COMPREHENSIVE EVALUTIONS OF LNG TRANSFER TECHNOLOGY FOR OFFSHORE LNG DEVELOPMENT

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1 COMPREHENSIVE EVALUTIONS OF LNG TRANSFER TECHNOLOGY FOR OFFSHORE LNG DEVELOPMENT EVALUATIONS APPROFONDIES DE LA TECHNOLOGIE DE TRANSFERT DE GNL POUR LES DEVELOPPEMENTS DE GNL OFFSHORE David McDonald, MS. P.E. Advisor, Marine Facilities Engineering ChevronTexaco Shipping Company San Ramon, California, U.S.A. Chen-Hwa Chiu, Ph.D., P.E. Senior Technology Advisor, LNG and Gas Processing ChevronTexaco Energy Technology Company Bellaire, Texas, U.S.A. Dean Adkins, BS, P.E. Advisor, Facilities Engineering ChevronTexaco Energy Technology Company San Ramon, California, U.S.A. ABSTRACT Future development of LNG projects, whether for LNG export or LNG import, in offshore locations around the globe demand a critical and comprehensive evaluation of the current slate of available technologies for offshore LNG transfer. The transfer of LNG between floating offshore facilities and LNG carrier is arguably the weakest link of the total chain for offshore LNG development. Since the strength of a chain is only as strong as its weakest component, current offshore technology research and development efforts are concentrating their efforts on LNG transfer systems and technologies. Since the there is a spectrum of offshore LNG transfer technologies being developed by private companies or through joint industrial projects (JIPs), and the urgency of linking these developments to the evolving floating offshore LNG export or receiving terminal projects, a comprehensive comparison and critical evaluation of these emerging offshore LNG transfer technologies was initiated by ChevronTexaco in 2000 and continues today. This paper presents a review of currently available offshore LNG transfer technologies and then presents a methodology of evaluation based on the total system design, safety and operability, equipment integrity, testing and certification and economics and timing to market. Results of the evaluation presented herein represent a snap shot of current status from the point of view of an operator evaluating offshore LNG terminals. RESUME Le développement futur de projets de GNL, que ce soit pour l'importation ou l'exportation de GNL offshore à travers le monde, exige une évaluation approfondie des technologies actuelles disponibles pour le transfert de GNL offshore. Le transfert de GNL PS3-5.1

2 entre des installations offshore et le méthanier est sans conteste le maillon faible de la chaîne dans le développement de projets de GNL offshore. Puisque la résistance de la chaîne dépend de la force même de son maillon le plus faible, les efforts actuels de recherche et de développement dans le domaine des technologies offshore se concentrent principalement sur les systèmes et technologies de transfert de GNL. Toute une gamme de technologies de transfert de GNL offshore est actuellement développée par des sociétés privées ou par le biais de projets industriels conjoints (PIC) ; il est par conséquent essentiel de lier ces développements aux installations d'exportation ou de réception de GNL offshore en constante évolution, aux projets de terminal de stockage et de regasification, et d'effectuer des comparaisons approfondies et une évaluation complète de ces nouvelles technologies de transfert de GNL. Cette publication passe en revue les technologies de transfert de GNL offshore actuellement disponibles et présente une méthodologie d'évaluation basée sur la conception totale du système, la sécurité et l'exploitabilité, l'intégrité des équipements, les essais et la certification, ainsi que l'aspect économique et les délais de livraison sur les marchés. Les résultats de l'évaluation présentés ici représentent une vue d'ensemble de l'état actuel des choses du point de vue de l'opérateur de terminal de GNL offshore. INTRODUCTION This paper presents a review of currently identified offshore LNG transfer technologies, the critical components to the success of the systems, and then presents a methodology of evaluation based on the total system design, safety and operability, equipment integrity, testing and certification and economics and timing to market. Results of the evaluation presented herein represent a snap shot of current status from the point of view of an operator evaluating offshore LNG terminals. MARINE LNG TERMINAL CONCEPTS There are two main categories of offshore LNG terminal concepts; fixed facilities, such as Gravity Based Structure (GBS) platforms, and floating facilities such as Floating LNG plants (FLNG) or Floating Storage and Regasification Units (FSRU). Critical elements of each of these terminal types are the berthing and mooring arrangements, and the transfer of the LNG between LNGC and terminal. Gravity Based Structures Gravity Base Structures (GBS) can have a variety of shapes and designs. They can be used to support the liquefaction (LNG production and export) or regasification (LNG receiving terminal and regasification) process facilities and to store LNG. GBS concepts have been considered for many different projects, but none have been installed to date. ChevronTexaco is designing GBS facilities for the Port Pelican LNG receiving terminal in the Gulf of Mexico and for Terminal GNL Mar Adentro de Baja California, and has short listed the concept for other possible terminals in other parts of the world. The GBS can be arranged to provide a sheltered berth for the LNG carrier (LNGC) as shown in the Figure 1 below. The arrangement shown in the figure is a regasification facility; however a liquefaction facility would only differ in the nature and arrangement of the equipment on the top of the GBS. PS3-5.2

