The LNG Futures FacilityPhysical & virtual LNG plants for technology

demonstration and industrial training

Professor Eric F. MaySeparations & Sensing Workshop

29th November 2017

Fluid Science & Resources Division

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Eric May

Mike Johns

BrendanGraham

ZachAman

PaulStanwix

ACADEMIC & RESEARCH STAFF

Gongkui Xiao

2 Mechanical Workshop Technicians ~30 Masters/Honours/Visiting Students

DarrenRowland

Sarah Vogt

EinarFridjonsson

SaifAl Ghafri

Mauricio Ruggeri

John Zhen

Sofia Mylona

Mosayyeb Arjmandi

Peter Metaxas

Masoumeh Akhfash

Nick Ling

Ming Li

PhD Students (> 30 in 2017)

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MarcoZecca

GhazalAvijegon

KeelanONeill

LisabethWagner

JordanOakley

CoreyBaker

KumariniSeneviratne

BruceNorris

ShaneMorrissy

TomCharlton

ZhikaoLi

NicholasBristow

YahuaQin

ShamsurRaman

Paul Connolly

ArmanSiavashi

FernandoPerez

FSR LocationsCO2 Research Lab

Located at UWA CrawleyResearch & Teaching

4 www.fsr.ecm.uwa.edu.au

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ARC Training CentreIndustrial Transformation Training Centre Australian Centre for LNG Futures

ARC ITTC awarded in May 2015 & launched in April 2016, first in WA

Nine Industry Partners, 11 Projects$9 million over 5 years

12 Academics, 5 Post Docs & 10 PhDs with industry placements

Objective: cost-effective LNG production, at all scales, in remote or deep-water locations

Flagship Project: Micro Scale LNG Plant RESEARCH | DEMONSTRATION | TRAINING

Scaling Up Research & TrainingChallenging of scale up from the lab to the real world

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Bench - ScaleMicron - Scale Pilot - Scale

Gas

Sep

arat

ions

Cry

ogen

ic F

luid

sFl

ow A

ssur

ance

No accessible, live environment exists for demonstrating new technologies & processes at industrial scale

No training facility available that uses actual natural gas or high pressures

Globally unique facility for training and deployment: enable commercialisation pathways for innovative technologies from operating companies, contractors/service companies and SMEs

LNG Futures Facility: Physical plantTraining | Demonstration | Research

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Training utilises a small scale LNG Plant

More & better instrumentation than industrial plants to ensure maximum data quality & rich data sets for training

Also use to qualify Industry 4.0 advancese.g. digital sensing & robotic technologies

Two trains: 1 for training & 1 for researchResearch Facility to provide real fluids for technology demonstration of: New processes (e.g. CO2 H2) New sensors (e.g. heavy HC dropout ) Synergistic operations: membranes +

molecular sieves for amine-free plant

Research ThemesResearch Themes 1-3 of 6

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Novel material development & advanced separation processesGas Separation Technology

Avoiding solids deposition & maximising productionCryogenic Fluids & Refrigerants

New and improved LNG storage and transportationLNG Storage Systems

Synergistic Operations: smaller footprint dehydration, acid gas and nitrogen removalAdsorption, absorption and membrane processes for subsea & floating operationsMercury capture materials and sensorsHelium capture for additional product streams

Prevention and remediation of BTEX freeze outDemonstration of new, online sensors in live plant environmentOptimisation of refrigerant blends and liquefaction cycles

Demonstration of new storage systems e.g. matrix pressure vesselsVerification of heat transfer data in storage systemsBoil Off Gas recovery systems

Research ThemesResearch Themes 4-6 of 6

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Predictive analytics and open datasetsData Analytics

Live test environment for roboticsRobotics & Automation

Accelerated Life-cycles Frequent start up and shutdown scenarios

Demonstration and functional testing of real-time data monitoring and analysis platforms e.g. GE PredixDemonstration of automated plan (unmanned response to process upsets)Open datasets case studies for education and research purposesEnhanced, fuller datasets through over instrumentation

Demonstration of ROVs for maintenance and inspection activities

Demonstration and verification of blow down and relief systemsDemonstration of new unit operations, instrumentation and sensorsChemical qualification

Industry 4.0 TestlabEngagement with PMs Taskforce & Siemens

LNG FF featured in PMs Industry 4.0 Taskforce report: Industry 4.0 Testlabsin Australia

Selected as Australias 2ndTestlab: Siemens Australia to grant UWA specialized software valued at $447 million to enable digital twins of LNG FF.

