Virtual Pipelines 201: Applications, Cases & FeasibilityApplications for CNG Beyond the Pipeline

Your Speaker:

David VanLaar

Manager of Product Solutions

IMW Industries

Your Host:

Sam Goldenberg

Director of Sales, MEA, APAC

IMW Industries

About IMW

IMW has been manufacturing industrial machinery since 1912, and has evolved to be a leading manufacturer of natural gas compression systems, serving all major markets Globally. Equipment is currently operating mid-east to North of the Arctic Circle.

• Quality Products & Leader in CNG Compression• Non-Lubricated Compression for Clean CNG

A variety of configurations for all applications

A Clean Energy Company

IMW operates as a wholly owned subsidiary of Clean Energy Fuels Corp. (NASDAQ: CLNE). Clean Energy is the largest provider of natural gas fuel for transportation in North America and a global leader in the expanding natural gas vehicle market.

Clean Energy offers CNG and LNG vehicle fueling as well as providing turnkey station construction and operation for fleets. Clean Energy also is majority owner of NG Advantage, an American retailer of bulk industrial gas.

Continuing Education Credit

1 hr Technical Informal

More CPD Info or Board Room Attendance:

Name Job title Company Email

webinars@imw.ca

Your Speaker

David VanLaar, P. Eng

Manager, Product Solutions Group

IMW Industries

NGVs and Conventional CNG Demand

Why? Use local, domestic energy Save 20 – 30% of energy costs Clean energy solution – lower emissions

Virtual Pipelines for Remote Energy Systems

Mother Station

Daughter Station

Factors for Successful Virtual Pipelines

Seek a high inlet gas pressure for mother stations to reduce energy consumption and operating costs.

‘Mother’ Station Pipeline Pressure

Example: 1000 SCFM (1600 Sm3/h) compressed to 4500 psig (310 barg)

At 0.12 USD per kWh and 5000 run hours a year, electricity cost savings of $115,000 USD per year can be expected!

Maintenance costs are also substantially reduced because less equipment is operating.

Scenario 2: transmission pipeline

Inlet pressure of 1000 psi (70 barg)

150 hp (110 kW) required

Scenario 1: distribution pipeline

Inlet pressure of 100 psi (7 barg)

400 hp (300 kW) required

Pipeline Compression Transport Decompression End Use

300

200

100

0

bar

200

150

100

0 C

-50

Temperature Management

Virtual Pipeline operates by changing the gas volume (CNG)

Gas pressure and temperature are functions of gas volume and therefore need to be managed

Temperature Handling

Temperature Handling

‘Mother’ Station Gas Composition

Methane

• 80%

Ethane

• 10%

Propane

• 5%

Butane

• 5%

• Attention needs to be paid to gas composition due to temperature fluctuations

• Water content• Gas dryers should be used if water content is higher than 2 lb /

MMSCF (32 mg/m^3)• Methane content

• Natural gas mixtures with less than 90% methane need to be evaluated to ensure heavy hydrocarbons don’t drop out as liquids

Problems with oil:• Compressor discharge gas is typically

10C above ambient• Even good coalescing filters don’t

remove oil well at warm temperatures – oil stays as a vapor

• When temperatures reduce oil vapor turns to oil liquid

• Trailers collect oil and lose capacity• PRS systems also collect oil where

ever gas velocities or gas temperatures decrease

• Oil buildup increase maintenance costs and downtimes

‘Mother’ Station Compressor Lubrication

Non-lubricated compressors

ensure that oil doesn’t enter

the gas stream!

Transportation is most significant cost driver of industrial gas products

Trailers are made up of small or large cylinders in 4 types: Type 1 – 100% steel (heaviest, smallest payload, $) Type 2 – hoop wrapped steel Type 3 – hoop wrapped aluminum Type 4 – fully composite (lightest, largest payload, $$

$)

Some vendors:

Transportation

FullFill Technology ensures that every bulk gas shipment is completed quickly and filled as completely as possible. IMW systems ensure that transport modules are filled at the optimum temperature and gas density through:

Proper prediction of trailer filling temperature rise

Proper sizing of cooling equipment Integration of proprietary compression

technology and comprehensive dispensing algorithms

PLC controlled continuous thermal management

Compression – ‘Mother’ Station

Maximum Offload Capacity ensures that only a minimal amount of gas is left on the trailer before it is disconnected. This is achieved by:

Using two line unloading methodologies where possible

Designing systems for minimal pressure drop

Employing scavenging compression where necessary to remove remaining gas

Decompression – ‘Daughter’ Station

End Users often have critical applications – consider:1. Redundant compressors – can daily trailer

requirement be filled at the lowest pipeline pressure with one compressor down for maintenance?

