L

NG is a critical energy resource today and, with numerous new LNG ventures under development, its importance is set to increase. While the market is becoming
more mature, LNG trading prices remain very dynamic, due to
demand-supply volatility, geopolitical concerns, regulatory
issues and public scrutiny. To better manage this uncertainty,
the systems making up the entire LNG value chain (from production, liquefaction and shipping in specially designed vessels, to regasification at the destination terminal) have to be
designed and operated in an optimal, safe and reliable fashion.
This complex business climate makes it imperative that
companies investing in new LNG projects have confidence in
both the technical and economic models required to support
optimal decision making. This article will look at some of the
best practices that enable better capital investment decisions
based on rigorous model based analysis of process, equipment design and economic alternatives. It examines ways to
leverage those same rigorous models to maximise operating
performance, and to ensure safe and reliable operation of the
LNG assets through the use of advanced process control
technologies. Industry examples and case studies will be
used to illustrate the recommended practices.

in this way can enable companies to realise a competitive

advantage throughout the LNG asset lifecycle.

Background

Conceptual design and economics involve establishing the

financial justification of an LNG project and a preliminary
decision with respect to the LNG technology to be used. It is
also very important to carefully select and retain the basic
technical and financial assumptions used in the LNG projects value chain made during this stage before proceeding
to the next stage: LNG process engineering and detailed
design. Project economics based on a certain reservoir and
well production schedule must remain tied into the overall
engineering and design of the LNG facility1. Imagine how
project economics would be impacted if an LNG facility
design was based on early reservoir production assumptions
and never updated to reflect new reservoir characterisations
and production forecasts. An LNG facility designed for an initial feed quality and production rate profile may be ill
equipped to operate as efficiently under these new production conditions. The use of consistent assumptions and data
in this way is especially critical because LNG projects often
involve a field development in combination with the

The dynamic nature of the LNG market is placing additional

demands on companies embarking on new investment projects. While margins are becoming tighter, regulatory and
public scrutiny can delay project authorisations and revenue.
Companies are pursuing economies of scale by designing
larger capacity facilities, but the economics, technical design,
environmental impacts and operational activity they need to
manage have all become more complex. This business environment demands lower cost, highly optimised processes.
Significant benefits can be achieved by approaching the
design of LNG liquefaction and regasification facilities in a
more integrated way. Too often project economics, process
evaluation, design and operation are carried out as separate
disciplines leading to suboptimal business decisions. Accurate
modelling of the process and design of key equipment, integrated with economic analysis of the process model, leads to
better design choices that deliver a superior return on investment. Adopting industry best practices for process automation

Project design and economics

An appropriate design for an LNG project drives its long term
viability, including the capability to operate efficiently, safely
and reliably, and to deliver good investment economics. To
achieve these objectives, the design process must be managed along the following three dimensions.

Engineering and design lifecycle

The process engineering and design work flow is a continuum from conceptual design to front end engineering and
design (FEED), through detailed design. To eliminate any
surprises, it is imperative that the engineering and design
lifecycle be tied to the economic evaluation of the design
choices at each step in the chain. Therefore, the design and
economic evaluation tools have to work in an integrated fashion, and must allow for incremental evolution of the design
from conceptual design, to process design, to detailed
design. This is an important best practice and is one of the
dimensions of LNG project design and economics.

Conceptual design and economics

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Figure 1. A integrated simulation model of

production wells, gas gathering, and the
liquefaction process can form the basis of a
streamlined approach to process design, economic
evaluation and operational improvements.

Figure 2. The LNG production system can be

optimised as a whole using an integrated asset
model to combine projected reservoir performance,
well deliverability, surface network analysis and
process engineering.
investments in liquefaction, transportation and regasification,
and the impact of the field development needs to be accurately represented. This is the second dimension of LNG project design and economics.

