Design of onshore LNG regasification plant

Design of onshore LNG regasification plant Parsa Mozaffari, Dijan Supramono Chemical Engineering Department, Faculty of Engineering, Universitas Indonesia, Depok, Indonesia E-mail: parsamozaffari@yahoo.com Abstract With the growth of utilizing natural gas all over the world, Liquefied Natural Gas (LNG) has been widely used in the modern era due to its advantages of storage and transportation. When LNG is unloaded in import terminal, in the time of need, the process of returning natural gas into its gaseous form is being done in the regasification unit with different technologies in order to process the gas and then distribute it by pipeline networks to the end users. Choosing the appropriate LNG vaporizer which is both cost effective and suitable to conditions of the location and environment is intended to be evaluated. The framework of this paper is studying the shell and tube LNG vaporization plant. The goal of this paper is simulating the arrangement of this type of vaporization plant and then estimating and evaluating the economical features of the project. Keywords: natural gas, LNG regasification plant, Shell and Tube vaporizer Faculty of Engineering Universitas Indonesia Page 1

Introduction Problem Background Natural gas is one of the essential components that the world needs to supply energy. With some beneficial factors that natural gas has such as cleanness, safety and environmental soundness, in compare to the other energy sources that have been using in the last century, it gave the idea of replacing the other sources by natural gas as the main energy supplier in the industries. Having adequate supplies of natural gas combined with some mentioned factors and also numerous applications, means that natural gas is going to play and important role in the future in human-being lives and meet the energy demands to help providing a better economic for the countries and also improving the quality of life. Increasing the demand of energy in world s economy pushed industries to ponder the utilizing natural gas resources which are economically and environmentally attractive rather than both coal and oil that have been used nearly used in the last century as primary choices of energy supplies, respectively. With the big benefits of the natural gas comparing to the oil and coal, its consumption has been increased rapidly in end-use classifications such as power generations, industry processes, or residential usages as an energy source. By the way, natural gas is the fuel that supports the two aforementioned concerns. Thus in industries, natural gas have been taking the position of the oil that had replaced the coal earlier. Apart from natural gas reservoirs, which are mostly located in the Middle East, Europe and former Soviet Union countries, the natural gas fields, are mostly located in remote areas and far from the market which is towns and cities that need this energy. In other words, the gas reserves are not close to the demand centers. It mostly comes from the underneath of the surface in the earth s crust. After exploring and the drilling, it has to be sent out to the facilities to be processed. On the other hand, pipeline transportation is costly and it is not practical. So, to solve this problem, one of the common methods is converting the gas into its liquid form of natural gas and transporting the LNG to the consumers all around by shipping which is safe and efficient. Faculty of Engineering Universitas Indonesia Page 2

The liquid form of natural gas reduces the volume significantly. Some impure non-methane components have been removed. It is transportable I more ideal way and also storable and can be kept in particular conditions and insulated tanks in order to be used in the future if immediately is not going to be used. As a consequence, LNG trade continues to grow globally and is becoming the choice of the countries as a fuel to provide the energy demands. At receiving terminals, the transported LNG is unloaded and then insulated in the tanks with specific conditions and then applying the processes to change the liquid form of natural gas to its gaseous state. It takes place in the regasification plant under particular circumstances. After regasification process, the gas can be delivered through pipeline to the gas transportation in order to be distributed for residential consumers or for filling gas cylinders. Problem Statement Unloading the LNG in receiving terminal, and vaporizing the LNG to its gaseous state using thermal energy sources in controlled environment and therefore processing the gas in regasification plant and distributing is being done through different methods in industry. The selection of Shell and Tube vaporization unit has been done in order to be simulated and it is considered to be in pre-determined location to ponder the typical conditions in the process. Objective Choosing the suitable LNG vaporizer depending on different conditions and specific factors needs be considered and it has been analytically more evaluated recently. Comparing the regasification technologies in terms of economic analysis is going to be assessed. Designing the regasification plant with consideration of the cost and also designing the inlet and outlet system of the regasification plant have to be taken into account. From this point, due to importance of economic analysis making the selection based on cost; as well as operability and etc. to obtain the typical arrangement of the plant has been the core of the work. The work has been mostly done at the Department of Chemical Engineering, University of Indonesia (UI) in Depok, Indonesia. Faculty of Engineering Universitas Indonesia Page 3

