ISO Grain LNG:

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1 ISO Grain LNG: Managing energy in an energy-intensive environment Written by: Gregg Dadson Plant Performance Engineer National Grid Grain LNG IGEM Young Persons Paper Competition 2014

2 ABSTRACT LNG importation and storage is an energy-intensive business, and due to the current global LNG climate, operational energy costs are at the forefront of UK shippers' minds. Grain LNG is the first company of its kind in the world to achieve the Energy Management standard ISO 50,001. However, this is just the beginning of the journey; maintaining the standard requires Grain LNG to demonstrate continuous improvement, which, in turn, will demonstrate to its customers its commitment to reducing energy consumption, despite these challenging times. This report describes the components of Grain LNG s ISO 50,001 standard and my involvement in the process of achieving the accreditation and the continuous improvement journey to maintain the standard.

3 1 Background In December 2010, Grain LNG commissioned the third phase of construction of the importation terminal, granting it the capability of delivering 20% of UK gas demand and becoming the largest LNG storage and importation facility in Europe. The 1billion investment to build Grain LNG into the facility it is today came from its six customers BP, Centrica, Eon, GDF Suez, Iberdrola and Sonatrach. On the 11 th March 2011, Japan suffered one of the worst tsunamis ever recorded, which resulted in the loss of its major nuclear power facilities. As such, Japan became highly dependant on its natural gas infrastructure, which is predominantly supported by LNG importation. Shippers from around the globe began to send most of their exports to the Far East because of the increase in gas price. The market was completely changed, leading to minimal activity at the Isle of Grain terminal: Minimum Delivery Figure 1: GLNG utilisation Jan 2010 Jan 2014 This low level of utilisation was never predicted; the plant scales and efficiencies were designed around maximum delivery 644GWh/day as opposed to the current 30GWh/day which poses both operational and financial challenges. 2 Challenges The majority of the fixed (capital) and variable (operational) costs of Grain LNG are paid for by the customers/shippers. There is a significant energy i.e. variable cost requirement even at low terminal utilisation due to the large plant being run. To put this into some perspective, the monthly electricity bill for the site in August 2012 was approximately 1.1million. The customers approached Grain LNG to demonstrate that as a terminal they were doing all they could to minimize energy consumption on site to help reduce the variable costs of operating the terminal at base load. An opportunity to do this presented itself in the form of the Energy Management Standard ISO 50,001.

4 3 ISO 50,001 The Energy Management Standard is a relatively new standard which seeks to drive businesses to continuously improve energy consumption through innovation and a structured management system. I was part of the team formed to achieve the accreditation and to help deliver continuous improvement in energy consumption. The basis of the ISO 50,001 is similar in its design to other standards; a simple process map is detailed below: Energy Policy Planning Management Review Implementation & Operation Internal Audit Checking Monitoring & Measurement Figure 2: Simplified flow chart of the ISO 50,001 Energy Management System 3.1 Energy Policy The Energy Policy is a high level document signed off by the Terminal Manager and is designed to raise awareness and outline Grain LNG s energy commitments. 3.2 Planning Corrective & Preventive action It was essential for Grain LNG to define its current position and demonstrate a structured process to start improving energy performance. My involvement was predominantly in developing the Energy Review, creating Baseline Performance Indicators and setting objectives and targets.

5 3.2.1 Energy Review The Energy Review is a document designed to highlight the energy consumption of individual pieces of plant, identify key variables and any improvement opportunities within culture, technology and the process. My primary objective was to provide the data for the energy consumption of the plant separated into both electricity and fuel gas and to identify key variables. I achieved this using multi-variable modelling software, Curvaceous Visual Explorer (CVE), which has the capability of comparing up to 1000 variables against each other. Using historic data allowed me to identify relationships between various parameters across the whole facility, which may have not been easily recognizable otherwise: Figure 3: Example plot from multi-variable modeling software The major output from the Energy Review was to identify our Top 10 Energy Consumers to provide direction for efforts to reduce energy consumption: Figure 4: Grain LNG s Top 10 Energy Consumers

