PART 2: Project Concept

Introduction and background

India is a developing country with a rising huge energy demand and a maturing energy market. Since there is a limited domestic reserve and production of petroleum fuel, India is a major importer of petroleum fuel. In view of high electrical energy demand and fuel gas supply/demand gap, Indias energy policy is to use a natural gas grid to supply a reasonably clean domestic and industrial fuel and also supply fuel gas to power electricity generation.
The importance of Natural Gas

India's total energy requirement in year 2007 was 404 Mt of oil equivalent and per capita energy consumption is 531 kg of oil equivalent. However with targeted GDP growth rate of 7 to 8%%, the energy requirement of the country is likely to grow at between 5.6% and 6.4% per annum over the next few years. This growth will require a four-fold increase in energy requirements over the next 25 years. If the current energy mix continues for the next 25 years, Indian carbon dioxide (CO2) emissions are likely to grow to 5.5 to 6 billion tonnes of CO2 equivalent annually. This quantity is higher than the present-day emissions of the USA, and would clearly be unsustainable in a more environmentally conscious future world. Thus, clean fuels and alternative energy are important in reducing green house gas emissions like carbon dioxide. Natural gas is a highly desirable energy source since it is the most environmentally friendly fuel among all the available hydrocarbon fuels and has a low carbon dioxide footprint. For sustainable growth, it will be imperative for the country to reduce the use of highly polluting coal in favour of the more environmentally friendly natural gas. This change is already reflected in the international scenario with the reduction in coal as a fuel source and the rise of natural gas

The demand for natural gas in India is increasing as it is a clean-burning fuel and with the expanding network of gas pipelines, fuel is available with minimal transportation costs. Natural gas constitutes 9% of total primary energy consumption in India. Natural gas finds application in the power, oil refining and fertilizer sectors, city gas distribution, manufacture of petrochemicals, sponge iron and other industrial processes. There have been a number of projections by different bodies on future natural gas demand in India by 2030. In addition to the potential indigenous gas supply from the Krishna-Godavari Basin (KG Basin) and the Mahanadi Basin, the demand will need to be met by imports to meet supply shortfall for indigenously-sourced gas. A GAIL/HSBC study estimates that by 2015, the supply shortfall is likely to be extremely large - of the order of 75 MSCMD. These projections clearly indicate that imported gas is likely to play a crucial role in bridging the gap between demand and supply Especially southern India is a high energy demand area; though there are many government driven proposals to have LNG terminals in east coast (on Bay of Bengal) at Ennore near Chennai, Visakhapatnam in Andhra Pradesh etc. On the western coast Cochin, Mangalore, Ratnagiri are marked for LNG terminals. These are typically of 5 MMTPA capacity (pushing about 15~20 MMSCMD of gas) being considered at a cost of approximately 800~1000 million USD each. These mega LNG terminals normally will take about anything from 3~4 years after environmental clearance and financial closure are obtained. Emerging Gas supply Position Estimated demand is over 300 mt/y by the year 2020, includes domestic sources

Year
ONGC/GAIL Petronet LNG - Dahej (Midwest) Petronet LNG - Kochi (Southwest) Shell LNG (Midwest) Reliance (Mid Southeast) IP GAS (Southeast) IOC (Southeast) Other projects (Incl. Iran Pipeline)

2006 2008 2010 2012 2014 2016

70 20 90 20 120 150 240 300 40 10 10 10 10 20 30 10 20 60 40 40 30 50 20 40 90 60 60 90 20 60 120 90 90 120 20 90

150 200 300

Total

100 130 310 520 820 1130

LNG and its advantages A Clear Liquefied Natural Gas at -160 Deg.C, at normal atmosphere

Non Corrosive, Non Toxic, Cryogenic liquid at normal temperature

Odourless, Lighter than air, Assimilates in air when exposed, Safe to handle Fewer Emission, Lower level of NOX, CO2 & particles, NO. SO2 & Mercury Reduced Sludge, No need to use Scrubbers as being done in Power plants using Coal. High Energy efficient - 60%. Use less fuel compared to Coal. Energy efficient about 30%.

