Oct-2016

Integrated design for gas processing

An integrated approach to designing process line-up delivers a range of economic, process and environmental benefits.

PAVAN CHILUKURI and ANTON DEMMERS
Shell Global Solutions International

Article Summary

The development of natural gas reserves containing harder to remove sulphur species has increased in recent years, while sulphur limits for treated gas and stack sulphur dioxide (SO2) emissions have continued to tighten. This combination has resulted in significant increases in the complexity of acid gas removal units (AGRU) and sulphur recovery units (SRU). With standalone designs for AGRUs and SRUs, licensors may be able to optimise the process units individually. However, additional benefits can be realised through an integrated design.

The key barrier to integration for many projects lies at the tendering stage. Often, invitation-to-bid (ITB) documents are issued for dedicated process items such as AGRUs or SRUs. Constrained by the terms of the ITB, bidders and licensors can only propose an ITB-compliant offer for that single unit and cannot put forward integrated, multi-unit solutions that may be more suitable for the project.

This unit specific approach to tendering may be guided by a desire to attract multiple bidders in order to boost competition. However, this article aims to demonstrate 
that an integrated approach typically outperforms non-integrated designs, and offers lower capital expenditure and higher net present values.

Available opportunities
At the bidding stage, project developers should consider that there might be a licensor that can provide all the required technologies. Having a single supplier provides an opportunity for the vendor to optimise the whole gas processing line-up, which can result in improved net present value for the client.

Having multiple licensors for different parts of the line-up introduces the problem of each unit having several different design margins to allow for any variations in the feed at the unit battery limit. Selecting an integrated line-up through one licensor with experience and in-depth knowledge of each of its units can eliminate that problem. This is because a vendor that is providing the entire line-up understands the parameters of each individual unit as well as how they can best work together. The vendor can, therefore, hone the design of the whole line-up to minimise design margins. This has a positive effect on equipment sizing and capital expenditure, and, ultimately, on operating costs.

An integrated line-up through one licensor also boosts flexibility for clients by giving them access to the licensor’s entire portfolio of technologies and to its operating experience. This can enable designs to be changed or refined even further should the project scope change after the initial tender is issued, thus minimising the impact on schedule and costs. It typically also results in an accelerated schedule for the process design package and means the single licensor can often start work on elements of the design in parallel rather than having to wait for another licensor to finalise Package A before Package B can be started.

During the contract stage, the integrated approach can also reduce the number of interfaces required. With one vendor, there is typically only one project team on the client’s side. A reduction in project and/or technical interfaces can remove obstacles to development and reduce project schedules.

It can also be beneficial because the client only has to deal with the overall process guarantees for the whole line-up, rather than defining the battery limits for every unit with multiple licensors. This can have a knock-on effect in the operating stage if there is an issue with one of the guarantee values. In that instance, licensors may often point blame at each other, leaving the operator to determine who is at fault. With one vendor, where the fault lies is much clearer and it can be rectified instantly.

Financial savings
Shell Global Solutions’ experience with providing entire gas processing line-ups has proven the value of an integrated approach.

For one Middle Eastern project, Shell Global Solutions started with a contract for a single unit, but later was able to convince the client to consider an integrated design after illustrating the flexibility and value such integrated line-ups can offer. This particular project faced challenges in defining the feed gas, which meant that any bespoke line-up design might prove inadequate once more data on the feed became available.

Early data for the project showed:
• The hydrogen sulphide to carbon dioxide (H2S/CO2) ratio in the feed ranging from 0.25 to 2.5, and likely on the lower side of the range
• An uncertain production profile
• Sulphur production in the range of 500 to 2000 t/d
• Uncertain levels of trace components in the feed, with no data on benzene, toluene, ethylbenzene and xylene (BTEX) and heavier alkane (C6+) concentrations.

With such uncertainty around the feedstock, Shell Global Solutions recognised an opportunity for the client to benefit from an integrated line-up. Therefore, it proposed an integrated, fixed capacity line-up with built-in flexibility that would enable easy replication of the units, if necessary, later in the project without significant cost or schedule impacts.

Analysis showed that this fixed capacity option’s flexibility would enable the project to progress quicker into the front end engineering and design, and engineering, procurement and construction phases, thereby reducing the overall project schedule. A shortened timeline can bolster the net present value of a project by enabling the developer to produce oil quicker and get an earlier return on investment.

Shell’s analysis showed that, for this particular onshore sour oil and gas project, the improved net present value likely to result from using the fixed capacity line-up would be significantly greater than the extra investment costs required during the design stage. Specifically, the design would enable the developer to avoid a project delay of one year, which would prevent about a 10% reduction in the project’s net present value, which roughly equates to a $3 billion saving. Meanwhile, achieving this required only a relatively small additional upfront investment of $150-250 million.

Another project in the same region saw Shell Global Solutions initially bidding on two separate units, an AGRU and an SRU, for the gas processing line-up. After securing the SRU contract, the company developed an integrated option to put to the client and found that it would result in significant savings in capital and operating expenditure (see Table 1).