Gas and LNG Storage The Future of Modular LNG Tanks Gas and LNG Storage | The Future of Modular LNG Tanks 1. Introduction 1.1 LNG and LNG to Power But the LNG market is changing, oil prices are lower, LNG prices are being driven down, even renegotiated, and buyers Market Overview are seeking shorter term, more flexible contracts. Despite these challenges there was 890 MMTPA of proposed new The LNG supply market has doubled in the last decade to liquefaction capacity in January 2016, key regions being 301.5 MMPTA [1], and it is anticipated that the next decade US, Canada, East Africa and FLNG. Clearly many of will see further growth, particularly in the USA, Canada, these projects will not proceed as they compete for supply East Africa and FLNG, increasing by 46% to 443 MMTPA contracts, but this should encourage demand side expansion. by 2021 based on projects currently under construction. This expansion is associated with very high and increasing LNG A number of factors will drive demand side expansion liquefaction costs. For those terminals coming on line by including conversion to cleaner cheaper fuels for power 2021 the estimated CAPEX is over $1,500/tonne. Efforts generation, to either reduce particulate pollution from coal to lower the unit costs of liquefaction has seen a move fired power stations or convert from fuel oil. In addition, away from very large scale, bespoke trains to a modular, those countries that seek to honor their COP21 commitments multi-train approach, based on smaller, midscale 0.5 to 1.0 are likely to see natural gas and liquefied natural gas (LNG) MMTPA trains, such as Energy World’s proposed plant in as an essential transition fuel to a lower carbon future. Sengkang, Indonesia. For those countries with an established gas distribution At the beginning of 2016 regasification capacity, or potential network, large scale regasification terminals, in excess of demand, was 757 MMTPA, including just over 10% FSRU 1.0 bcfd are appropriate, whereas archipelagoes such as the capacity, but from 2000 to 2015 utilization has remained Caribbean [4], Indonesia and the Philippines need to consider between 30% to 40%. With capacity only expected to expand a hub and spoke solution in which large scale LNG imports to 810 MMTPA by 2021, utilization would need to increase (7.0 MMTPA) can be distributed by smaller LNG carriers 3 to 44% to meet the estimated increase in demand. Clearly (30,000m ) directly to the power station. there has not been a lack of regasification capacity for the LNG supply, but some analysts have predicted an oversupply SomeSome companies companies are now are consideringnow considering vertical integration vertical in of LNG [3]. whichintegration they provide in which both supply they provideof LNG as both well supplyas demand Global trade was 245 MMTPA in 2015. The average yearly inof terms LNG of LNGas well to Power. as demand According in terms to Anatol of LNGFeygin to of growth of LNG demand since 2000 has been 6.6% pa. If Cheniere “that will be the major growth for LNG demand goingPower. forward” According and is a to model Anatol it is lookingFeygin to of replicated Cheniere this continues, demand would reach 358 MMTPA by 2021, “that will be the major growth for LNG which would represent a utilization of 80% on the planned globally [3]. Lower LNG prices are also making the fuel liquefaction capacity by 2021, without allowing for capacity moredemand attractive. going However, forward” for thoseand iscountries a model that it do is not taken offline. Some recent reports [2] have suggested the so havelooking an established to replicated gas distribution globally network [3]. Lower the capital LNG costs called glut in LNG has not materialized, and the numbers ofprices receiving, are storingalso making and regasification the fuel more at each attractive. power station can inhibit the development of LNG to power projects. above could lend support to that view. However, for those countries that do not have an established gas distribution network the capital costs of receiving, storing and regasification at each power station can inhibit the development of LNG to power projects. Gas and LNG Storage | The Future of Modular LNG Tanks Offtaker Power Station Capacity(MW) Storage Tank Capacity (m3) 2018 (Conv) 2032 (New) Total By 2018 By 2023 Total The Bahamas, BEC (NP) 393 320 713 70,000 90,000 160,000 The Bahamas, GBPC 240 0 240 20,000 20,000 40,000 Barbados, BL&P 60 245 305 35,000 45,000 80,000 Belize, BEL 62 40 102 5,000 15,000 20,000 Dominican Republic, All 1,025 1,800 2,825 370,000 460,000 830,000 Guyana, GPL 140 240 380 35,000 45,000 80,000 Haiti, EDH 238 560 798 55,000 225,000 280,000 Jamaica, JPS 621 1,320 1,941 