11th Pipeline Technology Conference 2016

SGT-750 Gas Turbine Case Study Mexico

Presenter:
Mr. Douglas Petrie
VP Business Development-Pipelines
Dresser Rand a Siemens Business
Houston, Texas, USA

Abstract:
The selection of Gas Turbines requires the evaluation of many criteria. First cost is
important however the long term cost of ownership requires we look at installation cost,
fuel cost and the cost of operation and maintenance.
On a recent project for a pipeline in Mexico CFE was looking for someone to build own
and operate a pipeline for 25 years. The flow varied a great deal and increased
gradually over time so part load fuel consumption and flow flexibility were also important.
In this paper we will review how evaluations were made and discuss some technical
solutions which allowed the owner to achieve greater flow flexibility.
Although industry standards exist for fuel consumption, compressor power requirements
and available turbine horsepower suppliers do not always provide consistent values for
these important pieces of information.
It is important to understand the differences between expected and guaranteed values.
We must also be clear about whether guarantees are for part load conditions or only
valid for full power. Finally we must understand tolerances allowed in common industry
standards such as API 616, API 617 and the ASME power Test Code. (ISO references
will be provided)
Only when all of these items are understood can the user understand the real long term
cost of ownership.

Project Overview:

CFE, the national power company of Mexico, went out for public tender for companies
willing to build own and operate a gas pipeline from El Encino to La Laguna. This will
become part a national grid to bring gas from Texas and provide fuel for power
generation with Mexico. CFE would provide a 25 year contract to pay for gas transport.
The bidders were evaluated on the net present value of the transport cost including the
bidders estimate for fuel. In addition there is a limit to the fuel available and substantial
penalties if the operator exceeds that limit.
The pipeline required compression in order to deliver the contract flow at the contract
pressure.
In December of 2014 CFE formally announced the contract award. The successful
bidder was then the Siemens client on the project.

Technical Solution for Compression:

CFE required that the pipeline be able to perform the design flow and pressure from the
beginning of the contract however the expected flow requirements began at
approximately 50% of the design flow. The flow will increase gradually to the design
condition over the first 8 years of the contract.

In addition years 9 and 10 had a flow which was greater than the eventual design flow.
The compressor selection was further complicated by the expected variations in inlet
pressure. Eventually the client requested approximated 100 variations in compressor
conditions, all or which had to be covered with the compressor selection.

As mentioned above fuel consumption was an important contractual requirement and

the cost of fuel at part load was an important part of the client evaluation.

The compressor solution offered was to provide an alternate “Low Pressure Ratio”
bundle for the initial operation.
By operating with the low pressure bundle during the initial operation and during times
of high inlet pressure alternatives, significant savings were possible using this low
pressure bundle alternative.
Low Ratio Scenario Fuel Savings with LP Bundle

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Scen A HP Scen A LP

The total power required to achieve this compression was approximately 50 MW at site
conditions. The initial evaluation by the client was to use 3+1 arrangement using aero-
derivative turbines.

Evaluation of the number of units:

Siemens proposed a 2+1 solution using the Siemens SGT-750 Gas Turbine which with
an ISO rating of 39 MW. Siemens pointed out we could achieve all the conditions using
the 2+1 configuration and the two bundle solution.

The SGT-750 has a published efficiency 41% which is significantly better than the 3+1
solutions

Evaluating Fuel Cost

Despite the above saving in fuel using the Siemens compression solution the initial
evaluation by the client showed the Aero-derivative turbines using a 3+1 solution had
lower fuel consumption.

Given that the ISO turbine efficiency is significantly better it seemed unlikely that even
at part load conditions the site efficiency and fuel consumption could be worse. We sat
with the client and worked with them to review their evaluation process and ensure that
the comparison was “apples to apples”. Three items were found to be areas for
additional evaluation.

1. Guarantee vs. Nominal or Expected heat rates: As the fuel consumption was
such an import part of the contract the client had asked for guarantee values
rather than an expected or nominal value. Once all bidder has submitted
Guaranteed values the difference was 3-4%
2. Guaranteed fuel rates at part load conditions: Once again due to the importance
of fuel at part load, the client requested a guarantee at an additional off design
point. A test at this point was in addition to the rated point. Siemens was willing
to test and provide a guaranteed value for both the design and one off-design
point.
3. Tolerances: Siemens had originally provided a value with no tolerance for the
guaranteed value. API 616 provides for a value of 3% for heat rate and power
during the factory test.

Note: During the factory acceptance test the machines were in compliance with these
guarantees.

After discussions with the client about these areas of possible confusion a new request
for quote was issued with clear requirements for guarantees at design and normal
conditions. They also clearly indicated values were to be in accordance with API 616.
When new values for heat rate and fuel consumption were issued, it became clear that
the fuel consumption for the SGT-750 was lower. This was true even though we had
offered fewer units and were therefore running in a part load condition more often.

Operation and Maintenance:

The client wanted Siemens to provide a Long Term Service Agreement so they could
define the the long term cost of ownership. Two factors worked to reduce the cost of
the LTSA.

First the frequency of inspection and overhaul of the SGT750 is reduced when running
at reduced load. The “Equivalent” operating hours are calculated as follows
The second factor impacting the cost of operation and maintenance was the “17 days in
17 years” program whereby availability is maximized on the SGT750 due to longer
times between overhaul and an ability to quickly change the turbine core.

As the expectation was that the machines would be running lightly loaded we could
extend the time between overhauls. Below would be a typical schedule at a .8 load
factor:
This provided the client with significant savings over the life of the project.

Summary/Lessons Learned:

• Although more units would imply more operating flexibility we have to look at all
the actual conditions. Innovative Compressor solutions can help.
• Fewer units offer saving in Capex and operating costs
• When evaluating fuel consumption you must make certain you are comparing
“apples to apples”.
• Long Term Service Agreements can give defined operating costs and if running at
reduced load there are options to extend time between overhauls.

Bios (CV)

Mr. Douglas Petrie

Mr. Petrie has been working in the Turbomachinery Industry for 35 years with roles in
Operations, Sales and Project Management. He has been at Siemens since 2011. His
current responsibility is Vice President of Business Development for pipelines for the
Americas. He has a degree in Mechanical Engineering from Clarkson University.

Dresser-Rand a Siemens Business

10730 Telge Road

77095 Houston, TX
Tel: +1 281 656-7069
Mobile: +1 832 341-2640
mailto:doug.petrie@siemens.com
Mr. John Wolohan

Mr. Wolohan has been working in the Turbomachinery Industry for nearly 30 years. He
joined Rolls Royce in 1997 and joined Siemens as a part of the Rolls Royce Energy
acquisition in 2014. He has worked in Engineering, Project Management and Sales and
his current role is Director of Business Development for pipelines for Europe, Africa and
Asia. He has a degree in Mechanical Engineering from Manchester Polytechnic

Dresser-Rand, a Siemens Business

Iceni Centre, Warwick Technology Park,
Warwick, CV34 6DA, UK

Mobile: +44 7921 244227

john.wolohan@siemens.com