Small and medium scale LNG for power generation

• KARI PUNNONEN• AREA BDM, OIL&GAS BUSINESS, MIDDLE-EAST, ASIA &

AUSTRALIA• WÄRTSILÄ FINLAND OY

1 © Wärtsilä 10 April 2023 K. Punnonen

Power Gen Asia 2-4 October 2013

Small and Medium Size LNGfor Power Generation

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Disclaimer

This document is provided for informational purposes only and may not be incorporated into any agreement. The information and conclusions in this document are based upon calculations (including software built-in assumptions), observations, assumptions, publicly available competitor information, and other information obtained by Wärtsilä or provided to Wärtsilä by its customers, prospective customers or other third parties (the ”information”) and is not intended to substitute independent evaluation. No representation or warranty of any kind is made in respect of any such information. Wärtsilä expressly disclaims any responsibility for, and does not guarantee, the correctness or the completeness of the information. The calculations and assumptions included in the information do not necessarily take into account all the factors that could be relevant. Nothing in this document shall be construed as a guarantee or warranty of the performance of any Wärtsilä equipment or installation or the savings or other benefits that could be achieved by using Wärtsilä technology, equipment or installations instead of any or other technology. All the information contained herein is confidential and may contain Wärtsilä’s proprietary information and shall not be distributed to any third parties without Wärtsilä’s prior written consent.


DISCLAIMER

AGENDA:

1. Company Profile

2. LNG Supply Chain

3. LNG Terminal with Power Plant

4.LNG Based Feasibility

SMALL AND MEDIUM SIZE LNG


© Wärtsilä4 10 April 2023 K. Punnonen

It’s Time for LNG

Wärtsilä Corporation

19,000 professionals

Marine/offshorePower Generation

Power Solutions for

• Listed in Helsinki • 4.9 billion € turnover (2012)

PowerPlants

ShipPower

Services


Installed base – Wärtsilä Powering the world*

Oil & gas

Flexible baseload

Industrial self-generation

Grid stability & peaking

Europe:Output: 12,1 GWPlants: 1793Engines: 3361

Asia:Output: 18,7 GWPlants: 1645Engines: 3627

Africa & Middle East:Output: 11,9 GWPlants: 856Engines: 2254

* On-shore Power Plants December 2012

30 April 2013 POWER PLANTS 20136 © Wärtsilä

Americas:Output: 11,3 GWPlants: 395Engines: 1342

Total: 53,7 GWPlants: 4689

Engines: 10584Countries: 169

Wärtsilä Hamworthy Gas Excellence

Your perfect match

– WÄRTSILÄ is a global leader in complete lifecycle power solutions for the marine and energy markets. In addition to being a world class engine manufacturer and supplier, Wärtsilä is also a recognized EPC contractor in the power generation sector with extensive references for turn key delivery of onshore power plants and floating power barges.

– HAMWORTHY OIL & GAS SYSTEMS was a leading designer, developer and manufacturer of advanced gas handling systems for onshore, marine and offshore applications. Hamworthy has patented LNG technology within LNG liquefaction and is a recognized provider of technology and systems for various LNG applications worldwide.

– With Hamworthy now being an integrated part of Wärtsilä the two companies’ extensive project execution experience and technology portfolios are combined into a seamless and fully accountable one stop shop for complete small and mid scale LNG production facilities.

Wärtsilä Oil & Gas Systems

LPG LNG Gas Recovery Separation Technology

LPG cargo handling systems

Reliquefaction & cooling plants

Cargo heaters & vaporizers

VOC recovery systems

Small scale LNG plants

LNG regasification plants

BOG reliquefaction plants

Aftermarket

Complete site support services

Project life time supportZero Flare solutions

Ship- and cargo tank design

HC blanket gas and recovery

LNG fuel gas systems Flare gas recovery and ignition Compact separation

VIEC /VIEC-LW internals

Interface level and profilers

Separator design

Training

Products and Organization from Wärtsilä Oil & Gas Systems

How to get LNG? – Conventional LNG supply chain

Liqui-faction

Large scale

shippingHub

Evaporation

PipelineEnd user

(NG)

Gas explo-ration


LARGE SCALE

Large Scale LNG• Intercontinental transport• Millions of tons per year• LNG Terminal feeding into

pipeline system• Providing a commodity

Jetty capable of offloading ships from 35,000 m3to 145,000 m3• Single containment tank (160,000 m3)• 125 MMSCFD Regas and Sendout

How to get LNG? – Mid and Small Size LNG

Gas explo-ration

Liqui-faction

Large scale

shippingHub

Evaporation

PipelineEnd user

(NG)

Mid scale

storage

End user(NG)

Small scale

shipping

Evapo-ration

Truck trans-port

Ship bunkering

Small scale

storage

End user (NG)

Evapo-ration


From Large Size to Small Size


Small Size LNG Carrier

• Typical small size LNG carrier. The vessel is often a combined gas and chemical carrier – 5 800 / 10 000 cbm.

