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Presentation for the award-winning paper of the same name, presented in Power-Gen Asia 2013 by Kari Punnonen, Area BDM, Oil & Gas Business, Wärtsilä Power Plants. Download the paper at: http://www.wartsila.com/file/Wartsila/en/1278537230339a1267106724867-Small_and_Medium_size_LNG_for_Power_Production_KPunnonen.pdf
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• KARI PUNNONEN• AREA BDM, OIL&GAS BUSINESS, MIDDLE-EAST, ASIA &
AUSTRALIA• WÄRTSILÄ FINLAND OY
1 © Wärtsilä 10 April 2023 K. Punnonen
Power Gen Asia 2-4 October 2013
Small and Medium Size LNGfor Power Generation
FO
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L P
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Disclaimer
This document is provided for informational purposes only and may not be incorporated into any agreement. The information and conclusions in this document are based upon calculations (including software built-in assumptions), observations, assumptions, publicly available competitor information, and other information obtained by Wärtsilä or provided to Wärtsilä by its customers, prospective customers or other third parties (the ”information”) and is not intended to substitute independent evaluation. No representation or warranty of any kind is made in respect of any such information. Wärtsilä expressly disclaims any responsibility for, and does not guarantee, the correctness or the completeness of the information. The calculations and assumptions included in the information do not necessarily take into account all the factors that could be relevant. Nothing in this document shall be construed as a guarantee or warranty of the performance of any Wärtsilä equipment or installation or the savings or other benefits that could be achieved by using Wärtsilä technology, equipment or installations instead of any or other technology. All the information contained herein is confidential and may contain Wärtsilä’s proprietary information and shall not be distributed to any third parties without Wärtsilä’s prior written consent.
2 © Wärtsilä 10 April 2023 K. Punnonen
DISCLAIMER
AGENDA:
1. Company Profile
2. LNG Supply Chain
3. LNG Terminal with Power Plant
4.LNG Based Feasibility
SMALL AND MEDIUM SIZE LNG
3 © Wärtsilä 10 April 2023 K. Punnonen
© Wärtsilä4 10 April 2023 K. Punnonen
It’s Time for LNG
Wärtsilä Corporation
19,000 professionals
Marine/offshorePower Generation
Power Solutions for
• Listed in Helsinki • 4.9 billion € turnover (2012)
PowerPlants
ShipPower
Services
5 © Wärtsilä 10 April 2023 K. Punnonen
Installed base – Wärtsilä Powering the world*
Oil & gas
Flexible baseload
Industrial self-generation
Grid stability & peaking
Europe:Output: 12,1 GWPlants: 1793Engines: 3361
Asia:Output: 18,7 GWPlants: 1645Engines: 3627
Africa & Middle East:Output: 11,9 GWPlants: 856Engines: 2254
* On-shore Power Plants December 2012
30 April 2013 POWER PLANTS 20136 © Wärtsilä
Americas:Output: 11,3 GWPlants: 395Engines: 1342
Total: 53,7 GWPlants: 4689
Engines: 10584Countries: 169
Wärtsilä Hamworthy Gas Excellence
Your perfect match
– WÄRTSILÄ is a global leader in complete lifecycle power solutions for the marine and energy markets. In addition to being a world class engine manufacturer and supplier, Wärtsilä is also a recognized EPC contractor in the power generation sector with extensive references for turn key delivery of onshore power plants and floating power barges.
– HAMWORTHY OIL & GAS SYSTEMS was a leading designer, developer and manufacturer of advanced gas handling systems for onshore, marine and offshore applications. Hamworthy has patented LNG technology within LNG liquefaction and is a recognized provider of technology and systems for various LNG applications worldwide.
– With Hamworthy now being an integrated part of Wärtsilä the two companies’ extensive project execution experience and technology portfolios are combined into a seamless and fully accountable one stop shop for complete small and mid scale LNG production facilities.
