“Africa Has Been a Prominent LNG Market” – Sergio Armenante, SAIPEM

Interview By Ndubuisi Micheal Obineme

In this interview, The Energy Republic talks to Sergio Armenante, Head of LNG Technology Process Department at SAIPEM, about the company’s global operations and latest technological solutions for the LNG industry. As the global LNG market is projected to grow by 70 percent by 2050, Sergio provided more insights about the company’s global LNG project developments, noting that Africa has become a prominent LNG market for SAIPEM. Excerpts:

TER: Saipem is a leading company in terms of engineering, drilling, and construction of major projects in the energy and infrastructure sectors. Please could you provide more insights on your company’s business lines in the LNG industry and the continent (countries) dominating Saipem’s LNG business activities?

Sergio: Saipem is a leader in the EPC LNG market. We have been pioneering this industry since its early days, back in the seventies and the eighties by participating in several initiatives where we developed our liquefaction technology (TEALARC) and built production facilities such as Marsa El Brega in Libya.

Since then, we have delivered several important LNG projects both in the field of liquefaction facilities and regasification plants. The most notable ones are projects such as Nigeria NLNG Bonny Island Trains 1 to 6, RAS GAS II Trains 3, 4, and 5, Canaport LNG, Freeport LNG, Revithoussa LNG, etc.

In the last decade, we have grown further and have been very active in the LNG EPC market, acquiring several projects in various locations worldwide, such as Algeria’s GNL 3Z Project in Arzew, Thailand’s Nong Fab Regasification Plant, Indonesia’s Tangguh Expansion Project, Mozambique’s; MZLNG liquefaction facilities and Nigeria’s Bonny Island Train 7 Project.

Thus, our capabilities are very diversified, ranging from the liquefaction and regasification of onshore facilities to Floating Storage and Regasification Units (FSRU), Floating LNG, or Gravity Based Systems (GBS) for LNG facilities. As of today, Saipem has participated worldwide in the construction of plants with 85+ MTPA equivalent LNG production capacity, 60+ MTPA equivalent LNG regasification capacity, and 8 million of m3 of LNG equivalent storage capacity.

We are also leveraging on our world-class assets, such as Moss Maritime, a renowned Norwegian offshore design and engineering service provider, fully owned by Saipem, which developed the Moss LNG carrier. With its distinctive spherical tanks, the carrier is one of the most recognized products in the LNG industry.

We are also a technology provider with our proprietary LIQUEFLEX^TM, a very efficient process, suitable for small and mid-scale natural gas liquefaction facilities, ranging from 0.1 MTPA to 1.2 MTPA capacity, using nitrogen or natural gas as a refrigerant fluid.

Hence this track record in the LNG Industry is very significant and puts Saipem in a privileged position to support our clients in all project phases, even in the early stage of prospect development with technical solutions and economic analysis studies.

TER: Is SAIPEM present in the African continent in the LNG EPC Contracting Market?

Sergio: Saipem has been and is still very active in Africa, having participated in almost all the continent’s LNG initiatives. We have an important track record of EPC projects executed in various African countries over the last 10 years, such as:

Algeria’s GNL-3Z project for Sonatrach, a 4.7 MTPA, liquefaction plant in Arzew industrial area, successfully delivered and we are the main contractor since 2015.

Nigeria’s Train 1 to 6 project in Bonny Island for Nigeria LNG Limited, and more recently, as JV Leader for Train 7 Project, an overall 8.3 MTPA expansion still under construction.

Angola’s Soyo LNG project, where we designed and built two LNG Storage Tanks of 160,000 m3 in 2010.

Mozambique’s Area 1 MZ LNG Project for TotalEnergies, a 13 MTPA liquefaction plant in Capo Delgado, currently under suspension.

Therefore, Africa has been a very prominent market for us, and we have always worked hard to help our clients develop their projects.

Additionally, we are pursuing several other initiatives in the continent which are not yet in an execution phase but will be developed over the next few years.

TER: As the Head of LNG Technology Process Department at Saipem, and with your extensive experience in various LNG Projects in countries like Qatar, Australia, Japan, and Indonesia. What has been your focus areas in terms of revolutionizing your company’s operations and adopting new technologies for natural gas and LNG?

Sergio: Considering my professional experience in this industry, I can observe that the natural gas sector is called on globally to solve a very complex challenge: increasing the natural gas offer while reducing its carbon footprint.

As a leading LNG EPC contractor and service provider, we are ready to support the LNG industry entering this new phase, where decarbonization and sustainable energy are the new drivers, ideally leading the entire LNG value chain to zero emissions.

For example, we have studied solutions on how to use hydrogen to replace methane in fuel gas to reduce the carbon footprint of an LNG production plant. Another possible solution can be the electrification of an LNG production plant by replacing gas turbines with more efficient electric motors.

