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QATARGAS II: FULL SUPPLY CHAIN OVERVIEW

QATARGAS II: DU PRODUCTEUR AU CONSOMMATEUR:

PRESENTATION DE LA CHAINE COMPLETE
D’APPROVISIONNEMENT
Grant R. Thompson
James B. Adams
Ali Al Hammadi
Qatargas II Development
Doha, Qatar
gthompson@qatargas.com.qa
Saad Al Kaabi
Qatar Petroleum
Doha, Qatar
s_alkaabi@qp.com.qa
Paul W. Sibal
ExxonMobil Upstream Research Co.
Houston, Texas, U.S.A.
paul.w.sibal@exxonmobil.com

ABSTRACT
The Qatargas II LNG Project (QG II) is an exciting, 'full supply chain' joint venture,
conceived by Qatar Petroleum (70%) and ExxonMobil (30%), which will set new
standards for scale and economy of LNG production. The project will expand the existing
Qatargas LNG facility at Ras Laffan, Qatar with the addition of two LNG trains,
significantly larger than any previously built. Each train will have an LNG production
capacity of approximately 7.8 million tonne/yr (MTA). Feed gas will come from the
North Field, which is the largest non-associated gas field in the world. The onshore plant
will extract LPGs (propane and butane), which will be fractionated, stored and exported
from Ras Laffan. Lean LNG production is targeted for the United Kingdom market, using
new, larger LNG transportation ships. A new receiving terminal in the UK will regasify
the LNG and send out sales gas into the U. K. NTS (national gas transmission system).
QG II shareholders have carefully evaluated available technologies and are
implementing programs to successfully deploy various technical innovations, including:
• AP-X™ Hybrid LNG process, licensed from Air Products and Chemicals, Inc.,
• GE Frame 9E gas turbines with Dry Low NOx combustors driving refrigeration
trains,
• Waste heat recovery and steam generation to improve overall thermal efficiency
and further reduce total air emissions, and
• Larger more efficient LNG transportation ships
A challenging schedule has been set to achieve new economies of scale, world-class
air emissions performance, and the key project objectives of superior safety and
environmental performance. First LNG sales in the U. K. are targeted for early 2008.

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RESUME
Le Projet de liquéfaction de gaz naturel Qatargas II LNG (QG II) est un projet de
grande envergure, conçu par Qatar Petroleum et ExxonMobil, qui consiste à réaliser une
chaine complète d’Approvisionnement en Gaz, Ce projet, par sa taille, va générer de
nouveaux standards techniques et économiques en matiére de Production. Le Projet
consiste à rajouter deux trains de LNG, beaucoup plus importants que ceux construits
précédemment, aux installations existantes à Ras Laffan, Qatar. Chaque train aura une
capacité de production de LNG d’environ 7.8 MTA. Le gaz sera produit du North Field,
qui est le plus grand champ de gaz au monde. Propane et Butane (LPG’s) seront extraits,
fractionnés, stockés et exportés à partir de Ras Laffan. Le gaz, après traitement, sera
liquéfié et stocké pour être ensuite transporté au Royaume Uni par méthaniers d’une
nouvelle generation. Le gaz liquéfié sera stocké dans un Terminal au Royaume Uni, où il
sera vaporise et envoyé dans le réseau national d’approvisionnement en Gaz.
Les partenaires de QG II ont soigneusement évalué les technologies existantes et
mettent en place un certain nombre de programmes pour déployer avec succés plusieures
innovations techniques:
• AP-X™ Hybrid LNG process, sous license Air Products and Chemicals, Inc.
• Turbines à Gaz GE Frame 9E des trains de refrigeration avec brûleurs Dry Low
NOx
• Récupération de Chaleur / Génération de vapeur (HRSG) pour améliorer les
rendements thermiques
Nouveaux bateaux de transport de LNG plus gros et plus efficaces.
Le Projet a fixé un calendrier agressif pour atteindre de nouvelles economies
d’échelle, les meilleures performances mondiales en matière de rejets industriels en
atmosphere, et surtout les objectifs principaux du projet qui sont excellence en Sécurité et
Environnment.
Les premières ventes de gaz au Royaume Uni sont prévues pour l’hiver 2007 / 2008.

