LNG StorageChemical Gas StorageLiquefaction PlantsGas Processing Plants Package Plants

Mid-Scale LNG – Niche Market or Global Trend?

Natural Gas is clean and environmental friendly with a major obstacle - it requires a large volume at ambient conditions. As a result natural gas is generally transported at high pressure or in chilled liquid form:

Pipeline Gas – transported at different pressure levels and ambient temperature. Long distance pipelines operate at around 80 bar.

Compressed Natural Gas (CNG) – transported at 200 bar and ambient temperature.

Liquefied Natural Gas (LNG) – transported at ambient or slightly elevated pressure and -160 °C.

Volume reduction is essential for batch transportation and allows for flexible handling and transportation route selection.

Volume of Natural Gas at different conditions.

Liquefied Natural Gas - LNG

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Pipeline Gas, 1/80 m³

CNG, 1/200 m³

LNG, 1/600 m³

Natural Gas1 m³

(NTP conditions)

Natural gas demand is expected to grow significantlyover the next years. Naturalgas contribution to the energybasket is expected to growfrom 14% to 23% in 2025.

Within the next years natural gasreplaces more and more coal asenergy source for several reasons, e.g.: mining constraints, rehabilitation, environmental issues.

Increasing demand requires development of: new transnational pipelines and LNG terminals accelerated utilization of domestic natural gas fields and other

alternative gas sources.

Natural Gas Demand in India

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Source: Ministry of Petroleum & Natural Gas, 2008-2009

Various smaller gas fields exist with most of them in remote areas or offshore. Only some of them are utilized due to large distances to existing natural gas infrastructures and consumers.

1 Bill. Nm³ of gas is flared and vented each year representing 3.3% of the gross natural gas production.

Coal bed methane gas (CBM) reserves are estimated to 4.6 Trill. Nm³ which is more than four times larger than the natural gas reserves (1.1 Trill. Nm³).

Landfill gas and biogas are “new” alternatives and can be considered as renewables with neutral carbon emission.

Potential Gas Sources in India for Small- and Mid-Scale LNG

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Small Gas Field

Flared Gas

Landfill Gas Biogas

Associated Gas

Coal Bed Gas

World’s known natural gas fields in terms of reservoir size.

More than 75% of the world’s gas fields can be considered as stranded and/or remote.

ConventionalLarge-ScaleLNGSmall- &Mid-ScaleLNG

50 - 100 tcf

0.5 - 1 tcf

0.25 - 0.5 tcf

0.1 - 0.25 tcf

< 0.1 tcf

5 - 50 tcf

1 - 5 tcf

Monetizes Remote/Stranded Gas Reserves

Stranded and/or remote natural gas reserves below 5 tcf (140 Bill. Nm³), e.g. associated gas from oil production, small onshore and offshore gas fields.

Flared and vented gas from single or multiple oil wells using a gathering system.

Monetizes Alternative Gas Sources Coal bed methane gas recovery from

coal resources. Landfill gas or biogas production with

no outlook for pipeline distribution. Gas hydrates on a long term

prospective.

Benefits of Small- and Mid-Scale LNG (I)

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Source: Infield

Solves the Energy Need for Stranded Customers

Customers that never get gas from a pipeline, e.g. small local power plants, local industry or vehicles and ships.

Customers that need LNG, e.g. due to environmental reasons or missing alternative energy sources.

Modest and widely dispersed consumers due to the ease of handling and high flexibility of LNG.

Promotes Cleaner Fuel Alternative “clean” fuel for power

generation, heavy duty trucks, busses and large machinery.

Investments into LNG infrastructure establishes the bridge to renewable energy such as biogas.

Comparison of fuel consumption and CO2 emissions.

Benefits of Small- and Mid-Scale LNG (II)

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Improves Cost and Capital Efficiency Fuel cost provides window of opportunity for

small and mid-scale liquefaction plants and LNG terminals for consumers.

Lower infrastructure cost due to size and simplicity compared to pipeline installations.

Infrastructure can be adjusted in line with growing demand based on proven off-the-shelf technologies.