Senator Cash co-announced $5 million fund to support the development of five Testlabsutilising digital twins.

NERA co-funding will help initiate this process & ensure the LNG FF can access these new federal funds

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TrainingPractical training co-designed with Industry.

Completely new training capability: no training facility that uses live fluids exists.

Holistic training: end-to-end scenario: treatment, liquefaction, storage, regasification, power generation.

Training for the next generation of Operators, Engineers & Contractors.

OPERATORS: an ageing workforce and ongoing growth in the LNG sector will result in a shortage of trained operating personnel (estimated at 3000 operators in the next ten years).

ENGINEERS: work experience, remote control capabilities for integration into course work

MAINTENANCE CONTRACTORS: training and preparation for scheduled plant shutdowns

LIVE PLANT DATA FOR OFF-SITE TRAINING: business model not limited to bodies on site -international market through access to live data 11

Kwinana Industrial AreaLandcorp recommendation

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KWINANA BULK TERMINAL INDUSTRIAL AREA

Kleenheat Plant

Tianqi Lithium

AMC

PROPOSED LOCATION

Location: Kwinana Industrial Area, 20 30 km south of Perth.National Facility open to students, companies & researchers across Australia & Region67% of Australian gas located off WA coastOver 800 global & local energy, petroleum, equipment, technology & service companies based in Perth

Business Model (Long Term)Form a Special Purpose Vehicle to own and operate facilities

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Once the facilitys detailed design is finalized, propose establishing an SPV to own, manage and provide governance. Full time trained plant

operators for microscale plant (NOT Academics or PhDs)

Scientists & research engineers run research facility

Separate Training Provider from Vocational Sector (e.g. ACEPT)GE / Clough

Training

GE / Clough

LNG plant

Design and construction

GE / Clough

Research

GE

Financial / Commercial

CloughClough

Operations and maintenance

ACEPT

Training operator

Operations and FM

UWA

Research operator

SPV

Equity

Land

Training

LNG plant

Research

AssetsOwnership Contract

Funding Model - Government supportResulting in either decreased Industry contributions or increased scope

Equity of $50M

Federal Government = $17.5M CAPEX + $15M OPEX over 10 years (e.g. NCRIS-type arrangement)

State Government provides land at peppercorn rate

On average each equity partner re-pays bank $539k p.a. for 10 years

Equity

Govt.SPV

Partner 1 Partner 2 Partner 3 Partner 4

Bank

Assume 4 equal equity partners, 4% interestBank provides cash flow as required to SPV to establish LNG Futures Facility

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Next Steps: Phase 1 & 2 of Facility DesignEnable progress to Final Investment Decision

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Cost of completing engineering design, securing regulatory & environmental approvals, and SPV legal & financial agreements estimated at $3.5 million

These will be achieved in Phases 1 & 2 of project during 2018 to allow for Final Investment Decision in 2019. SPV only formed if FID approved by all partners.

Phase 1 Funding Secured for Functional Specification & Concept Select: Hyundai Heavy Industries, Shell, Chevron & UWA have each committed $100k Woodside finalising its contribution NERA Growth Centre has approved matching funds $1 million total Siemens software grant central to Phase 1.

Forward PathMaking the LNG Futures Facility happen

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After completing Phase 1, NERA & industry partners have stage-gate before commencing Phase 2 FEED & Approvals

NERA, Shell, Chevorn & HHI have provisionally committed funds to Phase 2.

SeedFunding

2017 NERA Contract & Siemens Grant Finalised

January 2018 Phase 1 Functional Specification Commences

August 2018 Phase 2 FEED & Approvals Commences

April 2019 FEED complete, Final Investment Decision

September 2020 LNG Futures Facility Operational

Paced schedule to match

industrys current capacity

acceleration possible

Need for Federal Government support to establish open-access facility is virtually certain. Identify possible funding sources: NCRIS, Training?

