L NG is a critical energy resource today and, with numer-ous new LNG ventures under development, its impor-tance is set to increase. While the market is becomingmore mature, LNG trading prices remain very dynamic, due todemand-supply volatility, geopolitical concerns, regulatoryissues and public scrutiny. To better manage this uncertainty,the systems making up the entire LNG value chain (from pro-duction, liquefaction and shipping in specially designed ves-sels, to regasification at the destination terminal) have to bedesigned and operated in an optimal, safe and reliable fashion.

This complex business climate makes it imperative thatcompanies investing in new LNG projects have confidence inboth the technical and economic models required to supportoptimal decision making. This article will look at some of thebest practices that enable better capital investment decisionsbased on rigorous model based analysis of process, equip-ment design and economic alternatives. It examines ways toleverage those same rigorous models to maximise operatingperformance, and to ensure safe and reliable operation of theLNG assets through the use of advanced process controltechnologies. Industry examples and case studies will beused to illustrate the recommended practices.

BackgroundThe dynamic nature of the LNG market is placing additionaldemands on companies embarking on new investment pro-jects. While margins are becoming tighter, regulatory andpublic scrutiny can delay project authorisations and revenue.Companies are pursuing economies of scale by designinglarger capacity facilities, but the economics, technical design,environmental impacts and operational activity they need tomanage have all become more complex. This business envi-ronment demands lower cost, highly optimised processes.

Significant benefits can be achieved by approaching thedesign of LNG liquefaction and regasification facilities in amore integrated way. Too often project economics, processevaluation, design and operation are carried out as separatedisciplines leading to suboptimal business decisions. Accuratemodelling of the process and design of key equipment, inte-grated with economic analysis of the process model, leads tobetter design choices that deliver a superior return on invest-ment. Adopting industry best practices for process automation

in this way can enable companies to realise a competitiveadvantage throughout the LNG asset lifecycle.

Project design and economicsAn appropriate design for an LNG project drives its long termviability, including the capability to operate efficiently, safelyand reliably, and to deliver good investment economics. Toachieve these objectives, the design process must be man-aged along the following three dimensions.

Engineering and design lifecycleThe process engineering and design work flow is a contin-uum from conceptual design to front end engineering anddesign (FEED), through detailed design. To eliminate anysurprises, it is imperative that the engineering and designlifecycle be tied to the economic evaluation of the designchoices at each step in the chain. Therefore, the design andeconomic evaluation tools have to work in an integrated fash-ion, and must allow for incremental evolution of the designfrom conceptual design, to process design, to detaileddesign. This is an important best practice and is one of thedimensions of LNG project design and economics.Conceptual design and economicsConceptual design and economics involve establishing thefinancial justification of an LNG project and a preliminarydecision with respect to the LNG technology to be used. It isalso very important to carefully select and retain the basictechnical and financial assumptions used in the LNG pro-jects value chain made during this stage before proceedingto the next stage: LNG process engineering and detaileddesign. Project economics based on a certain reservoir andwell production schedule must remain tied into the overallengineering and design of the LNG facility1. Imagine howproject economics would be impacted if an LNG facilitydesign was based on early reservoir production assumptionsand never updated to reflect new reservoir characterisationsand production forecasts. An LNG facility designed for an ini-tial feed quality and production rate profile may be illequipped to operate as efficiently under these new produc-tion conditions. The use of consistent assumptions and datain this way is especially critical because LNG projects ofteninvolve a field development in combination with the

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investments in liquefaction, transportation and regasification,and the impact of the field development needs to be accu-rately represented.This is the second dimension of LNG pro-ject design and economics.Integrated asset model for processengineering and detailed designWith the conceptual design and early view of economicsestablished on the basis of basic technical and financialassumptions, and an understanding of the longer term pro-duction profile beyond the initial production period, processengineering and detailed design of the LNG facilities cannow proceed.

