Shaping the Future of Energy

¶ … shaping the future of energy production today, including the push for more environmentally friendly alternatives as well as the most cost effective approaches. In this environment, liquefied natural gas has emerged as a viable interim solution to many of the challenges involved in the transition from a fossil-fuel-based global infrastructure to one where a blend of energy-production approaches are in place. The primary advantages of using liquefied natural gas relate to the cost efficiencies in its transportation, since it occupies around one-six-hundredth of the space of the natural gas from which it is produced. One of the most significant disadvantages of liquefied natural gas, though, is the enormous expense involved in its manufacture and storage. At present, there are about 60 liquefied natural gas receiving terminals operating in 16 countries around the world and many more are either under active construction or are in the planning stages. The siting of these terminals is based on a combination of geographic proximity, as well as political and social factors that can increase the costs associated with the manufacturing process. Despite the challenges involved, the liquefied natural gas industry is expected to account for an increasing share of the energy market in the next several decades in the United States and abroad. Therefore identify the salient operational aspects of liquefied natural gas represents a timely and valuable enterprise which is the focus of this study. Chapter one of the study provides an overview and background in the introduction, as well as the study's aims and objectives and chapter two presents a review and analysis of the liquefaction process, how liquefied natural gas is used to generate power, and recent trends in the development and operation of natural gas fields

. Finally, a summary of the research and important findings are presented in the study concluding chapter.

Table of Contents

Chapter One: Introduction

Statement of the Problem

Aims and Objectives

Chapter Two: Review and Analysis

Liquefaction Process

Using LNG to Generate Power

Development and Operation of Gas Fields

Chapter Three: Methodology

Description of the Study Approach

Data-Gathering Method and Database of Study

Chapter Four: Conclusion

An Investigation of Modern Liquefied Natural Gas Operations

Chapter One: Introduction

Today, the liquefied natural gas (LNG) industry is generating an increasing amount of attention and investments from the private sector and these trends are expected to increase in the future (Liquefied Natural Gas 2012). These current trends are not surprising given that LNG is a highly useful approach to the transportation of natural gas because LNG only requires about one-six hundredth of the volume of gaseous natural gas (Liquefied Natural Gas 2012). Moreover, innovations in technology are further reducing the costs associated with the liquefaction and regasification of LNG (Liquefied Natural Gas 2012). Based on the cost advantages in transporting LNG compared to natural gas, LNG provides a viable approach for gaining access to otherwise-unreachable deposits of natural gas where pipeline construction would be cost prohibitive or unfeasible for other reasons such as disputed political boundaries and environment issues. For example, according to Ben-Moshe et al. (2009), "Natural gas liquefaction projects often take place in less developed countries in South America and West Africa, where political risk factors abound, including currency conversion risk, sovereign risk and environmental issues presented by investing in the global market" (p. 428).

There are some other advantages to reducing natural gas to a liquefied form as well. For example, when it is gasified, LNG will only combust when concentration levels of 5 to 15% when mixed with air are achieved; moreover, even in confined environments, LNG will not explode and any vapors associated with the product will likewise not explode, thereby reducing the potential for ignition of spilled fuel (Liquefied Natural Gas 2012). By eliminating all oxygen, water and carbon dioxide from natural gas, the liquefaction process transforms natural gas into nearly pure methane (Liquefied Natural Gas 2012). Based on these and other attributes that are discussed further below, current projections by industry analysts indicate that future use of LNG will continue to increase despite the enormous infrastructure costs that are involved (Liquefied Natural Gas 2012), with some industry analysts projecting a significant increase in demand over the next 25 years (Lebeck 2006).

At present, natural gas has become a vital component of the network that provides the U.S. with its energy needs, representing more than one-fifth (21.92%) of all of the energy produced in the U.S. In 2003 (Lebeck 2006). Currently, the main applications for natural gas in the U.S. include:

1. Electricity generation: 22.6% of natural gas delivered to end users;

2. Residential heating and cooking: 23.2% of natural gas delivered to end users, and,

3. Industrial production and manufacturing: 36.9% of natural gas delivered to end users (Lebeck 2006).

These respective levels are depicted graphically in Figure 1 below.

