Technology makes LNG available for offshore stranded gas.

Liquefied natural gas (LNG) is not just for monster fields anymore. A new system offers technology that works financially for stranded or associated offshore fields or onshore fields without access to pipelines. Wood Group's Mustang Engineering adapted existing technology to make the new system, which it calls LNG Smart, fit on a concrete barge for offshore work or on a small-footprint, low-profile site onshore.
As yet, the system hasn't been qualified by the major international organizations - American Bureau of Shipping, Lloyd's Register or Det Norske Veritas - but the application has been submitted, and the company is looking for operator acceptance for a project to speed up the regulatory process.

The ideal upstream support for this liquefaction system is an area with 1.5 Tcf to 2 Tcf of gas and 150 MMcf/d of production to produce between 1 million and 3 million tons of LNG a year.

The system uses the same process as bigger plants, but instead of huge vertical tanks and high-cost refrigerants used to handle liquefaction, this system uses horizontally installed, 38-ft (11-m)-diameter, 16,405 cf (5,000 cu m) tanks with compression and expansion to cool and liquefy the gas.

"The process isn't new; the packaging is," W. Scott Worthington, midstream manager with Mustang, said. That tank volume, by the way, represents the most cost-effective size. Each of the tanks holds 4.5 million pounds of LNG. Since the company will set the tanks in a concrete cold box filled with Perlite, the system is less vulnerable to damage from internal problems or external attacks, a big plus for safety.

Ned Baudat, project director for the Midstream Group, designed the system without the need for specialty or highly complex equipment, which means local fabrication companies can build the systems in-country. That's a big plus for operators that must meet local-content obligations. The concrete barge that could be used for the liquefaction, storage and regasification is an adaptation of Berger/Abam Engineering's design for an existing LPG barge with horizontal tanks.

According to Worthington, the system can liquefy gas for US $255/ton in a 1-million-ton-per-year plant. The cost of liquefaction, for either the onshore installation or the barge-mounted installation, is competitive with existin, large-scale onshore plants, said Milos Soudek, business development manager with the group. It uses more horsepower but achieves similar 89% to 90% thermal efficiencies as larger plants.

Some of the regions in which the application would work include Asia, New Zealand, Western Australia, Papua New Guinea (on the other side of the mountains from BP's Tangguh complex) and Malaysia. On the receiving side, most islands need LNG, and many need supplies in the range of 1 million tons a year. Islands in that category include many islands in Indonesia, the Philippines and the Caribbean. On the supply side, several areas of South America are on the company's potential source list. Northern Colombia and the Falcon area of Venezuela are possibilities.

The best potential clients are mid-sized independent operators and national oil companies. The technology could help operators offshore Nigeria sell LNG instead of flaring their gas. For that matter, the system can be used in any situation in which stranded associated gas is produced with oil. The preliminary economics for using the system for associated gas with oil production have been done and appear to have a lot of merit.

The company is looking at its existing client list of operators working on field development projects. There are hundreds of smaller fields around that fit the financial feasibility window, added Brad Hubbard, project development manager for the group. In that kind of situation, "We think we can deliver gas more competitively than the large-scale LNG plants within 500 to 1,000 nautical miles," Baudat said.
So far, Mustang has received more than one expression of interest. In this market size, its main competitor is compressed natural gas, but it takes longer to unload CNG tankers. With this setup, "All we need is one ship going for 1,000 miles (1,609 km) with 150 MMcf/d on the supply side and 150 MMcf/d on the use side and 60 Mcm (2.1 Bcf) of storage," Worthington added.

If Mustang got its first order today, it could move rapidly through the permitting process and could have the plant up and running in 27 months after permitting is received.

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