Fluor has been involved in the gas processing business from the earliest days in the post-war era, first in North America and then around the world. The industry transitioned from cycling plants to recover liquids and sulfur, through the use of refrigerated lean-oil absorption plants for NGL recovery, and on to sales gas. We were at the forefront of turboexpander technology with the first unit at San Antonio, Texas and the first refluxed expander project at Judy Creek, Alberta. We developed and designed many acid gas removal units, including our own Fluor Solvent (PC) and Econamine (DGA), along with projects utilizing pretty much every other solvent on the market. Additionally, we designed and built many Sulfur Plants around the world, and continue to be a leading provider of Sulfur Recovery, Tail Gas Treating and Sulfur degassing technologies, including our Goar-Allison D’GAASS offerings. Along the way, we learned a lot as the industry developed, about corrosion and contaminants and other operational surprises that impact production.
As a global contractor, we see a vast diversity in gas producers and target markets, and appreciate that the technologies and project execution methodologies that work best in one region many not apply elsewhere. In recent years, we have successfully executed large scale, very sour gas projects in the Middle East, where we have proven out our Improved Econamine process that can remove mercaptans from high pressure sour gas streams. But this isn’t applicable everywhere, as similar scale sour gas production is not favoured by market drivers in other regions. We have developed patented deep-cut NGL recovery processes, with a current focus on the US, Mexican and Canadian markets. Furthermore, market drivers vary widely even in the three aforementioned highly integrated economies regional differences exist.
In each nation, producers and midstream companies are considering varying project scales, product slates, and project timelines - one size definitely does not fit all. Throughput and NGL recovery drivers vary widely within North America. However, we are beginning to see some convergence. In Canada, low ethane/propane prices are driving capital investments in the petrochemical industry, along with the construction of propane export terminals on the Pacific Coast. These investments will change the dynamics of the ethane and propane market, and we are starting to see the Canadian market shift towards the US markets in terms of maximizing propane and ethane recoveries. The timing of increased demand for propane and ethane will vary across the major North American markets, making flexible plant designs capable of minimizing pre-investment yet optimizing future retro-fits very attractive.
Time to market is another key consideration within gas processing and midstream markets. Complex oil and chemicals projects, such as polymer production facilities, in-situ oil sands, or refining, have project timelines of 3 years or more. Larger scale LNG projects can be even longer. The complexity and scale of these projects often requires time to implement optimizations of configuration, modularization and sourcing strategies to reduce capital and/or operating costs. The upstream gas and midstream business in North America generally has smaller project sizes with more competition for capital investment that drives a much shorter time to market, with projects generally requiring completion within two years or less. These shorter durations do not mean that these projects cannot be optimized - rather the optimization approaches are different. Intercompany relationships and partnerships are common, capitalizing on differing skill sets and areas of expertise, to drive the most appropriate solutions. What has become clear is that smaller gas processing and midstream projects (<200 mmscfd) in Canada and the US cannot be executed the same way larger scale projects are executed. Cost structures, partner capabilities, trade considerations (tariffs), and labour market considerations, to name a few, have significant consequences on project success.
On our most recent Canadian gas plant program, we completed four 200 mmscfd gas processing trains in Northern British Columbia. We were ably assisted by good partners in the fabrication yards and at site, and delivered these projects well ahead of schedule and about 10% under the budgeted cost. A key aspect of project success was having transparent relationships between all stakeholders, including the owner, prime contractor, subcontractors and suppliers, and employing agile management techniques to drive results-oriented behaviors. This fostered a dynamic environment not encumbered by contractual compliance, but instead rooted in stakeholder alignment on project goals; informed decisions were made, and impediments quickly removed. We learned that not all work processes and innovations developed on larger projects are suited to smaller projects with shorter schedules. However, we are also learning that lessons from large project execution can revolutionize upstream and midstream gas project(s) execution as we employ more extensive modularization, and a tightly integrated and global supply chain, and benefit from highly data-centric execution.
We continue to seek out opportunities to apply our extensive project experiences and adopt new and different execution models, to support the growing natural gas and natural gas liquids markets.