OTC 23939 LNG Barges: The Offshore Solution for Export of US Pipeline Gas

Javid H Talib and Brian C Price, Black & Veatch Corporation

Copyright 2013, Offshore Technology Conference This paper was prepared for presentation at the Offshore Technology Conference held in Houston, Texas, USA, 69 May 2013. This paper was selected for presentation by an OTC program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed by the Offshore Technology Conference and are subject to correction by the author(s). The material does not necessarily reflect any position of the Offshore Technology Conference, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Offshore Technology Conference is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of OTC copyright.

Abstract With the advent of increased production of Shale Gas in United States, and the continuing drop in gas prices, the possibility of exporting US gas is becoming more real. Many developers are vying to build larger capacity LNG production facilities for exporting to Free Trade Agreement (FTA) and Non-Free Trade AgreementNon-FTA) countries in Asia and Far East while smaller market exists in South America and Caribbean requiring small to midscale LNG supply volumes. The larger on-land base load LNG export production plants require significant capital and takes 4 to 5 years to bring online. A novel LNG barge concept provides a faster way to build a small to midscale LNG production facility near-shore in protected waters and/or dockside. The focus on a simple, reliable process solution and barge structure is making this concept a reality for converting US pipeline gas into LNG for export to markets which require smaller LNG volumes than are envisioned with the large scale projects. A barge mounted LNG production facility requires the application of liquefaction technology that is simple, space efficient and energy efficient. The technology of choice for these applications is the Single Mixed Refrigerant (SMR) process. The simplicity, flexibility and scalability of the SMR process can provide a wide range of liquefaction capacities in a unique single or multiple-train configuration on the barge. There are several system options from which any configuration can be built around depending up on the location, power availability, permitting constraints for use of water cooling and the LNG offloading/export strategy. The barge could be self sufficient or be integrated with onshore support systems at dockside. The barge and its topsides production facility can be built in United States or anywhere in the world competitively and towed to US locations. This paper will cover the design features of the barge configurations developed specifically for liquefying US pipeline gas between 0.5 MMTPA and 2.1 MMTPA capacities opening up a new frontier for offshore LNG production in small to mid scale range. Introduction The US went through a period of build out of LNG import terminals in the last decade. This was in anticipation of a shortage of domestic gas supply and an increasing gas prices. As can be seen in Figure 1, the gas prices in 2006 time frame were increasing from $6/MMBTU to a peak of about $12/MMBTU. At these price levels, the importation of LNG represented a strong market for gas suppliers. During the 2000-2010 decade many LNG import terminals were completed in the US, Mexico and Canada to accept new supplies of LNG. However, during the 2008-2010 time period the price fell dramatically as the US economy sagged. Also, large supplies of domestic gas have been discovered in the shale gas areas of the US. At these price levels, importation of LNG is not an economically viable option. Recently, many owners have pushed forward projects to add liquefaction capacity to exiting terminals and also to new terminals that were permitted for import but will be built out for export. Most of the terminals are slated for large scale gas supply to Asian and European markets. These larger on-land base load LNG export production plants require significant capital and take 4 to 5 years to bring online. A novel LNG barge concept provides a faster way to build a small to midscale LNG production facility near-shore in protected waters and/or dockside. The focus on a simple, reliable process solution and barge structure is making this concept a reality for converting US pipeline gas into LNG for export to markets which require smaller LNG volumes than are envisioned with the large scale projects.