At Saipem, we are focusing on four pillars to support the decarbonization of LNG production plants: energy efficiency, process optimization, carbon capture, and hybridization. By implementing some important mitigative actions included in our portfolio of solutions, a very significant reduction in the ratio between the quantity of CO₂ generated by the liquefaction plant and the quantity of LNG produced can be achieved, even reaching values of 0.18 tons CO₂/tons LNG, which correspond to a 40% reduction if compared to a traditional Base-Load capacity LNG Liquefaction plant.

As for LNG regasification terminals, we have patented customized solutions to increase the energy efficiency of plants, minimizing power consumption and carbon footprint to maximize the profitability of our customers’ investments.

In addition, Saipem has developed a very powerful proprietary tool for estimating and identifying technologies to reduce greenhouse gas emissions in industrial plants called EMIRED^TM. This tool helps in identifying the most cost-effective decarbonization solutions for client assets, defining clients’ assets and targets while leveraging on the internal knowledge database of CAPEX and OPEX of reference for similar plants.

TER: With the growing energy demand, the global LNG market is growing rapidly as the world transitions towards a low-carbon system. Furthermore, according to several reports, global LNG imports are projected to increase by 4% – 4.5% (16 million-18 million mt) year on year to 416 million mt going forward, while the volume of natural gas processed into LNG has also increased drastically. Looking at these trends, please could you provide more insights on Saipem’s multiple solutions patented for several LNG projects, with the objectives to achieve the LNG liquefaction plant’s decarbonization and reduce GHG emissions?

Sergio: At Saipem, we work extensively as an EPC contractor and service provider, but we also have a strong technological focus. As a Technology Provider, for example, we own several patented process technologies, so we can be considered a Technology Provider.

This means that, in the LNG market, we have the flexibility to work with all the liquefaction process technologies providers, such as Air Products, Conoco Phillips, Linde, and Chart, or, at the same time, when the market opportunities are favourable, to use our technology, LIQUEFLEX^TM.

Saipem owns multiple patented or proprietary solutions for the LNG market ranging from liquefaction processing to the energy efficiency of regassification facilities, to a very innovative and efficient CO₂ post-combustion carbon capture technology, called CO₂ Solutions^TM.

CO₂ Solutions^TM is a non-toxic absorption process to capture post-combustion carbon dioxide, catalysed by a proprietary enzyme designed by Saipem and its technological partners to boost process performance with very high efficiency. This process is very innovative, and robust, and perfectly fits the need of the growing carbon capture markets, including an LNG production facility. It is a very compact and efficient process that we are proposing in a modular unit, in a product called BLUENZYME 200^TM.

In association with the LNG technology, Saipem patented a telescopic joint named CASS^TM, consisting of a joint with an innovative design that absorbs the pipe’s thermal contraction in cryogenic application avoiding piping loops, with a consistent optimization of pipeline routing and related construction costs and plant capex reduction.

For instance, if applied, this solution will allow clients to avoid expensive expansion loops and associated substructures in LNG Jetty facilities. The innovative joint exploits the principle of telescopic movements, replacing expansion loops and it applies to cryogenic pipes but also on the hot application.

Saipem is in the process of completing DNV certification which will be ready in 2023. The next step in the technology development will be the installation of an operating plant.

TER: A lot of conversation is going on about Energy Transition and many companies have developed their energy transition strategy. Based on these developments, what’s Saipem focus areas for 3Ds of Energy: Decarbonization, Digitization, and Decentralization?

Sergio: Saipem is a key player and a global leader in the engineering and construction of major projects for the energy and infrastructure sector, both offshore and onshore. The Company’s purpose is “ENGINEERING FOR A SUSTAINABLE FUTURE” and as such, Saipem is committed to supporting its clients on the energy transition pathway, toward its NET ZERO Program and its 4-year Sustainability Plan, fully integrated into our business strategy.

Saipem is committed to preventing climate change in two main areas of action:
Improving the efficiency of its assets and operations supporting Clients’ decarbonization path, proposing low GHG emissions strategies and technologies, and offering “Carbon Neutral Construction Site/Project”.

Based upon our long-standing commitment to the global decarbonization trend, we set our medium and long-term objectives for decarbonization, which became the milestones of our Net Zero Program:
350% reduction in Scope 1 and 2 emissions by 2035 based on 2018 GHG emissions,
Carbon Neutrality for Scope 2 by 2025.
Net Zero for Scope 1, 2, and 3 by 2050.

Saipem adopted a platform for estimating scope 3 emissions (due to suppliers), through structured and technical onboarding of key vendors on the categories with the greatest emission impact.