140,000 155,000 295,000 Suriname, EBS 299 640 939 50,000 105,000 155,000 Total 3,078 5,165 8,243 780,000 1,160,000 1,940,000 Table 1 LNG Storage Tank Capacities for Caribbean hub and spoke scenario [4] 1.2 LNG to Power The Caribbean is only one example. Other countries, such as the Philippines and Indonesia have much greater demand Storage Requirements for power station conversion and new build. Also, projects in Central America are being considered, but based on receiving For the Caribbean the IADB report [4] forecasts gas demand 150,000m3 LNG carriers unloading to FSRUs or onshore 3 of 490 MMSCFD or almost 23,000m of LNG per day. LNG regasification terminals that are effectively oversized Assuming a hub and spoke scenario for distribution from for the power station capacity. the Dominican Republic, Table 1 summarizes the storage capacity by country required in 2018 and then expansion 1.3 Background to Modular through to 2032 to meet the forecast demand. LNG Tanks For perspective a modern combined cycle gas turbine has a thermal efficiency of between 45% to 55%. Therefore The authors have been involved with LNG tank design and a 100MW power station consumes approximately 800m3 development for almost 20 years. In that time the traditional of LNG per day or over 24,000m3 per month. The report solution for LNG storage in excess of 10,000m3 has been outlines conversion and new build forecasts for CCGT, a stick built 9% Ni steel single or full containment LNG single cycle gas turbines and reciprocating gas fueled storage tanks. Most LNG projects have targeted throughputs power stations. greater than 1000 MMSCFD or 7MMTPA. The storage The results highlight a key issue for development of LNG volumes for this size of regasification or liquefaction plant 3 to power projects. The storage capacities at the end of have exceeded 160,000m . Indeed as the capacity of LNG 3 each spoke are relatively small. If the capacity for the carriers has increased up to 266,000m (Q-Max) the onshore Dominican Republic is ignored the average storage capacity storage tank size has also increased to ensure filling or is approximately 50,000m3. If Belize is also ignored and a discharge can be achieved within 24 hours. nominal tank size of 20,000m3 is assumed, each phase of development could be based on multiples of a standard tank size. By 2018 the Caribbean market could require 20 x 20k m3 LNG storage tanks with perhaps another 40 x 20k m3 or 20 x 40k m3 LNG tanks by 2023. Gas and LNG Storage | The Future of Modular LNG Tanks Figure 1 27,500 m3 ethane/ethylene/LNG carrier operated by Evergas © Relatively little work has been done to develop cost effective Presentations at the Trinidad Oil and Gas Conference in storage tank sizes for the LNG to Power market. Tank sizes 2014 [5] and Gastech 2015 [6] have highlighted the market greater than 160,000m3, required to receive a standard export opportunity for LNG to power and emphasized that the LNG carrier, would provide 10 months of storage for a design and delivery of smaller LNG tanks is essential to 100MW CCGT. Even for a larger power station it is clear reduce overall cost and schedule to ensure that the cost base that there is a mismatch between the storage tank and the is reasonable and the market sustainable. exporting LNG carrier. Smaller carriers exist, using Type C Another market that is expected to see significant expansion or membrane technology, but there is a definite requirement is the LNG marine fuels business. Eagle LNG has recently for smaller ships to support cost effective LNG to power completed its project in Maxville, FL, USA and Conrad delivery. Ships in the range of 10,000m3 to 30,000m3 would Shipyard is building an LNG bunkering barge. The LNG allow smaller marine facilities and be compatible with the volumes for each ship are suitable for Type C storage required onshore storage. containers, but aggregated onshore LNG storage tank volumes in excess of 10,000m3 are necessary. Figure 2 Economies of scale- tank volume [8] or number of tanks [9] Gas and LNG Storage | The Future of Modular LNG Tanks 1.4 The opportunities TheThe key key modular modular LNG LNG tank drivers tank driversare: are: The small to midscale LNG market, supplying power – – Standardize Standardize tank tank design design by volume by volume based on basedsite specific on stations or the marine fuels business, requires a smaller seismic isolation capacity LNG storage tank, in the range of 10,000m3 to site specific seismic isolation – Offsite tank pre-fabrication in parallel with foundation 100,000m3. The traditional solution based on 9% Ni steel –construction Offsite tank pre-fabrication in parallel with technology is stick built on site.