THE UNIVERSITY OF MELBOURNE DEPARTMENT OF CHEMICAL AND BIOMOLECULAR ENGINEERING CHEN90022 and BIEN90002 DESIGN PROJECT DESIGN NOTICE

4 PROCESS DEVELOPMENT AND DETAILED DESIGN BRIEF Issued 13/08/12 Introduction The investment company has reviewed your feasibility report and in response has initiated discussions with both State and Federal governments within Australia. There is considerable interest in developing an LNG product from Coal Seam Gas from the Surat Basin. In particular, there is interest to progress a proposal for an LNG facility (8 mtpa) in Queensland off the coast near Gladstone using coal seam gas extracted from the Surat Basin and piped to the LNG facility. Construction is to start in 2014. To provide sufficient natural gas for the LNG project, several thousand wells will be required together with multiple gas processing facilities (GPF) all supplying to a central pipeline system running to Gladstone. You have been contracted to provide a gas and water processing facility and should proceed with the design of a single Gas Processing Facility (GPF) to be located near Chinchilla, Queensland of up to 4mtpa capacity. It is expected that at least two GPFs will be needed for the total LNG supply (each of capacity 4 mtpa) not necessarily located adjacent to each other. You will only need to design a single 4 mtpa GPF and associated water treatment plant (WTP). A separate company has been selected, because of their specialised knowledge of LNG systems, to design and build the LNG facility. In addition, the task of drilling the CSG wells and the initial gas/water separation and low pressure piping to your GPF will be contracted out to a separate company. Therefore, the process development and detailed design requested in Notices 4 and 5 will begin with a saturated CSG gas received from a large collection of wells in the Surat Basin. One of the issues faced by designers of CSG gas processing facilities which provide LNG is that the LNG facility has a large investment cost and may have an operating life which exceeds the life of the original coal gas reservoirs. It is expected that new CSG fields will need to be brought on-line continuously particularly in light of the planned expansion in 2020. The composition of the gas may therefore change significantly over time and what may have been the best process design for the original gas is not necessarily the best process design in the future. This is particularly true should the company wish to also exploit shale gas in the future and treat it in the same facility. You have therefore been specifically requested to consider in your design the flexibility of handling a range of acid gas concentrations (to be provided). In addition, the company would like the flexibility of selling the natural gas into the domestic natural gas market, in the event of undesirable fluctuations in LNG price. This means that your product specification should also satisfy domestic gas requirements. Finally, you have been specifically requested to manage the water which is co-produced with CSG and treat it to the standard indicated. Another company will be responsible for the development of site infrastructure including electricity, access roads, telephone lines and administration facilities.

Design Brief and Project Scope You are to provide the relevant engineering design and costing information for the Gas Processing Facility and Water Treatment Plant (WTP) (contained within the dashed area in Figure 1). You are also to estimate the return on investment for the total project, based on the economic information to be provided in a separate communication.

Gas from multiple CS wells

Gas Treatment Facility: CO2 & H2S removal, dehydration, compression

Gas to pipeline at required T,P, composition

CSG Water

Water Facility

Irrigation water & potable water

Saleable salts

Figure 1. Flow Diagram of Proposed Gas Processing and Water Treatment Facility. The CSG reserve of the combined Bowen/Surat Basins is estimated to contain over 35,000 PJ of gas. The wells providing your GPF with gas are located in the Surat Basin approximately 50km SW of Chinchilla. The plant operating life is expected to be 25yrs. The production rate of 4mtpa is assumed to be constant over time after an initial ramp up period of ~3 years to bring the first set of wells on-line. Gas Processing Facility The low pressure gas is collected from numerous wells, separated from CSG water, and sent to field compression stations where it is compressed to 1000 kPag before entering a medium pressure network finally arriving at your Gas Processing Facility. The gas enters your facility saturated with water with the composition shown in Table 1. You must produce gas for the natural gas pipeline which will supply gas to the LNG facility as well as possible use in the domestic gas market. You may also want to use some of your clean gas for power generation on-site. The product specification details are presented in Table 2. Natural gas pipeline specifications have several purposes: corrosion prevention (limits H2O and H2S), preventing liquid drop out (hydrocarbon dewpoint), and burner performance (limits inerts, HHV and Wobbe index, etc). Although H2S is not expected during routine operation it is desirable to design for this possibility as future use of the GPF may include wells which produce some H2S. The required specification shown in Table 2 is expected to satisfy pipeline requirements for domestic gas use and also for LNG processing. The flow rate of the inlet gas stream to the GPF must be calculated on the following basis: 2

Feed to the natural gas pipeline from your facility is 4 mtpa. Inlet pressure to your GPF from the well header is 1000kPag, the gas inlet temperature is 30C

