Monetization of natural gas is a critical need for the energy industry as a whole, a flagship technology for Halliburton, and a particular area of expertise for KBR. Natural gas development includes liquefied natural gas (LNG), ammonia, and olefins — ethylene and propylene.

LNG is particularly important, as it represents the only current commercially feasible way of using stranded gas — natural gas where pipeline infrastructure does not exist and is not practical. This is the case in most of the world, especially Asia, where there are large natural gas reserves to be developed.

KBR has built, either alone or in joint ventures, the majority of the world’s LNG complexes. It is currently working on large-scale projects at Bonny Island, Nigeria, as well as in Malaysia, Algeria, Qatar, Australia, Egypt and the Americas. Technological advances in LNG are typically efficiencies in the engineering of large plants and equipment rather than breakthroughs in process technologies. In this area, KBR’s breadth of experience and roster of specialists put it in an excellent position to continue capturing a major share of future LNG engineering and construction business.

KBR has established a position as one of the preferred providers due to its reputation for helping clients deliver the lowest cost LNG. In 2000, KBR added to its position with a series of design firsts for the Ras Laffan Onshore Facilities Project in Qatar, including built-in reliability and maintainability in the design. KBR engineers also developed a new way of designing LNG liquefaction plants using a new dynamic simulation program that eliminates the inherent over-design that is characteristic of traditional methods.

Another aspect of natural gas use is in converting natural gas feedstocks into ammonia for fertilizer. In this area, KBR’s technologies account for more than half the worldwide production capacity. Recent innovations in this area include KAAPplus™ — a complete, state-of-the art process technology that combines the KBR Advanced Ammonia Process (KAAP), the KBR Reforming Exchanger System (KRES™), and the Braun Purifier.

In olefins, KBR’s Selective Cracking Optimum Recovery (SCORE™) process, combining portions of KBR’s and ExxonMobil Chemical’s ethylene technologies, will be licensed to Thai Olefins. This plant, which will be built in partnership with Chiyoda of Japan, will be the first new ethylene project in Asia since the recent recession. A letter of intent was signed in 2000, and project completion is scheduled for 2004.

This year also saw the mechanical completion of the ExxonMobil Olefins Project in Singapore. KBR and Chiyoda provided the basic design, engineering, procurement and construction for this 800,000-ton-a-year ethylene plant under a lump-sum contract which, along with ancillary work, was about half the $2 billion Singapore Chemical Plant. This project uses the ExxonMobil low-residence-time cracking technology that is now part of KBR’s SCORE offering.

In propylene, KBR acquired an exclusive license in 2000 from Lyondell for its Superflex^SM technology. Superflex converts low-value, low-octane light gasoline streams into propylene and ethylene by a catalytic process. This new offering responds to customer needs to find alternative uses for the feedstocks that are now producing methyl tertiary butylether (MTBE) for gasoline. As MTBE is phased out for environmental reasons, Superflex will provide customers a valuable option for upgrading these low-value products. KBR has made this technology available for license, with the first contracts expected in 2001.

The production of clean fuels is another area of focus for proprietary technology. Increasingly stringent standards in the U.S., European Union and elsewhere require refiners to continuously improve particulate and gaseous emissions.

The MAKfining™ Premium Distillate Technologies introduced in 1999 by the MAKfining™ Alliance were selected by OMV Deutschland GmbH for production of premium diesel fuel in its refinery at Burghausen, Germany. When completed, the plant will process atmospheric distillate and gas oil feedstocks to produce high-quality diesel fuel with less than 10 ppmw sulfur content. KBR performed basic engineering design for the unit as part of its work with the Alliance.

In 2000, KBR formed an alliance with Fortrum Oil and Gas Oy of Finland to offer NExOCTANE, a new process technology for high-octane gasoline. NExOCTANE solves the problem of how to eliminate MTBE in gasoline production. The new technology allows refiners to convert their existing MTBE production facilities to isooctane, a cost-effective replacement for MTBE. KBR will offer this technology for license and will provide engineering and continuing technical support to licensees.