Woodside Energy Limited v ExxonMobil Upstream Research Company

[2014] APO 53

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Woodside Energy Limited v Exxon-Mobil Upstream Research Company [2014] APO 53

Patent Application:                2005264908

Title:Scalable capacity liquefied natural gas plant

Patent Applicant:                   Exxon-Mobil Upstream Research Company

Opponent:  Woodside Energy Limited

Delegate:  Rhys Munzel

Decision Date:  25 July 2014

Hearing Date:  30 April 2014, in Canberra

Catchwords:  PATENTS – manner of manufacture – methods of designing a processing plant – whether identification of single inventive concept is necessary for fair basis, clarity and succinctness

Representation:  Patent applicant:  Watermark, Perth

Opponent:Mr Andrew Fox of Counsel assisted by Dr Marguerite Port of McCarthy Port Patent and Trade Mark Attorneys

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:                2005264908

Title:Scalable capacity liquefied natural gas plant

Patent Applicant:                   Exxon-Mobil Upstream Research Company

Date of Decision:                   25 July 2014

DECISION

The opposition succeeds on the grounds that:

·claims 7, 39, 40, 45, 76 and 78 lack novelty;

·claims 1-8, 10-19, 22-49, 51-61, 68-82 lack inventive step; and

·claims 2-4, 10-37, 40, 41, 74, 76, 79 and 81 define subject matter which is not a manner a manufacture.

I allow the applicant eight weeks from the date of this decision to propose amendments to overcome these deficiencies.

I award costs according to Schedule 8 against Exxon-Mobil Upstream Research Company. 

REASONS FOR DECISION

Background

1. Patent application 2005264908 in the name of Exxon-Mobil Upstream Research Company (“Exxon”) was examined and accepted by the Commissioner, and subsequently opposed by Woodside Energy Limited (“Woodside”). As Exxon requested examination before 15 April 2013 substantive amendments of the Patents Act brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 do not apply to this opposition.

2. Woodside and Exxon each rely on evidence provided by several declarants. Woodside’s evidence in support was provided by: Dr Marguerite Port; Dr David Fletcher; and Dr Michael Johns. Exxon’s evidence in answer was provided by: Dr John Stone; Carol Kane; and Costa Tsesmelis. Woodside’s evidence in reply consists of additional declarations from: Dr Fletcher; Dr Johns; and Dr Port. Some declarants provided multiple declarations and many declarations included annexed exhibits. I will refer to the evidence where appropriate by, for example, referring to Dr Fletcher’s first declaration as “Fletcher 1” and Dr Fletcher’s first exhibit as “DF-1”.

3. The hearing occurred on 30 April 2014. Mr Andrew Fox of counsel and Dr Marguerite Port attended on behalf of Woodside while Exxon relied on its written submissions.

   Onus

4. In proceedings such as these before the Commissioner the onus rests with the opponent to clearly establish its case. In establishing that any ground of opposition succeeds, the Commissioner should be “clearly satisfied that the patent, if granted, would not be valid” (F. Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 at [67]).

   Grounds of Opposition

5. The opponent relied on the following grounds of opposition:

   • Lack of fair basis
   • Lack of clarity / succinctness
   • Lack of full description
   • Lack of novelty
   • Lack of inventive step
   • Lack of a manner of manufacture

   The nature of the invention as described

6. Before construing the specification, I note what Middleton J said in Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214, 100 IPR 451 at [139]:

   “It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense.  The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent.  From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date.”

7. The invention described broadly relates to hydrocarbon fluid processing plants, in particular natural gas liquefaction plants (“LNG plants”).

   The background to the invention

8. Natural gas, a fuel source predominately formed of methane and found in subterranean reserves, is often liquefied to reduce volume for transport. Liquefaction of natural gas occurs in an LNG plant. In its background section the application teaches that:

   • established configurations of LNG plants involve construction of parallel stand-alone trains which are each comprised of all the individual processing units necessary to liquefy a stream of feed gas; and

   ·train size can depend heavily on: the extent of available natural gas resources, technology, and available funds.

9. Fig. 1 of the specification is not described as relating to traditional LNG plant design. However I understand its division of process sections to correspond with the established art. I will therefore explain my understanding of the known natural gas liquefaction process with reference to Fig. 1.