Figure 1. Respective Levels of Natural Gas Use in the United States

Source: Based on textual data in Lebeck 2006

In addition, natural gas is regarded as a superior source of fuel for generating electricity compared to coal since it creates less emission, does not involve as much initial or long-term capital investment, and is more efficient in the combustion process (Lebeck 2006). Not surprisingly, these attributes have resulted in the increased consumption of natural gas at the global level as well over the past 3 decades or so, and comparably significant increases are projected for global demand for natural gas through 2030 (Lebeck 2006). These projections are supported by other industry analysts such as Knowles who reports, "Natural gas is forecasted to be the fastest growing component of global energy consumption, with projected average annual increases of 2.8% between 2001 and 2025. Global natural gas consumption is projected to increase from 90 trillion cubic feet (Tcf) in 2001 to 176 Tcf in 2025" (2009, p. 294).

These trends are further reinforced by recent initiatives by state and federal lawmakers in the United States as well as other governments that are pushing environmentally responsible energy solutions in response to climate change (Lebeck 2006) and the need for additional energy sources to reduce dependence of foreign suppliers to promote national security (Ben-Mosbe, Crowell, Gale, Peace, Rosenblatt & Thomason 2009). These trends have special significance for LNG production and supplies for the next 25 years, an issue that is the focus of the problem considered by this study which is discussed further below.

Statement of the Problem

Domestic consumption of natural gas is projected to increase significantly during the next 25 years, outpacing the overall demand for energy during this same period (Lebeck 2006). Although a major facility LNG receiving terminal has recently been completed in Louisiana, the costs that are associated with launching and maintaining these facilities makes their justification an important and timely enterprise given the scarcity of alternative energy developmental resources. Moreover, with electricity accounting for the majority of the natural gas applications during the coming quarter century, it will be critical to determine whether these investments are worthwhile in view of the projections concerning peak oil at mid-century and the availability of even remote supplies of natural gas that are suitable for liquefaction and transportation as LNG (Lebeck 2006). In sum, the growing demand for natural gas represents a wide range of supply issues given the current and projected production levels of natural gas in the United States (Lebeck 2006), making the need for this type of study all the more timely and important today. To achieve this analysis, this study was guided by the aims and objectives described further below.

Aims and Objectives

The overarching aim of this study was to determine the suitability of liquefied natural gas as an energy source for generating power by investigating the operation principles of liquefied natural gas and the associated risks involved. In support of this aim, the study was guided by the following objectives.

The objectives of this study were two-fold:

1. To critically review the relevant literature concerning the processes involved in the extraction, production and transportation of liquefied natural gas; and,

2. To build a reference list of all resources and sources of data utilized for this project.

Chapter Two: Review and Analysis

Chapter Introduction

This chapter provides a review of the relevant peer-reviewed, scholarly, organizational and governmental literature concerning the processes involved in the extraction, production and transportation of liquefied natural gas, including the liquefaction process, a discussion concerning how LNG is used to generate power, followed by an assessment of current trends in the development and operation of gas fields around the world.

Liquefaction Process

Just as the basic technologies involved in processing petroleum have remained unchanged for several decades, the technologies for LNG processing also date back to the early 1940s where the first commercial facility was constructed in Cleveland, Ohio; however, the facilities was closed after just a few years of operation due to a gas leak and explosion (Chandra 2012). The first large-scale commercial LNG plant was constructed in 1964 in Algeria and became operational a year later; likewise, Phillips built LNG facilities in Alaska in 1969 and by early 2006, there were around 17 LNG plants producing LNG in Africa, Middle East, Asia, Australia, the Caribbean, and Alaska (Chandra 2012).

As the term suggest, liquefied natural gas (LNG) is natural gas that has been reduced to a liquid by cooling it to minus 161°C thereby eliminating oxygen, carbon dioxide and other unwanted components to achieve almost pure methane (Liquefied Natural Gas 2012). According to one LNG producer, "In the liquefaction process, impurities are removed from the gas before it is cooled. The cooling of natural gas to -162°C causes it to liquefy at which point it takes up 1/600th of its original volume. This allows the gas to be stored and transported safely and economically in large vessels" (LNG Liquefaction Process 2012, p. 2). Interestingly, Chandra (2012) points out that after natural gas is cooled to -- 161.5° C ( -- 260° F) and reduced, the actual volume shrinkage is about 610 times; however, 600 times reduction is typically cited in the literature. Because of its highly cooled and liquid state, LNG. It is typically stored and transported at cold temperatures with low pressure (Chandra 2012).

