Pair NGL Recovery with LNG Production to Improve Processing Economics

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Pair NGL recovery with LNG production to improve processing economics D. BECK, Audubon Companies, Denver, Colorado SPECIAL REPORT: LNG TECHNOLOGY In recent years, the use of LNG as a clean-burning alternative to coal, gasoline and diesel has grown dramatically. However, this trend has been somewhat hampered in recent months as the price differential between crude oil and natural gas has narrowed. Overall demand for natural gas throughout the globe is expected to rise steadily in the coming years. In light of this growing demand, the need for new and more efficient methodologies that can help producers deliver LNG to market quicker and cheaper has also increased. Pairing LNG production facilities with NGL recovery plants has proven to be an effective way of delivering LNG to market. As the industry continues to shift away from large, multi-ton LNG facilities in favor of small-scale (micro) production operations that can better accommodate local markets, optimization of these systems will become increasingly important. Present LNG production. The price of LNG is largely determined by three factors: the price of natural gas, the cost of liquefaction and the cost of transportation. Liquefaction makes up approximately 30%–40% of the total cost. By reducing the cost required to liquefy gas, the price of LNG can be decreased and passed on to operators as increased market share and/or profits. The majority of today's LNG production takes place at large-scale liquefaction plants. These facilities are designed to produce extremely large volumes of LNG. As a result, they often cost hundreds of millions of dollars to develop and require a large footprint, making them impractical in many areas of the world. LNG is also used for peakshaving in natural gas power plants. W hen demand for power increases, the supply of natural gas from the pipeline may be insufficient. More recently, LNG has been used as a clean-burning alternative to gasoline and diesel in the trucking, railroad and marine markets. Conversion kits can be added to diesel engines to allow them to burn LNG in lieu of, or in combination with, diesel. Why couple LNG with NGL recovery? Traditionally, NGL recovery and LNG production have been viewed in the marketplace as two separate segments. Upstream and midstream providers have typically focused on recovering NGL and producing a residue gas stream, while downstream providers have focused on using that gas stream to produce LNG. With the current market and infrastructure in many regions of the world, however, this supply chain limits LNG distribution to a relatively small radius. As a result, LNG production is now migrating into the midstream arena in an effort to shorten the market distribution chain and broaden LNG availability, leading to more selling options for producers. Small-scale, or micro, LNG facilities provide such distribution options when paired with natural gas processing plants. With larger LNG plants, exports are transported internationally via carriers to end users. With micro-LNG facilities, on the other hand, LNG production is distributed primarily within local markets where demand is high. In addition to significantly reducing capital costs, this methodology allows for much faster market penetration and has the potential to expand LNG opportunities into nontraditional markets and allow producers to exploit gas sources that were, at one time, considered uneconomical. The biggest benefit of pairing NGL recovery with LNG production comes from the commonalities between the two facilities, as both require much of the same operating and utility units, including gas treating, power distribution systems, control systems, flares, water treatment systems and other ancillary infrastructure. Micro-LNG facilities also offer greater operational flexibility, along with lower capital and operating costs. By sharing the plant infrastructure, operators can save approximately 35%–45% on capital costs when compared to a standalone LNG plant. Similarly, operating cost savings are estimated at approximately 20%–30% when compared to two standalone units. The regeneration gas disposal is another advantage of combining the two facilities. In a standalone LNG plant, one of the main process challenges is the disposal of the spent regeneration gas, which can contain CO 2 and other impurities. In a standalone LNG plant, this spent gas can be both difficult and expensive to dispose of due to the limited options for removal. In an NGL plant, however, the spent regeneration gas stream can be easily managed with the use of the plant processing options via fuel gas or blending. These advantages are spawning a new generation of natural gas processing techniques that aim to transform LNG into a preferred fuel source. TABLE 1 illustrates facility unit comparisons for a typical standalone NGL recovery plant and a standalone, mid- sized LNG plant. The middle column, "Common," shows which systems can be shared and/or consolidated. Design principles and challenges. Coupling an LNG plant with the backside of a cryogenic gas plant allows for the minimization of infrastructure costs by

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