Adopting a ‘keep it simple’ approach, several developers of US export projects are advocating multiple, smaller-scale liquefaction trains of modular construction in the drive for flexible, reliable and low-cost LNG
Elba Island, one of the new US LNG export terminals due to commence loading cargoes in 2018, is notable for its choice of gas-processing technology. Rather than the large-scale liquefaction trains commonly chosen for export projects, the terminal operators have opted for a series of modular units, each capable of producing 0.25 million tonnes per annum (mta) of LNG.
Elba Island is one of six US LNG export terminals for which small and mid-scale liquefaction solutions have been chosen in order to streamline project realisation. One other has been approved and, although the remaining four are yet to receive the green light, the projects’ developers are confident of the technical and commercial merits of their offerings and expect to make financial investment decisions (FIDs) shortly.
Elba Island rebirth
Situated near Savannah in Georgia, Elba Island entered service almost 40 years ago, in September 1978, as an LNG import terminal to receive the large volumes of gas expected to arrive from Algeria under long-term contract. The project faltered due to a pricing dispute, and Elba Island was mothballed in 1982.
The Georgia terminal was reopened as an expanded receiving facility in October 2001, as dwindling US gas reserves led to a renewed need for LNG imports. However, within a decade, drillers had discovered how to exploit the country’s vast shale gas resources and cargo discharges at Elba Island have been sporadic in recent years.
Now operated by a 51/49 Kinder Morgan/EIG Global Energy Partners joint venture, Elba Island is one of several US LNG import terminals being given a new lease of life as an export facility through the provision of a bi-directional capability. With storage tanks and marine jetties in place, all these installations need for their new role is a liquefaction plant.
The gas processing technology chosen for Elba Island is Shell’s Moveable Modular Liquefaction System (MMLS). The masterplan for the site involves installing six MMLS units in the first phase of the project, followed by another four in the second phase to provide an overall LNG export potential of 2.5 mta. Peak output rates could be expanded up to 4 mta.
Shell has a contract in pace to take the full output of the Elba Island terminal for 20 years. The first six MMLS units are scheduled to be operational by mid-2018 while the facility will reach full capacity by mid-2019.
The MMLS units are produced at a dedicated manufacturing plant and moved to Elba Island for easy assembly. The various units that make up each small MMLS train can be disassembled and moved to a new site if required.
Shell pointed out that the technology enables the start of LNG production much more quickly than is possible with a conventional large liquefaction train of, say, 5 mta capacity. The 2.5 mta Elba Island liquefaction project entails an overall capital expenditure of US$2.2Bn, making the unit production costs associated with an MMLS unit roughly comparable with those of a large train.
Elba Island has been permitted for LNG sales to customers worldwide, but in addition to exports the facility is well positioned to supply LNG bunkers to domestic locations. Savannah and the Florida home ports of the big cruise liners serving the Caribbean region will be a particular target.
Corpus Christi joins in
Another US export terminal operator swayed by the potential advantages of small to mid-scale liquefaction is Cheniere Energy. All five trains at the company’s Sabine Pass facility and the first two trains at its new greenfield Corpus Christi installation are units with a liquefaction capacity of 4.5 mta. Subject to an FID on its construction, a third Corpus Christi train would also be of 4.5 mta.
However, for the Stage 3 expansion phase at Corpus Christi, the planned 4.5 mta fourth and fifth trains will be replaced with seven 1.4 mta liquefaction units of modular design totalling 9.5 mta in capacity.
Cheniere believes it is more cost-effective to build the smaller trains as this would eliminate the need for costly excavation and foundation work and provide the requisite export capacity more quickly than would be possible with larger processing units. Also, the smaller output per train is expected to make it easier to line up prospective LNG buyers and enable construction to proceed on a train by train basis.
Initial estimates by Cheniere show that the unit production costs of the mid-scale trains are similar to those of a 4.5 mta unit. While the energy company still supports the efficacy of traditional, large-scale liquefaction trains, it is keen to explore the small-to-mid-scale option to ensure the buildup of in-house expertise across the range of options.
Supporters of modular trains are also hoping to avoid the delays and cost overruns that have dogged certain custom-built mega-projects. The spiralling costs and extended time delays that Chevron experienced with its Wheatstone and Gorgon schemes in Australia are a case in point.
LNG Ltd and Tellurian
LNG Ltd and Tellurian are both developing schemes for LNG export plants in Louisiana near Lake Charles and the Calcasieu River. LNG Ltd is proposing four 2 mta trains for its Magnolia project, while Tellurian Inc is planning for up to 20 trains of 1.38 mta each to underpin operations at its Driftwood LNG terminal.
LNG Ltd is advocating its own optimised single mixed refrigerant liquefaction technology for Magnolia. The mixed refrigerant (MR) cycle at the heart of the process consists of a gas turbine-driven compressor with a single-suction scrubber, after cooler, cold box and MR separator.
The company points out that the selection of a centrifugal compressor that does not require a gear box, helper motor or inter-stage components for the mixed refrigerant highlights its twin philosophies of ‘keep it simple and reliable,’ and ‘stick to well-proven equipment’ when it comes to liquefaction plant design.
Established by Cherif Souki, formerly of Cheniere Energy, and Martin Houston, ex-BG Group, Tellurian is planning to bring the 27.6 mta Driftwood LNG project onstream in four stages. Targeted for an early 2023 start, the first phase would comprise two storage tanks, one marine jetty and eight mid-scale trains capable of producing 11 mta of LNG.
The Driftwood liquefaction process will use integrated precooled single mixed refrigerant technology. When fully operational as a 20-train facility, the terminal will be equipped with 20 GE refrigeration compressors driven by GE aero-derivative turbines. Tellurian stated that the US$15.2Bn overall cost of the project means that Driftwood will set a new standard for low-cost LNG production.
Although each individual Driftwood liquefaction train will be a mid-scale unit, by replicating such trains many times over, the project’s overall output will be larger than the volumes produced by most LNG export terminals. Certainly, the facility’s storage tanks, GE turbines and marine jetty arrangements will match the size of any available.
Commonwealth and Eagle LNG
The final two US project developers opting for small-to-mid-scale liquefaction solutions are Commonwealth LNG and Eagle LNG. Commonwealth LNG is a scheme proposed for a site near Cameron, Louisiana and the plan calls for eight single mixed refrigerant LNG liquefaction trains with a total output of 9 mta. Target dates are 2019 for a decision to proceed and 2022 for the start of operations.
Eagle LNG is poised to commence construction on the first phase of a three-train, 1 mta LNG plant near the Florida port of Jacksonville’s Blount Island Marine Terminal. The company has received federal approval for small-scale exports and is aiming for initial LNG production commencing in Q3 2019.