10. In the disclosed LNG plant feed gas from a natural gas field first passes through a slug catcher 30 to handle the flow of gas from the gas field. The buffered gas flow passes (in this case via gas preheater 32) to an acid gas removal contactor 33 to remove acid gas impurities such as carbon dioxide and hydrogen sulphide. Water is also removed from the natural gas in the dehydration unit 33. Heavier hydrocarbons such as ethane are removed from the dehydrated natural gas in the deethaniser 36. Those heavier hydrocarbons are processed in the fractionator 40 to recover liquid petroleum gas (“LPG”), potentially for sale. The natural gas exiting the deethaniser 36 passes to the liquefaction unit 37 where cryogenic heat exchangers liquefy the natural gas. Helium and nitrogen are removed from the liquefied natural gas (“LNG”) in the nitrogen rejection and helium recovery unit 39. The LNG is then ready for transport.

11. The specification teaches each processing stage of established plants are designed and constructed to match the desired plant or train processing capacity. As set out at paragraph [0070] of the specification:

    “Prior design philosophies have focused on designing and constructing the most costly piece of equipment just large enough to meet the desired plant processing capacity and then designing the other equipment and units to match the capacity of the most costly piece of equipment.”

12. Two problems with traditional LNG plant design, in particular train type design, are identified:

    ·trains are designed to operate at a selected natural gas feed processing rate and are not normally designed to operate at significantly reduced processing rates.

    ·large LNG plant projects expose developers to substantial commercial risk due to the large initial capital costs.

    The aim of the invention

13. The aim of the invention is perhaps best set out at paragraph [0066], which states:

    “One embodiment of the invention includes a design concept for a hydrocarbon fluid processing plant, for example an LNG liquefaction plant, that it is both cost effective at any plant capacity and that it is expandable. In alternative embodiments of the invention a portion of the plant can be completed and commissioned while an expansion portion of the same plant can be constructed. Such an arrangement has the advantage that hydrocarbon production can be started earlier than would be allowed had the entire train been constructed at once, therefore improving the overall project economics. This type of arrangement alters the concept of a train in favor of a larger, more integrated plant that can more easily take advantage of economies of scale.”

    I also consider paragraph [0070], as quoted above, to be relevant to determining the aim of the invention.

14. As could be noted from the above, the aim of the invention would appear to depend on the particular embodiment of the invention under review. Most generally the invention aims to improve upon one or more of the: cost effectiveness, flexibility, and expandability of train style LNG plants.

    Summary - the nature of the invention

15. While it is not stated in such terms I identify the invention to relate to the design, operation and expansion of LNG plants having process equipment arranged and configured to certain criteria.

    The common general knowledge of LNG plant design

16. I initially note the evidence is broadly consistent with the background information provided in the application, in that:

    • LNG plants typically comprised parallel stand-alone trains; and
    • train size depended heavily on: natural gas resources availability, technology, and funds.

    Design during the initial conceptual phase

17. Design of an LNG plant begins once availability, quantity and composition of the gas is determined. The plant designer then prepares the most economical design to process that gas. Consideration at this stage is given to initial capital and operating costs. Higher initial capital costs are often weighed against later operational savings (Fletcher 1, at paragraph 64).

    Determining a capacity for a train

18. In determining the capacity of a train, designers would seek to provide the compressor / compressor driver units and the cryogenic heat exchangers at their most efficient, i.e. at their “maximum processing efficiency” – as discussed below (Fletcher 1, at paragraphs 66 and 71; Stone 1, at paragraph 7.2.3; Stone 2, at paragraphs 18 and 21; Fletcher 4, at paragraph 60). Determining the size of these units effectively sets the capacity of the train.

    Determining the capacity of components within the plant

19. Once the capacity of the compressor / compressor driver units and cryogenic heat exchangers is determined the designer will consider design of other individual components. Gas composition is an important design factor, particularly in relation to condensate and acid gas recovery, and for fractionation units (Fletcher 1, at paragraph 95). Gas flow-rate through an acid gas removal unit is altered by the removal of CO₂ and H₂S. Similarly flow-rate though a dehydration unit is reduced by the removal of water. Taking these factors into account components are required to provide sufficient capacity to provide purified natural gas to the cryogenic heat exchangers at the designated flow-rate.

    Oversizing components

20. Components such as the compressor units and the cryogenic heat exchangers represent a large portion of the overall capital costs of an LNG train. As a result there is “no desire” to oversize them (Fletcher 1, at paragraph 46). An oversize of 3-5% may be provided as a design error margin (Fletcher 1, at paragraph 72). Less costly components can be oversized at relatively little extra expense, and provide flexibility during operation. It is, for example, preferable to routinely run less expensive oversized equipment below capacity than it is for the cryogenic heat exchangers. Less expensive equipment is therefore typically designed at 10%, running to 15% overcapacity (Fletcher 1, at paragraphs 46 and 72; Fletcher 2, at paragraph 40). 