Small Size LNG•Regional supply•Directly to end-users •Providing an energy solution previously not available10,000 m3 Multigas Carrier


Source: Norgas

Source: Knutsen

Small Size LNG Harbour•LNG Carrier loading•Road tanker loading

LNG Recieving Terminal – Power Plant


“Does it make sense to invest into a Single Purpose LNG Receiving Terminal - as a fuel system for a Power Plant?”

Natural Gas has become the fuel of preference and is expected to pass coal within a decade or so…

LNG Based Power Plant

A Feasibility Analyze was done to evaluate this question. The results are presented here:


30 April 2013 POWER PLANTS 201316 © Wärtsilä

Power Output Fuel Consumption LNG Consumption

Power Plant – Technical Solution

Wärtsilä Power Plant – Technical Solution

Power Output•Single Cycle, gas engine 9MW and 18 MW•Net Power at Step-Up Trafo: 50, 100, 300 MW•Outgoing Voltage: 110 kV

Fuel Consumption•Fuel: LNG (Natural Gas)•Generator set efficiency: 46%•Own electrical consumption: 4 MW at 400V•Plan Net Electrical Efficiency: 43,1 - 44,5%

Ambient Conditions•Average ambient temp: 29 C (min. 10 C, max. 40C)•Height above sea level: max. 100 m•Methane number 80

Operational Profile•Annual Running Hours: 7000•Plant average load: 80%•Utilization factor: 64%

Chosen Power Plant Characteristics for the study


Power Plant Configuration

Plant Size 50 MWe 100 MWe 300 MWe

Prime Mover 6X20V34SG 12X20V34SG 18X20V50SG

Plant Net Output @site conditions

53 MWe 106 MWe 304 Mwe

Net Electrical Eff.Net Heat Rate

43,1%8271 kJ/kWhe

43,2%8250 kJ/kWhe

44,5%8013 kJ/kWhe


LNG cons/day 511 m3 1022 m3 2840 m3


LNG consumption by power plant (base load)

100MW plant 100% utilization0.14 Million Ton/year (MTPA)0.31Millon m3/year

300MW plant 100% utilization0.41 Million Ton/year (MTPA)0.94 Million m3/year


Wärtsilä 300 MW power plant based on W50SG

© Wärtsilä 2011

LNG Carrier Capacity Storage Tank Capacity Re-Gasification Process

LNG Recieving Terminal – Technical Solution


LNG Consumption at max. and average loads


Power Plant Consumption, max. load

511 m3/day 1022 m3/day 2840 m3/day

Additional Gas Take-Off, max. Load

701 m3/day 1360 m3/day 1754 m3/day

Total Gas Consumption, max. load

1212 m3/day 2382 m3/day 4593 m3/day

Total Gas Consumption, average load

677 m3/day 1311 m3/day 2604 m3/day


Annual Consumption,Average load

247.000 m3 478.000 m3 950.000 m3

Terminal optimization

• The most important parameter when optimizing the terminal is the LNG supply. The ship size will determine the cargo that will be received. Shipping time and needed weather margins will determine the time between cargos. But also available HUB slots and costs need to be considered.

• The average consumption requirement will determine the slope of the volume curves and thus the needed re-gasification capacities.

• Heel Requirement is for safe-guarding the cry-temperature in the LNG tank at all times

Shipping timeIncl. loading and unloading

Total storage volume

Emergency Inventory

Vo

lum

e

Time

Sh

ip

carg

o

Heel requirement


LNG Carrier Capacity Determination

Main Parameters for carrier capacity determination: Transportation Distance: 1500 NM LNG Carrier average speed: 15 Knots LNG Tank sizes as defined Gas consumption as defined For average capacity

Carrier Capacity

Plant Size

No GasOff-Take

With GasOff-Take

50 MWe 6000 m3 13.000 m3

100 MWe 12.000 m3 30.000 m3

300 MWe 35.000 m3 52.000 m3

LNG Storage Tank Capacity Determination

Main Parameters for storage tank capacity determination: Safety inventory: 7 days Heel requirement: 10% Shipping information as defined Gas consumption as defined For average gas consumption

LNG-Tank Capacity

Plant Size

No GasOff-Take

With GasOff-Take

50 MWe 10.000 m3 25.000 m3

100 MWe 20.000 m3 45.000 m3

300 MWe 57.000 m3 90.000 m3

Re-Gasification Low Pressure System

10.04.2023

LNG Re-Gasification Process to deliver Low Pressure Gas: Low pressure consumer, i.e. Power Plant Atmospheric full containment tank Delivery Pressure @10 bar(g) Boil Off Gas fed into low pressure gas supply system Heating media for re-gas: ambient air, sea water of hot water/steam Dimenioned for max. gas consumption

