1. LNG

In this part of economics, we will elaborate on the insulation and use of LNG as an alternative fuel for our aircraft. We will assume that the feed gas (natural gas) is available at both the airports, Perth and Melbourne. We will begin with the conceptual design of our ground system with the following breakdown:

  1. Conceptual configuration of Ground Systems
  2. Ground systems operating procedure
  3. Evaluation of relative safety of LNG ground system
  4. Evaluation of energy consumption of the ground system
  5. Estimation of capital and operating cost of the ground system


  1. Conceptual Configuration
    • Liquefaction Cycle

Liquefaction allows gas to be stored economically.


Propane Precooled Multi-Component Refrigerant Cycle (Carson’s Report, pg 221) will be used to create the LNG from the natural gas feed. This process is also known as the C3-MR system is used widely in today’s LNG industries. This system uses a multi-component refrigerant, usually nitrogen, methane, propane, butane, ethane and pentane to condense and evaporate natural gas in one cycle over a wide range of temperatures. (


  • Storage Facility


In this section we will show our storage facility by calculating the storage capacity needed (table 1.2.1), studying the current LNG storage tanks and their capacity and choosing the appropriate facility for our project.








Storage Capacity    
Number of Flights per day   14
  Usage per Flight  
Density (kg/m^3)   455
Weight (kg)   26043.97
Volume(m^3)   57.23949
  Usage per Day  
Density (kg/m^3)   455
Weight (kg)   364615.6
Volume(m^3)   801.3529
Needed storage capacity per day (m^3)    
LNG 801.3529  
Annual Storage Capacity (m^3)    
LNG 292493.8  

Table 1.2.1 Storage Capacity Calculation


LNG is a cryogenic liquid. The term “cryogenic” means low temperature, generally below -73°C. LNG is a clear liquid, with a density of about 45% that of water.


The LNG is typically stored in double-walled tanks at atmospheric pressure. The storage tank is actually a tank within a tank. The annular space between the two tank walls is filled with insulation.


The inner tank, in contact with the LNG, is made of 9% nickel steel, suitable for cryogenic service and structural loading of LNG. The outer tank is generally made of carbon steel or prestressed concrete.


  • Processing Facility

This stage includes the requirements to sub-cool LNG prior to the loading into the aircraft fuel pods.

Long needs to be subcooled to -161 degrees Celsius for it to remain in the liquid form.


  • Distribution Facility

Our distribution facility will include pipings, pumps and hydrants required to deliver LNG from the storage tanks to the aircraft.


Pipeline System

As the liquefaction and storage facilities are within the airport boundary, the pipeline costs will be lesser than that of distribution and transportation through trucks.

  • Sizing requirements to meet the distance from the storage tanks to the aircraft.
  • To be able to simultaneously fill 2 aircraft at one time.
  • Under the ground (trench covered by open grating) to prevent heat penetration.
  • Pipeline insulation by thick polyurethane to prevent heat infiltration.


  1. Ground Systems Operating Procedure


The primary operations that will be considered in this section:

  • Receipt of gas for liquefaction
  • Liquefaction
  • Storage
  • Delivery of LNG


In our project, we will be receiving liquefied natural gas, which will eliminate the process of liquefaction. The reason for such an arrangement would be that the amount of LNG usage for our operation does not require a facility to produce LNG with a natural gas feed. Also, costs are not feasible to create a natural gas feed at the airports.





With this, we move on to the storage operations of the LNG.


2.1 Storage Operations

According to Spectra Energy Corp. (2012), one of the Fortune 500 companies in North America which meet the need for LNG by “gathering and processing, transmission and storage, and distribution”, the usual reason why storage has to be done is in order to meet the seasonal requirements. During the times when demand is low, LNG is injected into storage tanks where it can be more accessible to the aircraft. In order to keep it in liquefied form, the storage facility must be able to maintain a temperature of less than -73oC and down to a sub-cool temperature of -161oC   before LNG is loaded into the aircraft fuel pods.

