OPTIMISING THE LNG CHAIN OPTIMISATION DE LA CHAINE DE GNL

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1 OPTIMISING THE LNG CHAIN OPTIMISATION DE LA CHAINE DE GNL David Haynes Jenny Lee-Yong Mark Rogers Advantica Ltd. Ashby Road, Loughborough, LE11 3GR, U.K. ABSTRACT The technical and business risks associated with the complete LNG chain are influenced by many factors including failures of supply at the LNG export terminal, liquefaction difficulties, export delays, import delays and gasification problems. The relationship between technical and business risks is often complex and it is essential to be able to evaluate the risks associated with different parts of the LNG chain, and the chain as a whole, to enable informed decisions to be made when deciding on both the design of facilities and contractual supply arrangements. The use of advanced availability modelling techniques enables the LNG chain to be optimised. To enable such optimisation Advantica has used their OPTAGON simulation software. This uses the Monte Carlo approach and can include explicit modelling of LNG storage at export and import terminals, incorporate the effect of shipping delays and berthing arrangements together with using operational data to effectively model process failures. This approach has been successfully used in optimising the LNG chain. RESUME Les risques techniques et commerciaux associés à la chaîne de GNL dans son ensemble sont influencés par de nombreux facteurs, parmi lesquels les pannes d alimentation au terminal d exportation de GNL, les problèmes de liquéfaction, les retards à l exportation, les retards à l importation et les problèmes de gazéification. Les relations entre risques techniques et risques commerciaux sont souvent complexes, et il est indispensable de pouvoir évaluer les risques associés à différentes parties de la chaîne de GNL et à la chaîne dans son ensemble pour pouvoir prendre des décisions informées quant à la conception des installations et aux dispositions contractuelles d alimentation. L utilisation de techniques sophistiquées de modélisation de la disponibilité permet d optimiser la chaîne de GNL. A cette fin, Advantica Ltd. utilise son progiciel OPTAGON. Celui-ci fait appel à la méthode Monte Carlo et peut inclure la modélisation explicite du stockage de GNL aux terminaux d exportation et d importation, et incorporer l effet des retards d expédition et des dispositions en matière d amarrage. Il permet également d utiliser les données opérationnelles pour modéliser avec efficacité les incidents processus. Cette approche est utilisée avec succès pour optimiser la chaîne de GNL. PO-37.1

2 INTRODUCTION The technical and business risks associated with the complete LNG chain are influenced by many factors including failures of supply at the LNG export terminal, liquefaction difficulties, export delays and gasification problems. The relationship between technical and business is often complex and it is essential to be able to evaluate the risks associated with different parts of the LNG chain and the chain as a whole, to enable informed decisions to be made when deciding both on the design of facilities and contractual supply arrangements. Failures of supply at the LNG terminal can be due to either gas production or gas processing failures. Gas reserves are being developed in progressively more challenging environments requiring evermore complex mitigations to avoid significant logistic delays for interventions and repairs. It is often possible to predict how a single component or subsystem within the gas production/processing chain may perform. However, the way in which the performance of all different components or subsystems interact and effect the likelihood of failures to supply overall is not something easily predicted. Moreover the effects of an upstream failure on the downstream operations have become increasingly complex and frequently can not be understood without modelling the entire LNG chain. For the purposes of this paper the LNG chain has the following links Offshore Gas Production Onshore Gas Processing LNG Export Terminal Shipping LNG Import Terminal Figure 1: The LNG Chain COMMERCIAL RISK When considering the availability of a LNG facility the natural tendency is to look first at the gas turbine compressor sets in a liquefaction plant, or the high pressure send out pumps of a receiving terminal. There are however, other factors and equipment items that should also be examined when deciding on the business risks associated with a full LNG chain. This paper discusses some of the impacts of the upstream infrastructure and shipping elements and compares these with the more equipment intensive import and export plant. Risk can be considered to be the combination of the probability of an event happening and its consequence, and the examination of mitigating factors that reduce its influence on the operations and business performance. The earlier decisions are taken in the design process, the more impact will they have on the minimisation of cost and the reduction of risk. RELIABILITY OR PROBABILITY Reliability is the amount of time a piece of equipment statistically operates for between failures in a given time period. Good reliability therefore means long intervals between maintenance and failure. Intuitively, low reliability would be expected from PO-37.2

