Reducing the economic risk of lng tank construction under conditions of fluctuating resource prices

Fluctuating resource prices affect the costs of the materials used in the construction of LNG (liquid natural gas) tanks. In this paper, methods based on the field experience of the writers for the reduction of the cost of LNG tanks in general and in-ground LNG tanks in particular are discussed. Of the various components of the construction cost, the price of steel materials is a significant contributor. Using a newly defined cost impact index, the costs of construction of different types of LNG tanks are compared. Further, by considering actual examples of the construction of in-ground tanks, important issues relating to the use of steel materials are identified and, by using a cost reduction index, recommendations are made for the reduction of the cost risk during fluctuations in resource prices.