LNG Application

Power Sector - Primary fuel, substitute to Naphtha, Diesel Glass & Ceramic industry Fertilizer - Feed Stock Transport Sector - LCNG for Automobiles Industrial Sector - Alternate fuel for direct heating and boilers Piped gas: Household, Restaurants as cooking fuel. LNG Cold - Fisheries, Food Industries - Cold Storage Textiles, Engineering Units, casting & forging, Rice Mills

MINI LNG Terminals

Introduction: A normal LNG terminal receives LNG from a bulk LNG carrier, stores, regasifies and delivers RLNG in the form of natural gas to the consumer(s). Since a bulk carrier will normally carry 100000~300000 M3 of LNG and since they unload their full cargo, the terminals normally have a land based storage hold for 200000 to 500000 M3 or even in excess. This means a project of 3 MMTPA or more capacity of R-LNG, a huge storage, mega financial outlay and long time schedule of project execution from conception to completion. This also means a natural gas consumer or a grid to carry R-LNG. A mini LNG terminal is much smaller in capacity. In order that the bulk LNG is received in full lot from the carrier, a FSU is permanently berthed at the jetty; this means the land storage and regasification facility shall be smaller and is built to meet the gas demand. Comparison of Mini LNG terminal with normal Terminal Overall qualitative comparison A preliminary qualitative comparison table is presented below No 1 Feature capacity Standard Terminal 3~10+ MMTPA The terminal is normally built in a single stage or in two / three phases MINI Terminal 0.4 ~2.0 MMTPA The terminal is normally built in a modular structure, thus enabling faster building

Storage size

30000~300000 M3

1000~10000

The storage is large ready to The storage is larger in FSU and take the full tanker capacity very small in land 3 Storage siting Onland or offshore (FSRU); in case of FSRU, R-LNG shall be delivered onshore to a natural gas grid Large sized Flat bottomed cryogenic tanks; can be over ground, underground or inground tanks (see..) Site construction Offshore for bulk storage plus onshore for smaller daily parcels of LNG. Regasification shall be onshore. Double walled containers or bullets; can be pre-fabricated or with some site fabrication. Capacity built by banks of bullets.

Storage type

Comparison of flat bottom tanks with double walled vacuum insulated tanks No 1 Feature Storage construction time Storage ground area Flat Bottom cryogenic tanks 3~5 years; Double walled vacuum insulated 6 ~12 months

Small for the capacity

Vertical tanks: marginally higher; Horizontal: Larger foot print per M3 of storage

3 4

Storage cost Design and cost of concrete foundations and containment Method of construction Shop lead time

Overall high capital cost; cost Comparatively low capital cost; cost per M3 of LNG shall be less per M3 shall be more. Design is complicated and Design is simple support as in any involving; cost is expensive other tanks / bullets as outer skin shall be CS and ambient. Cost is very low and nominal

5 6

Exclusively at site with some Majority pre-fabricated with some amount of shop preparation amount of work at site Several weeks Several weeks; but can be reduced by using different shops for identical work; Only in days. Can be built as the market demand changers Can be relocated relocation cost; with minimal

7 8

Site lead time Facility for capacity extension Ability to relocate

Several months Not in small steps;

Not possible

No 10 11

Feature Pressure storage Send off Pump requirement Evaporation rate Operators Access and maintenance

Flat Bottom cryogenic tanks Very low; 0.02 atm

Double walled vacuum insulated Possible upto 8 barg; as bullets are used;

Definitely required even for low Not required upto 8 barg discharge; pressure discharge shall be required at a higher R-LNG requirement. 0.1% to 0.2 % (high considering the storage volume is very high) Difficult; only from the top; costly maintenance and inspection as keeping it empty/offline is very costly Yes; the pressure is monitored in relation to the ambient pressure and temperature and is adjusted to reduce boil-off Roll-over is possible as stratification is possible and as new batch can be unloaded in the existing partially filled tank High; sometimes 0.25% at rollover Needed; and to be sized for a high capacity Difficult, complicated and costly High level of damage as the unit is large Not possible as the storage is large; 0.06~0.08% (low as pressure build up is allowed; and also storage amount is low) Easy as it is at ground level and normally exposed; maintenance and inspection cost is low as unit can be taken offline without affecting overall performance. Standard simple pressure control as the storage is already pressurised.