    Splitting a process step between parallel components

21. Designers recognise that it is generally more expensive to split a process between multiple component units (Fletcher 1, at paragraph 64). Designers will split a stream between units where:

    • increased flexibility is required in case of breakdown of one unit (Fletcher 1, at paragraph 73; and at paragraph 49 – in relation to electricity generators);
    • a single unit would be so large that transport and installation is difficult (Fletcher 1, at paragraph 93 – in relation to a CO₂ absorber column);
    • regeneration of equipment such as dehydration units is required (Fletcher 1, at paragraph [31]);
    • a manufacturer has not produced a unit of that capacity before, and therefore reliability is a concern (Fletcher 2, at paragraph 93 – in relation to cryogenic heat exchangers);

    ·because it is found to be cheaper to purchase install multiple units to provide the same capacity as a larger unit (Fletcher 2, at paragraph 32); or

    ·to allow for flow flexibility where a single larger unit would not effectively process lower flow-rates (Fletcher 2, at paragraph 65 - in relation to condensate recovery units).

    Sharing equipment between trains

22. Significant cost savings may be made by sharing facilities, such as fixed infrastructure including control rooms, LNG storage tanks, ship jetties and power generation. In an example of sharing process equipment, refrigeration strings may be shared between trains (Stone 1, at paragraphs 4.16 and 5.1.4; Fletcher 4, at paragraphs 30, 31 and 45). I note in particular Dr Stone’s declaration, provided in relation to a separate opposition proceeding (Dr Stone’s declaration being annexed to Dr Fletcher’s fourth declaration as DF-14):

    “sharing LNG refrigerant compression facilities between cryogenic heat exchanger units was known and documented as of September 2002 and is described in at least US 6747744 (sic – this would appear to be US 6647744), which describes the concept of supplying cooling refrigerants as a "utility" to the cryogenic heat exchangers.”

    and (Stone 1, at paragraph 5.1.4)

    “Significant cost reductions may be achieved by sharing facilities, such as refrigerant compression strings and other facilities between a number of trains (using the "two trains in one" concept).”

    Other equipment which is known to be shared between trains include: the slug catcher, condensate recovery units and fractionation sections (Fletcher 1, at paragraph 57).

    Expanding an existing plant

23. It is desirable to expand a pre-existing plant having, for example, under-utilised infrastructure and a general trend existed to expand existing plants with additional trains (Fletcher 1, at paragraphs 49 and 52). This may require expansion of some fixed infrastructure, such as power generation (Fletcher 1, at paragraph 56).

    Debottlenecking an existing train

24. When a plant is operational it is considered generally difficult to change capacity through changes in hardware and the focus is generally on optimising existing equipment (Fletcher 1, at paragraph 76). Plant operators will first seek out restrictions limiting output and/or causing instability and typical ‘debottlenecking’ steps taken include: increasing pipe sizes; optimising internal components of equipment such as distillation columns to reflect actual over assumed gas composition (Fletcher 1, paragraph [0078]); and adjusting refrigerant composition (Fletcher 1, at paragraph 86).

    Modular construction and engineering

25. The term “modular” may apply to two principles in plant design. “Modular construction” relates to the preassembly and testing of sections of a plant in a factory environment (Fletcher 1, at paragraph 121), while “modular engineering” relates to an overall plant design methodology which seeks to arrange equipment onsite into modules to improve configuration, thereby minimising equipment and operational costs (MP-12; Fletcher 4, at paragraph 45).

    Construing the claims

26. The correct approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70, 81 IPR 228 at [118] – [120]:

    "the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear  …  while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole  …  it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification …  terms in the claim which are unclear may be defined or clarified by reference to the body of the specification".

27. The specification contains 82 claims. Claims 1-9, 68 and 73 are drafted as independent claims, while claims 78-82 are rely on references to the description and drawings. The claims are reproduced in Annex A. I initially note that the specification provides an extensive dictionary of terms as annexed in Annex B. I will briefly discuss dictionary defined terms as they become relevant. Where I introduce a new dictionary defined term I will underline it.

    Independent claims

28. Claim 1 defines:

    “A method of producing liquefied natural gas using a LNG liquefaction plant, wherein the LNG liquefaction plant includes a plurality of process unit module types, said plurality of process unit module types including at least a first process unit module type having one or more first process unit modules and a second process unit module type having two or more integrated second process unit modules, wherein further at least one of said first process unit modules and at least one of said second process unit modules are sized at their respective substantially maximum processing efficiency, said LNG liquefaction plant including two or more integrated process unit module types, said method comprising producing liquefied natural gas from said LNG liquefaction plant.”