Literature review Liquefied Natural Gas (LNG) Dating back to 19 th century and over 40 years, LNG had been produced all over the world and also currently; it is a prominent source of supplying energy. LNG industry and respective projects mostly refer to as LNG value chain and it is rapidly growing due to growing natural gas demand. Liquefied natural gas (LNG) is odorless, colorless, non-flammable, non-toxic and non-corrosive liquid form of natural that has been cooled down to reach to the specific point that it condense to liquid form. It happens at temperature of around -161 C (-256 F) and at atmospheric pressure. LNG is consisted of approximately 90% methane. But it also contains ethane, propane and some other hydrocarbons as well as nitrogen. [Foss, 2007] Table 1.Typical Range of LNG composition (Source: Center for Energy Economics, cited in GIIGNL, 2009) LNG value chain LNG value chain or LNG supply chain has four interdependent parts which are linked to each other. The main objective of these processes and operations is taking an unusable condition to the state of using the natural gas as a fuel and also utilizing it as a feedstock for different materials. These operations are mostly invested by companies to make the LNG available. Four parts of LNG value chain are exploration - production (E&P), Liquefaction, Shipping and Regasification Storage. Exploration and production is searching the natural gas mainly in the earth s crust and underground to extract. The second is liquefaction which is turning the natural gas into its liquid form in order to transport efficiently. Shipping is transporting the LNG around the world. The Faculty of Engineering Universitas Indonesia Page 4

last part is storage and regasification that is storing the LNG in special tanks that has been constructed and then vaporizing the liquid form of natural gas into its gaseous state and makes it prepared so as to be transported via pipeline to the end users. [Introduction to LNG, 2007] LNG regasification unit The fourth step of LNG value chain is regasification which is mostly waterfront terminals and next to the seas facilities. LNG carriers generally transport the LNG to marine terminals in order to be stored which is one level before going through the regasification plant. Moreover, LNG can be delivered into the offshore facilities. Typically, they are special constructed LNG ships that are called Floating Storage and Regasification Unit (FSRU) and if without any storage, it is called Floating Regasification Unit (FRU). These facilities help to terminals to be built offshore and on the sea water. In receiving terminals, LNG may be used in various purposes. For instance, LNG can be directly used as fuel for trucks. So, it will be directly distributed to the fuel stations or LNG import terminals may be located in place where there are stations of electric power generations. Thus, using the cryogenic properties of LNG to cool the power plant and also it is converted to the gaseous state for the customers via pipeline system. [GIIGNL, 2009] At the time of arrival of LNG to the facility, first of all, LNG is unloaded and then at atmospheric pressure, LNG is pumped into the double-walled storage tank to be stored at atmospheric pressure until needed to be processed. Then, it is delivered by pumping at high pressure to special sections in the terminal, in order to be processed and heated in controlled environment and at specific conditions. For converting the liquid natural gas to its typical gaseous state, firstly, it is sent to the regasification plant. Therefore by passing it through pipes that is heated by direct fire or in another method, using sea water under specific circumstances or even the liquid is heated through pipe inside the heated water. Once regasified natural gas is heated, it is controlled and regulated for required pressure to be distributed through pipeline system to be used in daily residential or commercial purposes that is being utilized. [Introduction to LNG, 2007] Faculty of Engineering Universitas Indonesia Page 5

Each regasification technologies have different features with their own advantageous and disadvantageous. Choosing the best LNG vaporizers depends on different conditions and factors need be considered and also it has analytically been more evaluated recently. Different types of vaporizers have impact on surrounding such as releasing the gas to the environment or even into the sea. There are some issues that need to be considered in selection the different types of LNG vaporizers. These issues are contemplating the impacts that each vaporizer can have on environment such as emissions of gas into the air and seawater. Availability of water which is needed to process and fuel cost, as well. One of most important issues in terms of economic is the amount of capital cost that are aimed to be invested besides of the operating cost that each vaporizer certainly takes. Assessing each vaporizer and the ability of construction of them in the related areas is significant aspect of the regasification terminals. So, Thinking economically helps to give the plausible choice with the best efficiency and will be more beneficiary. Faculty of Engineering Universitas Indonesia Page 6

Methodology Description of the activities and works in the steps and order that need to be done is provided. Literature Study Shell and tube heat exchanger arrangement Simulation Optimization of design Design of inlet and outlet of heat exchanger Economic evaluation Cost consideration NO YES Analysis Figure 1.Research flow diagram Faculty of Engineering Universitas Indonesia Page 7