INTRODUCTION
On June 24, 2002, Qatar Petroleum (QP) and ExxonMobil (EM) signed a Heads of
Agreement (HOA) to supply liquefied natural gas (LNG) to the United Kingdom (UK).
Since then, preliminary engineering has progressed on a plan to supply this LNG by
staging the construction of two approximately 7.8 million tonne/year (MTA) LNG trains
at the existing Qatargas (QG) LNG plant site in Ras Laffan Industrial City (RLIC), Qatar.
The project is currently in the Front-End Engineering and Design (FEED) stage, with
plans in place to competitively bid Engineering, Procurement, and Construction (EPC)
contracts in the 2004. There are currently three operational LNG trains at the existing QG
site. Qatargas II (QGII) Train 4 will start up as soon as practical, with anticipated first
delivery of LNG in early 2008. Future expansion is planned to meet market demand, with
Train 5 planned for implementation one to two years after Train 4.
The QGII project is unique in the industry because of its large scale and the agreed
commercial scope between shareholders. Rather than developing a plant for long-term,
firm sales contracts, the QGII venture is developing the full supply chain for ex-terminal

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sales into an open market. The integrated projects to produce, export, and sell LNG and
LPG include:
• Offshore production platforms and pipelines
• Onshore gas treating, LPG recovery and LNG facilities
• Large LNG (LLNG) ships with capacities ranging from 145,000 to over 200,000 m3
• LNG receiving and re-gasification terminal in the UK
The purpose of this paper is to provide an overview of the project, with particular
focus on the large train technologies that will be implemented. A brief recap of industry
benchmarks is first provided to illustrate the relative position of the QGII project. Finally,
the venture’s approach to managing technical risk is briefly described.

Scale Relative to Other LNG Projects

The base load LNG industry started in 1964. Algeria’s Arzew GL4Z (Camel) Project
had three LNG trains with an initial design capacity per train of 1.4 million standard
cubic meters per day (MSCMD) (50 million standard cubic feet per day), or roughly 0.3
MTA. These initial trains exported LNG to a receiving terminal at Canvey Island in the
UK.
The design capacity of LNG trains has steadily grown during the nearly four decades
that have elapsed since construction of those first LNG trains in Algeria. As shown in the
following figure, LNG train capacities increased to around 1.5 MTA by the mid-1970s, to
roughly 2.5 MTA by the late 1980s, and to 3.3 MTA by 1999. This growth occurred
through continued developments in liquefaction, gas turbine, and refrigerant compressor
technologies, along with continued market growth, predominantly in Japan, South Korea,
Taiwan, and Europe.
A further significant leap in train size was seen with the development of the RasGas II
trains in Qatar. The first of these 4.7 MTA trains, with startup in January 2004,
established a new LNG industry benchmark for achieving unit cost reduction through
economies of scale. Additional grassroots or expansion LNG projects in Trinidad, Egypt,
Australia, and elsewhere have been announced with per train design capacities in the 5
MTA range; some of these are currently under construction.
At nearly 7.8 MTA per train, the QGII LNG trains will be at least fifty percent larger
than any other LNG project. As discussed below, this will be achieved by applying the
latest developments in liquefaction and refrigerant compressor technology, and through
the first-ever use of Frame 9 gas turbines to drive the compressors.

