Oman LNG

Image Source : Oman LNG Website

Location : Qalhat, near Sur

In January 1992, based on the discovery of substantial non-associated gas fields, the Oman government signed an MoU with Royal Dutch Shell, for its first LNG plant. A shareholders’ agreement was signed by the Government of Oman, Royal Dutch Shell, Total S.A., Korea Gas Corporation, Partex, Mitsubishi, Mitsui and Itochu in June 1993, leading to the establishment of Oman Liquefied Natural Gas LLC (Oman LNG) in 1994. The coastal town of Qalhat, Sur, in the South Sharqiyah Governorate, approximately 200 km south-east of Muscat, was identified as the site to construct the Oman LNG (OLNG) plant.

The signing of a long-term Sale and Purchase Agreement (SPA) with Korea Gas Corporation for supply of 4.1 MMTPA for 25 years, prompted construction to be initiated in November 1996. 2 LNG trains of capacity 3.3 MMTPA were built on the 1.4 square kilometre site. A 360-kilometre, 48-inch pipeline carries feed gas from Central Oman Gas Field Complex, operated by Petroleum Development Oman (PDO). In October 1998, another 25-year SPA was signed with Osaka Gas, followed by a 20-year agreement with India’s Dabhol Power Company, effectively committing the capacity of the plant almost entirely.

The first train was ready in 1999 and in 2000, His Majesty Sultan Qaboos bin Said inaugurated the Oman LNG plant. Maiden cargo from OLNG was dispatched to South Korea in April 2001. The company produces and sells Liquefied Natural Gas (LNG) and its by-product, Natural Gas Liquids (NGLs). The success of the 2 trains triggered further expansion plans, with construction of a 3^rd train, christened Qalhat LNG, starting in 2004. The 3^rd train was inaugurated in March 2006 and in September 2013, all 3 trains were integrated into the Oman LNG banner, with a consolidated capacity of 10.4 MMTPA.

In 2010, within a year of shipping its 1000^th cargo, Oman witnessed devastation on account of Cyclone Phet and operations at OLNG were shut down temporarily. In 2015, gas shortage on account of rising domestic demand, led to rescheduling of some of the plant’s exports.¹ The plant had been running at 75-80% capacity for a decade. However, in 2017, BP-Oman’s large Khazzan gas project came online, boosting the production of all 3 LNG trains to full capacity for the first time.²

The plant has a staff of 606 personnel and boasts of 88% Omanisation. The company sponsors higher education of 12% of its staff as well as professional qualification of another 8% of the employees.³ When Cyclone Guno rampaged through Oman in 2007, the company shut down all its non-essential work and directed its employees to relief work. They also donated $13 million to the Sultan’s fund and encouraged their staff to pitch-in by matching a 5-fold amount on all staff contributions.

OLNG is committed to safety, social responsibility and concern for the environment. 1.5% of its net income post tax is spent on Social Investment Programs (SIPs), with over $330 million already dedicated to more than 4,000 SIP projects. The company’s CSR funds are utilized for community projects in the region, national projects across the country, as well as for a reserve fund to ensure future sustainability. A US$40 million referral hospital was constructed for the host community, in addition to funding various health initiatives covering gene testing, cancer treatment, specialists training and establishing dental clinics. On the education forefront, OLNG invests in Smart Classrooms and mobile IT laboratories for remote schools, as well as supports programs for skill development and vocational training in the area. In addition, OLNG funds various programs covering sustainable fishing, cultural development, preservation of local heritage and sports & recreational activities.⁴

The company prides that its plant delivers world-class performance in minimising environmental impact on air, water and soil quality. OLNG is the single largest sponsor of the Environmental Society of Oman (ESO), that works on protecting indigenous species as well as waste reduction, reuse and recycle programmes. Oman LNG is also a leading sponsor of the Turtle Research and Exhibition Centre at Ras Al Jinz.

