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Petronas and UOP to cooperate in gas processing technology

Floating LNG lead Petronas to develop new solutions

Petroliam Nasional Berhad (Petronas) from Malaysia and Honeywell’s UOP from Des Plaines, Illinois, USA, signed a cooperation agreement to develop new solutions for the natural gas treatment on board of vessels.

While the crude oil production is stalled on a plateau, the natural gas production is increasing continuously in all continents as the cleanest and cheapest fossil fuel.

According to the US Energy Information Administration (EIA), the consumption of natural gas should reachpe 160 trillion cubic feet per year in 2035 out of which Asia would take 35%.

By contrast with USA where the natural gas may be traded on the spot market, actually below $3 per million btu, the gas prices in Asia are still driven by long term agreements such as the JCC contracts, indexed on the crude oil prices, and get closer to $20 per mmbtu.

With such a gap on gas prices between regions, there is no evidence that Asia gas market will stay at the actual level even if the demand is growing significantly in some countries.

The impact of the shale gas turning US from the status of importer to become a significant exporter has already reached Europe and Middle East where Gazprom and Qatar had to accept new deals on their export gas contracts.

This new energy balance will affect Asia where the gas prices should also take more distance from the crude oil prices to enter a more competitive market.

South Asia and Pacific regions hold significant reserves of natural gas but located in offshore fields where the production costs are unlikely to decline leading the oil and gas companies to innovate.

With the example of liquefied natural gas (LNG) projects in Western Australia calling for $30 billion capital expenditure to finance the offshore platform, the subsea pipelines and the onshore LNG facilities before shipping anything, Petronas is looking for innovative solutions to monetize its natural gas

Petronas to replicate Labuan FLNG in South Asia 

On June 2012, Petronas awarded its first floating LNG (FLNG) engineering, procurement and construction (EPC) to the consortium made of Technip and Daewoo Shipbuilding & Marine Engineering (DSME) for the Labuan Sarawak project.

Petronas Labuan Sarawak project is about one third in capacity of Shell Prelude FLNG.

But Petronas intends to replicate this format of FLNG in quantities as it matches with the most common size of the offshore natural gas fields in South Asia.

On these FLNGs, the liquefaction of the natural gas is processed by large compressors, as in onshore LNG Trains.

But before being liquefied the natural gas is still at raw stage and requires to be treated to eliminate the water, the natural gas liquids (NGL), sulfur and all kind of contaminants and impurities.

This treatment operation is performed in gas central processing facilities (CPF) which requests space and brings significant additional weight.

So far the central processing facilities were designed to be constructed and operated onshore or in dedicated platform offshore where the space and weight are not as critical as in FLNG where all operations have to fit in the same vessel.

Through their technology cooperation agreement Petronas and Honeywell’s UOP will focus on reducing the footprint of the gas central processing facilities for floating production units.

Honeywell’s UOP to build land-based pilot plant

Petronas and UOP put their attention of the carbon dioxide (CO²) absorption technology as to improve the reliability of the process to clean up the raw natural gas from its contaminants  such as CO2, hydrogen sulfide, mercury and water, or remove trace sulfur compounds prior to liquefaction.

Petronas and UOP were used to work together for this application since UOP opened in Kuala Lumpur in 2008 a gas processing center to design and build pre-fabricated skid mounted gas processing plants.

In May 2012, UOP inaugurated in Penang, Malaysia, a production unit of natural gas membranes elements.

Therefore, UOP could offer its local expertise and facilities to propose Petronas a development program based on land-based pilot plant to develop and test the new gas processing technology before moving it offshore for classical platforms as well as for the next generation of floating LNG (FLNG).

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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