To achieve optimal design for safe and reliable operation,and to achieve good overall project economics, it is highlydesirable that companies utilise a computational tool thatintegrates projected reservoir performance, well deliverabil-ity, surface network analysis and process engineering, sothat the production system can be optimised as a whole.Thisis now possible following advances in simulation technologythat enable models of each element of the system to be inte-grated together, thereby allowing companies to simulate theperformance of the overall system, including the complexinterrelationships between the different assets. Use of this

kind of integrated asset model will help companies ensureoptimisation of the LNG value chain, enabling them to reflectthe rapidly evolving supply-demand patterns for LNG aroundthe world and the volatility this situation might impose in dif-ferent regional markets.

The ability to connect the LNG plant constraints with vari-ables (chokes) in the production system is a key benefit ofthe integrated asset model. Upstream conditions no longerneed to be treated as static quantities by the process engi-neer. Modelling from the well through the process facility isfeasible using a common simulation environment, thus bridg-ing the gap that commonly separates the production andprocess engineering domains. For example, being able tointegrate the range of uncertainties in field assumptions canallow for appropriate flexibilities to be included in the lique-faction plant design. This is the third dimension of LNG pro-ject design and economics.Process operations and safetyNow that the LNG facility has been optimally designed andbuilt, it is critical to ensure that the operation of the facility isas efficient as possible. However, this is no easy task withproduction schedules, gas/liquid contract nominations andflaring limits, just a few of the operational constraints thatneed to be managed on a day to day basis. As in the designand engineering phase, process automation systems canplay a significant role in helping to manage operations, bothin terms of optimising production performance and maintain-ing safety and reliability. For example, advanced processcontrol (APC) allows LNG plants to react more rapidly to fre-quently changing economic conditions by automaticallymaintaining operations close to multiple operating con-straints. The simulation models developed during the designof the LNG asset can also be leveraged into operations in anumber of significant ways. By using these existing models,for example, an operator can easily see if his LNG asset isperforming to the highest standard possible, and can analysethe root cause of any deviation.

Production and operations optimisationThe following example illustrates how APC can be used tooptimise production in an LNG facility. Ras Laffan LiquefiedNatural Gas Company Limited (RasGas) operates two largeLNG trains within Qatars North Field. During the summermonths when there is less demand for LNG, RasGas doesnot need to maximise production of LNG, but can focus onoptimising its processes and making the greatest amount ofLNG with the least amount of gas. The company also has tomanage the impact of making up to 20 rate changes peryear. In an effort to address any process flaring caused bythese rate changes, RasGas made initial efforts to stabilisethe plant through loop tuning. After some success using thismethod, an analysis was done to determine the incrementalbenefits of implementing an APC solution, including thecapability to react more rapidly to frequently changing eco-nomic conditions.This analysis concluded that there were 15areas of potential benefit, and after quantifying only the firsttwo benefits, it was determined that there would be a shortpayback for an APC project. Some of the benefits identifiedby the study included: Optimised plant performance (e.g. higher throughput). Optimised cost (e.g. reduced utility consumption). Creation of a virtual cruise control environment for the

plant. Reduced operator intervention.

The value of applying simulation models in operationscan be illustrated by an example at BP Trinidad and Tobago(BPTT). BPTT has combined several existing models into a

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Figure 2. The LNG production system can be optimised as a whole using an integrated assetmodel to combine projected reservoir performance,well deliverability, surface network analysis andprocess engineering.

Figure 1. A integrated simulation model of production wells, gas gathering, and the liquefaction process can form the basis of astreamlined approach to process design, economicevaluation and operational improvements.

single integrated asset wide LNG model, allowing the pres-sure/flow equations of its complex gathering networks to besolved together with the equations governing the perfor-mance of the wells. The constraints imposed by theonshore stabilisation facilities are properly modelled andtaken into account, such as maximum stabilised flowrates,maximum permitted flaring quotas and maximum watergeneration.

The complete BPTT production system involves ninereservoirs produced by approximately 80 wells; six are gasreservoirs and three are oil reservoirs. The interactionsamong the different parts of the system (including wells, plat-form separators, transportation pipelines, stabilisation facili-ties) are too complex for an operator to process based sim-ply on experience.

