TABANGAO LNG

PLANT
Bartolo, Jeremy Allan C.
Layug, Nicole L.
Memije, Raymund Angelo C.
 OUTLINE

■ Introduction
■ Market Analysis
■ Process Flow Diagram
■ Material Balance Summary
■ Economic Evaluation
■ Conclusion
WHY NATURAL
GAS?
■ Demand for natural gas is
increasing
■ It is growing in exponential pattern
■ From 195 MMSCF to 140,368
MMSCF
■ 95% is accounted for power
generation
■ Environmentally Clean Fuel
■ Neither corrosive nor toxic
■ Sulfur free
■ Lower nitrous oxide and carbon dioxide
emissions
■ Lessens problems on ozone layer, acid
rain and greenhouse gases
■ Harmless source of energy when
transported, stored and used
BUT…
 SOLUTION!!!

LIQUEFY IT!!!
PLANT LOCATION
■ Barangay Libjo, Batangas City
■ 527 m x 980 m
■ Convenient air, water or land
transportation
 Liquefied Natural Gas
■ about
  the space that natural gas does in its
gaseous form
■ can be easily shipped overseas
■ weighs about 45 percent as much as water
■ odorless, colorless, non-corrosive, and non-
toxic

Component % mol
CH4 99.94
C2H6 0.03
CO2 0.03
MARKET
ANALYSIS
 Historical Demand
160000

140000

120000
Total Consumption in mmscf

100000

Consumption (Transport)
80000 Consumption (Industrial)
Consumption (Power)

60000

40000

20000

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year
 Historical Supply
160000

140000

120000

100000
Production in mmscf

80000

60000

40000

20000

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year
Average Price in U S $/m m btu
Historical Data on Price of Natural Gas
14

12

10

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year
 Historical Supply and Demand
300000

250000
Supply and Demand in mmscf

200000

Demand
150000
Supply

100000

50000

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Year
 Projected Supply
250000

200000
Total Production in mmscf

150000

100000

50000

0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Year
 Projected Demand
250000

200000
Total Consumption in mmscf

150000

100000

50000

0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Year
Market Share

■ 5% market share
■ With the projected supply of 139052.6316 mmscf in 2016
■ Stream factor of 0.9 (330 days/year)
PROCESS FLOW
DIAGRAM
■ PLANT CAPACITY:
120.57 million kg/year

■ ANNUAL RAW MATERIAL:

150.56 million kg/year

■ MARKET SHARE: 5%
 Key Assumptions

■ PLANT OPERATION ASSUMPTIONS

Operating hours: 24 hours
Operating days: 330 days/year
Market Share: 5%
Plant on-stream factor: 0.90
 Key Assumptions

■ MATERIAL BALANCE ASSUMPTIONS

MATERIAL
BALANCE
SUMMARY
■ RAW MATERIAL ■ PRODUCT
Natural Gas Kg/day LNG Kg/d
CO2 30967.31313 CO2 309.6731313
N2 5299.81191 CH4 364730.72
CH4 368414.8958 C2H6 210.408
C2H6 21040.79322 Total 365,250.8011
C3H8 13555.05569
i-C4H10 4000.697178
n-C4H10 5550.437852
i-C5H12 2226.62211 Target Market Share 5%  
n-C5H12 1599.251386 120,566,016
Yearly Production .2 Kg/yr
C6H14 885.8035441
10,960,546.
heptanes 2315.217575 Monthly Production 93Kg/mo
Total 455,855.8994 365,351.564 Kg/da
Daily Production 3 y
15,222.9818
Hourly Production 5 Kg/hr
 ECONOMIC
EVALUATION
 Equipment Quantity Tag No. Values, $
Absorption Tower 1 AT01 386086.9565
Stripping Tower 1 ST01 311652.1739
Amine Solution Storage Tank 1 STT01 371331.1794
Compressor 01 1 CO01 18834.25395
Compressor 02 1 CO02 29064.0264
Cooler 01 1 CLO1 21224.3877
Cooler 03 1 CLO3 57554.42071
Electrocooler 1 CLO02 1672352.444
Flash Drum 1 FD01 142238.9704
Fractionation Column 1 D01 224000
Heat Exchanger 01 1 HE01 29828.8692
Heat Exchanger 02 1 HE02 29159.63175
Heat Exchanger 03 1 HE03 69791.90551
STT09, STT10, STT11, STT12, STT13,
Liquefied Natural Gas Tank 6 2727047.004
STT14
STT02, STT03, STT04, STT05, STT06,
Water Storage Tank 6 2156283.064
STT07
Natural Gas Liquids Tank 1 STT08 367220.1494
Methane Storage Tank 4 STT15, STT16, STT17, STT18 1371363.141
Ethane Storage Tank 4 STT19, STT20, STT21, STT22 1678447.525
Butane Storage Tank 3 STT23, STT24, STT25 1133210.214
Nitrogen Storage Tank 2 STT26, STT27 639791.0023
Mixer 3 M01, M02, M03 1268300.573
Pump 01 1 P01 11130.43478
Pump 02 1 P02 6956.521739
Pump 03 1 P03 11130.43478
Pump 04 1 P04 1391.304348
Pump 05 1 P05 2086.956522
Pump 06 1 P06 4173.913043

