The annual three-day Gastech conference and exhibition is expected to draw in 35,000 attendees from the global gas industry to discuss the industry’s present and future challenges
This year’s Gastech 2019 event – a three-day conference and exhibition running 17-19 September in Houston, Texas – will incorporate some 150 strategic and technical presentations and 16 ministerial and leadership panels. The associated exhibition will feature 700 stands from exhibitors representing the entire global LNG supply chain. There is also six Spotlight Programmes: Diversity & Inclusion in Energy; Energy Talent Exchange; Gas for Transportation Forum; Power & Energy; Young Gastech; and Asia LNG Market Development Forum.
SIGTTO general manager and chief operating officer Andrew Clifton, who is serving as one of Gastech’s Strategic Governing Body co-chairs, says creating the technical programme involved assessing some 1,100 submissions. “We were oversubscribed by 8 to 1. There were so many outstanding and unique presentations, we could have had a second concurrent Gastech,” he says.
Mr Clifton, who will moderate five shipping sessions, including the opening one traditionally referred to as the ‘SIGTTO session’, says the excitement and anticipation around the event is reflective of the recent strong growth in the LNG market, which now boasts a fleet of 600 LNG carriers and another 100-plus on order or under construction at shipyards, mostly in Asia.
Among the notable presentations, Mr Clifton cites two that focus on floating LNG (FLNG) projects. Golar Management Ltd chief executive Iain Ross will discuss the floating FLNG vessel Hilli Episeyo, which went into service in 2018 under a long-term contract offshore Cameroon. In 2013, Golar made the decision to convert an existing LNG carrier, Golar Hilli, on a speculative basis to an FLNG unit. Golar worked with Singapore shipbuilder Keppel Offshore & Marine and US engineering firm Black & Veatch on the conversion.
Golar says the conversion approach, rather than opting for a newbuild, was adopted to provide the marine platform, ancillary systems and LNG storage to support integration with the selected mature LNG Prico SMR liquefaction technology. Golar is working with both Keppel and Black & Veatch on a second FLNG conversion. Mr Ross’ presentation, ‘Golar FLNG – deployment strategies, opportunities and commercial flexibility’, will discuss lessons learnt from the project and some of the near-term projects for FLNG technology.
Siport21 head of mooring analysis and offshore department Luis Lopez will discuss Argentina’s Tango FLNG project in ‘Feasibility Study for an FLNG Barge Installation in Bahia Blanca’. Mr Lopez will present on the nautical studies performed to analyse the feasibility of the ship-to-shore (STS) LNG load operations from the shore installations to a receiving LNG carrier, through the mooring of an Exmar-owned FLNG barge at YPF’s terminal in Bahía Blanca, Argentina. The project allowed Argentina to export its first LNG cargo in June, joining Peru as the only South American countries that export LNG.
An ideal location
When it comes to discussing LNG projects in the Americas it is impossible to ignore the United States. Propelled by the shale gas revolution, the US began exporting LNG cargoes from the Cheniere’s Sabine Pass facility in 2016. Emerging as the world’s top energy producer, the US accounts for about 45% of the growth in global LNG production and nearly three-quarters of the LNG export growth. Much of the new export capacity is on the US Gulf Coast, making Houston an ideal location to host this year’s Gastech.
Worley Parsons senior vice president global LNG and FLNG Paul Sullivan, a Gastech Strategic Governing Body co-chair, says that the current market has undergone a “rethink” from where it was three to four years ago. At the time, he says, the market was focused on building ever larger liquefaction trains to take advantage of economies of scale.
Now LNG export projects “have begun moving more towards an incremental build up”, says Mr Sullivan. This modularised approach employs small liquefaction trains that “tie in with the parcels of LNG that customers are buying. Current projects under development are looking to grow incrementally, adding smaller units of 0.5 to 1.5 tonnes of LNG.”
By contrast, world-scale mid-scale LNG projects tend to utilise trains that have nominal capacities of between 5 to 8 mta. “That requires you to have a very large customer, or a group of customers to take that quantity on a regular basis”, he points out.
“The economics of the process have changed. The new thinking in the industry is that bigger is not always better. People are very interested to hear about the pros and cons of each approach and this is the first year of the conference when this is going to play itself out.” He says there are a number of projects that are going to go to FID this year which represent both ends of the scale, with liquefaction trains ranging from 6 mta to 0.5 mta.
In the US, an example of this modularised buildup is embodied by Kinder Morgan’s LNG export terminal on Elba Island in Savannah, Georgia, which will add 10 trains sequentially between now and 2020. It will be one of six US LNG export facilities in operation by the end of this year. The US$2Bn project is being underpinned by a 20-year contract from Shell.
“There is a great degree of interest underwriting the economics of these projects”, says Mr Sullivan. What it boils down to is that “the technical people can serve up whatever you want from the menu, while the commercial side puts together the financial packages and make the contracts.”
Appetite for LNG continues to grow
The popularity of LNG is expected to grow as countries replace coal-burning power plants with cleaner-burning natural gas to support policies of decarbonisation. Mr Sullivan, who is responsible for the initiation, development and securing of all LNG projects at engineering firm Worley Parsons, put the phenomenal growth of the market in perspective.
“When I first started in the LNG industry in the 1980s, we were trading 38M tonnes of LNG globally. Last year, we reached 340M tonnes and by the end of 2020, we should be close to 400M tonnes.”
He added: “We’re looking to add another 50% in capacity by 2030. This means that in the next five to six years, we will have to commit to another 200M tonnes in production in order to meet those goals by 2030.”
Strong economic growth in the early 1990s in countries such as China, India and southeast Asia required an increase in power generation, which was supplied by low-cost, highly polluting coal, seen as a readily affordable, abundant resource. China accounts for about half of the world’s coal consumption.
But air quality was profoundly impacted by the increase in coal consumption, resulting in unhealthy conditions in and around urban areas in China. This led to the ‘blue skies’ policy intended to curb emissions, including closing some coal-fired power plants.
Mr Sullivan said replacing this coal-powered energy will require hundreds of millions of tonnes of LNG: “China, for example, has 3.8Bn tonnes of coal-generated power. By simply replacing 5% of this coal with LNG, it would require 150 to 160M tonnes. It speaks to why we need these types of conferences and not just a global exhibition. We need to understand what’s driving it. It is a constantly changing market. You need a constantly changing model for development.”