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Spring 2012
LNG_Spring2012_OFC.indd 1 16/03/2012 11:51
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LNG_Spring2012_IFC.indd 1 14/03/2012 15:21




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An audit certicate is available on
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Copyright Palladian Publications Ltd 2012. All
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ISSN 1747-1826
03 Comment
05 LNG news
10 A tale of two gas markets
Ng Weng Hoong, LNG Industry Correspondent,
discusses the disparity between the Henry Hub price
and the Asian LNG price.
18 A toast to 2011!
Pat Roberts, LNG-Worldwide Ltd, UK, looks back at a
successful year for the global LNG sector.
25 FLNGs time to shine
Victor Alessandrini and Mohamed Ould Bamba,
Technip, Europe, discuss the increasing importance of
the FLNG concept for offshore gas production.
30 Floating between islands
Olaf Beyer, TGE Marine Gas Engineering GmbH,
Germany, discusses the provision of engineering
services to provide LNG infrastructure for Guadeloupe
and Martinique.
37 Small scale solutions
Moty Kuperberg, Dynamic Shipping Services, Israel,
explains the benefits of using the small scale LNG
feeder system to supply consumers spread over many
40 Shipping: awash with costs
Lars Petter Blikom, DNV, China, examines how
cost increases in the shipping industry are leaving
shipowners searching for cost reduction measures.
45 Dropping the temperature
Vasserman Aleksandr and Shutenko Maxim,
Odessa National Maritime University, Ukraine, explain
an alternative method of LNG transportation, which
eliminates the need for an onboard reliquefaction
47 Offshore storage solutions
Stphane Maillard, GTT, France, examines the benefits
of using membrane tank systems in offshore FPSOs
and FSRUs.
53 Agents of change
Nick Elliott, Inchcape Shipping Services, UK,
examines the role of shipping agents in the LNG
58 Qatari shipyard goes global
Rebecca Watson, Nakilat, Qatar, details the rise of the
successful Nakilat-Keppel Offshore and Marine repair
64 Getting it right first time
Barbara Grant, International Paint, UK, describes
the benefits of spending time and money on quality
coatings to prolong the lifespan of ships.
72 Meeting the challenge
Thierry Vermeersch, AVEVA, UK, examines current
capabilities and trends in the integration of
engineering, design and information management
technologies between the plant and marine
77 Storage challenges
Mun-Seong Kim, Endress+Hauser, Japan,
describes the intricacies of LNG storage solutions.
81 Sweet from sour
Lorenzo Micucci, Siirtec Nigi, Italy, takes a holistic
approach to sour gas treatment.
85 Scaling it down
James Solomon, Jr., Air Products, USA, explains how
small to mid-sized plants are likely to play a key role
in servicing demand.
89 Vanquishing varnish
Akram Reda, ExxonMobil Lubricants and Specialties,
EAME, explains the benefits of choosing the right
lubrication oil for gas turbines.
93 25
World Gas Conference
2012: Exhibitor Preview
LNG Industry presents a small selection of companies
that will be exhibiting at the 25
World Gas
Conference, Kuala Lumpur, 4 - 8 June 2012.
Spring 2012
LNG Spring2012 OFC indd 1 16/03/2012 11:51
CB&I was selected to provide
front end engineering and
design (FEED) services for the
Yamal LNG project. The project
encompasses production,
treatment, transportation,
liquefaction and shipping of
natural gas and NGLs from
the South Tambley eld on the
Yamal Peninsula in Northern
Siberia, Russia. CB&Is scope
includes FEED development
for a 16.5 million tpy LNG
liquefaction plant, including LNG
storage and loading facilities.
LNG_Spring2012_01-02.indd 1 16/03/2012 12:23
LNG_Spring2012_01-02.indd 2 16/03/2012 09:50

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n December, I accompanied the
Winter issue of LNG Industry to
the World Petroleum Congress
in Doha, Qatar. During my time in Doha I had the privilege of
visiting Ras Laffan Industrial City, which was a unique experience.
The site was astonishing in its scale, having been transformed
from barren desert into a technologically sophisticated energy
hub supplying all corners of the world. It is amazing to consider
that the transformation of the Qatari economy on the back
of natural gas has occurred in such a relatively short period
of time; Qatars North gas field was discovered in 1971 and
Ras Laffan Industrial City began operations in 1996. In that
time frame, the countrys GDP has increased from approximately
US$ 300 million in 1971 to US$ 110 billion in 2008. And they
have plenty of shiny skyscrapers to show for it
Naturally, industry players spend a lot of time conjecturing
which region or country is likely to be the next big thing.
Australia has taken the limelight away from Qatar somewhat
recently, and continues to develop at a promising rate, with
huge amounts of money being invested in first-of-a-kind
projects such as Shells Prelude FLNG project; the largest floating
facility in the world. Inpex and Total are proceeding with their
joint development of the Ichthys project one of the largest
onshore gas facilities in the world. The companies have arranged
US$ 70 billion worth of sales agreements with Japan for 15 years
worth of LNG production. BG Group has recently announced it
will sell down its stake in the Queensland Curtis LNG project for
up to US$ 2 billion. The company intends to sell approximately
20% of its existing 93.75% stake in the project, which is set to
be the first in the world to produce LNG from coalbed methane.
Demand for LNG from Asia continues apace; reports have
claimed the region will expand its regasification capacity by
almost 35% between 2010 and 2015. China aims to bring
three LNG import terminals online in 2012 and in the same year
Japanese demand for LNG is likely to increase by more than
25%. China is likely to be the second largest LNG importing
country by 2020, after Japan.
The world keeps looking for the next big supplier. But
aside from Australia, another region that is gaining some
attention as an emerging potential exporter is the eastern
coast of Africa. Shell has recently agreed a 992.4 million bid
for Cove Energy, a small oil and gas exploration company with
interests in east Africa. Cove currently owns an 8.5% stake
in a large gas field recently discovered offshore Mozambique.
Anadarko Petroleum, Cove and Eni have all made huge
gas discoveries in this area. According to Financial Times
correspondent Guy Chazan, Their two fields combined
could contain up to 60 trillion ft
of recoverable resources of
gas nearly as much as Kuwaits entire reserves. That should
be enough to turn Mozambique into a key exporter of LNG,
to China and Indias fast growing economies. As the gas
majors move into the area and buy out smaller companies
such as Cove, the pace of exploration and LNG development
in the region will inevitably accelerate. Chazan points out
that, Fewer than 500 wells have been drilled in east Africa,
compared with some 20 000 in the north and nearly 15 000
in the west of the continent. Maybe the LNG sector could
start contemplating a new multi million dollar question: if
Australia is the next Qatar, could Mozambique be the next
Australia? Well have to wait and see
LNG_Spring2012_03-04.indd 3 19/03/2012 10:50
After 50 years of operation, the Groningen gas field in the
Netherlands is now, and also for the coming decades, able
to continue supplying its clients. The facilities have been
fully modernized. One key success factor was the long-
term relationship of the operating company NAM and its
contractors. Siemens has updated the compression and
Solutions for the oil and gas industry
variable-speed drive technologies to ensure the adapta-
tion of the gas supply to fluctuating demand, to slash
maintenance requirements, and to maximize environmen-
tal performance. Highest availability and low power con-
sumption of all units are the best basis for an eco-friendly
and successful operation.
Nothing can stop
a real performer.
Eco-friendly compressor technology boosts production
LNG_Spring2012_03-04.indd 4 19/03/2012 08:41
Spring2012 / LNGINDUSTRY / 5
egh LNG has entered into a 10 year time charter
for a floating LNG storage and regasification unit
to be used as an LNG import terminal in Lithuania. The
agreement is subject to the approval of the shareholders
of AB Klaipedos Nafta. The Lithuanian state owns
70.63% of Klaipedos Naftas shares.
Hegh LNG intends to use the second of the
three new regasification vessels being built at
Hyundai Heavy Industries Ltd in South Korea for this
agreement, which will commence in the second half of
2014. The time charter is expected to give an EBITDA
contribution of approximately US$ 50 million per year.
Hegh LNGs President and CEO, Sveinung Sthle,
said, We are delighted to have established a long term
relationship with Klaipedos Nafta and we look forward to
operating the floating LNG regasification terminal in the
Port of Klaipeda.
The proposed FSRU would break up the Russian
monopoly on gas imports to Lithuania. The deal with
Hegh comes soon after Russian gas giant Gazprom has
begun legal manoeuvres to protect its investments from
changes to Lithuania's industry legislation.
Maersk sells LNG
Hegh LNG to
supply FSRU
he Danish company Maersk has released a statement
regarding its recent sale of Maersk LNG to Teekay LNG and
Marubeni Corp. The agreement was subject to a regulatory
approval and consents from Maersk LNGs customers. These
conditions have now been fulfilled. Accordingly,
A.P. Mller-Maersk A/S has completed the sale of all
the shares in Maersk LNG to Malt LNG holdings ApS, a
company jointly owned by Teekay LNG Operating LLC and
Marubeni Corp.
Under the terms of Maersk LNGs partnership agreements
with Socit Generale and Qatar Shipping Co., each owning
an LNG vessel, the sale of Maersk LNG triggered pre-emption
rights to Maersk LNGs partnership shares.
Both partners have exercised the pre-emption rights and
acquired Maersk LNGs 26% ownership share in each of the
limited partnerships on the same terms as offered by
Teekay LNG and Marubeni Corp.
The sale of Maersk LNG generates an accounting gain
for the A.P. MollerMaersk Group in the order of
US$ 80 million, including accumulated exchange rate
differences previously recorded in equity, Maersk added.
LNG for HGVs?
he use of LNG by giant cargo vessels crossing the worlds
oceans has been advocated for some time and has recently
started to pick up steam. What might be less well known,
however, is the small but growing trend towards using LNG
for road haulage vehicles such as HGVs.
Although the infrastructure is nowhere near as
widely distributed as that provided for conventional fuels,
companies in the USA, such as Encana Corp., have begun
to make real inroads towards using LNG as the main
fuel for their goods vehicles. Encana recently completed
construction of its first LNG fuelling station and its partner,
Heckmann Water Resources, has ordered 200 LNG fuelled
vehicles, with 50 already operational.
Executive Vice President of Encana, Eric Marsh, said,
This new station is a major step towards encouraging
companies to convert their vehicles to run on affordable,
environmentally-responsible natural gas.
In Europe, Volvo has promoted the development of blue
corridors, which would provide a network of LNG refuelling
stations for goods vehicles across the continent.
LNG_Spring2012_05-09.indd 5 16/03/2012 14:07
6 / LNGINDUSTRY / Spring2012
Cheniere secures
CNOOC begins
China's first FLNG

21 - 23 May
32nd Annual International
Operating Conference & Trade
t: +1 703 875 2018
04 - 08 June
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t: +60 3 2171 3500
heniere Energy Partners has secured US$ 2 billion
worth of funding as part of an exclusive deal with
Blackstone Energy Partners L.P., Blackstone Capital Partners VI L.P.
and certain affiliates, to fund the building of its planned LNG
liquefaction plant at Sabine Pass LNG terminal and acquire the
Creole Trail pipeline.
Cheniere Energy Partners is moving towards a final
investment decision on the first phase of its proposed liquefaction
plant. The first phase will consist of two liquefaction trains with a
capacity of 4.5 million tpy at a total cost of US$ 4.5 - 5 billion.
Construction is expected to begin in the first half of 2012.
Cheniere Energy Partners is looking to take advantage of high
Asian and European LNG prices to export shale gas in the form
of LNG.
The liquefaction project is expected to be constructed with
each LNG train commencing operations approximately six to
nine months after the previous train. The company has already
entered into a lump sum turnkey contract for the engineering,
procurement and construction of the first two trains of the project
with Bechtel Oil, Gas and Chemicals, Inc.
Chairman and CEO of Cheniere, Charif Souki, said,
"Obtaining this financing will be a significant milestone for the
advancement towards construction of the first two liquefaction
Bringing you the power of information
Energy Global
For more diary dates go to...
hina National Offshore Corp. (CNOOC) has begun the
construction of China's first floating LNG (FLNG) facility
in the city of Tianjin. More precisely, the development
will involve the construction of a floating storage and
regasification unit (FSRU).
The groundbreaking project is set to cost approximately
US$ 900.5 million and is designed to be able to
manage 2.2 million t (or 3 billion m
) of LNG per year.
Other investors in the project include Tianjing Port and
Tianjing Gas Group.
CNOOC has also announced that it has plans for
a second phase of the project, which will involve the
development of a land-based LNG terminal capable of
receiving 6 million tpy and due to be operational by 2015.
Ever rising domestic Chinese demand for LNG delivered
by tankers has seen a host of onshore LNG terminals enter
operation along China's east coast.
This demand has led to intense competition between
Chinese industry giants with companies such as CNOOC,
PetroChina Co. Ltd and Sinopec fighting for suitable terminal
sites, which has led to a demand for FLNG facilities.
LNG_Spring2012_05-09.indd 6 16/03/2012 14:07




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8 / LNGINDUSTRY / Spring2012
airstar Heavy Transport N.V. has been awarded two
transportation contracts for the giant Ichthys LNG project
situated offshore Darwin, Australia.
The contract, scheduled to begin in Q2 2014, will involve
the use of two of Fairstars semisubmersible ships Forte, and
Finesse for a minimum of 12 months each. This 12 month
tenure is estimated to be worth US$ 56 million.
Japan Gas Corp., the company that awarded the two
contracts, has an option to prolong the two contracts by an
additional six months, adding a further US$ 28 million to the
contract value.
The two vessels will travel between the Ichthys site and
several different construction yards in Asia as they transport
the components for the two LNG trains due for construction
in Darwin.
Fairstar CEO, Philip Adkins, said, Fairstar will work closely
with JGC to manage the safe and reliable delivery of the LNG
modules for Ichthys and will be closely engaged with the JGC
project Team in Japan.
ingapore uses LNG to meet approximately 80% of its
power generation requirements, most of which is piped
in from Indonesia and Malaysia. However, growing energy
demand in these two countries looks likely to reduce the
amount of LNG that is available for Singapore to import.
In an attempt to supplement its energy supplies in
light of what appears to be an inevitable decline in imports
from Indonesia and Malaysia, Singapore has constructed a
new LNG terminal capable of managing imports of up to
15 million tpy. According to some analysts, this means that
the terminal should theoretically be capable of supplying
Singapores entire energy needs if the long term contracts
with Indonesia and Malaysia were not to be renewed.
The Chief Executive of Singapores Energy Market
Authority, Chee Hong Tat, said, Supply will come under
pressure because of growing domestic gas demand in
Malaysia and Indonesia. What we will do is ensure sufficient
capacity to import LNG to meet all of our gas demand.
he Spanish company has reported a 6.4% increase in its net
income for the first nine months of 2011, bringing the figure
up from g 1.786 billion to g 1.901 billion from the previous year.
Total operating income for the company was recorded as
g 4.01 billion; a 1% increase on September 2010.
The most dramatic improvements were seen in the group's
LNG division, with profits for the first nine months of 2011 rising
a staggering 367.8% to g 276 million up from their 2010 value
of g 59 million. The company attributes this rise to an increase in
sales volumes.
Other members of the group fared less well, with YPF
reporting a decline in income of approximately g 200 million
down to g 1.008 billion. Gas Natural Fenosa also posted a
reduced income of g 712 million, down 4.9% on the previous
The company announced that, "The 2011 earnings increase
is mainly due to improved oil and gas prices [...] with a 13.4%
and 14.8% increase respectively, this was boosted by the solid
performance of the LNG division."
Fairstar scores
Ichthys contracts
LNG terminal imports to replace piped
supply if needed
income rises to
W 1.901 billion
LNG_Spring2012_05-09.indd 8 16/03/2012 14:07
Offshore LNG loading is like threading a needle on a trampoline:
It takes highly specialized equipment. Almost a decade ago, we began
developing the worlds rst offshore LNG loading system. We designed
it with constant motion swivels to handle rapid, unpredictable motions.
We developed a patented cable targeting system to enable connection
under these same conditions. And we helped make offshore LNG
both practical and cost-effective. To see what weve done and how
were approaching a next generation, worst-condition solution,
LNG_Spring2012_05-09.indd 9 16/03/2012 14:08
Ng Weng Hoong, LNG Industry
Correspondent, discusses the disparity between
the Henry Hub price and the Asian LNG price.
LNG_Spring2012_10-17.indd 10 13/03/2012 09:11
Spring2012 / LNGINDUSTRY / 11
s US natural gas prices plunged below US$ 2.40 per mmBTU to their lowest levels in over
a decade, LNG held firm near record levels in Asia, creating probably the greatest arbitrage
trading opportunity in the history of any major commodity. But no one was taking advantage
of this sure win high-margin trade, (or likely will in the near term), to ship North Americas natural
gas to Asia, which continues to pay between US$ 16 - 20 per mmBTU for its spot LNG cargos.
In this strange tale of two markets for the same commodity, North Americas rising natural gas
production and lack of export infrastructure could ensure that its overflowing supply continues to sell
for an astonishing discount to Asian prices for a few more years.
In the USA, weak demand, insufficient storage capacity and record production of over
23 trillion ft
last year, primarily from shale, drove natural gas prices down by a third from 2010.
These trends are expected to continue through the rest of 2012 and even beyond unless the weather
turns seriously cold and the economy recovers strongly.
LNG_Spring2012_10-17.indd 11 13/03/2012 09:11
12 / LNGINDUSTRY / Spring2012
But in Asia, consuming countries cant get enough
supply from a handful of maxed-out regional producers,
ensuring natural gas and LNG prices remain supported at
or near current high levels. This is contributing to the
worsening shortages and rising costs of electricity in the
Led by Asia, global natural gas consumption will grow
at an average annual rate of 2.1% through 2030,
outpacing oil and coal, according to BPs latest
Energy Outlook report.
BP claims that Asian LNG demand will constitute the
fastest growing segment of the natural gas market. In
response, annual global supply will grow by 4.5% to 2030,
more than twice the rate of global gas production and
faster than the 3% annual rate of increase seen for
inter-regional pipeline trade, the report said. Growing at an
annual rate of 7.6%, Chinas gas use will reach
46 billion ft
/d in 2030 to match the size of the European
market. The BP report raises the hopes of producers and
traders hoping to exploit the widening Asia-North America
price, predicting that the USA and Canada will be able to
export 5 billion ft
/d by 2030.
Paradoxically, the prolonged weakness in
North American gas prices has created a powerful long
term barrier, not incentive, to export. Large industrial
consumers like power and petrochemical companies are
opposed to exports that will raise their feedstock costs.
The anti-export lobby cites recent studies by
Navigant Consulting, Deloitte and ICF International
showing that domestic US gas prices could rise by
15 - 20% from current levels if producers succeeded in
exporting between 6 and 12 billion ft
/d. These price
increases could hobble US attempts to revive its battered
manufacturing sector.
The debate over US LNG exports could become an
important reference point for the future of Asias energy
supply. Both sides have lined up powerful supporters, with
producers like ExxonMobil and Chevron investing heavily to
boost unconventional gas supply in favour of exports while
chemical companies and industrial consumers argue that
they need cheap energy feedstock to compete against
low-cost Asian manufacturers.
Asia dissipating global LNG
supply glut, say two separate
American fears are well founded according to two recent
studies which found that fast-growing Asian demand is
starting to impact the current glut in global gas supplies.
A report distributed by consulting firm
Research and Markets predicts that the glut will dissipate
from 2014, with Asia-led demand expected to exceed
supply by 75 million t by 2020.
China, Japan, India, South Korea and Southeast Asia
will use more LNG not only to fuel their economic growth,
but also to try to displace coal and oil in their energy mix
to reduce pollution.
In the near term, the report said global LNG demand at
248.5 million t in 2011 will be boosted by the hurried
closure of the majority of Japans nuclear power plants as
well as plans for nuclear phase-out by several European
countries. The report said another 17 countries will become
LNG consumers and begin competing for supplies through
the decade.
Exacerbating the supply tightness, the report said many
proposed export terminals in Asia and Australia will not be
built in time as a result of insufficient funding and skilled
labour shortages.
In its latest annual survey, the France-based
international association CEDIGAZ said that global LNG
trade is poised for rapid expansion in the short term after
growing by 10% last year, partly due to a demand surge in
Japan following the Fukushima Daiichi nuclear plant
tragedy in March 2011. Rising demand in Asia helped
offset the 9% plunge in Europe to boost global demand
for 2011.
On the supply side, it predicts growth in unconventional
gas output and a 60% rise in global liquefaction capacity
by 2020, laying the foundation for sustained growth in the
international LNG trade.
Asias regasification capacity
to expand by more than a
third from 2010 to 2015
Asia is expected to expand its regasification capacity
by nearly 35% from 14.38 trillion ft
in 2010 to nearly
19.37 trillion ft
in 2015, according to a report by
consultant GlobalData.
Thanks to technological advancements, LNG has
emerged as a viable option for importing natural gas to
compete against piped gas. Since early 2008, the global
LNG industry has been bolstered by rising demand,
expanding supply from unconventional sources, and
improved liquefaction and regasification technology.
The report found that state-owned companies
dominate the liquefaction industry, with just five companies
accounting for approximately 36.8% of global liquefaction
capacity in 2010.
The regasification industry is more fragmented and
diverse due to the low cost of building regasification
plants. To meet the rising appetite for natural gas in most
countries, more private companies are investing in
regasification projects.
The report said that global LNG liquefaction
capacity increased from 121.71 million t in 2000 to
273.92 million t in 2010 while regasification capacity rose from
264.33 million t to 583.51 million t over the same period.
Producing countries Qatar, Indonesia, Malaysia, Nigeria
and Australia accounted for over 62.4% of the worlds
liquefaction capacity while importers Japan, the USA,
South Korea, Spain and the UK accounted for 78.6% of
the total regasification capacity.
For both natural gas producers and consumers, LNG
offers greater flexibility compared to pipeline delivery.
LNG_Spring2012_10-17.indd 12 13/03/2012 09:11
LNG_Spring2012_10-17.indd 13 13/03/2012 09:11
14 / LNGINDUSTRY / Spring2012
Another pipeline to deliver gas
from Central Asia by 2013
China expects to start up its third West-to-East pipeline
next year to deliver up to 30 billion m
of natural gas from
Central Asia.
Measuring a total of 18 104 km in length, the three
pipelines that make up the West-to-East system will have a
combined capacity to deliver 72 billion m
/yr of natural gas.
The 5200 km third network will include one trunk and
six branch lines, three gas storage terminals and an LNG
terminal. Operator PetroChina plans to add two lines to
this network after 2015, each with the capacity to carry
approximately 30 billion m
of natural gas from
Turkmenistan, Uzbekistan and Kazakhstan to Chinas
industrialised coastal regions in the east.
According to the National Development and Reform
Commission (NDRC), Central Asia now accounts for nearly
half of the countrys natural gas imports, with LNG
supplying the rest.
The first WTE pipeline measuring 4200 km started
up in October 2004 and has the capacity to supply
12 billion m
/yr a year from Chinas western Xinjiang region
to Shanghai.
PetroChina started building the second 8704 km
network in 2008, and expects to complete it in June 2012
with the capacity to deliver 30 billion m
Shale to boost domestic LNG
China isnt just counting on imports; it is also aiming to
triple its domestic LNG production to 7.5 million tpy by
2015, according to the China Petroleum and Chemical
Industry Federation.
Speaking at the recent World Petroleum Congress in
Qatar, Fu Chengyu, the Sinopec Group Chairman, predicted
that China could overtake the USA in producing natural
gas from shale and unconventional sources within 10 years.
Rival China National Petroleum Corp. (CNPC) has signed
a 30 year agreement with Shell to jointly develop and
produce natural gas in the Sichuan province. The partners
will appraise and look to develop unconventional gas
reservoirs in a 4000 km
basin in the Jinqiu block.
China National Offshore Oil Corp. (CNOOC), the
nations largest offshore oil and gas company, has started
seismic operations to explore for shale gas on a 4800 km