10.04.2023Pump

LNG

LNG Tank

HP-pump LNG Vaporizer

To Engines

BOG

Natural BOGCompressor

LNG Supply

BOG Heater

Vapor Return

Excessive BOGCompressor

Loading Arms 5000 m3/h each

Blowdown toVent/Flare

Regas Phase 2

Regas Phase 1

To Gas Grid

Re-Gasification High Pressure System

LNG Re-Gasification Process to deliver Low and High Pressure Gas: Low pressure, 10 bar(g), High pressure to NG pipeline, 50 bar(g) Atmospheric full containment tank Boil Off Gas fed into low pressure gas supply system Heating media for re-gas: ambient air, sea water of hot water/steam Dimenioned for max. gas consumption

Petronas MelakaRe-Gas Capacity 3*221 t/hPressure: 70 barSea Water Heating Dry Weight 945 tons

Re-Gasification High Pressure System

Heating media: SeawaterIntermediate: Propane, phase-change

Heating media: SteamIntermediate: Water/Glycol

REGASIFICATION SYSTEMS

LNG Recieving Terminal – Power Plant


”Terminal Effect” on gas price-transportation cost-investment cost-operation and maintenance cost

10 April 2023

LNG Feasibility Analyze – STEP 1

Distribution Gas Price: US$/MMBtu

LNG Transportation

LNG Receiving Terminal

LNGRe-Gasification

LNG FOB-PriceAt Main HubUS$/MMBtu

Conversion Cost-fuel cost-investment cost-O&M cost

Sales Power TariffUS$/MWh

Power Plant energy

conversion

STEP-1

STEP-2

Distribution Gas Price as fuel CostUS$/MMBtu

LNG ”Terminal Effect”

• Own LNG carrier operation• Out-sourced Carrier operation

to third party• Transportation through LNG

provider

• All In Cost by LNG provider is considered. Depends according to LNG volume

LNG transportation

• Tank and main process • Re-gasification process• Other: land, on-shore and off-

shore infrastructure• Working Capital, LNG tied in

vessel and storage tank

• Considered as total investment

Terminal Investment

• Operational Man Power • Maintenance Man Power• Spare parts and Material for

maintenance

• Typical estimation 1-2% of the investment in annual bases

Terminal O&M

STEP 1

FOB LNG Purchase

LNG Transportation

LNG Storage

LNG Re-Gasification

STEP 2

Power Plant Power Sales


Terminal Effect Constituents


LNG transportation • All in cost by LNG provider is

considered. Gas price increase due to transportation.

All in Transportation Cost (US$/MMBTU) :• 50 MW – 2,14 US$/MMBtu• 100 MW – 1,85 US$/MMBtu• 300 MW – 1,43 US$/MMBtu

Back-Ground

Terminal Investment • Total Investment effect on gas

price:

Effect on Gas Price (US$/MMBtu)Plant Size No-Off-Take With Off-Take• 50 MW 4,09 2,04• 100 MW 2,28 1,47• 300 MW 1,60 1,34

Terminal O&M • Operational cost relatively

insensitive for Terminal size• Maintenance cost follows the

size

Effect on Gas Price (US$/MMBtu)Plant Size No-Off-Take With Off-Take• 50 MW 1,57 0,76• 100 MW 1,05 0,52• 300 MW 0,47 0,33

Investment Fundaments for Terminal• Existing harbour facilities available next to the Terminal and Power Plant sites – no maritime or off-shore works• Project Life time for evaluation and gas price calculations: 25 years• Weighted average cost of capital: 10%• On top of the power plant gas consumption, additional gas Off-Take was considered as in a similar magnitude as

the power plant itself. Gas delivered to Off-Takers via 50 bar pipeline system• LNG average inventory Working Capital between 3 to 22 M€ depending on the project capacity



Terminal Effect - $/MMBtu

Plant Size No GasOff-Take

With GasOff-Take

50 MWe 7,80 4,94

100 MWe 5,18 3,85

300 MWe 3,50 3,1

50 MW

No O

ff-Take

50 MW

with

Off-

Take

100 MW

No O

ff-Take

100 MW

with

Off-

Take

300 MW

No O

ff-Take

300 MW

with

Off-

Take0

2

4

6

8$/MMBtu


Terminal RelatedTransportation

Terminal Effect

”Distribution Gas Price”


