Friday, January 4, 2008
Consider new regasification technology for natural gas transport
4 January 2008
Hydrocarbon Processing
R. Bryngelson, Excelerate Energy, Houston, Texas
A_s global demand for energy continues to increase, the energy industry is being driven toward finding new solutions to deliver efficient and environmentally responsible fuels. Natural gas (NG) has become the fuel of choice to meet this growing energy need. While NG does provide significant benefits, it is not without its challenges. With the US, UK and other nations experiencing declines in domestic gas production, and developing nations entering the global energy markets with new demands, energy suppliers must find creative solutions to meet changing needs.
This surge in energy demand has resulted in a renewed focus on liquefied natural gas (LNG) as a means to satisfy the global hydrocarbon appetite. For more than 40 years, the point-to-point model of delivering LNG from remote liquefaction plants to onshore regasification terminals in key demand centers has been the de facto solution. Given the cost for these facilities and the dependence of downstream markets on the NG supplies, capital recovery and supply security rely on long-term fixed sales contracts. As a result, the LNG market has not seen the commoditization that other petrochemical products such as crude oil have seen, resulting in reduced flexibility and market inefficiencies.
Wellhead to consumer. In addition, the high cost of entering the LNG business, along with the historic requirement for an integrated supply chain from wellhead to consumer, have resulted in an industry largely dominated by the super majors. This creates significant barriers to entry by market innovators. As with any good monopoly, change is painfully slow. However, as the benefits of new ways of doing business become evident, momentum will build, resulting in sweeping changes.
Consumers are searching for new ways to secure NG supplies and are motivated by requirements not previously achievable with an LNG-based solution. A conventional land-based regasification terminal can take three years to construct. It also requires several years of planning, design and permitting and can cost upward of $1 billion. Clearly, it is not the solution for every situation. Among the requirements NG suppliers must meet are:
-- Satisfying short to intermediate-term NG needs ahead of a significant development, e.g., pipeline construction or prove-up of reserves
-- Meeting demand in markets that see significant seasonal swings in consumption
-- Developing market access in regions where future overall load growth is uncertain, or where there is political or economic instability
-- Allowing delivery into congested, densely populated or environmentally sensitive areas.
Cost, timing (speed to market) and location are the essential driving factors. Meeting increasing energy demands while addressing the needs of consumers means thinking outside the proverbial box. Previously, delivering NG consisted of "point A to point B" transfers of LNG into high-cost facilities on a 20-plus year time frame. Without a doubt, transporting LNG and delivering it in safe, secure, economical and environmentally responsible ways is challenging (Fig. 1). However, by using new technologies and taking an innovative approach, these goals can be achieved while providing markets what they need.
Fig. 1 Increasing demand for NG requires transport by ocean vessels to move supplies to consumer regions.
New regasification approaches. More reliability in LNG transport is being demonstrated through new regasification technologies. New floating LNG regasification technology is specially designed regasification vessels. For example, purpose-built LNG tankers incorporating onboard vaporization equipment provide more flexibility to receiving terminals. The new regasification vessels not only transport LNG to its destination, but also serve as floating terminals to vaporize the LNG and deliver NG gas to downstream markets. These vessels are loaded in the same manner as standard LNG tankers at traditional liquefaction terminals (Fig. 2). However, the new onboard regasification process provides flexibility to discharge LNG in three distinct ways. These are:
-- As a liquid at a conventional receiving terminal
-- As vaporous NG through a deepwater submerged turret load (STL) system with a subsea buoy in the hull of the ship
-- As vaporous NG through a high-pressure gas manifold located forward of the vessel's LNG loading arms.
Fig. 2 New floating regasification technology is constructed onboard LNG vessels and provides more flexibility to receiving terminals as well as to transport ships.
The maximum discharge rate from the LNG vessel to the deepwater port will be determined by a combination of the availability of capacity on downstream pipelines and the onboard regasification capabilities of the facilities.
The technology is fully compliant with or exceeding US and international regulations. This system is a robust solution and can operate in hostile environments and extreme sea states.