29. Dictionary definitions apply to the following (abbreviations as provided will be applied):

    ·Process unit module (“PUM”) constitutes a single grouping of one or more pieces of equipment that together complete or support a process step. For example, a cryogenic heat exchanger unit constitutes a grouping of equipment which completes the process step of cooling natural gas from near ambient temperatures to cryogenic temperatures (as discussed at paragraph [0057] of the specification). An acid gas removal unit may constitute a grouping of equipment which completes the process step of removing acid gas from natural gas. I note the definition does not necessarily require equipment within the module be arranged or installed together, potentially as a prefabricated unit (Tsesmelis 1, at paragraph 4.7.2; Stone 2, at paragraph 11). Rather, the equipment may merely be grouped in the sense of them working together to perform a process step. I note the definition is quite broad in that sense that it could include any piece of equipment supporting a process step – and I would suggest most pieces of equipment in an LNG plant are provided to support a process step – or it may include a far broader grouping of equipment depending on how one defines “process step”.

    ·Process unit module type (“PUMT”) is defined as “the total amount of a particular type of process unit module”. I consider the definition as referring to the categorisation of PUMs such that reference to a PUMT is a reference to any and all PUMs of that type within the plant.

    ·Maximum processing efficiency (“MPE”) defines the PUM capacity size that minimizes its cost per unit of capacity. Cost can be selected from construction cost, operating cost, lifecycle cost, or combinations thereof. For example, to determine the MPE of a gas dehydration unit on the basis of construction cost, one would size the unit to minimise the construction cost per unit amount of gas dehydrated. The maximum processing efficiency of the gas liquefaction unit might therefore be determined to be X cubic metres of LNG produced per day. Exxon submitted that the definition of how cost may be calculated is non-exhaustive and that cost may be calculated by other measures than construction cost, operating cost and lifecycle cost. However I consider that use of the term “can” in the definition is intended to limit how the person skilled in the art can calculate cost.

    ·maximum feed processing capacity – (“MFPC”) is used in the definition of “integrated” discussed below. It represents the capacity of a particular process unit module type in terms of feed entering the LNG plant (i.e. natural gas from the field). If a plant has a PUMT “A” which when running at full capacity allows a plant to process 100 units of feed, then the maximum feed processing capacity of A is 100 units. This is the case regardless of whether the overall plant actually has a capacity of less than 100 units because another PUMT “B” has a capacity of 90 units.

    ·the term “integrated” is used to define a PUMT comprising multiple PUMs in parallel with each PUM providing a portion of the PUMT’s MFPC, and wherein each PUM is able to either:

    o   process any portion of the LNG plant feed, LNG plant product, or any LNG plant intermediate stream;

    o   complete any particular processing step in the LNG plant; and/or

    o   complete any portion of a particular support service for a PUMT, a plurality of PUMTs or equipment types;

    without regard to the respective source of the feed, product, intermediate stream, process step, PUMT or equipment type.

    In essence, this definition requires that the multiple PUMs are not merely side by side or “stand alone” but rather share a common input and/or output. That is, flow from a common input may be diverted through any integrated PUMs, or any integrated PUM may provide a support service to another PUMT or equipment type. An example of this might be a group of electricity generators cumulatively providing power to a number of PUMTs.

1. Returning to claim 1 – it defines operation of an LNG plant where at least two PUMTs comprise integrated PUMs, at least one of those PUMTs comprises a PUM sized at substantially its MPE, and a further PUMT – which may be the other PUMT comprising integrated PUMs – comprises at least one PUM sized at substantially its MPE. Claim 73 defines an LNG liquefaction plant per se having a configuration the same as that of claim 1.

2. Claim 2 defines a method of designing an LNG plant where at least two PUMTs comprise PUMs sized at substantially their respective MPEs.

3. Claim 3 defines designing the expansion of a pre-existing LNG plant including: determining a first pre-existing PUMT requiring additional MFPC to increase the existing plant maximum feed processing capacity; and designing an expanded LNG liquefaction plant, said design including addition to the first pre-existing PUMT of one or more PUMs sized at substantially its MPE.

4. A dictionary definition applies to the term:

   • plant maximum feed processing capacity – (“PMFPC”) means the maximum feed processing capacity of the entire LNG plant

5. There is no requirement that the additional PUM of claim 3 is integrated with existing PUMs of the LNG plant. The claim would therefore allow for the addition of PUMs within a new standalone train.