Total
14,665,667.1
Purchased    
6
Equipment
 TOTAL CAPITAL INVESTMENT
■ DIRECT COST
Direct Cost Fraction of Delivered Cost
Equipment (million $)
Purchased Equipment, E’   14.670
Delivery, fraction of E’ 0.10 1.467
Subtotal: delivery equipment   16.137
Purchased equipment installation 0.47 7.584
Instrumentation&Controls 0.36 5.809
(installed)
Piping (installed) 0.68 10.973
Electrical systems (installed) 0.11 1.775
Buildings (including services) 0.18 2.905
Yard improvements 0.10 1.614
Service facilities (installed) 0.70 11.296
Total Direct Cost 2.60 58.093
 TOTAL CAPITAL INVESTMENT
■ INDIRECT COST

Indirect Cost Fraction of Delivered Cost

Equipment (million $)
Engineering and supervision 0.33  5.325
Construction expenses 0.41 6.616
Legal expenses  0.04 0.645
Contractor’s fee 0.22 3.550
Contingency 0.44 7.1
Total Indirect Cost 1.44 23.237
 TOTAL CAPITAL INVESTMENT
■ FIXED CAPITAL INVESTMENT
INDIRECT COST + DIRECT COST = 81.330 MILLION $/YR
■ WORKING CAPITAL
  Fraction of Cost
Delivered (million
Equipment $)
  Working Capital 0.89 14.362

TOTAL CAPITAL INVESTMENT = $ 95.692

million
Total annual cost of raw materials

ANNUAL RAW MATERIAL COST

Name of material Price, $/kg Annual Annual raw
amount, materials
million kg/y cost, million
$/y
9.04 0.129 1.17
Natural Gas $/mmbtu mmbtu/y
25% DEA 1.50 23.970 2.40
Methane
Refrigerant 0.47 80.435 2.54
Ethane
Refrigerant 0.13 150.820 1.35
Nitrogen
Refrigerant 0.09 70.33 0.41
Butane
Refrigerant 0.06 242.82 0.97
Total annual value of products

ANNUAL VALUE OF PRODUCT AND BYPRODUCT

Name of material Price, Annual Annual raw
$/kg amount, materials
million kg/y cost, million
$/y
Natural Gas 0.12 18.033
Liquids 2.16
Liquefied Natural
Gas 0.54 120.53 64.71
ANNUAL OPERATING LABOR
COST ■ Plant Capacity =
366220.1948 kg/day
■ Operating Labor = 45
employee-hours per day
processing step
■ 24 hours per day
■ 3 shifts per day
■ 8 operators per shift
■ Operator Rate = $21/hr
■ Annual Operating Labor
Cost = US $ 1.472 million
 ANNUAL OPERATING LABOR
 
COST

 
 
 TOTAL UTILITY COST = million $/y

UTILITIE  
2.081

Sent to sheet 'Annual TPC'  

 
 
 