Therefore, there must be a freezer installed to make that possible. Northeast Gas Association (2012) describes how LNG is delivered, saying that through the process of compressing the gas (oftentimes Methane) by LNG liquefaction at -260oF, it is possible to transport LNG. Converted into Centigrade by using the conversion formula, that would be as follows:

F = (C x 1.8 ) + 32

-260o = 1.8C + 32

C = (-260 – 32) / 1.8

C = -162.22o



The computed sub-cool temperature is about the same figure (-161 o C) mentioned earlier. At that temperature, LNG is compressed and can be transported to a storage facility. Linde Engineering (2012) clarified further what actually happens to the volume of gas. At a liquefied state, LNG will be utilizing only 1/600 of the volume needed to accommodate the same natural gas.

Some equipment (e.g. Cryogenic Loading Arms and Truck Loading Arms) will be needed to move LNG from the Storage Tanks to the transport tanker and from the tanker to the Aircraft. In addition, pumps and safety devices will be necessary.

2.2 Delivery of LNG

LNG is usually delivered by sea for safety and security reasons coming from an outside source. However, once it is in the Storage Tanks in liquid form, these will be pumped out into tanks to be transported to the aircraft refuelling station.  The LNG in loaded tanks will then be pumped out and loaded into the aircraft fuel pods while the LNG is at very low temperature.

For safety purposes, the refuelling station should be sheltered from too much heat and should be far from other sources of heat or fire.

  1. Evaluation of relative safety of the Ground system

In Australia, there are “policies and regulations that support a safe and secure LNG Industry” (Foss, NichelleMichot PhD. 2006., p.31). Four layers of protection are required. The first involves the primary container. This is the LNG Storage Tank. The 2nd precaution is that if during the transfer from Storage Tank to the aircraft, there might be a leak, the places of leakage should be isolated from communities or populated areas and can be contained by the 3rd layer.

The third is the use of Emergency Shutdown Devices (ESD), alarm systems, and safety measures in case of an unexpected failure. Finally, the 4th layer concerns the policy of operating far away from places or properties that can burn. The LNG Industry is said to have a low probability of disaster except in cases of terrorism. And even with acts of terror, because the LNG operations are separated and located far from people and properties, little damage can be inflicted on the public. (Foss, NichelleMichot PhD. 2006.p.6)


  1. Evaluation of energy consumption of Ground System

Aside from the Storage Tank to receive, maintain, and reserve the LNG for eventual use, there is the cost of power to cool the contents at the desired temperature.

Cost of energy storage was determined by Schoenung, Susan PhD (2011, p.18) to be depending on the type of technology utilized and “the planned operation and especially the hours of storage needed” for the utilization of the storage facilities. The cost is $ / kWh as of 2011 was computed to be as follows:

(Source: Schoenung, Susan PhD 2011. Energy Storage Systems Cost Update. Sandia Report SAND2011-2730. Sandia National Laboratories for US Dept. of Energy, April 2011.p.13)

(Source: Schoenung, Susan PhD 2011. Energy Storage Systems Cost Update. Sandia Report SAND2011-2730. Sandia National Laboratories for US Dept. of Energy, April 2011.p.14)

(Source: Schoenung, Susan PhD 2011. Energy Storage Systems Cost Update. Sandia Report SAND2011-2730. Sandia National Laboratories for US Dept. of Energy, April 2011, p.15)




  1. Estimation of capital and operating cost of the ground system

As of August 15, 2012, cost of constructing the Plant Site with the LNG Storage Tanks of Chevron which would have a capacity of 180,000 cubic meters (m3) would reach $ 45.3 billion according to GCaptain Staff (2012). A picture of that project is shown below.

(Source: GCaptain 2012. As Australian Dollar Gains Strength, Gorgon LNG Project Will Cost Chevron $8 billion more than Anticipated. Viewed September 14, 2012, @ <>)

But there won’t be a Plant Site. Only the LNG Storage Tanks and Piping Facilities will be present.

In 2006, the cost of constructing one LNG Storage tank was estimated to be $100 million for a 160,000 m 3 or about $400 / m3 (Arup Energy 2006).

But by 2012, according to Tugwell, Paul (2012) at Bloomberg, the cost of creating one LNG Tank in Greece has risen to $ 150 million for one with 95,000 m3 or an average of $ 1,578 / m3. That is nearly a 300% increase in the cost in 6 years or an average increase of 50% per year.