Results and Analysis Process description The simulation of the LNG vaporization plant that forms a part of LNG receiving terminal to vaporize LNG and convert it NG for metering and then sending out to the consumers, has been done in specific arrangement. This arrangement has been made to circulate the Heating Transfer Fluid (HTF) in a closed loop cycle and using three different HTFs (Water/Glycol mixture, Propane, Steam). In all three simulations, some factors and equipment had been considered to be similar in general. The arrangement of Shell and tube vaporizer has been chosen out of many other configurations to facilitate the simulation of the unit. As shown in figure, in this arrangement four heat exchangers have been applied in order to convert LNG to natural gas. The desired arrangement for the plant has been shown in figure below to give general indication of the Shell and Tube Vaporizer. Figure 2.Shell and Tube Vaporizer configuration (source : CH IV, 2007) Faculty of Engineering Universitas Indonesia Page 8

All the heat exchangers in Shell and Tube Vaporizer configurations are developed to have zero pressure drops in both Shell and Tube sides. There is an assumption of no heat loss in the heat exchangers which is considered as to be ideal. The simple BFD of the process has been shown below. Figure 3.Vaporization plant Faculty of Engineering Universitas Indonesia Page 9

Economic Estimation The cost of major equipment has been calculated. Equipment for all three units is similar. So roughly, the cost can be considered to be for the other units as well. The cost of equipment is provided due to capital cost estimation. This method of calculation that gives a rough estimate of the equipment price can be a reasonable way in order to obtain an approximate cost. This method had been gained from the book Analysis, Synthesis, and Design of Chemical processes by Richard, Turton. So, the total equipment cost is estimated to be 9.5 M USD. While, the operating cost calculated to be around 8M (more or less for 3 different HTFs). The amount of money needed in order to construct a total plant and consequently run the respective plant, can be estimated using typical ranges and factors that had been assumed. For calculation of total cost, factors that have been obtained from Peters S. Max, Timmerhaus D. Klaus (1991) and the method used for this estimation is percentage of equipment-delivered cost. So each factor has been considered as percentage of equipment cost. Table 2.Cost estimation using equipment- delivered cost method Total Purchased Equipment(million $) 9.5 Direct Costs Typical factors Delivery Cost 0.1 0.95 Subtotal Delivered-Equipment Cost 10.45 Purchased equipment installation 0.47 4.912 Instrumentation & Controlled(installed) 0.36 3.762 Piping(installed) 0.68 7.106 Electrical systems(installed) 0.11 1.150 Building(including services) 0.18 1.881 Yard improvements 0.1 1.045 Service facilities(installed) 0.7 7.315 Total Direct Costs 2.6 37.620 Indirect costs Faculty of Engineering Universitas Indonesia Page 10

Engineering and supervision 0.33 3.449 Construction expenses 0.41 4.285 Legal expenses 0.04 0.418 Contractor s fee 0.22 2.229 contingency 0.44 4.598 Total indirect costs 1.44 7.286 Fixed Capital Investment(FCI) 52.668 Working Capital Cost 0.89 9.301 Total Capital Investment(TCI) 61.969 Investment Analysis Figure below shows the two trends of cash flow for discounted cash flow and nondiscounted cash flow. The first has been shown as declined lines in order to describe the expenditure in the first 2 years. Discount rate of 10% has been assumed within the 10-year project life of the plant. (millions of dollars) 80.0 60.0 40.0 20.0 0.0-20.0-40.0-60.0-80.0 Discounted cash flow non- discounted cash flow -3-2 -1 0 1 2 3 4 5 6 7 8 9 10 11 Years Figure 4.cash flow diagram Faculty of Engineering Universitas Indonesia Page 11