3 Figure 1 - GBS LNG Facility with LNGC The berthing of the LNGC to a GBS is analogous to berthing at a conventional wharf and the cargo transfer mechanism between the GBS and the LNGC is identical to a conventional wharf (e.g. Chicksan arms). The mooring and fendering arrangement would be similar to those of a conventional wharf and could either be integrated into or separated from the GBS structure. While this concept is ideally suited for remote offshore installations, it is limited to shallow water depths due to both economic and constructability (construction site availability) issues. Concrete has a long history of successful performance in harsh offshore environments, as well as in LNG service. There are no new components or technology required for this concept, and it is being deployed by ChevronTexaco. FLOATING LNG FACILITIES FSRU and FLNG Vessels Floating LNG (FLNG) vessels are functionally analogous to Floating Production, Storage and Offloading (FPSO) vessels, except that the fluid processed and stored is gas and LNG, not oil. The LNGC can be moored to the Floating LNG facility in either a sideby- side or in tandem arrangement depending on the local environment. Due to the relative motions between the two vessels, side-by-side offloading is only suitable for sheltered or mild environments; whereas tandem offloading will be more suited to exposed environments. Shown in Figure 2 is a conceptual FLNG vessel with export tankers in both a side by side and tandem mooring arrangements. Floating Storage and Regasification Units (FSRUs) are functionally equivalent to an onshore receiving terminal. LNG is transferred from a LNGC to the FSRU where it is stored, regasified and exported via pipeline to a distribution system. PS3-5.3

4 Figure 2 - FLNG with LNGC in Side by Side and Tandem Mooring Arrangement (Courtesy of IHI) In both floating LNG facility types, the FLNG and the FSRU, the LNG is stored in tanks located within the hull and the gas processing equipment is set on the deck. The material used in the construction of the hull structure can be steel or concrete depending on local resources and project drivers. The LNG containment systems on FLNG and FRSU vessels are the same as those used on LNGCs and are proven technologies. A variation of the FSRU concept is the Regasification LNGC. There are various conceptual configurations of this concept with the most publicized being the EP Energy- Bridge developed by El Paso Global LNG Company. The concept combines LNG shipping and a regasification facility on a single LNGC. Along with a mooring and cargo transfer system, it can regasify LNG onboard and export the gas through a subsea pipeline system into a distribution network, or to an end user, such as a power plant or an industrial facility. Since the LNGC is used for LNG storage and for regasification, this results in an inefficient use of the LNGCs, and more LNGCs being required for a fixed demand than in a conventional development. The regasification LNGC is a niche technology that may be suitable for specific locations and circumstances, such as for terminals in areas with strong seasonal gas demand, or in remote areas with little existing infrastructure. There may be other potential scenarios where the regasification LNGC could have advantages over other terminal options; however this is dependant on the specifics of the project and the terminal operator. The main drawbacks of this system are the suboptimal utilization of the dedicated LNGCs, the inability to accept LNGCs of opportunity, and the potential need to disconnect in storm conditions and interrupt gas send-out to the market. In addition, the regasification LNGC concepts that have been configured to date have limited gas export rates, and expanding the export rate is difficult. The capital and operating costs of this PS3-5.4

5 concept are expected to be higher than other concepts due to the additional LNGCs and multiple regasification facilities installed on each LNGC. The design and fabrication of the floating LNG facility vessels (FLNG, FSRU, and Regasification LNGC) are extensions of existing technology, combining the experience and technologies of LNGCs and FPSOs. Therefore, the vessels themselves are not the critical technology risk in the floating LNG chain. The unproven technologies are in the cargo transfer system between the floating LNG facility and the LNGC. To address this missing link, several companies have developed conceptual designs that have been studied and engineered to varying degrees. Some of the systems that have been proposed are: Boom to Tanker (BTT) and Tandem Loading Systems (FMC) Offshore Cryogenic LNG Loading (OCL) System (OCL JIP) Soft Yoke System (SBM) Big Sweep System (Bluewater) Various conceptual systems proposed by Eurodim (with the Technip-Coflexip cryogenic hose) LNG TRANSFER SYSTEM TECHNOLOGIES Boom To Tanker (BTT) The FMC (BTT) system was developed to transfer LNG between a turret moored FLNG or a FSRU and a tandem hawser moored LNGC. It is based on existing and proven technology where possible. The concept has undergone several design revisions, and the newer designs have not been fully evaluated. The concept that is discussed herein was presented during the Azure JIP. The objectives of the Azure JIP were to develop a system design suitable for use in the Atlantic Margins, North West Shelf Australia or West Africa conditions in 100 and 1,000 meter water depths. The JIP performed analytical and physical modeling of the relative motions of the tandem moored LNGC and the FSRU using motion data from basin tests. The Azure JIP fabricated and tested a large scale model (1/5) of the FMC BTT to simulate the behavior of the system during transshipment, and during the connection and disconnection phases. The BTT system was successfully tested and verified the performance of the system and the results of the analytical work. Development of the position monitoring system, boom rotation control system and the emergency disconnect procedures and limits were major portions of the work. The tests carried out at the FMC facility in France, demonstrated the ability of the BTT to connect, remain connected and disconnect in various conditions of 2.0 to 3.8 m significant wave heights depending on the wave direction and vessel characteristics. The BTT consists of the following main components: An 80 m long lattice boom and king post type crane located on the stern of the FLNG to carry the LNG product and vapor return pipelines, The double pantograph system; LNGC manifold and connecting device with jumper assemblies; Control and vessel / boom position monitoring systems. The double pantograph links both the 24 LNG transfer line and 16 vapor return line from the boom tip to the bow of the LNG carrier while accommodating the relative motions between the two vessels. Newer designs use 24 line for both product and vapor PS3-5.5

