Liquid Energy
Natural gas trade routes and liquefaction processes

About a fourth of the international trade in natural gas is as liquefied natural gas (LNG). In 2001, that amounted to 106.6 million tons. The Linde Statoil LNG Technology Alliance is attempting to use new concepts to reduce the costs of natural gas liquefaction plants and, at the same time, to reduce construction time.

The primary energy consumption of the world in 2001 amount to 9.126 billion tons of oil equivalent (toe). The small increase of 0.34% reflects the small growth in the industrialized world. Coal and nuclear energy — so to speak, the home-grown resources – have the highest increase, while consumption of oil and hydropower have decreased. Germany for example consumed 335.2 million tons of oil equivalent, or 3.7% of the total world consumption.
Some 23% of the natural gas supply was traded internationally, and a fourth of that was as liquefied natural gas (LNG). One ton of oil equivalent equals 41.9 billion Joules, and one ton of LNG equals approximately 55 billion Joules. This means that the heating value of LNG per unit of weight is about 31% greater than that of oil. In 2001, world trade in LNG was 106.6 million tons. This is 1.53% of the world primary energy consumption. In 1996, it was 72.6 million tons, an increase of 46.9% in five years. It can be expected that this considerable increase of 8% per annum will continue for some time. In 2001, the price for natural gas in large quantities, in dollars per toe, was 166.30 Dollar in Europe, 161.60 Dollar in the USA and 184.20 Dollar in Japan. Since in Japan only LNG is used, this price can be considered as an average price for LNG. In the USA, the price for natural gas has increased considerably to 161.60 Dollar. Therefore, in the future, larger quantities of LNG will find their way into the USA. In Europe the natural gas price of 166.30 Dollar is between that of Japan and the USA so that even there LNG can compete against pipeline gas.