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Excludes
Condensate
And LPG

10
Capacity per Train (MTA)

0
‘64 ‘72 ‘78 ‘82 ‘89 ‘97 ‘99 ‘03 ‘05 ‘06 ‘07 beyond ‘07

Others Qatargas II
Shareholders
1

Figure 1: Trends in LNG Train Size

QGII Offshore Development Plan

As part of the first phase of the development plan, two remote, unmanned offshore
production platforms, with 12 and 15 well slots will be initially installed to produce a
combined 41 MSCMD (1450 MSCFD) of gas and condensate to the first train of LNG
production facilities. The gas will be exported from these platforms through a 91 cm (36
inch) pipeline from Platform 4 and a ~41 cm (16 inch) CRA clad intrafield flowline from
Platform 5, which will be tied into the 91 cm (36 inch) pipeline via a subsea connection.
The full two-train development will require a third platform (Platform 6) and a second
91 cm (36 inch) pipeline to provide a total of 82 MSCMD (2900 MSCFD) of wellstream
gas. A second CRA clad intrafield flowline from Platform 5 will be tied into the 91 cm
(36 inch) pipeline from Platform 6 via a subsea connection. Platform 6 will be of a design
similar to Platform 4. The offshore field layout is illustrated in Figure 1.

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WH-4
WH-6
(12 Slots)
(12 Slots)

WH-5
(15 Slots)

LNG TRAIN 4
EXPANSION

LNG TRAIN 5
EXPANSION
Qatargas
Ras Laffan Ind. City

Figure 2: Offshore Field Layout

QGII intends to operate these production facilities in the wet gas mode; consequently,
there will be no offshore separation or dehydration. The offshore processing equipment
will be limited to a test separator and the platforms designed as remote, unmanned
wellhead production systems. Kinetic hydrate and corrosion inhibitors will be injected
into the pipelines from each wellhead platform. Each platform consists of integrated, 2-
level topsides, together with 2 mezzanine decks, supported on a 4-pile jacket. Power and
telecommunications will be supplied from the existing Qatargas North Field Bravo Utility
Platform via submarine cables.
Current plans include the drilling of a data well with a jack-up rig at the Platform 5
location during early 2004. This well will be designed with a mudline suspension for later
re-entry when the Platform 5 jacket is installed. Production wells will be batch drilled
through the jackets.

Qatargas II Plant Features

Acid Gas Removal and Gas Treating. The North Field wellstream contains considerable
quantities of acid gas (H2S, and CO2) and other contaminants, including moisture and other
sulphur compounds such as COS and mercaptans. Gas sweetening and dehydration is
therefore required. The project will employ activated MDEA (aMDEA) as the primary
gas treating solvent to remove the acid gas components and COS down to low levels.
Molecular sieves are then employed to remove moisture and mercaptans from the gas and
Selexol will be used to treat the regeneration gas. Thus, gas treating is a three-step
process:
1. The acid gas is removed with aMDEA. Most of the H2S, CO2 and COS are
removed in this step.
2. The molecular sieve beds, in addition to removing H2O, will now remove the
mercaptans (RSH).

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3. As the molecular sieves are now removing large quantities of RSH, the
regeneration gas now must be treated before sending to the fuel system. Selexol is
used for this service.
The acid gas removal step is illustrated in Figure 3:

TREATED GAS TO
DEHYDRATION

ACID GAS TO ACID

GAS ENRICHMENT

aMDEA

FUEL
aMDEA
CONTACTOR

FEED
GAS

Figure 3: aMDEA AGR Unit – Simplified PFD

Acid Gas Disposal. The project is currently carrying alternatives for either Acid Gas
Injection into a subsurface geologic formation or sulfur recovery units (SRU) with tail
gas treating. For both cases, new SCENR (Supreme Council for the Environment and
Natural Resources) air emissions standards of 99+% sulfur recovery will be targeted. The
QGII SRUs will be designed in a modular fashion with a processing capacity of
approximately 600 Tonne/day (591 LT/day) per 1 mol % sulphur in the gas stream. EM’s
Flexsorb SE solvent will be used as the primary treating agent in the tail gas unit.
NGL Recovery. NGL recovery will utilize the SCORE (Single Column Overhead
REcycle) process licensed by Ortloff Engineers, Ltd. This is an expander-based cryogenic
process that has been applied in numerous plants worldwide. The NGL plant
accomplishes the function of Scrub Column in a typical liquefaction process—i.e.,
removal of C5+ prior to liquefaction. Accordingly, no Scrub Column will be included in
the design. As a consequence, the liquefaction unit will not be able to operate without the
NGL plant. Rich LNG production will still be possible by injecting the C3 and C4 back
into the gas stream prior to liquefaction. Figure 4 provides a simplified Process Flow
Diagram.

