John Hart, Matrix Service
The proliferation of LNG megaprojects in North America has garnered significant headlines, the result of abundant low-cost natural gas and its cost advantage over crude. The collapse of oil prices, however, has also created uncertainty in the LNG global market, slowing development of these projects. Yet ongoing is the need for small to mid-scale LNG facilities to meet increasing demand in the marine, transportation and power sectors.
In the marine sector, more stringent engine emission standards for oceangoing vessels are being phased in globally by the International Marine Organization and in the U.S. and U.S. Caribbean by the EPA. Among these standards are emission control areas that limit the use of diesel fuel. In response, maritime companies are adopting LNG as the fuel of choice, creating demand for coastal- and river-based LNG bunkering facilities.
While the pace at which trucking and rail companies adopt LNG may temporarily slow due to the low cost of crude, forward-looking companies continue to plan for significantly higher future demand. For example, a railroad in Florida recently purchased 24 locomotives for conversion to both LNG and diesel for mainline operations and has constructed and commissioned its own LNG small-scale liquefaction facility. In power production, small- to mid-scale LNG facilities are being built to meet peak needs in developed but fuel-constrained areas such as New England and to provide fuel for power plants in remote, underdeveloped areas such as islands, mining facilities and oil and gas plays. One Caribbean island recently contracted to convert its gas turbine power plant to dual fuel capability and is building infrastructure to receive LNG from the U.S. to provide lower-cost power to residents, businesses and industry.
Maximizing return on investment
In every instance — whether in the liquefaction of natural gas, receiving and regasification, peak shaving storage or other applications — developers, energy providers, fuel distributors, transportation companies and financing groups all have shared objectives in the design and construction of LNG infrastructure:
- Efficient, economical production or conversion of LNG with the lowest possible capital cost
- Reliable operation with competitive operating costs and minimal emissions
- Flexibility in operation
And they want it in the shortest time possible, because faster speed to market can mean more lucrative pricing and terms with off-takers and end users. It’s all about maximizing return on investment.
From concept to cooldown, getting there means minimizing design and construction time by partnering with firms or well-established teams that have a long history of success in this highly complex segment and who can provide all of the needed services — EPC management — to integrate the complexities of liquefaction, regasification and/or cryogenic storage technologies.
What to look for in an EPC management partner
Look for partners that understand the complexity of LNG projects and have proven expertise in front-end engineering design as well as detail engineering, procurement and construction of cryogenic tanks, the liquefaction or regasification process, and balance of plant construction. They should also have relationships and ready access to global resources — key for critical components such as liquefaction modules or in-tank pumps but also with craft labor such as experienced welders certified in the welding of high-alloy steels such as 9-percent nickel.
The contractor’s project managers should possess decades of experience in managing complex projects with multiple critical path activities.
Ask about past historical performance and the provider’s record of repeat business with existing customers. More importantly, inquire about its emphasis on safety and safety record.
Finally, look for a partner willing to sup-port your operations after plant commissioning and willing and able to enter into a strategic alliance for long-term operations support. Doing so helps ensure dedicated resources and work flow predictability, commitment to safety, consistent performance and teamwork.
For more information, call John Hart at (832) 448-4370, email jhart@matrixservice.com or visit www.matrixservice.com.
