Property risk assessment for liquefied natural gas liquefaction plants

Liquefied Natural Gas (LNG) liquefaction plants have become increasingly important as natural gas is exported from the United States of America to markets world-wide. Downtime of any part of the process train (gas turbine, compressors, controls, etc.) due to failure of one or more of its components can result in high costs. The total cost of loss is of great concern to the LNG industry as it moves towards increased LNG exports with required operational efficiency, and downtime reduced to a minimum. This paper reports the application of a methodology of property risk assessment, providing insight into the use of PML (Probable Maximum Loss) and MFL (Maximum Foreseeable Loss) risk measures. Major sources of risk are analyzed, drawing from both technical literature and operational information on typical large LNG liquefaction plants. The outcome of this paper is an estimation of the economic loss associated with property risk for two hypothetical LNG liquefaction plants, based upon sample plants located in North America and characterized by different capacity. These plants represent recently built and commissioned plants and are chosen to take advantage of current technology and plant capacities.