Originally appeared in: SPECIAL REPORT: LNG TECHNOLOGY

March/April 2014, pgs 21-26. AND FIELD PROCESSING

Used with permission.

Optimize small-scale LNG production

with modular SMR technology
B. PRICE and M. MAHALEY, Black & Veatch, Overland Park, Kansas;
and W. SHIMER, UOP, Des Plaines, Illinois

In North America, there is renewed push and demand This distributed LNG model provides much more flexibility
from end users for cleaner, cheaper, locally supplied fuels for of supply than a traditional pipeline system because the LNG
transportation and high-horsepower applications. A number can be sourced from any number of suppliers. In the past five
of solutions have been brought forth, each with their own years, the focus in China has shifted to developing clean fuel
benefits and drawbacks. One technology solution that has for transportation applications. At recently built plants, filling
seen sustained growth throughout the world is the use of LNG stations have been added to provide LNG loading directly to
for heavy-duty trucks and high-horsepower (or off-road) uses. user vehicles, in addition to facilities for LNG tanker loadout.
Although LNG facilities have been in operation for more than When all of the presently contracted facilities come onstream,
40 years in the US, the use of LNG for vehicle and off-road the total LNG capacity in China will be more than 9 MMgpd.
applications is in its infancy. The average LNG plant size in China has grown to about 33
MMscfd (400 Mgpd).
Small-scale LNG: North America. The small-scale LNG Typical peakshaving LNG plants in the US have liquefaction
industry in the US was initially developed in the 1960s and capacities of 5 MMscfd–20 MMscfd (60 Mgpd–240 Mgpd)
1970s, and generally consisted of peakshaving facilities for and are intended to fill a large LNG tank in 150 to 200 days.
winter gas supply. Here, “small-scale” is defined as liquefaction These plants are designed to ship large volumes of gas for winter
plants with single-train capacities of less than 40 million use from tankage at a moment’s notice. One such plant is shown
standard cubic feet per day (MMscfd), or 485 thousand gallons in FIG. 3. This liquefaction plant has a 12-MMscfd (145-Mgpd)
per day (Mgpd) of LNG output. liquefaction capacity. Approximately 1.2 billion cubic feet (Bcf)
In North America, demand for LNG as a fuel substitute (60,000 m3) of storage is used to hold the LNG until it is ready
for diesel is projected by Zeus Development Corp. to grow for use in the winter heating season.
by more than 50%/year (yr) from 2014–2020, reaching A similar facility was developed in Brazil to produce 14
3.5 billion (B) gal/yr (10 MMgpd) of LNG by 2020. FIG. 1 MMscfd (170 Mgpd) of LNG for use as vehicle fuel (FIG. 4). The
illustrates this projected demand buildup. The vast majority of LNG is stored in a 6,000-m3 (1.6-MMgal) tank that provides
the LNG production units will be supplied by new, standalone about nine days of storage. The facility is designed to handle six
plants and additions to existing gas processing facilities. A different feedstocks of varying pressure and richness to produce
few existing peakshaving plants may be modified for LNG a usable LNG product for vehicles. This plant started operation
net supply, but all will require regulatory approval to modify
operations. To fulfill this demand, in excess of 30 new small- 3,500
scale liquefiers could be required in North America by 2020
North American rail and offroad
for distributed LNG fuel use alone. 3,000 North American oil field
North American marine
North American onroad trucking
Small-scale LNG: Rest of world. In several other countries, 2,500
LNG plants are being developed to supply LNG to remote
LNG demand, MMgpy

users and provide clean vehicle fuels. These facilities are 2,000
growing rapidly in both number and capacity as LNG is
1,500
adapted to new end uses. One company that has been active
in the LNG fuel industry for 10 years has completed 25 1,000
such plants globally. This company’s Chinese plants follow
a distributed LNG model, where LNG is produced and 500
transported to a number of different users. The schematic in
FIG. 2 illustrates this distributed LNG model. With a small- 0
2012 2013 2014 2015 2016 2017 2018 2019 2020
scale LNG plant and trucking facilities, gas can be provided Year
to new customers in both industrial and residential locations.
New customers can be added in a short time with a single FIG. 1. North American LNG demand forecast. Image courtesy of
LNG tank and a small vaporizer. Zeus Development Corp.