6 3.2.2 Electricity and Fuel Gas Baselines The first requirement in defining the electricity baseline was to separate the Air Products site electricity data from the Grain site data Grain LNG has no real control over Air Products, so the ability to achieve energy reductions was unknown. Looking solely at Grain LNG electricity data, a baseline was developed comparing electricity consumption against gas delivered: Figure 5: Scatter graph from multi-variable modeling software comparing delivery to electricity consumption Figure 6: Distribution plot from multi-variable modeling software for electricity consumption The Fuel Gas baseline looks at the amount of fuel gas used against the gas delivered, or shrinkage, which was directly related until the introduction of the heat pipe system which enables less fuel gas to be used in the process. With this system and the data I had collated previously, new RAG (Red/Amber/Green) values were established to drive performance, operations and potential investment:

7 3.2.3 Objectives and Targets Figure 7: Fuel Gas shrinkage over 16 months The primary targets for ISO 50,001 are related to electricity and fuel gas, which were developed from the analysis previously described: Site electricity consumption to be reduced by 2% - although this does not sound like much, 2% of Grain s electricity bill is 240,000 a year 40% heat pipe utilisation to reduce fuel gas consumption The secondary target of the management system is the Carbon Intensity Factor (CIF). National Grid has a target to reduce its carbon emissions by 45% by 2020 and 80% by CIF is the amount of carbon emitted per unit of delivered gas, which is the best way for Grain LNG to monitor its carbon performance. CIF is the amalgamation of all of the other performance indicators and I have redesigned it to incorporate all of the primary ISO 50,001 targets to drive improvement (see Figure 10) There are also tertiary targets: amount of vented gas, nitrogen used, propane used and water used. 3.3 Implementation To deliver on the targets, my principle role was to deliver feedback and try and create a culture change amongst the operations department. Through the use of CVE, I accurately monitored performance against key variables and planned plant configuration to change certain behaviors, with the primary focus on the SCV (Submerged Combustion Vaporiser) Fuel Gas and the MP (Medium Pressure) compressors (numbers 1 and 3 in the Top 10). 3.4 Monitoring It is now my responsibility to provide monthly reporting to the senior management on the progress towards the Energy Management System targets. I have redeveloped the majority of existing reporting to make it easier to understand and to provide better context of energy consumption and delivery on Performance Indicators:

8 Figure 8: Monthly Electricity usage report graph Figure 9: Monthly Fuel Gas Shrinkage report graph Figure 10: Monthly CIF report

9 4 The Story So Far In November 2012, Grain LNG became the first business of its kind to be accredited the ISO 50,001 Energy Management standard and demonstrate to its customers that is a prudent energy consumer and is striving to reduce its consumption. Grain LNG has had a challenging 18 months, with the past 7 months being spent at minimum delivery. In that time issues arose with the Heat Pipe, which saw it out of commission for the same period. There have been other unforeseen operational challenges, which have made it very difficult to see any improvement in electricity consumption on the LNG site. Despite this, there have been some very good news stories. Following a routine outage of the steam generators (number 5 in the Top 10), I recognized an opportunity to reduce fuel gas usage significantly below its normal range. This plant configuration can only be achieved in the summer months, but could save a significant amount of fuel gas since August 2012; fuel gas shrinkage has reduced by approximately 30% already, thanks largely to the Heat Pipe system. The biggest success over the last 12 months is the reduction in electricity consumption from the Air Products facility. A lot has been done to build a good working relationship with them and from this improvement opportunities have been identified. Air Products energy consumption has been reduced by around 60% at minimum delivery since February worth approximately 300,000 per month in savings for the customers. The reduction has been so great that it is now been demoted to third highest energy consumer. 5 Next Steps One of the key objectives of the ISO 50,001 Energy Management System is to demonstrate continuous improvement. All of the information presented in this paper and everything else encapsulated by ISO 50,001 will be internally audited and reviewed by management to make sure the right drivers are in place. Following the positive and productive work done in conjunction with Air Products to bring them down to the third highest energy consumer on site, it is now time to focus on the MP compressors, which have been promoted to second. I am looking to do some more culture change work and seek to improve energy consumption from the MP compressors by running them less, using a different part of the system. I will run a cost benefit analysis to justify this, as this will affect both Grain LNG and its customers counteractively. A project has begun to install smart meters across the Top 10 energy consumers to give more granularities to energy data. This would allow me to not only identify which areas of the plant are most consuming, but if two of the same pieces of kit are consuming more or less. With the big wins we have had so far - the Heat Pipe and Air Products - Grain LNG will need to look deeper to find ways of saving energy.