S
Default Annual utility Default units Annual utility
Default
Utility unit requirement, in of utility cost, million
cost units
cost appropriate units requirement $/y
Air, compressed
Process air 0.45 $/100m3 #   100 m3#/y  
Instrument air 0.90 $/100m3 #   100 m3#/y  
Electricity
Purchased, U.S. 2.349
0.045 $/kWh 52202568 kWh/y
average
Self-generated 0.05 $/kWh   kWh/y  
Fuel
Coal 1.66 $/GJ 201531 GJ/y 0.335
Fuel oil 3.30 $/GJ   GJ/y  
Natural gas 3.00 $/GJ   GJ/y  
Manufactured gas 12.00 $/GJ   GJ/y  
Refrigeration, to temperature
15 oC 4.00 $/GJ   GJ/y  
5 °C 5.00 $/GJ   GJ/y  
-20 oC 8.00 $/GJ   GJ/y  
-50 oC 14.00 $/GJ   GJ/y  
Steam, saturated
3550 kPa 8.00 $/1000 kg   1000 kg/y  
790 kPa 6.00 $/1000 kg   1000 kg/y  
Exhaust (150 kPa) 2.00 $/1000 kg   1000 kg/y  
Waste water
Disposal 0.53 $/m3 67586 m3/y 0.04
Treatment 0.53 $/m3   m3/y  
Waste disposal
Hazardous 145.00 $/1000 kg   1000 kg/y  
Non-hazardous 36.00 $/1000 kg 11866 1000 kg/y 0.427
Water
Cooling 0.08 $/ m3 75072 m3/y 0.006
Process
General 0.53 $/m3   m3/y  
Distilled 0.90 $/m3   m3/y  
ANNUAL TOTAL PRODUCT COST
Item Defaul Basis Basis Cost Cost million
t million $/y $/y
Factor
Raw Materials 8.839
Operating Labor 1.472
Operating Operating 1.472 0.221
Supervision 0.221 Labor
Utilities 3.153
Maintenance FCI 82.876 4.973
and Repairs 4.973
Operating Maintenance & 4.973 0.746
Supplies 0.746 Repair
Laboratory Operating
Charges 0.221 Labor 1.472 0.221
Royalties 0.321 co 33.253 0.333
Variable cost 19.956
ANNUAL TOTAL PRODUCT COST
Taxes 0.02 FCI 82.876 1.658
Financing 0.03 FCI
(interest) 82.876 2.486
Insurance 0.01 FCI 82.876 0.829
Rent 0 FCI 82.876 0.000
Fixed charges 4.973
Plant 0.6 Labor, 6.665 3.999
overhead, Supervision
general and
Maintenance
Plant overhead, general 3.999
Manufacturing cost 28.928
Administration 0.2 Labor, 6.665 1.333
Supervision
and
Maintenance
Distribution 0.05 co 33.253 1.663
and Selling
Research and 0.04 co 33.253 1.330
Development
General Expense 4.326
 ANNUAL TOTAL PRODUCT COST

TOTAL PRODUCT COST W/O DEPRECIATION = co = $

33.253 million
 BREAKEVEN PRICE

■   Price, $/kg = +
Price, $/kg = +
Price, $/kg = 0.206824 $/kg
 CASH FLOW CALCULATION
■ Modified Accelerated Cost Recovery System (MACRS)
■ Salvage Value is Zero
■ 15-year property class for LNG plant
■ Year 0 is 2015
■ Construction Inflation Rate = 0.014
■ Product Price Inflation Rate = 0
■ TPC Inflation Rate = 0.014
■ Income Tax Rate = 0.3
■ Minimum Acceptable Rate of Return = 0.10
Year Plant  Land, 106 FCI Working  Total  Operating  Annual  TPC w/o 
Age Capital+ Capital Rate Sales depreciation
Start Up Investment
2013 -2 -11.11 -12.20 -23.31
2014 -1 0 -28.86 -28.86
2015 0 0 -41.81 -14.63 -56.45
2016 1 0 0 -8.29 0 0.50 33.44 -24.27
2017 2 0 0 0 0.70 46.81 -28.83
2018 3 0 0 0 1 66.88 -35.65
2019 4 0 0 0 1 66.88 -36.15
2020 5 0 0 0 1 66.88 -36.65
2021 6 0 0 0 1 66.88 -37.17
2022 7 0 0 0 1 66.88 -37.69
2023 8 0 0 0 1 66.88 -38.21
2024 9 0 0 0 1 66.88 -38.75
2025 10 0 0 0 1 66.88 -39.29
2026 11 0 0 0 1 66.88 -39.84
2027 12 0 0 0 1 66.88 -40.40
2028 13 0 0 0 1 66.88 -40.96
2029 14 0 0 0 1 66.88 -41.54
2030 15 0 0 0 1 66.88 -42.12
2031 16 11.11 0 0 1 66.88 -42.71
Sum -82.88 -108.62 1016.52 -600.21
CUMULATIVE CASH FLOW CALCULATION