12

13

14

Need of strict pressure control Risk of Rollover

15

Roll over is not possible

16 17

Boil-off generation Boil-off compression Earthquake resistance design Catastrophe damage level Possibility of partial operation

Very low; and can be routed to unloading tank May not be required as the vent-off may be routed to unloading tank or sent as fuel. Simple, standard and cheaper

18

19 20

Can be restricted to a small number of tanks. One or more tanks can be taken offline

Cost comparison of storage options A typical cost comparison is given (courtesy Chart-ferox.com) below;

From the above as well from simple engineering sense, it is clear that upto 2000~2500 M3 capacity, bullets are economically advantageous and above 20000 M3 Flat bottomed cryogenic tanks are economically advantageous. Considering other advantages mentioned in the previous section, it is clear that a mini-LNG terminal storage need to be built by multiple double walled vacuum insulated tanks. The second option to evaluate is to size the individual tanks; standard ISO containers have a maximum capacity of 40 M3; though they can be bought off-the-shelf, it is worth noting that many fabricators have standard design of 100 to 500 M3 capacity. Any size in excess of 100 M3 shall have a site fabrication component including welding inspection, integrity inspection and checking. Some samples pictures: Horizontal and vertical tank sketches: Given below are simply diagrammatic sketches of vacuum insulated tanks; the inner shell is stainless steel designed for a temp of -250 deg C and 8 barg pressure; the outer vessel is carbon steel; the in-between space is vacuum filled with perlite; no external insulation is present. The tank is supported by saddles or skirt on the outer vessel; the inner vessel is supported on to the outer vessel and suitable provision is made for contraction of the inner vessel on cooling.

Vertical tank sample: The picture below shows the simple foundation for the skirt support of a vertical tank.

k The next picture shows the erection of the vertical tank on the foundation; the tank is of 215 m3 capacity (courtesy Statoil, Norway)

Horizontal tanks

Three tanks each 500 M3 capacity; each tank is 5 m dia and 36 m and pre-fabricated; two banks of AAVs each of 1500 Nm3/h of R-LNG.

The following example is 9000 M3 Ora Terminal, (Norway) built by Chart; (courtesy gasener.com

Project basis for a mini LNG terminal Size / capacity: The economical size of an LPG terminal with re-gasification is typically 3 MMTPA; however with high energy / fuel gas demand, it is expected that even a smaller size my economically work, if captive supplier and consumers are identified. Here the project size is pegged at 0.5 MMTPA. This reduces the initial outlay requirement. Storage option: Since construction of LNG ground tanks take 3~4 years (150 to 200 weeks), the proposal is to use an offshore bulk storage; this could be a barge LNG storage or a decommissioned LNG tanker. The idea is to use the storage till ground facilities are brought to full level of operation. The second point is to use the ground storage made of pre-made ISO containers or double walled bullets of 300~500 M3 range. A normal LNG terminal has two or three huge mega storages of 50,000 to 100,000 M3 capacity; however, here in this proposal the offshore FSU is the bulk storage and onshore storage is take-off storage of 2000~4000 M3 constructed out of ISO containers or bullets. This option will reduce the lead time required to complete the storage facility. The second benefit is that this is modular in nature such that the project can be expanded as demand and cash-flow increases. Siting By locating the LNG storage / regasification facility at a minor port, the project cost is envisaged to go lower as common facilities and services can be used; this is especially advantageous for low capacity LNG terminals. Second advantage of using a minor port is the tax incentives as it is in SEZ and infrastructure tax options. Regasification Location However, the gas requirement is at Chennai is projected as 564 MMSCM per year, ie approximately 1.5 MMSCMD. Since there is no direct gas line minor port to Chennai, it is proposed to transfer LNG (in liquid form) by Rail and then use a regasification unit at the battery limit of consumer. (vide Appendix 1). Rail road transport of LNG MFL has a dedicated rail siding which is connected to Indian Rail network; thus. It is proposed to use standard ISO 40 LNG tank containers; since each of them will carry approximately