2. Trailers – is logistics modelling conservative? What happens if a trailer blows a tire?

3. PRS units – can PRS units handle peak loads even if one unit is offline?

4. Storage at daughter side – install ground storage and booster compressor if transportation link between mother and daughter can be interrupted

Redundancy

End User Types

Independent Power Producers

MinePower Station

Daughter Station

125 MW with GE LM6000PF gas turbines and Solar Titan 130 turbines

IPP – Gas Turbines

Gas Turbines typically require:1. High inlet pressures – 25 to 50 barg2. Warm gas well above dew point3. Wide range of flow rates4. Less than 1 second shut down times

Gas Turbines typically are:5. Sensitive to pressure pulsations in

certain frequencies 6. Sensitive to even small amounts of

oil carryover7. Sensitive to heavy hydrocarbons

and any liquidsGE LM6000

Peaking Power Plants

• Power plants sized to turn on for peak loads only.

• Often don’t have a gas pipeline nearby or don’t have a properly sized gas pipeline nearby

CNG for Peak Hours

IMW CNG Compressors

Gas Compression during “Base Load (NON Peak hours)” &

Storage

CNG Storage

Decompression of Gas During

PeakHours

PRMS

Gas

Gas from Pipeline or Virtual Pipeline

Power Station

Asphalt Plants

• 4000 asphalt mixing facilities in the US alone

• Plants consume between 200,000 to 600,000 gallons of fuel oil per year.

• Facilities are located close to the paving projects they work on and therefore they cannot always be built near a natural gas pipeline

• Cost savings over #2, #6 or bunker oil is 20 – 40%

• CO2 and particulate emissions reduction

• Burner conversion costs range from $100K to $300K

• Payback of about 1 year

Courtesy of NG Advantage

Asphalt Plants

Drill Rigs

Where suitable natural gas isn’t available, drilling rigs are run on diesel.

Incorporating CNG into drilling rigs typically:• requires a $200,000

investment for conversion kits• Provides the same power

output as diesel• Provides cost savings of about

$1000 per day• Reduces CO2 and particulate

emissions

Stranded Distribution Networks

Remote towns with no access to natural gas can be served by virtual pipelines.

Daughter station is built in a central location and distribution pipelines are built to nearby factories or housing complexes.

Uptime is critical so typically dedicated ground storage is utilized to provide backup gas if the trailer traffic is interrupted.

Stranded Distribution Networks

Project Feasibility and ROI

Inputs Required

Technical Inputs:1. Current or Predicted Fuel Type Consumption – per year

a. Peak load and minimum load if available2. Regional location of mother and daughter site3. Natural gas supply pressure at mother station4. Natural gas delivery pressure at daughter station5. Gas composition at mother station (water content, methane content)6. Fuel end use uptime required and necessary redundancy7. Trailer type (if known)8. Distance between mother and daughter station and average travel speed

Commercial Inputs:9. Cost of natural gas from pipeline or cost of CNG from provider10.Cost of current fuel11. Transport operating costs for local region (if available)12.Electricity cost

IMW Industrial Gas ROI Model

COMMERCIAL SUMMARY

CAPTIAL COSTS ASSETS

Description Qty Unit Price Extended Price1. Compression Site "Mother"1.1 Gas Drying Equipment

Twin Tower Auto Regen, 30 barg inlet, 2067 Sm3/hr 1 175,000.00$ 175,000.00$ 1.2 CleanCNG Compressors

IMW50 Single Compression Unit, 30 barg inlet, 300 HP 2067 Sm3/hr Electric Motor drive. Oil free gas delivery.

2 398,800.00$ 797,600.00$

1.3 Gas cooling SystemHeat Exchanger Unit, 5 Shell and Tube HX per unit 0 40,000.00$ -$ Chilling Unit, including pump skid, 25 Ton Capacity 0 50,000.00$ -$

1.4 Fill PostsMetered Filling Posts, 2 filling lanes, 1 Fill Posts per lane. Includes redundancy. Dual inlet for both high and low pressure filling

2 40,000.00$ 80,000.00$

1.5 Master ControlRemote mountable electrical panel with Master PLC system. Includes system programming.

1 58,500.00$ 58,500.00$

2. Transport2.1 Trailers

Type 1 (100% Steel) Pressure Vessels configured in Number of trailers per Prime Mover 1

Minimum number of trailer groups 2Additional redundant trailer group 1

Total number of trailers required 3 350,000.00$ 1,050,000.00$ 40' Bare Trailers, triple axle, locally sourced 3 80,000.00$ 240,000.00$

System Pricing Notes: These prices are indicative, provided for budgetary purposes only and therefore subject to change.

3. Decanting Site "Daughter"3.1 Decant Posts

Decant Posts, 2 filling lanes, 1 Fill Posts per lane. Includes redundancy. Multiple lanes for continuous decanting.