Along with this flexibility, LNG vessels with onboard regasification retain the ability to load at a standard liquefaction plant and do not have increased draft, beam or other characteristics that would constrain their operation.
Deepwater transfer methods. One of the latest and most technologically advanced answers to the problems associated with NG gas delivery is an innovative deepwater port regasification system. By using a subsea buoy system, LNG vessels dock well offshore, vaporize the LNG and deliver NG to market through a subsea pipeline—thus, eliminating the need for onshore infrastructure. In this system, the subsea buoy submerges to a depth of 80 to 100 feet (Figs. 3 and 4). The only infrastructure above the water is a small marker tethered to the buoy so that it does not present any navigational obstacle. The subsea buoys are anchored to the seabed by chains, wire rope and suction anchors and serve as the vessel mooring.
Fig. 3 The deepwater regasification system is a subsea buoy that is located offshore.
Fig. 4 The deepwater regasification unit is capable of handling extreme states with high reliability and safety.
The first subsea (submerged) turret loading (STL) unit in an LNG application was designed and constructed for a deepwater LNG port, Gulf Gateway, located 116 miles off the Louisiana coast in the Gulf of Mexico. This project will be followed in January 2008 by the completion of the Northeast Gateway deepwater port installation located 13 miles offshore in Massachusetts Bay (Fig. 5). The STL units can be constructed in roughly one-sixth the time of a conventional land-based LNG terminal and with much less capital investment.
Fig. 5 Installation of the deepwater regasification system 13 mi offshore in the Massachusetts Bay.
In the design of a deepwater port STL, proprietary technology was adapted from the turbulent North Sea. The STL buoys, flexible risers and manifolds are designed to accommodate NG deliveries in the most extreme sea states.
Dockside developments. New developments for dockside installations improve operations and reliability for receiving terminals. Vessels with onboard regasification technology were also the basis for the development of a dockside LNG regasification system. This system uses a new or suitable existing jetty with a high-pressure gas connection to directly offload LNG from the vessel into the onshore NG grid, thus minimizing onshore infrastructure and environmental impacts (Fig. 6). The first dockside unit, Excelerate Energy's Teesside facility (Fig. 7), was placed into service in February 2008. The unit was constructed and placed in-service in one year and at a cost of roughly 10% of a conventional land-based LNG terminal.
Fig. 6 The dockside regasification system uses a high-pressure connection to directly unload LNG vessels.
Fig. 7 Teesside facility uses the dockside regasification system to receive LNG.
New regasification technologies provide different options to receiving terminal operators. New solutions address the issues of cost, timing and location. More important, they can increase operations flexibility.
Northeast Gateway Deepwater Port project. The Northeast Gateway Deepwater Port located in the Massachusetts Bay, 13 miles southeast of the city of Gloucester, Massachusetts, is an example of a well-executed project that was developed and implemented, taking all stakeholder concerns into consideration. The process, from start to finish, has not been without obstacles and challenges that needed to be overcome. However, the key to success was doing the appropriate homework. By fully understanding market needs, issues and concerns, this project will become a safe, reliable and secure part of New England's energy supply portfolio.
Building an offshore LNG importation facility can make sense for a number of reasons. It provides relatively easy access to NG pipeline infrastructure and does so with a minimum impact to the environment. In addition, it eliminates the need for onshore infrastructure and keeps the entire LNG delivery and regasification process well away from population centers and critical infrastructure. To make the project a reality, however, the facts needed to be proven and properly communicated to the various stakeholders and communities involved.
Stakeholder and community outreach. From the outset, the terminal development team realized that, by locating offshore the problems associated with a traditional new land-based LNG facility might be avoided. Still, it was recognized that the project would not be without some controversy. For that reason, education and dissemination of information were among the highest priorities for the project team. More than a year before a single piece of paper was filed, the terminal development team began a series of meetings with regional stakeholders in Boston and on the North Shore of Massachusetts Bay (the closest point of land). These discussions not only included federal and state regulatory agencies, but also commercial fishing groups, city and town governments, business groups and essentially any other group that wanted more information about the project.