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SPECIAL REPORT: LNG TECHNOLOGY AND FIELD PROCESSING

The SMR process has been the

LNG workhorse of the industry, with an
LNG
LNG estimated 80% share of installed capacity,
and it continues to be the process of choice
Liquefaction plant Vehicle fuel for most applications. Dual-loop and
cascade processes have been applied in the
past, but these processes generally are not
suitable for these smaller plants because of
LNG Gas
complexity and capital cost issues.
Industrial supply
The expander process is useful when
a facility is located where a large volume
LNG
of gas can be let down from a HP to a
LP gas distribution system. The process
LNG Gas is often applied with no compression or
minimal compression, which helps reduce
Power generation Gas distribution power requirements. The process works
by processing a large volume of feed gas to
FIG. 2. Distributed LNG model for China. liquefy about 15%–18% of the feed gas; the
balance must go to a LP pipeline. The ratio
of feed gas pressure to tail gas pressure drives the process. A
ratio of approximately 16:1 to 20:1 (in absolute pressure) is
needed for the process to be applied efficiently with little or no
compression. Lower pressure ratios drive the process to liquefy
less of the feed gas.
For a 20-MMscfd (240-Mgpd) liquefaction plant, the feed
gas rate would be around 140 MMscfd, resulting in a ratio of
7:1 requirement of feed gas to LNG output. A typical expander
process, which is a fairly complex setup, is shown in FIG. 5. First,
all of the feed gas is dehydrated before it enters the process.
Two expander/compressors are then used to boost the pressure
of the gas. After compression and cooling, the gas is split into
FIG. 3. Alabama Gas Co.’s LNG plant in Pinson, Alabama. parts. The major portion is expanded and used as refrigerant,
and then dumped to the LP tail gas system. The minor portion
in 2006 and has been steadily increasing supply of LNG with its to be liquefied is sent to a carbon dioxide (CO2)-removal unit
first train. A second train is under consideration. and then on to the cold box. The major portion of the feed gas
Within North America, LNG plant capacities of 4 is cooled and expanded in two steps to provide cold streams for
MMscfd–40 MMscfd (50 Mgpd–500 Mgpd) are under liquefying the gas. Controlling the temperatures and pressures
evaluation for new greenfield investment. Modular project in this loop is critical because the gas still contains CO2 and
execution has been embraced by the majority of future LNG heavy hydrocarbons. Many of the operating problems endemic
owner-operators because of the cost, schedule and reliability with these units are in this section of the plant.
advantages offered vs. entirely field-erected liquefaction plants. The major benefit of this technology is the reduction in
Finally, a new small-scale greenfield modular single-mixed- power consumption. For many situations, no compression is
refrigerant (SMR) plant in North America is estimated to required; however, the process has by far the highest capital cost
provide LNG plant owner-operators with a highly competitive, of all the processes because of the complexity of the cycle with
variable production cost, excluding natural gas feedstock, of multiple expander/compressor systems, multiple exchangers
$0.08/gal to $0.11/gal of LNG. and the need to process a much larger gas stream. Another issue
with expander plants is the sensitivity to feed gas pressure and
Technology selection. Three processes are applied to composition. Pressure is related mostly to capacity, but the
distributed fuels and peakshaving LNG production facilities: composition is critical in the cold separators and in the CO2
methane expansion, nitrogen (N2) refrigeration and SMR. solidification area. With changing gas markets and a continual
Each of these processes has preferred application areas. increase in peak demand, this process is difficult to utilize in an
Methane expansion plants have been applied in areas where a area where a large quantity of tail gas cannot be handled on a
large quantity of gas is expanded from a high-pressure (HP) day-to-day basis.
pipeline to a low-pressure (LP) pipeline on a daily basis. This The N2 refrigeration process utilizes N2 as the working
pressure differential can be utilized to produce LNG. The N2 fluid to accomplish liquefaction. Using a relatively inert medium
refrigeration process has been applied in small projects and on is one of the attractive features for this process. Since N2 is a gas
many LNG tankers to recondense boil-off gas. Peakshaving that is lighter than the natural gas being liquefied, it is not used
and vehicle fuel applications have been limited because of low as a liquid refrigerant.
efficiency for N2 processes. The process works by compressing the N2 in a large
GAS PROCESSING MARCH/APRIL 2014
SPECIAL REPORT: LNG TECHNOLOGY AND FIELD PROCESSING