6 return which balances the pantograph and is considered a needed improvement. The BTT system uses FMC s constant motion swivels to provide five degrees of motion freedom (roll, pitch, yaw, surge and heave). The sixth degree of motion (sway) is accommodated by the slewing of the crane boom. FMC has continued the development of the BTT concept and has produced variations of the original design to address various concerns and operability issues with the original design. While addressing some of the concerns with the original BTT system, FMC has introduced new concerns that need to be reviewed and addressed. The results of the analytical and model testing programs indicated that the BTT would be able to remain connected in sea states up to 5.5 meters significant in directions parallel to the longitudinal axis of the vessels. For cross-wave conditions, the very large relative motions and the high hawser loads reduced the maximum wave heights that the system could handle. Further site-specific work would be required to determine its operational characteristics for an actual application. The main advantages of the BTT system are: Transfer system is an extension of existing proven technology, however the performance of some of the hardware and control system needs to be verified in dynamic applications Ability to bring all the major components on to the deck of the floating LNG terminal for inspection and maintenance Suitable for exposed environments Extensive development and testing program The main concerns with the system revolve around the ability of the control system to track the movement of the LNGC and to slew the boom to ensure the LNGC does not exceed the allowable displacement envelope. Offshore Cryogenic Loading (OCL) System Navion, Framo Engineering, APL and Seaflex developed the Offshore Cryogenic Loading (OCL) System. The system has been designed using existing and new equipment and procedures suitable for typical North Sea environments. Development of the concept has focused on LNG transfer between a FLNG and LNGC in deep water applications, and has been proposed by Statoil as the development concept for deep water LNG developments. Even though the concept was developed to export LNG from a FLNG, as shown in Figure 3, it is equally suitable for a FSRU and potentially for a tower SPM concept as well. The OCL LNG transfer system consists of the cryogenic LNG transfer hose system and the hawsers required for mooring the LNGC to the LNG Terminal during the LNG transfer operation. A 1/10 th scale model has been built and tested for verifying the connection and disconnection procedures of the pull-in head. PS3-5.6

7 Figure 3 - OCL System connected to a LNGC (Courtesy of OCL Group) The FLNG facility vessel is turret moored allowing it to freely weathervane. The current concept configuration assumes a STP type turret supplied by APL, a member of the OCL JIP. The STP turret is a conventional turret handling only oil, gas and condensates from off site production or other processing facilities. The LNGC is tandem moored to the FLNG in a crowfoot configuration with a nominal separation distance of 65 meters, as shown in Figure 3. The crowfoot arrangement is intended to reduce the relative motions in sway and yaw of the vessels during the LNG transfer operations as compared to a conventional single hawser system. This is required to satisfy the relative motion restrictions between the two vessels imposed by the loading system. The mooring analysis performed by the OCL group also assumes the LNGC has DP assist and is providing a 50 mt stern thrust. The LNG transfer system consists of a 35 meter long crane located at the stern of the FLNG which rotates towards the bow of the LNGC. Seven 55 meter long flexible hoses (corrugated, vacuum type) hanging from the tip of the crane; five are used to transfer LNG liquid and two are dedicated to vapor return. On the FLNG side the hoses are connected to the boom of the crane with swivels, while the connection on the LNGC side is fixed (bending stiffeners, no swivels). The hoses at the LNGC side terminate at a transfer head which includes a manifold with valving, QC/DC s, ERS s and a pull-in head structure. When not in use, the crane is pulled back and the flexible hoses are stored on a cradle. The purpose of the cradle is to provide storage for the complete length of the flexible hoses, and to allow inspection and maintenance. The LNGCs that service a terminal with this type of loading system will have to be purpose built to receive the bow loading system. In addition to the receiving structure there are also two constant tension winches used to haul the transfer head over from its storage rack on the stern of the FLNG into the receiving funnel. The critical components of this loading system are the flexible hoses and the pipe swivels on the crane. The flexible hoses have been used in static applications and are proven technology for that application. The issue that needs to be addressed is their performance in a dynamic application. PS3-5.7

8 The swivels used at the base and the top of the crane are similar to the existing types of swivels with the exception that these will see significantly larger rotations as the boom travels from the parked to the extended positions, as well as the high cycle small motion dynamic movements that will be seen during a loading operation. The swivels are not a new technology, but are extensions of existing technology and their performance needs to be verified. Both the LNG hose and the swivel have been tested at LNG transfer conditions. The marine operations aspects of this concept are similar to berthing a shuttle tanker at a FPSO; however it is complicated by the crowfoot mooring arrangement and the need for DP of the LNGC. The main advantages of the OCL system are: Transfer system is an extension of existing proven technology, however the performance of some of the hardware needs to be verified in dynamic applications Relatively few moving parts and simpler to maintain Ability to bring all the major components on to the deck of the floating LNG terminal for inspection and maintenance Suitable for exposed environments Robust hose design with very low heat transmission skin temperature ~10 F below ambient Impervious to water ingress Hose manufactured in a continuous process and up to 1.0 km in length at 10.5 ID The main concerns with this system are the marine operations of berthing the LNGC and transferring the connection transfer head from the FLNG terminal to LNGC and back. The transfer system is very sensitive to fishtailing which drives the need for the complicated mooring arrangement. Another concern is the emergency disconnect situation in which the connector head would be dropped into the water which could result in a total loss of the connector head. Concerns have been raised relative to the complexities of a system with 7 hoses, but OCL are working on larger hoses, in both 12 and 16 ID sizes. SBM Soft Yoke The Soft Yoke principle has been successfully used to moor oil FPSOs in shallow water locations where catenary mooring lines cannot provide sufficient restoring capabilities, in both harsh and benign environments. The mooring yoke consists of an A frame horizontal structure with counter-balanced cylindrical tanks filled with ballast, which is suspended from two mooring legs hanging vertically from the support frame. In the neutral position the yoke is balanced. When the LNGC moves away from the jacket, the mooring legs incline and the ballast provides a restoring force. Likewise, when the LNGC moves towards the terminal facility, the mooring legs incline in the opposite direction and the ballast creates a compression force pushing the LNGC away from the terminal facility. The soft yoke system for LNG under development by SBM can be used in any of the concepts, including FLNG, FSRU, and fixed (tower or jacket structures) liquefaction or regasification applications. The fixed applications can be configured to accommodate either a bow loading arrangement (requiring dedicated ships) or a conventional amidships manifold (allowing for LNGCs of opportunity). However, the configuration for the PS3-5.8

