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LNG Fundamentals Howard Thomas

The World is Filled with

Knowledge, but Very Little

Understanding – Ervin Welsh

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LNG Small Part of Hydrocarbon Industry

Processing Gas

Processing

Gas Well

Well Fluid Gas

Natural Gas Liquids (NGL)

LNG Carrier Storage Storage

LNG Processing Regasification Customer

Gas

Customer

Customer

Storage Tanker Refiner

Processing

Tanker Refiner Storage

Processing

"Dead" Crude

"Live" Crude "Dead" Crude

Well Fluid

Oil Well

Processing

"Live" Condensate

(NGL)

Gas

Tanker Storage

Tanker Storage

Customer

Customer

Propane

Butane

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Here to Stay

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LNG Overview

LNG Chain

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LNG Plant Overview

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Darwin LNG

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Competing LNG Technologies

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Bladin Point LNG Plant

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INPEX Ichthys

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Offshore LNG

LNG Production

Storage

Gas reservoir

Land-based

LNG

Chain

Offshore

LNG

Chain

Floating

or

Gravity Based?

LNG

Plant

Storage

Regasification

User Distribution

Local Power Utility

Companies

Industrial/

Commercial

Gas Consumers

Domestic

Gas Consumers

Reception

Terminal

Floating

or

Gravity Based?

Open

Waters

Sheltered

Waters

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Prelude

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LNG Carrier

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Gasification

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Natural Gas to LNG Process

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Natural Gas

Composition

 Typical

AnalysisRange

(mole %)  (mole %)

 Methane 87.6  87.0 - 97.0

 Ethane 5.6  1.5 - 7.0

 Propane 2  0.1 - 2.5

Other Alkanes 0.9  0.01 - 1.0

 Nitrogen 0.7  0.2 - 5.5

 Carbon Dioxide 3.2  0.1 - 5.0

Component

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Gas Treatment

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Cascade Cooling

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Methane, Ethylene and Propane Hazards

20

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Domestic Fridge

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Industrial Refrig

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23

Boiling Point V's Pressure

-200

-150

-100

-50

0

50

100

0.00 0.50 1.00 1.50 2.00 2.50 3.00

Pressure MPa gauge

Tem

pera

ture

C

Methane

Ethylene

Propane

LNG Storage Tanks

-161°C @ 3.5KPag

Ethylene Storage

-16°C @ 1.6MPa

Propane Storage

42°C @ 1.6MPa Propane

-42°C @ 3.5KPag Refrigerant Properties

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Optimised Cascade Process

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Temperature Profile

Cryogenics

Cold Burns

Insulation for Cryogenic Pipework

Asphyxiation

Low Temperature Embrittlement

Alloy DT (deg C) ASME Code AS/NZ Code

C-Mn -46 A333 Gr 1 AS 4041/1677

2.25% Ni Steel -73 A333 Gr 7 AS 4041/1677

3.5% Ni Steel -101 A333 Gr 3 AS 4041/1677

9% Ni Steel -196 A333 Gr 8 AS 4041/1677

304 Stainless -254 A312 AS 4041/1677

304L Stainless -254 A312 AS 4041/1677

316 Stainless -196 A312 AS 4041/1677

316L Stainless -196 A312 AS 4041/1677

347 Stainless -254 A312 AS 4041/1677

Thermal Stress

Material Coefficient of Expansion

Carbon Steel 5.8 x 10-6

Stainless Steel 9.6 x 10-6

Aluminium 13.3 x 10-6

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Pressure Profile

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Piping Profile

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LNG Transfer Vessel Mounted Pump

34

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LNG Storage

35

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LNG Loading Arms

36

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Powered Emergency Release Couplings (PERCs)

37

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Hydraulic Quick Connector

38

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39

LNG Carriers

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SME Phase 1

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Service Opportunities

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Business Drivers

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Business Functions

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Complex Operations

Australian Standards for LNG

American standard NFPA 59A – Standard for the production, storage,

and handling of liquefied natural gas

AS 1940 - The storage and handling of flammable and combustible

liquids

AS1170.2 Structural design actions: wind actions

AS1170.4 Structural design actions: earthquake design actions in

Australia

AS1210 Pressure vessels

AS2885 Pipelines—gas and liquid petroleum

AS3846 The handling and transport of dangerous cargoes in port

areas

AS3961 The storage and handling of liquefied natural gas

AS4801 Occupational health and safety management systems

AS4997 Guidelines for the design of marine structures

AS/NZS 60079.10 Explosive atmospheres - classification of areas -

explosive gas atmospheres

AS IEC61511 Functional safety – safety instrumented systems for the

process industry sector

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Service Opportunities

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Rotable Assets

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Brownfield Modifications

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Collaboration

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Productivity First Law of Economics Adam Smith

1776

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Why Collaborate Now?

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New Reality

Quick Wins (Slash and Burn)

Post Quick Wins

Potential for Collaboration

Oil and Gas Lags

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Commodity Procurement Practices

Project practices

concentrate on cost

Project culture

encourages compliance

Forces a commodity

services market

Scale wins ‘Economies

of Scale’

Scale resists change

Lack of change

drives poor productivity

A commodity

service offers no

competitive

advantage

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Limit to Economies of Scale Smith 1776

Tainter 1988

How do we avoid (or get back to) the point of negative inflexion?

Relationship Building not Selling

Been Done Before

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Macro Economic Cycles Milton Friedman

1976

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Sharing Economy

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Social Networks

All markets are self-organizing networks

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Collaboration Models

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Economies of Scope Cluster Michael Porter

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Economies of Speciality Joint Venture

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Formal Network

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Message

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Economies of Specialisation

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Current State Assessment

Exercise

Decision Analysis

Client Leadership and Technical

Team

Experienced Talent

Strategy Design approach & inputs

Gap Definition Program

Directional Setting

Cost Benefit Risk Analysis

Define Performance Requirements

Project Roadmap

Development 1 2 3 4 5

Existing Models

Technical SMEs

Decide Your Strategy SME Maximiser

AC

TIV

ITIE

S

OU

TP

UT

S

› Overall risks and opportunities workshop (ISO 31000)

› Identify business processes to carry forward and new processes that need to be considered for gap closure

› Map the above to the risk mitigations and opportunity pursuits from Risk & Opportunities Workshop

› Define organisational impact for each process area

› Quantify implementation effort

› Quantify business benefits

› Establish decision making criteria for objective function that aligns with project strategies

› Apply analysis for optimised selection of business processes

› Establish project performance standards and goals

› Document the business benefits

› Develop list of project management activities and interdependencies

› Risk and opportunities register with identified mitigations and pursuits

› First pass short list for cost benefit risk analysis

› Optimised portfolio of prioritised business processes

› Develop programme milestones

› Develop schedule of activities

› V-model development.

› Develop Organisational Characteristics and competencies

› Performance standards

› Goals

› V-Model for project

› Organisational characteristics & competencies

OU

TC

OM

ES

› Agreed expectations › Expectations enhanced by advisory experience and insight

› Realistic expectations given limits of budget

› Measurement s that reflect expectations

› Alignment of project tasks with performance expectations

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Questions

Howard Thomas

M +61 429 293 196

P +61 8 9252 1064

E Howard.thomas@tamconsult.com.au

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