CNG power reduces construction costs for new gas plants

In today’s tight margins climate, the onus on cutting construction costs for two new 200 MMscf/d sweet gas plants in British Columbia lead to consideration for a temporary power system capable of reducing fuel costs. Diesel generators were originally specified for these two remote sites where a natural gas supply was not available during the construction phase.

Adherence to the midstream developer’s corporate goal of utilizing domestic natural gas assets provided an opportunity to evaluate other power options. The alternative clean burning power system needed to be fully redundant without technical issues or power interruptions. This would allow each project partner to remain focused on their respective areas of expertise for facilities incorporating complex compression and refrigeration process systems.

A temporary grid was designed for the construction phase around a parallel generation system using a line of smaller kW generators vs one or two larger diesel generators at each site. CNG was selected to fuel five 200 kW generators at one site and three 200 kW generators at the other site. Each site also had step-up transformers, distribution panels and neutral grounding resistors. The CNG equipment provided by Aggreko’s CNG partner, Certarus, was also fully redundant with two pressure reduction skids and two CNG trailers at each site.

This case typifies the North American natural gas boom emerging in remote areas with limited grid access, providing opportunities for exploiting domestic natural gas based power for environmentally compliant operation. Overall, the CNG-based solution delivered the following benefits:

• No fuel spill risks as seen with diesel generators
• Use of CNG fueled generators provide a market for the developer’s natural gas assets
• National programs to reduce emissions from non-road diesel engines are imposing increasingly stringent upgrades to diesel gensets, favoring other cleaner burning options
• Line of generators running in parallel offered full redundancy (vs original requirement for one prime diesel generator and one standby diesel generator); allowing construction to stay on schedule
• Savings of up to $600,000 over 16-months at current market conditions (primarily influenced by gas vs diesel prices).

In review of these benefits, the ability to quickly mobilize necessary equipment for the CNG fueled temporary power grid is why this option delivered such high levels of efficiency. In addition, external factors such as projections for rising diesel costs in expectation of the 2020 IMO 0.5 wt% Global Sulfur Cap changes the paradigm for diesel-based power generation, favoring low priced natural gas. Knowing that the CNG power option selected for the two gas plants in British Columbia saved the contractor approximately $600,000 during construction merits consideration for selecting CNG at other planned midstream expansions where diesel-based generation was originally considered. Against this backdrop, these validated savings can be duplicated for similar projects by selecting CNG over diesel.