Wärtsilä Oil & Gas Systems
LPG LNG Gas Recovery Separation Technology
LPG cargo handling systems
Reliquefaction & cooling plants
Cargo heaters & vaporizers
VOC recovery systems
Small scale LNG plants
LNG regasification plants
BOG reliquefaction plants
Aftermarket
Complete site support services
Project life time supportZero Flare solutions
Ship- and cargo tank design
HC blanket gas and recovery
LNG fuel gas systems Flare gas recovery and ignition Compact separation
VIEC /VIEC-LW internals
Interface level and profilers
Separator design
Training
Products and Organization from Wärtsilä Oil & Gas Systems
How to get LNG? – Conventional LNG supply chain
Liqui-faction
Large scale
shippingHub
Evaporation
PipelineEnd user
(NG)
Gas explo-ration
9 © Wärtsilä 10 April 2023 K. Punnonen
LARGE SCALE
Large Scale LNG• Intercontinental transport• Millions of tons per year• LNG Terminal feeding into
pipeline system• Providing a commodity
Jetty capable of offloading ships from 35,000 m3to 145,000 m3• Single containment tank (160,000 m3)• 125 MMSCFD Regas and Sendout
How to get LNG? – Mid and Small Size LNG
Gas explo-ration
Liqui-faction
Large scale
shippingHub
Evaporation
PipelineEnd user
(NG)
Mid scale
storage
End user(NG)
Small scale
shipping
Evapo-ration
Truck trans-port
Ship bunkering
Small scale
storage
End user (NG)
Evapo-ration
11 © Wärtsilä 10 April 2023 K. Punnonen
From Large Size to Small Size
12 © Wärtsilä 10 April 2023 K. Punnonen
Small Size LNG Carrier
• Typical small size LNG carrier. The vessel is often a combined gas and chemical carrier – 5 800 / 10 000 cbm.
Small Size LNG•Regional supply•Directly to end-users •Providing an energy solution previously not available10,000 m3 Multigas Carrier
13 © Wärtsilä 10 April 2023 K. Punnonen
Source: Norgas
Source: Knutsen
Small Size LNG Harbour•LNG Carrier loading•Road tanker loading
LNG Recieving Terminal – Power Plant
14 © Wärtsilä 10 April 2023 K. Punnonen
“Does it make sense to invest into a Single Purpose LNG Receiving Terminal - as a fuel system for a Power Plant?”
Natural Gas has become the fuel of preference and is expected to pass coal within a decade or so…
LNG Based Power Plant
A Feasibility Analyze was done to evaluate this question. The results are presented here:
15 © Wärtsilä 10 April 2023 K. Punnonen
30 April 2013 POWER PLANTS 201316 © Wärtsilä
Power Output Fuel Consumption LNG Consumption
Power Plant – Technical Solution
Wärtsilä Power Plant – Technical Solution
Power Output•Single Cycle, gas engine 9MW and 18 MW•Net Power at Step-Up Trafo: 50, 100, 300 MW•Outgoing Voltage: 110 kV
Fuel Consumption•Fuel: LNG (Natural Gas)•Generator set efficiency: 46%•Own electrical consumption: 4 MW at 400V•Plan Net Electrical Efficiency: 43,1 - 44,5%
Ambient Conditions•Average ambient temp: 29 C (min. 10 C, max. 40C)•Height above sea level: max. 100 m•Methane number 80
Operational Profile•Annual Running Hours: 7000•Plant average load: 80%•Utilization factor: 64%
Chosen Power Plant Characteristics for the study
17 © Wärtsilä 10 April 2023 K. Punnonen
Power Plant Configuration
Plant Size 50 MWe 100 MWe 300 MWe
Prime Mover 6X20V34SG 12X20V34SG 18X20V50SG
Plant Net Output @site conditions
53 MWe 106 MWe 304 Mwe
Net Electrical Eff.Net Heat Rate
43,1%8271 kJ/kWhe
43,2%8250 kJ/kWhe
44,5%8013 kJ/kWhe
Plant Size 50 MWe 100 MWe 300 MWe
LNG cons/day 511 m3 1022 m3 2840 m3
18 © Wärtsilä 10 April 2023 K. Punnonen
LNG consumption by power plant (base load)
100MW plant 100% utilization0.14 Million Ton/year (MTPA)0.31Millon m3/year
300MW plant 100% utilization0.41 Million Ton/year (MTPA)0.94 Million m3/year
19 © Wärtsilä 10 April 2023 K. Punnonen
Wärtsilä 300 MW power plant based on W50SG
© Wärtsilä 2011
LNG Carrier Capacity Storage Tank Capacity Re-Gasification Process
LNG Recieving Terminal – Technical Solution
21 © Wärtsilä 10 April 2023 K. Punnonen
LNG Consumption at max. and average loads
Plant Size 50 MWe 100 MWe 300 MWe
Power Plant Consumption, max. load
511 m3/day 1022 m3/day 2840 m3/day
Additional Gas Take-Off, max. Load
701 m3/day 1360 m3/day 1754 m3/day
Total Gas Consumption, max. load
1212 m3/day 2382 m3/day 4593 m3/day
Total Gas Consumption, average load
677 m3/day 1311 m3/day 2604 m3/day
Plant Size 50 MWe 100 MWe 300 MWe
Annual Consumption,Average load
247.000 m3 478.000 m3 950.000 m3
Terminal optimization
• The most important parameter when optimizing the terminal is the LNG supply. The ship size will determine the cargo that will be received. Shipping time and needed weather margins will determine the time between cargos. But also available HUB slots and costs need to be considered.