6. Claim 4 defines a method of operating an LNG plant. The LNG plant comprises at least two PUMTs having PUMs sized substantially at their respective MPEs, one of those PUMTs comprising integrated PUMs. The defined method of operating the plant involves determining how many PUMs in each PUMT are necessary to meet a certain LNG production rate and operating the plant to meet that production rate accordingly. I consider this could for example include determining that plant should operate at maximum capacity and therefore commissioning all PUMs to meet that rate.

7. Claim 5 defines a method of operating a plant when configured in a second phase. The first phase of the plant comprises a plurality of PUMTs, at least one PUMT having a PUM sized at substantially its MPE. The second phase of the plant requires the installation of at least one additional PUM to one or more of the first phase PUMTs, wherein the additional PUM(s) is integrated within that PUMT.

8. Claim 6 defines:

   A method of producing liquefied natural gas, including:

   a)   providing an LNG liquefaction plant comprising a plurality of product sized process unit module types, said LNG liquefaction plant having a first PMFPC;

   b)   expanding the MFPC of at least one but less than all of said product sized process unit module types to achieve a second PMFPC that is 10 percent or greater than said first plant maximum feed processing capacity wherein the expanding includes adding at least one additional PUM; and

   c)   producing LNG in said LNG liquefaction plant after initiation of said expanding step b).

9. A dictionary definition is provided for product sized process unit module type (“PSPUMT”), which is defined as a PUMT whose capacity is determined by the LNG product stream leaving the LNG plant. Therefore, if the desired LNG production rate would traditionally affect sizing of a process unit module or otherwise affect overall capacity of a process unit module type, then that PUMT is a PSPUMT.

10. Expanding the MFPC of at least one but not all PSPUMTs would exclude from the subject matter claimed, for example, expansion by construction of a further completely stand-alone train. Claim 6 does not necessarily require the additional PUM to be integrated with any existing PUMs of its PUMT. The extra PUM could for example be provided in series instead of parallel.

11. Claim 7 defines a method of operating an LNG plant in first and second phases similar to claim 5. However, the first phase LNG plant of claim 7 does not require a PUM of any PUMT to be sized at substantially MPE. Claim 7 instead requires that the additional PUM of the second phase LNG plant is constructed while the first phase LNG plant produces LNG.

12. Similar to claims 5 and 7, claim 8 defines expanding the capacity of an LNG plant by providing at least one additional integrated PUM to a PUMT. Unlike claim 5 the additional PUM need not be sized at substantially MPE and unlike claim 7 the PUM need not be constructed while the plant is operating. Instead claim 8 specifies the PUMT is specified to be the refrigerant compressor service type of a refrigerant circuit.

13. Claim 9 defines a method of expanding an LNG liquefaction plant having a plurality of PUMTs, each PUMT comprising at least one PUM, the method including: providing at least one second PUM for each existing PUMT, thereby providing a second phase LNG liquefaction plant; and integrating one or more of said original PUMs with one or more of said second PUM for two or more respective PUMTs.

14. The wording of claim 9 requires the installation of an additional PUM for each (i.e. all) PUMTs found within an existing plant. I have discussed above what could constitute a PUM or PUMT. Claim 9 therefore requires installation of an additional unit for all processing and process support equipment, including utility units and slug catcher units.

15. Claim 68 defines an LNG liquefaction plant, including one or more high construction cost PSPUMTs and one or more low construction PSPUMTs, at least one of said low construction cost PSPUMTs having a MFPC that is at least 110 percent of the MFPC of at least one of said high construction cost PSPUMTs.

16. To broadly state the nature of the invention claimed: at least one low cost PUMT is sized at a capacity at least 10% higher than would be required by strict comparison to the capacity of a high cost PUMT. The underlined terms are provided the following dictionary definitions:

    ·High construction cost product sized process unit modules types are product sized process unit modules types that represent more than 10% of the construction cost of an LNG plant.

    ·Low construction cost product sized process unit modules types are product sized process unit modules types that represent less than 7% of the construction cost of an LNG plant.

    Omnibus claims

17. In relation to the omnibus claims 78-82 I note that paragraphs [0008]-[0017] provide consistory statements that generally conform to claims 1-9. The omnibus claims variously refer to an LNG plant, and methods of operating, designing and expanding an LNG plant as shown in the Figures. Reviewing the description and Figures as a whole I find no limitations are necessarily placed on which PUMs are to be integrated or sized at MPE or on how PUMs are to be necessarily configured. Even when referring to the examples provided in the Figures (in particular Fig. 1) the description makes clear that specific equipment may or may not be included or may take on various other configurations as known in the art. Such being the case I find that omnibus claims 78-82 vary little in scope from the independent claims.