onshore block in eastern Anhui province.
Following its recent acquisition of Chesapeake Energy
assets in the USA, the Anhui project represents the
companys first onshore venture, signalling unconventional
reserves as a new strategic target for future growth.
The Chinese government has set a target for the
industry to produce 6.5 billion m
from domestic sources by
2015 and 80 billion m
by 2020.
Japans LNG imports up 12%
six months after Fukushima
Compensating for the loss of the bulk of its nuclear power
capacity, Japan increased its LNG import by more than
12% to over 45.6 million t in the first six months of the
2011 - 2012 financial year to September 2011.
According to official data compiled by consultancy
GlobalData, Japan imported 45.606 million t of LNG for the
March to September 2011 period compared with
40.686 million t for the same period the previous year.
Japan has shut down more than 90% of its nuclear
power capacity since March last year. Disillusioned and
distrustful of the governments mishandling of the crisis,
the public has demanded the complete closure of the
nuclear industry by this year.
Pre-quake, Japan derived 29% of its electricity from
nuclear power, and there were plans to raise that
proportion to 40%. Now, Japanese demand for LNG could
grow by more than 25% to over 100 million t in 2012 after
surging by over 15% to a record of more than 80 million t in
2011, said a senior executive from the Japan Oil, Gas and
Metals National Corp. (JOGMEC). Qatar and Australia are
slated to become future major LNG suppliers with traditional
suppliers Indonesia, Malaysia and Brunei playing support
Indonesias state energy firms
preparing to import LNG
Indonesia was, until recently, the worlds largest LNG
supplier, but now faces the prospect of becoming a
net importer later this decade as it is not finding and
developing enough new gas reserves to meet its growing
domestic energy demand.
Its three main state energy companies, gas distributor
PGN, power utility PLN, and oil and gas firm Pertamina, are
preparing to start importing LNG.
Pertamina and PGN have formed a 60/40 joint venture
firm, Nusantara Regas, to own and operate the nations
first two receiving terminals in West Java and
North Sumatra.
The priority will be to start up the first terminal, an
FSRU, this year to serve Java, home to approximately 60%
of the population. The three companies have been
ordered to work on the 3 million tpy terminal on the
western part of the island with Pertamina guaranteeing
LNG supply from the Bontang export terminal on
Kalimantan Island.
Last April, Nusantara Regas signed a US$ 500 million
deal with Golar LNG to charter the FRSU from a converted
vessel to handle imports for an initial 11 year term with
automatic conditional extension options up to 2025.
Golar expects to complete the conversion and deliver
the 125 000 m
vessel, Khannur, this quarter. Khannur will
deliver up to 500 million ft
/d or 3.8 million tpy of LNG
through a Nusantara Regas pipeline to two power plants
owned and operated by PLN.
Last December, a joint venture between Japans
Mitsui OSK Lines Ltd and Indonesian shipping firm
PT Trada Maritime Tbk secured the contract to ship LNG
from Bontang to the FSRU.
Nusantara Regas is looking to start work on the second
terminal in Arun city on Sumatra Island by 2015.
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Pertamina has set aside US$ 378 million to convert the
existing export terminal into a receiving facility. In the near
term, however, Pertamina faces difficulty getting the
approval of the government, which is focused on
completing the FRSU project on West Java and PGNs plan
for a 140 million ft
/d unit in Belawan in northern
Sumatra Island.
Pertamina is not giving up the fight. For now, it is
cutting back on exports and redistributing LNG from within
its system to meet the estimated 10 million tpy demand of
its domestic customers including fertiliser manufacturers in
Under the 2001 oil and gas law, Pertamina and other
companies are mandated to allocate a quarter of their
production to domestic users. The pro-export faction said
Indonesia should honour its supply contracts as well to
earn hard-currency revenues from LNG sales instead of
subsidising domestic consumption.
Nevertheless, oil and gas regulator BPMigas has been
warning its international customers to brace for further
cutbacks as the countrys natural gas production is forecast
to fall by another 28% in 2012.
Indonesias three main LNG export terminals at
Bontang, Arun and Aech may be able to produce a total of
only 262 cargos in 2012, down from last years 365 cargos.
With 30 cargos already allocated to domestic customers
this year, Indonesia will have only 235 cargos to meet the
needs of its term customers in Japan, South Korea, China
and Taiwan.
China to pay at least 50%
more for Tangguh LNG cargos
Chinas CNOOC will have to pay at least 50% more for its
LNG supply from the Tangguh export terminal in Papua
province, said BPMigas.
In its negotiations with CNOOC, BPMigas wants to raise
the contract price from US$ 3.35 per mmBTU to between
US$ 5 and US$ 6; still substantially less than the recent
Asian spot price of over US$ 16.
CNOOC helped launch Tangguh back in 2002 when it
signed on as a foundation customer by agreeing to pay
US$ 2.60 per mmBTU for its annual supply of 2.6 million t
of LNG when crude oil was languishing at less than
US$ 30/bbl.
Four years later, CNOOC, which owns a 13.9% stake in
Tangguh, agreed to the first price revision by pegging LNG
to a basket of crude price of US$ 38/bbl., up from the
original price of US$ 25, set in 2002. The agreement allows
for price reviews every four years.
With UK major BP as Tangguhs operator owning a
37.16% interest, Indonesia has secured five long term LNG
supply contracts from the 7.6 million tpy terminal.
Tangguhs other customers include Sempra Energy,
which lifts 3.7 million tpy while Japans Tohoku Electric
Power imports 125 000 t. South Koreas Posco and
K-Power each have annual contracts for 550 000 t and
600 000 t respectively.
Thailand to fast forward
construction of second LNG
import unit at Rayong
Thai state energy company PTT is aiming to complete the
expansion of the countrys second LNG import terminal
by 2014 - 2015 instead of the original target deadline of
Citing faster than expected growth in the countrys
natural gas demand, the company said the new
5 million tpy plant at its Map Ta Phut, Rayong terminal,
approximately 220 km southeast of Bangkok, will have to
start up soon in anticipation of the completion of new
gas-fired power plants. The new US$ 400 million plant will
enable Thailand to double LNG imports to 10 million tpy.
The US$ 900 million Rayong import terminal, which
started up last September, making it the first in
Southeast Asia, comprises two tanks each with a
capacity to hold 160 000 m
of LNG.
The Thai government has had to back away from
building more coal-fired plants in the face of environmental
opposition while quietly dropping plans for nuclear energy
following the disaster in Japan.
The government is expected to sharply raise the share
of natural gas in Thailands energy mix in its upcoming
revision of the countrys long term power supply master
plan, or the Power Development Plan (PDP) later this year.
The previous plan, which included nuclear energy and an
expanded role for coal, had envisioned natural gas use to
grow by 6 - 7% a year to meet 40% of the nations energy
demand. These rates will have to be raised by at least 50%.
Vietnam seeks LNG from
Australia and Qatar
Vietnam looks to be joining the growing Asian bandwagon
to import LNG from Australia and Qatar.
Traditionally an energy exporter, Vietnam is facing
shortages of coal and fuel as its energy demand is growing
at a faster rate than its domestic production and reserves.
State PetroVietnam subsidiary PV Gas recently met with
officials of Australias Queensland state and Qatargas as part
of its plan to build two terminals in Vietnam to import LNG.
PV Gas is aiming to build a 1 million t capacity terminal
along the Thi Vai River in southern Vietnam and a 3 million t
capacity terminal in Binh Thuan in central Vietnam.
The Thi Vai terminal is expected to start up by 2014, while
the larger terminal is due to come onstream a year later.
India expects LNG import
capacity to more than
quadruple by 2020
India is planning to raise its LNG import capacity from
13.5 million tpy now to 47.5 million tpy by 2016 and
62.5 million tpy by 2020, said Petronet, the countrys sole
natural gas importer and LNG terminal operator.
The company is building a second receiving and
regasification terminal at Kochi in Kerala state to add to its
existing facility at Dahej in Gujarat.
LNG_Spring2012_10-17.indd 16 16/03/2012 15:08
Spring2012 / LNGINDUSTRY / 17
Petronet could soon face competition from
GAIL Gas Ltd, a wholly-owned subsidiary of GAIL, which is
working with the Andhra Pradesh state government to set
up an FSRU along Indias southeastern coast that will also
import LNG. The partners are aiming to start up the
Rs 50 billion facility by 2014 with the capacity to import up
to 5 million tpy of LNG.
Separately, privately owned Reliance Industries
and UK major BP have received approval from the
Indian government to invest a total of US$ 1.5 billion to
further develop the countrys largest natural gas block in
the Bay of Bengal.
The partners are aiming to produce 10 million m
from four new satellite fields in the KG-D6 block from
2015. The block is producing less than 40 million m
/d of
gas and is in rapid decline after peaking at approximately
60 million m
/d in June 2010.
The Indian government wants oil and gas companies to
find and develop domestic reserves to reduce import
IOC awards contract for LNG
terminal in Tamil Nadu state
Engineering giant Foster Wheeler AG said subsidiary
Foster Wheeler India Pvt Ltd has won a contract to develop
a new (5 million tpy) LNG receiving terminal in Ennore city
in the Indian state of Tamil Nadu by 2016.
Australias rise as worlds
LNG supermarket
Despite worries over rising cost, labour shortages and a
new carbon tax from July this year, Australia looks set to
maintain its run as one of the biggest winners of the global
LNG boom that began a decade ago.
With at least eight projects underway worth a total of
AU$ 175 billion and another seven being planned, the
countrys natural gas production is expected to triple to
over 5700 billion ft
over the next decade, said energy
economics group EnergyQuest. (US$ 1 = AU$ 0.97).
Speaking at the recent Australia Gas 2011 conference,
EnergyQuest CEO Graeme Bethune said Australia is in a
strong position to lead as well as benefit from what the
International Energy Agency (IEA) has called the coming
golden age of the natural gas industry.
When the current eight projects are completed,
Australia will be supplying 10% of Chinas gas needs, 20%
of Japans needs and 30% of Koreas needs, with major
economic and environmental benefits for those countries,
he said.
However, Australia has to lock down as many of the
projects as possible while conditions are favourable to
ensure long term survival and profitability, said Dr Bethune.
He warned that some projects were already behind
construction schedule and over budget, while competitors
were accelerating their plans to develop LNG export
terminals in the USA and Canada. Government policies,
natural disasters and environmental restrictions are also
presenting challenges to Australias natural gas and LNG
project developers.
Acknowledging the industrys growing worries,
Federal Resources Minister Martin Ferguson hinted the
government may delay its approvals for new LNG projects.
Ratings agency Fitch has given Australias booming oil
and gas sector a negative credit outlook this year while
Deutsche Bank said the countrys workers in the resources
sector are probably the worlds most expensive, earning
twice as much as the global average.
China, Japan step up
investment flows into
Australias LNG sector
For now, Asian investors are showing little concern about
this rising wall of worry.
In January, Asias two largest economies lifted their
involvement in Australias LNG sector. Chinas
Sinopec Group has agreed to raise its previous 15%
holdings in a US$ 20 billion LNG project in Queensland
state to 25% while a consortium led by Japans Inpex
announced it would invest US$ 34 billion to develop the
Ichthys project in the Northern Territory state.
Sinopec Group, which paid US$ 1.5 billion for its initial
15% stake in the Australia Pacific LNG Pty Ltd (APLNG)
project in April, will acquire its additional shares from
consortium partners US ConocoPhillips and Australias
Origin Energy Ltd.
As part of the first deal, the consortium agreed to supply
4.3 million tpy of LNG to Sinopec. In the latest deal, Sinopec
will purchase another 3.3 million tpy of LNG from 2016 to
2035, said Origin Energy on behalf of the consortium.
APLNGs export-oriented LNG project includes the
development of its substantial coal seam gas resources in
the Surat and Bowen Basins over a 30 year period, a
530 km transmission pipeline, and a multi-train LNG facility
on Curtis Island, near Gladstone. The project was
sanctioned in July last year for an initial LNG production
train and infrastructure to support a second train.
Separately, Inpex and Frances Total had given their final
approval to proceed with their joint development of the
US$ 34 billion Ichthys project.
The port city will be the site of the one of the worlds
largest onshore gas facilities to process and produce
8.4 million tpy of LNG, most of it for export to Japan, from
the end of 2016. The terminal will consist of two LNG
trains at Blaydin Point, with additional land already made
available by the Northern Territory state government for the
possible addition of another four trains.
Gas from the offshore Ichthys field in the Browse Basin
off the coast of Western Australia will be delivered via a
889 km pipeline to the onshore terminal in Darwin. Ichthys
holds an estimated 12.8 trillion ft
of gas and
527 million bbls of condensate.
Inpex and Total recently concluded US$ 70 billion worth
of sales agreements with Japanese customers for the bulk of
the projects entire LNG production for 15 years from 2017.
As one of the worlds largest LNG facilities based on an
estimated 40 years of gas and condensate reserves from
the Browse Basin, Ichthys will also produce 1.6 million tpy
of LPG and 100 000 bpd of condensate at peak.
LNG_Spring2012_10-17.indd 17 13/03/2012 09:11
A toast to
LNG_Spring2012_18-24.indd 18 13/03/2012 09:50
Spring2012 / LNGINDUSTRY / 19
ast year will be remembered as a very successful year in the LNG
industry. The global industry grew its sales by an estimated 9% to
240 million tpy. Several markets increased their LNG demand. Notably
the UK (mainly supplied from Qatar), India, China, Korea and Argentina
collectively imported approximately 15 million t more in the first nine months
of 2011 than in the same period in 2010. An unexpected test for the industry
came from Japan following the earthquake and tsunami in March. A sudden
increase in LNG demand followed the shutdown of 11 Japanese nuclear
units (12 GW). By the end of last year, it is estimated some 10 million t
of additional LNG will have moved from Asia, the Middle East and the
Atlantic Basin to Japan. This extra LNG demand is expected to continue whilst
several nuclear units remain shut down for prolonged maintenance and until
the countrys nuclear policy becomes clear.
The consequential increased demand on shipping put an upward stress
on charter rates to approximately US$ 100 000 per day, with virtually the
whole fleet deployed. In turn, Asian spot LNG prices became much higher
than Atlantic Basin markets with premia of US$ 8 - 13/mmBTU. These price
differentials are some of the highest levels we have seen for some time and
they look set to remain for the short term at least.
LNG sellers demonstrated that with the growing volume of divertible
LNG and spare shipping, it can be effective in responding to sudden supply
challenges and provide supply reliability when and where it is most needed.
New supply capacity came onstream in Qatar; all the new mega trains
have now reached (and exceeded) their design outputs. In total, Qatar added
19.5 million tpy of new supply to the market. Short term LNG sales rose to
approximately 20% (48 million t) of the global market and last year was a
year of high value arbitrage trading for the market players who, by contract,
control the destination of the LNG they purchase. Commercial opportunities
to import and re-export from the USA at regas terminals in Louisiana and
Texas continued and indeed similar activities developed in Mexico, Belgium
and Spain. Overall, 1.5 million t of LNG was re-exported in the first nine
months of the year.
Pat Roberts,
LNG-Worldwide Ltd*,
UK, looks back at a
successful year for the
global LNG sector.
LNG_Spring2012_18-24.indd 19 19/03/2012 08:57
20 / LNGINDUSTRY / Spring2012
Market fundamentals will be
more complex to assess
At a macro level, the Eurozone crisis, the Japanese earthquake, its
impact on the nuclear industry worldwide, and the Arab Spring
all demonstrate that we operate in a complex environment for
forecasting LNG supply, demand and pricing developments. More
dynamic forecasting is needed to incorporate all the uncertainties
arising from the business environment. This is becoming an
important feature of our business.
On the demand side, the worlds largest LNG consumer,
Japan, suddenly has a lot of variability in its demand, varying
from 63 - 92 million tpy depending on assumptions over the
period 2012 - 2020. Also, most of the new LNG demand
growth is associated with countries in Asia whose demand is
very sensitive to price. Depending on outright pricing, wide
variations in demand are evident in countries like China and
India. Overall, demand forecasting will be more complicated
and more variable. To make it internally consistent, it is
necessary now to recognise there is tiered LNG demand.
Some LNG is must buy whereas other demand is price
sensitive, and sustained high prices will limit the development
of much of the new market demand. Coupled with the fact
that the supply of new LNG is linked to a variety of projects
with very different cost stacks, it means that simple volume
charts showing supply and demand growth are of little use in
determining the commercial features that will drive supply and
demand and in devising robust business plans.
Throughout the year, the prospect of North American LNG
exports has been growing as a credible option to resolve some
of the key supply, demand and pricing uncertainties.
We end the year with the Cheniere project at Sabine Pass
having signed three conditional agreements with BG Group,
Gas Natural Fenosa and GAIL (India) Ltd.
As a result, a new round of economic and regulatory risk
modelling needs to be undertaken before we can assess the
volume of North American LNG supply that could be expected
to develop by 2020.
Gas pricing differentials between markets was a common
theme. Understanding US shale economics, new LNG cost
stacks and the ability of markets to support prices linked to oil
have all been discussed. Throughout the year the price
differentials have widened. It is this inter-regional
spread that supports long term North American exports.
Charles River Associates coined the phrases
Pacific Shale Spreads and Atlantic Shale Spreads to refer to
the arbitrages between Asia and the US, and Europe and the
US, gas markets. It has been too early to forecast the
consequences on these spreads as North American exports
develop, but it is clear there are definite price risks to manage,
either through the physical business or through locking in
future spreads by hedging.
In addition, it raises the issue of whether North American
exports will lead to the US Henry Hub index developing as a
new market index for LNG prices in other regions.
Demand growth to 2020 is
expected to remain strong,
but needs to be matched with
new supply cost control and
continual commercial innovation
The industry has doubled roughly every 10 years and the
prospects remain good that it will almost double again to
400 million tpy by 2020. A new round of expansion is well
underway with 12 projects (76 million tpy) currently under
construction, mostly centred on Asia Pacific supply (Australia)
to Asian markets. There are also several other projects that may
mature. Globally, projects totalling 280 million tpy have been
announced as being under active development and include
Tanzania and Mozambique as potential new sources. In 2012,
some 70 million tpy of projects are targeting a final investment
decision (FID) and the majority is focusing on supplying the
Asian market. It is difficult to see how all these projects can
take FID further in 2012. So the race is on.
However, positive demand prospects alone will not drive
the business forward at its recent growth rates. Not least, since
much of the new LNG demand growth is expected to be in
Asias price sensitive markets. Collectively, the industry will need
continuous improvements coming from technological and
commercial innovations to deliver a cost-effective gas supply to
customers. In addition, LNG will need to be price competitive
with other gas supplies and other fuels to ensure it builds
market share.
This is nothing new of course, but the current global
uncertain economic times and sustained energy inflation makes
supply cost control harder. Yet it is increasingly central to any
credible investment plan. The LNG sector is collectively relying
on two major pillars of support for its plans:
Technical and commercial
The LNG industry has been innovating continuously over the
last 50 years. It will remain a key success factor for the future.
2011 has been an outstanding year for technical innovation.
Shell has taken FID on its Prelude floating liquefaction
project in Northwest Australia to prove its concept of a
mobile liquefaction plant as a way of monetising smaller
scale reserves.
Two more coalbed methane sourced LNG plants have taken
FID in Queensland (Gladstone LNG and APLNG).
Excelerate Energy has considerably shortened the lead
times to complete an FSRU project in Argentina.
Small-scale liquefaction (and modular builds) are under
active development.
Figure 1. Summits throughout the year questioned the
speed with which more trading would develop.
LNG_Spring2012_18-24.indd 20 13/03/2012 09:50
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technologies to power the world.
At GE, the future is at work.
LNG_Spring2012_18-24.indd 21 13/03/2012 09:50
22 / LNGINDUSTRY / Spring2012
Technically challenging Arctic plans are under development.
US regas terminals are developing plans to add liquefaction
capacity and provide bi-directional terminals.
The outlook presented last year was more innovation and
new supply growth of 150 million tpy by 2020. Within this
there is likely to be a variety of technologies and ongoing cost
control. Unconventional feed gas for LNG plants looks as
though it will grow progressively over the period.
In parallel to technical innovations, a sustained drive to
develop innovative commercial propositions is needed.
Companies who can successfully combine cost-effective supply
growth, whilst retaining as much commercial flexibility in their
transactions will develop an important competitive edge. The
word flexibility has been central to everyones aspired business
model. It has been the value added feature in several growth
plans for buyers and sellers alike.
Flexibility to divert long term sales of LNG to other markets,
or trade some LNG on a spot basis is likely to lead to an
increase in market liquidity of both volumes and players open
to trade. However, the barriers to LNG being a global traded
commodity remain strong. It would need a fully liquid market,
spare open access at terminals, spare shipping, standardised
contracts and balanced risks and rewards. These criteria are not
all in place, but there are signs the markets are adapting to
incorporate more short term sales.
Summits throughout the year questioned the speed with
which more trading would develop. Times are changing and
countries like Singapore and Thailand are building spare
regasification capacity to offer new services to customers, whilst
several LNG companies are opening regional offices in Asia to
prepare for more short term trading and optimisation activities.
Challenges ahead
It is clear that the next phase of growth isnt going to be all
plain sailing. As the industry grows, the challenges facing the
industry are evident and serious:
Delivering the current 12 new LNG supply projects under
construction on time and on budget; some have already
announced they are delayed and over budget.
This level of concurrent building has never happened
before, particularly since seven of the projects
(53 million tpy) are in Australia.
The new supply projects are getting more complex. For
example, they involve large scale CO
coalbed methane as feed gas and floating liquefaction. In
addition, the Australian projects are competing with each
other for labour and resources.
Whilst these challenges are being addressed, a further
challenge will be the impact that unconventional gas may have
on the need for new LNG. The view that all gas is good voiced
by a variety of IOCs masks the fact that some LNG growth may
be stymied by the development of unconventional gas supplied
by pipeline. Notably in China (one of the most important
markets for new LNG growth), growth in unconventional gas
supply has largely been assumed will take place post-2020.
However, if this were advanced successfully, it could
substantially reduce Chinas need for LNG and significantly
change demand assumptions.
Successful business models (for both buyers and sellers) will
incorporate flexibility and be fast to react to change.
The general consensus in 2011 was that flexible business
models would be the best means of managing uncertainty for
buyers and sellers alike and generate and protect value. At first
sight, it is difficult to imagine how both buyers and sellers can
have flexibility in their LNG business models at the same time.
Yet each party claims this is needed if their growth targets are
going to be met. Market price differentials over the last seven
years have made everyone aware of the tremendous value
available from arbitrage if companies have access to sufficient
infrastructure and divertible LNG to respond quickly to short
term spikes in demand.
Sellers have made it clear that flexibility comes at a price for
buyers. The tension we will be seeing over the next few years
will be the extent to which both buyers and sellers can extract
value from their portfolios and manage risks effectively. Success
isnt just going to be measured by price alone, but also the
wider operational flexibility negotiated in the supply
Much of the new buying interest will come from buyers
who are likely to find the traditional terms of long term
purchase quite onerous, such as: high take or pay, limited
operational flexibility, limited destination flexibility and long lead
times for scheduling cargos. LNG exports from North America
operating on a FOB business model may address many of the
concerns of new buyers. However, it is clear that flexibility will
come at a price. In this case, the long term monthly payments
of a fixed capacity charge. It is too early to say which players
Figure 3. Last year was a successful one for the global
LNG sector.
Figure 2. Industry leaders gathered at the annual
CWC World LNG Summit in November last year.
LNG_Spring2012_18-24.indd 22 16/03/2012 15:11
are best suited to manage these risks, but the companies that
can manage the shale spread price risks, could see a fast track
approach to securing new LNG.
Throughout 2011, summit speakers from across the value
chain described how their business models are being developed
to operate across a broad supply chain. The evidence of this
happening in 2011 comes from Chinese and Japanese
companies taking more upstream positions in LNG supply
projects. More similar activity is expected in 2012. The
midstream is another area where we should expect new
business to develop. 2012 - 2013 will see midstream players
offering infrastructure services (provided capital costs can be
covered adequately). As a result, new liquefaction tolling, regas
terminal storage break bulk, reloads and perhaps bunkering for
LNG fuelled ships services are likely to grow.
Some wildcards to look out for
in 2012
Some wildcards which could seriously affect the future LNG
supply and demand growth were identified in 2011.
Supply side issues which may surface:
Unconventional gas goes global much faster than had been
thought. Examples were China and Indonesia being two
countries whose upstream developments could change the
supply/demand balance in Asia faster than expected.
EPC costs stay stubbornly high, slowing new growth and
stalling the development of price sensitive markets.
Demand side issues which may surface:
A double dip recession particularly starting in Europe and
impacting the global economy.
Consumers who are continually experiencing rising fuel
bills, a rising US dollar vs. the Euro, may respond through
more energy efficiency and savings than currently forecast.
To conclude, it is evident the industry has to live with more
uncertainty, change and risk. Yet as an energy sector, LNG
remains a very attractive energy business. The talent pool is
increasing and the prospect of working in an industry where
LNG is a big part of the energy solution is key to making the
industry a premium place to work.
*Pat Roberts works closely with CWCs gas and LNG Summits
(LNG World Series: Asia Pacific Summit, LNG Americas and World LNG
Summit) which aim to bring together the industrys leading players to
address the key issues facing the sector, developing knowledge and
providing commercial solutions.
Figure 4. The outlook presented last year was more
innovation and new supply growth of 150 million tpy by
Industrial Gas &
LNG Croygenic Insulation
For Technical information please contact Anatoli Kogan at +1-518-880-1959 /
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Product Portfolio
LNG_Spring2012_18-24.indd 23 13/03/2012 09:50
Bringing you the power of information
Energy Global
LNG_Spring2012_18-24.indd 24 13/03/2012 09:50
NG is a marine industry, and yet, with the exception of a few reception terminals
located close to shore, all LNG facilities are onshore. All offshore gas fields in
production today have been developed by piping the gas to an onshore plant
where the gas is cleaned up and then liquefied when LNG is the desired product. This
is about to change.
What is FLNG?
FLNG is the gas equivalent of an oil FPSO such as Akpo. The designs use a purpose
built ship-shaped hull that can store large amounts of LNG at approximately -160 C
and atmospheric pressure in highly insulated tanks. All facilities for receiving the raw
gas, treating it to remove undesirable components and finally liquefying it are located
in the topsides. The LNG is offloaded to shuttle tankers through specially developed
systems designed to operate safely in the open sea.
FLNGs time to shine
Victor Alessandrini and Mohamed Ould Bamba,
Technip, Europe, discuss the increasing importance
of the FLNG concept for offshore gas production.
Figure 1. Prelude
FLNG (Courtesy of
LNG_Spring2012_25-29.indd 25 13/03/2012 10:49
26 / LNGINDUSTRY / Spring2012
Why now?
The possibility of transferring a liquefaction plant to a floating
facility located directly above the offshore gas field was first
seriously considered 35 years ago, but it was more a matter
of wishful thinking, since, at that time, there were no subsea
wellheads, no flexible risers, no multipath rotary joints, no
knowledge of motion effects on process equipment, no FPSOs
and no known means of transferring LNG to a shuttle tanker
out at sea. The requirement for innovation in the 1970s was
just too high but the progress made in sister industries has
meant that as time has passed, these technological barriers
have progressively been lifted, creating the conditions that led
to the advent of FLNG today:
Subsea production of oil and gas and FPSOs have become
mature technologies and several mega FPSOs (topsides
>30 000 t) are in operation.
Computer modelling of floating structures and the effects of
motion have progressed enormously.
Open sea transfer of LNG has now been made possible
with several qualified technologies such as Technips
Amplified LNG loading system (ALLS).
In parallel with technological progress, other trends have
developed that are favourable to FLNG:
New fields tend to be in deeper water and further from
the coast as gas reservoirs in shallow waters have been
depleted. This makes a pipeline solution much more
expensive. For example, the pre-salt fields in Brazil are
typically 300 km offshore in more than 2000 m of water.
Pipelines of up to 1000 km are planned in Australian waters.
Rising HSE and labour standards are raising the cost of
construction in remote areas. LNG trains are now among
the largest industrial plants, and building them onshore in
remote locations is increasingly costly, requiring many skilled
tradesmen and supervisory staff recruited from a global
Safer, faster, cheaper
The principle advantages of FLNG are:
Better HSE construction takes place in a highly organised
shipyard that will benefit from repeat orders.
Shorter schedules, no site preparation, no onshore
permitting, and no community relocation.
Lower project cost:
Building an FLNG vessel in a shipyard provides access to
highly skilled and productive labour.
No long distance pipelines.
No marine terminal.
No site infrastructure such as roads, residential areas
or temporary facilities such as construction jetties,
workshops, housing.
Challenges remain
FLNG presents numerous new challenges that have all been
addressed and at least one solution found. Among the key
technical challenges, the following can be highlighted:
The effect of motion on processing
Whilst oil and associated gas systems have operated successfully
on floating systems for over 25 years, LNG process equipment is
more sensitive to motion.
Motion mainly affects the operation of equipment where
there is liquid distribution under the effect of gravity. When
accelerations due to motion are superimposed, liquid
misdistribution could occur, potentially leading to a loss of mass
or heat transfer efficiency, off-specification product, process
upsets, etc.
For columns, the industry has feedback from floating
processing platforms and laboratory tests. Structured packing is
favoured. Distribution of liquid is critical, for example; shallow
open pan distributors are avoided. Specialist suppliers in
internals for mass transfer have done a lot of work on this topic
by themselves and with the process technology licensors.
Technips first specially designed fractionation columns for the
NGL extraction and LPG fractionation units
of the Nkossa project (Congo) have been
in operation for over 15 years. Other
examples are fractionation columns on the
Sanha LPG FPSO offshore Angola and the
Belanak FPSO in the Natuna Sea, Indonesia.
However, the recognised challenge that
is specific to liquefaction is distribution of
liquid over all the tubes of the coil wound
exchangers used to condense and sub cool
the LNG.
To minimise the effects of motion, the
columns, critical tanks and cryogenic heat
exchangers are located as close as possible
to the ships centre of gravity. Internal
baffles minimise the sloshing of liquids, and
special distributors minimise the risk of
misdistribution of liquid in the equipment.
When appropriate, motion-insensitive gas
phase processes are selected. Energy
efficient processes of this type have been
The design of topside equipment
requires the collaboration of an entire team
Figure 2. Total Akpo FPSO.
LNG_Spring2012_25-29.indd 26 13/03/2012 10:49
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Today DYWIDAG LNG Technology is part of STRABAG SE, one of Europes largest
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This dedication, our experience and knowhow make us your LNG expert, worldwide.
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80807 Munich/Germany
Phone +49 89 360555-2310
LNG_Spring2012_25-29.indd 27 13/03/2012 10:49
28 / LNGINDUSTRY / Spring2012
of naval architects, piping, process and equipment engineers,
critical equipment suppliers, installation specialists and engineers
skilled in advanced numerical modelling.
Accelerations are quantified and loads on mechanical
equipment checked with vendors. The effects of hull motions on
gas/liquid separation in process equipment are studied when
necessary with process licensors and suppliers.
Large gas volumes through swivels
FLNG requires larger volumes of high pressure gas to be brought
onto the vessel deck than previously experienced. In a harsh
environment the FLNG vessel must weathervane to minimise
motions and mooring loads. With oil FPSOs the proven solution
is generally a swivel device that has multiple flow paths for the
gas, chemicals, hydraulic fluid and signals for operation of the
Cargo containment system
There are two acceptable technologies available in the market:
membrane tanks (commonly used for LNG carriers) and SPB
tanks (fewer references, but originally developed for arduous
service). A cargo containment system must resist sloshing loads
in partially filled tanks and be able to operate for 20 - 30 years
without dry docking. There is a tendency to consider that
solutions with membrane tanks present some cost and schedule
advantages. The ultimate choice is usually a question of client
LNG offloading
Two configurations are today considered as applicable:
The availability of side-by-side loading using articulated
loading arms is reduced compared to a shore berth operation.
The governing criteria for availability are the prevailing metocean
conditions, especially the wave conditions (height and period),
wind and relative heading.
As for oil side-by-side
operations (see OCIMF
guides), typical limits
appear when the wave
height exceeds 3 m for
head sea conditions.
Again, availability very
much depends on site
conditions and on the
presence of acceptable
wave conditions that are
persistent enough to cover
the entire length of the
offloading operation.
The vendors have had
to demonstrate that their
technology can be
operated safely in these
offshore conditions and
have had to assess the
quantity of reinforcement
to be added on LNG
carrier manifolds to sustain
the loads developed during operation. Specific locations, such as
Brazil, require tandem systems due to frequent cross sea
Using expertise combined from flexible pipe
design/ manufacturing, LNG and offshore expertise,
Technip developed ALLS, which uses Technips cryogenic
flexible pipe to allow ship-to-ship LNG transfer in the open
sea. When it is reel-mounted, the pipe is installed on the stern
of the FLNG vessel to allow it to tandem offload its liquefied
gas cargo onto the bow of a modified LNG tanker.
Technip is also developing a floating hose that will enable
unmodified LNG carriers to receive the LNG cargo via their
mid-ship manifolds whilst still in a tandem configuration.
Safety: cryogenic and hazardous fluid risks
The challenge for the layout of an FLNG facility is the large
process area and the relatively high congestion of modules in
a reduced footprint. A risk-based approach is needed to assess
potential consequences and associated frequencies to derive
appropriate safeguards and mitigation measures.
Among process risks (fire and explosion) and non-process
risks (ship collision, dropped object, etc.), the risk of exposure of
personnel and the facility itself to cryogenic fluids in the event of
a spill is a hazard that is specific to FLNG.
The objective is to develop the design to minimise the
potential for escalation and promote safe escape and evacuation
with provisions for rescue of personnel in the event of major
Naval architecture
Naval architects have to address several new challenges:
Sheer size: larger than existing FPSOs.
Harsh environmental conditions.
Weathervaning systems suitable for extreme storms.
LNG cryogenic transfer between two floating units in the
open sea.
Figure 3. Total Nkossa FPU.
LNG_Spring2012_25-29.indd 28 19/03/2012 09:58
Accommodating a wide range of LNG and LPG
The development of the turret, mooring and riser
system requires the combined marine/metocean
expertise of all parties including the topside
contractor, operator turret contractor and shipyard.
Design solutions can be confirmed with the help
of two tests:
Wind tunnel tests to derive the wind and current
loads on the FLNG with and without the LNG
carriers present.
Wave basin model tests with FLNG and LNG
carriers covering:
Mooring in design storm conditions.
Decay and motion response tests.
Berthing and mooring and the equipment
required between the two vessels.
The loads generated when towing.
Shells FLNG
The LNG world changed when in May last year,
the Technip Samsung Consortium (TSC) was
given notice to proceed with the construction of
Prelude FLNG, the first floating LNG facility in the
world, to be located offshore Australia. This key
chapter of the FLNG story starts when in
mid-2009, Shell awarded the TSC a 15 year
Master Agreement for the design, construction
and installation of multiple FLNG facilities.
Technip, acting as leader, and its partner,
Samsung Heavy Industries (SHI), first executed
the FEED for a generic solution with a capacity of
3.5 million tpy. In March 2010, Shell awarded the
contracts for the FEED and EPCI for Prelude with
the latter becoming effective after FID.
The Shell Prelude FLNG facility will be the largest
floating facility in the world, at 488 m from bow to
stern; longer than four soccer fields laid end to end.
When fully loaded, it will weigh approximately
600 000 t; roughly six times as much as the largest
aircraft carrier. Some 260 000 t of that weight will
consist of steel; approximately five times the amount
of steel used to build the Sydney Harbour Bridge. It
is designed to operate under harsh ocean conditions
and to process a wide range of gas compositions.
The facilities will be capable of producing
3.5 million tpy of LNG, plus associated LPG
and condensate with total liquid production
potential of over 5 million tpy.
Other FLNG programmes
Many operators are now considering offshore gas
field developments with FLNG. Some observers
consider that about 5% of LNG production could be
produced offshore by 2020.
Floating LNG is now a viable alternative to
traditional onshore LNG plants, providing a
commercially and environmentally attractive approach
for monetisation of offshore gas fields.
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LNG_Spring2012_30-36.indd 30 13/03/2012 10:56
Spring2012 / LNGINDUSTRY / 31
ighly polluting or expensive fossil fuels such as
heavy fuel oil (HFO) or diesel oil are nowadays used
for electric power generation in isolated power
plants, e.g. on islands. The use of natural gas as a fuel is
a cost-efficient alternative and at the same time enables
significant reductions in atmospheric pollution.
On the other hand, isolated locations are typically
unconnected to natural gas pipeline grids due to
challenging terrain or losses in economy of scale due to