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RECOMPRESSOR

RESIDUE
GAS TO
NGL LIQUEFACTION
COMPANDER

J-T
GAS / GAS VALVE REFLUX
EXCHANGER CONDENSER REFLUX
DRUM

FEED
GAS COLD
SEPARATOR
DEETHANIZER

GAS / LIQUID
EXCHANGER

TO / FROM
DEETHANIZER NGL TO
LIQUID DRAW FRAC

Figure 4: Ortloff SCORE NGL Recovery Unit – Simplified PFD

(Ethane Rejection Mode)

AP-X™ LNG Process (APCI). The liquefaction process selected is the AP-X™ LNG
process technology. The process was patented by APCI in 2001 and has been studied
extensively by Qatargas II shareholders for this application.
APCI has developed the heat and material balances for the liquefaction and
refrigeration sections, which form a crucial component of this design. The design rate of
LNG from the liquefaction process for this study is approximately 960 metric Tonnes per
hour of LNG rundown per train. The AP-X™ LNG Process improves the existing APCI
Propane-Pre-cooled Mixed Refrigerant ("C3MR") LNG Process by adding a third
refrigeration cycle, which employs nitrogen as the refrigerant, and by using this third
cycle to further cool the gas after the gas exits the Main Cryogenic Heat Exchanger
(MCHE). The nitrogen refrigeration cycle offloads the other two cycles, thereby allowing
higher LNG production within the currently proven MCHE diameter (~4.6 meter (15
feet) diameter) and weight limits, and refrigeration compressor designs. APCI has applied
nitrogen refrigerant cycles in numerous air separation plants and is very experienced with
their design and operation. Thus, QG II considers the AP-X™ LNG Process to be the
combination of two well–proven technologies.
Initially, lean LNG will be the primary objective, but facilities will be provided to
allow production of separate rundown streams of Lean and Rich LNG simultaneously.
Splitting the lean LNG rundown stream, and then re-injecting LPGs into one of these
streams to create a Rich LNG product will achieve this. This method will allow up to 1/3
of the total rundown flow from the train to be convertible into Rich LNG.

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The AP-X™ LNG Process consists of the following steps:

• Pre-cooling of the inlet gas stream by propane refrigeration.
• Liquefaction in a coil wound Main Cryogenic Heat Exchanger (MCHE) using
a mixed refrigerant system.
• Sub-cooling of the liquefied gas in a coil wound exchanger by nitrogen
refrigeration.

Figure 5 illustrates the AP-X™ LNG Process with NGL Recovery Integration.

FUEL
HELIUM GAS

Helium
Recovery
Nitrogen
Rejection LNG

SUB - EXPANDER/
PROPANE COOLER COMPRESSOR
COMPRESSOR E C

PRE-COOLING:

PROPANE + PROPANE SYS TE M

MHE

Sweet
Gas LPG
RECOVERY GAS
COLD
DEHY BOX NITROGEN
PROPANE CHILLERS MR
RECYCLE
COMPRESSOR

MIXED REFRIGERANT (M.R.) COMPRESSORS

Figure 5: AP – X™ LNG Process – Simplified PFD

Gas Turbines/Compressors. The LNG process will use GE Frame 9E gas turbines
as refrigeration compressor drivers. There will be three Frame 9E machines per train,
driving three compressor strings:
• The propane refrigeration compressors (two casings in series)
• The MR compressors (two casings in series)
• The nitrogen refrigeration recycle compressors (two casings in series)
The Frame 9E has been used extensively as a driver for electrical power generation.
Approximately 350 units are in operation as generator drivers. Four Frame 9E’s are
currently used in combined power generation and mechanical compression service at
steel mills located in Taranto, Italy. The Frame 9E’s, electrical generator and compressors
are on a common shaft or string. This same arrangement will be implemented for the
QGII project. The Frame 9E’s will be equipped with Dry Low NOx (DLN) combustors to
reduce emissions. GE has produced over 90 Frame 9E’s with DLN. Various other
operating LNG plants have utilized DLN.