    Party Submissions on Construction

18. Each party provided submissions on the construction of the claim set generally which I will now address.

    Do the claims represent a departure from train design principles?

19. Exxon has submitted that the invention broadly claimed represents a departure from train design principles, which it submitted are abandoned in favour of a modularity approach. Any departure from train design principles must be found in the words and construction of the claims themselves. While the claims include terms like “process unit module” and “process unit module type” such terms are to be accorded the provided dictionary meaning. I have discussed the meaning provided for “process unit module” and note again that it may relate to any piece or group of equipment supporting or completing a process step within a plant. Therefore, as a general note, inclusion of a plurality of process unit modules in a plant does not itself represent a departure from train design principles.

    Is sizing equipment to minimise cost for a required capacity the same as sizing to minimise cost per unit capacity?

20. I will address this question by way of example. It is known, when designing a gas treatment unit to treat 100 units of gas per hour (“uph”), to split a gas stream between two 50 uph units where it is cheaper than installing a single 100 uph unit. In such a case the designer is minimising cost to match the required capacity. This is not necessarily the same as sizing a unit to minimise cost per unit capacity. In sizing a unit to minimise cost per unit capacity a designer might determine the ideal size to be a 75 uph contactor. In this scenario the installation of that contactor may not be viewed as ideal as it requires: the installation of a 25 uph contactor to match the required capacity; or providing two 75 uph contactors and therefore providing more capacity than required under existing train principles.

    Clarity, succinctness and fair basis

21. Woodside submitted that each claim of the specification lacks clarity and succinctness and/or is not fairly based due to the inherent difficulties in ascertaining the nature of a single general inventive concept from a fair reading of the specification as a whole. I will consider this submission applying the established tests relevant to each ground.

    Are the claims fairly based?

22. In discussing the test for fair basis, the High Court in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 at [69], 217 CLR 274 at 300 (“Lockwood v Doric”) approved of the words of Gummow J in Rehm Pty Ltd v Websters Security System (International) Pty Ltd (1988) 81 ALR 79 at 95:

    “the question is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification.”

23. Regarding Woodside’s submission, I am not aware of any requirement that the matter described in the specification is to be limited to any single inventive concept. So long as there is a real and reasonably clear disclosure in the description of what is claimed in a claim under review I do not consider it strictly relevant that the description discloses additional matter. In the present description Woodside was able in evidence and submissions to clearly ascertain and delineate concepts disclosed and claimed (Fletcher 2 generally). While Woodside submitted that these concepts were not related to each other, that is not a requirement for fair basis. Woodside has not established that any claim lacks fair basis.

    Are the claims clear?

24. A claim is lacking in clarity if a third party could not ascertain whether an act would fall within the scope of the claim (Monsanto Co v Commissioner of Patents (1974) 48 ALJR 59 at 60). A lack of precise definition in claims is not fatal to their validity so long as they provide a workable standard suitable to the intended use (Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Ltd [1980] HCA 9 at [46]; [1980] HCA 9; (1980) 144 CLR 253 at 274).

25. Regarding Woodside’s submissions, I am not aware that it is a requirement for clarity that each claim be bound to a single inventive concept. Such a requirement is related to unity under s 40(4) of the Act, which is not available as a ground of opposition.

26. I note that evidence supplied by Woodside (Fletcher 3 paragraphs 22-84) demonstrates that a person skilled can give meaning to each of the independent claims and is further able to determine how the scope of each of those claims would differ. As a matter of law I was able to provide a construction to each independent claim as I have set out above. Woodside has not established that any claim lacks clarity.

    Are the claims succinct?

27. Bancroft's Application (1906) 23 RPC 89 has recognised that claims may lack succinctness under two circumstances:

    (a)A claim may be drafted with such prolixity that its meaning cannot be determined

    (b)A claim set may comprise such a number of repetitious claims to render the claim set as a whole not succinct.