LNG Consumption 247.000 m3 478.000 m3 950.000 m3

LNG FOB Price- $/MMBtu

Plant Size No GasOff-Take

With GasOff-Take

50 MWe 17,82 17,11

100 MWe 16,39 15,68

300 MWe 14,97 14,25

LNG FOB-Prices negotiated based on estimated annual LNG consumption

34 © Wärtsilä 10 April 2023 K. Punnonen 50

MW

No

Off-Tak

e

50 M

W w

ith O

ff-Tak

e

100

MW

No

Off-Tak

e

100

MW

with

Off-

Take

300

MW

No

Off-Tak

e

300

MW

with

Off-

Take

0

5

10

15

20

25

30

Terminal related Capex&Opex

Transportaiton

FOB Price

US$/MMBtuDistribution Gas Price

10 April 2023

LNG Feasibility Analyze – STEP 2

”Terminal Effect” on gas price-transportation cost-investment cost-operation and maintenance cost

Distribution Gas Price: US$/MMBtu

LNG Transportation

LNG Receiving Terminal

LNGRe-Gasification

LNG FOB-PriceAt Main HubUS$/MMBtu

Conversion Cost-fuel cost-investment cost-O&M cost

Sales Power TariffUS$/MWh

Power Plant energy

conversion

Distribution Gas Price as fuel CostUS$/MMBtu

STEP-1

STEP-2

LNG Based ”Power Tariff”

• EPC cost• Other up-front costs: land, on-shore

infrastructure, licenses, etc.• O&M mobilisation costs

• Considered as total investment

Power Plant Investment

• Operational Manpower • Maintenance Manpower• Spare parts and Material for

maintenance

• Fixed O&M cost• Variable O&M cost

Power Plant O&M

STEP 1

FOB LNG Purchase

LNG Transportation

LNG Storage

LNG Re-Gasification

STEP 2

Power Plant Power Sales


Power Tariff Constituents

LNG Based ”Power Tariff”

Fuel Cost• Fuel cost for power plant as per

the “Distribution Gas Price”• Lube oil consumption: 0,3 g/kWh• Lube oil price: 1 US$/Litre

Back-Ground

Power Plant Investment• EPC part of total Investment

(M€)• 50 MW – 880 US$/kW• 100 MW – 850 US$/kW• 300 MW – 845 US$/kW

Power Plant O&M • Variable O&M cost: 7-9

US$/MWh • Fixed O&M cost typically

between 5 – 10 US$/kW annually

• Fixed insurance cost• Fixed Administrative costs

Investment Fundaments for Power Plant• Power Plant Site location next to the LNG Terminal• Gas delivered to plant at 10 bar(g)• For simplicity; 100% equity financing considered• Return on Equity (ROE) Target: 15%• Project Life time for evaluation and power tariff calculations: 25 years• Running profile: annual running hours 7000h, average load 80%, capacity factor 63,9%

Sasol New Energy Holdings, South Africa O&M Agreement with thousands of MW sView of 6 engines modular engine hall

Absolute Power Tariffs


FOB Tar

iff

Term

inal T

ariff

FOB Tar

iff

Term

inal T

ariff

050

100150200250300

ROEFixed O&M CostVariable CostFuel Cost

US$/MWh

No Re-gas With Re-gas

50 MW Power Plant Solution

FOB Tar

iff

Term

inal T

ariff

FOB Tar

iff

Term

inal T

ariff

0

50

100

150

200

250


US$/MWh



FOB Tar

iff

Term

inal T

ariff

FOB Tar

iff

Term

inal T

ariff

0

50

100

150

200


US$/MWh



50 MW Plant 100 MW Plant 300 MW Plant0

50

100

150

200

250

300


US$/MWh

Terminal Effect Power Tariffs, No Gas Off-Take

Power Tariffs, Terminal Effect No Re-Gas

Simple Pay-Back Time less than 6 years

ROE-chart for 300 MW plant, No Gas Off-Take-fuel price: 18,5 US$/MMBtu


50 MW Plant 100 MW Plant 300 MW Plant0

50

100

150

200

250


US$/MWh

Terminal Effect Power Tariffs, With Gas Off-Take

Power Tariffs, Terminal Effect With Re-Gas

Simple Pay-Back Time less than 6 years

ROE-chart for 300 MW plant with Gas Off-Take-fuel price: 17,4 US$/MMBtu


Final Conclusions

Single Purpose Terminal can make sense• For remote location LNG can be the only

acceptable fuel. Alternative would be HFO• LNG Terminal can serve the regional

industry with clean and affordable fuel • LNG can be a domestic fuel

Terminal economics is case specific• Each case must be studied indivudually• LNG FOB-price dominates the

Distribution Gas Price structure• Additional Gas Off-Take will benefit the

project feasibility• Difference between the best FOB-price

and Distribution price is around 20%

Gas fired power plant – a natural choice• For ”Green-Field” power development

LNG is preferable vs. HFO• Power tariff difference is 37% between the

two extremities• At its highist the ”Terminal Effect” will

increase the power tariff with around 25%• At its lowest the ”Terminal Effect” will

increase the power tariff with less than 10%


With right LNG FOB price and power tariff a Single Purpose LNG Terminal can make sense...

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