compressor and then cooling and expanding it in two steps to rate for an N2 system will be approximately double that of a
produce temperatures low enough to liquefy the feed gas. This MR process. In addition, with more major rotating equipment
process has been used for more than 20 years, but it has had pieces, lower reliability is expected.
limited application recently because of the large amount of The SMR process is the workhorse of the LNG industry
power required to circulate the N2. Using N2 as a refrigerant and is used in the vast majority of liquefaction installations.
results in a system with about 40% greater energy requirement This process depends on a single mixed-refrigerant (SMR)
than a well-designed mixed-refrigerant (MR) system. Since the system to perform liquefaction. After treatment, the feed
development of efficient MR cycles, the N2 refrigeration process gas is totally liquefied. Only a small amount of flash gas is
generally has been applied only on small-scale projects where produced, as the LNG is let down to storage. LNG yields of
refrigerant power consumption is not a primary consideration. over 98% are typical, and because the system uses a mixture
The process uses a large N2 refrigeration compressor and of refrigerant components and can be tailored to the specific
two expander/compressor systems, as shown in FIG. 6. The application, it is the most flexible of all the liquefaction
expander systems are necessary because the N2 refrigerant will systems. As shown in FIG. 7, the final refrigerant separator
not condense in a traditional refrigeration loop setup. To link produces vapor and liquid streams. The liquid flowrate
these systems, multiple heat exchangers (or a complex main (and, therefore, the vessel holdup) can be changed in the
exchanger) are required to provide the needed refrigeration for distributed control system.
LNG production. This liquid flowrate combined with a constant HP vapor
The process also has some difficulty achieving low LNG stream determines the molecular weight of the refrigerant in the
temperature; all the cooling is sensible heat, so the vapor main exchanger. Therefore, the refrigerant can easily be adjusted
refrigerant must be generated at a lower temperature than the for changes in feed conditions while the plant is in operation.
LNG stream. The greater number of components required for The other liquefaction processes cannot alter the circulating
the N2 refrigeration process (expander/compressors) and larger condensing medium (gas or N2); the only adjustment available
compression increase the cost of the system. The circulation is flowrate. This ability to adjust to changes in feed gas
Feed gas
Heavies

Second
expander/
compressor

First Heavy ends

FIG. 4. White Martin’s LNG plant in Paulinia, Brazil. expander/ separation
compressor
To LNG storage
Gas to liquefaction N2
LP tail gas compressor
Heavies
FIG. 6. Diagram of an N2 refrigeration process.
CO2 removal

First exchanger LP refrigerant Treated feed gas

Second HP
expander/ Refrigerant refrigerant
compressor condenser
Second exchanger
Suction Refrigerant
drum separator Main heat exchanger
Refrigerant
compressor

Interstage
First Third exchanger cooler
expander/ Refrigerant
compressor Interstage pump
separator
Dehydration
unit Heavy liquid
LNG
LNG to storage
HP feed gas Interstage pump

FIG. 5. Diagram of a typical methane expander process. FIG. 7. Diagram of a proprietary SMR process.