9 amidships manifold is less developed and is only suitable for locations with a very benign environment as it relies on a CBM mooring arrangement. Since the focus of this paper is on offshore LNG transfer, the CBM configurations are not considered. Shown in Figure 4 is a conceptual development in which the soft yoke system is mounted on a jacket located several miles from the onshore LNG facility. LNG is delivered to the onshore plant or the LNGC through subsea cryogenic pipelines. Figure 4 - SBM Tower Yoke Loading/Offloading Concept (Courtesy of SBM) The product transfer lines are supported by the yoke structure and are all constructed from conventional insulated steel piping. The system requires four 6 lines (2 for product transfer, 1 for vapor return and 1 spare), thereby allowing a conventional transfer rate of 10,000 m 3 / hour. Each of the product lines is equipped with 7 to 8 inline swivels that allow the yoke and connector to accommodate the relative motions between the LNGC and the terminal. Although the inline LNG swivels are existing technology, the range of motion is greater in terms of amplitude and velocity than those existing designs. SBM has embarked on a testing program at ambient and cryogenic temperatures to verify the performance of their proprietary inline and toroidal swivels. The version of the yoke system for floating LNG facilities, as shown in Figure 5, is identical to the tower yoke system with the exception of the cryogenic toroidal swivel on the terminal side, and the configuration of the support frame for the yoke is modified to suit the end of the LNG facility vessel. SBM has performed an extensive model test PS3-5.9

10 program for a FLNG with a LNGC moored in tandem with a soft yoke system which indicated the performance of the soft yoke system was within the acceptable range in sea states up to 5.5 meters significant with associated winds and currents. From a purely technical standpoint, the soft yoke system on a floating LNG facility is closer to being ready for deployment than is the tower option. Figure 5 - SBM Floating Soft Yoke Loading/Offloading Concept (Courtesy of SBM) The soft yoke system has been designed to allow for connection to a LNGC in sea states up to 3.0 meters significant and to remain connected in sea states up to 5.5 meters significant. The approach and connection procedures for both the tower yoke and the FLNG/FSRU yoke systems are similar to the procedures currently used for approaching a SPM, CALM or FPSO for tandem offloading. The main advantages of the SBM Soft Yoke System are: Minimal offshore facilities for the tower yoke concept Suitable for exposed open sea locations (system able to weathervane) Yoke mooring system based on proven technology All piping and swivels are accessible for inspection and maintenance work, but over open ocean Redundancy in the LNG product and vapor return lines Can connect in 3 meters significant sea states and stay connected up to 5 meters significant The main concerns with the system are its reliance on proprietary swivel technology that is under development, the large number of swivels to maintain (28-32) and personnel PS3-5.10

11 safety while accessing the swivels for maintenance. Additionally, this concept requires unproven subsea cryogenic pipelines for the tower concept. The other drawback to the system is the requirement for dedicated LNGCs (with a toroidal swivel in the bow) and the inability to accept cargos of opportunity. Bluewater Big Sweep The primary driver behind Bluewater s Big Sweep was a design philosophy in which the system can accept non-dedicated LNGCs of any size with conventional amidships manifolds. In addition, the system should have minimal downtime due to weather, be able to operate in sea states of up to 5.0 meters significant in open water conditions, and have a LNG transfer rates of up to 10,000 m 3 /hr. The Big Sweep consists of three basic elements: A tower structure with turntable, or turret moored FLNG/FSRU vessel A rigid arm, hinged at one end to the tower turntable (or FLNG vessel) and terminating at its other end with a buoyant column. An LNG loading and transfer deck structure located on top of the buoyant column. The overall length of the rigid arm is configured such that the buoyant column is positioned near the amidships manifold position of the longest expected LNGC to call on the terminal. The position of the amidships manifold of the various size vessels would be accommodated by increasing or decreasing the length of the mooring hawser which is mounted on a traction winch on the deck of the tower structure (or on the stern of the FLNG/FSRU vessel). The tower structure, shown in Figure 6, which in Bluewater s concept is a tripod, supports the turntable and the cryogenic piping for the LNG transfer system. Figure 6 - Bluewater Tower-Based Big Sweep LNG Loading Berth (Courtesy of Bluewater) PS3-5.11