• The average consumption requirement will determine the slope of the volume curves and thus the needed re-gasification capacities.
• Heel Requirement is for safe-guarding the cry-temperature in the LNG tank at all times
Shipping timeIncl. loading and unloading
Total storage volume
Emergency Inventory
Vo
lum
e
Time
Sh
ip
carg
o
Heel requirement
23 © Wärtsilä 10 April 2023 K. Punnonen
LNG Carrier Capacity Determination
Main Parameters for carrier capacity determination: Transportation Distance: 1500 NM LNG Carrier average speed: 15 Knots LNG Tank sizes as defined Gas consumption as defined For average capacity
Carrier Capacity
Plant Size
No GasOff-Take
With GasOff-Take
50 MWe 6000 m3 13.000 m3
100 MWe 12.000 m3 30.000 m3
300 MWe 35.000 m3 52.000 m3
LNG Storage Tank Capacity Determination
Main Parameters for storage tank capacity determination: Safety inventory: 7 days Heel requirement: 10% Shipping information as defined Gas consumption as defined For average gas consumption
LNG-Tank Capacity
Plant Size
No GasOff-Take
With GasOff-Take
50 MWe 10.000 m3 25.000 m3
100 MWe 20.000 m3 45.000 m3
300 MWe 57.000 m3 90.000 m3
Re-Gasification Low Pressure System
10.04.2023
LNG Re-Gasification Process to deliver Low Pressure Gas: Low pressure consumer, i.e. Power Plant Atmospheric full containment tank Delivery Pressure @10 bar(g) Boil Off Gas fed into low pressure gas supply system Heating media for re-gas: ambient air, sea water of hot water/steam Dimenioned for max. gas consumption
10.04.2023Pump
LNG
LNG Tank
HP-pump LNG Vaporizer
To Engines
BOG
Natural BOGCompressor
LNG Supply
BOG Heater
Vapor Return
Excessive BOGCompressor
Loading Arms 5000 m3/h each
Blowdown toVent/Flare
Regas Phase 2
Regas Phase 1
To Gas Grid
Re-Gasification High Pressure System
LNG Re-Gasification Process to deliver Low and High Pressure Gas: Low pressure, 10 bar(g), High pressure to NG pipeline, 50 bar(g) Atmospheric full containment tank Boil Off Gas fed into low pressure gas supply system Heating media for re-gas: ambient air, sea water of hot water/steam Dimenioned for max. gas consumption
Petronas MelakaRe-Gas Capacity 3*221 t/hPressure: 70 barSea Water Heating Dry Weight 945 tons
Re-Gasification High Pressure System
Heating media: SeawaterIntermediate: Propane, phase-change
Heating media: SteamIntermediate: Water/Glycol
REGASIFICATION SYSTEMS
LNG Recieving Terminal – Power Plant
29 © Wärtsilä 10 April 2023 K. Punnonen
”Terminal Effect” on gas price-transportation cost-investment cost-operation and maintenance cost
10 April 2023
LNG Feasibility Analyze – STEP 1
Distribution Gas Price: US$/MMBtu
LNG Transportation
LNG Receiving Terminal
LNGRe-Gasification
LNG FOB-PriceAt Main HubUS$/MMBtu
Conversion Cost-fuel cost-investment cost-O&M cost
Sales Power TariffUS$/MWh
Power Plant energy
conversion
STEP-1
STEP-2
Distribution Gas Price as fuel CostUS$/MMBtu
LNG ”Terminal Effect”
• Own LNG carrier operation• Out-sourced Carrier operation
to third party• Transportation through LNG
provider
• All In Cost by LNG provider is considered. Depends according to LNG volume
LNG transportation
• Tank and main process • Re-gasification process• Other: land, on-shore and off-
shore infrastructure• Working Capital, LNG tied in
vessel and storage tank
• Considered as total investment
Terminal Investment
• Operational Man Power • Maintenance Man Power• Spare parts and Material for
maintenance
• Typical estimation 1-2% of the investment in annual bases
Terminal O&M
STEP 1
FOB LNG Purchase
LNG Transportation
LNG Storage
LNG Re-Gasification
STEP 2
Power Plant Power Sales
31 © Wärtsilä 10 April 2023 K. Punnonen
Terminal Effect Constituents
LNG ”Terminal Effect”
LNG transportation • All in cost by LNG provider is
considered. Gas price increase due to transportation.