GAS PROCESSING MARCH/APRIL 2014

SPECIAL REPORT: LNG TECHNOLOGY AND FIELD PROCESSING

conditions and composition is the primary reason that mixed- motor drives.
refrigerant systems are more flexible. The SMR process is efficient as measured by power
The process, as shown in FIG. 7, has a low equipment count, consumption; its power requirement is higher than that for
which simplifies operation and minimizes maintenance costs. the expander process, assuming that all the tail gas can be
Since the mixed-refrigerant process has one compression dumped to the LP pipeline at all times. If the tail gas cannot
system, it has the highest reliability, in part because the be dumped, it would need to be recycled, and recompression
refrigerant pumps are spared. The refrigerant makeup is also would be needed. The N2 process loop has the highest power
minimal during operation and typically represents less than 2% consumption, as previously discussed. In many cases, the
of the plant operating cost. savings in power for the expander process cannot overcome the
investment cost difference.
Process comparison. In TABLE 1, a techno-economic Operating cost. The direct operating costs for the processes
comparison is shown for the three processes based on electric are fairly comparable in terms of personnel staffing. The two
motor-driven compressors for all services. expander systems require more maintenance than the MR
Capital cost. The SMR process typically requires the lowest process; each of these units has instrumentation and lube oil
capital cost. In addition to having only one major piece of systems that require attention. Overall, the SMR process has the
rotating equipment, rather than two for the expander process lowest operation and maintenance cost of the three processes.
and three for the N2 process, the SMR process is an all-carbon In summary, within North America, the SMR process is
steel system. Since there are no expanders, the only stainless anticipated to deliver a variable LNG production cost, excluding
steel metallurgy is in the heavy hydrocarbon-removal and LNG natural gas feedstock, of $0.08/gal to $0.11/gal, which reflects a
product systems. 20% cost advantage compared to N2 expansion.
The N2 process has a higher upfront cost than SMR, primarily Safety and reliability. Although the N 2 process uses a
because of its expander/compressor packages, larger refrigerant non-hydrocarbon refrigerant, the other two processes use
circulation rate and larger refrigeration compressor. The refrigeration systems that contain the same hydrocarbons
expander process has the highest capital cost because it requires as found in the feed gas. Only the relative proportions
a larger gas treating system; a more complex exchanger/cold are different. The expander and SMR processes use a
box; significantly greater numbers of cryogenic vessels, valves, refrigerant that is primarily methane. In the expander
etc.; and a larger inlet compressor than the other processes. The process, feed gas with heavy ends removed is used as the
costs defined here include inlet dehydration and CO2 removal. refrigerant. In the SMR process, the feed gas is used as
Power cost. TABLE 1 provides a recent comparison of a makeup, with additions of hydrocarbons normally found in
20-MMscfd (240-Mgpd) plant application with electric the feed gas in different proportions.
The expander and MR systems have proven reliable and safe
TABLE 1. Techno-economic process comparison, for over 30 years. In the US, nearly 90% of liquefaction units
20-MMscfd example are based on the mixed or cascade refrigerant and the expander
Process
cycle. Additionally, the SMR process, with only one major
compression duty rather than three, will have a reliability edge
Parameter Expander N2 refrigeration SMR
over the other processes.
Capital cost (relative Modularization. Modular fabrication and project execution
1.4–1.6 x SMR 1–1.3 x SMR 1 (base)
to SMR) provide benefits, including an accelerated schedule, a lower
Refrigeration power, hp – 11,800 8,000 installed cost and increased reliability, to small-scale LNG plant
Refrigerant flow (mass owner-operators. The McKinsey Global Institute estimates that,
1.25 x SMR 1.75 x SMR 1 (base)
flow relative to SMR) within the oil and gas sector, direct project costs can be reduced
Number of compressors 3 3 1 by as much as 15%, and project delivery can be expedited by
Tail gas to LP pipeline,
120 2 2
MMscfd Benzene
Refrigeration removal
CO2 vent Regeneration gas makeup
Capability Modular* Field-constructed*
NGL
Ability to minimize or eliminate FEED separation
Feed gas
Availability of major equipment from suppliers CO2 removal Dehydration Liquefaction
Degree of cost control N2
Reduced field labor cost removal
Low-pressure refrigerant Treated feed gas
Flexibility to process a wide range of natural gas streams Refrigerant
High-pressure
refrigerant
LNG
Ability to relocate plant
condenser
H2
removal
Suction Refrigerant
drum separator Main heat exchanger
Refrigerant
Fast cycle delivery performance compressor

High level of field performance Interstage

cooler
Refrigerant
Interstage pump
Ability to deliver the plant globally separator
Heavy liquid

*A filled circle represents higher capability; an unfilled circle represents lower capability. Interstage pump
LNG to storage

FIG. 8. Comparison of packaged modular vs. field-built process units. FIG. 9. Process flow of a proprietary standard SMR plant module.

