Skip to main content

Powering the Pilbara—a new market for LNG

April 19, 2017
Three billion litres of diesel fuel imported into the Pilbara each year, primarily to power the mining industry; 5 billion litres of heavy fuel oil annually consumed by ships carrying iron ore from the Pilbara to North Asia. Match these figures with a technological leap in dual-fuel engines, and pressure on carbon and pollutant emissions, and the climate looks right for a revolution in powering Western Australia’s resourceful north.
With this opportunity in mind, two giants of industry have targeted the West with plans to develop  a substantial local market for liquefied natural gas (LNG).

“These factors mean now is the time that we’re going to start to see the swap from an oil-fuelled heavy-transport fleet to gas-fuelled heavy transport,” says Craig Jennings, opportunity manager for LNG fuels at Woodside Energy. “Mining activity in the Pilbara has trebled in the past decade and the scale of energy use makes it the ideal place to lead the transition.”

On railways in the US, GE is amassing a track record for its LNG/diesel-fuelled locomotives.

“We’ve run 145,000 miles in dual-fuel mode already. We are seeing a 76% reduction in particulate emissions, and up to 50% cost savings compared to running on diesel fuel alone,” says Jason Waller, account director for GE Transportation in Australia and New Zealand.

By 2018 the technology will allow an 80:20 mix. GE has to date designed and supplied more than 70% of the locomotives used in Australian mining.

On Rio Tinto's Pilbara rail network alone, some 192 GE locomotives, currently running on diesel, connect the company’s 15 mines in the Pilbara to port. Retrofitting with dual-fuel LNG/diesel technology would enable these locos to run more cleanly and efficiently. LNG generates carbon emissions up to 25 per cent lower than diesel and emits virtually no sulphur or particulates.

That’s just a snapshot, a fraction of the context for this year’s agreement between Woodside Energy, and GE Oil & Gas, Transportation and Marine divisions, to work together to support the development of a new market for LNG as a fuel in Western Australia.
“There’s real synergy in these two large organisations investing in technology to develop the market—we’re not following the market, we’re developing the market.” Jason Waller, GE

“The underlying factor of this partnership,” says Waller, “is we have one partner who’s best in class in commodity-supply technology and the other who’s best in class in terms of capital-equipment technology. There’s real synergy in these two large organisations investing in technology to develop the market—we’re not following the market, we’re developing the market.”

One of the world’s largest producers of LNG, Woodside has operated in the Pilbara region for more than 30 years. With its Pluto and adjacent North West Shelf projects, an interest in the Wheatstone project due to begin yielding gas mid-2017, as well as other projects planned for expansion and development, it has the supply and geographical advantage to take LNG to WA’s big ore miners.

Woodside’s relationship with GE Oil & Gas is as old as the North West Shelf project, which commissioned its first offshore platform, North Rankin A, in 1984. It has seen GE supply, maintain and provide training for power generation, turbomachinery for processing gas into LNG, and related technology for Woodside projects. “We have decades of experience working with GE’s gas-fired equipment,” says Jennings.

On the Transportation side, Waller says large iron-ore miners run a total of about 250 locomotives 24/7 in the Pilbara. On an 80:20 fuel mix, those haul heroes could run more efficiently—achieving faster average speeds because the locos would carry their own LNG and therefore need to stop less frequently for refuelling; run more cost effectively in terms of fuel and maintenance; and their emissions would be greatly reduced. Each loco currently uses 1.8 million litres of diesel a year. GE has developed its NextFuel Natural Gas Retrofit Kit with Dual Fuel Technology to enable the 80:20 leap.
“The mines in the Pilbara are very long-life mines. There are decades of iron-ore reserves. You have the biggest mining companies in the world and they’re in a great position to lead the world in using cleaner fuels.” Craig Jennings, Woodside

GE calculations put the potential total Australian market for LNG at about six million tonnes per annum. Of that, Waller says, “Power generation would potentially be 2.2 million tonnes; rail, 1.5 million tonnes; heavy to medium vehicles, 1.3; mine-haul trucks, 0.6; and upwards of 0.4 million tonnes for marine.” The marine figure, he says is based only on fuel used in Australian waters and only for certain categories of shipping—totally and globally the marine potential is far greater.

The scope of the pit-to-port LNG-development agreement was, on GE’s side, inspired by a cross-company directive to take a GE Store approach to discussions with customers. That is, to take an awareness of what the whole company— with its expertise in Digital, Energy distribution, Oil & Gas, Transportation, Power generation, Healthcare, Renewables, Aviation, Mining and Marine—can deliver. Not all the businesses will be relevant all of the time, but Woodside appreciated its GE key-account manager, Laerte Herrero’s inclusive approach.

