Baker Hughes Co. and Technip Energies have set the groundwork to develop next-generation modular LNG systems to bring plug-and-play facilities online more quickly.

The memorandum of understanding would allow the two global giants to jointly work on modular solutions for up to 2 million metric tons/year (mmty) of liquefied natural gas. 

The modules would complement Baker’s existing 1 mmty LNG Mid-Scale Modular Solution and Technip’s 2 mmty-plus SnapLNG solution. The end result could increase LNG capacity and accelerate the time to market to build out infrastructure. 

“The combination of our expertise, modular approach and references will enable shorter delivery times and better affordability,” Technip CEO Arnaud Pieton said. “Importantly, it reflects Technip Energies’ commitment to deliver low-emission liquefaction solutions through electrification and the elimination of fugitive emissions to accelerate the energy transition”

Baker CEO Lorenzo Simonelli called the agreement a “milestone” in the company’s long-term working relationship with Paris-based Technip. “LNG will continue to play a key role to solve the energy trilemma, and the ability to accelerate time-to-production through modularized solutions can be a differentiator.”

Baker has provided plug-and-play modules for LNG for more than a decade. Technip’s SnapLNG is a compact, fully electrified solution that now provides 2-3 mmty.

Multiple Needs, Multiple Solutions

In a recent conversation with NGI, Baker’s Alberto Matucci discussed how the LNG market is growing and why getting faster solutions is key. Matucci, based in Florence, Italy, is vice president of Gas – Equipment & Projects, Industrial and Energy Technology. He is responsible for commercial to product development to commissioning of all new equipment projects worldwide, from LNG to onshore, offshore, pipeline and downstream.

It’s “too early to say” when the joint project by Baker and Technip may be commercially available, Matucci told NGI, but work is underway. 

“With this specific agreement, we are looking at the global onshore LNG market segment,” he said. “It’s important to bear in mind that we recognize there are multiple needs within the LNG segment – and therefore potential solutions – including modularized ones, which as Baker Hughes, we have provided for over 10 years now and cater to different sized projects.”

Baker’s perspective “is informed by 30-plus years in LNG,” said Matucci. “We see that demand exists for both modular and mega trains that range from 10 mmty to 30 mmty. This is not an either/or proposition.”

Every LNG project has “unique characteristics,” he noted. Baker’s role “is to work with the customer to identify the most suitable solutions that will meet their needs, leveraging our extensive portfolio of diversified LNG solutions.”

That said, the Houston-based oilfield services company is “seeing a lot of interest in modular solutions as they present some compelling advantages when it comes to reduced risks and minimal installation requirements.”

The surge in energy demand “requires solutions that are more readily installed and online,” Matucci said.

Asked how much time could be saved using advanced technologies versus building greenfield projects, the executive said “from inception to operation, modular solutions are faster than traditional stick-built approaches, up to two years less” using Baker’s Mid-Scale Modular solution.

“In this collaboration with Technip, we have not determined a particular time frame but anticipate a similar duration,” he said. “As for efficiency, the smaller footprint and lighter weight offered in modular solutions means we use more compact compression, and this can improve efficiency by several percentage points” versus mega trains.

“The beauty of these modular designs is that they can be scaled to a specific customer’s need, so the timeframe for each will vary. We are seeing a lot of interest in these solutions as they present some compelling advantages when it comes to reduced risks and minimal installation requirements.”

Simonelli in the quarterly conference calls has said the macro outlook for LNG has grown increasingly uncertain. Matucci noted that global natural gas and LNG prices remain elevated, “as a multitude of factors increase tensions on an already-stressed global gas market. 

“Europe’s surging demand for LNG has redirected cargos from other regions and created an exceptionally tight global market that could get even tighter in 2023. This situation has resulted in record-high LNG prices but has also slowed down switching from coal to gas in some developing countries,” he said.

“We believe that significant investment is still required over the next five to 10 years to ensure natural gas’ position as a key part of the energy transition. However, while the current price environment is attractive for new projects, this is also a pivotal time for the industry, with price-related demand destruction occurring in some markets and LNG developers facing inflationary pressures and a higher cost of capital for new projects.”

The landscape, said Matucci, “may be shifting in favor of established LNG players with the scale, diversity and financial strength to navigate the risks and uncertainties. Those with brownfield projects and projects that utilize faster-to-market modular designs may be particularly advantaged in the coming years.”