GAS PROCESSING MARCH/APRIL 2014

SPECIAL REPORT: LNG TECHNOLOGY AND FIELD PROCESSING

20% compared to purely field-fabricated projects.

TABLE 2. SMR liquefiers in operation globally as of 20131
There are a number of reasons why modular projects can
offer benefits over field-constructed projects. A common set Capacity, MMscfd LNG capacity, Mgpd Number of plants
of proven mechanical equipment is incorporated into the <6 < 75 2
modularized designs to increase reliability. Shop fabrication 6–12.5 75–150 12
also uses more specialized, repeatable labor practices that can
15–20.5 180–250 6
increase the quality of welding and standardize the layout
of equipment. Both practices contribute to a high-quality, 25 300 1
consistent, preengineered small-scale LNG plant. 33–37 400–450 12
As mentioned previously, the prefabrication and quick 41–58 500–700 1
installation of modules also saves time and cost compared
to field-erected plants. An estimated six-month schedule 58–83 700–1,000 3
advantage can be achieved with modular construction. This > 83 > 1,000 4
time savings is achieved by preengineering the key process
modules and equipment, avoiding unnecessary customization
and preordering the long lead-time equipment, including
compressors, heat exchangers and bullet tanks.
Within the North American LNG fuel sector, this six months
could be worth up to $12 MM in additional liquefaction
revenue, assuming a 70% operating rate for a 16.5-MMscfd
(200-Mgpd) facility. Construction of a modular, small-
scale LNG facility is also simplified by reducing the need for
connective piping and wiring external to pipe skids. The layout
of the plant skids is predetermined, which reduces engineering
and incremental labor requirements for field construction.
Finally, the process modules are checked for quality in the
shop to reduce field corrections and startup complexity. FIG.
8 illustrates a comparison of modular and field-constructed
project execution.
Modular project execution is already proven within the
natural gas industry, as demonstrated by its role in facilitating FIG. 10. Schematic of a preengineered modular plant.
the rapid development of shale gas reserves within the US.
Nearly 100 prefabricated gas treatment and cryogenic NGL pretreatment and liquefaction modular platform.
recovery plants have been supplied to support the economic The North American transportation and high-
recovery of NGL and new supplies of shale gas. horsepower sectors will benefit from the availability of
Within the “gas patch,” upstream and midstream plant preengineered, full-scope, turnkey liquefaction plants.
owner-operators realized the economic value of a fast, flexible Owner-operators, particularly those unfamiliar with the
and repeatable modular work process. A reduced schedule of operation of liquefaction facilities, will demand both project
up to six months was achieved for specific projects, allowing management and ongoing program management from their
owner-operators to be first movers in areas such as the Eagle plant providers. A North American alliance addresses this
Ford and Marcellus basins. Financial returns and cashflows need through the supply of a full-scope, small-scale liquefier
were enhanced through faster monetization of natural gas with lifecycle services spanning from conceptual design to
and NGL. Finally, modular gas plants have, and continue to startup to aftermarket support.
provide, the flexibility to adjust for changing gas composition, A schematic of the inside battery limits processing portion of
thereby allowing companies to preorder plants in anticipation a 16.5-MMscfd (200-Mgpd) small-scale LNG facility is shown
of future projects. in FIG. 10 to illustrate the modular nature of the liquefier. The
A modular execution model fits well for the small-scale schematic does not include tank storage or LNG offloading that
LNG fuels sector. The North American LNG fuel industry will would be included as part of a full-scope liquefier.
demand high-quality, consistent and cost-effective liquefiers A question remains in the industry as to which preengineered
that can be replicated across multiple locations and feed gas small-scale LNG plant capacity will most competitively
conditions. A preengineered, repeatable modular solution position LNG fuel suppliers. To effectively balance capital cost,
is, therefore, ideal for owner-operators that are evaluating operating cost and plant capacity loading, an 8-MMscfd–35-
investment in multiple liquefaction plant locations or phased MMscfd capacity (100-Mgpd–400-Mgpd) liquefier should
capacity investments at a single plant location. be considered, subject to localized demand projections. At 8
Additionally, to offer flexibility, individual process MMscfd (100 Mgpd) or greater of LNG capacity, and with a
modules can be added as needed to address different feed gas turndown rating of up to 50% for SMR technology, sufficient
impurities and end-product requirements. FIG. 9 illustrates scale of the key mechanical equipment can be achieved to
how hydrocarbon (benzene, NGL), N2 and hydrogen provide an effective capital cost while maintaining an efficient
process modules can be incorporated as add-ons to the core energy-to-refrigeration conversion.
GAS PROCESSING MARCH/APRIL 2014
SPECIAL REPORT: LNG TECHNOLOGY AND FIELD PROCESSING