Provides Faster Mobilization and Higher Flexibility

Faster to implement and provides locational flexibility due to ease of handling and storage.

Supply of LNG with trucks is faster than building a pipeline.

For offshore gas fields FLNGs are capable of rapid development and subsequent relocation.

Comparison of fuel prices.

Cost of power generation using LNG is 50% less than with coal, when considering conventional environmental abatement.

Benefits of Small- and Mid-Scale LNG (III)

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Benefits of Small- and Mid-Scale LNG (IV)

Lowers Market Entry Barriers Makes it feasible for several suppliers

of natural gas to compete for sales in a region, without being dependent on third-party access to pipelines.

Avoids committing to large investment funds against sales, reducing the overall financial risk, e.g. no commitment to a future pipeline has to be made upfront.

LNG based supply systems creates real options by leaving flexibility in whether and when to move to the next steps in developing the supply chain. This is particular relevant where traditional fuels are well established and the sales growth is generally slow.

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Import Terminal Small LNG Carrier

Intermediate StorageLiquefaction Plant

Truck Loading Truck Distribution

Satellite Station Fuel / Filling Station

Supply Chain Elements for Small- and Mid-Scale LNG

Solutions

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Satellite Station

LNG FPSO (FLNG)

Sea Transport

LNG FSRU

Pipeline

Liquefaction *

* including upstream pre-treatment

Export Terminal

Import Terminal

CNG Station

City Gas Network

Regasification

Cylinder Station

LNG Fuel Station

LNG Filling Station

Land Transport

Distribution

CNG Fuel Station

Small Consumer

Sea Transport

Distribution

LNG Storage

Various proven liquefaction technologies are available on the market using expander or mixed refrigerant cycles.

Stranded gas is too far away from the market and/or too small to monetize otherwise. The value of the gas can be considered much lower than conventional gas sources.

For world-scale plants a high efficiency is essential whereas for small- and mid-scale plants the key to success is to compensate the negative effect of the economy of scale: Use proven of-the-shelf equipments Keep the process as simple as possible Standardize and modularize plant design

and construction Optimize the balance between cost and

energy efficiency

Cost of liquefaction plants for various plant capacities.

Small- and Mid-Scale Liquefaction

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TGE as the main contractor for the Shan Shan liquefaction plant has been the pioneer in small- and mid-scale LNG. Key drivers for the investment decision were:Availability of remote sources of clean energy ready to monetizeUnsatisfied demand for gas in Eastern ChinaNo pipeline system available

Location: Shan Shan, Xinjiang, Western China

Capacity: 1.5 Mill. Nm³/d(0.432 mtpa, 54 tph)

Plot area: 490 m x 585 m

Process: Linde Multi Stage Mixed Refrigerant (LIMUM) processwith CWHE (2 m / 3 m x 43 m)

8.5 MW feed gas compressor

MEA gas treatment

20 MW cycle compressor driver

30,000 m³ storage tank

320 m³/h truck loading station for 100 containers in 16 hours

Small- and Mid-Scale LiquefactionShan Shan Liquefaction Plant,

Xinjiang, China

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TGE together with TGE Marine has developed small- and mid-scale LNG FPSO solutions based on the Shan Shan plant design and LNG offshore experience to:Monetize small stranded offshore gas fields with no nearby infrastructureSupply energy to isolated islandsGenerate early cash flow as “early production system” for larger gas fields

Small- and Mid-Scale LiquefactionLNG FPSOs for Small Offshore Gas

Fields

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LNG Production 0.5 mtpa 1.0 mtpa

Length x Breadth x Depth

146 m x 45 m x 22 m 205 m x 54 m x 24 m

Deadweight 29,000 t 37,000 t

Storage 40,000 m³, 4 IMO type C tanks

60,000 m³, 6 IMO type C tanks

Liquefaction 1 train, Linde LIMUM process

2 trains, Linde LIMUM process

Required Reservoir Size

0.5 tcf for 20 years operation

1.0 tcf for 20 years operation

For the local transportation of LNG mobile tank container trailers and tank semi-trailers are available on the market.

