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PERSPECTIVE. High worldwide gas prices enhance chances for small-scale LNG. via

ited periods. LNG peak shaving plants use two liquefaction technologies: Nitrogen refrigerant cycles or a single mixed- refrigerant (SMR) cycle. Nitrogen cycles are generally used for low gas liquefaction volumes, while SMR processes are employed in the larger peak shaving plants because of their improved efficiency. The key decision for a mid-scale LNG project is: scale up a low capital cost, high operating- cost peak-shaving technology, or scale down a high capital cost, low operating-cost baseload LNG technology? Both strategies, as well as hybrid technologies, are being used by the industry.

Mid-Scale Costs

Mid-scale LNG developers have opted for a different con- struction strategy than base-load producers, preferring modularization over the in-situ assembly approach gen- erally in use for baseload plants. The physically smaller equipment required for mid-scale projects is much more amenable to shipping and connection.

There are also other important features. Firstly, more suppliers can make the equipment, providing more compe- tition, and hopefully, lower prices. Secondly, manufactur- ing schedules are shorter as alternative fabrication shops can be used. And thirdly, less complex equipment designs mean that the equipment can almost be supplied “off the shelf”. In contrast, the baseload LNG industry relies on spe- cialized equipment from few (usually very busy) suppliers with the need to provide significant test work (and poten-


tially rework) to ensure that margins and guarantees are met.

Potential Disadvantages

Both shipping and storage of LNG are costly. A mid-scale project has a very difficult decision to make on its export strategy, which will have a profound impact on these is- sues: Does the project want to supply a niche market, which can accommodate small LNG ships (with small storage tanks and a reduced marine facility), or should it supply a variety of customers (therefore needing to handle standard ship sizes with a larger marine facility and associ- ated storage tanks)? Being a portfolio supplier will poten- tially allow higher earnings but at potentially much higher capital investment.

Since the cost contribution of marine facilities and site preparation will be many times more for a smaller-through- put terminal, mid-scale plants require careful site selection. It seems logical for a small terminal to use small ships to reduce the need for expensive onshore storage capacity. However, vessels of less than 60,000 m3 are few. A dedicat- ed, new-build small ship is an expensive option.

LNG storage tanks are another high-price project ele- ment. There must be sufficient storage available to fill the waiting LNG tanker without unnecessary delay and still retain a sufficient quantity of LNG to meet demand until the next delivery. While modularization and off-the-shelf equipment improve construction schedules for the

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