As noted in the introductory chapter, one of the chief benefits of LNG is its compactness in volume compared to its natural gas equivalent, having been reduced by 600 times or more in the liquefaction process. This reduction process makes LNG technologies especially suitable for remote gas fields that might not be amenable siting locations for pipelines or other transportation alternatives, but particularly well suited for transportation by large tankers that are constructed for this specific purpose (Liquefied Natural Gas 2012). This advantage of LNG compared to natural gas is cited by Chandra (2012) who writes, "Gas converted to LNG can be transported by ship over long distances where pipelines are neither economic nor feasible. At the receiving location, liquid methane is offloaded from the ship and heated, allowing its physical phase to return from liquid to gas. This gas is then transported to gas consumers by pipeline in the same manner as natural gas produced from a local gas field" (2012, p. 3). According to the industry analysts at the Australian Government's Department of Resources, Energy and Tourism who report LNG "is transported to dedicated LNG receiving terminals, which have the capacity to store and re-gasify the LNG for supply to markets. LNG, in its liquid state, is not flammable or explosive" (Liquefied Natural Gas 2012, p. 3).

It is important to note, though, that liquefaction of the natural gas must take place before it is suitable for transportation, creating the need for costly and technically sophisticated facilities (Sherbiny & Tessler 1999). Moreover, not only is there a great cost in the liquefaction process and transportation, but LNG regasification terminals cost hundreds of millions of dollars to build and are, therefore, relatively rare, with just around 60 currently operating worldwide; besides significant structural costs, there are also ongoing expenses associated with cleansing impurities from the systems (Sherbiny & Tessler 1999). Furthermore, there are more technical and engineering challenges involved in the LNG process compared to pipeline transportation. The so-called "LNG chain" is comprised of several components: (a) upstream, (b) midstream liquefaction plant, (c) shipping, (d) regasification, and (e) gas distribution and is illustrated in Figure 2 below:

.Figure 2. The "LNG Chain"

Source: Chandra 2012 at http://www.natgas.info/images/lng-fig1.gif

The liquefaction process itself is technologically complicated by fairly straightforward and generally follows the steps depicted in Figure 1 above. The LNG chain involves the reception of LNG tankers at LNG receiving terminals which are also known as "regasification facilities" or simply "regas facilities" (Liquefied natural gas chain 2012). The primary constituent elements of these facilities include:

1. The offloading berths and port facilities;

2. LNG storage tanks;

3. Vaporizers to convert the LNG into gaseous phase; and,

4. Pipeline links to the local gas grid (Liquefied natural gas chain 2012, p. 3).

5. In addition, LNG tankers may also be offloaded offshore to avoid congested and shallow ports using a floating mooring system via undersea insulated LNG pipelines to a land-based LNG facility (Liquefied natural gas chain 2012).

At present, LNG is typically transported to the end consumer by large tankers that are specifically designed for the purpose; older vessels use the gas that is boiled off during transport as fuel while newer ships feature refrigeration that keeps boil-off to a minimum (Liquefied natural gas chain 2012). The majority of LNG facilities operating today are serviced by dedicated fleets of LNG ships which operate on a near-continual basis, but there has been an increasing tendency for LNG ships to transport their cargo where the prices are optimal (Liquefied natural gas chain 2012).

The majority of natural gas imported into the United States is obtained from Canada suppliers with the remainder being obtained on the international market and transported in an LNG form from Trinidad and Tobago, Algeria, Malaysia, Qatar, Oman, and Nigeria (Ehrmann 2006). To date, a number of U.S. companies and consultants have provided LNG field developmental assistance, including technical guidance and project development/construction services in West Africa and Angola (Chambers 2009).

The cost-benefit analysis concerning whether to commercialize a natural gas field through the use of LNG processing or by a pipeline involves a number of variables, but the distance to market is perhaps the most salient, but there are other factors involved in the analysis as well that make each situation unique. According to Chandra (2012), industry best practice indicates that LNG might be a potential alternative in those cases where the following characteristics exist:

The gas market is more than 2,000 km from the field.

The gas field contains at least 3 tcf to 5 tcf of recoverable gas

Gas production costs are less than $1/MMBtu, delivered to the liquefaction plant.

The gas contains minimal other impurities, such as CO2 or sulfur.