 
Year Plant  Annual  Annual  Annual  Annual  Annual  Total  Cumulative 
Age dep  depreciation Gross  Net Profit Operating  Annual  Cash Position
factor Profit Cash Flow Cash 
Flow
2013 -2 -23.31 -23.31
2014 -1 -28.86 -52.17
0 -56.45 -108.62
2015
2016 1 0.050 4.14 -3.26 -3.26 0.88 0.88 -107.74
2017 2 0.095 7.87 10.11 -3.26 14.95 14.95 -92.78
2018 3 0.086 7.09 24.14 -3.26 23.99 23.99 -68.80
2019 4 0.077 6.38 24.35 -3.26 23.43 23.43 -45.37
2020 5 0.069 5.74 24.48 -3.26 22.88 22.88 -22.49
2021 6 0.062 5.16 24.55 -3.26 22.35 22.35 -0.14
2022 7 0.059 4.89 24.30 -3.26 21.90 21.90 21.76
2023 8 0.059 4.89 23.77 -3.26 21.53 21.53 43.29
2024 9 0.059 4.89 23.23 -3.26 21.16 21.16 64.45
2025 10 0.059 4.89 22.70 -3.26 20.78 20.78 85.22
2026 11 0.059 4.89 22.14 -3.26 20.39 20.39 105.62
2027 12 0.059 4.89 21.59 -3.26 20.00 20.00 125.62
2028 13 0.059 4.89 21.01 -3.26 19.61 19.61 145.23
2029 14 0.059 4.89 20.45 -3.26 19.20 19.20 164.43
2030 15 0.059 4.89 19.86 -3.26 18.80 18.80 183.23
2031 16 0.030 2.44 21.72 -3.26 17.65 17.65 200.88
82.88 325.15 226.23 309.50 200.88
Sum
 Cumulative Cash
250
Cash (Million $) 200
150
100
50
0
13 15 17 19 21 23 25 27 29 31
-500
2 20 20 20 20 20 20 20 20 20
-100
-150
Year
 PROFITABILITY ANALYSIS
 
Return on Investment

 
 PROFITABILITY ANALYSIS

Net Present Worth Method

•measures how much money a firm could afford to pay for the investment in
excess of its cost

•assumes that cash generated by the alternative is available for other uses
that earn interest at a rate equal to the MARR

•desirability measure: PW >0

  For annual end-of-year cash flows and discounting

 For continuous cash flows and discounting

Year Plant Age Annual End-of-Year Cash Flows Continuous Cash Flows and
and Discounting Discounting
Present worth Present worth of Present worth Present worth of
factor annual cash factor annual cash
flows flows

2013 -2 1.21 -28.20 1.27 -29.59

2014 -1 1.10 -31.75 1.15 -33.31
2015 0 1.00 -56.45 1.05 -59.22
2016 1 0.91 0.80 0.95 0.84
2017 2 0.83 12.36 0.87 12.97
2018 3 0.75 18.02 0.79 18.91
2019 4 0.68 16.00 0.72 16.79
2020 5 0.62 14.21 0.65 14.91
2021 6 0.56 12.61 0.59 13.23
2022 7 0.51 11.24 0.54 11.79
2023 8 0.47 10.04 0.49 10.54
2024 9 0.42 8.97 0.44 9.42
2025 10 0.39 8.01 0.40 8.40
2026 11 0.35 7.15 0.37 7.50
2027 12 0.32 6.37 0.33 6.69
2028 13 0.29 5.68 0.30 5.96
2029 14 0.26 5.06 0.28 5.31
2030 15 0.24 4.50 0.25 4.72
2031 16 0.22 3.84 0.23 4.03
Sum     28.47   29.87
 PROFITABILITY ANALYSIS
Discounted Cash Flow Method
■ Internal rate of return method
■ return in which all investments and cash flows are discounted
■ Calculated by setting the net present worth to zero and getting the
discount rate
■ Discount rate >= MARR
End-of-Year Cash Flows Continuous Cash Flows
Both discount rates >
Discount Rate = 15.2 MARR Discount Rate = 14.1
% %
Thus, project is
desirable.
 PROFITABILITY ANALYSIS
Effect of Inflation Before Time Zero
■ ROI = 11.3%
■ Payback Period = 4.9 years
■ Net Return = 1.48 million US dollars
■ Net Present Worth (End-of-Year Cash Flows) = US$ 13.5 million
■ Net Present Worth (Continuous Cash Flows) = US$ 14.25 million
■ Discount Rate (End-of-Year Cash Flows) = 12.9%
■ Discount Rate (Continuous Cash Flows) = 12.1%
Summary
Parameter Calculated Desirability Factor
ROI 13.0% Greater than MARR
(10%)
Payback Period 4.3 years Less than 10 years
Net Return US$ 3.30 million Greater than zero
Breakeven Price 0.206824 US$/kg Greater than product
price (0.54 US$/kg)
Net Present Worth US$ 28.47 million Greater than zero
(EOY)
Net Present Worth US$ 29.87 million Greater than zero
(Continuous)
Discount Rate (EOY) 15.2% Greater than MARR
(10%)
Discount Rate 14.1 % Greater than MARR
(Continuous) (10%)
Conclusion

All parameters are

satisfied thus Tabangao
LNG Plant is feasible!