OWNERSHIP (Equity %)

Government of Oman	51.00%
Royal Dutch Shell	30.00%
Total S.A.	5.54%
Korea LNG (KOGAS, Hyundai, Posco, Samsung, SK Group)	5.00%
Mitsubishi Corporation	2.77%
Mitsui	2.77%
Partex Oil & Gas	2.00%
Itochu Corporation	0.92%

General Data

Estimated Capital Cost (USD)	1 B per Train
Plant Type	Onshore
Plant Stage	Operating
Final Investment Decision (FID) Year	1996
FEED Contractor	M. W. Kellogg Limited (now KBR Inc.) JGC Corporation
EPC Contractor	Chiyoda Corporation Foster Wheeler
No. of Trains / capacity	2 Trains / 3.3 MMTPA each
Production Start Year	2000
Products	LNG, LPG, Condensate
Gas Type	Non-associated Gas (NAG)

Technical Data

Cooling Media	Seawater
Liquefaction Technology	APCI AP-C3MR™
Refrigeration Train Details:
Propane String
Driver	GE PG6551B DLN1 (Frame 6B) Heavy Duty Gas Turbine
Gearbox	Double Helical Speed Reduction Gear box
Propane Compressor	3MCL1004 GE (Nuovo Pignone) Horizontally Split Centrifugal Compressor
Starter/Helper Motor	7.5 MW Synchronous Motor with Siemens VSD System
Mixed Refrigerant (MR) String
Driver	GE MS7121EA DLN1 (Frame 7EA) Heavy Duty Gas Turbine
Low Pressure (LP) MR Compressor	AN200 GE (Nuovo Pignone) Axial Compressor
Medium Pressure (MP) / High Pressure (HP) MR Compressor	2BCL806 GE (Nuovo Pignone) Radially Split Centrifugal Compressor
Starter/Helper Motor	7.5 MW Synchronous Motor with Siemens VSD System
Power Generation	6 x GE PG6551B DLN1 (Frame 6B) Heavy Duty Gas Turbines 2 GTGs dual fuel with black start capabilities