Using the integrated asset model, BPTT is able to deter-mine process conditions that will satisfy gas demand, simul-taneously maximise oil production and minimise flaring. Thenumber of involved decision variables (more than 30) andprocess constraints (more than 20) makes it necessary touse automatic optimisation tools. Now the operation can bepushed to the system limits, producing the required gas nom-inations with an increased oil throughput2.

Some different challenges apply for companies seekingto optimise the regasification portion of the LNG lifecycle.Although the process facilities required here are fairlystraightforward, it becomes very important to monitor andunderstand the impact of the regasified LNG as the naturalgas enters the pipeline transmission network, and simula-tion models can help companies manage this process. Thequality of the new gas entering the pipeline must be takeninto account since it could adversely affect the final deliveryquality of the transmission line gas to the end customers.Critical gas properties such as heating value, percent inertsand Wobbe index should be rigorously modelled as theyare combined with the main transmission line gas to ensureproper pipeline and customer delivery specifications aremet.

Safety and reliabilitySafety is another area in which models originally developedfor process design can play a key role. Understanding thecomplex operation of the LNG facility, terminals and regasifi-cation sites is especially critical during startup or shutdown

conditions. The steady state models used by the processdesign engineers can be an important starting point in creat-ing more detailed dynamic models to simulate these tran-sient operations. By building on existing validated steadystate models, one can be assured that the dynamic modelsare based on a sound engineering foundation.

The Saggas Sagunto LNG project demonstrated thatdynamic simulation can be a valuable tool for supporting theefficient and safe operation of an LNG regasification termi-nal3. For the Sagunto project, the main applications ofdynamic simulation were to analyse and verify the perfor-mance of the emergency shutdown (ESD) system and tostudy other transient conditions, such as pump, compressorand vaporiser startup/shutdown. To maximise the efficiencyand quality of the engineering design work for the Saguntoproject, both steady state and dynamic modelling tools werea core part of the study of a range of scenarios. The toolsincluded: Pump startup/shutdown analysis, which confirmed the

correct sizing of valves, closing time and minimum flowassurance to keep lines cooled with a certain liquid flow.

The supply gas cut off and vaporiser shutdown study,which demonstrated that the process operated safelywithout the need to increase the size of the venting sys-tem to evacuate this extra amount of gas, resulting in sig-nificant cost savings.

General or partial shutdown analysis that verified the cal-culated sizing of the venting system.

A startup support tool to allow process engineers toanticipate problems that could arise during startup condi-tions or in the normal operation of the plant.

Control loop tuning using dynamic models, whichenables control engineers to pretune the control loops ofthe plant, thus saving time during the operational startupof the facility.

Procedure development and timing to help understandthe time available to take corrective action in the event ofoperational disturbances.

ConclusionThe major global investment in new LNG liquefaction andregasification capacity is creating substantial new competi-tion in the natural gas market. Companies that can optimisethe performance of their production assets will be well placedto improve their margins and achieve a significant competi-tive advantage.

LNG integrated asset modelling and economic evaluationare essential for optimal design, investment and operationaldecisions. The technology to achieve this is available today,and best practices have been established. Industry examplesand case studies have demonstrated the value of applyingthe principles outlined in this article.

The volatility of the LNG market also makes it essentialthat companies have clear visibility of the real time perfor-mance of their operations, and have the decision supporttools in place to make the most profitable choices. The latestgeneration of integrated software solutions provides compa-nies with the information they require to respond effectively ina dynamic operating environment.

References1. KAPPOS, Leonidas, SHIPPEN, Mack and SZATNY, Michael,

Integrating Production Network and Process Simulation for a FloatingLNG Facility, Offshore Technology Conference, May 2005, Houston,Texas.

2. STENHOUSE, Bryn and GOODWIN, Stephen, Barriers to Deliveringfrom Model Based Gas Field Production Optimization, GPA Dublin,2004.

3. CONTRERAS, Jorge and FERRER, Jos Maria, Dynamic simulation: acase study, Hydrocarbon Engineering, May 2005. ______________

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Figure 3. Process simulation models can be leveraged in operations to help optimise performance.