PolaireTech LNG plants to monetise inland gas resources

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By: PolaireTech
PolaireTech is a technology company that supplies technology for the construction of small-scale, standardized, modular plants for the liquefaction of natural gas.

[Johannesburg, 2 September 2023] PolaireTech’s modularised small-scale plants for the liquefaction of natural gas to produce liquefied natural gas (LNG) are now available in southern Africa. PolaireTech is a South African/Canadian joint venture company specialising in small-scale LNG (ssLNG) plants. According to Freek van Heerden, PolaireTech CEO, these plants employ a patented zero-refrigerant technology which reduces the equipment count and consequently the capital cost.

Gas as a transition fuel

The drive to decarbonise industry to attain a net zero carbon emission by 2050 puts tremendous pressure on high CO2 emitters, especially coal-based power, and coal-based fuels generation. The logical alternative for the immediate future is to generate as much renewable power as possible and to use natural gas as a transition fuel in the interim.

Commercial deployment of ssLNG plants is driven by the need for cheaper alternatives as compared to crude oil derived fuels like diesel, LPG, or petrol. The use of LNG as a replacement fuel in diesel trucks and mining equipment, trains, remote power stations, or other industrial and heating applications presents an opportunity for ssLNG plants that is fast gaining momentum. Conversion of diesel vehicles to diesel/LNG dual fuel is now common practice in many industries and countries.

Importation of LNG is seen as the solution and large industries and the government has been focusing on this alternative. Studies have shown that Matola, Richards Bay, Coega, and other ports in South Africa are possible locations for import terminals. These terminals and the logistics of supplying the LNG require very large import volumes to make these facilities viable, irrespective of whether these facilities are land based or floating storage and regasification units (FSRU). At the moment, the only LNG terminal that appears to be moving ahead is the Matola terminal. It is not clear whether further LNG terminals can be justified, especially considering the rapid gain in momentum of renewable energy. No one wants to create facilities at huge expenditure that could become obsolete once renewable energy becomes dominant.

Inland gas resources

South Africa uses around 180 PJ/a of gas, mostly imported from Mozambique. It is well documented that the Pande and Temane gas fields in Mozambique are reaching the end of their useful life with gas flows expected to decline within 4 to 5 years. It is also well known that industrial expansion has been curtailed by the limited gas supply.

However, various gas resources exist inland in southern Africa that can potentially supply all of the region’s gas needs into the future, providing labour and reducing foreign exchange demands. It is estimated that these gas resources can provide gas to the Mpumalanga, Gauteng, and Northwest provinces cheaper than what would be possible by importing LNG. Substantial gas fields are present in Mpumalanga east of Secunda, Limpopo close to the Zimbabwe border, in the Waterberg area, and also in Central Botswana.

The helium and natural gas field near Virginia in the Free State being developed by Renergen should start producing LNG and liquid helium during the latter half of 2022. The first locally produced LNG will spearhead the development of the local LNG market in specific niche applications.  The other gas fields are all at different stages of development with some starting to produce initial test quantities while others, e.g., Botswana, are finalising power purchase agreements in order to commence power production. Development work on some fields have stopped some 10 years ago for various reasons.

Generate an early revenue

Commercialising a gas field is a very costly exercise when one considers the exploration work and the need to have flowing gas wells to prove the productivity of the field before financing can be secured. In the past, gas from test wells was flared for substantial periods of time whilst productivity data was accumulated. This practice requires huge upfront expenditure before a company can start earning a revenue. Flaring of gas is also not acceptable anymore due to the release of greenhouse gases.

The need for a way to generate early revenue from the wellfield development is obvious. Gas production can then be sustainably ramped up whilst the market is being developed and financing secured. A way to get this relatively small volume of gas from wellfield development to market is to liquefy the gas, thus enabling it to be cost-effectively transported to customers. As the above mentioned southern African gas fields are generally inland and much closer to the final customers, delivery costs can be lower than transporting imported LNG from the coast to Gauteng or Botswana.

LNG technology

In the past, the focus on optimising LNG plants was on reducing the liquefaction cost through economies-of-scale. This resulted in single-train LNG plant capacities of up to 7 million tpa, costing multi billion dollars to erect. Such plants are not suitable for smaller inland gas fields, and especially not during field development. Over the last 5 years, several companies have realised that opportunities exist for small-scale natural gas liquefaction plants (ssLNG), ranging from 5 000 tpa to 250 000 tpa. However, it is not possible to just scale down the very large plant designs and technologies to these required low capacities.

Several companies are now offering innovative ssLNG plants that can compete in smaller niche applications. These ssLNG plants face challenging economics given their small scale. Special emphasis must be placed on the development of a competitive offering with the lowest life cycle cost. Achieving the objective of lowest life cycle cost requires firstly, a process configuration that strikes a competitive balance between capital and operating cost, and secondly, a project development and implementation approach that benefits from a lean standardised modular design, low-cost shop fabrication, and reduced project schedule.

Typically, ssLNG plants employ an optimised system of expanders to provide the necessary cryogenic refrigeration using nitrogen or mixed refrigerants in a closed loop. PolaireTech’s zero-refrigerant technology uses methane in the incoming natural gas feed as a refrigerant in an open loop cycle. Because of the higher heat capacity of the methane, power consumption per ton of LNG is typically reduced by around 25% as compared to nitrogen loop systems.

Van Heerden says that the PolaireTech ssLNG plants are fully modularised. The use of plant modules reduces on-site construction man-hours and allows for scalable, plug-and-play units, along with easy integration with existing systems. A further advantage is the compact footprint that a modular plant provides.

A compact modular solution has the benefits of reduced capital cost due to improved labour productivity and reduced bulk quantities. According to van Heerden, modularisation typically results in capital cost savings of 15% compared to traditional construction methods. An additional advantage of a modular plant is the ability to easily relocate the plant if required.

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