As LNG demand increases over time within an BRIAN PRICE is the LNG advisor for Black & Veatch. Previously,
he served as vice president for LNG technology, in charge of
approximately 300-mile orbital radius from the liquefier, technology development and process design for LNG
the capacity loading would be expected to ramp up quickly production facilities, LNG import terminals and related gas
from the initial 50% or greater operating rate. Taking all processing and NGL recovery facilities. Mr. Price has worked for
these factors into consideration, LNG production costs for Black & Veatch for the past 20 years. He has over 40 years of
experience in gas processing and related technology areas. Prior
an SMR liquefier with a capacity of 8 MMscfd–35 MMscfd to joining Black & Veatch, he worked for ARCO Oil and Gas Co. Mr. Price is a
(100 Mgpd–400 Mgpd) will be significantly lower vs. smaller member of AIChE and is active in the Gas Processor Suppliers Association (GPSA).
mini-/nano-sized plants of less than 4 MMscfd (48 Mgpd) of He serves as chairman of the editorial review board for the GPSA Engineering
Data Book, and previously served as chairman of the technical committee for the
LNG capacity. Gas Processors Association (GPA). Mr. Price holds BS and MS degrees in chemical
TABLE 2 displays the number of one company’s proprietary engineering from Oklahoma State University.
SMR liquefiers in operation globally as of 2013.1 The data
indicate that the SMR liquefaction process has been effectively MARTIN MAHALEY is responsible for business development,
strategic planning and commercial analysis for the
applied to a wide range of plant capacities—from 6 MMscfd–80 Transportation LNG project portfolio within Black & Veatch’s oil
MMscfd (75 Mgpd–1,000 Mgpd). The table also indicates a and gas business unit. Goals for Transportation LNG include
spike of plants in the 6-MMscfd–20.5-MMscfd (75 Mgpd–250 expansion of market, focusing on high-horsepower and heavy-
duty transportation markets in North America. Mr. Mahaley has
Mgpd) and 33-MMscfd–37-MMscfd (400-Mgpd–450-Mgpd)
been involved in US heavy-duty and freight transportation
capacity ranges, particularly as the LNG fuel industry has markets for over 30 years, as both an owner of transportation companies and a
rapidly developed in China. provider of value-added transportation products and services.
In the future, the need for more preengineered liquefiers
WILL SHIMER is a senior strategic marketing manager within
in North America in the 8-MMscfd–35-MMscfd (100-Mgpd– UOP’s Gas Processing and Hydrogen Group. He is focused on
425-Mgpd) range appears to be the appropriate “sweet spot” business development for emerging sectors within the natural
to most competitively position LNG fuel producers for the gas space, including small-scale LNG. Mr. Shimer has previous
long term. GP experience with Air Products and Chemicals Inc., BP America,
and Occidental Chemical Corp. in roles including project and
product management, strategy and business management. Mr.
NOTE Shimer holds a BS degree in chemical engineering from the University of Illinois
1
The proprietary SMR technology is Black & Veatch’s PRICO process. and an MBA degree from the Harvard Business School.

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