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Motor/Generators and VFD’s. A separate electric motor/generator is provided for

starting each Frame 9E unit at full settle out pressure, for providing extra power input
(“helper”) during high ambient temperature conditions, and to “auto generate” electrical
power under normal operations. Each motor/generator will also be equipped with an
advanced technology variable frequency drive (VFD) which will enable precise
frequency and voltage control of electrical power to and from the large motor /generators.
This is important to minimize stresses along the string, to enable power generation
capability at any speed, and to provide for reliable operation.
Cogeneration. In order to further improve overall air emissions, plant thermal
efficiency and overall plant reliability, heat recovery steam generators will be used to
generate steam using waste heat from the Frame 9E turbines. Steam will be used in
various utility services in the plant, including power generation and the drive for steam
powered off-gas and fuel-gas compressors.
Flaring Philosophy. All new flares will be designed to operate as smokeless flares
for most relief scenarios. The Plant systems will be designed for upstream recovery of
hydrocarbons whenever practical and flaring will be minimized during commissioning,
start-up, planned shutdown, and process upsets. Flaring cannot be avoided during plant
emergencies.
Air Emissions Targets. QGII intends to meet SCENR requirements for low NOx
emissions by providing DLN-1 combustion equipment on Frame 9E gas turbines,
resulting in overall NOx emissions of less than 55 mg/Nm3 (27 ppmv). In addition, the
project has a target for overall sulfur recovery in the gas-processing stream of 99+%.

Large LNG Carriers (LLNG)

For the LLNG ships, extensive technical studies and shipyard evaluations have been
completed to determine that a volumetric increase from 145,000 m3 to well over 200,000
m3 per ship is technically feasible and commercially viable. Three types of LNG
containment techniques have been qualified, including membrane, spherical containment
and self-supporting prismatic (SPB) tanks. In addition, onboard LNG re-liquefaction and
new more efficient propulsion systems have been qualified. Two general categories of
hull sizes are being developed: 1) Q-Max, which will have the largest dimensions that can
be accommodated at the Ras Laffan port (345 m (1132 ft) LOA), and 2) Q-Flex, an
intermediate size which can be accommodated in smaller terminals around the world (315
m (1033 ft) LOA).
The LLNG Principal Dimensions are expected to be as follows:

• LOA: 315 to 345 m (1132 to 1033 ft)

• Beam: 50 to 55 m (164 to 180 ft)
• Maximum Loaded Draft: 12 m (39 ft)

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The propulsion options include:

• Single skeg, steam turbine, and gearbox driving a fixed pitch propeller,
• Twin skeg, twin slow speed diesel engines, each driving a fixed pitch propeller
with reliquefaction plant,
• Single or twin skeg medium speed diesel, dual fuel with electric propulsion
The vessels will be constructed and certified for Suez Canal transit, as well as
applicable rules and regulations for International Trade, Class and Flag State
requirements that are expected to apply within 5 years of laying the keel of the first
vessel. The vessels will be required to load and discharge LNG at Ras Laffan, Qatar, and
any LNG facility worldwide that is fit to receive a vessel of the specified size. The hull
form, together with propulsion and power generation systems, will be designed for
maximum efficiency and fuel economy, and a 5-year docking cycle.