laf Beyer, TG
arine G
Engineering G
, G
any, discusses the provision of
engineering services to provide LN
infrastructure for
uadeloupe and M
LNG_Spring2012_30-36.indd 31 13/03/2012 10:57
32 / LNGINDUSTRY / Spring2012
small volumes. Existing LNG infrastructure is sized to handle
much larger volumes than needed for these consumers.
TGE Marine Gas Engineering has developed cost-efficient
small to mid-scale import solutions comprising shuttle tankers
and floating storage facilities for such markets.
TGE Marines fellow company Gasfin Development SA is
currently evolving an LNG infrastructure project with EDF
(Eletricit de France) to supply natural gas to EDFs power
generation facilities in Martinique and Guadeloupe. Gasfin is an
independent developer and infrastructure service provider of
mid-scale LNG and natural gas solutions.
TGE Marine has been selected by Gasfin to supply the FEED
package comprising hull and gas handling system design for
the shuttle tanker and the FSRUs.
Bureau Veritas (BV) acting through its subsidiary Tecnitas
was identified as the third party technical advisor for the project
and has carried out risk studies and independent reviews and
assessments to assure a high level of safety. BV will also be the
approving classification society for the FSRUs and the shuttle
The project objective is to deliver natural gas to the power
plants as a replacement fuel for HFO. For that, the existing
diesel engines will be retrofitted to dual fuel engines. In
addition to realising material cost savings, the fuel switch will
enable the plants to reduce emissions of CO
and NOx by up to
30% and 85% respectively. Sulfur and particulate emissions will
be virtually eliminated. High overall availability of the power
generation system is assured, as the existing fuel system acts as
reserve fuel in case of LNG supply shortage.
The objective was to design an integrated LNG delivery
service scheme for both islands using right sized infrastructure
based on proven and safe technology. The infrastructure will
comprise a new mid-sized 20 000 m
LNG carrier and
two purpose built 25 000 m
floating storage and regasification
units (FSRUs). It is envisaged to supply LNG directly from
Trinidad or to re-export via one of the regional terminals. The
FSRUs will be moored close to shore in the vicinity of the power
plants. The LNG will be vapourised on the FSRUs and sent to
the consumers via flexible risers and a short subsea pipeline.
When implemented, this project will be a world first in
terms of using floating LNG infrastructure to facilitate
economically viable international deliveries of LNG and supply
natural gas to markets of this size, which presently do not have
a viable means of accessing international markets.
The envisaged supply scheme provides a continuous supply
over a period of more than two weeks without reloading based
on annual LNG demands of approximately 200 000 t for each
of the islands.
In Guadeloupe, the FSRU will be moored in a protected bay
approximately 6 km offshore the Point--Pitre power plant at
25 m water depth.
The favoured location for the Martinique FSRU is situated
on the calm, leeward side of the island approximately 2 km
offshore the Bellefontaine power plant at a water depth of
350 m. Both sites are located at a safe distance from marine
traffic lanes and the public.
Figure 2. FSRU receiving LNG.
Figure 1. FSRU portside.
LNG_Spring2012_30-36.indd 32 16/03/2012 15:16
LNG_Spring2012_30-36.indd 33 13/03/2012 10:57
MAY 21-23, 2012
Hilton Americas-Houston
George R. Brown Convention Center
HOUSTON, TEXAS | +1-703-875-2011
Dan Burrus
Technology futurist, business strategist and best-selling author
During the keynote address entitled Flash Foresight: Powerful Personal Strategies
for Shaping Your Future, Burrus will provide an exclusive perspective on the future
of technological change and give specific insights into the opportunities that will
be made possible by these changes and what ILTA conference attendees can do to
capitalize on them.
LNG_Spring2012_30-36.indd 34 19/03/2012 10:32
Spring2012 / LNGINDUSTRY / 35
Technical concept: FSRU hull
The FSRUs will be designed as a permanent installed
(non- propelled) offshore service barge with an uninterrupted
service life of 25 years.
The LNG will be stored in two cylindrical tanks arranged
parallel along the vessels longitudinal axis.
At both locations, the FSRUs will be permanently moored
to the seabed by a spread mooring system. Anchor chains
will secure the vessels to the seabed using high holding
drag embedment anchors or driven piles. The system is
designed to withstand severe hurricane conditions with
a 100 year return period, which has been derived from
site-specific metocean data.
The hull of the FSRU is a single deck design with a
deckhouse at its aft end. The deckhouse accommodates
service and control rooms as well as living quarters. In
the cargo area the hull will have a double bottom and
double side shell. The general subdivision of the vessel is
in accordance with the requirements of intact and damage
stability criteria of the IGC Code.
The main dimensions are 116 m overall length, 38.8 m
breadth and a scantling draught of 8.60 m.
The shuttle carrier will berth at the FSRU in a side-to-side
modus. To assist in a safe approach of the LNG carrier,
the FSRU will be equipped with a suitable fendering and
a berthing aid system. Quick release hooks will ensure
unobstructed departure of the carrier in an emergency.
Technical concept:
FSRU process
The general design basis with few exceptions as detailed below,
is valid for both Martinique and Guadeloupe. The intent is
that both units will have a common design, with modifications
limited to the mooring and subsea system.
The storage volume of 25 000 m
covers approximately
2.5 weeks sendout at the normal expected annual
The LNG transfer system will consist of two loading arms,
one liquid arm and one vapour return arm at portside. The
vapour return arm will be designed as a spare liquid loading
arm. An alternative solution for the transfer of LNG in the
form of cryogenic flexible hoses is being investigated.
The FSRU will have two cylindrical IMO type C storage
tanks, i.e. self-supporting pressure vessels of 12 500 m