World trade in LNG
At present, there are 15 sites of baseload liquefaction plants: Abu Dhabi (1), Alaska (1), Algeria (2), Australia (1), Brunei (1), Indonesia (2), Libya (1), Malaysia (1), Nigeria (1), Oman (1), Qatar (2), Trinidad/Tobago (1). Other plants are being built, such as Damietta/Egypt; Hammerfest/Norway; and Sakhalin/Russia, and others are being planned in Africa and South America. In Europe, there are these LNG receiving terminals with regasification plants: Spain (3), France (2), Belgium (1), Italy (1), Greece (1), Turkey (1).
One LNG terminal in Canvey Island/UK was shut down and dismantled as was another one in Nantes/France. The majority of regasification plants (19) are located in Japan. There are also LNG terminals or regasification plants in Taiwan and Korea. Aside from the two already operating in Korea, a third one is being built. In the USA there are still three terminals in use, while a fourth one, Cove Point, Maryland, was converted into a peak shaving plant, but will be turned back into a receiving terminal this year.
In 1964, Algeria started to export LNG from its Camel plant in Arzew. Numerous plants in Alaska, Libya, Brunei, Abu Dhabi and Indonesia were added in the 60s and 70s. Indonesia quickly became the world’s biggest exporter. In 1983, Malaysia started to export LNG, in 1990, the North West Shelf Project in Australia followed. In the meantime, Qatar, Trinidad & Tobago, Nigeria and Oman have joined the group. The first importer was the UK with a terminal in Canvey Island at the mouth of the river Thames. Although, the UK stopped importing in 1981, as enough gas could be supplied by pipeline from the North sea. France and Japan started to import LNG in 1965 and 1969 respectively. Japan soon became the biggest importer. Then Spain, Italy and the USA joined the group. It is worth mentioning that, in 1979, the USA imported their largest quantity up to now. In 1980, as a consequence of the second oil price crisis and the fact that the price of LNG was coupled to the oil price, the American importer was unable to sell the LNG and filed for bankruptcy. Naturally, the shipments by the Algerian exporter decreased. Even Germany bought LNG through the French terminal in Fos sur Mer. As China, India, Mexico and Brazil are planning imports, the forecasted growth will continue. Europe and the USA together consume only 29%, and Japan, Korea and Taiwan 71% of the total of LNG produced.
Enormous effort necessary
The enormous investments are the greatest problem in building up LNG supply chains. They require long-term contracts between financially strong and reliable partners on both the buyer and seller’s side. A certain spot market has indeed developed in recent years. For instance, for a long time the USA only purchased through short-term contracts on the spot market.
But that is not a basis for building new liquefaction plants or new ships. Assuming the specific investment costs per ton of annual liquefaction capacity to be 300 Dollar (only very recently has the cost decreased below that), the installed capacity represents an investment of 32 billion Dollar. In 2001, 128 LNG ships were in operation. These ships have a value of about 25 billion Dollar. At the same time, 40 regasification plants were in operation, representing an investment of at least 12 billion Dollar. Those numbers do not include the costs of gas production, collection and piping to the liquefaction plant, nor the distribution of the revaporized gas. These numbers emphasize the enormous effort necessary to provide only 1.5% of the primary energy supply of our world.
New customers will be added to the existing liquefaction plants. India, China and Brazil are already more or less advanced. The outstanding efficiency of gas turbine and steam turbine power plants and the relative environmental acceptability of natural gas make LNG a preferred source of primary energy for “independent power producers” (IPP) which will establish themselves in the heavily populated coastal regions. One project of this type was completed in Puerto Rico in 2000.
Liquefaction processes
People in the LNG industry have often wished for more competition and new concepts to reduce the costs and construction time for liquefaction plants. Because of that, the Norwegian Oil and Gas Producer Statoil and Linde AG formed an alliance at the beginning of 1996 with the objective of developing new concepts for:
- the liquefaction process,
- the manufacturing of cryogenic heat exchangers, and
- the design and construction of the entire plant.
First, all existing liquefaction processes had to be evaluated. We can distinguish between three different processes:
- the Classical Cascade (CCP),
- the Single Flow Mixed Refrigerant (SFMRP), and
- the Propane Precooled Mixed Refrigerant Process (MFCP).
Both the Classical Cascade and the SFMRP have been established at three locations. The three processes with simple mixed flow may have remarkable differences within their designs, but they have in common that one mixed refrigerant stream is compressed by one single compressor. The most successful process so far, however, has been the Propane Precooled Mixed Refrigerant Process of APCI, which has been used with start-up dates from 1972 to 2001 in more than 55 liquefaction plants in eight different countries.
The liquefaction plant represents approximately 50% of the investment cost of the entire LNG value chain. The Alliance therefore scrutinized and compared the existing processes. In the Classical Cascade Process (CCP) shown on page 34 a three-stage propane precooling cycle is followed by a three-stage ethylene liquefaction cycle and a three-stage methane subcooling cycle. While propane is compressed leaving the different suction drums at its dew point, ethylene and methane are vaporized and superheated before being compressed.
Process optimization
Page 34 also shows the Single Flow Mixed Refrigerant Process (SFMRP) which was the result of extensive optimization work. The first objective of the Alliance, development of an improved process, led to design of the Mixed Fluid Cascade Process. The figure below shows a sketch of this process, which consists of three mixed flows connected in cascade. The precooling cycle consisting of a mixture of C2H6 and C3H8 is compressed in compressor C1, liquefied in sea water cooler CW1 and subcooled in cryogenic heat exchanger E1A. One part is throttled to an intermediate pressure and used as refrigerant in E1A. The other part is further subcooled in heat exchanger E1B, throttled to the suction pressure of compressor C1 and used as refrigerant in heat exchanger E1B. The liquefaction cycle is compressed in compressor C2, cooled in sea water coolers CW2A and CW2B, further cooled in heat exchangers E1A, E1B and E2. It is throttled and used as a refrigerant in liquefier E2. The subcooling cycle is compressed in compressor C3, cooled in sea water coolers CW3A and CW3B, further cooled in heat exchangers E1A, E1B, E2 and E3, expanded in liquid turbine X1 and used as refrigerant in subcooler E3. All compressor suction fluids are slightly superheated above their dewpoints. One German and several international patents have been granted for this process in the meantime. A special effort was made to investigate the different processes on a comparable basis. Linde’s proprietary design optimization program Optisim was used for this purpose. We attempted to have similar heat transfer surfaces for all processes within the cooling water and the cryogenic section.
This was not always possible as the limitation of a minimum temperature difference was given priority. Under these assumptions the compressor shaft power at 100% adiabatic efficiency for the refrigeration cycles turned out to be 70.4 MW for the Mixed Fluid Cascade Process. If one compares the compressor shaft power with real adiabatic efficiencies the advantage of the MFCP versus the C3MRC may disappear, because no axial machine can be applied at the MFCP, while compressor C2 in the C3MRC can be built as an
axial machine, with higher adiabatic efficiency.
In spite of that Linde sees an advantage for the MFCP, since heat exchangers E2 and E3 of this process are of similar size and well within the limits of manufacturability of spiral wound heat exchangers. That means that those heat exchangers are not the limiting factor for the size of a liquefaction train. As far as the
SFMRP is concerned we believe that the limits of manufacturability are exceeded in several areas, e.g. suction line, separators D1 to D3 and compressor C1. Thus this process can be used only for smaller lines with capacities not exceeding two million tons per year.
The optimum capacities for the different liquefaction processes are shown on page 35. While the Single Flow Mixed Refrigerant Process best covers the capacity up to 2 million tons per annum, the Dual Flow Mixed Refrigerant Process and the Propane Precooled Mixed Refrigerant Process are suited for 1 to 4.5 million tons p.a. and the Mixed Fluid Cascade Process for 3 to 8 million tons p.a..
Conclusion
The work done by the Statoil - Linde LNG Technology Alliance with respect to process design, selection of main components, manufacturing of cryogenic heat exchangers and the installation of the process plant on a purpose built barge has led not only to significant savings in investment cost but also to a considerable shortening of the project execution time. The decision to build the Hammerfest plant was a result of this.j