All in Transportation Cost (US$/MMBTU) :• 50 MW – 2,14 US$/MMBtu• 100 MW – 1,85 US$/MMBtu• 300 MW – 1,43 US$/MMBtu
Back-Ground
Terminal Investment • Total Investment effect on gas
price:
Effect on Gas Price (US$/MMBtu)Plant Size No-Off-Take With Off-Take• 50 MW 4,09 2,04• 100 MW 2,28 1,47• 300 MW 1,60 1,34
Terminal O&M • Operational cost relatively
insensitive for Terminal size• Maintenance cost follows the
size
Effect on Gas Price (US$/MMBtu)Plant Size No-Off-Take With Off-Take• 50 MW 1,57 0,76• 100 MW 1,05 0,52• 300 MW 0,47 0,33
Investment Fundaments for Terminal• Existing harbour facilities available next to the Terminal and Power Plant sites – no maritime or off-shore works• Project Life time for evaluation and gas price calculations: 25 years• Weighted average cost of capital: 10%• On top of the power plant gas consumption, additional gas Off-Take was considered as in a similar magnitude as
the power plant itself. Gas delivered to Off-Takers via 50 bar pipeline system• LNG average inventory Working Capital between 3 to 22 M€ depending on the project capacity
32 © Wärtsilä 10 April 2023 K. Punnonen
LNG ”Terminal Effect”
Terminal Effect - $/MMBtu
Plant Size No GasOff-Take
With GasOff-Take
50 MWe 7,80 4,94
100 MWe 5,18 3,85
300 MWe 3,50 3,1
50 MW
No O
ff-Take
50 MW
with
Off-
Take
100 MW
No O
ff-Take
100 MW
with
Off-
Take
300 MW
No O
ff-Take
300 MW
with
Off-
Take0
2
4
6
8$/MMBtu
33 © Wärtsilä 10 April 2023 K. Punnonen
Terminal RelatedTransportation
Terminal Effect
”Distribution Gas Price”
Plant Size 50 MWe 100 MWe 300 MWe
LNG Consumption 247.000 m3 478.000 m3 950.000 m3
LNG FOB Price- $/MMBtu
Plant Size No GasOff-Take
With GasOff-Take
50 MWe 17,82 17,11
100 MWe 16,39 15,68
300 MWe 14,97 14,25
LNG FOB-Prices negotiated based on estimated annual LNG consumption
34 © Wärtsilä 10 April 2023 K. Punnonen 50
MW
No
Off-Tak
e
50 M
W w
ith O
ff-Tak
e
100
MW
No
Off-Tak
e
100
MW
with
Off-
Take
300
MW
No
Off-Tak
e
300
MW
with
Off-
Take
0
5
10
15
20
25
30
Terminal related Capex&Opex
Transportaiton
FOB Price
US$/MMBtuDistribution Gas Price
10 April 2023
LNG Feasibility Analyze – STEP 2
”Terminal Effect” on gas price-transportation cost-investment cost-operation and maintenance cost
Distribution Gas Price: US$/MMBtu
LNG Transportation
LNG Receiving Terminal
LNGRe-Gasification
LNG FOB-PriceAt Main HubUS$/MMBtu
Conversion Cost-fuel cost-investment cost-O&M cost
Sales Power TariffUS$/MWh
Power Plant energy
conversion
Distribution Gas Price as fuel CostUS$/MMBtu
STEP-1
STEP-2
LNG Based ”Power Tariff”
• EPC cost• Other up-front costs: land, on-shore
infrastructure, licenses, etc.• O&M mobilisation costs
• Considered as total investment
Power Plant Investment
• Operational Manpower • Maintenance Manpower• Spare parts and Material for
maintenance
• Fixed O&M cost• Variable O&M cost
Power Plant O&M
STEP 1
FOB LNG Purchase
LNG Transportation
LNG Storage
LNG Re-Gasification
STEP 2
Power Plant Power Sales
36 © Wärtsilä 10 April 2023 K. Punnonen
Power Tariff Constituents
LNG Based ”Power Tariff”
Fuel Cost• Fuel cost for power plant as per
the “Distribution Gas Price”• Lube oil consumption: 0,3 g/kWh• Lube oil price: 1 US$/Litre
