Director, Global LNG and FLNG Technology & Development
Manager, LNG Technology & Licensing
09:15 - 09:45
Thursday, 19 September 2019
T1.7 Midscale is the New Small Scale
Over the past three years, “Small Scale LNG” has become a favorite theme in gas conferences. Many proponents of liquefaction technology assert that facilities composed of small scale LNG trains would be cheaper, faster and more financeable than large scale LNG trains. Several projects have been proposed based on this notion with a few now well advanced in development that could reach a final investment decision (FID) in the near future.
However, most seasoned LNG observers are unsure if the small scale LNG project cost metrics will hold true when projects advance past FEED and into the EPC phase. So far, not many have reached FID and at least one small scale LNG project in construction is well behind schedule, making the assertion of faster implementation to appear not to ring true. While the benefits of successfully implementing small scale trains are attractive, many stakeholders find the risks are high and economics less compelling than previous expectations.
As more small scale LNG projects completed the FEED phase, a noticeable trend developed. In some cases, the train size (including pretreatment units) have increased as EPC companies recognized economies of scale influence on the overall US$/tonne metric. Another design evolution observed is designing a larger base load LNG facility with one pretreatment unit integrated with multiple smaller scale liquefaction units in parallel.
Even so, small scale LNG developers continue to move the industry in a positive direction by challenging the fundamentals that drive project cost and schedule. Liquefaction technology that is neatly modularized and integrated in a repeatable approach requires less front end engineering than bespoke designs. Simplifying the FEED through standardization is likely to drive down cost and schedule pre-FID, with additional post-FID benefits in regions where construction resources are not readily available.
A key benefit of standardization is allowing ample time and resources (pre-FID) to develop a reliable EPC project execution plan. This plan encompasses the fabrication, logistics, integration, and testing strategies that are necessary to deliver a firm lump sum EPC price and schedule. While many solution providers advertise low LNG costs based on US$/tonne, the true cost of any LNG project is made or lost in the EPC phase.
In September 2018, KBR and ConocoPhillips LNG Licensing LLC announced plans to develop low-cost and expedited “midscale” LNG solution for the marketplace. This team will complete a FEED quality reference design for a high efficiency midscale LNG train with capacity ranging from 1.5 – 3.0 MTPA in 2019. Gastech 2019 occurs exactly one year from that initial announcement. This paper will provide an overview of the unique midscale design features and execution plan. In short, this paper explains why “Midscale is the New Small Scale” in an ever changing LNG industry.