28. Woodside does not submit that any particular claim is drafted with undue verbosity. Neither does Woodside submit that the claim set is unduly repetitious. Woodside instead submits that the scope of the claims vary, making it difficult to identify a single inventive concept. The present scenario is therefore similar to that of AmericanNational Can Company v W.R. Grace & Co.-Conn. and Trigon Packaging Systems (NZ) Limited [1996] APO 23, where the delegate stated:

    “I consider it is the right of an applicant to draft his claims so as to protect every aspect of the invention that he has disclosed. This can lead to a large number of claims, and potentially even a large number of independent claims… One reason for the number of claims is that there are two types of inventions (which I previously referred to as types A and B) …I consider that the claims of each type of film structure are not repetitive, and the nature of the inventions of the two types can be determined without excessive difficulty. I am thus of the view that it has not been established that the claims are not clear and succinct.”

    Woodside has not established that the claims are not succinct.

    Full Description

29. Woodside submitted that the claims lack full description. Section 40(2)(a) requires that a complete specification: describe the invention fully (provide an “enabling disclosure” of the invention), and that the applicant describe the best method known of performing the invention (“best method”) (see Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426 at paragraph [164]). I will consider these requirements separately.

    Is there an enabling disclosure?

30. As set out in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 at [25]; (2001) 207 CLR 1 at 17 the test for full description is whether:

    “the disclosure enable[s] the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty.”

31. Woodside referred to evidence provided by Exxon (Stone 1, at paragraph 8.1.1(d) – my emphasis added):

    “The methods and plant described and claimed in the Application has significant operational and economic merit and application in the LNG industry. The primary economic advantage is that all parts of the plant are designed at their individual optimum economic design point.”

32. Woodside submitted that, if the invention lies in providing an LNG plant as set out by Dr Stone, the invention has not been fully described and a best method of performance has not been provided. I note that Dr Stone is a listed inventor for the present application and it seems his evidence on this point is affected by his involvement in the specification’s preparation (Stone, at paragraph [6.3.3]). Dr Fletcher did not construe any claim as requiring all parts of an LNG plant be designed at their optimum economic design point (Fletcher 4, at paragraphs [83]-[98]). I do not consider Dr Stone’s statement to be helpful in determining whether any claim is fully described.

33. I refer to Dr Fletcher’s evidence (Fletcher 4, at paragraph 101 – when referring to the relevance of a chemical engineering graduate’s understanding of the art):

    “No-one would expect the students to approach the task of designing an LNG plant (or any other plant) with the same level of detail or confidence as a more experienced person like myself or Dr Stone. However, in my view the claims of the Application do not require detail or confidence”

    and (Fletcher 4, paragraph [113]):

    “the claims of the Application cover broad design method steps which do not include any requirement to have access to accurate data based on actual experience.”

34. I agree that the claims relate to broad principles of plant design. These are principles that would be understood by the person skilled in the art without the need for detailed exemplification. Woodside have not established that any claim of the specification is not enabled by the body of the specification.

    Is there a best method?

35. The requirement for a best method supplements the requirement to describe the invention fully (Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426, at paragraph [164]). The best method need not be identified as such in the complete specification (Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 at 77 [374]). In Firebelt Pty Ltd v Brambles Australia Ltd (2000) 51 IPR 531 at 544 [51]-[53], Spender, Drummond and Mansfield JJ stated:

    “The requirement of s 40(2) of the Act is that the patentee is required to give the best information in his power as to how to carry out the invention. That requirement is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention offered, with reference to drawings of specific mechanisms or structure or examples of specific process conditions or chemical formulations, depending on the field of the invention and the nature of the invention to be conveyed. It is necessary to have regard to what is the invention claimed…”

36. Woodside submitted that the lack of worked examples of a plant detailing: flow rates, capacities, efficiencies and costs resulted in a lack of best method of performance. As I have discussed above, the nature of the present invention relates to broader principles of LNG plant design. Exxon is therefore required to provide a best method of practising those broader principles. While it may have been useful to provide such further information, I do not consider that Exxon is necessarily required to delve into more detailed steps of plant design or operation, or exemplify taught principles when applied to a particular set of economic and physical conditions. Woodside have not established that a best method of performing the invention claimed in any claim is not provided.

    Novelty

37. Woodside relied on the following prior art documents for the purposes of novelty:

    D1Marcin, B. G. and Schulte, M. M., “Modular Technology Matures: Modular-Engineered Process Plants”, Chemical Engineering Progress, American Institute of Chemical Engineers, November 1982, Pages 37-42

    D6Joko Soeryanto IR. and Triyanto, A. IR., “Availability and Capacity Improvement of the Arun LNG Plant”, Liquefied Natural Gas X, Session II, Paper 1, May 25-28 1992, Kuala Lumpur, Malaysia.