During these initial key communication sessions, information was gathered that allowed a decision to be made regarding the location of the Northeast deepwater regasification system. Eventually, a location was selected near the Massachusetts Bay Disposal Site (MBDS)—an ocean dumping area now limited to dredge tailing disposal—to minimize impacts on fishing interests. Given that the MBDS is off-limits to commercial fishermen, siting the project close to it resulted in a minimized impact. This location also had the benefit of being outside of two state marine sanctuaries (the North Shore Ocean Sanctuary and the South Essex Ocean Sanctuary) and one federal marine sanctuary (the Stellwagen Bank National Marine Sanctuary). It also is just north of shipping lanes into Boston, thereby minimizing transit distances of ships across key ocean habitat areas.
Concerns about port security. Following the terrorist attacks of Sept. 11, 2001, many US cities, including Boston, demanded increased security around the delivery of LNG shipments to their ports. In the aftermath of 9-11, the terminal development team realized that a deepwater port would not have the safety and security concerns associated with an onshore facility, while still providing the same energy benefits to the region.
Further facilitating the process was the existence of an offshore pipeline placed into service in Massachusetts Bay in 2005 (the HubLine pipeline). Tying into this pipeline eliminated the need for onshore construction associated with the Northeast port. All construction activities, including the subsea interconnection to HubLine, occurred offshore. The result was a much less costly facility and a construction cycle of about six months.
Project benefits. As part of the project development process, the terminal development team undertook an initiative, independent of any mitigation that might be ordered by regulators, to begin a three-year, $5 million fuel assistance and energy efficiency grant program using area nongovernmental organizations already engaged in such activity. This program commenced with a $1 million donation in 2006 and consecutive $2 million donations in 2008 and 2008.
In addition, the project developer agreed to a $27.5 million mitigation package, which includes $6.3 million to establish the Gloucester Fishing Community Preservation Fund; $1.7 million for impacts to commercial lobstering interests; $5.3 million to increase public access to the Boston Harbor Islands; $3 million for ocean-floor mapping; and additional funds for ocean habitat protection, education and research.
This mitigation package also features a state-of-the-art acoustic whale monitoring and research system that was developed in conjunction with Cornell University Lab of Ornithology, the National Oceanic and Atmospheric Administration, and the Woods Hole Oceanographic Institution. This system will provide five years of acoustic data and life of the port acoustic detection capability in the Port of Boston shipping lanes, allowing for greater detection and avoidance of whales—in particular the North Atlantic Right Whale.
The project developer also agreed to a first-of-its-kind program with the Marine Engineers' Beneficial Association, with the goal of having an aggregate 25% of its port staff and vessel crew calling on the Northeast facility being US citizen mariners by 2012. Prior to this, and independently of any request to do so, Excelerate Energy embarked upon an aggressive cadet training program with the Massachusetts Maritime Academy, the Maine Maritime Academy and Texas A&M Galveston to train their cadets to work aboard existing LNG vessels. This program is designed as a grassroots effort to train crew members early in their careers to meet future needs aboard LNG ships.
Future LNG options. Through new developments for onboard, deepwater and dockside unloading /regasification methods, delivery of NG from upstream reserves to downstream markets can be accomplished more safely and efficiently than through a conventional LNG trade. Using innovations and technological advancement, LNG traders have the means to bring LNG to downstream markets more quickly and economically than ever before. HP
The author
Rob Bryngelsonis president and CEO of Excelerate Energy. He previously served as executive vice president and chief operating officer, where he was responsible for overseeing the company's extensive global operations. A founding member who helped form the company, he began at Excelerate in 2003 as vice president of development and downstream services, overseeing development, permitting and construction of Excelerate's LNG importation projects and related downstream activities. Mr. Bryngelson's extensive experience in global energy markets spans more than 15 years. Prior to joining Excelerate, he was managing director for El Paso Global LNG, responsible for LNG infrastructure development, supply procurement and downstream marketing for North America. In this role, he oversaw the development of several land-based LNG terminals and led the team that developed the Gulf of Mexico Energy Bridge deepwater LNG port project. Mr. Bryngelson holds master's degrees in business administration and mechanical engineering from the University of Texas at Austin. He received a BS degree in aerospace engineering from Texas A&M University.