A marine port where a liquefaction plant could be built is relatively close to the field.

The political situation in the country supports large-scale, long-term investments.

The market price in the importing country is sufficiently high to support the entire chain and provide a competitive return to the gas exporting company and host country.

A pipeline alternative would require crossing uninvolved third-party countries and the buyer is concerned about security of supply.

The LNG vernacular is somewhat complicated, making the cost-benefit analysis particularly challenging. In this regard, cubic meters or cubic feet are used to measured the volume of produced natural gas, but after it is reduced to LNG, the product is measured in mass units (typically tons or million/tons, or "MMT" or even more frequently, just "MT" (Chandra 2012). Following its conversion back into a gas form, the product is then marketed by energy units (expressed in millions of British thermal units or "MMBtu") (Chandra 2012). According to Chandra, "One ton of LNG contains the energy equivalent of 48,700 ft3 (1,380 m3) of natural gas. An LNG facility producing 1 million tons per year (million tons per annum, or MTA) of LNG requires 48.7 bcf (1.38 bcm) of natural gas per year, equivalent to 133 MMcfd. This facility would require recoverable reserves of approximately 1 tcf over a 20-year life. Similarly, a 4-MTA LNG train would consume an equivalent of 534 MMcfd (requiring reserves of 4 tcf over 20 years)" (2012, p. 208). The operation of the LNG chain is virtually identical to the technologices and equipment used for the production of traditional gas systems, including the types of gas wells, wellheads, and field processing facilities that are used (Chandra 2012). Liquefied natural gas facilities must be provided with LNG that is as pure methane as possible in order to avoid potential damage from harmful constituent elements including carbon dioxide and sulfur which can harm the facility's refrigeration systems, diminish the quality of the LNG produced, or both (Liquefied natural gas chain 2012).

As noted above, although all LNG facilities are unique in some fashion, they have a number of commonalities involved including those depicted in Figure 3 below which shows the layout of a typical LNG liquefaction and loading facility:

Figure 3. Typical LNG Liquefaction and Loading Facility

Source: Liquefied Natural Gas Chain at http://www.natgas.info/images/lng-fig2.jpg

Based on its advantages over other sources of fuel, LNG has become the focus of a growing amount of interest among the international community as well. At present, the total percentage of gas that is transformed into LNG and transported in this form accounts for less than 10% of all gas trade worldwide, but the market for LNG is expanding quickly and there are increasing numbers of sellers and buyers (Chandra 2012). In addition, a majority of major cities throughout North American and Europe, as well as Northern Asia, already feature sophisticated natural gas networks that provide commercial and residential customers with natural gas that is used for heating and cooking (Chandra 2012). In these settings, the delivery of natural gas is accomplished using the marketing structure depicted in Figure 4 below.

Figure 4. Gas is typically delivered to the residential customer via the marketing structure

Source: Chandra (2012) at http://www.natgas.info/images/gasusage-fig3.gif

The LNG industry generally uses one of two primary liquefaction processes as follows:

1. The pure refrigerant cascade process (also known as the Phillips process), or,

2. The precooled propane mixed refrigerant MCR process (promoted by Air Products, Shell, and others, and used by the majority of LNG plants) (Chandra 2012, p. 4).

The first LNG plants built in Alaska and Algeria during the mid-20th century utilized the Phillips cascade process and relied on propane, ethylene, and methane for their refrigerants; however, most of the LNG facilities constructed since that time have cryogenic heat exchangers to facilitate the reduction process (Liquefied natural gas chain 2012). Because of their size and comparative sophistication, the liquefaction facilities that are needed to transform natural gas into LNG are typically the most costly components in any LNG initiative (Liquefied natural gas chain 2012). According to the industry analysts at NatGas.Info, "Because 8% -- 10% of gas delivered to the plant is used to fuel the refrigeration process, overall operating costs are high even though other costs, such as labor and maintenance, are low" (Liquefied natural gas chain 2012, p. 4). Likewise, despite a reversal of a long-term decline in the costs associated with constructing and maintaining new LNG facilities, the newer LNG facilities that have been constructed to date are more efficient and can even be shared, thereby minimizing unit cost (Liquefied natural gas chain 2012).