In this new market, says Jennings, “Woodside will provide LNG for transport equipment. For power generation, on which we’re also working with GE under this agreement, Woodside would provide gas to the remote customer, including storage and regasification on the customer site. Then GE would provide the power station, or power-generation equipment.”

GE provides a range of generation options including Jenbacher gas engines, trailer-mounted compact TM2500s, and heavy-duty gas turbines that run consistently on a variety of fuels in the harshest conditions. Such fast, reliable solutions will have mines, mining towns, and outback communities, too, running cleaner and more cost-effectively—once LNG supply lines are established.

It all started a couple of years ago, says Herrero, with the aim of supporting Woodside in its Pluto Subsea Gas Compression, using GE’s Blue-C compressor. Rather than set up a one-off memorandum of understanding (MOU), the companies agreed to establish a Technology Development MOU that could underpin future opportunities.  

Following a joint technology workshop between GE and Woodside, the ‘Power in a Box’ initiative was born: containerised, portable power plants could be supplied with LNG from Woodside’s existing facilities or from new small-scale LNG plants.

Small-scale modular LNG plants offer a cost-effective way to supply the domestic market from positions on so-called stranded pipelines, particularly in remote areas.

“On the back of the Power in the Box initiative,” says Herrero, “the discussions evolved into newer and more innovative ideas; in addition to engaging GE Transportation to enable LNG as fuel for locomotives; we’ve drawn on the GE Marine team to bring gas turbine technology to power large ships.”

GE’s aeroderivative gas turbines are frequently incorporated in power generation for other industries. Several of GE’s marine-engine solutions, for example, use the company’s aircraft jet-engine technology and features: modular construction makes for easy maintenance in the constrained marine environment; and ultra-durable, lightweight materials such as single-crystal alloys and ceramic matrix composites increase reliability because they maintain strength and integrity under stress for longer than other materials.

Importantly, GE’s gas-turbine-powered engines already meet regulations set forth by the International Maritime Organisation (IMO) that will restrict sulphur content of marine fuels from 2020. LNG generates carbon emissions up to 25 per cent lower than diesel and 30 per cent lower than heavy fuel oil, and emits virtually no sulphur or particulates.

The Siem Thiima is Woodside’s first dual-fuelled marine-support vessel, which transports supplies to offshore platforms and supports subsea repair works. It joined the company’s fleet in 2017, after Woodside “took a decision to convert our marine support fleet across to LNG”, says Craig Jennings. The company’s LNG carriers already run on LNG when it is available onboard.

Another motivating factor for switching to LNG fuel for maritime use is that high-powered turbine solutions such as GE’s aeroderivative COmbined Gas turbine Electric and Steam (COGES) propulsion system are lighter and more compact than engines designed to run on traditional marine fuels. By incorporating COGES in their designs, “naval architects have the flexibility to carry more cargo or passengers in the same-size ship…” says Tim Schweikert, president and CEO of GE Marine Solutions.
“GE is one of several companies that are united to accelerate the use of LNG as a marine fuel via their participation in the SEALNG cross-industry initiative.” Tim Schweikert, GE

Woodside CEO Peter Coleman agrees that there is growing global interest in LNG as a transport fuel, "We think the trade routes from northern Western Australia are the perfect place to drive the transition to LNG as a marine fuel, with exporting industries in close proximity to world-class LNG supplies,” he said recently.

Woodside is working with a range of industry partners to promote green shipping. At the Gastech conference in Japan in April, Woodside and GE joined with Hyundai Heavy Industries, classification body Lloyd’s Register, and shipping company Anangel to work on designs for an LNG-fuelled Very Large Ore Carrier, which will include next-generation GE propulsion technology.

The view from the bridge is building, that Australian-produced LNG could help lighten the country’s emissions profile, contribute to green shipping, and potentially power Australia’s many off-grid businesses and communities.

Under their agreement, Woodside and GE have already initiated discussions with miners for retrofit of gas-engine technology to locomotives and begun developing the abovementioned designs for next-generation LNG-powered bulk-ore carriers. Herrero and Jennings also both see potential beyond WA, including in rapidly growing Asian markets. The possibilities lie in the partnership, in the dual promise of fuel and new-era infrastructure delivered to the customer’s door.

Main image: Woodside's Pluto LNG processing facility on the Burrup Peninsula, near Karratha on the Pilbara coast has the capacity to produce 4.9 million tonnes of LNG per annum and is slated for expansion. It will be ideally placed to supply a new Australian market for LNG.