As per Saipem’s roadmap, Scope 1 and 2 emissions will be reduced over time through three key phases:
Retrofit: Phase I, increasing the energy efficiency of Saipem’s operations through the use of the best available technologies (2018-2030);
Renewal: Phase II, replacing older assets with innovative ones that are more energy efficient and with lower GHG emissions, including digitalization. For example, unmanned operations (2030-2040).

Renewables: Phase III, massive use of renewable energy and technologies, both conventional and advanced, such as marine and floating solar energy, and possible application of Carbon Capture & Storage technologies where feasible on assets (2040-2050).

In addition, Scope 1 and 2 emissions will also be reduced thanks to:
Use of alternative fuels: replacing fossil fuels with low carbon-emission fuels (e.g. HVO biofuel);
Electrification: switching from electricity generation with fuel-powered generators to grid power where possible.

To meet the Scope 2 target, priority will be given to the following criteria, in order of importance:

1. Energy saving and efficiency.
2. Renewable energy from the grid or self-produced.
3. Offsetting residual emissions after all the measures above will be implemented by 2023: Saipem intends to invest in offsetting projects using Nature-Based Solutions to compensate for CO₂ and benefit several key themes, like biodiversity, ecosystem protection, local communities, and natural resources.

For Scope 3 emissions, which are also “shared” with other companies, Saipem is playing an active role in supporting and encouraging all the players in the value chain to reduce the carbon footprint together, with actions in the supply chain area, as follows:
The adoption of an ESG platform to monitor the sustainability performance of its vendors
The definition of methodologies and tools for monitoring emissions for more accurate traceability of the carbon footprint (Use of a “Carbon Tracker” platform)
The introduction of sustainability requirements in the procurement of products and services from a life cycle perspective to improve environmental impacts arising through the supply chain.

TER: More so, technology and industry collaboration will play key roles in the development of the LNG market. How is SAIPEM partnering with other players to accelerate the LNG industry growth opportunities?

Sergio: Decarbonization of the LNG industry is currently leveraging on the development/improvement of existing technology; however, this is not enough, and we think that a further step is required to explore new technologies.

Currently, we are in talks with private and public institutions to contribute to this process. This cooperation is key to keeping the momentum towards the net zero target.

TER: You were among the speakers at the just concluded 20th International Conference & Exhibition on Liquefied Natural Gas (LNG2023), held on 10 – 13 July 2023 in Vancouver, Canada. What were your major talking points during the panel discussions?

Sergio: I presented the results of a case study conducted by Saipem, as part of a set of possible solutions to reduce the carbon footprint of a large-scale base load LNG plant, with the aim of minimizing the modification to the existing plant design.

While the demand for LNG is increasing worldwide, the growing need to provide a cleaner energy offer emerges. In this scenario, natural gas can be considered both a transition and a destination fuel. So, it is widely recognized that natural gas and LNG are essential for the energy transition as they play an extraordinarily pivotal role in shifting away from coal and helping in moving toward net-zero emissions. As the transition evolves, natural gas will remain vital in providing reliable and efficient energy to support economies in different parts of the world.

Thus, the LNG industry is entering into a new phase, where decarbonization is becoming a requirement that needs the joint effort of both companies and contractors to let the LNG demand growth become sustainable, targeting zero emissions ambitions at the soonest.

Today, technologies necessary to reduce emissions, increase efficiencies, and capture carbon from natural gas operations are already available and can be implemented in existing facilities or new greenfield projects. This is essentially needed to help natural gas and LNG to be part of the energy mix as well as keeping the global energy supply stable and sustainable, particularly in the current global scenario.

As Engineering, Procurement, and Construction (EPC) Contractor with a focus on technologies, Saipem has the unique advantage to bring the most complete suite of low-carbon solutions to energy and other industrial markets, including capabilities in hydrogen and carbon capture, utilization, and storage.

TER: Saipem was among the exhibitors at LNG2023. What are the latest technological solutions your company showcased at this year’s event?

Sergio: We exhibited at LNG2023 to showcase a number of our solutions, starting from our so-called “Green LNG” technologies which we have developed, and we did a presentation about it during our discussion in the technical conference.

Additionally, we presented our carbon capture technology, CO₂ Solutions . We have great expectations for this innovation, and we are very keen to share recent positive developments with industry shareholders.

We also showcased our liquefaction process (LIQUEFLEX^TM) based on either nitrogen or natural gas as a refrigeration fluid, which, in our opinion, is very much in line with the new trend of leaner onshore/offshore liquefaction facilities based on a multi-train medium size modular fast track approach.

Furthermore, LNG2023 served as an opportunity in updating our customers on Saipem’s patented telescopic joint CASS^TM.