Integrated asset model for process

engineering and detailed design
With the conceptual design and early view of economics
established on the basis of basic technical and financial
assumptions, and an understanding of the longer term production profile beyond the initial production period, process
engineering and detailed design of the LNG facilities can
now proceed.
To achieve optimal design for safe and reliable operation,
and to achieve good overall project economics, it is highly
desirable that companies utilise a computational tool that
integrates projected reservoir performance, well deliverability, surface network analysis and process engineering, so
that the production system can be optimised as a whole. This
is now possible following advances in simulation technology
that enable models of each element of the system to be integrated together, thereby allowing companies to simulate the
performance of the overall system, including the complex
interrelationships between the different assets. Use of this

kind of integrated asset model will help companies ensure

optimisation of the LNG value chain, enabling them to reflect
the rapidly evolving supply-demand patterns for LNG around
the world and the volatility this situation might impose in different regional markets.
The ability to connect the LNG plant constraints with variables (chokes) in the production system is a key benefit of
the integrated asset model. Upstream conditions no longer
need to be treated as static quantities by the process engineer. Modelling from the well through the process facility is
feasible using a common simulation environment, thus bridging the gap that commonly separates the production and
process engineering domains. For example, being able to
integrate the range of uncertainties in field assumptions can
allow for appropriate flexibilities to be included in the liquefaction plant design. This is the third dimension of LNG project design and economics.

Process operations and safety

Now that the LNG facility has been optimally designed and
built, it is critical to ensure that the operation of the facility is
as efficient as possible. However, this is no easy task with
production schedules, gas/liquid contract nominations and
flaring limits, just a few of the operational constraints that
need to be managed on a day to day basis. As in the design
and engineering phase, process automation systems can
play a significant role in helping to manage operations, both
in terms of optimising production performance and maintaining safety and reliability. For example, advanced process
control (APC) allows LNG plants to react more rapidly to frequently changing economic conditions by automatically
maintaining operations close to multiple operating constraints. The simulation models developed during the design
of the LNG asset can also be leveraged into operations in a
number of significant ways. By using these existing models,
for example, an operator can easily see if his LNG asset is
performing to the highest standard possible, and can analyse
the root cause of any deviation.

Production and operations optimisation

The following example illustrates how APC can be used to
optimise production in an LNG facility. Ras Laffan Liquefied
Natural Gas Company Limited (RasGas) operates two large
LNG trains within Qatars North Field. During the summer
months when there is less demand for LNG, RasGas does
not need to maximise production of LNG, but can focus on
optimising its processes and making the greatest amount of
LNG with the least amount of gas. The company also has to
manage the impact of making up to 20 rate changes per
year. In an effort to address any process flaring caused by
these rate changes, RasGas made initial efforts to stabilise
the plant through loop tuning. After some success using this
method, an analysis was done to determine the incremental
benefits of implementing an APC solution, including the
capability to react more rapidly to frequently changing economic conditions. This analysis concluded that there were 15
areas of potential benefit, and after quantifying only the first
two benefits, it was determined that there would be a short
payback for an APC project. Some of the benefits identified
by the study included:
 Optimised plant performance (e.g. higher throughput).
 Optimised cost (e.g. reduced utility consumption).
 Creation of a virtual cruise control environment for the
plant.
 Reduced operator intervention.
The value of applying simulation models in operations
can be illustrated by an example at BP Trinidad and Tobago
(BPTT). BPTT has combined several existing models into a

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conditions. The steady state models used by the process

design engineers can be an important starting point in creating more detailed dynamic models to simulate these transient operations. By building on existing validated steady
state models, one can be assured that the dynamic models
are based on a sound engineering foundation.
The Saggas Sagunto LNG project demonstrated that
dynamic simulation can be a valuable tool for supporting the
efficient and safe operation of an LNG regasification terminal3. For the Sagunto project, the main applications of
dynamic simulation were to analyse and verify the performance of the emergency shutdown (ESD) system and to
study other transient conditions, such as pump, compressor
and vaporiser startup/shutdown. To maximise the efficiency
and quality of the engineering design work for the Sagunto
project, both steady state and dynamic modelling tools were
a core part of the study of a range of scenarios. The tools
included:

