Stages of an LPG Terminal Project – Focus on Conceptual Design and Feasibility Studies

1 Overview of the Article

There has been a considerable increase in the demand and use of LPG for various purposes. One of the most important uses of LPG in Africa is as cooking fuel. Over the years, there has been a considerable increase in the number of LPG storage and distribution terminals in Africa due to the increasing demand.

These LPG storage terminals/depot’s sizes vary depending on the business model. Though there is no clear classification of LPG facilities based on storage capacity, I have tried to differentiate these facilities based on my experience. There has been an increase in skidded LPG dispensing facilities with storage capacity ranging from below 2.5 to above 50 metric tons. These facilities I have termed mini LPG facilities. These facilities can be easily installed and relocated from one point to another. The mini-size facilities are the most common in Nigeria and many West African countries.

In addition to the mini-storage facilities are medium storage facilities with storage capacities ranging from hundreds to a thousand metric tons. In these facilities, you may find more than one horizontal storage vessel installed with other equipment required for the facility’s operation.

The last group of storage facilities is the bulk storage facilities with storage capacities above 5000 metric tons. The storage vessels found in these facilities are mostly spherical. In Nigeria in early 2022, Ardova plc performed the ground-breaking for 20,000 Metric tons LPG storage terminal. This facility, when completed, will be the largest LPG terminal in West Africa.

All the above described LPG mini to Mega projects points to the fact that there has been an increase in the demand for LPG.

This article aims to explain various stages of an LPG project focusing on the Conceptual design and feasibility studies. The major focus of this article is on medium and bulk storage facilities.

2 Introduction

LPG (liquefied Petroleum Gas) is a hydrocarbon compound consisting carbon and hydrogen.

As per NFPA 58 Section 3.3.36 LP-Gas or LPG is any material having a vapour pressure not exceeding that allowed for commercial propane that is composed predominantly of the following hydrocarbons, either by themselves or as mixtures: propane, propylene, butane (normal butane or isobutane), and butylene’s.

LPG has both industrial and domestic applications including;

• As a source of fuel for power generation
• As a source of fuel for cooking
• As a source of fuel to power cars

LPG used for any of the above applications is sourced from a storage facility. These facilities must be properly planned and constructed, not mind the storage capacity. LPG storage facilities are highly regulated because of their hazardous nature and can cause catastrophic fire incidence. These stringent regulations vary across countries. The project complexity increases with an increase in the facility storage capacity. Various tasks are carefully executed to ensure the project is successful.

Though the construction phase of an LPG storage terminal project is the most visible, other phases should be properly executed for the project to be successful. The basic phases of a project are listed below:

• Feasibility Studies
• Conceptual Design
• Front End Engineering Design
• Detailed Design
• Construction and Installation
• Commissioning and Start-up

In some projects, feasibility studies and conceptual design are executed in a single phase to understand the project’s feasibility better. In some cases, only feasibility or conceptual design is performed; however, the activities should be sufficient to decide whether the project is feasible.

3 LPG Storage TERMINAL Project STAGES

There are different project phases in developing an LPG storage facility, as listed in section 2.0. The number of phases varies per client requirement; however, the basic phases will be briefly explained below. Note the focus of this article is on conceptual design performed together with feasibility studies.

3.1 Feasibility Studies/ Conceptual design

The conceptual design and the feasibility studies stage are the earliest phases of a project. These phases may be executed together because they are quick decision-making gates to determine whether the project should continue or be discontinued before enormous resources are expended. The earliest decision to progress or terminate the project is taken at this stage of the project.

The conceptual design entails idealizing how the project will be executed, documenting the project requirements. All the ideas itemized are evaluated to determine their advantages and disadvantages.

While the conceptual design focuses on the technical requirements and how to execute the project, the feasibility studies focus on determining if the ideas can be executed and are worthy of execution from a commercial point of view.

At the end of this phase, a single report is generated with various attachments generated by all disciplines.

Some of the key considerations and activities performed during conceptual design and feasibility studies are briefly discussed below.

3.2 Determine Available Market Size

Every investor aims to get value from the business, including revenue. The market size available is a key to the value derived from the business.

LPG consumption data are obtained to determine the volume consumed within a specified targeted area. Forecast consumptions should be included in determining the actual market size available. The previous year’s consumption data should be obtained and extrapolated into future consumption.

The available market data should be properly tabulated with the name of the potential customers and the required product volume. Potential customers may be categorized based on envisaged gas LPG demands. Assuming the project aims to establish a 10,000 metric tons LPG storage depot, having customers with a demand of 100 metric tons is better than having customers whose maximum demand is 2.5MT.

The facility’s minimum and maximum storage capacity can be established based on the available market size. A larger available market implies large storage terminals can be built; however, constructing a large storage facility is not feasible when the market size is small.

3.3 Determine Existing LPG Facilities and Envisaged Future LPG Facilities

Existing and future planned facilities are the major competitors in the available market. The actual consumption within a particular area does not automatically translate into the available market size because the available facilities have secured portions of the market. The storage capacity of the existing facilities should also be considered when evaluating the available market size. Data of planned LPG projects for the selected market area should be considered because when all the facilities come on stream, they will all compete for the available market.