3 items of rotating equipment such as compressors, pumps and turbines. Table 1 shows some typical reliabilities of LNG process equipment. Table 1: Typical Reliabilities Equipment Item Reliability LNG Send out Pumps 97.3% Process Pumps 98.5% LNG Refrigerant Compressor 99.8% Process Compressor 99.3% Gas Turbine 97.0% Frame 5 LNG Compressor Drive 99.4% The clean nature of LNG/natural gas and consistent operation within design parameters can clearly be seen to improve reliability of some items beyond normal dirty process service. Other items of non rotating equipment should not be forgotten as they are also prone to failure. For example, submerged combustion vaporisers in import terminals, particularly the older multi-burner type have historically has a poor reliability of about 96.5%. AVAILABILITY OR CONSEQUENCE The data on reliability discussed above are interesting but fairly trivial unless they can be expressed in quantifiable terms of consequence, i.e. lost production. Availability can be defined as the annual actual production divided by the theoretical annual production. Two additional items of information are therefore required, the time to repair the failure and the impact of the failure on the business. For example, if an import terminal has two send out pumps and one fails, 50% of the terminal s revenue stream disappears for the 120 hours it takes to repair the pump. The system availability is therefore: Lost production = 120 x 50% / (365 x 24 x 100%) = 0.68% Availability = % = 99.32% The LNG gas turbine-refrigerant compressor combination is particularly poor for a typical LNG liquefaction plant. For example, using a state of the art APCI propane precooled mixed refrigerant (C3MR) process, should one of the Frame 7 turbines trip, all LNG production is lost. Fortunately, repair/restart times are relatively low and annual production shortfall (attributable to the gas turbine/compressors only) is very low at 1.39%, an availability of 98.61% Before moving on it is useful to examine one more item of equipment where failures would perhaps not be expected to have such a high level of impact. A cryogenic plate fin heat exchanger in LNG service is very reliable with failure rates in excess of 150,000 hours but it can take nearly 700 hours to warm up the plant, purge, enter the coldbox and cut out or weld up the leaking exchanger and then reinstate the equipment. As LNG PO-37.3

4 production is lost completely for this time, this rare failure mode has a low availability of 0.38%. AVAILABILITY MODELLING The above examples have deliberately been very simple and traditional analytical techniques such as reliability block diagrams and fault tree analysis are widely used for predicting reliability and availability. Such methods are usually applied only to these relatively simple systems with constant failure rates, simple logic and simple repair processes. In real processes, particularly those involving many interlinked and interacting process steps like the LNG chain require a different approach. Monte Carlo simulation techniques based on the use of random numbers and statistical distributions are the most widely used technique. Advantica has developed such a computer application called OPTAGON specifically for gas, oil and LNG modelling. This package uses reliability block diagrams to represent the functionality of the system in terms of its components but extends the use of the diagrams by associating a maximum flow capacity with each component and assigning a demand level that the system must meet. By doing this, partial operation of the system can be modelled. When considering the Monte Carlo approach in the reliability context, the performance measures of interest are characteristics such as the reliability and availability of the system. Events to which the model is subjected are, typically component failures and repairs, while its nature means that it is possible to include a wide variety of complex component and system behaviours, such as the use of resources, storage, start and logistic delays, equipment start delays (e.g. cooling down), preventative maintenance and demand fluctuations. MITIGATIONS OR SPARAGE PHILOSOPHIES The main mitigation for low availabilities is to provide additional, spare equipment so that no production is lost as a result of equipment failure. The LNG pump example is typical. LNG sendout pumps cost about US$ 2 million each and are therefore relatively inexpensive. An installed spare is therefore justified in all cases, and two installed spares can be justified in certain scenarios. When LNG refrigerant compressor/turbine sets are considered the additional investment, perhaps US$ 20 million is harder to justify. The APCI C3MR process has no scope for redundant equipment. The Philips Optimised Cascade process, however, with its two trains in one concept does just that. It balances the additional capital investment against the additional availability, i.e. sales revenue. As shown in Figure 2 below, the Phillips process operating with 6 x Frame 5 turbine/compressor sets achieves slightly better levels of production shortfall at 1.17% compared with an APCI C3MR process using two Frame 7 turbines (1.39%) although its availability is considerably worse (96.17% vs 98.61% on a turbine/compressor alone basis). PO-37.4

5 UPSTREAM GAS PRODUCTION Figure 2: Simplified OPTAGON simulation of the Phillips Cascade Process Typically, the upstream element of a LNG project usually consists of several platforms supplying the liquefaction plant through multiple connecting pipelines. The technology is relatively simple, separation of a three phase fluid and perhaps some dehydration. Compression and liquids pumping are often required in later years. Redundancy can usually be built in. In any case complete failure of a platform, usually through problems with the less exotic items such as the Gas Compressor, Gas Turbine, ESD System and Production Separator, will only result in a partial loss of production. In Advantica s experience, offshore platforms can typically have availabilities of above 97%. Repair times are generally relatively low but the trend towards not normally manned platforms in harsher marine environments means that getting a repair team in place and keeping them in place can lead to significantly longer supply interruptions. An LNG example would be Statoil s Snohvit project in northern Norway. Statoil have gone to considerable lengths and costs to reduce the need to work in northern Norway during the winter period where low temperatures, continual darkness and distance to supply centres are all issues. The one exception is the failure of a producing well where a protracted work over perhaps lasting several months will be required for repair. Where mobilisation of equipment to a remote area is also required repair times may extend further. The impact of a well failure is however minimised by the number of wells typically handled by one of today s platforms. The other trend within the industry is exploration and production in deeper and deeper water. BG Group s Egyptian LNG is supplied by gas from the West Delta Deep Development located in m of water. Platforms can be designed for these conditions as evidenced by the US Gulf of Mexico but the current trend is to produce the wells using purely subsea equipment and tie the fields back to shore using multiphase pipelines. This brings two issues to the fore, firstly maintenance of the subsea trees and PO-37.5

