lng quality and market flexibility challenges and solutions
TRANSCRIPT
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Presentation outline
• Quality specifications for different distribution networks
Characteristics of LNGs currently produced
• Quality adjustment options available to producers and terminal operators
• Overall optimization: a suggested approach(case study)
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Network gas specifications by regionNetwork gas specifications by region
Objectives:Objectives: SafetySafety – non-toxic, non-corrosive– non-toxic, non-corrosive Interchangability Interchangability of gas being distributedof gas being distributed
limit variation range of parameters affecting combustionlimit variation range of parameters affecting combustion
GCV specs for domestic gas: 3 main regions:GCV specs for domestic gas: 3 main regions:AsiaAsia (Japan, Korea, Taiwan):(Japan, Korea, Taiwan): high GCVhigh GCV > 1090 Btu/scf> 1090 Btu/scfUK & USUK & US: : low GCVlow GCV < 1065 Btu/scf.< 1065 Btu/scf.
In addition, WI < 51,41 MJ/m3(s) for In addition, WI < 51,41 MJ/m3(s) for
UKUKContinental EuropeContinental Europe: : wide range of GCVwide range of GCV: : 990 to 1160 Btu/scf 990 to 1160 Btu/scf
Main parameters covered by specifications:Main parameters covered by specifications:Calorific Value (GCV) Calorific Value (GCV) per unit volumeper unit volumeWobbe IndexWobbe Index (WI = GCV / (WI = GCV / relative density) relative density)ICF, Soot Index, Yellow Tip Factor, …ICF, Soot Index, Yellow Tip Factor, …
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Different quality specifications: historical reasonsDifferent quality specifications: historical reasons
Gas producing countries - Gas producing countries - specs based on characteristics of local gasspecs based on characteristics of local gas : : High inert gas content (UK - Groningen)High inert gas content (UK - Groningen) Extraction of C3 & C4 to valorize as LPGExtraction of C3 & C4 to valorize as LPG Extraction of C2 for petrochemicals feedstock (US Gulf Coast)Extraction of C2 for petrochemicals feedstock (US Gulf Coast) Need to take different gases from diverse sources (Cont. Europe)Need to take different gases from diverse sources (Cont. Europe) Separate networks (H gas & B gas in Europe)Separate networks (H gas & B gas in Europe)
Countries using imported LNG from the start – Countries using imported LNG from the start – specs based on specs based on
characteristics of LNG available in the Asia-Pacific basincharacteristics of LNG available in the Asia-Pacific basin::LNG with low inert gas contentLNG with low inert gas contentLNG rich in ethane and often also C3 – C4LNG rich in ethane and often also C3 – C4Adjustment of GCV before distribution, by injection of LPGAdjustment of GCV before distribution, by injection of LPG
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Characteristics of LNGs currently producedCharacteristics of LNGs currently produced
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54
55
56
57
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39 40 41 42 43 44 45 46 47
Gross Calorific Value in MJ/m3(n)
Wo
bb
e In
de
x in
MJ
/m3
(n)
Kenai : almost pure methane
Trinidad&Tobago;Algeria GL1K and GL2Z:
LNGs designed for USA market
15 other plants:LNGs designed for Asian
or European markets
UK Wobbe Index limit
1,075 Btu/scf JapanUSA
UK
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Quality adjustment at the import terminalQuality adjustment at the import terminal
• Options available:
LPG injection (butane and/or propane) Japan Nitrogen injection UK, US Extraction of C3+ and even C2 US Gas streaming to users US, Japan Blending with local gas US, UK, Europe Blending different LNG cargoes Everywhere
Terminal specs can be quite different to network specs Both specs and available equipment may vary over time
Negotiation on a case-by-case basis
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Terminal specifications - GCV