Using LNG to Generate Power

At the global level, electricity generation remains the primary application for natural gas, and demand for this source of energy is increasing (Gas Usage 2012). The natural gas that can be obtained from reconverted LNG represents a viable power generation alternative based on growing concerns over nuclear power, emissions from conventional coal-fired plants and the need for more environmentally responsible options to counter global climate change (Gas Usage 2012). The decision to use LNG-sourced natural gas to generate power therefore involves yet another cost-benefit analysis since the cost of fuel represents almost two-thirds (65%) of the total cost of the electricity produced (Gas Usage 2012).

Despite the continuing popularity of coal as the primary source of fuel to generate electricity worldwide, these patterns are shifting in response to growing concerns over toxic emissions and inefficient operations (Gas Usage 2012). According to the industry analysts at NatGas.Info, "Modern gas-fired power plants are much cleaner and more efficient than their predecessors. They are also larger, cheaper to build, less noisy, less polluting, and easier to switch on and off. In addition, obtaining permits to build gas-fired plants is usually much easier than an equivalent coal or nuclear plant for these reasons" (Gas Usage 2012, p. 5).

In addition, fuel cells powered by natural gas derived from LNG sources also offer a number of advantages that will likely affect the demand for LNG over the next 25 years. The use of natural gas-powered fuel cells has a number of benefits, including those set forth in Table 1 below:

Table 1

Benefits of natural gas-powered fuel cells

Benefit

Description

Clean Electricity

Fuel cells provide the cleanest method of producing electricity from fossil fuels. While a pure hydrogen, pure oxygen fuel cell produces only water, electricity, and heat, fuel cells in practice emit trace amounts of sulfur compounds and very low levels of carbon dioxide. However, the carbon dioxide produced by fuel cell use is concentrated and can be readily recaptured, as opposed to being emitted into the atmosphere.

Distributed Generation

Fuel cells can come in extremely compact sizes, allowing for their placement wherever electricity is needed. This includes residential, commercial, industrial, and even transportation settings.

Dependability

Fuel cells are completely enclosed units, with no moving parts or complicated machinery. This translates into a dependable source of electricity, capable of operating for thousands of hours. In addition, they are very quiet and safe sources of electricity. Fuel cells also do not have electricity surges, meaning they can be used where a constant, dependable source of electricity is needed.

Efficiency

Fuel cells convert the energy stored within fossil fuels into electricity much more efficiently than traditional generation of electricity using combustion. This means that less fuel is required to produce the same amount of electricity. The National Energy Technology Laboratory estimates that, used in combination with natural gas turbines, fuel cell generation facilities can be produced that will operate in the 1 to 20 Megawatt range at 70% efficiency, which is much higher than the efficiencies that can be reached by traditional generation methods within that output range.

Source: Adapted from Natural Gas and Technology 2012

The generation of electricity through conventional methods such as coal has been a highly inefficient process that generates a great deal of pollution; as fuel cell technologies become more refined in the future, the demand for LNG will likely increase as a concomitant, especially if current trends in production and demand continue as expected (Natural Gas and Technology 2012). Fuel cells using natural gas from LNG sources, though, are in competition with a wide array of existing fossil fuel sources as well as a growing number of alternative sources. In this regard, Akimoto, Oda, Homma, Rout and Tomoda (2008) report that there are currently eight main types of primary energy sources used worldwide: natural gas, oil, coal, biomass, hydro and geothermal, solar photovoltaics, wind, and nuclear. According to these authorities, "As technological options, various types of energy conversion technologies are explicitly modelled besides electricity generation. Some of them are oil refinery, natural gas liquefaction, natural gas reforming, coal gasification, water electrolysis, and methanol synthesis" (Akimoto et al. 2008, p. 47). These trends will ultimately depend, though, on the continuing development and operation of natural gas fields as discussed further below.

Development and Operation of Gas Fields

There are a number of recent and current trends that have affected the development and operation of gas fields around the world. To begin with, increasing LNG prices have generated increasing global interest in gas fields that were regarded as too remote or too small for exploration and extraction in the past (Liquefied natural gas chain 2012). According to the industry analysts at NatGas.Info (2012), though:

There are numerous technical challenges, most importantly the effect of 'sloshing' on partial filled tanks -- while LNG is being produced -- and the offloading of LNG from one floating vessel to another floating vessel. There are a number of companies that are promoting their FLNG (Floating LNG) concepts, with first production likely in 2011-2012, probably in West Africa or Southeast Asia/Australia. (Liquefied natural gas chain 2012, p. 5)

The developmental pattern that is expected to result for natural gas field around the world will likely continue to be concentrated in those regions where natural gas is already an important fuel source (Knowles 2009). According to Knowles, "The future of LNG as part of the U.S. natural gas supply must be viewed in the context of the global market for LNG. Existing LNG facilities in the U.S. will not be adequate to provide the quantities of LNG projected to be needed to satisfy future demand. Expanding existing LNG terminals, or constructing new terminals, will involve investments of hundreds of millions of dollars for each facility" (2009, p. 295).

