LNG Production Flash

Propane RefrigerantTo/From

Booster Compressor

Recycle Compressor

Rec

ycle

Stre

am

LNG-Pro Scheme(U.S. Pat 5,755,114)

This scheme is the intellectualproperty of the Randall Division of

ABB Lummus Global Inc.

BAHX

Methane RecycleCompressor

Nitrogen RecycleCompressor

Methane Expander

Nitrogen Expander

Liquid Expander

Intellectual Property of ABB Lummus GlobalU.S.Patent 6,412,302Embodiment 'B'

Methane Expansion + Propane Refrigeration

Dual Expansion Methane / Nitrogen

Propane Pre-Cooled Dual Expansion Methane / Nitrogen

BAHXTreated Inlet Gas

Methane RecycleCompressor

Nitrogen RecycleCompressor

Intellectual Property of ABB Lummus GlobalU.S.Patent 6,412,302

Embodiment 'C' Propane Pre-Cooled

HL Chiller

Methane Expander

Nitrogen Expander

Liquid Expander

LL Chiller

Figure 4.0

1-15- 0601

1-16- 0602

1-15-0603

1-12-0601

PROCESS FLOW SCHEME

1-11-0602

1-15-0601Gas/ Gas

Heat Exchanger

1-16-0602LNG Receiver

1-12-0601Methane Expander/

Booster Comp.

1-15-0602Methane Booster

Comp. After Cooler

LC

PC

1-12-0602

1-15-0602

1-15-0605

1-15-06061-15-0607

1-11-0601Methane Compressor

1-12-0602N2 Expander/

Booster Comp.

1-15-0605N2 Booster

Comp. After Cooler

1-11-0602N2 Compressor

1-15-0606N2 Compressor

First Inter-stage Cooler

TC

1-11-0601Notes 1 & 2

Notes :1. Suction scrubbers shall be provided by thecompressor vendor.

TC

PC

1-15-0603Methane Compressor

Inter-stage Cooler

1- 15- 0608N2 Compressor

After Cooler

2. No. of stages to be confirmed by the vendor

Notes 1 & 2From 21-0502

001B

No.

101 103

104

105

106

401

405

406 407

201

202

203

251 253

254

255

351

352

353

354 355356

301 302 303

3. Compressor type is not final

1-15-06041- 15- 0604

Methane CompressorAfter Cooler

CompressedFeed Gas

LNG To Storage

Vent

1-15-0608

1-15-0607N2 Compressor

Second Inter-stage Cooler

PCEnd-flash To Boill-off

Compressor

FromBoill-off Compressor

NicheLNG Process Schematic

Figure 6.0

Block Flow Diagram LPG/LNG

Inlet GasFacilities DehydrationGas

TreatingLPG

Extraction

SolventRegen

Regen

GasReception/Compression

Liquefaction

LNGOff-loading

Utilities

LNGStorage

CO2,H2S

H2O

LPG/C5+Storage

C3/C4's Condensate

Dry Gas

LPG/Cond.Off-loading

To Ships

To Ships

Feed Gas Preparation LNG Liquefaction

Utilities

© Gastech 2005 Verghese 16

Figure 7.0

LNG Containment – Ship Options

IHI SPB Prismatic Type Membrane Type

Moss Spherical Tanks

Figure 9.0

NicheLNG FPSO Overall Arrangement

P5 (flare tower)

P3 (deethanizer)P4 (fractionator)

P6 (loading arm)

P7 (stern on deck)

P2 (side on deck)

P1 (CG)

P8 (LQ)

P9 (turret)

Figure 11.0

NicheLNG FPSO - Topsides Layout

Figure 8.0

LNG Containment - Prismatic SPB Storage

Source: IHI

Figure 10.0

NicheLNG FPSO – LNG/LPG Product Containment

LPG/LNG FPSOLength (LBP) 312.00 mBreadth 51.00 mDepth 28.00 mDraft 11.00 mBlock Coefficient 0.945LNG T.(4 SPBs) 170,000 m3LPG T.(1 SPB) 35,000 m3LNG Plant 1.5 mmta/yOffloading SS/TandemAccommodation 60 persons

LNG CarrierLength (LBP) 263.00 mBreadth 44.60 mDepth 28.60 mDraft 11.00 mLNG T.(4 SPBs) 130,000 m3

BB

C C

312 m

No. 1LNG &Ballast

No. 2LNG &Ballast

No. 3LNG &Ballast

No. 4LNG &Ballast

No. 5LPG &Ballast

APFP

No.1 B.(P/S)

No. 1 C.(C)

No.2 B.(P/S)

No. 2 C.(C)

No.3 B.(P/S)

No. 3 C.(C)

No.4 B.(P/S)

No. 4 C.(C)

No.5 B.(P/S)

No. 5 C.(C)

30m

midship

Figure 12.0

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

0 1000 2000 3000 4000 5000 6000 7000 8000

Shipping Distance

CO

S, $

/MM

Btu

150225

300

LNG Make,MMSCFD

1 Ship

1 Ship

2 Ships

3 Ships

2 Ships

2 Ships

3 Ships

4 Ships

1 Ship

miles

kms1610 3220 4830 6440 8050 9650 11260 128700

Cost of Service Evaluation