3.4 Define Source of LPG

LPG is obtained from either refining crude oil or processing natural gas, meaning LPG is sourced from gas processing and crude refining facilities. During the early stages of the project, all possible sources of LPG should be identified and documented. The sources should be classified either as in-country or outside the country, with the available product quantities documented. Also to be considered is if the potential source has signed an agreement with other customers that can impede the product’s availability at the planned facility. Most of the LPG utilized in West Africa are imported from outside the continent. Over 50% of the LPG utilized in Nigeria is imported.

3.4.1 Means of Transportation.

The question is, how will the products be transported to the LPG storage facility? A single means of transportation may apply. A combination of two or more transportation modes may apply depending on the facility’s size, location, and design philosophy.

All possible options for transporting the product such as rail, pipelines, road, and water using vessels should be evaluated.

Bulk LPG storage facilities receive products via pipelines. The pipelines are connected to offshore berth facilities or directly connected to LPG processing facilities. Medium size facilities may receive products either through pipelines or via trucking. In West Africa, small storage facilities that sell LPG products to consumers mostly receive products via trucking.

For bulk storage and medium storage facilities, pipelines are the most economical means of transporting LPG to the facilities.

3.5 Regulations and Standards

As previously stated, LPG storage facility projects are highly regulated with varying requirements across countries. All the required regulations should be documented; a study should be performed if the requirements can be fulfilled. In most countries, regulations prohibit sitting Bulk and medium storage facilities in populated areas. Small size facilities/retailers’ outlets may be sited in a populated area; however, an appropriate distance from all adjoining facilities must be maintained. In addition to the local regulations, international codes and standards govern the design, construction, and operation of LPG facilities. The most prominent are the NFPA codes and standards. Refer to the NFPA website (https://www.nfpa.org/Codes-and-Standards/All-Codes-and-Standards/List-of-Codes-and-Standards) for a list of codes and standards

One of the most utilized code is the NFPA 58 (Liquefied Petroleum Gas Code).

The code covers various requirements, including the spacing between equipment installed in the facility, offset distance between equipment (storage vessels, etc.), adjoining facilities, etc. There are other NFPA codes and standards governing various facilities associated with LPG transportation and operation; refer to sections 1.1 and 1.3 for the scope and application of the NFPA 58 Code.

3.6 Analyse Project Impact on Community/Environment

A preliminary project impact study on the environment and community should be conducted. Note the impact should include both positive and negative impacts. Environmental Impact Assessment (EIA) should be performed in further stages of the project.

3.7 Stakeholders Identification

At the early stage of the project, critical stakeholders should be identified. Note that stakeholder identification will continue till the end of the project. Identified stakeholders should be categorized as either major or minor, supportive or not etc.

3.8 Perform preliminary Designs

Only preliminary designs are performed at this stage of the project. The key driver of the preliminary design is the process design. A summary of high-level design performed by each department are listed below

3.8.1 Process

The process design drives the entire conceptual stage of the project. The process should consider possible future expansion projects, an alternative source of products etc. below are key deliverables prepared by the process discipline.

3.8.1.1 Process Flow Diagram

A process flow diagram covering the entire facilities should be developed at this stage of the project, i.e., it should cover from the point of product reception to the point of product transfer to consumers. Assuming the product will be received from a vessel/ship and further transferred via a pipeline to the storage facility, the process flow diagram should capture the entire process.

The below image shows a typical process flow scheme for an LPG storage facility.

3.8.1.2 Vessel Sizing and Selection

Tank sizing is performed based on the envisaged storage capacity. The decision on the storage size may be based on a market survey performed or solely based on client requirements. Assuming the monthly demand for LPG is 100 metric tons after conducting a market survey, the client might require the facility to be designed for monthly storage of 150 metric tons. The type of storage vessel (spherical or horizontal) should be defined at the conceptual design stage. Spherical storage vessels are favoured for bulk storage facilities because they occupy lesser space than horizontal vessels. Small storage facilities favour horizontal vessels because they can be shop fabricated and easily installed on-site.

Technically there are existing spherical storage vessels with a capacity exceeding 4000 metric tons, while there are horizontal storage vessels with storage capacity up to 500 metric tons. These volumes are based on the writer’s experience.

3.8.1.3 Pipeline Sizing/ Hydraulic Simulation

Hydraulic simulation should be performed assuming various feasible flowrates, i.e., the desired receivable quantity of LPG per unit time. The calculation should be cognizance of recommended pressure drop and velocity criteria for LPG transportation.

To determine the optimal pipeline size to transport the product to the storage facility, pipeline sizing satisfying the flow rate should be performed. While performing sizing, consideration shall be given to possible future throughput increases.

