LNG plant


James Hoare - 14 April 2016

The LNG growth story continues, however projects need to careful. The discussion is currently continuing at LNG18, the world’s largest global LNG event, currently being held in Perth, Australia.

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Mr James Hoare
James Hoare is a member of Valve World magazine's editorial team and is contributing to articles, interviews and reports for KCI publications.
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When I woke up this morning my Twitter app was jumping up and down like a petulant child, demanding some attention. What was the fuss you ask? Twitter was alerting me that a lot of my contacts had been present at the LNG18 Gas conference, and there were evidently some interesting things to talk about.

Perhaps because I’m Australian and like to keep up-to-date of developments from my home country, or perhaps because our May issue is our LNG special, I was soon reading through my Twitter stream before I’d had a chance for morning coffee. So, what were they all talking about down there?

Well, the event held in sunny Perth was LNG18, the world’s largest global LNG event which is held every three years. LNG is of course a growth story - it emits less than half the emissions of coal for power generation and even mines and plants are starting to run their trucks on LNG, which emit 20% less carbon dioxide than trucks running diesel. According to a UN population projection, by 2020 the global economy will be 20% larger and inhabited by about one billion more people, so industry will need to meet growing demand.

Chevron CEO John Watson, speaking as part of the LNG18 conference program summarised the need for LNG in his plenary lecture when he said: “Experts project global LNG demand will increase nearly 130 percent by 2035 - to put that in perspective, the world will need more than a Gorgon-sized project every year for nearly 20 years to meet projected demand.”

Woodside CEO Peter Coleman's plenary address on the transformation of gas had a theme of “back to the future”. By this he meant to learn from the past to guarantee the industry’s future. Citing project development as an example, Mr Coleman argued that in the current price environment it is better to phase a development out over a longer timeframe, rather than take a fast track approach driven by an insatiable desire to grow. He expects future LNG projects to be smarter and greener, but not necessarily bigger.

This theme was further continued by Inpex chief executive Toshiaki Kitamura, who highlighted that LNG buyers are no longer seeking long-term stable LNG supplies, but rather seeking flexibility in procurement volumes and destinations, and that “to respond to this shift in buyers’ priorities, suppliers must fast improve the competitiveness of their projects through efficient project development and operations”.

According to GE, this gives rise to a new market for small-scale LNG plants whereby suppliers are encouraged to consider smaller-scale LNG plants that can be built more quickly to produce earlier returns on capital investment. Incremental expansion of a smaller plant gives a faster return, rather than waiting on the massive machinery required, This means that a plant starts producing (and paying of its investment) a lot sooner.

Such modular or “off the shelf” projects are also more important, and incremental expansion of smaller projects are becoming more important, according to GE. Which highlights the importance of modular LNG projects and the consequences for valve suppliers. To read more about this, please see our previous article on modular projects Modular megaprojects: a smart approach to valve delivery (vol 17, Issue 4, p.77) or my previous blog post.

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