volume each, which offer specific advantages. There is
no secondary barrier required, there are no restrictions
regarding partial filling allowing the FSRU an unobstructed
top deck for the arrangement of the vaporiser process.
Furthermore, the elevated working pressure provides a
higher operational flexibility.
In case of prolonged sendout interruptions, e.g. due to
hurricanes, the tanks can retain the boil-off gas, which is
permanently generated in the storage tank by inevitable
ambient heat ingress, for three to 10 weeks, depending on
the tank filling level.
TGE Marine owns a patent for LNG specific design, which
enhances a typical type C LPG tank bearing arrangement
to withstand the higher thermal movements in LNG service.
Unlike typical LPG/ethylene tank foundations, the patent
incorporates the foundation to allow uniform shrinkage
and load distribution.
The tanks will be equipped with submerged motor type
sendout pumps with variable speed drive.
Ambient air vaporisers (AAV), which use ambient air as heat
source, have been chosen as a means for regasification of
the LNG at a pressure of 15 barg.
The LNG flows through the stainless steel pipes of the AAV
and heat is transferred directly from the surrounding air
through the fins of the vapourisers to the cold LNG.
The vapourised gas is delivered to the consumers onshore
via a flexible riser and a subsea pipeline. A branch flow is
taken from the sendout stream as fuel gas for the FSRU`s
power generation. The boil-off gas is removed from the
tanks by piston compressors and added to the sendout
Environmental impact
The use of heat from ambient air results in lower operating
costs and lower environmental impact than other regasification
methods like open loop seawater vapourisers or combustion
The main environmental impact is the formation of fog as
the cold air discharge from the AAV arrays mixes with warm
and humid air. Appearance of fog largely depends on
environmental conditions (air temperature, humidity, wind
speed etc.) and the actual load of the plant.
To verify the actual situation, an extensive study has been
carried out on the potential for the fog cloud to be a visual
impact or to affect the shipping activities in the vicinity of
the FSRU.
In addition, a worst case scenario considering the most
unfavourable ambient conditions and maximum load typical
scenarios of load environmental conditions was looked at. The
investigation was based on different theoretical models of fog
formation as well as on a computational fluid dynamics (CFD)
analysis. For the actual maximum continuous load and average
ambient temperature, humidity and wind speed conditions fog
appears only in the vicinity of the vapourisers. Based on these
results the appearance of fog can be regarded as a relatively
low probability event of local impact on the immediate
surroundings of the FSRU.
Figure 3. IMO type C tanks.
LNG_Spring2012_30-36.indd 35 19/03/2012 10:59
B a se d o n i ts p ro ve n a n d p a te n te d LN G typ e C ta n k te ch n o -
lo g y, TG E M a ri n e p ro vi d e s sto ra g e a n d tra n sp o rt so lu ti o n s
th ro u g h o u t th e e n ti re sm a ll to m i d -sca le LN G ch a i n .
S to ra g e b a rg e a n d ca rri e r d e si g n s ra n g e fro m 1 , 0 0 0 m
5 0 , 0 0 0 m
. R e g a s syste m s m a y b e p ro vi d e d b a se d o n se a
wa te r, i n te rm e d i a te cycle o r a i r va p o ri ze r te ch n o lo g y.
LN G F S R U s
LN G F P S O s
C a rri e rs: LN G o r m u lti p le ca rg o e s
LN G sto ra g e b a rg e s
M id sca le flo a tin g LN G so lu tio n s
LN G lo a d i n g syste m LN G F P S O LN G sto ra g e syste m LN G F S R U
w w w . tg e -m a ri n e . co m
As the cloud will also under unfavourable conditions not
exceed the exclusion zone around the FSRU, shipping traffic will
not be affected and due to the minor height of the cloud there
will be practically no visual impact.
Technical concept: LNG carrier
The shuttle carrier is designed for the dedicated trade between
the LNG supply terminal and the two FSRUs. An important
design request related to economic operation is to enable
berthing at the FSRU without the need for tug boat assistance.
The carriers transport capacity of 20 000 m
the frequency of calls at the LNG loading terminal to
approximately 50 per year to cope with the limited berthing
slot availability.
Aft and bow thrusters together with a high lift rudder
will be provided to accomplish the high manoeuvrability
The main dimensions are 160 m overall length, 24 m
breadth and a scantling draught of 7.20 m. The design
service speed is 15 kn.
The technical concept of the LNG storage system is basically
the same as for the FSRU. Cylindrical IMO type C cargo
tanks will provide high operational flexibility whilst the
boil-off gas is used for the gas-fired propulsion system.
The compatibility of the mid-scale carrier with regional LNG
terminals has been assured for all ship-to-shore interfaces.
Project status and outlook
To date, the engineering of the topsides, LNG containment
system and processes has been completed along with the FSRU
structural and naval architectural design as well as anchoring
and side-by-side mooring layout.
HAZID and HAZOP, collision risk analysis and several risk
assessment workshops have been executed and the results have
been implemented into the design. The basic design for the
shuttle tanker is available and the compatibility with the loading
terminals has been confirmed. Permitting documents including the
Safety Dossier according to French regulations (Etude de Dangers)
and the environmental impact assessment (EIA) for both locations
have been finalised and submitted to the local authorities.
An ongoing process is the design approval by BV, which is
expected to be completed in the first quarter of 2012.
An array of further detailed studies is under way, including
a detailed reliability, availability, maintainability (RAM) study to
confirm the results of the initial study as well as a fire and
explosion risk assessment (FERA), which has to verify structural
design loads of the FSRUs.
Model tests will be carried out to assure the results of the
numerical studies to verify the anchor loads under hurricane
and side-by-side mooring conditions as well as the excursion of
the FSRUs needed as input for the final riser design.
Gasfin expects to finalise the development phase at the end
of Q2 2012. Subject to the permitting duration, a final
investment decision could be achieved in the second half of this
year allowing the first delivery of gas in 2015.
LNG_Spring2012_30-36.indd 36 19/03/2012 10:32
Spring2012 / LNGINDUSTRY / 37
ith LNG now commonly referred to as the fuel of choice, and with the best shipping
system of lightering/feeding proven over decades for all liquid fuels; the question we
should deal with is not what it is or how it works, but why LNG feeder tankers are not
commonly seen in the LNG sector. Why has it not entered into widespread usage wherever it is
needed so it can be available within a relatively short time for any small or medium sized energy
There are now 19 LNG exporting countries with supply available ex-train, and 23 more countries
with supply available out of their dozens of receiving terminals spread all over the market. The potential
market is destinations where no grid is available or possibly too expensive or technically too
complicated to build (the Norwegian coastline for example).
LNG feeder tankers are LNG tankers sized between 1100 m
(operated in Norway) and
20 30 000 m
that can serve destinations and customers that require up to 1 - 1.5 billion m
Good examples are the six Japanese-built 18 800 22 500 m
LNG tankers shipping small volumes of
LNG from Malaysian and Indonesian LNG production trains directly to power plants and other gas
Other smaller size tankers of 1500 2500 m
serve small gas companies in the coastal waters of
Japan, taking their LNG from the large receiving terminals (ex-hub). The LNG feeder tankers need
Moty Kuperberg, Dynamic Shipping Services,
Israel, explains the benefits of using the
small scale LNG feeder system to supply
consumers spread over many destinations.
LNG_Spring2012_37-39.indd 37 13/03/2012 11:05
38 / LNGINDUSTRY / Spring2012
limited land space and limited supply chain links of storage and
regas systems that are compact and much more economical to
build and operate.
This way, a typical Japanese small scale terminal will use just
35 000 90 000 m
of land to handle up to 410 000 tpy. While
an average large terminal needs 200 000 m
to handle
1.5 million tpy, 1.2 million m
to handle 6 million tpy, and the
largest one will use 1.93 million m
of land to handle
8 million tpy.
Smaller size terminals, which consist of a small jetty to allow
the 1100 2500 m
feeders with their 3.6 4.2 m draft to dock
and discharge their LNG load into 500 - 1500 m
storage tanks
are a common sight now in Japan and along the Norwegian
Japan is leading the way with small scale LNG feeders, as well
as land based distribution. There are now more than 50 satellite
terminals in operation in Japan. The same system is widely used in
many countries that import or export LNG, from the USA through
to Norway, Turkey and other countries.
Three case studies
Turkish coastal waters
Turkey has a large road tanker LNG distribution fleet serving
hundreds of customers with satellite terminals spread from
the Marmara and Izmir receiving terminals across the whole
country. This land based distribution system is operated by
10 companies using a fleet of 250 trucks that travel on average
approximately 700 km to supply LNG. In some cases the trucks
travel more than 1000 km with their 20 - 25 t loads of LNG.
In total they supply approximately 0.5 billion m
/yr. The land
transportation adds approximately 20% to the delivery price of
the gas.
The national gas company has been looking into using LNG
feeder tankers to supply a few coastal locations to cut down
transport costs and increase the reach of the trucking fleet at the
same time. A feasibility study carried out back in 2005 provided
better economic data on two main routes. The first from
Marmara to three destinations along the Black Sea northern
shore, spread from the Samsun area to Rize, close to the
Georgian border. The second route is from Marmara to three
more destinations spread from Antalya to Adana on the southeast
Mediterranean coast.
The intention was to feed several communities that were out
of the grid and out of any planned grid. The initial plan was to
start with a capacity of 0.25 billion m
and increase it to over
1 billion m
after five years, then gradually continue to grow to
over 1.5 billion m
after a further 10 years.
This way, the long range travelling trucks could feed many
more customers out of the new small scale regional hubs to be
built for the feeders.
Caribbean Sea
The region, with its islands and close supply hubs is an ideal area
for the LNG feeders. Trinidad and Tobago are LNG producers and
the two existing receiving terminals can serve as regional hubs for
distribution into the islands and neighbouring coastal countries.
This way, more Central American countries like Panama,
Costa Rica and the rest can benefit from the available gas.
Other directions that were studied were local LNG small scale
production of 0.5 1.0 billion m
/yr serving neighbouring
The full range of the Caribbean Sea could be covered within
one to three days sailing time for an LNG feeder tanker. If we add
to it the developing LNG export options out of the US Gulf, there
is a lot of potential to grow the market.
European coastal waters and
The pioneers in Europe were the Norwegians back in 2004,
introducing another potential concept for LNG feeders a
small scale production plant near Bergen, serving the nearby
coastal region. What started with a 40 000 t plant is now
growing and spreading further south from the Norwegian
western fjords into the Baltic Sea.
When the new emission control limitations come into force,
more gas will be needed for more and more applications. One of
the major applications in Europe will be shipping propulsion. This
will add vessels that will require LNG bunkering barges.
The Baltic and Norwegian coastal trade and offshore industry
already operate some LNG driven vessels.
On another feasibility study carried out a couple of years ago
into European waterways, some length/beam/draft and air draft
limitations were crucial to allow the required LNG volume of the
project to be carried. Together with TGE Marine Gas Engineering,
a special shallow draft design was introduced to give the best
carrying capacity for that restricted waterway.
Road map to success of feeder
Several feasibility studies were carried out and a number of
required parameters were developed. The company used the
following criteria and parameters when delivering solutions to
customers over the last few years:
Time frame. Schedule as set by suppliers (of LNG, land based
infrastructure, vessel availability, yard availability).
The suggested solutions: size and general design for vessel
and receiving terminal/storage.
Budget and economics of the vessels.
Fleet requirements: number of vessels, other types required,
their general design (GA General Arrangement).
Safety: local regulations, class requirements, worldwide
The next stage: pre-FEED, FEED, selecting yard/EPC company,
negotiation, contract for first vessel first type, order and
First vessel delivered. Continue to the second one, if required,
and onward to establish a strong operating fleet.
Further co-operation: fleet management, supply of LNG to
other destinations, franchising the concept in other places as
an off the shelf solution.
The intentions and plans/methods can consist of regional
distribution of LNG, distribution and further downstream
operation, trading hub, bunkering and more. Then the vessel size,
number of units, storage size, required LNG volumes,
destinations, time frame, storage days required and all other
The company also took into consideration load and discharge
port limitations (for example what maximum draft is allowed or
possible at the ports, length restrictions, air draft). In one recent
project the company carried out, there were draft limitations on
LNG_Spring2012_37-39.indd 38 13/03/2012 11:05
an inner waterway of 3.5 m; the company produced a
design to cover that.
Then attention is paid to linking supply chain
parts production, load port and jetty, discharge port
and jetty, storage, regas. It is a very detailed feasibility
study that lays the foundation to continue into a firm
project. It provides all the necessary tools to make
decisions toward further development of the customers
LNG supply programme.
From a successful feasibility study, the next stage is to
develop the project for commissioning within 24 months
or earlier:
The method of work is an open mutual hands-on
work on all required issues.
It is a truly tailor made solution, based on LNG
experience in similar projects.
One of the main achievements of such a study is the
possible smooth continuation into implementing it.
Together with the customer, the company dictates
missions and intentions and works to execute them.
The future:
More locations and destinations to build regional
distribution, including upriver consumers of gas.
Serving regional distribution out of FSRUs and FLNGs.
The LNG small scale feeder system is a proven way to
supply LNG to small and medium size consumers spread
over many destinations. It is ideal for consumers of up to
1 million tpy over any range between 200 nautical miles
or less, and up to 1000 nautical miles range.
The beauty of it is the full package is available with a
very small footprint; much more economical to build and
operate to serve those markets in comparison to other
LNG has many advantages as a fuel over other liquid
fossil fuels as it is clean burning and readily available, and
the technical delivery method is not too different. If an
island generates its electricity from coal, heavy oil or
gas oil that is supplied with small LPG or crude tankers,
then an alternative LNG feeder operation would be much
the same for them.
As security of supply becomes a much more
important aspect of any energy market, natural gas and
LNG feeders will have important roles to play in supplying
energy markets.
More gas will soon become available out of the
planned floating LNG projects that will bring more
stranded gas to market and there are new suppliers of
unconventional gas sourced LNG. LNG feeders will have
their important role to carry some of that gas to nearby
markets. The combination or integration of floating LNG
and feeders will contribute to the small and medium size
markets. In a way this article is a wake up call for the
many consumers of other fossil fuels to upgrade their
energy sources, economy and environment, regardless of
their size, to adopt what the LNG small scale system can
provide for them.
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SafeHouse Habitat
The Only lnternationally ATEX accredited
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LNG_Spring2012_37-39.indd 39 16/03/2012 15:19
LNG_Spring2012_40-44.indd 40 14/03/2012 09:02
Lars Petter Blikom, DNV,
China, examines how cost
increases in the shipping
industry are leaving
shipowners searching
for cost reduction measures.
t is evident that the shipping industry is undergoing
difficult times. In general, day rates have been on a
downward slope for a long time, while costs have
been increasing. This is not a healthy combination of
developments in the long run. And unfortunately, the
light at the end of the tunnel is not yet to be seen.
Particularly on the cost side, there are significant
additional expenses lurking on the horizon. And
it does not seem likely that exemptions from
future legislation is going to be a viable strategy;
governments and other authorities are unlikely
to move backwards when it comes to combating
environmental issues.
LNG_Spring2012_40-44.indd 41 14/03/2012 09:02
42 / LNGINDUSTRY / Spring2012
One upcoming cost item is the installation of ballast
water treatment systems. The shipping industry is
transporting huge amounts of ballast water across the
oceans, and this ballast water contains various forms of
marine life that may have negative effects when
discharged into waters with different ecosystems. The
requirements for ballast water treatment will be stepped
up gradually to eventually include all ships from 2018. The
cost of the system is somewhat uncertain, but it can be
expected to add at least 2 - 3% to the price of a ship.
Another upcoming cost item is scrubber systems to
meet future limits for SO
content in the exhaust gas. From
2020, the limit for SO
content in the fuel is 0.5%. For
vulnerable areas, designated as Emission Control Areas,
the requirement will be even stricter at 0.1% from 2015.
An alternative strategy for meeting these requirements is
to replace the existing fuel qualities with low sulfur fuels,
but this is expected to be a significantly more costly
strategy than to install scrubbers. Again, the cost
implication is uncertain, and highly dependent on ship
type, but it is safe to say that the impact of the SO

regulations will be even more severe than that of the
ballast water treatment systems. There are several aspects
that render the impact of these regulations very uncertain;
it is unclear how much low sulfur fuel the refineries will be
able to produce and at what price. It is uncertain how
many scrubbers the suppliers and the yards will be able to
manufacture and retrofit, and there is also uncertainty
about how to deal with the special waste produced by the
For new ships constructed after 2016, there will also
be limits on emissions of NO
. For conventional marine
engines, installation of a catalyst reduction system is
necessary in order to significantly reduce the emissions.
These systems are currently being developed and tested,
so cost figures are difficult to obtain, but significant
figures can be expected. It is also worth observing that the
catalysts will use some of the power produced by the
engine to clean its exhaust. This of course leads to higher
fuel consumption with its direct follow-on consequences
of higher fuel costs and more CO
On top of these introductions of more complex
technology comes the simple fact that the oil price seems
to continue on its upward slope,
resulting in higher costs for all
qualities of marine fuels.
In order to understand how
important fuel prices are for
shipping, we can have a look at
the contributions by main cost
items for four typical ships; this is
illustrated in Figure 1. The main
observation is that fuel cost
represents between 58 - 78% of
total daily costs. In other words,
fuel cost is by far the most
important cost driver for any ship
type. It is also interesting to
observe that the service of Capex
investments is a fairly small
portion of the daily costs, indicating that there should be a
willingness to accept up-front investments in order to
reduce the much bigger cost item of fuel. The carbon
costs, ranging from 7 - 9%, are based on expectations of
a future carbon tax regime.
Based on this cost picture, it is a clear conclusion that
competitiveness in the shipping industry to a large extent
will boil down to consumption volumes and fuel prices.
The problem with calculations of daily costs, net present
values, return on investment, etc. is that they are based on
project economics. And this is not normally how things are
done in the shipping industry. There are two aspects that
complicate the matter; the first is that often the charterer
pays for the fuel, which means that the shipowner does
not have any direct incentives to invest in reduction of
fuel consumption. The second aspect is that often the
shipowner wants to make the profits by selling the ships
secondhand when the markets are good. If this is the plan,
of course the appetite for up-front investments is smaller.
Even when project economics is used as the basis for
an investment decision for ship orders, there is a
complicating factor: the overshadowing parameter is the
uncertainty in future fuel prices. For all practical purposes,
the oil price has proved impossible to predict. And when
the most important parameter is impossible to predict,
people become worried. This is not new to the shipping
industry, it has been the case for many years, but the
difference is that earlier, the fuel price fluctuations
impacted all shipowners equally hard. Now that another
fuel source has entered the picture, shipowners will be
unequally impacted. This new fuel source suddenly
available to ships is LNG.
Over the past 10 years, LNG has been proved as a
technically viable and safe marine fuel for practically all
ship types. The consequence of this is of remarkable
financial interest to the shipping industry, as it creates a
source of competitive differentiation for the most
important cost driver. A few percentages difference in the
price per energy content for oil versus natural gas will
create a massive difference in cost of ship operation. As
mentioned previously, the fact that fuel suddenly becomes
Figure 1. Shares of daily costs.
LNG_Spring2012_40-44.indd 42 14/03/2012 09:02 1-281-296-4027
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LNG_Spring2012_40-44.indd 43 14/03/2012 09:02
the most important differentiating factor in shipping
competition will have a big impact on the decisions that
are being made in the near future. The value of a ship will
not just be a matter of todays day rates and availability of
tonnage anymore; it will also reflect the future compliance
and fuel consumption of the ship.
What should shipping
companies do?
First, it should be fairly safe to predict that with ever
increasing fuel bills the charterer will bring this back to
the shipowners at some point asking for improvement.
Blindly expecting charterers, who are also hard pressed by
weakening growth in most regions of the world, to pick
up larger and larger fuel bills without asking any questions
would be foolish. Even if charterers dont start to question
this practice, the punishment for inefficient operations will
come in the form of future emissions taxes. So, shipowners
should acknowledge early on that they are likely to be
held accountable for their future fuel performance, one
way or the other.
Secondly, analysts have a proven track record of
consistently failing to predict future oil prices. This task is
now complicated further; they need to predict the relative
price difference between two independent energy
sources (independent is not entirely true, hence the
inverted commas). No shipowner should bet his or her
company on analysts succeeding in this task. And as they
will not be able to make better predictions themselves,
they should adopt other ways of planning for the future.
There are many tools available; for example real option
valuation and scenario planning. What these tools have in
common is that instead of making single point forecasts
about what the future will hold, they consider the much
more interesting question of, what if I make the wrong
Thirdly, as most shipowners now see this coming, it
can be predicted that we will see many LNG fuelled ships
in the future. It is the cheapest insurance towards
sky-rocketing oil prices. If the prices develop such that the
natural gas price is much lower than oil, the
implementation of LNG fuelled ships will be fast. If the
prices develop such that the price difference is small, the
implementation will be slower. In any case, the demand
for LNG as a marine fuel can be expected to grow
significantly, creating new market opportunities and
premium prices for LNG sellers. Just to indicate the
potential: if the entire global shipping fleet converted to
run on natural gas, it would consume approximately
1.5 times the global output of LNG.
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LNG_Spring2012_40-44.indd 44 14/03/2012 09:02
Spring2012 / LNGINDUSTRY / 45
resently, LNG is transported by sea
in tankers at atmospheric pressure.
Boil-off gas is either burnt in the tankers
main engines or condensed in an onboard
reliquefaction plant and then returned
into tanks. 90% of the existing fleet burns
boil-off gas, while the majority of newbuilds
recondense it. The burning of boil-off gas
implies the use of steam turbines for the
vessels propulsion, which are characterised
by low fuel efficiency. Another shortcoming is
the reduction in the quantity of LNG delivered
to the port of destination. Fitting the tanker
with a reliquefaction plant solves these two
problems, but the plant is quite expensive:
approximately 10% of the vessels construction
An alternative way to absorb heat
inflow into the vessels tanks is to cool LNG
below its saturation temperature at
atmospheric pressure
1, 2
. During the voyage,
the temperature of the LNG will be rising
gradually and will reach saturation temperature
upon arrival at the port of destination. As far
as the authors are aware, such a solution was
never discussed for LNG transportation. A
probable reason for this is that the pioneers of
the LNG industry copied solutions used by
century scientists for storing relatively small
quantities of liquefied gases at atmospheric
pressure. The large quantities of LNG carried by
tankers enables them to use its enormous heat
capacity to absorb heat inflow. The
corresponding increase in the temperature of
the LNG will be 4.5 C for a typical 20 day
voyage by a 150 000 m
The method
In the proposed method of LNG transportation,
LNG is cooled prior to its loading into tankers
Vasserman Aleksandr and Shutenko Maxim,
Odessa National Maritime University, Ukraine, explain
an alternative method of LNG transportation, which
eliminates the need for an onboard reliquefaction plant.
the temperature
LNG_Spring2012_45-46.indd 45 14/03/2012 09:14
46 / LNGINDUSTRY / Spring2012
to a temperature that is lower than the saturation temperature at
atmospheric pressure. During the voyage, heat inflow is absorbed
by the LNGs gradual heating to saturation temperature. LNG is
not boiled off so it is not necessary to use a reliquefaction plant
onboard the ship.
The LNG is cooled by a shore-based liquefaction plant, which
uses cheaper electricity than a ship-based reliquefaction plant.
Moreover, powerful shore-based plants use more efficient thermal
schemes (AP-X, C3-MR, cascade)
3, 4
, than ship-based ones (N
). For
this reason, shore-based plants consume per kJ of withdrawn heat
no more than 70% of the mechanical power required to drive a
ship-based plant
. Due to the economies of scale, capital expenses
per kW of withdrawn heat also favour shore-based plant (one
typical shore-based liquefaction plant produces a quantity of LNG
that can be transported by 16 constantly operating tankers).
Tankers carry large quantities of LNG so the level of subcooling
from saturation point will be small. For example, the daily boil-off
on a 150 000 m
capacity LNG tanker, which carries its cargo at
0.103 MPa is 0.15 %
or 94.9 thousand kg. The heat of
vaporisation is 509.9 kJ/kg
, so the heat inflow is
48.39 million kJ/day. The mass of LNG in the vessels tanks is
63.27 million kg, the isobaric heat capacity of liquid methane is
3.424 kJ/kg
, so subcooling by 0.22 C is sufficient to compensate
daily heat inflow. When the basic duration of the voyage is
20 days, the subcooling of LNG required to absorb heat inflow
is 4.5 C.
The subcooling temperature drop between environment and
LNG will result in a corresponding increase of heat inflow. The
temperature drop between environment (15 C) and LNG at
saturation temperature (at atmospheric pressure) is 176 C.
Because of subcooling, the average increase in temperature drop
will be 2.3 C, i.e. 1.3%.
Methane vapour in the ships tanks above the LNG surface will
arrive at thermodynamic equilibrium with liquid. The temperature
of subcooled LNG is lower than its saturation temperature so after
completion of loading it is necessary to mix methane vapour in
tanks with inert gas (e.g. nitrogen). The content of each
component should be selected on the basis of equality of the sum
of partial pressures to atmospheric pressure. In the course of the
voyage the temperature of the LNG will be rising and partial
pressure of methane in the mixture of gases will be rising
correspondingly. Excessive parts of the gas mixture from tanks
should be released into the atmosphere or burnt in the ships
propulsion plant.
In the case of methane, with subcooling of 4.5 C, the partial
pressure of its saturated vapour will be equal to 0.070 MPa
the partial pressure of nitrogen will be 0.033 MPa
Costs and savings
The application of the method to an LNG tanker with a capacity of
150 000 m
and an onboard reliquefaction plant will produce the
following results:
The cost of power for maintaining the LNG in a liquid
state during ocean transportation will decrease by
US$ 430 000 per year.
For a ship that does not use a reliquefaction plant, at the
commencement of ballast passage it will be necessary to
leave LNG heel in tanks in order to keep them cold until the
end of the ballast passage. This will increase fuel expenses
for the ships propulsion plant by US$ 640 000 per year but
will decrease fuel expenses for the reliquefaction plant by
US$ 670 000 per year.
The cost of the additional energy required for LNG
subcooling before its loading on the tanker amounts to
US$ 60 000 per year.
All of the above will reduce operational expenses by
US$ 400 000 per year.
Capital expenses are reduced because the increases
in the capacity of a shore-based liquefaction plant will
cost US$ 3.4 million but there is a possibility of saving
US$ 20 million for an onboard reliquefaction plant, which will
become redundant.
For ships with reliquefaction plant, application of the method
on or before the stage of the vessels construction will reduce both
operational and capital expenses. Application of the method to
existing ships is not justified.
For the same LNG tanker without a reliquefaction plant, the
results will be as follows:
Fuel expenses will be reduced by US$ 640 000 per year due
to the use of heavy fuel oil instead of boil-off natural gas in
the vessels propulsion plant.
The cost of additional energy required for LNG
subcooling before its loading on the tanker amounts to
US$ 60 000 per year.
Capital expenses arising because of an increase in the capacity
of a shore-based liquefaction plant will be US$ 3.4 million.
Thus, for an LNG tanker without a reliquefaction plant the
basic return on investment taking into account annual
depreciation of 7% will be 10 years.
LNG subcooling implies the use of heavy fuel oil for the
vessels propulsion. For LNG tankers without a reliquefaction plant
there is a possibility of replacing steam turbines (with 30% thermal
efficiency) with slow speed diesel engines (with 50% thermal
efficiency). For existing tankers the feasibility of such a replacement
should be decided on a case-by-case basis. For new tankers the
replacement of steam turbines with slow speed diesel engines will
always be feasible because all new vessels with reliquefaction
plants (which also make it possible to use heavy fuel oil for
propulsion) are fitted with diesel engines, not with steam turbines.
1. Shutenko Maksym, Vasserman Oleksandr. Method of liquefied gases
(primarily LNG) transportation at the temperature below saturation
temperature. PCT application PCT/IB2011/000623. International filing
date 23 March, 2011. (In English language).
2. Vasserman A.A., Shutenko M.A., Method of transportation of liquefied
gases at temperature below saturation temperature. Application for
patent of Ukraine a 2010 12221. Filing date 15 October, 2010. (In Ukrainian language).
3. Tusiani M.D., Shearer G., LNG: A Nontechnical Guide. Tulsa,
Oklahoma, USA, PenWell Corp., 2007. p. 436.
4. Bronfenbrener J.C, Pillarella M., Solomon J., review the process
technology options available for the liquefaction of natural
gas. Selecting a suitable process, LNG Industry, Surrey, UK,
Palladian Publications, 2009.
5. V.V. Sychev, A.A.Vasserman, V.A. Zagoruchenko, A.D. Kozlov,
G. Spiridonov, V.A. Tsymarny. Thermodynamic Properties of Methane.
Hemisphere Publ. Corp. New York, 1987. p. 341.
6. V.V. Sychev, A.A.Vasserman, A.D. Kozlov, G.A. Spiridonov, V.A.
Tsymarny. Thermodynamic Properties of Nitrogen. Hemisphere Publ.
Corp. New York, 1987. p. 341.
LNG_Spring2012_45-46.indd 46 14/03/2012 09:14
Spring2012 / LNGINDUSTRY / 47
he recent worldwide increase in the consumption of natural gas has in turn
led to a significant change in the requirements and in the corresponding
solutions required to meet these new demands. These past years, the LNG
business has increasingly taken a fresh look at offshore operations. GTT, as a
designer of membrane containment systems, has been continuously adapting its
technologies to meet these new challenges.
Particularly, on the offshore side, challenges for FLNG units cover several fields
never explored up to now. These units require continuous production, entailing
both onsite maintenance (no regular drydocking as for LNG carriers) and operations
with partially filled tanks. Adaptation of the cargo handling system must also be
addressed to meet production and maintenance requirements.
Stphane Maillard, GTT, France,
examines the benefits
of using membrane tank systems
in offshore FPSOs and FSRUs.
Figure 1.
LNG_Spring2012_47-52.indd 47 14/03/2012 09:42
48 / LNGINDUSTRY / Spring2012
Tank design
General arrangement
The tank arrangement of an offshore unit takes into account
several factors.
Concerning the storage capacity, apart from the production
(liquefaction or regasification) flow rate and the size and turnover
of the shuttle vessels, some margins in the overall storage capacity
are considered, for example:
Due to potential delay in the ship-to-ship operations.
Due to the actual operating range (filling levels) of the tank.
Due to the maintenance at sea of the tanks.
Once the storage capacity is fixed, one may opt between a
one-row (like LNG carriers) and a two-row design. The first
possibility is identical to the standard design of an LNG carrier, that
is to say that all the tanks are successively along the ships axis
(only one tank abreadth of the ship), each tank being separated
from the other by a transverse cofferdam. The second possibility is
to split the breadth of the ship into two segregated rows of tanks.
This implies using a longitudinal cofferdam on the ships centreline.
This second option brings some advantages both in terms of
support for the topside and sloshing issues.
Liquid motion analysis
Liquid motions inside the cargo tanks are investigated for each
new project, in order to assess the ability of the containment
system to withstand impact pressures from sloshing. Such a study
is based on onsite environmental conditions, barge motions
representative of the whole operation (i.e. all loading cases from
the operating sequence are investigated) and tank response. Liquid
motions within the tank are a function of:
The environmental conditions.
The barge design (unit main dimensions, sea-keeping
characteristic, tank geometry, tank position etc.).
The barge operational profile (filling level, relative ship/wave
heading etc.).
The methodology used by GTT for all projects (LNGCs,
FSRUs, FPSOs) can be summarised by three main aspects. The
load evaluation aims at defining the relevant sloshing loads to
be considered for design purposes. It is based on the latest
state-of-the-art model tests, and statistical post-processing. All
parameters of influence on the sloshing activity are
thoroughly screened. In parallel, the various failure modes of
the containment system are defined and the associated
ultimate strength under in-service conditions including both
thermal and dynamic effects is calculated. The assessment is
finally based on a reliability approach. Reliability methods
require acceptance criteria in term of annual probability of
failure (based on the structure
considered and the consequences of
the failure). A design is deemed
acceptable when the calculated
probability of failure of the design
remains below the admissible values.
Containment system
Several levels of reinforcement have been
developed for the containment systems.
For NO96, the reinforcements are
based on the thickness increase of the plywood in adequate
locations of the insulation boxes. For example, primary boxes
have been designed with an additional top cover (making two
successive top covers of 12 mm or 15 mm) and secondary
boxes have been designed with thicker internal partitions,
additional combs or one additional internal bulkhead.
Subsequent improvements such as increasing the staple density
(for a better connection of all subcomponents) were also
introduced. The two Invar membranes remain identical on all
For Mark III, reinforcements for the membranes concern firstly,
the possibility to apply ribs and wedges for the primary membrane
to limit/avoid the eventual deformations of the corrugations;
secondly, the possibility to apply polyurethane glue for the
bonding of the secondary membrane (supple Triplex on rigid
Triplex) to provide increased strength to the bonded joint. Finally,
increasing the foam density induces an increase in the foam
compressive strength, making it able to withstand very high
Some of these developments are already applied on LNGCs,
and if necessary, the flexibility of membrane systems makes it
easily possible to design further reinforcements for both systems as
appropriate, based on the liquid motion analysis results.
Two-row arrangement
By adding a longitudinal cofferdam on the ships centreline,
the tank breadth of a two-row arrangement is divided by two
compared to an equivalent one-row design. From a liquid motion
point-of-view, the transverse natural period of the liquid has thus
been divided by approximately two. As a result, the liquid natural
period has been shifted towards the low barge response area,
significantly reducing the liquid motion activity.
The benefits that a two-row arrangement can bring compared
to a single row can be summarised as follows:
Large range of fillings free of sloshing impacts: due to its
narrow breadth, a two-row arrangement will experience a
large filling range without any sloshing activity in almost any
sea state.
Only large wave heights may induce sloshing initiation:
basically, the wave height for which the first sloshing loads
(not necessarily critical) may be observed is higher than the
wave height for an equivalent one-row design. This leads to
a much reduced potential span of sea states that may induce
Due to the adequate ratio between breadth and length of the
tank, and due to the barge motions in both transverse and
longitudinal directions, the highest sloshing activity has always
been observed in beam seas. Longitudinal waves within the tank
have never been observed during model tests.
Figure 2. Typical cross-section for one-row (left) and two-row (right) designs.
LNG_Spring2012_47-52.indd 48 16/03/2012 15:54
LNG_Spring2012_47-52.indd 49 14/03/2012 09:42
50 / LNGINDUSTRY / Spring2012
The two-row arrangement has already been tested for several
projects, for several tank dimensions, barge designs and site
conditions anywhere in the world and is well representative of
offshore opportunities for FLNG units. These studies, reviewed by
Classification Societies, have always concluded to full operability
onsite (no filling restrictions or limitations in the operations), even
in harsh conditions (wave heights above 11 m).
Cargo operations
The purpose of a standard Cargo Handling System is to perform
the following functions:
Prepare the tanks to be used for commercial operations.
Receive LNG. The loading operation requires mainly piping and
monitoring equipment such as level, temperature and pressure
Maintain LNG at stable conditions for storage.
Unload LNG. This operation involves the major part of the
equipment installed in the cargo tanks.
Prepare tanks to be inspected during dry-dock maintenance.
Filling operations
Two devices can be used to fill the tank with LNG: a bottom filling
device (as for an LNGC) and, as an option, a top filling device. It
should be noted that, as it is assumed that the produced LNG is
always cooler than the stored LNG, the top filling device allows
a better phase separation of the flash gas and an enhanced
homogenisation of LNG inside the storage tank.
Emptying operations
Emptying operations can imply two types of pumps:
The main cargo pumps whose role will be to unload the
tanks to load an LNGC (FPSO application) or to feed the
regasification plant with LNG (FSRU application).
The stripping pump, whose role is to empty the tank as much
as possible (before decommissioning operations for example).
Typically for an LNGC, the cargo pumps are fixed to the pump
tower. For this type of pump, other elements are essential such as
electrical cable ways and pump supports.
For offshore units, adaptations of the pump tower have been
made to be able to implement retractable pumps if required
(removal of cable ways, increased diameter of pump wells, etc.) for
pump maintenance without tank decommissioning. A foot valve
device at the bottom end of the pump well is provided in order to
isolate the pump column from the tank storage.
Tank commissioning and
Most of the operations for the commissioning and the
decommissioning of the tanks are based on the replacement
of the gas phase in the tank by another gas phase compatible
with the next step. In order to avoid mixing of the phases and
to obtain reasonable operating times, the injection of the gas is
made so that the two phases act as heterogeneous components.
This phenomenon based on the difference of density between the
phases is called the piston effect.
Unless otherwise required by the project specification, onboard
an FLNG using GTT membrane designs, one or several tanks can
be temporarily decommissioned for maintenance purposes while
other tanks can be kept operating normally, including NG network
feeding, LNG production, and (ship-to ship-transfer) STS.
For each operation, GTT defines the criteria to ensure that the
considered step has been successfully completed. The requirement
of the client regarding the duration of each step will impact the
size and capacity of the various auxiliaries that can be involved
(compressors, heaters, etc.). Nevertheless, it should be noted that
membrane systems have the fastest cooling down and warming
up durations compared to any self-supporting tank technology.
Instrumentation and protection systems
Apart from the density control, all instrumentation and protection
systems presented hereafter are already in place on LNG carriers,
but some points can be specific to FLNG units.
A liquid level control, coupled with several levels of alarm, for
both low fillings (to protect the pumps) and high fillings (to
prevent overfilling).
A pressure control: tanks are equipped with safety valves
(pressure relief valve and vacuum relief valve) and several levels
of alarm protect the tanks from over-pressure and vacuum.
A temperature control: the tank, the insulated spaces and the
inner hull are equipped with temperature sensors. Some are
located on the pump tower, and are used to check the correct
cooling down of the tank.
A gas detection system: the gas content within the insulated
spaces is permanently checked, at a maximum interval of
Figure 4. Inside an LNG membrane tank with
NO96 system.
Figure 3. Effect of a two-row arrangement on resonance
LNG_Spring2012_47-52.indd 50 14/03/2012 09:42