3.8.2 Mechanical and Pipeline

3.8.2.1 Major Equipment List and Systems

Based on the process description, the mechanical discipline should generate a preliminary list of all major equipment. Notable equipment in a typical LPG storage facility may include any of the following:

• Product Reception and transfer system (SPM, PLEM, Unloading/loading arms etc as may be required)
• Storage Vessels
• Product Transfer pumps
• Product transfer compressor
• LPG vapor recovery units
• LPG bottling systems
• Utility Water System
• Firewater System
• Pipeline System
• Product Metering system

3.8.2.2 Preliminary Layout Drawing

The layout generated at this stage is very important because it is used to estimate the required land size. It also shows the preliminary location of all key equipment with consideration given to the required spacing as per regulations and standards. If the land has not been acquired after the preliminary layout design has been performed, an appropriate site location is identified for procurement.

3.8.2.3 Pipeline System

A clear definition of the pipeline system should be performed at this stage to identify all the major pipeline components. Some facilities require fixed offshore platforms/jetties with loading and unloading arms, while some utilize Single Point Mooring (SPM) with a pipeline end manifold (PLEM) and hose systems. All the main components of the pipeline system, including pump stations, pigging stations, should be captured in the process flow diagram. A preliminary pipeline route(s) shall be developed at this stage utilizing satellite imagery, available maps and charts. The route shall connect the product source to the storage facility. If products are delivered to customers via pipeline, the route shall be captured.

See below a typical preliminary pipeline route connecting an SPM to an LPG facility for illustration purposes.

3.8.2.4 Pipeline Material

LPG is transported by steel pipe materials mostly used are the API 5L materials. A pipe grade should be selected, further utilized for preliminary wall thickness calculation. It is important to perform the wall thickness calculation because it is a key input to the cost estimate. Also, the process department requires internal diameter to perform and optimize flow analysis.

3.8.3 Electrical Requirements

Preliminary electrical designs are performed at this stage. The most important task performed is to estimate the preliminary power requirement for the facilities. Below is a summary of tasks performed during the conceptual design/feasibility studies.

• Estimate the power demand for the facility (pumps, lighting, UPS system, utility equipment etc)
• Define the electrical power generation philosophy including the source of power e.g. gas power generators, national electricity grid etc.
• Define electrical power distribution philosophy.
• Prepare the major equipment list including items such as power generators, UPS system, Power motor control centre etc.
• Define the cathodic protection system requirement for buried pipeline and storage vessels.

3.8.4 Instrumentation and Controls Requirements

A preliminary control system for the facilities and ancillaries is developed. For effective monitoring, operation and control of the LPG Process, there is a need for an Integrated Control System which may have the following or more:

• Emergency Shutdown System (ESD)
• Station Control System (SCS)
• Telecommunication System
• Field Instrumentation

The Integrated Control System is located in a control room, and the control system interface or communicate with field Instruments located in different position across the LPG plant. All these should be defined and elaborated further as the project progresses.

3.8.5 Civil Requirements

Civil/structural design at the preliminary stage is not detailed. At this stage, it is imperative to identify the major civil structures for further detailing in future stages of the project. The most important tasks performed are:

• Define the access roads on the mechanical layout
• Define the facility drainage layout
• Define the location of weighbridges
• Define and indicate parking bay for trucks and car parks
• Indicate all perimeter fencing and define entrance gates
• Identify and define structures such as loading gantries, pump house, electrical and instrument control room, offices, restaurants/canteens, clinic etc. preliminary layout size should be developed.

3.9 Perform Cost Estimates

At the end of the feasibility studies or conceptual design, a class 4 cost estimate is developed to give an insight into the cost of executing the project. Note this estimate is for decision-making. As the project progresses, more detailed cost estimates are prepared.

3.10 Prepare a List of Deliverable to be Prepared During FEED

At the end of the conceptual design, a list of deliverables to be prepared during front-end engineering design is prepared. There might be inclusion and exclusion from the list when the FEED commences.

3.11 Front End Engineering Design (FEED)

Front End Engineering Design (FEED) is performed to bridge the gap between Conceptual Design and Detailed Engineering Design. The preliminary designs from the conceptual design are elaborated at this stage by all departments to have a more detailed design. Process simulations are revised based on better available information, datasheets for all major equipment are prepared, piping layouts are developed, civil designs for major buildings and structures are performed.

Relevant permits are secured during this stage of the project, and the facility location is firmed up for procurement immediately.

A more detailed cost estimate is performed.

3.12 Detailed Engineering Design

Detailed Engineering Design (DED) commences when there is approval to progress the project to the EPC phase. The FEED deliverables are elaborated with new documents included in the deliverables at this stage. All specifications, datasheets and drawings are developed. Detailed designed documents are issued to vendors to procure equipment and items required for construction and installation. Inputs from vendors are implemented in the design as may be required to update the design.

3.13 Fabrication, Construction and Installation

The construction phase is the most prominent phase of the project; it entails the physical execution of the project. A contractor is mobilized to the site to commence construction works. The earliest tasks performed are the civil foundations and structures, followed by equipment installations. Electrical installation and instrumentation hook-up to equipment are performed after mechanical equipment has been performed

3.14 Commissioning and Start-up

At this stage of the project, the facility is brought into operation. After the mechanical completion, products are received into the facility during commissioning, and operation commences.

4 References

NFPA list of Codes and Standards: https://www.nfpa.org/Codes-and-Standards/All-Codes-and-Standards/List-of-Codes-and-Standards)

NFPA 58: Liquefied Petroleum Gas Code