35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Possible future European standard
Spain - All terminals
USA - Lake Charles
France - Montoir and Fos
UK - NGT Transco
USA - Southern California
USA - Florida Gas Transmission
USA - Elba Island
USA - Everett
USA - Cove Point
Japan (example 3)
Japan (example 2)
Japan (example 1)
Korea
Taiwan
Gross Calorific Value in MJ/m3(n)
Group:
Europe
Asia
USA
Problem with USA specification
Nigeria / Indonesia
Qatar / Malaysia
Oman / Australia
Brunei / Abu Dhabi
Trinidad & Tobago
Alaska
Algeria (2 plants)
Algeria (2 plants)
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Wobbe Index Specification
48 49 50 51 52 53 54 55 56 57 58 59 60
Future European standard
Spain
France
United Kingdom
Japan (example 1)
Japan (example 2)
MJ/m3(n)
Group:
Japan
UK
Europe
Nigeria / Indonesia
Qatar / Malaysia
Oman / Australia
Brunei / Abu Dhabi
Trinidad & Tobago
Alaska
Algeria (2 plants)
Algeria (2 plants)
Problem with UK specification
Terminal specifications – Wobbe Index
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C2+ production from existing plants
Petrochemicals
GCV
Gas production
GCV
Gas production
Petrochemicals
GCV
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LPG extraction at the plant
• Negative aspects
Increased Capex and Opex
(extraction units, storage and loading facilities)
Marked increase in safety constraints
Risk of saturating port facilities
• Positive aspects
Increased amount of feedgas produced
LPG easy to valorize
better project economics
Ethane only worth extracting if petrochemicals outlet nearby
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Overall optimization – a suggested approach
GNL
Shipping
GNL
Import terminal
GNL
CONDENSATS
GNL
EXTRACTION
Liquefaction plant
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Overall optimization – a suggested approach
Need for a global approach factoring in shipping
• Case study
Delivery of 750 mmscfd to the US Gulf Coast market
(~ 5,4 Mt/an)
Production in Middle East (North Field type gas)
Quality compatible with UK specs to allow rerouting
140 000 m3 tankers
Voyage duration 24 days
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Three scenarios studied
Three quality-adjustment options,
but, same amount of energy delivered on the natural gas market
1. No extraction at plant – Injection of nitrogen at terminal(max. N2 content: US 3%, UK 5%)
2. Extraction of GPL at plant and valorization at FOB Arabo-Persian Gulf price
3. No extraction at plant – Extraction of GPL at terminal and valorization at Mont Belvieu price
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Extra costs vs extra product revenues
Case n°1 Case n°2 Case n°3
Feed gas 813 884 (+9%) 878 (+8%)
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Extra costs vs extra product revenues
Case n°1 Case n°2 Case n°3
Extra LPG 500 kt 480 ktExtra condensates 10 kt 10 kt
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Extra costs vs extra product revenues
Case n°1 Case n°2 Case n°3
Nitrogen
Injection
220,000 t
Extra costs
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Extra costs vs extra product revenues
Case n°1 Case n°2 Case n°3
LPG extraction,Storage and loading
+3 cargoes +7 cargoes
Extra costs
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Extra costs vs extra product revenues
Case n°1 Case n°2 Case n°3
LPG extraction,Storage and loading
+3 cargoes +7 cargoes
Extra costs
at at
feed-gas Henry
Hub
price price
Fuel gas
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Overall optimization - Conclusions
• Extraction of LPG: Helps boost production from gas field 8 - 9% Profitability OK at current LPG prices
• Extraction at plant rather than US terminal Need detailed study factoring in real Capex Sensitive to relative LPG prices in Gulf and US
• Extraction at plant LNG meets both US and UK specs: GCV = 1052 Btu/scf ; WI = 51.41 MJ/m3(s)
• Extraction at US terminal harder to reroute within Atlantic zone, but LNG meets Asian specs:
GCV ~ 43 MJ/m3(n) i.e. 1,100 Btu/scf
• Should factor in impact of LNG composition on shipping costs