LNG Receiving Terminal

QGII is currently pursuing multiple options to secure UK LNG terminal capacity. In
parallel with investigating various third party options, a build/own/operate alternative at
the former Esso refinery site at Milford Haven, Wales is being progressed. The refinery
was decommissioned and dismantled in the 1980's. This prospective terminal has been
named “South Hook”, in honour of a historical fort that lies on the edge of the site. The
terminal will involve the refurbishment and outfitting of existing jetty and berthing
facilities, construction of LNG vaporization and gas conditioning facilities, tankage, and
an interconnection with the UK National Transmission System. Significant efforts are
underway to ensure that the site is developed in a manner consistent with all regulatory
requirements and the needs of local constituents. Figure 6 conceptually illustrates the site
in its fully developed state.

Figure 6: South Hook Terminal at Milford Haven, Wales

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Three full-containment LNG storage tanks are planned for Phase 1 of the terminal,
which will be designed to handle the first large train of LNG production.
The LNG terminal is designed for safe handling of vapour discharges from the
system, such as relief valves, which are sent to the flare header and then to the knockout
drum before going to the flare. There are two flare systems, a high pressure (HP) flare
and a low pressure (LP) flare. During normal operation, there is no vent and relief. Gas
that would otherwise be flared is normally recovered to the boil off gas system. Flaring
will be a rare event during normal and unloading operations. A safe distance between the
elevated flare stack and the ground level will be maintained and radiation levels will be
minimal at the property line.

Execution Strategy
Offshore. Due to drilling schedule constraints, the first two jackets are being
developed on an accelerated schedule. EPC contracts for the third jacket, all topsides
equipment, and the pipelines will be competitively bid on a lump sum, turnkey basis.
These bids will be segmented so that prospective contractors may bid individually for the
three major elements or for the entire scope. Release of invitation to tender (ITT)
packages for the Offshore EPC is expected in early 2004.
Onshore. The onshore LNG plant scope, including on-site and off-site works such as
tankage and run-down lines, will be competitively bid as a single package. ITT packages
for the onshore scope are planned for release before mid-year 2004.
LLNG Ships. Shipyard pre-qualification activities were completed in 2003. In
parallel, groups of potential ship owners and potential operators were also pre-qualified.
ITT packages were sent to pre-qualified shipyards in late 2003. Invitations to ship-owners
to bid on time-chartering vessels to QGII were solicited in early 2004, as were
management contracts from pre-qualified ship owners. These management contracts will
be concluded should QGII decide to own rather than charter the vessels. Ownership
versus chartering is being evaluated and will be decided based on economic
considerations.
South Hook Terminal. Site preparation for LNG tankage will be bid separately from
the primary UK terminal scope. The terminal EPC contract, including scope for
refurbishment of marine facilities, will be competitively bid in spring 2004.

Managing Technical Risk

Qatargas II has taken a structured approach to risk management during the maturation
of project elements over the last 3 years, with considerable attention given to both
technology integration and technology qualification activities for critical processes and
equipment. Specifically, a Technology Qualification Management System (TQMS) has
been employed to systematically determine the suitability of all new critical equipment
and processes, including the AP-X™ Hybrid LNG process, Frame 9E gas turbines with
associated compressors and large electric motor/generators, expander/compressor units
utilized in the nitrogen sub-cooling loop, onboard LLNG re-liquefaction systems, ship
propulsion, and LLNG containment systems. The shareholders have a high level of
confidence that a new benchmark in LNG economy of scale will be achieved while
maintaining an acceptable level of risk. These risks are being actively mitigated with
engineering studies and programs that are actively underway with vendors and suppliers.

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CONCLUSION
The Qatargas II venture is unprecedented in scale when compared to previous LNG
projects. While challenging from the standpoint of financing, technical, and project
execution considerations, it is the shareholders belief that all key issues have been
addressed and the pathway for a successful project has been defined.

REFERENCES
Qatar and ExxonMobil – Reducing the Cost of Supply to Expand LNG’s Commercial
Reach, Jim G. Galloway, ExxonMobil Upstream Research Company, and Elton E.
Lesikar, ExxonMobil Development Company, Gastech 2002 Conference, Doha,
Qatar, October 16, 2002

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