6 Pipeline End Manifolds (PLEMs) is difficult, expensive and requires specialist equipment and secondly multiphase pipelines containing gas, water and hydrocarbon liquids can block through formation of hydrates, waxes or corrosion products should inhibition devices fail. With this type of arrangement, catastrophic failure is now a possibility where all LNG production could be lost for weeks if not several months. Mitigations are all high cost, for example redundant pipelines or specialist standby vessels, and must be carefully considered. When considering the reliability of the West Delta Deep project, Advantica considered over 1000 system components and performed in excess of 10,000 simulations. This is only now available with modern computing power and complex modelling software such as OPTAGON. The extreme case of a failure of a subsea component or the pipeline could only be partially mitigated by the availability of supply boats and an increased spares holding at the supply base. A commercial mitigation through the use of pooled gas from other fields to minimise overall revenue losses is a potential solution to provide acceptable risk free project returns. SHIPPING Ships suffer from several availability considerations. Availability in this context is perhaps best thought of as a ship arriving within its loading/unloading window. Failure to do so is likely to have production implications for either or both of the liquefaction and receiving terminals. Ship speed is typically lost through bad weather and machinery failures. Machinery failures, like their land-based counterparts, can be predicted; weather is less predictable. Most voyages are sufficient to allow a carrier to make up lost time by increasing the ship s speed if delays happen early or during the middle of a transit. The cost for this is increased bunker use but this is often a minor consideration given other potential contractual penalty clauses. The main problem therefore is the final part of the transit, typically the approach to the import terminal which is often restricted by tidal and/or daylight berthing considerations, other traffic and weather. One of the more extreme examples is the approach to the Lake Charles terminal in the USA which involves a long transit up the congested Calcasieu River. The US Coastguard and local pilots have developed this to a fine art over the years but the early morning fog which clears slowly is a problem. The decision to start a transit up the river is therefore an individual decision of the pilot who has to balance using his experience of the speed of dissolution given sunshine, wind, humidity, etc.. Monte Carlo simulation can be used to define the risk of shipping delay given sufficient data from, for example, port authorities. An example is shown in Figure 3, below which equates terminal availability for National Grid Transco s Isle of Grain terminal (under construction in the UK) with shipping delay. In this case the approach is physically relatively straight forward and weather, occasional mist, much less of an issue. In this case, restrictions because of other traffic is the main consideration. PO-37.6

7 Availability (%) hr Delay 48hr Delay 72hr Delay % of Ships Delayed Figure 3: Ship Delays for the Isle of Grain Terminal STORAGE THE ULTIMATE MITIGATION One of the few mitigations for ship delays and therefore for both upstream and downstream parts of the chain is the size of the storage tanks provided at both terminals. There are two problems with storage tanks, firstly the capital cost involved and secondly that they only come in discrete sizes. At about US$ 300/m 3, LNG storage tanks are an expensive mitigation for shipping risks. Designers are normally under pressure to reduce tank sizes and numbers to the minimum. Storage tank sizes have increased rapidly over the last 5 years to the present level of 160,000 m 3. Above ground tanks of 180,000 m 3 are under construction in Japan with a lower limit of perhaps 140,000 m 3 still being designed and built. This narrow range of larger size tanks makes matching of optimised inventories increasingly difficult. Figure 4: Storage Tanks at the Isle of Grain, UK Reducing storage margins leads to lower capital costs but increases the risks of tank emptying and therefore reduced production and even warming up, or at the other extreme, inability to load or unload a LNG carrier. Figure 5, below, again for the Isle of Grain project, shows the risk of different gas export rates for a given size of LNG storage. At higher flowrates, ship deliveries are very PO-37.7

8 frequent and any interruption of gas send-out can result in the storage tanks being too full to unload the waiting LNG carrier. Time (days) Existing storage Tank empty Tank <25% full Tank 25-50% full Tank 50-75% full Tank >75% full Tank 100% full 100% 125% 167% 183% Gas Export Rate (Mcmd) Figure 5: Availability Analysis of Tank Levels Indicating Periods of Empty or Potential Overfilling This figure nicely demonstrates the complexities and interactions of shipping, storage and regasification equipment. CONCLUSIONS The increasing complexity of the LNG chain can now only be optimised by using advanced Monte Carlo availability techniques. Although traditional techniques can determine the importance of certain equipment configurations, wider risk issues can not be examined. An understanding of catastrophic rather than average levels of risks is becoming more important as upstream gas production moves into harsher environments. Suitable physical mitigations are increasingly difficult to engineer in a cost effective manner and therefore new commercial structures will be required to reduce risk to acceptable levels. PO-37.8