12 The LNG subsea pipelines would be routed through the central structural member from the seabed to the bottom of the swivel located at the turntable. The turntable, which allows the Big Sweep to weathervane about the tower, supports the rigid arm pitch hinges, the fluid swivels, the hawser attachment point, monitoring and control station and a helideck for personnel access. The floating LNG facility version of the Big Sweep is shown in Figure 7. Figure 7 - Bluewater Floating LNG Facility Based Big Sweep LNG Loading Berth (Courtesy of Bluewater) The rigid arm is a steel structural lattice which extends from the tower structure to a position nominally near the amidships manifold location of a tandem moored LNGC. The rigid arm is supported at the free end by the buoyant column (integrated with the lattice framework) which extends above the waterline to support a deck section at an elevation of approximately 14 meters above sea level. The buoyant column includes the cargo transfer system, machinery to support ballasting (draft changes during transfer operations) and positioning (thrusters) of the column relative to the LNGC, and control system equipment. The LNG transfer system consists of three 20 Pipe in Pipe (PIP) lines between the LNGC and the floating LNG Terminal (or FLNG/FSRU vessel). Two lines are dedicated to LNG (both to support flow capacity and the option of re-circulation). The third line is dedicated to vapor return. Articulations in the system are accommodated by the use of hoses and swivels where appropriate. Weathervaning motions are accommodated by a swivel assembly in the turntable, while the pitch motions of the rigid arm are addressed by the use of cryogenic hoses (Bluewater assumes Technip-Coflexip hoses). All of these are located above water on the floating LNG Terminal facility (or FLNG/FSRU vessel) and are therefore accessible for inspection and maintenance. Transfer of the LNG between the hull section of the rigid arm and the LNGC can either be done with flexible hoses or with a modified loading arm type arrangement (designed for an enhanced working envelope). Both options use a Coflexip hose for the PS3-5.12

13 vapor return and, would require a connection guide frame to be installed on the LNGC to control and align the flowline connector package. In addition, special connectors would need to be installed on the LNGCs manifold to interface with the connector package. It would be difficult to handle LNGCs of opportunity since they would have to be outfitted with special adaptors for the manifolds. The berthing operations with the Big Sweep are similar to those for a convention SPM. When a LNGC is approaching the terminal, the rigid arm and buoyant column would be rotated out of the way using thrusters located in the buoyant column. Once the LNGC is secured with the mooring hawser, the arm is rotated back and positioned adjacent to the carrier and the transfer system is connected. The main advantages of the Big Sweep System are: Ability to accommodate LNGCs of various sizes Adaptable to FLNG/FSRU or tower SPM developments Can be modified (connection mechanism) to allow tankers of opportunity System weathervanes to minimize environmental loads Low visual impact (most of it is below sea level) The main concerns with this concept are the difficulty of inspecting and maintaining the submerged rigid arm structure and product piping. The structure will see dynamic loading due to waves and currents and overtime will accumulate significant marine growth, leading to concerns over the structural integrity of the system, in particular the hinged point at the tower or FLNG/FSRU vessel. This system also requires the use of unproven subsea cryogenic pipe. Eurodim Eurodim, Gaz de France and TotalFinaElf (TFE) have developed several alternatives to traditional jetties. These systems have four common components: Cryogenic submarine pipe the terminal is located remotely from the LNG processing facility with minimal facilities located offshore Dual-path coaxial cryogenic swivel joint Cryogenic flexible transfer hose, with Coflexip hose selected as the hose for LNG transfer Hose connecting system the interface between the LNG transfer hose and the manifold on the LNGC is configured to accept conventional LNGC s with the Eurodim ALLS JIP System selected As shown in Figure 8 Eurodim and their partners have conceptualized alternatives for a variety of environmental conditions. All the concepts are intended for shallow water (minimum of 20 meters), and near to the LNG Processing facility (up to 5.0 km) applications, but could potentially be extended to deep water with further development. All the concepts are at early stages of development and at this point are only supported by numerical analyses (vessel motion envelops and mooring analysis), and some component development. The design basis for the concepts is to allow unloading of non dedicated LNGCs ranging from 70,000 to 137,500 m 3 at a transfer rate of 10,000 m 3 /hr. The hoses and systems are configured to mimic the interface between the LNGC and a conventional terminal with three 16 hoses (2 loading and 1 vapour return) and two PS3-5.13

14 36 submarine pipelines. In all cases, LNGCs can berth to the facility in sea states of up to 2 meters significant. Figure 8 - Range of Concepts Proposed by Eurodim and Partners [Ref 1] The marine operations aspects of all these terminal concepts are analogous to crude oil terminals already in existence. The guidelines and procedures already in place at crude oil terminals would have to be revised to reflect the unique nature of the LNG transfer operations. The main advantages of the Eurodim concepts are: Located remotely from LNG Processing Facility Minimal offshore facilities Load LNGCs through conventional amidships manifold In calm environment, the 2 conventional buoy mooring (CBM) concepts may be attractive Structural design simpler than other concepts; potentially can be matured quickly Floating Coflexip would be an enabler for SPM concepts The main concerns with all the Eurodim concepts are that they rely on technology that is under development, and it is unclear when some of the components will be ready for deployment. Some of the technology issues can be addressed by adopting technologies developed by other suppliers. LNG SYSTEM COMPONENT The critical links to each of the loading systems discussed above are the components of each of the systems, such as the swivels, hoses, connectors, and the subsea pipelines. The technology development programs to address the components are being done in JIPs or through internal proprietary R&D programs. The success of any new loading system will be dependant on the successes of the individual component technology development PS3-5.14