Figure 3. Process simulation models can be

leveraged in operations to help optimise
performance.
single integrated asset wide LNG model, allowing the pressure/flow equations of its complex gathering networks to be
solved together with the equations governing the performance of the wells. The constraints imposed by the
onshore stabilisation facilities are properly modelled and
taken into account, such as maximum stabilised flowrates,
maximum permitted flaring quotas and maximum water
generation.
The complete BPTT production system involves nine
reservoirs produced by approximately 80 wells; six are gas
reservoirs and three are oil reservoirs. The interactions
among the different parts of the system (including wells, platform separators, transportation pipelines, stabilisation facilities) are too complex for an operator to process based simply on experience.
Using the integrated asset model, BPTT is able to determine process conditions that will satisfy gas demand, simultaneously maximise oil production and minimise flaring. The
number of involved decision variables (more than 30) and
process constraints (more than 20) makes it necessary to
use automatic optimisation tools. Now the operation can be
pushed to the system limits, producing the required gas nominations with an increased oil throughput2.
Some different challenges apply for companies seeking
to optimise the regasification portion of the LNG lifecycle.
Although the process facilities required here are fairly
straightforward, it becomes very important to monitor and
understand the impact of the regasified LNG as the natural
gas enters the pipeline transmission network, and simulation models can help companies manage this process. The
quality of the new gas entering the pipeline must be taken
into account since it could adversely affect the final delivery
quality of the transmission line gas to the end customers.
Critical gas properties such as heating value, percent inerts
and Wobbe index should be rigorously modelled as they
are combined with the main transmission line gas to ensure
proper pipeline and customer delivery specifications are
met.

 Pump startup/shutdown analysis, which confirmed the

correct sizing of valves, closing time and minimum flow
assurance to keep lines cooled with a certain liquid flow.
 The supply gas cut off and vaporiser shutdown study,
which demonstrated that the process operated safely
without the need to increase the size of the venting system to evacuate this extra amount of gas, resulting in significant cost savings.
 General or partial shutdown analysis that verified the calculated sizing of the venting system.
 A startup support tool to allow process engineers to
anticipate problems that could arise during startup conditions or in the normal operation of the plant.
 Control loop tuning using dynamic models, which
enables control engineers to pretune the control loops of
the plant, thus saving time during the operational startup
of the facility.
 Procedure development and timing to help understand
the time available to take corrective action in the event of
operational disturbances.

Conclusion
The major global investment in new LNG liquefaction and
regasification capacity is creating substantial new competition in the natural gas market. Companies that can optimise
the performance of their production assets will be well placed
to improve their margins and achieve a significant competitive advantage.
LNG integrated asset modelling and economic evaluation
are essential for optimal design, investment and operational
decisions. The technology to achieve this is available today,
and best practices have been established. Industry examples
and case studies have demonstrated the value of applying
the principles outlined in this article.
The volatility of the LNG market also makes it essential
that companies have clear visibility of the real time performance of their operations, and have the decision support
tools in place to make the most profitable choices. The latest
generation of integrated software solutions provides companies with the information they require to respond effectively in
a dynamic operating environment.

References
1.

Safety and reliability

Safety is another area in which models originally developed
for process design can play a key role. Understanding the
complex operation of the LNG facility, terminals and regasification sites is especially critical during startup or shutdown

2.

3.

KAPPOS, Leonidas, SHIPPEN, Mack and SZATNY, Michael,

Integrating Production Network and Process Simulation for a Floating
LNG Facility, Offshore Technology Conference, May 2005, Houston,
Texas.
STENHOUSE, Bryn and GOODWIN, Stephen, Barriers to Delivering
from Model Based Gas Field Production Optimization, GPA Dublin,
2004.
CONTRERAS, Jorge and FERRER, Jos Maria, Dynamic simulation: a
case study, Hydrocarbon Engineering, May 2005. ______________

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