Hydrocarbon Processing - August 2021 - GP-14

SPECIAL FOCUS: SMALL-SCALE LNG
VPU-1
PAU-1
tracting clean gas at pressure from gas distribution
pipelines at various locations and
the assumption that the LNG produced
will be sold within a radius of 250 mi as a
diesel replacement fuel. The opportunity
is conditional on various factors, including
the prevailing oil price and location of
the point of use, and the location of a gas
supply to feed the small-scale LNG plant.
Even at relatively low oil prices, opportunities
exist in land-locked countries with difficult
or lengthy transportation logistics.
A case study of an optimized, 60,000VPU-3
VPU-2
FIG.
5. Breakdown and definition of a 60,000-tpy, small-scale LNG plant module.
Generic, 60,000-tpy LNG plant IRR using pipeline gas
100
125
75
50
25
12
14
16
18
20
LNG delivered price, $/MMBtu
FIG. 6. Typical return on investment for a generic, 60,000-tpy, small-scale LNG plant.
A limited number of standard-capacity
module templates were developed within
the small-scale LNG plant range, allowing
for an optimal selection to suit a customer's
needs. Multiple modular trains can be
installed to reach a desired overall output.
An advantage of this approach is that additional
trains can be added in a phased
manner as the market is expanded, significantly
reducing the initial capital cost and
funding requirements.
Lean execution schedule. By applying
a standardized design for a limited
range of plant capacities, the overall
execution schedule can be reduced by
40%-50% when compared to traditionally
executed LNG facilities. A typical
schedule would be 9 mos-12 mos from
order to ready for commissioning, with
modules being shipped to site ex-module
yard within 6 mos-9 mos.
14 JULY/AUGUST 2021 | GasProcessingNews.com
Commercial deployment. Commercial
deployment of small-scale LNG plants is
driven by four key factors:
* The need to reduce greenhouse
gas emissions and decarbonize the
energy industry
* The ability to supply gas
competitively to users
* Alternative means of transporting
gas to productive use
* Regulatory requirements.
The following section illustrates specific
applications of small-scale LNG
plants and highlights the economic viability
of the opportunities.
Diesel fuel replacement. The use of
LNG as a replacement fuel in diesel vehicles,
trains, remote power stations or
other industrial and heating applications
presents an opportunity for small-scale
LNG plants. The concept is based on exGreen
renewable LNG from biogas.
Biogas is obtained from the anaerobic
digestion of domestic, industrial and agricultural
waste and is typically reinjected
to a gas grid or used to generate electricity.
However, anaerobic digestion also
presents opportunities for biogas liquefaction.
In these cases, micro-scale LNG
units of 5,000 tpy (or even smaller) may
find application.
Harvested biogas is typically produced
at atmospheric pressure and contains substantial
quantities of water, N2
and CO2
. It
needs to be compressed and cleaned before
being fed to the liquefaction section
of an LNG plant. This results in higher
capital and operating costs compared to
pipeline gas but could still represent a
profitable opportunity. FIG. 7 illustrates
an expected return on investment for a
5,000-tpy bio-LNG plant.
It is expected that a newly constructed
biogas facility would need to sell the gas
to a small-scale LNG plant at a price of
22
24
Gas price $0/MMBtu
Gas price $2/MMBtu
Gas price $5/MMBtu
Gas price $7/MMBtu
tpy, small-scale LNG plant using pipeline
gas, as described in this article, is shown
in FIG. 6. The figure illustrates expected
returns against gas input price vs. LNG
selling price. As an example, such a plant
can achieve an internal rate of return of
25%, even at a $7/MMBtu gas input price,
when delivering LNG to the customer at a
price of $16/MMBtu.
With a diesel price of $3.16/gal
($22.80/MMBtu), this would reflect a
direct fuel price reduction of around 30%.
In addition, the efficiency of dual-fuel engines
(LNG plus diesel) has, during field
tests, been observed to be around 10%
better than diesel only, resulting in additional
savings for the end user. The actual
cost savings and LNG plant netback price
will depend on local and federal taxes and
will be calculated more precisely for each
specific opportunity.
IRR, %
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Hydrocarbon Processing - August 2021

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