Indeed, Platt (2005) reports that current financing efforts to new LNG facilities are setting new global records for the amounts of money that are involved. In this regard, Knowles (2009) emphasizes that, "LNG projects are large endeavors requiring investments in the hundreds of millions of dollars for a single LNG terminal. A full supply chain project can require investment in excess of $2.5 billion. The structure of future LNG projects and the regulatory environment must be capable of encouraging and facilitating the necessary investments" (Knowles 2009, p. 295). Furthermore, according to Lebeck (2006), any proposed LNG terminal projects tend to generate enormous public backlashes in the form of "not-in-my-backyard" responses as a result of the high costs that these terminals impose on their surrounding communities which are two-fold as follows:

1. The volatile nature of natural gas creates a significant risk of physical harm for any community in close proximity to the terminal. Although the exact consequences of an accident or terrorist attack affecting an LNG terminal are not known, the potential risks are staggering. One study found that a serious explosion could produce heat sufficient to cause second-degree burns at a distance of greater than half a mile.

2. LNG terminals can cause environmental damage due to the effects of increased large-ship traffic in the area. In contrast to these extremely localized costs, the majority of the benefits derived from constructing an LNG terminal are quite diffuse. Although LNG terminals can provide both additional jobs and revenue to a community, many benefits derived from an LNG terminal are due to the increased supply of LNG to the entire region. Any reasonable increase in the supply of natural gas will reduce both gas prices and gas price volatility for all natural gas consumers in the region (Lebeck 2006, p. 244).

Notwithstanding these constraints to development the push to develop additional LNG gas fields in other regions of the world is also setting new records in financing requirements and engineering challenges (Platt 2005). For example, the in Salah natural gas project in Algeria already has a budget of approximately $3.5 billion; this amount includes building a 520-kilometer pipeline from Krechba to Hassi R'Mel at which point gas pipelines link to export facilities that transport LNG to Europe (Williams 2006). The new LNG processing facilities at in Salah in Algeria are projected to produce about 9 billion cubic meters of natural gas annually and has an expected lifespan of about 20 years (Williams 2006). The in Salah facility is also equipped with new carbon dioxide reduction technologies that are not typically found on older facilities. According to Williams (2006), "The $50 million re-injection plant will give a net reduction of CO2 emissions of about 1 million tons a year, or 17 million tons over the project's lifetime. That is the equivalent of taking about a quarter of a million cars off the world's roads every year" (p. 46).

Other new technologies that are helping extract as much natural gas from existing and newly developed fields as possible include innovative drilling techniques that allow producers to access previously inaccessible gas deposits (Williams 2006). In this regard, Williams add that, "At in Salah, the re-injection wells run vertically to a depth of more than 2 kilometers, then horizontally for a further kilometer" (Williams 2006, p. 47). At present, the in Salah facility is the world's largest such carbon dioxide-capture initiative, and the proven technologies that have been demonstrated there are being applied to other new LNG facilities as well (Williams 2006). In this regard, Williams notes that, "There are other major projects around the world that will be relying heavily on the experience gained in the Algerian Sahara. BP, alongside ConocoPhillips, Shell and Scottish and Southern Energy, are evaluating plans to build the world's first industrial-scale decarbonised power plant. Given the go-ahead in June last year, the plan is to convert natural gas piped ashore from North Sea fields to create hydrogen to power a new 350MW power station in Scotland. The CO2 content of the gas will be returned offshore for EOR re-injection at BP's Miller oilfield" (2006, p. 47). Other signs that LNG gas field and facility investments will continue to increase in the future include reports that Edison and BP will construct hydrogen-fuelled 500MW power plant adjacent to BP's existing Carson refinery south of Los Angeles, California at a cost of about $1 billion (Williams 2006).