THANK YOU

lngfutures.edu.au

Research Themes

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Novel material development & advanced separation processesGas Separation Technology

Avoiding solids deposition in cryogenic plantCryogenic Fluids

New and improved LNG storage and transportationLNG Storage Systems

Predictive analytics and open datasetsData Analytics

Live test environment for roboticsRobotics & Automation

Accelerated Lifecycling Frequent start up and shutdown scenarios

Typical Focal Activities & Work Scope FEED & Detail Design

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Phase 1Feasibility & Concept

Phase 3Detailing & Fabrication

Concept Definition1st Half of FEED

System Definition2nd half of FEED

Detail Design - System Detail Design - Global Detail Design and Sub-Contracting

1. Purchase Priority 1 & 2 equi 1. Purchase Priority 3 equipmn1. Issue Design Deliverables2. 15% plot plan review (early) 2. 70% layout Review for fabrication/construction3. Award site preparation contr3. Award Civil Contract 2. Award steel & piping Fab 4. 30% layout review Contracts

3. Award Mech, Steelwork,Piping, E&I Install Contracts

HSE Studies, analysis and Environment Impact Report

Preliminary HSE and safety risk assessment

HSE and safety risk assessment checked

HSE and safety risk assessment frozen

HSE and safety risk assessment complete

Freeze functional requirements, design basis, overall system description and layout

First vendor information for Priority 1 POs incorporated in Layout/3D Model

First vendor information for Priority 2 POs incorporated in design

Frozen vendor information for all POs implemented in System Engineering

System Engineering; P&IDs, Line List, MEL issued for construction

Equipment list, flow diagrams and Single Line Diagram

P&IDs, Line List , Mech Equip List, EIT registers/databases and 3D Model

System Engineering: P&IDs , Mech Equip List, EIT registers/databases and 3D model

P&IDs, Line List, Mech Equip List, EIT registers/databases and 3D model

Procurement; All POs with vendor information implemented and material take off done.Bulk material topping up placed.Supplier package follow up

Layout and unit arrangement finalised

Issue P&IDs for approval Main Process HAZOPs complete and P&IDs Issued For Design

Procurement; All equipment POs awarded, all bulk materials orders placed

Layout and 3D Model ;Detail design completed and Design drawings issued

Construction methods Priority 1 Equipment POs awarded

Procurement: Priority 2 & 3 equipment POs awarded, First bulk material orders placed

Layout and 3D model are Clash free. Ready to issue details. All major interfaces frozen

Subcontracting; Start awarding Priority 2

Site preparation design complete

Subcontracting plan & strategy complete

Subcontracting; 1st priority subcontract issued, 2nd priority subcontracts draft

Subcontracting; 1st priority subcontracts awarded, 2nd priority subcontracts issued

Fabrication/Construction plan and methods finalised. Completion preparation finalised

Finalise completion execution strategies

Fabrication/Construction methods and draft plan

Completion preparation substantially complete

Preliminary Process HAZOP

Pre-qualification Main Sub-Contractors

Prepare and verify project schedule and cost estimate

Prepare Detailed Deliverable Schedule and update current cost estimate

Verify Contract Milestones and Detailed Construction Schedule and update current cost estimate

Milestones and Detailed Construction Schedule verified

Finalise Project Execution Strategy

QA plan established HSE program for engineering and procurement in place

HSE program for construction in place

HSE program for completion in place

Establish class D cost estimate +/-10%

Quantity and weight baseline & trending program

Risk assessment update

FEED Detail Design

Phase 2System Definition

1. Process Definition2. Project scope definition3. +/- 10% Cost estimate

Sheet1

FEEDDetail Design

Phase 1Feasibility & ConceptPhase 2System DefinitionPhase 3Detailing & Fabrication

Concept Definition1st Half of FEEDSystem Definition2nd half of FEEDDetail Design - SystemDetail Design - GlobalDetail Design and Sub-Contracting

1. Process Definition1. Purchase Priority 1 & 2 equipment1. Purchase Priority 3 equipmnt1. Issue Design Deliverables

2. Project scope definition2. 15% plot plan review (early)2. 70% layout Reviewfor fabrication/construction

3. +/- 10% Cost estimate3. Award site preparation contract3. Award Civil Contract2. Award steel & piping Fab

