Weak global prices for natural gas have created the need to sharply reduce the capital expenditure required for tomorrow’s liquefaction projects, to ensure profitability. Achieving the same performance with much lower investments means we must rethink our approach to LNG infrastructure. To this end, we are looking at every angle to find ways of incorporating new technology building blocks into our projects. The challenge is to develop architectures that will help curb the costs of developing our future liquefaction plants.
Seeking Innovative Solutions
Leaving no stone unturned
Working jointly with experts in LNG, exploration and business development teams, we are identifying these technology building blocks by carefully screening projects already developed by Total and other operators; we are also exploring concepts available elsewhere and configurations taking shape for future developments. Promising solutions are assessed by the technical disciplines tasked with developing our LNG operations. Once the detailed cost estimates are established, they are available to be included in all new projects from the earliest conceptual and preliminary design phases. The drive to innovate applies to every component of a natural gas liquefaction plant because myriad factors must be leveraged to bring down costs.
Alternatives tailored to context
Plant construction alone accounts for no more than 25 to 30% of our total expenditure on our projects. Much of the investment is devoted to dealing with the constraints inherent in the plant surroundings. Project location is a dominant cost item in terms of site preparation or the construction of gas processing installations; protective structures such as breakwater jetties; and utilities infrastructure. Having alternative architectures available before project design begins means we can choose the optimal solution for each situation. For example, in the case of complex coastal geography, a nearshore option could prove less costly than a plant built onshore. Similarly, when the gasfield is far offshore, having Floating LNG (FLNG) capability could offer a more economical solution by eliminating the need to build a pipeline to shore.
Major cost savings can be achieved by combining functions. Building a breakwater jetty that also serves as an LNG storage tank can reduce costs by eliminating onshore storage tanks. We are investigating such configurations taking a “Swiss Army Knife” approach. But we are also considering simply doing away with certain of the costly elements typically found in “conventional” liquefaction facilities. One target for elimination are LNG export jetties. These may become superfluous with the installation of cryogenic subsea pipelines that would allow direct supply to an offshore LNG tanker loading dock, or by deploying new jettyless transfer systems.
Choosing solutions that are “fit for purpose” is another major optimization strategy. Why build a power plant to Oil & Gas specifications when an “ordinary” power plant built beyond the perimeter of the LNG complex would suffice? This alternative could shave some 50% off the cost of the power plant. Further cost-optimization opportunities lie in designing plant equipment for greater availability from the outset to limit shutdowns and lost production days – two powerful drivers of profitability. We are also identifying methods for keeping FLNG vessels as compact as possible without compromising on safety. The goal is to validate, from the outset, the minimum allowable safety distances between the modules for blast-resistant design, while at the same time cutting the initial costs.
Another factor to consider is the variable composition of the natural gas entering the plant, which makes the necessary treatment more or less complicated and thus significantly affects plant profitability. It is therefore crucial to ensure the efficiency of the selected treatment processes. We are investigating potential synergies that liquefaction units could allow, to improve the overall efficiency of new cryogenic separation techniques being considered for CO2 capture.
Modular and mid-scale
Along with several partners, we are taking a close look at mid-scale architectures, especially modular concepts consisting in small liquefaction trains with a unit capacity on the order of 1 million tons per annum (Mtpa). Such plants are already being developed in the United States, where the Elba Island, Driftwood and Calcasieu projects will meet the CAPEX target of US$500/tpa. Cost reduction at these plants is achieved by optimizing the efficiency of the construction phase and using more standard equipment.
Another major advantage of this approach is the capacity flexibility that can be achieved by adding a succession of mid-scale units as projects come on stream. Large-scale liquefaction plants do not allow that flexibility.
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