15 programs. Highlighted below are some of the development programs that can potentially have a significant impact on the acceptance and deployment of offshore LNG terminals. Coflexip - Aerial Hose & Floating Hose Coflexip demonstrated the feasibility of a flexible pipe for LNG transfer in the eighties when they designed, manufactured and tested two 15 meter long sections of 8 inch diameter hose. The hose underwent cryogenic testing at -160 o C and were fatigue tested to one million cycles without damage. Starting in 1998 Coflexip revived the program and undertook the design, manufacture and testing of a 16 flexible hose for LNG aerial service configurations. This work was funded via a Joint Industry Project that included BP, BHP, ChevronTexaco, Gaz de France and Shell, as well as funds from the French government. The program was completed in 2001 with the successful testing of a 17 meter long section of 16 nominal inside diameter hose. The design criteria envisioned the use of the flexible hose for off-loading a LNG FPSO to a tandem moored LNGC at typical 10,000 m 3 /h rates. At the 16" size this would require dual liquid transfer lines and a single vapor return line. It was assumed that the flexible hose would normally be suspended in air, but would also be able to handle salt water immersion during emergency disconnect. Construction of the hose is based on a stainless bellows liner that serves as the pressure containing liquid barrier. The bellow liner is wrapped with layers of polyester fiber armors, water barriers and insulating materials, and then covered with a rubber tape sheath which serves as the primary water barrier and provides mechanical protection. The maximum length of a section of hose is limited to 100 meters by the manufacturing process. The minimum bend radius is 10 meters dynamic and 5 meters static. The design pressure is 10 barg, with a burst pressure of 50 barg. The hose has a design service life of 5 years with a safety factor of 10 on the fatigue life. The thermal design prevents ice accumulation by maintaining the outer skin temperature above freezing at ambient temperatures above 10 o C, except at the end connections which are metallic and will form ice. Extensive component testing was undertaken to support and verify the design, and then a 20 meter long sample of the 16 inch diameter flexible hose was manufactured. This prototype hose underwent a testing program that included static pressure and traction testing, and cryogenic fatigue testing. The sample successfully withstood one million cycles under liquid nitrogen conditions at 10 barg, and was then cycled at ambient temperature with an increased curvature to break the pipe and validate the design. The sample underwent two million cycles before developing leaks. The failure occurred as a small crack in the inner metallic bellows, but was not a catastrophic failure. Problems were encountered with the outer rubber sheath water barrier, which has been redesigned and will undergo a testing and verification program. Technip-Coflexip has proposed a JIP extension for the development of a floating LNG hose based on the aerial design. The aerial hose does float by the nature of its design; however, Technip-Coflexip envisions adding additional insulation and waterproofing layers to provide additional buoyancy, reduce the outer skin temperature differential, provide a secondary water intrusion barrier and to improve resistance to mechanical abrasion and impact damage. They are also working on a water intrusion detection system for the floating hose design. The initial work to develop simulation PS3-5.15

16 software has started as an extension of the original JIP. Challenges to the JIP include developing an outer carcass to provide adequate protection for the hose, and designing the connections between the 100 meter sections of hose with suitable end stiffeners and a removable insulating system. FMC Chicksan Loading Arms. Chicksan arms are the conventional means of transferring LNG between LNG terminals and LNGCs. They are currently in use at terminals all over the world, with approximately 40 years of operating experience. These applications are different from the offshore terminals in that the vessel motions are greatly reduced since the terminals are located in sheltered harbors. FMC has developed Chicksan arms for use in ship-to-ship transfers of crude oil and refrigerated LPG. The limiting component of the Chicksan system is the in-line swivel joint and has been the subject of significant development efforts by FMC. The newer version of the swivel, referred to as the Constant Motion swivel, is designed to accommodate the constant and larger displacements that would be experienced in ship-to-ship transfers in exposed environments. The latest version of the Chicksan arms is reported as being able to operate in sea states of up 4.0 meters significant. Based on industry experience with Chicksan arms in both crude oil and LPG service in offshore terminal (ship-to-ship) applications, this is the only LNG transfer technology that can be considered proven at this time. However, the issue with offshore side-by-side LNG transfer is not so much the Chicksan arms capability as it is whether or not the vessels can actually be moored safely. Offshore Cryogenic Loading (OCL) System JIP Cryogenic Hoses One of the key objectives of the Offshore Cryogenic Loading (OCL) System JIP was to develop, test and qualify a flexible cryogenic hose for dynamic service. The OCL JIP chose an existing cryogenic hose (CryoFlex TM ) manufactured by Nexans (Hanover, Germany) upon which to base the design. Nexans have 40 years experience with cryogenic flexible hoses for onshore facility applications, i.e. static service. Nexans hoses had never been used in dynamic applications, but there appeared to be no major issues that would preclude them from dynamic offshore applications. The OCL JIP began development work with Nexans utilizing a lightweight, longitudinally seamed, double-wall corrugated pipe design, with insulation provided by a high vacuum in the annulus. OCL performed extensive design optimization, testing and qualification work starting with various materials, corrugation profiles and wall thicknesses for the corrugated pipes. The development work culminated in full-scale flow and thermal testing of the finished hose with LNG at 10 barg pressure. Construction of the hose is based on stainless bellows tube that is manufactured in a continuous process where sheet steel is welded longitudinally and then corrugated to a threaded profile. The design does not rely on intermediate circumferential welds, and the hose length is limited only by transportation concerns. Two concentric tubes are manufactured with high-tech ring spacers between the tubes to preclude contact during bending. A super-insulating foil is wrapped on the inner tube between the spacers to improve thermal isolation and minimize radiation heat gain. A severe vacuum is pulled on the annulus, in the range of 0.1 mbar at room temperature, to reduce heat convection and conduction. The design includes a non-intrusive means to monitor the vacuum as well. Mechanical protection is provided by a rubber based, reinforced outer carcass, PS3-5.16