The plant will operate continuously 24 hours per day 365 days per year. A two week scheduled shutdown will occur once every two years. More frequent short shutdowns of a few hours only can occur to change over equipment using the storage within the gas pipeline. Based on this, the overall plant availability averaged over two years will be 95%. Some gas may be used to provide power to onsite operations. An additional final polishing of the natural gas will occur at the LNG facility prior to liquefaction to remove trace water and CO2. You should provide gas ready for connection to the Surat-Gladstone pipeline currently under construction as part of the Arrow-LNG project. Water Treatment Plant Water is produced from CSG extraction and is typically extracted in large quantities in the initial stages of gas production. Over time, the volume of produced water declines with a simultaneous increase of produced gas. However, since new wells are continually added to the site over the 25 year life span of the project, we expect a continuous supply of water from gas extraction. On average, you are to design for 20GL/yr at the water treatment facility with a peak of 30GL/yr. Over time it is expected that this will decrease to less than 10 GL/yr. Although the composition of the water varies greatly over the life of the project, an average value may be assumed for design purposes since a buffer container will be used to store the water prior to treatment. Initial studies have given the composition shown in Table 3 and the required specifications in order to provide the water for irrigation or livestock or potable use. It is expected that the water will benefit farmers, town residents and industry around Chinchilla. Your facility should include a feedwater dam, a treated water dam, and a brine storage/evaporation dam. Consideration should be given into converting the brine into commercial products for sale to recover some revenue. Since you facility is remote, you will not have ready access to utilities and will need to provide your own process water. Note that although Table 3 does not show it, it is likely that the water also contains suspended solids and some amount of microbial contaminants, similar to groundwater. These will need to be dealt with prior to water treatment. Location The location of the planned CSG wells (Surat Basin) is in the Chinchilla development region about 50km SW of Chinchilla although expansion further east and south is expected as the production from the wells decrease. The GPF and WTP should be located near the town of Chinchilla to exploit the available local infrastructure and labour force and for proximity to the Arrow Surat pipeline to Gladstone. Within this constraint, your team has the freedom to choose the specific site for the gas processing facility, setting aside also sufficient plot area for the water treatment facility. Battery Limits The following units will be outside the battery limits as regards your design: CSG gas and liquid extraction system and collection network, natural gas pipeline, and LNG liquefaction and any other downstream items. Other supporting infrastructure located outside the Battery Limits includes the fire water system, loading/shipping facilities. Utilities will be generated inside the battery limits. CSG fired engines will provide power and treated CSG water will be used for process cooling. It is also likely that compressors will be 3

driven by gas turbines. In this instance, it may be possible to generate hot recirculating oil for heating purposes from the GT exhaust gas or through independent natural gas boilers. Potable water must also be provided on-site. You are responsible for the following major functions: a. Removal of CO2, H2S, and water to the required levels and providing natural gas of the required specifications (Table 2). This will involve acid gas removal processes and dehydration units. b. Water treatment buffering and desalination to the required levels as well as polishing for potable water use and provision of demineralised water for use on-site. c. A flare system for initial phase of production and for shutdown/startup. d. A compression station for providing high pressure gas to the pipeline e. The only utility available to you is electricity from a nearby substation. Heating/cooling must be provided for by your own facility. f. The CO2 emitted will contain H2S. For some teams, removal of the H2S and emission of the CO2 will be considered. For other teams, sequestration of the CO2 (and contained H2S) will be designed for. ALL ENVIRONMENTAL REGULATIONS MUST BE ADHERED TO IN THE CONSTRUCTION AND OPERATION OF YOUR FACILITY Submission of Process Development Report A single Process Development Report is required per team. The report must be a maximum of 100 pages, including appendices except those containing manual calculations backing up data in the main report. A coversheet must accompany the report. The report should be submitted to the General Office by 9am, 10th September, 2012. You will be asked to sign an acknowledgement of your submission. You are also required to submit an electronic copy of the following sections of your report separately to the Turnitin database: 1. Process Description (Section 2) (as a Team) 2. Safety and Health (Section 3) (as a Team) 3. Material and Energy Balances (Section 4(b)) (individually) Please refer to the Learning Management System www.lms.unimelb.edu.au for detailed instructions on electronic submission.

Submission of Detailed Design Report A separate detailed design report is required from each team member. The report must be a maximum of 100 pages, including appendices except those containing manual calculations backing up data in the main report. A coversheet must accompany the report. The report should be submitted to the General Office by 4pm, Thursday 25th October 2012. You will be asked to sign an acknowledgement of your submission.

Economic Information All economic data and assumptions will be provided in a separate disclosure. 4

Table 1 Coal Seam Gas Supply to GPC: Specifications Design 30 1000 Sensitivity 40 800

Temperature C Pressure kPag Composition (dry basis)**: 91 90;95 CH4 mol% 6 8 CO2 mol% ~1 0 C2H6 mol% 2 4 N2 mol% ~100 0; 150 H2 S ppmv 50 Particulates* mg/Nm3 *Particulate particle size is approximately 20 micron coal powder ** Gas is saturated with water

Table 2 Gas Product Specifications-LNG and Domestic Gas Use

Min:47; Max:52 100 <4 (5.7 mg/m3) -2C dewpoint at MAOP or <100 ppmv <10 Particulates mg/Nm3 This is much lower than the usual amount tolerated (1-2%) since it is desirable to avoid an additional CO2 removal step at the LNG facility. Mole sieve driers will be used at the LNG facility to remove trace water and CO2. ppm ppmv

Temperature Pressure Composition: WI (Wobbe Index) CO2* H2 S H2 O

C bar

30 80

Table 3 CSG Water Analysis Temperature Electrical conductivity(EC) at 25 C Total Dissolved Solids Hydroxide alkalinity as CaCO3 Carbonate alkalinity as CaCO3 Bicarbonate alkalinity as CaCO3 Total alkalinity as CaCO3 Cl Ca Mg Na K Fe Total anions pH Suspended solids Requirements: USE Livestock Irrigation Potable Water TDS(ppm) <1000 EC(dS/m) 6.5-7.5 1.0 (salinity) SAR* (see graph below) See Australian Drinking Water Guidelines C S/m mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L meq/L Average ~20 10,500 5,800 <1 25 720 730 3200 40 23 2400 17 5 107 8.0 Sensitivity 30 10,000

8.5

*Sodium Adsorption Ratio =

Na + (meq) Ca +2 (meq) + Mg +2 (meq) 2

Figure showing effects of SAR on ability of water to infiltrate soil (Ayers, R. S. and Westcot, D. W. Water Quality for Agriculture. FAO Irrigation and Drainage Paper 29 (Rev 1), Food and Agriculture Organization of the United Nations. 1985)