1. Valdez Alaska LNG Summit
13SEP12
Good afternoon ladies and gentlemen. I want to thank Bill Walker for inviting me to
participate in this session of the LNG summit and I would also like to thank Mayor Cobb
for hosting the event. I apologize for not being able to be there. I truly enjoyed my visit
to Valdez last year and look forward to the opportunity of future visits.
I have been asked to provide my opinions on the concept of placing an LNG liquefaction
terminal immediately adjacent to the existing Valdez Marine Terminal (VMT) and also to
comment on some of the potential advantages of having the terminals on essentially the
same site.
The primary purpose of liquefying natural gas is to reduce its volume for shipping. A
good example is that one LNG vessel equals 600 vessels full of natural gas.
Please direct your attention to the first conceptual site plan that we have prepared. This
is an overall site plan that includes the docks , VMT and proposed liquefaction terminal.
The terminal includes 3 liquefaction trains of approximately 4 million tonnes per year of
LNG. One of the assumptions of this plan is that the pre-treatment of the natural gas
will be done on the North Slope or somewhere along the pipeline before it reaches the
terminal. Pre-treatment is required to provide a dry gas free of carbon dioxide and other
trace elements. It also assists in boosting up the pipeline pressure before going to
liquefaction. Another major assumption is that due to reduced storage capacity
requirements at the VMT, the current west crude tank farm can be demolished. It is our
understanding that these tanks are not currently in active service. This overall site plan
falls within the boundaries of what we understand is the current property boundaries of
the VMT.
The liquefaction terminal will require its own reliable source of power generation. This
could be accomplished by installing a gas turbine generation plant that is fueled by the
incoming natural gas supply. This plant is anticipated to be in the 100+ megawatt range
and could be located where the existing power plant is currently located (in between the
east and west tank farms). Replacing the existing power plant with an efficient and
modern gas turbine power plant should provide the VMT with a much more cost efficient
power supply system. It is my understanding that the current power plant provides flue
gas to the fixed roof crude tanks for blanketing to remove oxygen in the vapor space to
eliminate flammable conditions. In the event that floating roofs are not installed in the
fixed roof tanks in the future to eliminate the vapor space then a nitrogen generating
facility could be installed. Blanketing with inert nitrogen gas provides a safe and non
contaminating means of controlling oxygen in the tank vapor space. A nitrogen supply
is also important in the operations and maintenance of the liquefaction facility.

2. Page 2
The large area behind what once was Jackson Point could serve as a construction
staging area and/or camp area. This area appears to be mostly unused or under-
utilized at present. It has been my experience that providing construction logistics and
access on remote sites is a large schedule and cost item.
We have indicated a new LNG dock 6 to the west of existing dock 5. Two docks will
most likely be required for a terminal of this size. 12,000,000 annual tonnes of LNG
equals approximately 176 vessels in the 150,000 cubic meter class. The VMT is
operating on 2 crude berths at the current throughputs at dock 5 and dock 4. Existing
dock 3 is not in crude service at this time. Existing dock 5 could be reconstructed for
LNG service. Existing dock 3 could be placed in crude service to assist the main crude
dock at dock 4. We would then have two LNG berths and two crude berths.
A major item for comprehensive study in a liquefaction facility is the spacing of the
trains, tanks and other structures. Please direct your attention to the second conceptual
site plan which is a closer view of the onshore facilities. The spacing used in this
concept is very preliminary but is representative of current liquefaction facilities.
The LNG tanks may be placed in the area where the west tank farm is currently located.
This will save an enormous amount of civil work and would allow the tank construction
to begin very early in the project.
The three liquefactions trains, or units, would be "stair stepped" down the base of the
mountain. A little more separation between units due to existing topography and
grading may be required in the final design than what we have indicated.
The control room would be designed as blast proof and is centrally located. The
buildings area can be spaced far enough away from the tanks and the trains to satisfy
safe distance requirements. There are other items that can be placed on site such as
the nitrogen generation, plant/instrument air system and refrigerant storage.
The flare is currently placed on the NW corner to take advantage of the prevailing
winds.
Overall, it is my opinion that designing and constructing a liquefaction facility as
indicated could provide large cost and schedule savings in the LNG construction and
also be very beneficial to the existing Valdez Marine Terminal.
Thank you very much for the opportunity to present this concept to you.
Stan Lloyd
Lloyd Engineering, Inc. __________________________________________________