Refrigeration Train Configuration

Key Facts

Oman LNG plant is situated at a natural harbour, which is protected by severe ocean currents and tropical storms. The deep waters are in close proximity to the shore and allow a less than 500 m long jetty. This provides clear advantages in terms of project costs, reliability and safety.⁵
The LNG plant consists of two process trains, two LNG tanks of 120,000 m³ capacity each, two condensate storage tanks, power generation, common facilities area for the inert gas system, desalination plant, drinking, service & process water system, fire water supply, instrument & tool air systems, vapor & liquid flare systems, effluent treatment plant, water intake & outfall lines as well as material off-loading & LNG loading jetties. The facility can accommodate 3 more trains in the future.⁵
The plant employs GE Frame 6 and Frame 7 fixed speed gas turbines, based on APCI’s Propane Pre-cooled MR Cycle. In addition, the facilities include an Acid Gas Removal Unit (Shell International Oil Products BV) and a once-through sea water main process cooling system.⁵
APCI manufactured one of the largest cryogenic heat exchangers, of capacity 3.3 MMTPA, for Oman LNG.⁵
The plant employs large kettle-type heat exchangers that are chained together (tubesheet to tubesheet) to pre-cool treated gas. This arrangement reduces the power required by the compressor for refrigeration by minimizing the pressure loss. It also reduces interconnected pipework, minimizing piping cost, plot size and number of flanged joints.⁵
The plant, with a 25 year operating life, has the largest capacity LNG Trains and the lowest emissions in the base load LNG world.⁵
In April 1999, 15 million man-hours without LTI was achieved with peak construction manpower of 6800 personnel.⁵
Fast track commissioning driven schedules of 38 months and 42 months, from commencement to ready for start-up (RFSU), were respectively achieved for Train 1 and Train 2.⁵
Considerable effort was made during project execution to ensure technology transfer to Omani nationals and by start-up the plant had about 50% Omani workforce.⁵
A new generation of liquid expanders, which operate at variable speed, are employed at Oman LNG, in order to optimize plant capacity, costs and efficiency.^6,7
The high Nitrogen content in the feed gas necessitated designing of a nitrogen-stripping column for the train. This ensured a sharper split of the nitrogen components, in order to meet the LNG specification of N₂< 1.0mol%. Printed Circuit Heat Exchangers (PCHE), which are uncommon in LNG applications but widely employed in off-shore applications, were used in the Nitrogen Strippers and in the MR Recovery Heat Exchangers.⁸
2 of the most significant challenges experienced by Oman LNG post start-up, was the full assessment of the interference of the Dry Low NOx (DLN) technology on operating conditions and ensuring a more fit-for-purpose safeguarding and control philosophy, especially for vendor packages:⁸
> The DLN system resulted in several upsets during the transition between the Lean-Lean combustion mode and the Premix combustion mode. Special procedures were developed for seamless transition, to mitigate risk of failure.
> Several vendor packages were designed with protection focussed on the individual package instead of being aligned to the criticality of the equipment to the plant as a whole. Shell GSI’s methodology for classification and implementation of Instrumented Protective Functions (IPF) was employed to identify criticality of vendor equipment safeguarding .
A debottlenecking project executed between 2003 – 2004 increased the capacity of Trains 1 &2 by 15% to 7.7 MMTPA. The scope of the debottlenecking included:⁸
> Replacing internals in the Nitrogen Stripper column
> upgrading seals in air compressors of Gas Turbines
> upgrading the linkages of the Inlet Guide vanes of the MR axial compressors
Through increased rundown capacity, application of APC, elimination of reliability issues and improved maintenance schedule Oman LNG has consistently increased its committable capacity.
KOGAS of Korea and Itochu Corporation and Osaka Gas of Japan are Oman LNG’s key customers for production from Trains 1&2, through 20-25 year SPAs on FOB basis.⁹
In January 2018, BP Singapore signed an SPA with Oman LNG, committing to purchase 1.1 MMTPA of LNG for 7 years.¹⁰
In June 2018, Oman LNG signed contracts with MAN Diesel & Turbo and KBR to build a new gas engine driven power plant at Qalhat, which will be the first of its kind for liquefied natural gas (LNG) applications in Oman. This initiative is part of Oman LNG’s efforts to conserve natural gas and reduce CO2 emissions.^11,12
Oman LNG employs Brüel & Kjær’s Conditioning and Performance Monitoring (CPM) system, which is a “first” in a big scale LNG project. The system provides base-line data for the machines during start-up and user friendly fault analysis during plant upsets.¹³
In September 2018, Oman LNG began considering debottlenecking its 3 LNG trains, aiming to add 1.5 MMTPA to the facility’s current capacity of 10.4 MMTPA. An additional 0.5 MMTPA is expected by end of 2019 through few easy fixes, while major hardware upgrades could add another 1 MMTPA by 2021.¹⁴
Oman LNG has received several awards and honours for sustainable growth in the LNG sector^15,16
> First Omani company to receive the H.M. Sultan Qaboos Bin Said Al Said Award for Voluntary Work twice
> LNG Facility of the Year award at the 2nd International LNG Summit in Barcelona in April 2017
> Shell’s ‘Gas Plant of the Year’ award 2017
> Best LNG Production and Distribution Company International Finance Award 2017
> Petroleum Economist Award 2016 for Best Corporate Social Responsibility (CSR) Programme of the Year
> Best CSR Initiatives in Arab World 2017
> Al Roya’s Economic Award 2016 for Best CSR Entity
> Asia Best Corporate Responsibility Practices Award 2016 and Asia Best Community Development Award 2016
> GCC Award for CSR (Social Development)
A 200% increase in domestic gas demand led to availability of less than 25% of Qatar’s gas production for LNG exports. To avoid breaching existing commitments, Oman LNG and Qalhat LNG were merged in April 2013. In a bid to increase LNG production by 20%, Qatari gas was imported through Abu Dhabi’s Dolphin Energy; an MoU was signed with Iran to build a pipeline linking IGAT (Gas trunkline); and BP was permitted to develop the unconventional gas reservoirs at Block 61 and the Khazzan and Makarem gas fields.¹⁷
An air quality analysis using Industrial Source Complex Short-Term (ISCST) dispersion model was conducted to predict the deterioration in air quality during construction and operation of QLNG Train 3.¹⁸