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What will the future LNG infrastructure and technology look like?

By
Magnus Eikens
and
Jan 1, 2021
7
minutes read time

Innovation keeps the LNG world in constant motion. This article discusses how and why we can expect LNG infrastructure and technology to change in the future.

Technological development for modern needs

Historical needs

In the 1940s when the commercial development of LNG started, it was used as a peak shaving technique with stationary storage, and regasification and feeding into pipelines during high demand. Technical development led to larger scale LNG export, with shipping being introduced in the late 1950s and mid-1960s. Import and export facilities were further implemented through the 1970s, which has since then led LNG to become a major part of the global energy mix. With its environmental and climate beneficial properties, LNG is set to play a big part in the future energy mix.

Storage of LNG can be used as a peak shaving technique with stationary storage, and regasification and feeding into pipelines during high demand.

Increasing efficiency

Essential technological components and infrastructure in the typical LNG value chain include liquefaction facilities, coolers, storage tanks and similar cryogenic equipment and regasification plants. This technology is not new but has in fact existed for decades. However, technological progress continues with focus on improving energy efficiency rather than reinventing entire components. Heat exchangers, gas turbines and compressors are important thermodynamic components in the gas cycle, both up- and downstream, for which increased efficiency and reduced losses are sought through research and development.  

One way of increasing energy efficiency is by utilizing high efficiency gas turbines. The most effective ones that are used commercially are the aero-derivative turbines, with an efficiency of over 60%, which can provide up to 3% higher all over plant efficiency. Additionally, aero-derivative turbines emit less CO2, are lighter and more compact than the industrial ones, which make them suitable for offshore installation.

With the recent modularization trend, it is now common to make self-supporting modules of equipment systems that are constructed in a fabrication yard and then shipped to the plant site. Modularization can decrease cost and improve the quality of the equipment by better utilization of labor forces in ideal working conditions. Both modularization and more compact equipment come in handy when developing floating solutions, where main processes work on the same principles as for land-based ones, but with some variations allowing them to fit on board floating vessels. This implies that the technology must be more compact to fit within limited space, requiring different solutions than the land-based ones.

Floating LNG technology

FSRU’s

In recent years actors at all stages of the value chain have increasingly focused on offshore capacity. Floating storage and regasification units (FSRU) have been operating since the mid-2000s but experienced a major increase in fleet size since 2015. They receive, store, and regasify LNG before transferring it in a gaseous state to the consumers. FSRUs have been proven as reliable and flexible solutions, with great benefits compared to the land-based solutions when it comes to cost optimization, decreased time-to-market and simplifying regulatory and permitting complexity. Their ability to relocate and continue operations at a new location and hence also time chartered, provide beneficial flexibility to operators and owners. The concept can also function for small scales, exemplified by the Bali FSRU with a storage and send out capacity of 26 000m3 and 50 MMscf/d, which is sufficient for a 200-250MW power plant and hence a perfect solution for small island regions.

FSRU in Bali moored to quay under blue sky
Bali FSRU with a storage and send out capacity of 26 000m3 and 50 MMscf/d which is sufficient for a 200-250MW power plant and hence a perfect solution for small island regions.

FLNG’s

Floating liquefied natural gas (FLNG) systems have also emerged in recent years. In 2017, the PFLNG Satu became the world’s first water-based combined production, liquefaction, storage and transfer plant. Since first introduced, the capacity of LNG transferring ships have also seen huge development, now ranging up to Qmax size. The most common process in FLNGs is the PRICO process, using a single mixed refrigerant to achieve train sizes that are as small as 0,6mtpa and easy to modularize. The process is used both in Exmar Tango FLNG, the Golar Hilli Episeyo FLNG in Cameroon and in the new Tortue project for Mauritania.

There are currently four FLNGs in operation, namely

  1. Petronas PFLNG1/Satu, that started production offshore Sarawak on the Kanowit field but has been moved to the Kebabangen field offshore Sabah.
  2. Cameroon FLNG, an old LNG tanker from 1975 converted by Keppel in Singapore. The FLNG is leased from Golar LNG to produce LNG for the Kribi field for eight years.
  3. Prelude FLNG that started production in March 2019. It is the largest one with 3.6mtpa LNG capacity, and has been the subject of significant costs and delays, explained by Shell as an investment in a new design that can work as a basis for many future FLNG’s.
  4. Exmar FLNG is an inshore barge for liquefying pre-treated gas from onshore fields. It was originally called the Caribbean FLNG but was renamed to Tango as it was reassigned from Columbia to Argentina. However, the contract with the state owned Argentinian oil & gas company YPF has now been cancelled, and the FLNG barged is hence looking for a new home.

What are the expected future trends and outlook for LNG?