GTT at the heart of LNG
1 route de Versailles, 78470 Saint-Rmy-Ls-Chevreuse - France Tl : (33) 130 234 789 E-mail :
GTT is ready to work with you on the optimization of its well known NO96
and Mark III systems in order to adapt them to new operational conditions,
thereby offering improved economies and flexibility.
LNG_Spring2012_47-52.indd 51 14/03/2012 09:42
52 / LNGINDUSTRY / Spring2012
30 min., according to the IGC Code. In case of gas ingress,
gas detectors located on top of the tank (as methane is lighter
than nitrogen) will warn the operators immediately.
A draining system: secondary barrier space bilge wells are
provided with a water ingress detection system with alarm.
Bilge wells are fitted with two liquid sensors in order to detect
the leakage from ballast tanks.
A density control: a density gauge is required if stratification is
considered as a plausible scenario in offshore cases. This device
is implemented on the liquid dome in addition to the level
gauging systems. The density gauge also provides information
on level and temperature.
Maintenance made easy
Contrary to LNGCs for which maintenance is scheduled during
drydock, maintenance policy for offshore units has to include
the possibility to perform all
controls and eventual repairs
offshore. Control and repair
methods currently in service for the
maintenance of conventional LNG
carriers have been used by GTT
for several decades and have been
refined accordingly.
Several analyses have been
performed by GTT to analyse the
various failure modes that can be
encountered with membrane
systems. Formal Safety Assessment
and Maintenance Analysis (FSAMA),
Failure Mode Identification and
Risk Ranking (FMI and RR) were
performed on the maintenance operations for an offshore unit.
These analyses have received a Statement of Endorsement from
Class, showing the suitability of membrane systems for offshore
Control and inspection
During the standard maintenance phase, testing of the
tightness of the membranes, visual inspection of pump tower,
of containment system and maintenance of cargo pumps are
performed (in case of fixed pumps). Methods are made available
to detect and localise any defect of the containment systems.
Some methods are performed when the tank is in-service to avoid
any downtime of the tank.
For example, GTT systems are equipped with a primary
membrane control system based on gas concentration
measurement. The integrity of the primary membrane is thus
checked continuously when the tank is in service. This system is in
use on more than 250 membrane vessels and is working perfectly
on each vessel (oldest vessels are 42 years old). A helium test is the
common procedure to localise a defect in the primary membrane
if it occurs.
Similarly, for the secondary membrane, the recently introduced
Thermographic Assessment of Membrane Integrity (TAMI) aims at
monitoring the secondary membrane when the tank is in service.
The cargo tank is used as a cold source and slightly pressurising
the primary space (compared to the secondary space) forces the
cold nitrogen of the primary space to flow in the secondary space
through an eventual defect. The inner hull temperature will thus
decrease locally (where the defect has occurred) and temperature
differences as low as 1 C can be detected.
Other control methods are available when the tank is under
maintenance. Mainly based on vacuum tests, these tests are the
same as that for LNG carriers.
If repairs have to be carried out, the same practices, expertise
and sometimes same procedures as building methods are used.
Due to the thickness of the membrane, the repairs mainly
consist of welding a new piece of membrane where required.
Patches of various shapes and sizes are available to repair the
membrane locally. Tests to check that the repair has been
correctly executed are then performed (dye penetrant test,
vacuum box test, etc.). If the insulation has been damaged,
methods are available to repair locally one part of the
insulation. The complete replacement of a box/panel can be
carried out if required. The size of such elements is sufficiently
small to be inserted inside
the tank through the
standard tank openings
(manhole, material access
hole). Finally, repairs on
the hull can be performed
(welding) even with the
containment system in
Tank access requires that
the tank should be emptied,
warmed up, gas freed and
its atmosphere made safe for
human entrance.
As damage is mainly due to human presence inside tanks,
repairs are mostly performed in the lowest (accessible) parts of
tanks. Nevertheless, access to upper areas, although very unlikely
to be necessary, is provided. Depending on the location of a
defect, scaffolding could be erected if necessary. This scaffolding is
based on existing proven technologies and adapted for moving
platforms: it is specially designed to cope with the exact
dimensions of the tank and the site specific motions.
LNG carriers equipped with membrane systems have several
advantages recognised by all industrial players: compactness,
simple but strong hull structure, fast construction time,
cost-effectiveness, etc. Membrane systems have already
demonstrated their suitability for offshore applications, through
the 10 RVs already in service; two membrane LNGCs are currently
used (after conversion) as FSRUs moored at a quay and two
additional membrane vessels are currently under conversion into
FSUs. Five additional newbuilt FSRUs are currently on order with
membrane systems.
Concerning LNG-FPSO; many studies have been launched so
far. Many oil and gas majors and shipowners have been
investigating the possibility of using membrane systems; many of
them led to Front-End Engineering and Design (FEED) studies to
ascertain the feasibility of such platforms. Public information
allows us to confirm that Excelerate, Hegh LNG and
Petronas/MISC are considering GTT technologies for their units.
Finally, up to now, only one LNG-FPSO has been firmly ordered so
far. This giant floater, ordered by Shell for its Prelude project
offshore Australia features the GTT MarkIII system.
Figure 5. Double row concept of tank for
offshore application.
LNG_Spring2012_47-52.indd 52 14/03/2012 09:42
Spring2012 / LNGINDUSTRY / 53
s a shipping agent, Inchcape Shipping Services (ISS)
attends LNG tanker port calls and canal transits
across its global network, notably in North, Central
and South America, Japan and the Middle East.
Because of the specialist nature of the trade, particular
considerations apply to the handling of these ships. Here
we take a snapshot of some operations around the world.
North America
Prior to the recent discoveries of significant shale gas in
the USA, several large LNG receiving terminals were built,
mostly on the US Gulf Coast. Two such facilities are located
Nick Elliott, Inchcape Shipping Services, UK,
examines the role of shipping agents in the LNG sector.
LNG_Spring2012_53-57.indd 53 16/03/2012 15:58
54 / LNGINDUSTRY / Spring2012
in the Calcasieu Waterway leading up to Lake Charles
in Louisiana 36 nautical miles inland. The Trunk Line
Terminal was completed in 1981 while the newer
Cameron LNG Terminal opened for operations in 2009.
The ISS Lake Charles office handles a significant amount of
this trade.
The Calcasieu Waterway is shared by the shipping
industry, sportsmen and recreational boaters alike. The ship
channel has a project depth of 40 ft and a bottom width of
400 ft. The Gulf Intracoastal Waterway intersects the ship
channel 12 miles south of the city docks.
The port of Lake Charles is the 11
largest in the USA,
encompassing a variety of terminals that move an array of
cargos including crude oil, chemicals, aggregates, bulk
pet-coke, bulk agriprods, wood products, project cargos of
all types, and of course LNG.
The LNG vessel makes its voyage from loadport into the
Lake Charles area where the pilot boards outside port
limits. The transit time from Pilot Station to Trunk Line LNG
is between seven and seven and a half hours and around
an hour less to Cameron LNG.
Often, the USCG will perform an Offshore Security
Boarding procedure and most LNG vessels (depending on
what port they have sailed from) are required to go
through this before being permitted to proceed to the
terminal. Offshore Security Boarding only operates during
daylight hours.
Upon clearance, the vessel will commence the transit
with the US Coast Guard restricting all other movements in
port. Vessels have to maintain a three mile safety zone
behind any LNG carrier going into or out of the Trunk Line
and Cameron LNG Terminals. If a vessel requires a
Certificate of Compliance (CoC) inspection, a Coast Guard
requirement for all tank vessels, then the USCG will
conduct this boarding at the dock during daylight hours
only. During this period the vessel is permitted to connect
one vapour line only to help control the LNG vapour. Once
the CoC has been completed, the Coast Guard will advise
all parties the vessel is cleared for discharging.
In certain cases determined by the vessel
owner/operator, LNG vessels must have escort tugs for the
inbound transit day or night. Each terminal has contracted
tugs that they utilise for docking and undocking and
standing by the vessel during cargo operations. Vessels
calling at Cameron LNG must have dedicated tugs for the
entire duration of the vessels port stay while alongside, as
well as assisting vessels passing by the facility.
Each terminal has different requirements for delivery of
bunkers. At Cameron LNG, bunkers are permitted on a
case by case basis. If permitted, the bunker barge is
Figure 1. The launch fleet attends tankers at anchor off
Fujairah and Khorfakkan.
Figure 2. Personal basket transfer.
LNG_Spring2012_53-57.indd 54 14/03/2012 09:47
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56 / LNGINDUSTRY / Spring2012
required to be alongside and the bunker hose connected
before cargo arms or cargo operations can commence.
Only after completing bunkering will the terminal
commence cargo operations. At the Trunk Line terminal no
bunker barges are permitted alongside at any time. This
creates a dilemma for vessels coming in on long transits
that are in need of fuel to undertake their next voyage.
Both terminals allow stores, provisions and spare parts
to be delivered; however, only via launch, which must
arrive and depart the vessel prior to the cargo arms and
cargo operations commencing. Normal discharging time for
an LNG vessel at any berth is between 18 - 24 hours.
The agents role on an LNG vessel is unique to this type of
ship. Particularly when it comes to the additional requirements
and regulations for the US Coast Guard and towage.
Some of the newer North American LNG facilities are
joint ventures with their own dedicated tugs serving each
facility typically four tugs on permanent station used for
docking and undocking, standing by during cargo
operations, assisting passing vessels in the channel adjacent
to the terminal and sometimes on other jobs where time
permits. In the past, such tugs have been used to rescue
nearby vessels in difficulty. The cost for these towage
services is footed by the joint venture partners along with
the vessel owner/operator calling at the particular terminal.
As there are multiple players involved, the role of a
Marine Co-ordination Agent was conceived following
discussion with various companies. The main purpose of
the MCA is to co-ordinate the towage operation,
including the accounting and other information regarding
the towage contract; acting as a go-between with the
LNG partners and the towage contractor. The MCA also
co-ordinates Marine Working Group meetings between
the various parties where port operations are discussed
including towage, pilotage, government regulations and
more. In essence, the MCA role serves as a neutral party
between all partners involved in the port call.
Partners at the Cameron LNG terminal are Sempra LNG
and ENI and partners at the Energia Costa Azul LNG
terminal are Sempra LNG, BP Tangguh, Shell and Gazprom.
As an important footnote, the discovery of shale gas in
the USA has prompted existing as well as potential new
facilities to be built with liquefaction capability, radically
altering the balance of trade. Where several billion dollar
facilities have been developed over recent years for the
import of LNG based on the fear of shortages, these are
now being transformed into export facilities with
US government approval. This in turn has resulted in a
transitional lull in business until conversion work is
completed still two years or more away.
Middle East and India
LNG loading operations in the Middle East are principally
centred on Abu Dhabi, Oman and Qatar where port agency
work is traditionally handled by state or local agents.
However, due to restrictions on vessel husbandry at most
of the load terminals in the region, LNG tankers carry out
survey work and crew changes and take on spares and
supplies at Fujairah, either when in transit to or from the
loadport or while waiting at the Fujairah anchorage, which
is the major husbandry point in the Middle East for this
kind of business.
The company handles such calls from a variety of
owners including such major operators as Mitsui OSK Lines
and BW Gas, with the companies launch fleet based out of
Fujairah and Khorfakkan, servicing such husbandry
A further operation for ISS on behalf of global clients
such as Teekay LNG Partners and Exmar, is the servicing of
floating regasification units operated from ports in Kuwait
and Bahrain. And across the Arabian Sea, the
Petronet regasification plant at Dahej in Gujirat, India, also
places demand for agency services.
ISS Japan maintains a full database of port information
for customers. The data is regularly updated giving a
comprehensive guide to the berths, wharves and terminals
of Japan. This includes not only port information but also
weather data and LNG market news.
The basic service is of course to set up the ships in and
out port call in the most effective way with minimum
turnaround time. In conjunction with local parties, the
agency proactively avoid delays with careful planning
before the ships arrival.
Key features of maritime service include:
Proactive port information with precise ship movements
and prospects advised well in advance.
Weekly congestion/line-up reports for all vessels in
Close supervision of terminal port agents to achieve
quick dispatch of the vessel.
Proactive minimising of port costs and time in port.
Close contacts within the shipping industry including
authorities, cargo suppliers and importers.
Regular LNG market news provided to LNG customers.
Marine superintendents available on demand to attend
any type of vessels including LNG tankers at any port.
On 13 January the Japanese company Inpex along with
French project partner, Total, made its final investment
decision to secure a AU$ 33 billion LNG project,
representing a huge boost for the port of Darwin. As was
the case in Aberdeen in the 1970s, there are plans to
extend the port infrastructure and introduce a high tech
VTS among other improvements to deal with the resulting
increase in shipping traffic. It is hoped that the project will
eventually make Australia the worlds largest exporter of
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LNG_Spring2012_53-57.indd 57 14/03/2012 09:47
Rebecca Watson, Nakilat, Qatar,
details the rise of the successful
Nakilat-Keppel Offshore and
Marine repair yard.
LNG_Spring2012_58-63.indd 58 14/03/2012 10:45
Spring2012 / LNGINDUSTRY / 59
atar-based LNG repair yard Nakilat-Keppel
Offshore & Marine (N-KOM) has had
a highly successful year. With over 50
projects under its belt, including 19 LNG vessels,
N-KOM has created a thriving shipyard in a
country where previously there had been no
marine industry. But how does an LNG repair
facility come from nothing to attract business
from around the world? Several factors can help
explain N-KOMs success.
N-KOMs prime asset is its location. The
repair yard is located in the Port of Ras Laffan,
situated on the northeastern tip of the Qatar
peninsula, at the heart of the Arabian Gulf and
on the doorstep of the gas terminal serving
Qatars North Field; source of one-third of the
worlds LNG. This location is a major
Figure 1. Repairs going
on full-swing.
Figure 2. Simaisma, the first LNG carrier
to be dry docked and repaired in Qatar.
LNG_Spring2012_58-63.indd 59 14/03/2012 10:45
60 / LNGINDUSTRY / Spring2012
Another key advantage is facilities. Purpose built from
scratch, the Erhama Bin Jaber Al Jalahma Shipyard where
N-KOM operates offers 43 ha. of state-of-the-art
workspace designed to accommodate the worlds biggest
gas carriers. The yards shore power rating of 1200 A., its
water ballast facilities and cranage are all designed for
work on Q-Max and Q-Flex vessels. At 53.8 m wide, the
Q-Max type LNG carrier is the largest in the world. The
yards cranes have a reach of 100 m allowing double
banking of these goliaths of the gas shipping industry.
Testing of LNG carrier cargo pumps is possible at
quayside. An extensive cryogenic facility of 390 m
for the simultaneous repair of more than one set of cargo
N-KOM also leverages on its parent companies
experience and reputation in the industry: Qatari gas
shipper Nakilat and Singaporean ship repairer and builder
Keppel Offshore & Marine.
Shipping company Nakilat owns and operates the
largest LNG fleet in the world; a total of 54 vessels
including 14 Q-Max, 31 Q-Flex and nine conventional
carriers, representing approximately 16% of global LNG
tonnage. Now producing 77 million tpy of LNG, Qatar is
the worlds biggest supplier of gas and Nakilats fleet is
the energy-rich countrys floating pipeline, with Qatars
two gas producers Qatargas and RasGas chartering the
fleet. Investment in maintaining this crucial economic
asset seemed like an obvious next step for the state of
Nakilat sought a partner for the project, not simply to
run a repair, maintenance and conversion yard, but
also to help establish a maritime industry in Qatar.
Keppel Offshore & Marine was chosen for its reputation
and industry experience and thus N-KOM was created; a
joint venture owned 79% by Nakilat, 1% by
Qatar Petroleum and 20% by KS Investments Ltd, a
wholly-owned subsidiary of Keppel Offshore & Marine.
Building work
The deal was struck in May 2007, but the shipyard
would not officially open for another three and a half
years. The 43 ha. facility had yet to be built. The land
upon which the shipyard would be built had yet to be
reclaimed from the sea, the Southern Breakwater at the
Port of Ras Laffan. Prior to opening for business, the
yard had already commenced the fabrication of its own
drydock gates. Completed in October 2010, the two gates
used a total of 2700 t of steel and were stepped into
the L 400 m x W 80 m x D 12 m and L 360 m x W 66 m
x D 11 m drydocks in time for the inauguration of the
shipyard on 23 November, 2010 by His Highness the Emir
of Qatar Sheikh Hamad Bin Khalifa Al Thani.
At its opening ceremony, N-KOM welcomed its first
LNG carrier, the Q-Max Mozah, flagship of the Nakilat
fleet and named in honour of Her Highness Sheikha Moza
Bint Nasser Al-Missned, wife to the His Highness the Emir,
whose vision for a Qatari marine industry was crucial in
the creation of the N-KOM yard. Mozah, being the first
vessel to berth at Qatars new ship repair facility,
demonstrated that creation of the shipyard facility was an
important step in the diversification of the Qatari
The first drydocking to take place at N-KOM was also
that of a Nakilat LNG carrier, Simaisma (see Table 2), in
March 2011. Since then, N-KOM has gone on to deliver a
total of 19 LNG projects during its first year of operation.
Highlights include Al Wakrah in May 2011, the first of the
gas carriers managed by Mitsui OSK Line (MOL) to be
drydocked at the yard, which underwent general repair
and maintenance and was delivered three days ahead of
schedule and Ejnan in July. Managed by NYK LNG
Shipmanagement, Ejnan became the first LNG carrier to
have the global acoustic test done for its membrane tank
Table 1. Yard information
N-Kom (Nakilat-Keppel Offshore
and Marine).
Erhama Bin Jaber Al Jalahma
Shipyard, Port of Ras Laffan, Qatar.
Date inaugurated November 2010.
Size 43 ha.
Repair, maintenance and
conversion for a range of vessels
and on and offshore structures.
Two dry docks (L 400 m x
W 80 m x 12 m and L 360 m x
W 66 m D 11 m); four 400 m
piers (all L 400 m x D 11 m);
two quays (both L 400 m x D
11 m); cranes with reach for
double banking of Q-Max; shore
power with a 1000 A. rating;
390 m
cryogenic clean room;
electrical, pipe, mechanical and
steel workshops; blast and paint
Future developments
Floating dock (L 375 m x W 66 m)
for delivery in 2013.
ASME, ISO 9001, OHSAS 18001
and ISO 14001.
Table 2. Milestone project: Simaisma
Vessel name Simaisma.
Maran Gas Maritime, Greece/Nakilat,
Operator Maran Gas Maritime.
Charterer RasGas.
Built Daewoo, Korea.
Delivered 2006.
DWT 84 863 t.
Length 286 m.
Breadth 44 m.
Capacity 146 000 m
Arrived at N-KOM March 29, 2011.
Days in dock 20.
In March 2011 the yard docked Qatars first LNG carrier:
RasGas-chartered conventional carrier, Simaisma.
LNG_Spring2012_58-63.indd 60 14/03/2012 10:45
LNG_Spring2012_58-63.indd 61 16/03/2012 10:04
while visiting N-KOM, in
addition to the general
repairs carried out during its
drydocking. The acoustic
equipment, in addition to
other leak test kits, has
since been stored in the
yard for future use. N-KOM
has extended its range of
services to over 40 vessels
while at anchorage.
At its opening, the shipyard facility garnered a
multitude of service agreements with various major fleet
owners, including a three year ship repair arrangement
with Shell International Trading and Shipping Co. Ltd
(STASCo). N-KOM had also entered into a Memorandum
of Understanding (MOU) with Gulf Drilling International
(GDI) and letters of intent with Idemitsu Tanker,
Mitsui O.S.K. Lines, NYK Line, Kawasaki Kisen Kaisha,
Lino Lines and the Marine Contracting Association
(MARCAS), to provide shipyard and drydocking services
for their vessels.
The future
With its network of over 20 shipyards worldwide and its
track record of LNG repairs, Keppel began its relationship
with Qatar in the 1990s. Keppel Shipyard in Singapore
docked Qatargas-chartered
and MOL-owned LNG carrier
Al Zubarah in June 1999
for a guaranteed repair of
the Japanese-built vessel.
Since then, Keppel Shipyard
has successfully carried out
dockings for the majority of
the Qatargas fleet, building
a strong relationship that led
to the signing of an Alliance
Service Agreement in 2006 for the drydocking of a fleet
of Moss type LNG carriers chartered by Qatar Liquefied
Gas Co. Ltd for a period of five years. Collaboration
between Keppels rig building division, Keppel FELS, and
Qatar Petroleum joint venture Gulf Drilling International
(GDI) has also paved the way for N-KOM to begin work
on offshore structures alongside its ship repair business.
By 2020, 4000 ships are expected to call at Ras Laffan
every year. 2012 will be a busy year. The first generation
Q-Flex and Q-Max vessels will commence their special
survey dockings at N-KOM and as the yards facilities
continue to expand; a floating dock of L 375 m x W 66 m
is currently on order. With over 50% of all LNG carriers
servicing the Arabian Gulf, LNG will form a significant
part of business in this region, despite Qatars marine
industry being relatively new.
Table 3. N-KOM project track records
LNG 19.
LPG 1.
Tankers 4.
Containers 5.
Support vessel/tug 11.
Jack-up rigs 5.
Others 5.
Total (as of January 2012) 50.
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LNG_Spring2012_58-63.indd 62 16/03/2012 16:06
LNG_Spring2012_58-63.indd 63 14/03/2012 10:45
64 / LNGINDUSTRY / Spring2012
it right
first time
Barbara Grant, International Paint,
UK, describes the benefits of spending
time and money on quality coatings to
prolong the lifespan of ships.
LNG_Spring2012_64-65.indd 64 14/03/2012 11:39
ooming demand for LNG is proving
to be the catalyst for a surge in vessel
contracting. 52 vessels were ordered
throughout last year, mostly in South Korea,
compared with just five in 2010 and none at all
the year before. Todays order book now stands
at close to 60 vessels.
Not all the contracts have been placed by
the relatively small number of specialist LNG
operators who populate this highly
sophisticated niche market. There are fears that
some of the newcomers may not employ the
top grade ship specifications that have
traditionally ensured the continued operational
safety and longevity of the worlds 360 or so
Bill Wayne is general manager of the
Society of Gas Tanker and Terminal Operators
(SIGTTO). He points out that this specialised
shipping sectors unblemished safety record is
crucially important to maintain. The safety
record of the LNG industry has been almost
without comparison in commercial industry, he
declares. It is a direct result of the care and
attention paid to the design, operation and
maintenance of the ships. It is, in effect, our
licence to operate.
There are ships operating today that are
more than 35 years old, but are still providing a
high standard of service, and are operating as
safely as they did on their first day of service.
LNG_Spring2012_64-65.indd 65 14/03/2012 11:39
66 / LNGINDUSTRY / Spring2012
Whilst this speaks volumes for the way ships have been
looked after over their lives, with appropriate long term
maintenance programmes in continuous operation, much
also depends on the quality of the original ship
specifications. A high quality coatings system and diligent
inspection are necessary to ensure the very best quality at
the beginning of a project. Ships generally rust from the
inside out, typically from the ballast tanks. If attention is
not paid to ballast tank coatings at the outset, the reality is
that half way through a long term charter, an operator
could find himself facing a major repair exercise involving,
for example, blasting and re-coating of ballast tanks,
entailing weeks out of service.
Such an operation could take several months and
seriously affect the economics of a project. The key
message is: get it right first time! If you have a long term
contract, its a false economy not to put in good corrosion
protection systems at the outset.
The LNG fleet
The demands made on LNG carriers are exacting.
Transporting confined, potentially highly flammable cargo
in tanks on tight schedules means that vessel safety and
operating efficiency with planned maintenance are critical
requirements. All of these issues will be high on the list
of vessel operators priorities, particularly when selecting
systems and equipment for a new ship. Choosing the
correct high performance protection systems can help
operators maximise returns on their substantial investments
while ensuring long term vessel safety, efficiency and asset
Fouling control
A critical requirement for LNG carriers is to arrive at
their destination on time. Loss of speed due to hull
and/or propeller fouling can result in not only delayed
arrival times but also increased engine wear, fuel
consumption and emissions. Fouling control is thus a vital
part of vessel operating efficiency, in which coatings can
play a very important role.
Foul release technology
Foul release coatings do not rely on biocides to control
fouling. The technology works by providing a very
smooth, slippery, low friction surface onto which fouling
organisms have difficulty attaching. Any that do attach,
normally do so only weakly and can usually be easily
removed either by the vessel moving through the water
or by simple washing/wiping.
The Intersleek foul release system, applied to over 30%
of the global LNG carrier fleet, claims to resist fouling for
up to 60 months and cut fuel consumption and emissions
by up to 9%.
Exmar Ship Management, one of the worlds largest
operators of LPG/LNG carrier vessels and the first company
in the world to operate Energy Bridge Regasification Vessels
(EBRV), has an interest in reducing fuel consumption and
vessel emissions. It chose Intersleek 900, the revolutionary
fluoropolymer foul release coating, for two LNG vessels.
Intersleek 900 was selected to meet the environmental
objectives of both Exmar and the vessel owner
Excelerate Energy. In September 2008, Intersleek 900 was
applied on the 76 500 dwt Excellence, the first
EBRV vessel to be coated with the fluoropolymer foul
Figure 1. Fouling control: four LNG newbuildings at
Samsung, all coated with foul release technology.
Figure 2. Fluoropolymer foul release technology on the
underwater sides.
LNG_Spring2012_64-71.indd 66 19/03/2012 10:03
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68 / LNGINDUSTRY / Spring2012
release technology. Its sister vessel, the 69 500 dwt LNG
carrier Excalibur, also had Intersleek 900 applied at Lisnave
shipyard in October 2008.
The project involved the application of the
Intersleek 900 system on the underwater vertical sides over
Intersleek Linkcoat, which removed the need for full
blasting, thus further reducing the overall environmental
Intersleek 900 was applied to the Sevilla Knutsen in
June 2010. Built at Daewoo Shipbuilding and Marine
Engineering (DSME) in South Korea, the 173 400 m
carrier was the first of Norways Knutsen OAS Shippings
vessels to be coated at newbuilding.
September 2011 witnessed a milestone for
International Paint and N-KOM, the Nakilat-Keppel
Offshore & Marine Ltd, Erhama Bin Jaber Al Jalahma
Shipyard, with the coating of three LNG vessels marking
the application of 10 000 litres of Intersleek foul release
technology at the new Qatar facility in less than four
months since opening.
The Al Marrouna and Al Areesh, 151 700 m
ships operated and managed by Teekay Marine
Management and the 137 354 m
Doha, which is owned
by a Japanese consortium led by Nippon Yusen Kaisha
(NYK Line) and managed by NYK LNG Shipmanagement
Ltd, were all repaired with the Intersleek 700 system within
four weeks, completing the projects ahead of schedule,
with the time savings afforded by the foul release system a
key factor.
The Al Marrouna and Al Areesh, coated with the
Intersleek 700 scheme at newbuilding in October 2006 and
January 2007 respectively, needed only one full coat at this
latest docking.
Significantly, the repair requirement is even less for
vessels undergoing interim dockings. For example, no full
coats were required for Doha, whose previous drydocking
took place in June 2009.
Biocidal antifoulings
A cost-effective alternative to foul release coatings are
biocidal antifoulings.
The 151 885 m
LNG carrier,
Tangguh Hiri, operated by Teekay Shipping,
was coated with Intersmooth SPC self
polishing copolymer antifouling at
newbuilding in November 2008. Analysis of
Figure 4. After 15 years in service,
cleaning of the ballast tank area reveals
the impressive true nature of the coatings
Figure 3. Foul
release coatings
can significantly
reduce time in
LNG_Spring2012_64-65.indd 68 14/03/2012 11:39
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the vessels activity over the subsequent 30 months showed
that for 65% of the time the vessels speed was between
0 - 1 knots, in average sea temperatures of 33 C, in
locations including the Yellow Sea, East China Sea and the
Sea of Japan.
Despite the severe fouling challenge presented by these
conditions, the June 2011 in-dock inspection of the vessel
revealed the vertical sides and flat bottom to be in excellent
Long term anticorrosive
With an operational requirement for the highest levels
of corrosion protection, many operators of recent
LNG newbuildings have specified the light coloured,
abrasion resistant, aluminium pure epoxy anticorrosive,
Intershield 300 for just about every area of the vessel,
including the structurally critical and difficult to maintain
water ballast tanks.
The recent 15 year inspections of the bulk carrier
m.v. Eleranta and the crude oil tanker Samco Raven have
suggested that Intershield 300 protects beyond compliance
with the requirements of the IMO PSPC (International
Maritime Organisation Performance Standard for Protective
Coatings), in water ballast tanks and cargo oil tanks
Built at Samsung in 1995 and operated by
V. Ships UK Ltd, the 73 222 dwt Eleranta had
Intershield 300 applied to her ballast tanks at newbuilding.
At her June 2010 inspection, with minimal maintenance
through her life to date, a Lloyds Register class surveyor
rated as good the condition of the double bottom tank
coatings. The original application on board the Eleranta
involved two coats of Intershield 300 of only 125 microns
each, rather than the two 160 micron dft coats specified in
the IMO regulations.
Ice abrasion protection
With 22% of the worlds unrecovered carbon reserves
located in the Arctic, operational requirements of
ice-going LNG carriers need to adapt to the challenge
of this environment. The first point of contact between ice
and a hull is the paint, and the correct ice class coating can
provide a multifunctional barrier.
Some coatings are especially designed for ships trading
in temperatures down to -50 C. Abrasion resistant, with
low frictional resistance, they can help reduce vessel power
consumption and fuel consumption.
Operating image
Topsides, superstructure and spherical tanks (on Moss type
vessels) represent a considerable and highly visible surface
area on LNG carriers. Whilst stained, faded or even
damaged coatings do not normally impinge on the asset
value of the vessel and are not on the critical inspection
list for surveyors or port authorities, in this condition they
are not the best advertisement for a professional company
or well managed ship. There is no doubt that the basis
for a good topsides system is the anticorrosive but the
choice of finish coat, however, should also be carefully
Low solar absorption coatings
Absorption of the suns infrared rays can lead to heat build
up inside the vessel and can affect the thermal control of
cargo and reliquefaction plants, crew and passenger comfort
in accommodation areas and increase in energy costs.
Principles of LSA coatings are that they reflect more
sunlight and absorb less heat, keeping these exposed areas
cooler and at a more constant temperature. These coatings
incorporate specialist pigments into a standard
polyurethane finish formulation with laboratory recorded
temperature reductions of up to 8 C.
With a strong growth phase
underway for specialised
LNG tonnage, the
importance of preserving
asset value, controlling
through life operating costs
and maximising return on
investment through a well
planned and implemented
coatings strategy cannot be
1. Energy and GHG Emissions
Savings Analysis of
Fluoropolymer Foul Release
Hull Coating, Professor
James J. Corbett, Energy
and Environmental Research
Associates L.L.C. (EERA),
February 2011.
Figure 5. Operating image is important.
LNG_Spring2012_64-71.indd 70 16/03/2012 16:11
LNG_Spring2012_64-65.indd 71 14/03/2012 11:40
Thierry Vermeersch,
AVEVA, UK, examines current
capabilities and trends in the integration
of engineering, design and information
management technologies between the
plant and marine industries.
LNG_Spring2012_72-76.indd 72 14/03/2012 11:51
n the energy sector, increasingly complex projects are
being driven by the move to more challenging oil and
gas resources, and enabled by increasingly powerful
engineering and design technologies. But even the most
powerful individual CAE or CAD tools are insufficient by
themselves for the new generations of oil and gas projects.
The key to success lies in integrating technologies to enable
effective collaboration between different engineering, design
and business disciplines across geographically distributed
project teams.
A clear illustration of this need is the development of
FLNG projects to harvest deepwater gas resources. If the
original oil FPSOs werent challenging enough,
tomorrows massive FLNG vessels will be more so.
They must combine the disciplines and
resources of shipbuilding with those of
process plant, deepwater well
engineering and cryogenic
storage. Meanwhile, onshore
LNG projects are
inexorably becoming
ever more
massive in
Evidently, technology must provide a seamless and scalable
working environment to support these challenges.
The oil and gas industry has come a long way in offshore
engineering. Inevitably, the first FPSOs were a learning
exercise as plant and marine engineers tried to get to grips
with each others unfamiliar disciplines. Early projects were
beset with problems leading to delays and cost overruns, due
in part to the functional barriers created by mutually
incompatible engineering and design software. While such
barriers are not unique to offshore, this sector arguably
suffers most because shipbuilding and plant engineering
have traditionally been independent industries, each with
their own working methods, standards and specialised
design tools. There was little need for technology integration
between them.
But a number of factors have changed this situation
rapidly. First, new technologies and the need to move into
ever deeper water have forced the demand. Second, the
collapse in demand for ships has driven more shipyards to
diversify into offshore, an obvious adjacent market for their
skills and facilities. Third, trends in the plant industries have
increased awareness of the need for wider data
interoperability and there has been much progress in the
adoption of neutral standards, for example. Lastly,
technology vendors have anticipated the demand by
integrating plant and marine applications.
Plant and marine integration
To an extent, of course, ship design includes an element
of plant design as every ship has at least a fuel
system. But the most complex vessels such
as cruise ships or warships can almost be
described as plants in boxes albeit very
sophisticated boxes. In practice it
was never very likely that a plant
contractor would adopt a
LNG_Spring2012_72-76.indd 73 14/03/2012 11:51
74 / LNGINDUSTRY / Spring2012
marine solution, even where it provided suitable functions,
and plant design systems have generally been unable to
integrate with the ship designers systems. So collaborative,
FPSO-type projects had to work around the design interface
This has now changed. AVEVA was among the first to
recognise the emerging demand and acquired a leading
marine design solution. Since then, not only has it greatly
extended the integration between hull and outfitting design,
it has also integrated many of the corresponding functions of
its plant and outfitting applications so that both can share a
common database. Marine outfitting designers also benefitted
from certain functions that were more advanced in the plant
applications. As a result, collaborations between ship and
plant builders have become much easier and even the most
complex vessel can be engineered and designed in a common
An obvious problem area in plant/ship design integration
is negotiating the physical interfaces between plant systems,
vessel outfitting systems and the hull structure. Much of this
involves detailed design negotiation between discipline
specialists, so it is essential that each should be able to see
the others design, while retaining control over their own.
Perhaps the most extreme example of this would be the
integration of a mooring turret into a hull structure, where
almost every project discipline would be closely involved. If
the turret and hull are designed in incompatible systems, clash
detection and elimination become difficult and time
3D design integration
3D might be the common technology for engineering design,
but it actually comprises two distinctly different technologies.
The systems used by hull designers (and also equipment
manufacturers) use modelling technologies based on surfaces,
while those used in outfitting and the plant industries use
geometric solids. Clearly, one cannot expect designers to
collaborate efficiently if their software cannot communicate,
but neither should one expect either discipline to abandon
its particular, optimal, design system. Worse, individual
equipment vendors systems use mutually incompatible
proprietary data formats.
Various approaches to 3D model exchange have been
tried over the years, but did not result in a sufficiently
effective or widely supported standard. However, growing
demand and recent initiatives by industry forums have
encouraged vendors to collaborate on neutral standards, with
notable success. Now the STEP data exchange protocols are
proving effective and are attracting wide industry support. In
AVEVAs case, STEP AP203 has been implemented in a
bi-directional interface which supports the leading
3D MCAD systems. This enables equipment vendors to export
3D models, in a selective and controlled manner, via the
neutral STEP format, for import into outfitting design. The
process is quick and robust, and ensures that the 3D outfitting
designer can work with accurate and sufficiently detailed
equipment models.
While such model exchanges will generally occur between
an equipment supplier and a designer, it also enables the
optimum choice of technologies within the same
organisation. A typical example might be a company in which
one division designs and builds, say, compressors, while a
sister division builds these into complete packaged solutions.
The two require different 3D design software, but now the
system builders need no longer be constrained by having to
use the same system as the equipment designers.
Engineering and design
Historically, individual disciplines have been supported by
specialist software applications, invariably each with its own
data format even when performing the same functions. While
this led to high productivity within disciplines it also created
barriers between them. These barriers have now become a
hindrance and removing them offers considerable productivity
gains across projects.
A good example is schematic design, for purposes such as
P&IDs or electrical and instrumentation (E&I) systems. Even
now, some commonly used 2D drafting systems only create
what are essentially dumb drawings; that is, they consist of
lines and symbols but do not contain the definitions or
associativity of the objects represented. This lack of
intelligence prevents the source design from supplying data to
support associated functions such as 3D layout design, so
these functions remain independent. Inevitably, this leads to
errors, inconsistencies, duplications and rework.
This has been overcome in the most advanced solutions
by enabling a systems engineer to create, say, a P&ID as an
interconnected set of defined objects. While the deliverable
may still be a 2D schematic drawing, this is now just one
particular view of a dataset which defines the system. By
storing this data in the common project database, it becomes
Figure 2. The management of engineering data across
multiple disciplines.
Figure 1. Example of a compressor originally created
in an MCAD system included in a 3D design model.
(Courtesy of Howden).
LNG_Spring2012_72-76.indd 74 14/03/2012 11:51
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LNG_Spring2012_72-76.indd 75 16/03/2012 10:11
76 / LNGINDUSTRY / Spring2012
accessible across the project and can be used by other
disciplines on a read-only basis.
This integration of engineering and design data is an
important enabler of efficient working. As soon as the initial
P&ID has been created, materials management can begin
procuring long-lead items, negotiating advantageous prices
and reserving suppliers production schedules. Meanwhile,
piping designers can translate the system into a 3D layout,
creating a detailed and accurate Bill of Materials (BoM) as they
do so. The P&ID, the BoM and the 3D layout are each different
views of the same underlying data. Both layout design and
BoMs can be updated in a controlled manner as the
engineering design evolves; one does not have to wait until
system engineering has reached an advanced state of maturity.
Interestingly, one feature provided in the AVEVA solution
is the ability for a systems engineer to create, say, a hydraulic
system schematic over the background of a ships hull
arrangement drawing. This not only provides a useful visual
context for the design, it actually associates each individual
pump, valve, pipe and so on with its location in the vessel,
making the outfitting designers work easier and facilitating a
number of important downstream tasks.
Information integration
So engineering and design integration is removing a
substantial constraint on complex projects. But schematics and
3D models are just the visible tip of a very large information
iceberg, which seems to grow exponentially with every new
generation of project. To make things worse, large scale
projects must inevitably be collaborations between a network
of partners, subcontractors and suppliers spread around the
world. Each of these will have their own preferences for
software tools for both technical and business functions, and
will create information in a wide variety of formats.
Some of this information incompatibility can be dealt with
as outlined above, using applicable neutral standards such as
STEP or ISO15926, but far more must be used as-is. This
creates a vulnerability if all this disparate information cannot
be centrally managed, cross referenced, validated and shared
across the team. Now we move into the realm of information
management: an application of technology which offers
possibly the greatest single increase in business performance.
Information management systems are advancing rapidly
and being increasingly deployed across the engineering
industries. And just as with engineering and design systems,
we are seeing integration within and across the plant and
marine sectors. Systems that have evolved to serve one
particular industry are being integrated and extended to
become much more widely applicable; many of the issues
they address are common to both plant and marine, for
The interesting challenge, for which some genuinely
exciting developments have been made, lies in integrating
many different types and sources of information. This is more
than just document management, because a single document
may contain many different items of information, which may
each relate to other items in other sources.
AVEVAs approach to this has been to create technologies
which are data-agnostic. That is, they can handle data of
widely different types and sources without needing the
programs used to create the data. Recognising also that
information is a valuable asset to be controlled, these
technologies are non-invasive; they read but do not interfere
with source data. On these technologies is built an
information management system comprising a central data
hub for all project or asset information, supported by a
number of interfaces (gateways) for different types of data,
and presenting information to the user through a
browser-type application.
The key features of this particular solution are that the
incoming information is automatically validated and
cross-referenced with related information so that all tag
related data is aggregated. Automatically applied hotspots
then enable the user to navigate through the integrated
digital asset in an intuitive manner, perhaps compiling custom
views to extract particular reports.
Different vendors have different approaches to the
problem, but two common user requirements are, first, that
any information management system be web enabled so that
it can be deployed flexibly and worldwide without requiring
costly infrastructure, and second, that it should be
vendor-neutral to allow the widest freedom of choice of
authoring applications. Such systems are now available and it
is notable that they are being widely adopted by leading
companies in the oil and gas industry.
Lastly, it is worth noting that these technologies are not
restricted to project execution; they are equally, arguably even
more, applicable to asset management. Here, they enable the
effective management and exploitation of all the information
embodied in a physical plant or vessel, the so-called
digital plant. Users of these systems have gained
considerable benefits in areas such as project handover,
operations and maintenance, shift handover, regulatory
compliance and auditing, and so on.
In conclusion
The last decade has seen a rapid advance in technology
integration that now provides a sound basis for designing,
building and operating the next generation of energy
projects. Unnecessary barriers to collaboration are continuing
to be swept away and new technologies are putting
information at the heart of business strategies. All these will
enable engineers to create increasingly ambitious projects
and make LNG an increasingly important source of the
worlds energy.
Figure 3. The latest information management technologies
put every type of information, even 3D models, at a users
LNG_Spring2012_72-76.indd 76 14/03/2012 11:51
Spring2012 / LNGINDUSTRY / 77
Mun-Seong Kim, Endress+Hauser, Japan,
describes the intricacies of LNG storage solutions.
Figure 1. Typical instrumentation on a modern LNG storage tank.
he recent earthquake and tsunami in Japan followed by the Fukushima nuclear disaster
have resulted in dramatic changes to the Japanese governments energy plan. In
considering energy sources to replace nuclear power generation, LNG has risen to the
top of the list. There are many reasons for this, namely the fact that Japan is already one of the
worlds largest consumers of LNG coupled with the environmental advantages inherent in LNG
utilisation. By expanding the existing infrastructure and securing additional sources of LNG, the
immediate energy demands can be met. At the same time, the long term goal is to develop new
technology for renewable energy sources and eliminate the dependence on outside resources.
LNG_Spring2012_77-80.indd 77 14/03/2012 11:54
78 / LNGINDUSTRY / Spring2012
LNG storage
Safe and efficient storage of LNG is a key factor that must be
addressed to allow the effective use of LNG. LNG results in a
600:1 compression of the storage space required. In a country
where space is at a premium, this is very important. However,
lowering the gas temperature to -160 C also results in many
technological challenges in handling cold temperatures.
Among the many things that must be considered are safety,
efficiency, security and environmental issues. Storage tanks
are often located in densely populated areas, thus, measures
must be taken to ensure that all factors have been properly
Proper instrumentation
Proper instrumentation for LNG storage tanks is a key factor
in providing the necessary information to operators for
intelligent and timely decisions during plant operation. These
tanks are quite large (typically approximately 60 m in diameter
and 55 m high and capable of storing 120 000 m
of liquid).
The tanks are filled rapidly from ships and then the liquid is
regasified and fed into distribution pipelines for electric power
generation and direct use by commercial and residential
users. All of this requires proper instrumentation to measure
liquid level, temperature, density, pressure and flow. The
information must be collected and presented in a user-friendly
way to enable operators to manage the LNG plants in a safe
and efficient manner.
Unique factors of cryogenic
liquid storage
The storage of LNG at cryogenic temperatures presents some
unique challenges that must be handled properly to ensure
that the plant is operated safely and efficiently. One of these
issues is the potential danger of a rollover. Rollover is a
term to describe the event of two layers of different densities
rapidly mixing with the side effect of large amounts of gas
being released. Most such events are relatively harmless, but
under the right tank conditions, the excessive amounts of gas
can result in product being lost to the atmosphere through
relief valves and, in a worst case scenario, the increase in
pressure can result in excessive pressurisation of the storage
tank with possible structural damage.
Offloading/mixing operation
The conditions in an LNG storage tank that could lead to such
an event is the formation of a light layer on top of a heavy
layer. There are several ways this can come about but the
most common one occurs in offloading from an LNG tanker
of lighter LNG into a storage tank that contains heavier LNG.
If this happens, there is no natural reason for the layers to
mix. The difference in density to inhibit mixing depends on
many factors, but published literature indicates a difference
of 1 kg/m
is sufficient. The heat leak through the insulation
of the storage tank causes energy to build up in the lower
layer and decreases the density. At the same time, the lighter
elements of the LNG in the upper layer tend to boil off first,
causing the upper layer to become heavier. At some point,
the layers converge to similar density values resulting in the
phenomenon called rollover. The layers do not really roll
over, but the name has become established throughout the
industry. Detailed studies of rollover have been made by
the major gas companies (such as Tokyo Gas, Kogas, and
Gaz de France) but the results of those studies are proprietary
and have not been released to the public.
Rollover prevention
To prevent such a condition, operators normally try to make
sure that the layer never forms in the first place. When
loading a tank, the normal procedure is to top-fill heavy LNG
and bottom-fill light LNG. If this is always done, then the
heavy LNG will sink and cause complete mixing so that no
layer can result. While some older LNG storage tanks may not
Figure 2. FPSO.
LNG_Spring2012_77-80.indd 78 14/03/2012 11:54

