Document Type

Working Paper

Date of this Version



The Marcellus Shale natural gas field that spans from West Virginia to New York is leading the recent surge in domestic energy production. Long an importer of natural gas, the United States will soon be able to export natural gas. Due to its low energy density however, natural gas must be converted to liquefied natural gas (LNG) before shipping to foreign markets. Liquefaction can occur at several different facilities: small-scale LNG plants, floating LNG operations, and retrofitted LNG import facilities. A design feasibility study is presented here to analyze the economics of retrofitting an existing LNG import facility into an LNG export plant.

The existing import facility is the Dominion Cove Point LNG plant located near Lusby, Maryland. This study sizes the export facility at 5 to 6 million tons per annum (MMTPA), which corresponds to a feed of about 750 million standard cubic feet per day of natural gas (MMscfd). In this process, natural gas is first precooled by propane and then liquefied with a mixed refrigerant blend of methane, ethane, propane, and nitrogen. One challenge is to minimize the large amount of mixed refrigerant used in this process. This can be done by optimizing the composition of the mixed refrigerant to reduce the amount needed to liquefy the natural gas.

After a comprehensive economic analysis, this proposed design is economically viable. This process has an estimated IRR of 23.5% and NPV of $219 million at a 20% discount rate, using an LNG selling price of $650 per ton. This 23.5% IRR is possible due to the retrofit advantages of some existing equipment and reduced construction time. Without these advantages, the IRR would be much less favorable at about 9.1%.



Date Posted: 25 July 2014