Thus, the planned LNG Storage Tank with the desired capacity of 292,494 or rounded off to 300,000 may require two separate LNG Storage Tanks with each having a capacity of 150,000 m3. Assuming that by the time it starts, the cost will increase by 50%, the average cost will be about $2,367 / m3 and the total cost can reach $710,000,000 just to have adequate storage capacity at the airport.

Add to this the cost of energy and manpower to maintain the Storage Tanks, Transport Tanks, and the total cost will be known. If solar panels will be utilized along with batteries, the cost of having the right quantity of solar panels and batteries will have to be added in the computation. These cost factors also depend on the specific location where the operations will take place and when it will start to operate.


  1. LPG


  1. Background Information

As a part of this project to use LPG as an alternative jet fuel to use an Airbus- A380, LPG ground system will be built. Generally, LPG processing technology units involve are: oil and gas exploration (sub-sea, top site, onshore), bulk separation, gas treatment prior to Natural Gas Liquid (NLG) extraction, Liquified Petroleum Gas (LPG), fractionation, condensate stabilisation, Carbon dioxide (CO2) gas compression & reinjection, Mono-Ethylene glycol (MEG) regeneration, etc. However, in this project, only LPG storage system will be built, meaning that the entire processing plant will never be built. This is because LPG will be bought straight from the outside seller and brought in on a tanker truck and then inject it to the storage tank to be stored and ready to be used by the Aircraft.

The simple illustration below demonstrates the system:

LPG Storage tank
LPG Fuel Distribution System





from the truck







Fuel Tank


Major facilities for Tullamarine Airport ground system.


  1. Site Location

The vacant space adjacent to the aeroplane dock edge as seen in the map below is identified as a suitable location for the proposed facility based on proximity to the airport runway.  The map is taken from the Google map, the website for both Melbourne Facility and the Perth.


Source: Google Map


Melbourne Airport- Proposed Location of the storage Set- Up

Source: Google Map

  1. Storage and Fuel Usage Calculation

The storage and usage of fuel with the number of flights is being determined, calculated and tabulated as below

Fourteen (14) number of flights per day
Fuel Usage Per Flight
Quantity Fuel- LPG
                             Density      (Kgm3) 510
                             Weight      (kg) 26043.97
                             Volume     (m3) 51.06660784
Fuel Usage per day
Quantity Fuel- LPG
Density      (Kgm3)   510
Weight      (kg) 364615.58
Volume     (m3) 714.9325098
Needed storage capacity per day (m3)
                                         Fuel- LPG                             801.3529
Needed Annual Storage capacity (m3)
                                         Fuel- LPG                            260950.4



  1. LPG Storage Tanks

LPG storage already designed by Mellcon Engineers Pty Ltd will be purchased to meet the requirements to accommodate schedule downtime, peak demand, and unscheduled downtime. The figure below shows the type.

Fig: 2 Storage tank/Bullets from Malecon Engineers Pty Ltd, New Delhi, India


The LPG storage tank will be Mounded Bullets & systems, available in a range of sizes, but the only suitable size for our requirement will be purchased having satisfied following requirements for LPG storage which methodically includes the steps:

Storage Capacity Requirements which was determined by an analysis of the LPG demand and supply cycle; Number and Size of Storage Tanks which is based on the expected operation at the airport in meeting  aircraft LPG demand; and the Type of Storage Tank which the  analysis was restricted to aboveground storage tanks, consequently the type of storage tanks is based on an economic analysis.  Furthermore, the storage tank that will be bought from Mellcon Engineers Pty Ltd is already equipped with all standard instruments and controls; Rochester gauge, excess flow check valves, safety valves, Pr. gauges, LPG Transfer compressor, Valves, Piping, Drains, Pr.Regulators, Water sprinkling system, gas leak detection system & a suitable Control panel. Optionally a Digital weighing scale can also be supplied as an integral part. That means almost entire distribution facilities equipment come together.

According to their design, the LPG storage tanks in standby-plant service will be steel, non-refrigerated pressure vessels. Tanks are available in many sizes for both aboveground and underground service but suitable size according to the capacity demand according to the technical specifications will be purchased.

