Published November 2004
Global trade of liquefied natural gas (LNG) has more than doubled during the last decade, and currently accounts for almost 30% of the internationally traded volumes of natural gas. The growth in LNG flows has resulted from a combination of several factors. On the demand side, LNG imports have been driven by the increasing use of natural gas for power generation, declin-ing production of natural gas in developed regions, and restructuring of the gas and electricity industries in Asia and Europe. From a supply perspective, LNG exports have been driven mainly by the desire to monetize the abundant gas reserves in countries such as Qatar, Algeria, Nigeria and Indonesia, and by significant reductions in LNG production costs. The trends in most of these factors are expected to continue over the next decade, and could support average LNG growth rates in the range of 7 to 9% per year.
Since the liquefaction plant is the most capital-intensive stage in the LNG chain, significant efforts have been made in recent years to improve the liquefaction technology and to achieve economies of scale. LNG train capacity has been increasing from a typical 1.5 MTPA (million met-ric tons per year) in the 1970s to a current installed range of 3 to 4 MTPA. During this decade, the trend will be toward even larger plants. Recent expansion projects and new greenfield plants have been commissioned with train capacities from 5 up to 8 MTPA. Air Products' two-cycle refrigera-tion process, using propane and a mixed refrigerant, has been the dominant technology for baseload LNG production worldwide. However, several new competing processes are now avail-able, including those by Axens-IFP, ConocoPhillips, Shell, and Statoil-Linde.
The focus of this report is a comparative techno-economic evaluation of three processes for baseload LNG production, using triple mixed, dual mixed, and single mixed refrigeration cycles, respectively. We also examine recent commercial and technology developments in the produc-tion, shipping and regasification of LNG. Our analysis indicates that the selection of process technology has an impact, although not dramatic, on the capital investment and operating costs of the liquefaction plant. Each type of technology seems to be most competitive within a certain range of train sizes. As a result, we expect that a variety of liquefaction processes, rather than a single standard technology, will play a role in the LNG industry.
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