LNG bunkering

The shipping industry has been essential to LNG for many years, and this connection will continue to be important in the future. However, the usage of LNG as bunkering fuel on ships is yet to take off. Due to IMO 2020 regulations, we can expect to see an increase in LNG-driven ships in the coming decade. IMO 2020 has placed a cap on sulfur emissions from ships, and due to low sulfur content, LNG has been highlighted as an alternative to high sulfur fuel oils (HSFO), which has traditionally been the main fuel for the shipping industry. LNG-compatible engines already exist but are most seen used in dual fuel engines, where boil-off gases (BOG) from LNG are used together with conventional marine fuels. Dual fuel and gas only engines are likely to impact the next global shipping fleet but are dependent on governmental support and technological development.

Cost savings, increased flexibility and shorter lead times

With low LNG prices comes the need for LNG suppliers and producers to save money on other budgetary spending, like LNG infrastructure. Integrated infrastructure deals in LNG projects together with innovative technology looking to improve efficiency and productivity is likely to become even more important going forth.

Evidently, the FLNGs under operation have already proven the flexibility enabled by floating solutions, as several have been moved from its original destination to meet demand elsewhere. Additionally, FLNGs allow leasing and tolling commercial structures, where the large upfront capital requirements is substituted with day rates or a fee per volume of LNG produced. Hence, utilizing offshore solutions is an increasingly popular way to increase the effectiveness of LNG value chains while gaining flexibility, as well as minimizing onshore construction work.

Reinforcing this trend is ECONNECT Energy's disruptive solutions for floating LNG transfer, a floating solution that provides further cost saving on infrastructure investments as well as operational costs and by reducing financial risk through mobility and increased up-time. New technology will be the leading star of an upcoming energy era where environmental impacts, investor skepticism and increasing competition will be defining factors.

A floating transfer system for LNG
Floating solutions reduces financial risk through mobility and provides cost saving on infrastructure investments as well as operational costs.

Bibliography

  • BloombergNEF (2018) The future of LNG
    Available at: https://about.bnef.com/blog/the-future-of-lng/
  • Deloitte (2018) How technology and changing business models are impacting the future of LNG
    https://www2.deloitte.com/ng/en/pages/energy-and-resources/articles/how-technology-and-changing-business-models-are-impacting-the-future-of-lng.html
  • ExxonMobile (2018) Fueling the future: liquefied natural gas demand forecasted to triple by 2040
    Available at: https://corporate.exxonmobil.com/Energy-and-environment/Energy-resources/Natural-gas/Liquefied-natural-gas/Fueling-the-future-cleaner-burning-natural-gas-demand-forecasted-to-triple-by-2040
  • General Electric (2020) Aeroderivative and heavy duty gas turbines
    Available at: https://www.ge.com/power/gas/gas-turbines (Accessed: 1.11.2020)
  • Handbook of Liquefied Natural gas (2014), p 437-464
    Available at: https://www.sciencedirect.com/science/article/pii/B9780124045859000106
  • IEA (2019) LNG market trends and their implications
    https://www.iea.org/reports/lng-market-trends-and-their-implications#executive-summary
  • IGU (2020) Global Gas Report 2020
    Available at: https://www.igu.org/app/uploads-wp/2020/08/GGR_2020.pdf
  • IGU (2018) Triennum work report
    https://www.igu.org/app/uploads-wp/2018/07/WGC2018__FLNG_Concepts-min.pdf
  • Pettersen, J. (2016) TEP 4185 Natural gas Technology: LNG.
  • Royal Dutch Shell (2020) Shell LNG outlook 2020
    https://www.shell.com/promos/overview-shell-lng-2020/_jcr_content.stream/1584588383363/7dbc91b9f9734be8019c850f005542e00cf8ae1e/shell-lng-outlook-2020-march.pdf
  • The Oxford Institute of Energy Studies (2016) Floating LNG (FLNG) Potential for wider deployment
    Available at: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2016/11/Floating-Liquefaction-FLNG-NG-107.pdf
  • The Oxford Institute of Energy Studies (2019) Floating LNG (FLNG) update - liquefaction and import terminals
    Available at: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2019/09/Floating-LNG-Update-Liquesfaction-and-Import-Terminals-NG149.pdf
  • The Oxford Institute of Energy Studies (2017) The outlook for floating storage and reagsification units (FSRUs)
    Available at: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2017/07/The-Outlook-for-Floating-Storage-and-Regasification-Units-FSRUs-NG-123.pdf
  • U.S Department of Energy (2017) Global LNG fundamentals
    Available at: https://www.energy.gov/sites/prod/files/2017/10/f37/Global%20LNG%20Fundamentals_0.pdf
Last updated:
Apr 20, 2021

This article is co-written by Magnus Eikens and Mats Møller.

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Magnus Eikens

About

Magnus Eikens

Chief Commercial Officer
As co-founder of ECONNECT, he has developed and brought to life the world's first jettyless transfer system. He holds a decade of experience in business development, strategy and commercialization, and is also a member of the Board of Directors of Energy Network Norway (ENN): a network of industry professionals and global companies leading Norway’s commitment to Clean Energy.

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