Some economical parameters have been found and shown in table below for both discounted and non-discounted cash flow analysis. Table 3.Discounted and non- discounted profitability analysis DISCOUNTED CASH FLOW ANALYSIS Parameters Values Net Present Value 11.33 M $ Discounted Cash Flow Rate of Return (DCFRR) 12.9 % Discounted payback period 5.9 Years NON-DISCOUNTED CASH FLOW ANALYSIS Parameters Values Cumulative cash position 68.7 M $ Rate of Return on Investment 13.06 % Discounted payback period 3.9 Years Conclusions This project has been simulated to gasify LNG and for this objective, shell and tube vaporizer arrangement has been assumed. Using three different heating transfer medium has also been considered: Propane, Water/Glycol mixture with typical compositions of 50/50 and Steam. Water/Glycol mixture has no phase change during the process, while propane and Steam faces a phase change after passing the vaporizers. At the end, fired heater is used to increase the temperature of mediums in to circulate in the closed-loop process. The total equipment cost are calculated as 9.5 M $ in which, the method of equipmentdelivered cost has been used in order to estimate the total capital cost. TCI is estimated around 62 M $. The comparison of three heating fluid is done in the simulation; however the economical part is done only for WG due to similarity. Faculty of Engineering Universitas Indonesia Page 12

The salvage value has been obtained 5.2 M USD has a percentage of Fixed Capital Investment. The sales revenue of the product has been obtained approximately 30.2 M USD. Fired heater is used in order to heat up the medium to the specific temperature for the cycle. The fuel of fired heater is calculated to be 1.6% of the final product. References Thesis, journals and papers [1]. Center for energy, (2013) [Online]. Available from: http:www.centreforenergy.com/aboutenergy/ong/liquifiednaturalgas/overview.asp?page=1 [Accessed 22:05:13] [2]. CH IV (2007) Oregon LNG import terminal, [Online]. Available from: https://s3-us-west- 2.amazonaws.com/oregonlng/oregonlng/pdfs/appendices/RR_13-1/Appendix13R-p2.pdf [Accessed 14:11:13] [3]. GIIGNL. (2009), Basic properties of LNG. [Online table]. Available from: http:www.giignl.org/fileadmin/user_upload/pdf/a_public_information/lng_basics/lng_1_- _Basic_Properties_7.2.09_AAcomments-Aug09.pdf p.2. [Accessed 29:05:2013] [4]. Introduction to LNG, (2007). [Online]. Available from: http:www.beg.utexas.edu/energyecon/lng/documents/cee_introduction_to_lng_final.pdf pp.18, 24 [Accessed 27:05:13] [5]. Kawamoto, H. (2008). Natural gas regasification technologies. Journal of environmental protection [internet]. Winter 2008/2009. 65(4), pp. 76-79, Available from: http: www.uscg.mil/proceedings/archive/2008/vol65_no4_wint2008-09.pdf [Accessed 02:06:2013] [6]. LNG information, (2012) [Online]. Available from: http:www.chiv.com/lng_information.html [Accessed 22:05:13] [7]. LNG value chain (2013) [Online image]. Available from: http:slng.com.sg/images/valuechainblue1.jpg[accessed 01:06:2013] [8]. Open Rack Type Vaporizer. (2013). [Online image]. Available from:http: tokyogas.co.jp/lngtech/orv/images/fig_01_01.jpg [Accessed 02:06:2013]Intermediate Fluid type Vaporizer (2013). [Online image]. Available from: http:kobelco.co.jp/english/machinery/products/ecmachinery/lng/img/ifv_02.jpg [Accessed 02:06:2013] [9]. Peters S. Max, Timmerhaus D. Klaus (1991). Plant design and economics for chemical engineers, Fourth Ed. [Accessed 19:5; 14] Faculty of Engineering Universitas Indonesia Page 13

[10]. Richard Turton, Richard C. Bailie, Wallace B. Whiting, Joseph A. Shaeiwitz (2009). Analysis, Synthesis, and Design of Chemical Processes, Third Ed. [Accessed 14:5; 14] [11]. The LNG value chain. (n.d.) [Online]. Available from: http: www.beg.utexas.edu/energyecon/lng/lng_introduction_08.php [Accessed 25:05:2013] [12]. Wheeler, F.,(2005). LNG regasification terminals: established and emerging vaporizers options journal of FW News [internet].spring/summer 2005, pp. 25-26 Available form: http:www.fwc.com/publications/pdf/fwn_summer_05.pdf?dirname=%23dirname%23 [Accessed 10:06:2013] [13]. Yang, C.C. Huang, Z., (2004). Lower emission LNG vaporization, LNG journal. November/December. pp. 24-26, Available from:https:www.fwc.com/publications/tech_papers/files/lower%20emission%20lng%20vap.pdf [Accessed 27:05:2013] Faculty of Engineering Universitas Indonesia Page 14