2 15,000.00$ 30,000.00$

3.2 Pressure Reducing Station2000 Sm3/hr, no enclosure, high pressure inlet. 2 136,000.00$ 272,000.00$

3.3 Scavenging SystemNot SelectedNot selected 398,800.00$

3.4 Master ControlRemote mountable electrical panel with Master PLC system. Includes system programming.

1 77,500.00$ 77,500.00$

SERVICES

4. System EngineeringSystem Front End Engineering Design 15% 10,500.00$ System engineering incorporates IMW FullFill Technology and maximum Offl oad Capability.

85% 70,000.00$

80,500.00$

5. FreightEstimated ocean freight for all modules and trailers 8 6,000.00$ 48,000.00$

6. Installation and CommissioningEstimated Installation, Commissioning and Training per module

5 16,000.00$ 80,000.00$

Spares per module 5 8,000.00$ 40,000.00$

TOTAL CAPITAL COST

3,029,100.00$

3,424,900.00$ For Reference Only: Total Capital Cost in $CAD

Total Capital Cost in $USD

IMW Industrial Gas ROI Model

INTERNAL PROJECT FINANCIAL ANALYSIS (ESTIMATED COSTS)ADDIONAL CAPTIAL COSTS (ESTIMATES)

Gas Installation Services Gas Pipeline Connection "Hot Tap" from Service Pipeline 1 100,000.00$ 100,000.00$ Gas Pipeline Connection "Hot Tap" to Powerplant 1 -$

Design and ConstructionLocallised civil engineering, construction management and overall project management. Includes obtainment of relevant regulatory approvals. Pricing based on 25% of total site works element of project

180,625.00$

Interconnecting pipework, electrical , mechanical, installation labour, civil works, system control and monitoring and regulatory approvals, priced per module.

5 104,500.00$ 522,500.00$

System power generation, site offi ces, security fencing and roadway for truck turnaround, priced per site.

2 100,000.00$ 200,000.00$

ESTIMATED COMPLETE CAPITAL COSTS

Total Capital Cost in $USD 4,032,225.00$

For Reference Only: Total Capital Cost in $CAD 4,838,670.00$

OPERATIONAL COSTS (ESTIMATES)OPERATIONS COST PER ANNUM IN $CAD

Extended Cost1. EnergyElectricity

1236220 kW-hr consumed, at a cost of $0.11 per kW-hr. 135,984.20$ Gas

166440 Sm3 of gas consumed, at a cost of $7 per GJ. 44,270.00$

2. Plant Operation and MaintenanceMother Station Operation and Maintenance

Based on cost of $0.01 per Sm3 of throughput. 80,160.00$ Daughter Station Operation and Maintenance

Based on cost of $0.01 per Sm3 of throughput. 80,160.00$

3. Transport Operation and MaintenanceCNG Transport Truck Operation and Maintenance

Based on labour rate of $50 per hour lease fees of $1 per km, maintenance cost of $0.2 per km and fuel cost of $1 per km. Assuming 129801 km/year and 6570 driving and operation hours /year.

614,060.00$

Total cost per km $4.73

TOTAL OPERATIONS COST

Total Operations Cost per Annum in $CAD 954,634.20$

For Reference: Total Operations Cost per Annum in $USD 795,500.00$

IMW Industrial Gas ROI Model

INTERNAL PROJECT FINANCIAL ANALYSIS (ESTIMATED)ALL COSTS AND CALCULATIONS IN $CADSCENARIO 2 0 1 2 3 4BENEFITS Year 0 Year 1 Year 2 Year 3 Year 4Total Cost of Gas $0 $2,132 $2,132 $2,132 $2,132Total Equivelent Fuel Cost (Fuel Oil) $0 $5,840 $5,840 $5,840 $5,840Fuel Savings: Natural Gas vs Fuel Oil $0 $3,708 $3,708 $3,708 $3,708

COSTS Year 0 Year 1 Year 2 Year 3 Year 4Capital $4,839 $0 $0 $0 $0Operations $0 $955 $955 $955 $955Total $4,839 $955 $955 $955 $955

CASH FLOW Year 0 Year 1 Year 2 Year 3 Year 4Annual Cash Flow ($4,839) $2,753 $2,753 $2,753 $2,753Cumulative Cash Flow ($4,839) ($2,086) $667 $3,420 $6,173

DISCOUNTED CASH FLOW Year 0 Year 1 Year 2 Year 3 Year 4Discounted Benefits $0 $3,433 $3,179 $2,943 $2,725Discounted Costs $4,839 $955 $955 $955 $955Discounted Cash Flow ($4,839) $2,478 $2,224 $1,989 $1,771Discounted Cumulative Cash Flow ($4,839) ($2,360) ($136) $1,852 $3,623

FINANCIAL DECISION PARAMETERSDiscount Rate 8%Internal Rate Of Return 0.43Net Present Value $4,279.62Return On Investment $0.59 $0.98 $1.24 $1.42Payback (Years) 2.07

43676 Progress Way • Chilliwack, BC • Canada V2R 0C3 p +1 604.795.9491 f +1 604.792.3806 e info@imw.ca

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+1 604-795-9491

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sales@imw.ca

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