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have both top-fill and bottom-fill capability, all newer tanks
have that capability. Of course, this also requires that the
exact density of the LNG both in the tank and on the ship is
Minimised BOG
A second phenomenon that works against this normal
procedure is the natural evolution of boil-off gas (BOG)
during filling operations. When top-filling a tank with heavier
(and colder) LNG, the liquid tends to flash when the colder
LNG hits the warmer LNG. When this happens, this BOG
must be dealt with in some way. Depending on the particular
design and facilities of the LNG plant it might be compressed
into liquid and returned to the storage tank or possibly fed
into the gas supply line from the plant. As a last resort, it
can be flared off but, of course, that is a loss of product. No
matter what choice is taken to deal with this, all solutions cost
money, thus the plant will try to make choices to minimise the
production of BOG.
LNG tank instrumentation
In order to deal with these and other matters effectively, it is
imperative that the LNG storage tanks such as liquefaction
storage tanks as well floating storage (LNG FPSO) be
fitted with proper instrumentation. Figure 1 shows the
typical instrumentation on a modern LNG storage tank.
This instrumentation normally consists of two level gauges
(either servo or radar), two in-tank temperature arrays,
a high-level alarm gauge, an LTD gauge for obtaining
temperature/density tank profiles, and an array of temperature
sensors outside of the storage tank. The temperature sensors
on the outside of the tank are initially used to monitor the
cooling-down process and subsequently also as on-going
leak detection sensors. All of these instruments are normally
combined to an integrated system to present the operator
with a complete picture of tank conditions. With that
information, intelligent and timely decisions can be made to
operate the tank safely and with maximum efficiency.
LTD density meter
In some ways, the LTD instrument stands out as somewhat
unique among these instruments. A single probe is traversed
over the entire depth of the LNG in the tank. The probe
contains both a temperature sensor and density sensor. The
temperature and density is recorded at different levels and
the data is shown in a graph. In this way, any layering can
be easily detected. The LTD unit is often used to measure
the density of the LNG in the tank before loading operations
commence and is then used again to scan the tank once
the operation is complete. This verifies that the proper
loading decision was made and if not, layering is immediately
detected so that the most cost-effective decision can be made
to eliminate the layer.
LNG management system
Since it is not always possible to completely eliminate all
layers, it is sometimes very useful to know if an existing layer
is potentially dangerous. A small layer that will only result in
a manageable amount of BOG can actually be advantageous
if it can be assured that the evolution of gas can be handled
safely. Because many factors enter into an accurate prediction,
it requires very specialised software to perform such an
analysis. Such software is available and has been proven to
be very effective. The safe and effective handling of even one
potential hazard in an LNG storage tank can actually pay for
the cost of the software.
Future trends in LNG
At the time of writing, there is a worldwide surge in the
production and usage of LNG. Due to commercial factors,
there is much more mixing of sources of supply than before.
In the past, receiving terminals tended to receive LNG from
a limited number of sources. The composition of the gas
was usually known and an effective plan was formulated to
handle any differences. However, in recent years there has
been a very large growth in what is known as spot trading.
This term is used to describe buying a shipload of LNG on a
random basis, thus the composition can vary widely. Japan
is one of the nations that has used this practice increasingly
in recent days. This means in practical terms that provision
must be made to deal with much wider composition (density)
ranges. This trend is expected to continue in the future.
Again, proper instrumentation is one of the most important
factors in dealing with this change.
In summary, LNG is destined to be a major factor in the
energy mix in the foreseeable future. Availability, flexibility,
environmental compatibility, and cost-effectiveness all work
together to meet the immediate demands. Even though Japan
has led the way in the past in the use of LNG, other nations
are not far behind in making effective use of this energy
resource to meet their ever growing demands.
Figure 3. Large capacity of LNG storage tank (over 180 m
Figure 4. Small scale LNG production tank.
LNG_Spring2012_77-80.indd 80 14/03/2012 11:54
Spring2012 / LNGINDUSTRY / 81
atural gas is a mixture of hydrocarbons,
mostly C1 through C6+, inerts
, He, H
, Ar, O
), acid gases
and H
S), organic sulfur species (RSH,
RSR, RSSR) and other impurities. The mixture
composition depends upon the location of
fields and the age of the wells.
By and large, the H
S content in natural
gas ranges from 0.1% - 5% vol., whilst the
ranges from 0.67% vol. to more than
15% vol. The natural gas is called sour if the
concentration of H
S is greater than 2% vol.
The content of H
S in natural gas is
generally not allowed to exceed 4 ppm vol.
The CO
concentration is typically required to
lie in the range of 1% 3% vol. For LNG
applications, the latter has to be less than
100 ppm vol. in order to avoid freezing
problems in the cold end of the plant. Thus, sour
gases have to be treated in order to remove these
acidic species before being sold or sent to the LNG
Figures 1 and 2 portray a general architecture of a
field gas development. As can be seen, the sour gas
from the slug catchers is mixed with the gas from the oil
treatment section and routed toward the gas treatment block.
The first initial function of the gas treatment plant is the acid
gas removal, which splits the feed into two streams: a sweetened
natural gas to be further treated in the downstream units
(dehydration, LPG recovery, etc.) to meet selling or LNG
Lorenzo Micucci,
Siirtec Nigi, Italy,
takes a holistic
approach to sour
gas treatment.
Sweet from sour
LNG_Spring2012_81-84.indd 81 14/03/2012 14:06
82 / LNGINDUSTRY / Spring2012
specifications and an acid gas stream to be disposed of with
sulfur recovery units.
The concentration of H
S in the acid gas stream from the acid
gas removal box is in the range of 10% 22% vol. For an LNG
plant, where deep CO
removal is required, the H
S concentration
can even be as low as 0.5 - 0.7% vol. These concentrations are
too low for the acid gas stream to be accepted by a typical
Claus unit because the flame inside its thermal reactor becomes
erratic and the whole operation becomes troublesome.
In these cases, the acid gas has to be further treated in an
enrichment box in order to raise the H
S concentration well above
40% vol. (the minimum concentration to assure the flame
stability) before entering the Claus unit.
As acid gases are mixtures of H
S and CO
, the enrichment
operation requires a selective separation of H
S from CO
Typically, this selective separation is achieved by means of a
regenerative absorption process on aqueous solutions of
There are several options that can be used to meet the
enrichment target. These include the use of tailored absorption
media (formulated, activated, or sterically hindered amines) or the
implementation of a particular process line-up, based on the use
of generic amine.
Tertiary amines do not form carbamate with CO
, thus they
are the most selective absorbing solvent for the H
S. This makes
MDEA the solvent of choice. In addition, its selectivity can be
further enlarged (selecting the absorber trays residence time) by
exploiting the slower mass transfer rate of CO
in the liquid film
relative to the H
The above properties have been used for the following case
study project to effectively enrich the diluted acid gas from a
sweetening unit without making use of a special solvent or a
particular process line-up (both of which are expensive).
It is noteworthy that treating sour gas from a gas field is not
all about the selection of solvents and designing the absorber to
maximise the CO
slip at the top of the tower. The enrichment
ratio attainable with the above method is around five, thus the
S concentration in the Claus feed may still fall outside the
performance envelope of the Claus unit depending upon the
actual natural gas composition.
Thus, to cover the full range of operational cases, the
configuration of the Claus thermal reactor needs to be addressed
so that the whole sour gas treatment plant is fully responsive to
all composition variations in a cost-effective manner.
Furthermore, the sulfur recovery unit exports energy across its
boundary and has material flows that can be synergistically used
in other process functional boxes. Thus, the holistic approach to
the design of a sour gas treatment plant results in the most
cost-effective project.
The following case study illustrates how this approach has
been implemented.
Case study
The launch of a big onshore project for the exploitation of
condensate wells located both in the Mediterranean Sea and
at onshore sites, gave rise to the challenging task of selecting
the most cost-effective technology for the sulfur removal and
recovery unit.
The management of the wells and the relevant
gas/condensate clusters could produce a broad variation of
quantity and quality of acid gases to be treated by the plants that
were targeted to produce 540 tpd of sulfur with a recovery
efficiency of 99.8%.
The H
S concentrations in the natural gas from wells were
estimated to range from 0.7% to 2.8% vol. The sales gas
specification required the customary 4 ppm vol. of H
S and
2% vol. maximum of CO
. Under these conditions and upon the
request of the customer not to be tied to a particular
solvent supplier, the generic MDEA at high pressure
(> 2 MPa) was selected for the sulfur removal process.
The enrichment section was conceived to be totally
independent from the sulfur removal section in order to
avoid upsets on the sulfur recovery block impairing the
gas treating line.
In fact, the goal of the gas field project was the
production of natural gas for selling offshore; therefore,
high reliability and availability of the plant were
requested. The availability assessment performed during
the feasibility study showed that the arrangement
described above was the best for maximising overall
plant availability.
In order to have one single solvent management
with common storage, loading and unloading facilities,
both the enrichment section and the high pressure
sulfur removal processes were based on MDEA
aqueous solution at 50% w. The operating pressure of
the absorption and regeneration ends of the
enrichment section was set at 20 kPa g and 70 kPa g
For the tail gas treatment, Siirtec Nigis HCR was
chosen, the off-gas from the tail gas treatment unit,
containing 150 200 ppm vol. of H
S, was routed
directly towards the thermal incinerator as shown in
Figure 2.
Because 95% of the fed sulfur was recovered and
collected in the sulfur pit, the quantity of H
S absorbed
Figure 1. Example of gas field
Figure 2. Example of gas treatment process architecture.
LNG_Spring2012_81-84.indd 82 14/03/2012 14:06
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84 / LNGINDUSTRY / Spring2012
into the MDEA was small. Thus, a semi-lean solution exited the
tail gas treatment unit (HCR).
It was convenient to strip off the H
S, loading this semi-lean
amine stream and kick it back to the Claus unit. For this reason,
two options have been investigated. Firstly, the installation of a
dedicated amine regenerator in the HCR area, or secondly, the
integration of the amine end of the HCR with the enrichment
Because the semi-lean flow rate coming from the HCR was
only 10% of overall amine circulating in the enrichment box, the
second option was chosen, with the aim of reducing the
investment cost.
Thus, the semi-lean amine stream was sent to the enrichment
absorber tower on an intermediate try in order to maximise the
service factor of this stream. The rich amine from the bottom of
the enrichment absorber tower was sent to a common
regeneration tower from where the lean MDEA was split, after
cooling in two streams: approximately 90% of the overall
flow rate was routed towards the enrichment absorber tower and
the rest to the HCR absorber tower. Figure 3 portrays the
integrated process scheme.
It is noteworthy that the design was aimed at achieving an
enrichment ratio (the H
S concentration ratio between the
enriched acid gas and the feed of the enrichment section) of
approximately five.
Accordingly, the trays of the absorber and the regenerator
towers were designed on the base of the mass transfer rate
criteria. Under this condition, the concentration of the H
S in the
acid gas leaving the regeneration tower ranged from 21% to
45% vol., depending upon the operating case.
This latter concentration could be handled by a
Claus thermal reactor operated according to the conventional
straight through configuration (all the acid was passed through
the main furnace burner along with the combustion air).
The lower limit could not be managed without using fuel gas
for supporting the combustion because, as mentioned earlier, the
flame produced by a very lean acid gas would be erratic and the
plant operation would become difficult, if not impossible.
The fuel supporting mode, however, bears the drawback of
further dilution of the process gas with flue gases (inert relative to
Claus process). The increased level of inert limits the overall plant
Thus the fuel support mode operation was limited only to
operational cases of very lean acid gases (H
S concentration less
than 27% vol.) processing.
For acid gases having a concentration between 27% and
45% vol., the stability of the flames was achieved by bypassing
part of the acid gas so that only a portion of the feed was
introduced into the main burner along with the whole air flow
The other part is injected downstream into the second zone
of the Claus thermal reactor through a distribution ring
constructed out of refractory material, located in between the
burner tile and the tube sheet of the waste heat boiler (double
chamber configuration). In this way, the temperature of the first
zone of the reactor and thus, flame stability, could be kept stable
by adjusting the bypass flow rate of the H
S concentration in the
In conclusion, the Claus thermal reactor operation modes for
the case study were:
S concentration in the feed > 45% (straight through
27% < H
S concentration in the feed < 45% (double
S concentration in the feed < 27% (fuel support mode).
The incinerator of the SRU was designed to handle the
off-gas from the absorber tower of both the sweetening unit and
the HCR unit containing 300 ppm vol. and 150 200 ppm vol. of
S, respectively. The sweep air coming from the sulfur pit was
routed towards the incinerator as well. The effluent discharged to
the atmosphere had less than 7 ppm vol. of H
Eventually, the steam demand of gas field facilities was a
further area in which the integration of a sulfur recovery unit
offered major benefits.
In the case study, because the overall capacity of the plant was
high (570 tpd), the recovery of heat developed by the Claus unit
was geared to produce saturated steam at 45 barg. Part of this
steam was used to supply energy to the Claus process and the rest
delivered to the high pressure steam network (at 40 barg) of the
gas field facility after having been superheated to 450 C in a
dedicated superheater coil located in the incinerator.
Part of the enthalpy of the effluent gas from the incinerator
was also recovered to produce superheated steam at 45 barg and
450 C. The incinerator was therefore fitted with a waste heat
boiler and two superheater coils. The first coils superheated the
steam coming from the Claus unit and the second the steam
generated by the incinerator waste heat boiler. Both sets of
superheated steam were mixed and delivered to the steam
network of the gas field facilities.
In conclusion, selecting the best processing
strategies for sour gas field development is
not a trivial task. It requires a careful selection
of solvents for the acid gas removal and acid
gas enrichment and a holistic approach to
integrate, cost-effectively, the boxes of the
sour gas treatment plant.
In particular, the Claus arrangement and
the related operating modes have to be
addressed in connection with the operation of
the other units of the plant. Furthermore, the
tail gas treatment process has to be selected in
the light of the potential integration with
other units for the best economic operation of
the gas complex.
Figure 3. Siirtec Nigis integrated HCR - PFD.
LNG_Spring2012_81-84.indd 84 14/03/2012 14:06
Spring2012 / LNGINDUSTRY / 85
or many years LNG has been primarily used for electric
power generation and domestic heating. However, today
natural gas is gaining momentum as a transportation
fuel replacing diesel in marine and trucking applications and
bus fleets. The emergence of natural gas as a transportation
fuel began primarily through the use of compressed natural
gas (CNG) in major cities as a means to ease pollution caused
by the heavy concentration of vehicular traffic. In many cases
the acceptance of natural gas as an alternative transportation
fuel was not automatic, but required government incentives
or regulations in order to effect the change. But the
growth is now being spurred on by fundamental economic
considerations rooted in the growing gap between crude oil
and natural gas prices. The favourable long term prospects
Scaling it down
James Solomon, Jr., Air Products, USA,
explains how small to mid-sized plants are
likely to play a key role in servicing demand.
Figure 1.
Baseload LNG plant
(courtesy of Segas LNG).
LNG_Spring2012_85-88.indd 85 16/03/2012 09:53
86 / LNGINDUSTRY / Spring2012
for an abundant natural gas supply indicate that this gap will
remain for an extended period of time, stimulating further
investment in LNG vehicles and fuelling facilities.
Advances driven by market
Advances in LNG technology have always been driven by
changing market requirements, which have continually
presented the LNG industry with new sets of challenges.
Up until recently, most LNG plants possessed very similar
attributes - all were land based export plants, most were
designed to employ the largest equipment that was proven
at the time, and all but one were in tropical locations.
However, these factors no longer hold true for some recently
established projects and many developing ones. Most known
large gas fields are already in production. Many new gas
finds are smaller, offshore, more remote or in Arctic locations.
In addition, some newer LNG plants will be designed to
produce LNG for domestic, rather than export, markets. As
a result, the challenges of establishing new projects have
multiplied and the market is demanding new solutions.
Designing a plant configuration to meet the smaller scale
requirements of the emerging transportation fuel market
is yet another challenge. But the dedicated contributors to
the industry have demonstrated time and again an ability to
meet a wide variety of challenges posed by an ever changing
Although the trend in recent years has been towards
larger LNG plants in order to capture economies of scale, it
is often overlooked that approximately half of the operating
LNG plants today have capacities of 0.5 - 2.5 million tpy.
Although these plants were historically built as
baseload plants, today plants in this size range are termed
mid-sized. In addition, for a number of years there was a
very active market for LNG plants only one tenth the size of
todays mid-sized plants. Most of these plants, in the
100 - 300 tpd range were built as peak shaving plants,
primarily in the USA. In its typical application, a peak shaving
plant would consist of a relatively small liquefaction plant
and large field erected LNG storage tank located adjacent to
a natural gas pipeline. During summer months, when
natural gas demand is low, gas would be withdrawn from
the pipeline and liquefied for storage. During cold weather
months, when pipeline demand is higher, the stored LNG
would be vaporised and injected into the pipeline to meet
peak winter demand. Thus, the peak shaving plant would
operate only a few months per year in order to fill the
available storage, and then be idled when the storage
capacity became full and during times of re-vaporisation.
As the transportation fuel market struggles to become
established, very small demonstration plants
(sometimes termed micro plants) may be a prerequisite to
spur local demand. However, as the market develops, plants
will need to be sized to economically meet the growing
demand, and this is where mid-size and traditional peak
shaver size plants will be required. So, while the market
drivers for small and mid-size LNG plants may be new, there
is significant experience within the LNG industry in supplying
technology and equipment for these size ranges.
Renewed interest in small and
mid-sized plants
In very simple terms, the production of LNG requires heat
exchange between natural gas and a refrigerant cold enough
to effect liquefaction. There are many choices of refrigerants,
but they fall into two general categories: mixed refrigerants
or pure component refrigerants. The majority of large LNG
trains in operation today use either a pre-cooled mixed
refrigerant or pure component cascade liquefaction process.
The propane pre-cooled mixed refrigerant technology is the
most prevalent liquefaction process in use today, followed by
the cascade process technology.
Partly due to the growing transportation fuel market,
there is a renewed interest in small and medium-sized plants
as a way to monetise lower volume gas reserves at reduced
cost. Because smaller plants cannot achieve the same
economies of scale as larger plants, many developers focus
on reducing capital. Additionally, project developers are
focusing on execution strategies that facilitate shorter project
schedules, accelerating time to onstream and thus, quicker
monetary returns. However, in order to be economically
viable in the long term, a small or medium-sized LNG plant
must minimise downtime, maintenance, and lost production
just like a large plant. For small and mid-size requirements,
either pure component nitrogen refrigeration or single mixed
refrigerant (SMR) systems may be an ideal fit.
Figure 2. LNG peak shaving plant.
Figure 3. Nitrogen recycle refrigeration process.
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Nitrogen recycle LNG liquefier
In the hope of reducing capital, nitrogen (N
) expander cycles
are often considered for smaller plants due to their simplicity.
A simple nitrogen recycle system is shown in Figure 3. The
nitrogen recycle system is easy to operate and has superior
turndown efficiency, and the nitrogen used as a refrigerant
is non-flammable and environmentally benign. The use of
nitrogen also eliminates the need to store hydrocarbon
refrigerants, as required by mixed refrigerant systems. For
this reason, nitrogen cycles are also being considered for
floating plant applications. In addition, the nitrogen recycle
liquefier can be highly modularised to minimise field
construction cost.
Attractive as these attributes are, most N
expander LNG
trains operating today are less than 0.1 million tpy and are
used in peak shaving or interruptible service. Although
simple, these cycles suffer from relatively low process
efficiency since the natural gas must be cooled, condensed
and sub-cooled all against a single-phase vapour refrigerant,
limiting their practical size. Nevertheless, a simple N