4. 30% layout reviewContracts

3. Award Mech, Steelwork,

Piping, E&I Install Contracts

HSE Studies, analysis and Environment Impact Report Preliminary HSE and safety risk assessmentHSE and safety risk assessment checkedHSE and safety risk assessment frozen HSE and safety risk assessment complete

Freeze functional requirements, design basis, overall system description and layoutFirst vendor information for Priority 1 POs incorporated in Layout/3D ModelFirst vendor information for Priority 2 POs incorporated in designFrozen vendor information for all POs implemented in System EngineeringSystem Engineering; P&IDs, Line List, MEL issued for construction

Equipment list, flow diagrams and Single Line DiagramP&IDs, Line List , Mech Equip List, EIT registers/databases and 3D ModelSystem Engineering: P&IDs , Mech Equip List, EIT registers/databases and 3D model P&IDs, Line List, Mech Equip List, EIT registers/databases and 3D modelProcurement; All POs with vendor information implemented and material take off done.Bulk material topping up placed.Supplier package follow up

Layout and unit arrangement finalisedIssue P&IDs for approvalMain Process HAZOPs complete and P&IDs Issued For DesignProcurement; All equipment POs awarded, all bulk materials orders placed Layout and 3D Model ;Detail design completed and Design drawings issued

Construction methodsPriority 1 Equipment POs awarded Procurement: Priority 2 & 3 equipment POs awarded, First bulk material orders placedLayout and 3D model are Clash free. Ready to issue details. All major interfaces frozenSubcontracting; Start awarding Priority 2

Site preparation design completeSubcontracting plan & strategy completeSubcontracting; 1st priority subcontract issued, 2nd priority subcontracts draftSubcontracting; 1st priority subcontracts awarded, 2nd priority subcontracts issuedFabrication/Construction plan and methods finalised. Completion preparation finalised

Finalise completion execution strategies Fabrication/Construction methods and draft planCompletion preparation substantially complete

Preliminary Process HAZOP

Pre-qualification Main Sub-ContractorsPrepare and verify project schedule and cost estimatePrepare Detailed Deliverable Schedule and update current cost estimateVerify Contract Milestones and Detailed Construction Schedule and update current cost estimateMilestones and Detailed Construction Schedule verified

Finalise Project Execution StrategyQA plan establishedHSE program for engineering and procurement in placeHSE program for construction in placeHSE program for completion in place

Establish class D cost estimate +/-10%Quantity and weight baseline & trending program

Risk assessment update

Schedule Now to End of FEED & FID

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Overall Project Schedule

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Proposed Funding Model (Long Term)Base plan: funding only from Industry

Equity

SPV

Partner 1 Partner 2 Partner 3 Partner 4

Bank

Equity of $50M = $35M CAPEX + $15M OPEX over 10 years

On average each equity partner re-pays bank $1,541k p.a. for 10 years

Likely to include both Industry and Research partners (e.g. UWA & CSIRO)

Assume 4 equal equity partners, 4% interestBank provides cash flow as required to SPV to establish LNG Futures FacilityModel assumes no financial support from Government and represents the maximum that industry partners will pay

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The LNG Futures FacilityPhysical & virtual LNG plants for technology demonstration and industrial trainingFluid Science & Resources DivisionPhD Students (> 30 in 2017)FSR LocationsARC Training CentreIndustrial Transformation Training CentreScaling Up Research & TrainingChallenging of scale up from the lab to the real worldLNG Futures Facility: Physical plantTraining | Demonstration | ResearchResearch ThemesResearch Themes 1-3 of 6Research ThemesResearch Themes 4-6 of 6Industry 4.0 TestlabEngagement with PMs Taskforce & SiemensSlide Number 11Kwinana Industrial AreaLandcorp recommendationBusiness Model (Long Term)Form a Special Purpose Vehicle to own and operate facilitiesFunding Model - Government supportResulting in either decreased Industry contributions or increased scopeNext Steps: Phase 1 & 2 of Facility DesignEnable progress to Final Investment DecisionForward PathMaking the LNG Futures Facility happenTHANK YOUResearch ThemesTypical Focal Activities & Work Scope FEED & Detail DesignSchedule Now to End of FEED & FIDOverall Project ScheduleProposed Funding Model (Long Term)Base plan: funding only from Industry