17 which also provides additional axial and radial strength. Each end is terminated with flanges and a polymeric bend stiffener. The OCL hose is based on a 10.5 inner tube with a 12 outer tube, resulting in a design flow rate of 2,000 m 3 /h, but achieved 2,500 m 3 /h during LNG flow testing. Thermally, the design is very robust with a thermal exchange coefficient of less than 0.1 W/m- o C. This was confirmed during LNG flow testing where the outer skin temperature was less than 5 o C below ambient temperatures. The maximum length of the 10.5 ID hose is limited only by transportation concerns, not by the manufacturing process. Nexans believes that they could manufacture the hose in a length up to a kilometer, although the vacuum annulus would be sealed into intervals of 100 meter sections. The minimum bend radius is 10 meters dynamic and 3.2 meters static. The design pressure is 10 barg at -163 o C, with a burst pressure in excess of 50 barg. The hose has a design service life of 5 years with a safety factor of 10 on the fatigue life. The hose underwent an extensive testing program, with the intent for eventual certification by DNV. Testing has included pressure, flow and fatigue testing, both at ambient and cryogenic conditions, and on small and full scale samples. Flow testing was performed first with water and then with LNG to determine friction factors and pressure drop correlations, and to evaluate low frequency vibration concerns. The full scale hose successfully withstood fatigue testing in excess of one million cycles under liquid nitrogen conditions at 10 barg. No significant problems were encountered during any phase of the testing program. To achieve a typical LNG transfer rate of 10,000 m 3 /h requires five liquid transfer lines and dual vapor return lines. This, coupled with the transfer head design and transfer means between ships, has raised concern from the participating Operator companies in the JIP. As the size of the hose is limited by the current manufacturing system, the OCL Group have started a development program to increase the inside diameter of the hose to 12 or possibly 16. This would reduce the OCL System down to 5 or possibly 3 hoses which is considered to be a necessary improvement. Additionally, the Group are exploring application of the hose in floating LNG transfer services. Amplitude LNG Loading (ALLS) System JIP The objective of this JIP is to design, fabricate, test and validate the Amplitude LNG Loading System ( ALLS ), comprising of the compliant loading pipe (supplied by Coflexip) and the Connecting System (the main focus of the JIP). The system is designed to be able to accommodate a wide variety of architectures for LNG transfer marine terminals. The main focus of the JIP is to develop the interface or transfer hose connection hardware between the LNGCs and the terminal, including the QC/DC and the Emergency Release System (ERS). All of the Eurodim concepts discussed above have been developed with this connection system in mind. The system itself is still in the final stages of development and the design will be certified by BV before being considered ready for deployment. A significant advantage of this system is that the main components of the system are proven in LNG service, and JIP participants have been involved in supplying valves and other equipment to the LNG industry for many years. PS3-5.17

18 Subsea Cryogenic LNG Pipelines Subsea cryogenic LNG pipelines are divided into two broad categories: Jacket insulated and vacuum insulated. There are potential manufacturers of both types of lines, each with their own unique advantages and disadvantages. Subsea cryogenic pipelines have been identified as one of the most critical components that need to be matured for future LNG loading terminals. Successful implementation of subsea cryogenic pipelines has the potential to reduce the capital costs of LNG terminals. Jacket Insulated Pipelines. Of the jacket insulated cryogenic subsea pipeline concepts, the concept which has been matured the furthest is that developed by InTerPipe (ITP). Their pipe-in-pipe uses a nickel alloy inner pipe, and one or two carbon steel outer pipes. The nickel alloy has a thermal expansion many times smaller than stainless steel, thus reducing the connection stresses between the inner and outer pipes, and eliminating the need for expansion loops. The continuous annulus between the inner and outer pipe is filled with insulation material and the annulus pressure is reduced to enhance its insulation properties. The properties of the insulation materials are such that it significantly reduces the diameter of the outer pipe which will operate at close to ambient seawater temperature. A typical 24 inner pipe would have a 30 diameter outer pipe. There are no intermediate spacers, nor connections between the inner and outer pipe except at the pipe ends. TotalFinaElf is the patent holder for this pipe-in-pipe system. Gaz de France helped with its development and performed LNG tests on a short 8 m section of pipe to determine the insulation values for the design. This system is based on a pipe-in-pipe design originally developed using carbon steel inner and outer pipes with the insulation material for subsea production flow lines to retain the produced fluid heat and prevent the formation of hydrates. It has been successfully used by several operators in various regions of the world. The system was also the focus of a JIP to test the thermal properties of the insulation material and the use of heat tracing in production flowlines. The subsea cryogenic pipe-in-pipe would be assembled on shore and bottomed towed into position. Trenching and burial, or rock (or concrete) mat stabilization would be required. In-place inspection of the inner and out pipes, and the annular space, and repair procedures still need to be developed. The main advantages of jacketed cryogenic pipelines are: Eliminate the need for a jetty (potential cost savings, permitting benefits, reduced storm exposure) Insulation systems have been tested in high and low temperature use and, in hydrocarbon use (for subsea flowlines up to 35 km in length) Can monitor the entire annular space (press, temp, HC presence) Uses standard pipe-in-pipe bottom tow procedures Not limited by length, diameter or water depth Uses conventional materials and welding Allow wider variety of loading concepts Facilitates offshore loading without deepwater harbor more siting flexibility. ITP insulation material has a potentially longer life. Material has structural strength don t need centralizers. PS3-5.18