refrigeration system may be acceptable for small
requirements, or where low capital is the main driving force,
and efficiency is not heavily weighted in the project
However, in order to supply LNG to niche markets such as
transportation fuel, the market demand may require a higher
capacity plant that will need to be designed to operate
continuously. For these applications, operating and
maintenance costs will tend to be weighted more heavily in
the evaluation, making a higher efficiency system relatively
more attractive. To make up for inefficiencies and the limited
size of proven equipment, multiple levels of expansion and
parallel equipment may be added as shown in Figure 4.
Adding pre-cooling to the nitrogen system can also increase
its efficiency, but these enhancements also increase the
number of pieces of equipment resulting in a more
complicated plant.
Mixed refrigerant process
For larger capacity requirements, the SMR LNG process can
provide proven performance and reliability. SMR processes are
more efficient than simple N
expander cycles, require fewer
rotating equipment items and are well proven in this size
range. The refrigerant consists of a mixture of hydrocarbons
and nitrogen optimised to match the natural gas cooling
curve as closely as possible. SMR cycles are still significantly
less efficient than pre-cooled mixed refrigerant cycles, which
tends to limit the practical size of a single train before
parallel equipment is required. However, when considering
efficiency, operating simplicity and capital in an overall project
evaluation, the market has proven that SMR systems are well
suited to mid-size applications.
Rising to the challenge
There is no single technical solution to meet every plant
requirement of a given size range. Figure 6 provides some
general guidelines, but the ideal solution for any particular
situation will depend on a variety of issues specific to a given
opportunity. Plant scale is only one aspect to be considered.
Energy costs, capital constraints and operating philosophy
are only a few of the other factors that should be taken into
account in the evaluation process. Throughout the history of
the LNG industry, technical advancements have always been
driven by market requirements. This will continue to be the
case in the future as the next generation of LNG plants is
built to meet the growing demand for LNG transportation
Figure 5. Single mixed-refrigerant liquefier.
Figure 4. Improved efficiency nitrogen recycle liquefier.
Figure 6. Liquefaction technology vs. plant scale.
LNG_Spring2012_85-88.indd 88 16/03/2012 09:53
Spring2012 / LNGINDUSTRY / 89
as turbines play a fundamental role in LNG
production, with many LNG plants using gas turbines
to drive compressors used to cool and liquefy gas
for transportation. As such, keeping gas turbines running
effectively is key to maximising plant productivity and
reducing expensive, unscheduled downtime.
One challenge to maintaining effective gas turbine
performance is controlling the formation of varnish, a
catch all term for deposits found in gas turbine operation
either in the form of sludge or varnish. Varnish can have a
significant detrimental impact on gas turbine operation but
by selecting the right oils, together with improved
maintenance strategies, companies can help minimise its
build-up and extend gas turbine life.
Compared to 20 years ago, there is now much greater
awareness of varnish issues. Based on limited experience,
some companies may hold the incorrect view that newer
technology turbine oils have caused increasing amounts of
gas turbine hydraulic varnish. However, direct field
experience, combined with test rig comparisons, confirms
that advancements in some turbine oil formulations have
improved turbine oil life with less varnish generation. For
example, ExxonMobil Lubricants & Petroleum Specialties
Akram Reda, ExxonMobil
Lubricants and Specialties,
EAME, explains the benefits of
choosing the right lubrication
oil for gas turbines.
LNG_Spring2012_89-92.indd 89 14/03/2012 14:18
90 / LNGINDUSTRY / Spring2012
has demonstrated that newer turbine oils have performed with
improved reliability in the same service as older, now retired
turbine oil formulations.
Understanding where varnish
comes from
One of the problems facing LNG operators is understanding
why some turbines are more susceptible to varnish than
others. The answer lies in varnish formation theory, which
looks at the different ways varnish can occur. There are three
main mechanisms of varnish formation: thermal degradation
of oil, which can take place at temperatures above 300 C,
oxidation, (a reaction that acts to decompose the oil) and
contamination of the oil, through either internal or external
While treating the symptoms of varnish through mitigation
technologies may extend service life, the important factors for
reliable operation are starting with a clean system and using a
turbine oil designed to prevent varnish from forming. A well
balanced formulation that utilises high performance base stocks
and advanced technology additives is the first line of defence
against the formation of sludge and varnish.
What to look for in turbine oil?
By selecting an oil with highly refined base oils and a proper
balance of advanced technology additives, operators are less
likely to see their oil compromised during long term service.
In general, higher group base stocks blended with advanced
technology additives offer the strongest defence against
In finding a well balanced gas turbine lubricant,
maintenance personnel should consider analysing a lubricants
deposit control, oxidation stability, air release and foam control,
filterability, rust and corrosion, and wear protection in their
selection of an appropriate lubricant that will mitigate and
manage varnish formation.
Deposit control
As mentioned earlier, varnish can be generated by
thermal degradation, oxidation and contamination. Some oils
generate more deposits than others, but advanced turbine oils
are formulated to limit the generation of sludge and varnish,
while keeping deposits in suspension.
Oxidation stability
Turbine bearing temperatures approaching 250 C, in
combination with equipment metals, contaminants and
entrained air all contribute to oxidation, which precedes varnish
formation. Operators should look for higher level turbine oil
base stocks and advanced antioxidants which can provide
protection against oxidation when properly formulated.
Air release and foam control
Entrained air in an oil with inferior air release performance
may be compressed in turbine bearings or high pressure
hydraulics and cause adiabatic compression (aka micro
dieseling). Adiabatic compression could cause localised elevated
oil temperatures that may promote the formation of varnish.
In addition, inferior air release can result in less than precise
control in system hydraulics.
Similarly, excessive surface level foaming can accelerate
oxidation and can lead to operational issues, such as the
inability to measure lubricant levels correctly, or lead to
reservoir overflow from vents. Oils formulated to have rapid air
release and minimal foam formation will provide superior
protection against the formation of varnish.
The filterability characteristic of a fluid can be defined as its
ability to pass through a filter with minimal pressure drop. An
oil with poor filterability will foul filters faster that an oil with
good filterability. This often translates into more frequent filter
Anti-rust and corrosion protection
Rust and corrosion can also contribute to oxidation and the
formation of contaminant-based varnish. Oils formulated
to minimise rust and corrosion will reduce the likelihood of
varnish formation.
Wear protection
Wear on high pressure hydraulics, the gears of the accessory
gearbox, generator reduction gear or turning gear, can
directly impact operation of gas turbine performance. Wear
material from these components can indirectly be a source of
varnish formation since the wear metals will act as an oxidation
A balanced formulation
Varnish formation and management are greatly impacted
by the oils formulation. It is anticipated that a gas turbine
utilising a lubricant formulated with highly refined base oils
Figure 2. The spider chart above graphically demonstrates
the concept of a balanced formulation.
Figure 1. Photos above show varnish formation on three
market available oils and an ExxonMobil Research and
Engineering developmental oil from test rig inspections.
LNG_Spring2012_89-92.indd 90 14/03/2012 14:18
and a proper balance of advanced technology additives will
be less likely to be compromised during long term service.
In general, higher group base stocks blended with advanced
technology additives offer the best first line of defence against
One of the main challenges is formulating an oil that
achieves key performance goals without sacrificing other oil
attributes. The leading attribute of a low varnish/sludge oil is
deposit control. However, achieving this may lead to some
performance characteristics being less than optimal, like
Less than optimal demulsibility is considered an acceptable
trade-off for a substantial improvement in improved deposit
control since gas turbines operate with bearing and reservoir
operating temperatures that will volatise minor water
Rig testing turbine oils
To help further its understanding of varnish and oil
performance, ExxonMobil Research and Engineering has
designed and constructed turbine oil developmental test rigs,
called Valve Varnish Rig Test (VVRT), that simulate real world
service. These test rigs are used to develop next generation
turbine oils and to evaluate oils in use today.
Testing oils in a rig offers evaluations closer to real world
conditions than the typical glassware testing traditionally used
in the industry.
Monitoring and predicting
Once the appropriate lubricant is selected, it is
imperative that its performance is monitored through
a proactive oil analysis programme. Sampling and
testing should be done at least quarterly, and it is
usually beneficial to perform it more frequently as the
oil condition degrades. By trending the results of these
tests, maintenance personnel can gain valuable insights
into the condition of the oil, the equipment and the
remaining service life of both.
Todays available historical oil analysis testing
methods cannot accurately predict varnish,
although the industry has been working to develop
methods to better predict varnish in gas turbine
hydraulic systems with a combination of Ultra
Centrifuge (UC), Membrane Patch Colorimetry
(MPC) and Linear Sweep Voltammetry (RULER)
While these tests can be helpful, care should be
taken regarding action plans based on test
performance. Action plans from these tests should be
application and oil specific. Application specific action
plans consider that gas turbines with combined
hydraulic and bearing reservoirs are more varnish
sensitive than a steam turbine with separate hydraulics.
Oil specific action plans refer to the formulation
chemistry of the turbine oil.
Making the right choice
Understanding how varnish is made and its impact
should provide plant personnel with tools to enhance
equipment reliability and allow them to focus on
The key to trouble free operation is selecting a high quality
turbine oil that has been validated in field-like conditions.
Setting the stage with a well formulated oil in a properly
flushed turbine and utilising the proper prediction tools will
offer years of reliable operation. But selecting the right oil is
not a simple choice, and LNG operators should work with
expert lubricant manufacturers and oil analysis providers who
have the application expertise needed to help vanquish
Figure 3. The chart above shows relative comparisons
of eight turbine oils based on hours to valve stick, in
ExxonMobil Research and Engineerings valve varnish rig
LNG_Spring2012_89-92.indd 91 14/03/2012 14:18
24-27 April 2012
Marriott Riverwalk | San Antonio | Texas
Distinguished Speakers Include:
The Premier Global LNG Gathering in the Americas
Championing a New Era for Gas & LNG in the Americas
Call Tyler Forbes on +44 20 7978 0061 or email
Senator the Hon.
Kevin C. Ramnarine
Minister of Energy &
Energy Afairs
Trinidad & Tobago
Davis Thames
Cheniere Marketing
Rob Bryngelson
Excelerate Energy
Clay Harris
President & CEO
GDF Suez LNG North
America LLC
Rudolf Araneda
LNG_Spring2012_89-92.indd 92 14/03/2012 14:18
World Gas Conference 2012
LNG Industry presents a small selection
of companies that will be exhibiting
at the 25
World Gas Conference,
Kuala Lumpur, 4 - 8 June 2012.
Air Products
ir Products is the world leader in natural gas liquefaction
technology. Our experience extends from peak shaving
plants producing less than 0.1 million tpy of LNG to
the largest baseload plants in the world using the new AP-X