Back-Ground
Power Plant Investment• EPC part of total Investment
(M€)• 50 MW – 880 US$/kW• 100 MW – 850 US$/kW• 300 MW – 845 US$/kW
Power Plant O&M • Variable O&M cost: 7-9
US$/MWh • Fixed O&M cost typically
between 5 – 10 US$/kW annually
• Fixed insurance cost• Fixed Administrative costs
Investment Fundaments for Power Plant• Power Plant Site location next to the LNG Terminal• Gas delivered to plant at 10 bar(g)• For simplicity; 100% equity financing considered• Return on Equity (ROE) Target: 15%• Project Life time for evaluation and power tariff calculations: 25 years• Running profile: annual running hours 7000h, average load 80%, capacity factor 63,9%
Sasol New Energy Holdings, South Africa O&M Agreement with thousands of MW sView of 6 engines modular engine hall
Absolute Power Tariffs
38 © Wärtsilä 10 April 2023 K. Punnonen
FOB Tar
iff
Term
inal T
ariff
FOB Tar
iff
Term
inal T
ariff
050
100150200250300
ROEFixed O&M CostVariable CostFuel Cost
US$/MWh
No Re-gas With Re-gas
50 MW Power Plant Solution
FOB Tar
iff
Term
inal T
ariff
FOB Tar
iff
Term
inal T
ariff
0
50
100
150
200
250
ROEFixed O&M CostVariable CostFuel Cost
US$/MWh
No Re-gas With Re-gas
100 MW Power Plant Solution
FOB Tar
iff
Term
inal T
ariff
FOB Tar
iff
Term
inal T
ariff
0
50
100
150
200
ROEFixed O&M CostVariable CostFuel Cost
US$/MWh
No Re-gas With Re-gas
300 MW Power Plant Solution
50 MW Plant 100 MW Plant 300 MW Plant0
50
100
150
200
250
300
ROEFixed O&M CostVariable CostFuel Cost
US$/MWh
Terminal Effect Power Tariffs, No Gas Off-Take
Power Tariffs, Terminal Effect No Re-Gas
Simple Pay-Back Time less than 6 years
ROE-chart for 300 MW plant, No Gas Off-Take-fuel price: 18,5 US$/MMBtu
39 © Wärtsilä 10 April 2023 K. Punnonen
50 MW Plant 100 MW Plant 300 MW Plant0
50
100
150
200
250
ROEFixed O&M CostVariable CostFuel Cost
US$/MWh
Terminal Effect Power Tariffs, With Gas Off-Take
Power Tariffs, Terminal Effect With Re-Gas
Simple Pay-Back Time less than 6 years
ROE-chart for 300 MW plant with Gas Off-Take-fuel price: 17,4 US$/MMBtu
40 © Wärtsilä 10 April 2023 K. Punnonen
Final Conclusions
Single Purpose Terminal can make sense• For remote location LNG can be the only
acceptable fuel. Alternative would be HFO• LNG Terminal can serve the regional
industry with clean and affordable fuel • LNG can be a domestic fuel
Terminal economics is case specific• Each case must be studied indivudually• LNG FOB-price dominates the
Distribution Gas Price structure• Additional Gas Off-Take will benefit the
project feasibility• Difference between the best FOB-price
and Distribution price is around 20%
Gas fired power plant – a natural choice• For ”Green-Field” power development
LNG is preferable vs. HFO• Power tariff difference is 37% between the
two extremities• At its highist the ”Terminal Effect” will
increase the power tariff with around 25%• At its lowest the ”Terminal Effect” will
increase the power tariff with less than 10%
41 © Wärtsilä 10 April 2023 K. Punnonen
With right LNG FOB price and power tariff a Single Purpose LNG Terminal can make sense...
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