The White Gold Elixir

By Sybil Hatch
Photographs by Yannis Kontos/Polaris

LNG is short for liquefied natural gas, but the “G” could well stand for gold. In a world where the demand for energy keeps increasing, LNG is the fastest-growing segment of the market. Its use is growing at a 7 percent annual clip, a rate that means usage is doubling every 10 years. Why? Because LNG is clean, efficient, affordable, and—best of all—it can be easily transported to places far from sources of natural gas.

Today, the biggest market for LNG is Asia, with Japan consuming more than half of the world’s production. In Europe, France and Spain are the largest importers. LNG is still a niche fuel in North America, representing less than 2 percent of current consumption, but that could soon change because traditional natural gas supplies will not be able to keep up with demand in the next decade. LNG is expected to make up much of the shortfall.

“Liquefied natural gas is going to be an increasingly important energy source for much of the world, including the United States,” says Bill Dudley, head of Bechtel’s Petroleum & Chemical global business unit.

The alchemy behind LNG is simple: It is made by cooling purified natural gas to about minus 161 degrees Celsius, turning the gas into liquid. This white elixir occupies 600 times less space than the gas, weighs half as much as water, and is odorless, noncorrosive, and nontoxic.

Once the natural gas is liquefied, it can be readily stored and transported at atmospheric pressure by oceangoing tankers. At the receiving end, the LNG is converted back to a gas for use in power production or consumer markets.

Over the past 25 years, Bechtel has set the standard for building cost-effective and technologically innovative LNG facilities. The company has designed, engineered, and/or constructed more than one-third of the liquefaction facilities now in operation worldwide.

In 1969, Bechtel constructed its first LNG plant, for Phillips Petroleum, on the Kenai Peninsula in Alaska to supply natural gas to the Japanese market. To liquefy the gas, Phillips specified its own Phillips Optimized Cascade LNG Process, in which the gas is progressively refrigerated in three phases using propane, ethylene, and methane. The process was originally designed to permit easy startup and smooth operation for a wide range of feed gas conditions.

The venerable Kenai plant is now one of the oldest continuously operating LNG plants in the world. Shortly after that project, Bechtel built an LNG receiving terminal at Elba Island, Georgia—one of only four such terminals in the continental United States today. Bechtel also has built LNG liquefaction facilities in Libya, Indonesia, Algeria, and the United Arab Emirates.

In the early 1990s, the market for natural gas started to heat up, as did discussions between Bechtel and ConocoPhillips about exploring a strategic collaboration that would solidify a new business model for both companies. The proposed Atlantic LNG facility in Point Fortin, Trinidad—the first major LNG project in the Western Hemisphere in more than 25 years—was the perfect opportunity to put this new collaboration into action.

The Bechtel-ConocoPhillips team included the innovative Phillips Optimized Cascade LNG Process in their bid proposal and won the project with a design whose simplicity and economy impressed many in the industry.

The Atlantic LNG facility now produces approximately 3 million tonnes of LNG annually from bountiful natural gas reserves off Trinidad. A fourth process train is now under construction.

“This golden opportunity has allowed both firms, together, to actively pursue additional LNG projects and to improve on the technology itself,” says Amos Avidan, manager of technology and development for Bechtel’s Petroleum & Chemical business unit. “It also allows ConocoPhillips to increase its equity share in the global LNG market and Bechtel to design and build the new plants.”

It’s a unique business proposition for Bechtel. “Most of Bechtel’s EPC [engineering, procurement, and construction] projects are technology neutral,” says Avidan. “To align
ourselves with one technology was a bold step.” Although the arrangement effectively removes Bechtel from contending for LNG projects with customers using other technology, there are many advantages.

“We use the same basic standardized process train model for each project,” says Avidan. “We’re able to do a better job, have more control, and manage risks.” A good example is the LNG plant in Idku, Egypt, where Bechtel has been performing engineering, procurement, and construction for trains 1 and 2. Because of the similarities in design, Bechtel is applying experience gained from building the Atlantic LNG plant.

“Our customers benefit from proven technology and construction practices,” says Avidan. “We’re very cost-competitive in the LNG market, and by using a negotiated open-book approach to the front end of the project, we can deliver a completed LNG plant nine months to a year ahead of a plant built under a traditional project execution model, where every phase of the project is bid out.”

Bechtel and ConocoPhillips formed the LNG Product Development Center in Houston, Texas, to continue to improve on the Phillips Optimized Cascade LNG Process. “We want to keep the technology competitive and to continue to innovate,” says Avidan. Case in point: An advanced aero-derivative gas turbine was incorporated into the design for a new super-low-emissions LNG plant that Bechtel is building in Darwin, Australia. The center is also developing efficient means to enlarge the capacity of the process train. That could lead to plantscapable of producing more than 7.5 million tonnes of LNG per year—twice the capacity of today’s largest facilities.

With ConocoPhillips’ LNG process and Bechtel’s construction experience, this partnership is worth its weight in gold.

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