Wood’s latest LNG contract win will see it undertake FEED for a pioneering platform-based LNG project. Sophie Davies learns more
In October, China’s Honghua Group awarded a US$12 million contract to UK-based energy services firm Wood Group for the development of a first-of-its-kind platform LNG (PLNG) facility in the Gulf of Mexico.
Floating LNG (FLNG) facilities have already come of age this year with the delivery of Wison’s Caribbean FLNG barge to Exmar and the maiden voyage of Prelude (and to some extent Ichthys) – but what makes this project different from the technology and designs the industry already knows?
The project, to be built in the Gulf’s West Delta area, will become the world’s first offshore PLNG liquefaction and storage facility, consisting of several different fixed offshore platforms that are joined to form a unit for the gas production, storage and shipment. Specifically, the project is made up of four production platforms, four storage platforms, an accommodation platform, a central processing platform and an LNG vessel that can transport up to 260,000 cubic metres of LNG.
Crucially, it is expected to be able to withstand the frequently adverse weather conditions in the US Gulf of Mexico but could also be adapted to other offshore conditions elsewhere.
Houston-based developer Argo LNG, which awarded US$1.8 billion of construction work to Shanghai-based Honghua last year, is developing the facility, and aims to have the site up and running by around 2020. All told, the project is expected to produce up to 4.2 million tpy of LNG and will be bolstered by storage capacity for up to 300,000 cubic metres of gas.
The front-end engineering design (FEED) contract recently awarded to Wood will see the firm finalise the design of the facility, following the completion of pre-FEED work on the project earlier this year.
This new job will include setting out onshore gas pre-treatment plant configuration and layouts, general utilities, feed gas processing and compression and transportation and delivery via repurposed pipelines, Wood indicated in an October press statement.
Essentially, the new PLNG model combines proven conventional LNG production technologies with advancements in LNG storage, Larry J Cutburth, a Houston-based project manager at Wood Group, explained to InnovOil. Although the design is built upon traditional fixed-structure platforms, he noted, what differentiates it the most from traditional models is that it uses environmentally sensitive power generation and process cooling technologies, meaning it can reduce its own carbon footprint and air and water emissions, he explained.
Cutburth noted that since the industry’s development in the 1960s, onshore facilities have been the dominant solution since for the import and export of LNG. Those have been replaced, in more recent years, by the development of floating LNG (FLNG) facilities – driven by the volatility in market dynamics and the need for recovering deepwater stranded gas reserves, he said.
Nonetheless, FLNG facilities “tend to vary widely in capacity, complexity, cost and schedule and can incur constraints related to candidate tanker hull availability,” he added.
The PLNG model, on the other hand, provides a “cost-effective, scalable, traditional ‘off-the-shelf” modular solution” for LNG production and market delivery, he stressed.
Avoiding the need for the more complex processing and storage arrangements of FLNG, PLNG uses traditional low-cost fixed structure platforms in water depths of up to 60 metres. At the same time, it meets the needs of two industry segments: those of mid-scale production of between 1 to 6 million tpy, and offshore locations between near-shore and deepwater depths, he said.
A new alternative
In terms of scalability, the PLNG facility is designed to cater to a variety of production capacities, including gas processing and treatment if required, to meet small, mid- and large-scale LNG production demands, he said. This differs from other models: “Onshore LNG terminals are historically developed as large-scale facilities exceeding 6 million tpy, while near-shore FLNG facilities typically range between 1 to 4 million tpy capacities,” he noted. In that regard, PLNG finds its own niche in between.
PLNG facilities are a favourable alternative to other types of projects because there are no space limitations, owing to their modular, configurable and stackable decks, he said. In addition, platforms can be added and production and storage capacity expanded at any time to meet a broader range of scenarios. This should allow operators to remain flexible in the face of changing market dynamics, he highlighted.
The new facility also offers advantages in coping with weather conditions, Cutburth said. “Water depth and weather events present prime challenges for all offshore solutions,” he noted, but the platform approach again allows additional stability.
Deepwater FLNG facilities are designed with full navigation autonomy and enhanced , unlike typical near-shore FLNG facilities, he continued. (Indeed, in the case of Royal Dutch Shell’s Prelude FLNG facility, that meant building a vessel capable of staying put even in a Category 5 cyclone). The result is that the latter can see operations interrupted in the event of extreme weather conditions, such as cyclones, which would require disconnection from moorings and gas feed pipelines. Extreme weather may require that some parts of the facility be taken to the safety of a harbour until the adverse weather has passed.
The fact that a PLNG facility is anchored permanently to the spot means that it can overcome the limitations of near-shore FLNG facilities during extreme weather conditions, he added. “The PLNG’s robust structural construction, with support piles penetrating deep into the seabed, provides a stable base during extreme weather events and during LNG carrier mooring and loading operations, enhancing operational certainty resulting in higher facility utilisation,” he said.
PLNG facilities are also inherently flexible, which means they can be applied around the world, he stressed. “The major advantages of the PLNG concept are the standardised, modular approach, scalability, flexibility and applicability worldwide,” he summed up. That may also mean greater flexibility within the supply chain: rather than numerous bespoke components, the fabrication and process technologies can be contracted out to a variety of providers, rather than a handful of specialised developers.
Lastly, it adds additional flexibility in terms of export options. The project developers have said that from around 2020, gas from the Permian Basin in Texas will be transported to the offshore platform for liquefaction, before being exported around the world. Shorter trips by LNG carriers and more flexible loading should also ensure prices are competitive.
In global markets awash with LNG, one possible issue facing this pioneering new development is whether there will be sufficient demand for its product once it does comes online in 2020. However, its flexibility and adaptability may well give it in the edge as price pressures mount, offering an alternative to the considerable expense of FLNG facilities.
In any case, its arrival on the scene will qualify yet another tool in the operators’ toolbox, and goes to show that innovation in the LNG technology sector still shows no sign of slowing down.