35~45 M3 of LNG, a quick calculation indicates a need of transport of 80 containers everyday by rail./ road Salient features: With the above basis in perspective, the salient features of the proposal are: Offshore Bulk storage:

An FSU, capacity in the range of 50000~200000 M3; probably leased; (Note: Petronas has infact converted two LNG carriers as LNG FSU to reduce the time to build onshore storage; read: http://www.mysinchew.com/node/74008. Quote:
He said the floating storage units concept has enabled the project team to save invaluable two years compared to building land-based re-gasification and storage facilities. "The two floating storage units, formerly Tenaga-class LNG tankers owned by Petronas' shipping arm, MISC Bhd, will berth at the island jetty. It has been designed to be berthed for at least 20 years without the need to dry docking," he said.

Since the FSU shall be permanently anchored / moored, it may use the modern STS (ship to ship transfer); with emergency break-off valves in case of too much sway or movement of the main tanker. The main equipment component in FSU shall be

storage, loading ports (STS: ship to ship transfer) cryogenic pumping for offloading Boil-off recompression (either to onshore or back to tanks) Flare and vent Control and emergency shutdown system Custody transfer system Fire and gas detection Sea water pumps for local fire system local power generation for pumping, lighting, HVAC, residential area small scale fire fighting, Life boats and evacuation facilities.

Jetty to FSU:

Expected to be in the scope of port; jetty will carry at least the following

Offloading line from FSU Offloading head with PERC Boil-off return from FSU Pressure balancing or boil-off return from and to FSU Power cable (with redundancy) Data cable (with redundancy) Utility line (water, air and dry nitrogen)

Onshore storage: At the start-up, storage of 2000~3000 M3 is envisaged; full capacity storage may be built in phases. In view of short time of construction, the storage shall be made of bank of (prefabricated) LNG 40 ISO tank containers or partly pre-built 200~500 M3 double walled bullets. Key features are Modular storage concept to incrementally build capacity Boil-off recompression Emergency flare multiple cryogenic pumps for offloading Loading arms Control room Custody transfer system Fire and gas detection Deluge and firewater system Instrument air, dry nitrogen production units Integration with utilities and services from port Emergency power generation unit Fire-fighting system (extended from and integrated with port) Rolling rail stock or road trucks

40 ISO LNG rail tankers; depending on the frequency of loading and time for transport the number of tankers shall be decided; at the outset one set of load is expected to be transported every day. Re-gasification Unit at consumerL B/L: The final capacity requirement at consumer b/L is 1.54 MMSCMD of natural gas (see Appendix 1). This is equivalent to 2400 M3 of LNG to be regasified. The chief components in the regasification unit are:

Local storage made of bank of ISO tank containers or double walled bullets Unloading arms for transfer of LNG from rail tankers to local storage Send-off pumps to pressurize the LNG to required B/L pressure Boil-off recompression unit Regasification units (capacity of ~2400 M3/day of LNG or 1.54 MMSCMD of R-LNG Natural Gas compression (if regasification is done at low pressure, the RLNG may be compressed to required B/L pressure) Custody transfer units (for measuring unloaded LNG and R-LNG) Control Room

Fire and gas detection system Fire-water and deluge system Flare system Pressure balancing lines, stand-by natural gas storage. Utility and services system

Schematics 1) Overall schematic is given below