Technical Specifications
Standard design As per ASME Sec VIII Div 1 Pressure Vessel Code
Pressure design 18.0  bar
Design Temperature(atm) range -20 / +50 °C
Hydraulic Test Pressure 25.0 bar
Joints efficiency 0.85
Radiographs 100%
Manhole 1
Flanging # ASA 300
Gates 8
Thickness 6 mm to 50 mm
Diameter 600 mm to 3000 mm
Length Up to 18 Meters Long
Weight 3000 To 80000 Kgs
Tank Annual Capacity 326188 m3 (20% allowance for gas expansion)


» Accessories» Materials of Construction» Design Codes Followed

» LPG Transfer Pump /               » SA 515 / 516 Grade 60 / 65 / 70

A compressor» SA 537 Class I / Equivalent.

» LPG Vaporizers                         » SS 304 / 304 L

» Pressure reducing station» SS 316 / SS 316 L

» Emergency shut off valve» SA 387 P 11 Class II

» Gas Leak Detection System

» Water Sprinkler System

» Rochester Gage / Roto gage

» Excess Flow check valve



There is various safety fittings Malecon Engineers supply for the storage tank they are grouped as below. The only one that suits each group will be bought.

» Pressure Relief Valves
  • Single Port
  • Multi-Port
» Excess Flow heck Valves
  • Threaded Type
  • Sandwich-Type » Level Gauges
  • Fixed Liquid Level Gauge
  • Roto-Gauge
  • Simple Magnetic Level Gauge
  • Rochester Gauge
  • Magnetorestrictive Type
  • Servo Level Gauge
  • Reflux Type
  • DP Type
» Alarms
  • High and Low-level Alarms
  • High-Pressure Alarm »Temperature and Pressure
  • Pressure Gauge and Transmitter
  • Temperature Gauges and Transmitter
» Remote Operated Valves
  • Pneumatically activate, with or without manual override
  • Solenoid Valves
  • Motorized Control Valves
  1. Processing Facility

The processing facilities include those that could be required to subcool the LPG prior to loading of the aircraft fuel tanks in the event analysis herein performed indicated such subcooling to be worthwhile. We will design a plant to reduce the hydrocarbon dew point of a natural gas stream to allow it to be safely introduced into a gas transmission system. and also design a plant to economically recover liquefied petroleum gases (LPG) where quantities are sufficient to consider this. Maintenance flexibility will also be considered and incorporated in the design process.


  1. Distribution Facility

The distribution facility includes the piping, pump systems, and hydrants required to deliver the LPG, from the storage tank to the aircraft fuel tanks. This will be designed and constructed in a proper step-by-step manner with an aim to reduce fuel head loss and distribution losses. Long run maintenance flexibility will also be considered and incorporated in the design process.


  1. Horsepower requirements/electrical energy required to run the system

Minimum horsepower requirements per standard CF/day of gas liquefied directly affect both initial capital cost and operating costs. The horsepower for the system is/will be based on proprietary data for energy consumption rate for individual equipment bought; for like refrigerant conditions or operating conditions. As expected, stages of expansion and cooling will exhibit a higher power consumption. Finally, Malcolm Engineers is pretty much each process vendor or supplier of all systems as stated above so their product energy rating will make up almost entire horsepower.



Arup Energy 2006. Liquefied Natural Gas – Market Challenges and Opportunities for Innovation.Touch and Oil Gas. December 2006. Viewed September 14, 2012 @ <>

Foss, NichelleMichot PhD. 2006.LNG Safety and Security.Texas, USA: Energy Economics Research, Bureau of Economic Geology CEE. Viewed September 14, 2012 @ <>

GCaptain 2012. As Australian Dollar Gains Strength, Gorgon LNG Project Will Cost Chevron $8 billion more than Anticipated. Viewed September 14, 2012 @ <>

Linde Engineering 2012. Liquefaction of Natural Gas.Viewed September 14, 2012 @ <>

Northeast Gas Association 2012.The Role of LNG in the Northeast Natural Gas (and Energy) Market.August 2012. Viewed September 14, 2012 @ <>

Schoenung, Susan PhD 2011. Energy Storage Systems Cost Update. Sandia Report SAND2011-2730. Sandia National Laboratories for US Dept. of Energy, April 2011.

Spectra Emergy 2012.About Us: At A Glance. Viewed September 14, 2012 @ <>

Tugwell, Paul 2012. Greece’s Desfa Calls for Bids to Build Third LNG Storage Tank. Bloomberg, March 14, 2012. Viewed September 14, 2012 @ <>


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