A techno-economic assessment of the liquefied natural gas (LNG) production facilities in Western Canada

The availability and low cost of natural gas in North America open the possibility of transporting it to places where there is significant demand. Natural gas can be transported long distances as liquefied natural gas (LNG). In this paper, data-intensive techno-economic models were developed to assess LNG production costs in Western Canada. A two-train (each with an annual natural gas liquefaction capacity of 5 million tons) LNG plant is designed in the context of anticipated LNG export facilities in British Columbia, Canada. The plant equipment parameters and costs were estimated using a data-intensive bottom-up cost calculation methodology. Cost correlations linking the equipment's design parameters to the equipment's installed cost were developed and overall costs assessed. The total installed cost of the plant equipment is about US$1.9 billion. Considering a $1200/tpa capital expenditure, a 12% discount rate, and a 25-year plant life, the total product (LNG) cost is $7.8/GJ, if the gas supply source is Montney, and $9.1/GJ, if the gas supply source is Horn River. The delivery cost of Canadian LNG to Asia was estimated and a sensitivity analysis conducted. Total liquefaction cost is influenced most by the LNG facility capital expenditure, gas supply cost, and the discount rate.