LNG, Markets, Projects

MEO plans Timor Sea LNG hub

MEO Australia proposed the development of the Timor Sea Liquefied Natural Gas (LNG) Project in 2002 as an extension of its Tassie Shoal Methanol Project, located in the Timor Sea off the coast of the Northern Territory.

Managing Director and Chief Executive Officer Jürgen Hendrich says “Engineering has been completed in enough detail to confirm project feasibility and for approval to be gained for the LNG plant to sit adjacent to the methanol plants.”?

Initially, MEO allowed three years for the approval process and was to use the time to appraise its NT/P68 permit or secure third party gas. However the Commonwealth Government granted project approval in less than 12 months.

Project scope

The project involves a 3 million tonne per annum (MMt/a) LNG production module hosted on a self installing platform, an LNG loading system and a steel LNG tank with concrete secondary containment on a concrete gravity based structure (GBS).

The LNG production module is to be an Air Products, dual mixed refrigerant design, using twin cryogenic heat exchangers. The plant will be powered by four LM6000 gas turbines – the stationary version of the models used to power Boeing 747 and Airbus A300 aircraft – and all electric drives. ConocoPhillips’ Darwin LNG Plant was the first LNG plant to use aero-derivative gas turbines. Cooling will be via indirect seawater heat exchange, which means that fin-fan coolers normally seen, and requiring a very large plot, are avoided.

Air Products technology is used in more than 80 per cent of all plants currently in operation – including three trains of the North West Shelf LNG Project.

The plant will be constructed in South East Asia as a fully complete, pre-commissioned module on an Arup Concept Elevating (ACE) self installing steel platform, then dry transported to the shoal. The platform will be approximately 50 x 100 x 8 metres with six steel legs by which the platform elevates itself using jacks.

The ACE production platform concept has been used in the upstream industry, with two regional examples at Yolla Gas Field in the Bass Basin, and Maari Oil Field in the Taranaki Basin, New Zealand.

The LNG loading system may not involve the use of a jetty. Instead, a Torp HiLoad unit and single point mooring could be utilised to avoid close vessel approaches and the use of tugs, as well as to increase load out availability.

The Torp HiLoad LNG load out system locates against the side of the LNG vessel at the normal loading point and loads via conventional articulated arms, so standard LNG carriers can be used. The system has not yet been used for LNG; however, MEO expects other projects to be utilising this technology before a final investment decision (FID) for the Timor Sea LNG project is reached.

“The recent certification of cryogenic flexible and subsea pipelines has opened the access to this technology, which has already been built for crude loading,”? says Mr Hendrich.

The LNG tank will be constructed on a concrete GBS of similar diameter to the LNG tank. The tank will be approximately 85 metres in diameter and the top of the tank dome will stand approximately 70 metres above the sea floor. The present design capacity is 170,000 cubic metres, with a potential to be increased to 225,000 cubic metres at detailed design stage with a small increase in diameter. The tank and GBS are to be built in South East Asia then wet towed to the shoal and grounded in approximately 14 metres of water by the 90 per cent flooding of the internal GBS cells.

The construction process and challenges

Mr Hendrich says that the timing of the project will be dictated by MEO’s access to gas. “Once gas supply is finalised, front-end engineering and design (FEED) can commence.”?

The company expects that the tanks and LNG module will take approximately 40 months to build and install after a FID has been made.

Mr Hendrich says that most of the construction challenges will be resolved during FEED, along with any further project optimisation opportunities.

While environmental approvals have been secured and the key parameters have been established for the project, Mr Hendrich notes that primary challenges will be focused around installation of plant and equipment, and operational impacts.

“Clearly, these large structures need good weather to transport to site and install. Operations and crew change can also be impacted by weather, but these are the same issues faced by Bayu-Undan and the Northern Endeavour at Woodside Petroleum’s Laminaria Oil Field and countless other production operations around the world.”?

He says that MEO’s project has an environmental advantage, being located on a shoal in relatively shallow water. Moreover, the shoal is little over a one hour helicopter ride from the Darwin airport.

“Plants and crew are protected from any severe weather events by the outer perimeter of the shoal, which would look like a surf beach when waves reach a certain height, dissipating much of the wave energy before it reaches the structures”? says Mr Hendrich.

Project innovation

MEO has incorporated proven and conventional technologies, but given the offshore location, their application is different. “The Timor Sea LNG and Tassie Shoal Methanol projects are the initial step to take processing offshore, closer to the gas, while avoiding the largely unresolved issues associated with floating options for both methanol and LNG,”? says Mr Hendrich.

Construction of the LNG tank is to be dry-built in a normal casting basin, and the LNG module would be constructed at an existing site experienced in this type of construction.

“The LNG plant layouts are very similar to a normal onshore plant layout but require a substantially smaller footprint due to the use of indirect seawater cooling,”? Mr Hendrich explains. “Land-based plants are typically air cooled and require a lot of real estate for the acres of fin-fan coolers required.”?

The LNG tank will have a 9 per cent nickel steel primary containment, concrete secondary containment and under-floor heating, just like most other LNG tanks presently in operation.

A northern Australian hub

Mr Hendrich says that the location of Tassie Shoal affords the project a natural competitive advantage as a potential gas processing hub.

“Tassie Shoal is over 400 hectares in area, and lies in the heart of the undeveloped Bonaparte Basin gas fields. MEO is confident that a number of LNG and/or methanol plants would be approved on the shoal, so this option has huge potential,”? he says.

“Capital costs associated with long supply gas pipelines and Australian construction can reduce the competitiveness of a plant. Tassie Shoal dramatically reduces the pipeline lengths required and also leverages the low labour cost advantage of South East Asia by having the plants entirely fabricated there.”?

Mr Hendrich also says that the Timor Sea LNG and Tassie Shoal Methanol projects afford a synergy.

The methanol plant requires 22-25 per cent carbon dioxide in the gas stream. “Any moderate (10-15 per cent) levels of carbon dioxide in the gas, which need to be stripped from the gas for LNG production, can be fed into the gas supply to the methanol plant as an effective sequestration method,”? he says.

“For instance, if we had 10 per cent carbon dioxide gas, and this carbon dioxide was removed and added to a methanol plant supply, we could make 3 MMt/a of LNG and 3.5 MMt/a of methanol without venting any carbon dioxide.”?

He explains that both projects are standalone and will likely be phased depending on access to and quality of any gas secured. However logistic support such as supply vessels and helicopters are expected to be shared, as well as maintenance staff, accommodation and the control platform. Additionally, a number of proprietary process synergies between the two plants have been identified.

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