Various standard tank / container volumes exist between 15 m³ and 51 m³.

Maximum gross weight for trailer trucks is generally restricted by governmental regulations, e.g. in India to 44 t.

LNG Transportation

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LNG TankSemi-Trailer

ISO LNG Tank Container

Trailer

Total Volume 15 - 51 m³ 14.5 - 42.5 m³

Effective Volume

13.5 - 46.4 m³ 13.1 - 38.3 m³

Working Pressure

2 - 8 bar 2 - 7 bar

Insulation Type

Vacuum Vacuum

Vaporization Rate

0.18% /day 0.18% /day

7,500 m³ LNG/Ethylene Carrier

51 m³ LNG Tank Semi-Trailer

43 m³ ISO LNG Tank Container Trailer

All LNG produced in the Shan Shan liquefaction plant is distributed with a fleet of over 600 trucks to more than 20 satellite stations, residential and industrial consumers.

Truck fleet: 600 trailer trucks with ISO 40 feet tank containers.

Capacity: Loading station designed for 63 trucks per day.

Distribution: To 24 satellite stations and consumers located at distances between 340 and 4,400 km (av. 2,000 km).

Since first start-up in June 2004: more than 120,000 trucks

loaded Overall traveling distance of

more than 480,000,000 km Some tucks have travelled a

distance of more than 600,000 km

No leakage, spill or loss of operation

LNG TransportationShan Shan Liquefaction Plant,

Xinjiang, China

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Shan ShanLNG Plant

SatelliteStations

Satellite stations are located close to the consumers and include truck unloading system, storage, vaporization and related infrastructure, safety and control systems.

Typical satellite storage volumes are between 30 and 30,000 m³. Stations for residential areas are often equipped with LNG cylinders with volumes between 60 and 500 liters.

LNG is commonly vaporized with ambient air vaporizers at discharge rates between 10 and 10,000 Nm³/h and discharge pressures of 2 to 4 bar.

LNG Satellite Stations

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LNG Storage Tank

LNG Cylinder

Total Volume 31.6 - 3,158 m³ 63 - 526 l

Effective Volume

30 - 3,000 m³ 60 - 500 l

Working Pressure

2 - 16 bar < 16 bar

Insulation Type Vacuum / Perlite Vacuum

Vaporization Rate

0.5 - 0.2% /day ~ 2 - 3% /day

Satellite station with air vaporizers and 4 x 150 m³ vertical LNG storage tanks.

Mobile LNG cylinder

The LNG from the Shan Shan liquefaction plant is delivered to 24 satellite stations, residential and industrial consumers.Considering a four days allowance in storage capacity an overall satellite storage capacity of around 10,700 m³ or 72 x 150 m³ tanks are required to handle the LNG production of 0.43 mtpa from the Shan Shan liquefaction plant.

LNG Satellite StationsShan Shan Liquefaction Plant,

Xinjiang, China

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Dehua satellite station equipped with 8 x 150 m³ vertical storage tanks and cylinder filling station.

Small satellite station for supply of vaporized LNG to residential area.

LNG fuelling station for busses.

Conclusion

Easy to Use – Natural gas has become a widely easy to use source with an promising growths perspective.

Monetizes Stranded Gas – Access to alternative / non-utilized gas reserves and to smaller markets.

Bridge to Renewable Energy – Investment into LNG infrastructure establishes the bridge to renewable energy such as biogas.

Links Distant Supply / Market – Access to distant gas reserves and markets.

Environmental Friendly – Natural gas is a clean fuel with significantly lower CO2, NOX , SOX and PM emissions compared to any other fossil fuel.

Attractive Cost – Alternative to “conventional” fuel with attractive cost incentives.

Flexible – Not physically linked to one supply / market.

Geography – Where pipelines not physically or geopolitically viable.

Strategic – By-pass pipeline constraints to access market.

Safe and Reliable – Shan Shan plant demonstrated excellent safety record with impressing reliability.

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