LNG process. Our MCR

main cryogenic heat exchangers and

natural gas liquefaction processes have become the worlds
standard for baseload LNG because of their reliability, high
efficiency and operational flexibility. With over 40 years of
LNG experience, Air Products has built more than 80 main
cryogenic heat exchangers for customers in 13 countries
worldwide. Air Products and Chemicals, Inc., a global
company with annual sales of US$ 10 billion, has a leading
market position in industrial gases and selected chemicals. The
company is recognised for its innovative culture, operational
excellence and commitment to safety and the environment.
Corporate headquarters are located in eastern Pennsylvania,
USA. Air Products operates in 40 countries and has more than
18 000 employees around the globe.
Please visit us at WGC2012 at stand number 9310.
Exhibitor Preview
LNG_Spring2012_93-96.indd 93 14/03/2012 16:02
World Gas Conference Preview
Arc Energy Resources
rc Energy Resources is one of the UKs leading
specialists in weld overlay cladding and fabrication
for the oil and gas industry. The companys expertise
provides protection against corrosion and wear for a variety
of process and pipeline equipment for use in any hostile
The company recently made a major investment in two
new Rotating Head welding machines costing 500 000.
This has increased productivity and extended the size and
scope of work it can handle, which now includes
complicated component geometries for the full or partial
cladding and fabrication of a huge range of component
sizes weighing up to 15 t. The companys in-house
designed cladding workstations feature state-of-the-art
control systems developed to suit its customers specialised
engineering requirements, and can clad bores up to 4 m in
diameter and areas of restricted access within bores as
small as 20 mm in diameter. Arc Energy also offers in-house
test weld, heat treatment, PMI and NDT facilities.
Industry certifications include ISO 9001:2008 quality
management, ISO 3834-2 fusion welding of metallic
materials, and the internationally renowned ASME U and
R Stamps, as well as ISO 14001:2004 environment
management, Investors in People and OHSAS 18001:2007
Health & Safety management system.
Have We Entered
the Golden Age
for Gas?
Find out more at Gastech 2012
LNG_Spring2012_93-96.indd 94 14/03/2012 16:02
World Gas Conference Preview
Gas Technology Institute (GTI)
as Technology Institute (GTI) is the leading research,
development, and training organisation serving the
natural gas industry and energy markets. For more
than 70 years, GTI has been meeting the nations energy and
environmental challenges by developing technology-based
solutions for consumers, industry and government. Specific
LNG technology areas include storage, safety, combustion and
interchangeability topics.
Our experience in technology development combined
with our educational expertise enables GTI to deliver high
quality training programmes and materials that meet
changing industry needs. GTI has been a leader in LNG
training and education since the industrys inception and
holds open-enrollment and private client courses in all aspects
of the LNG industry. Topic areas include an overview of the
LNG industry, terminal design and operations, as well as
detailed training for plant operating personnel. The modular
courses can be customised to address specific client issues and
our programmes accommodate the needs of employees with
varying experience levels.
GTI held the first LNG Conference in Chicago in 1968 and
remains one of three official sponsors. The company has
published the proceedings from LNG1 to LNG16, and its
publications are essential sources of information for anyone
involved in the LNG business.
The Global Gas Industry is Coming to London
The Gastech London conference begins with an exclusive opening address from
Sir Frank Chapman, Chief Executive of BG Group, before opening out with a
fascinating panel debate examining: Have We Entered the Golden Age for Gas?
Conrmed Moderator and Speakers to date:
(Moderator) Martin Houston, Chief Operating Ofcer & Executive Director BG Group
Helge Lund, President & Chief Executive Ofcer Statoil
Shigeru Muraki, Representative Director, Executive Vice President
& Chief Executive of Energy Solution Division Tokyo Gas Co Ltd
Hamad Rashid Al-Mohannadi, Managing Director RasGas Company Limited
& Vice-Chairman Qatar Petroleum
Bill Dudley, President & Chief Operating Ofcer Bechtel Corporation
Abdelhamid Zerguine, Chief Executive Ofcer Sonatrach
For more information about becoming a
delegate contact us at
Book before June 30 and take
advantage of our Spring Rate
on your



UK | ExCeL London | 8-11 October 2012
A world leader in natural gas
Hosted by
LNG_Spring2012_93-96.indd 95 14/03/2012 16:02
World Gas Conference Preview
KEMA Gas Consulting & Services
EMA Gas Consulting & Services is an independent, leading
authority and strategic partner on gas and energy market
developments. At the forefront of developments that will
shape the gas market of the future, GCS proactively adds value
to the business of its customers by offering premium consulting,
applied research and operational services. KEMA possesses broad
experience throughout the total energy chain, supplemented
by in-depth knowledge of the gas and LNG industry. Hence, we
are fully capable of integrating the LNG solution into the wider
energy strategy. LNG is one of the solutions, but this development
is not without risk. We strive for maximal value creation and risk
reduction with a special focus on integral solutions.
Over the years we have performed several projects and
assignments varying from market and strategic analysis and
conceptual design to safety and impact assessments, and
feasibility and performance studies. KEMA provides impartial
advice that is directly tailored to the best interests of the individual
client. KEMA can advise stakeholders throughout the various
stages of developing and operating LNG infrastructure as an
independent party with an integrated view on energy.
Visit us at the World Gas Conference, booth 2320.

LNG Industry is audited by the Audit Bureau of Circulations (ABC).
An audit certicate is available on request from our sales department.
ABC 44
CB&I OFC & 61
ENERGY GLOBAL 24 & 62 & 79
GASTECH 2012 94 & 95
GTT 51
LNG 17 87
UOP 55
DF SUEZ develops its businesses (electricity, natural gas,
energy and environmental services) around a model based
on responsible growth to take up todays major challenges:
meeting energy needs, ensuring the security of supply, fighting
against climate change and maximising the use of resources.
The group provides highly efficient and innovative solutions
to individuals, cities and businesses by relying on diversified gas
supply sources, flexible and low-emission power generation as
well as unique expertise in four key sectors: LNG, energy
efficiency services, independent power production and
environmental services.
GDF SUEZ employs 218 900 people worldwide and achieved
revenues of f 90.7 billion in 2011. The group is listed on the
Paris, Brussels and Luxembourg stock exchanges and is
represented in the main international indices: CAC 40, BEL 20,
DJ Stoxx 50, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100,
MSCI Europe, ASPI Eurozone and ECPI Ethical Index EMU.
Key group figures
218 900 employees in close to 70 countries.
Including 61 250 in electricity and gas.
77 200 in energy services.
80 450 in environmental services.
f 90.7 billion in 2011 revenues.
e 11 billion in investments per year over 2011 - 2013.
1100 researchers and experts at nine R&D centres.
100 000 new hires between 2011 and 2015: 50% in France
and 10 000 in Belgium.
First company in the utilities sector worldwide
(Forbes Global 2000).
Most valuable brand in the utilities sector worldwide
(Brand Finance Global 500).
LNG_Spring2012_93-96.indd 96 19/03/2012 10:34
Kobelco LNG BOG Compressors
Tokyo +81-3-5739-6771
Munich +49-89-242-18424
Kobelco EDTI
Compressors, Inc.
Houston, Texas
Kobelco reciprocating compressors
deliver robust performance in LNG
boil-off gas and booster service.
The API-618-compliant, horizontal
design delivers the industrys
broadest range of capabilities:
I inlet temperatures down to
-162C (-260F )
I discharge pressures up to
220 bar (3,200 psi)
I power as high as12,000 kW (16,000 hp).
Rugged design features like die-forged steel
connecting rods, steel-backed aluminum bearings
and long-life valves provide exceptionally high
reliability and dependable
long-term value.
Youll enjoy low maintenance
too, with extended continuous
operating intervals and design
features that make routine
service simpler, faster and more
economical to perform.
For LNG solutions, turn to Kobelco a leader in
gas compression technology since 1915.
Kobelco LNG BOG Compressors
high performance at low temperatures.
in the World
LNG_Spring2012_IBC.indd 1 14/03/2012 15:22
Our mission is a source of pride each and every day: responding
to todays needs while shaping the world of tomorrow.
Throughout the world, the men and women at GDF SUEZ focus their businesses on responsible growth to
take up todays major energy and environmental challenges: responding to energy needs, fighting against
climate change, ensuring the security of supply and maximizing the use of resources. For 50 years, the
Group is a leader of liquefied natural gas (LNG). GDF SUEZ has developed successfully relationships with
its partners on long term basis and all along the LNG chain. Today, GDF SUEZ is the 1st LNG importer in
the Atlantic Basin, and the 3rd worldwide. The Group has a unique, flexible and diversified LNG portfolio.
At the cutting edge of innovation, with the regasification vessels and the development of a floating
liquefaction project, LNG contributes to our customers safety of supply in order to satisfy daily their
energy needs. Thus, LNG represents almost 30% of the GDF SUEZ long term natural gas supplies portfolio.





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