19 The main concerns with the jacket insulated pipes revolve around the fabrication site availability due to the long lengths, testing of the welds and annulus spaces, and quality assurance. These issues are crucial since if there is any water ingress into the annulus, the pipe loses its insulation value. Vacuum Insulated Pipelines. Chart Industries, among others, makes a vacuum insulated pipe for low temperature service. It has been used for over 35 years in the US aerospace industry for handling liquid rocket fuels without any incidents. The Chart Industries vacuum insulated pipe is shop prefabricated in lengths that can be easily transported to site. Each section of pipe-in-pipe is connected at each end with a bellows arrangement to allow for the differential contraction of the inner, colder LNG carrier pipe relative to the outer, warmer pipe. Because the annulus is not continuous over the length of the entire pipeline, but is divided into short sections, it is difficult to monitor the annulus for leaks. However, a vacuum failure in one pipe section, or even a few, will not cause significant problems for the overall pipeline until repairs can be carried out. This pipe has been used in above ground LNG services at the Trinidad LNG plant for a 4 cool down line, and at the Everett LNG receiving terminal for the inlet lines to the LNG tanks. In field installation of the above ground lines it has been reported that installation can proceed very quickly. However, lay-barge installation of subsea pipelines, in-place inspection of the inner and outer pipe, and the annular space, and repair procedures still need to be developed for subsea service. The main advantages of Vacuum insulated cryogenic pipelines are: Has been used for 20 years onshore in cryogenic service. Can be fabricated in sections and can be connected rapidly. If outer layer is breached, it would only impact a single, short section of the overall pipeline. Very good thermal performance The main concerns with the vacuum insulated pipelines are the high capital costs, ability to monitor the non-continuous annular spaces, and it would be a new application (subsea) for use of this product. SYSTEM EVALUATIONS All the LNG terminal and LNG transfer technologies that are being proposed or developed have unique technical and commercial advantages and disadvantages associated with them. From an LNG terminal operator s perspective, the selection of a floating terminal and an LNG transfer technology has a profound impact on the success of the asset. Technical drivers have to be balanced with commercial drivers, and depending on the location of the terminal project, national and local political drivers can have a significant impact on the selection of technologies. Political drivers are beyond our control and will not be considered in our evaluation of alternative terminal and transfer technologies. The evaluation methodology we have developed compares the various technologies based on the following criteria. The weighting given to each of the criteria are subjective and will vary between projects due to the specifics of the project, technologies being considered, and the experience of the terminal operator and their partners. Technical Status / Qualification System Design & Performance PS3-5.19

20 Operability & Maintainability Safety and Environmental Cost and Schedule Shipping and Marketing The systems were then scored as described below in Table 1. Table 1. Scoring for LNG Transfer Technology Evaluation Rating Score Representative Guidewords Excellent 6 Highly efficient, meets and often exceeds objectives, minimal cost, significantly improved value metrics Very Good 5 Improved performance, meets or exceeds objectives, moderate cost, uninterrupted operations, improved value metrics Good 4 Meets stated objectives, competitive capital cost, satisfies regulatory requirements, good economics Satisfactory 3 Meets minimum objectives, affordable, satisfies minimum regulatory requirements, economics warrant funding Fair 2 Meets most objectives, some shortfalls, expensive, meets minimum regulatory requirements, meets threshold economics Poor 1 Meets few objectives, many shortfalls, excessive cost, below regulatory standards, uneconomic A blinded evaluation matrix used for an assessment of offshore floating LNG terminal and transfer system is shown in Table 2 (pages 22 and 23). In this application the weightings assigned to each of the criteria were developed by consensus of the internal project evaluation team. Each of the systems was then scored by individual project team members and the average of the individual scores was used for ranking the alternatives. As can be seen in the table, the systems advocated by companies C and D, while highly ranked in some areas, had an overall score that was significantly lower than the other systems. It is important to consider that different projects will have different drivers, and that systems that are eliminated from consideration for one project could have distinct advantages for a project in a different location. One of the major drawbacks of all the LNG transfer systems being developed is the lack of a common connector technology. This lack of a common connector for bow loading systems will result in one system potentially becoming the dominant player, not due to its technical merit, but due to its being first to be deployed and establishing precedence. The same issue is true for amidships loading systems. Currently, all the manifolds on LNGCs and terminals are configured to an established standard. The new systems being developed all rely on modifications to existing LNGCs with adapter packages to allow interfacing with existing manifolds. A key issue for terminal and ship operators is flexibility. It is highly desirable from our point of view to be able to send our ships to any terminal to load or discharge cargo. Likwise, we would like to be able to accept any LNGC, for loading or discharging at our terminals. Without this flexibility we, as an industry, will suffer from non-optimal utilization of our resources, and potentially an inferior technical solution. PS3-5.20