    D7Soemantri, H. and Untung, N., “LNG Plant Design – A Wish List from an Operating Company Point of View”, Eleventh International Conference of Liquefied Natural Gas, Paper 2.12, 3–6 July 1995, Birmingham, United Kingdom, 1995

    D12Tarakad, R. R., Durr, C.A., and Hunt, R., “Modular Engineering - Applications in Liquefaction Plant Design”, Gastech 86 LNG/LPG Conference Proceedings, November 25-28, 1986, Hamburg, Germany, pages 403-408, 1986.

    D31Australian Patent Application 2003275396A1 published 23 April 2004.

    D1

38. D1 is a journal article broadly introducing modular engineering design concepts to be applied to LNG plant design. It describes modular engineering as a methodology for achieving the lowest cost plant within all design constraints. Cost reductions are achieved by: more economical equipment, less bulk materials, and reduced plot area. The methodology begins with the development of the process flow diagrams (‘PFDs’) where the following steps are followed:

    • PFDs are arranged into block diagrams and/or process functional grouping of equipment into modules and submodules;
    • Where appropriate, two or more equipment pieces are integrated into blind modules;
    • The most advantageous equipment type and configuration are selected;
    • The process block modules are located for the most effective and economical overall modular plot plan arrangement;
    • The most effective local equipment arrangement within each process module and related busy piping interconnections are developed.

39. At page 41 D1 notes:

    “Parallel equipment and parallel streams may be proposed for such reasons as: to achieve the required throughput where adequate capacity equipment is not commercially available or transportable as a single unit; to provide for partial or full capacity during maintenance; and to allow for large plant capacity turndown.”

1. D1 thereafter notes:

   “Single large equipment pieces are almost always less costly to purchase and install than two or more smaller pieces. Generally, doubling of the equipment capacity will only increase cost 50% over a single, half capacity item. Use of parallel equipment and streams must be examined to achieve the best balance between plant cost and perceived plant reliability and versatility. Single train concept should be the reference basis for alternate parallel facilities considerations.”

2. While D1 provides a broad introduction to modular design principles I am not satisfied it provides more than a list of considerations to which a plant designer may have regard when designing a plant. In particular, I am not satisfied it provides clear and unmistakeable directions for a plant design comprising: PUMTs comprising PUMs sized at substantially MPE, integration of PUMs within multiple PUMTs, expansion of an existing plant by addition of further PUMs, or providing a low cost PSPUMT at 10% greater maximum feed processing capacity than a high cost PSPUMT. Woodside has not established that any claim lacks novelty in view of D1.

   D6

3. D6 discloses details of the Arun LNG plant in Sumatra, in particular how the plant has been operated and expanded since first going online in 1979. The plant began with three LNG trains in 1979, expanding to five LNG trains in 1984 and six in 1986. A further expansion occurred in 1988, in which an “integrated LPG unit installation” was placed on line.

   Plant layout

4. Fig. 1 of D6 provides a block diagram of the then current Arun LNG plant:

   The plant consists of four main units:

   ·The condensate recovery unit – gas from the gas field is sent to the condensate recovery unit where heavy hydrocarbons are separated, stabilised and sent to storage. The flash gas from the condensate recovery unit is sent to the gas treater unit

   ·The gas treater unit – gas is routed to six parallel gas treater units to remove: Hg, CO₂ and H₂S. The treated gas is then cooled and dehydrated in dryer beds to remove moisture. The dried gas is sent to a scrub tower to remove heavy components (C₂+). The heavy components are fed to two LPG fractionation units while the light overhead gas flows to the liquefaction unit (optionally via the three LPG recovery units).

   ·The LPG recovery unit – the light overhead gas from the scrub tower can go directly to the liquefaction unit or to a common header for distribution to three parallel LPG recovery units. If the light overhead gas is sent to the LPG recovery units the recovered LPG is sent to an LPG Fractionation Unit to separate propane and butane. The natural gas recovered from the LPG recovery units is sent through a common header to the liquefaction units.

   ·The gas liquefaction unit – the gas to be liquefied passes though one of six parallel units. LNG from the six trains flows through a common header to storage tanks.

   Plant modifications / expansions

5. D6 discusses the various efforts to improve plant availability and capacity since 1979. Efforts of particular interest include: the integrated LPG unit installation; installation of a second parallel Mercury Removal Vessel; installation of an operational Standby Main Heat Exchanger; and installation of a manifold from the treated gas outlets from all LNG trains.

   Discussion

6. Reviewing the plant layout as set out in Fig. 1 the disclosed Arun comprises: six integrated gas treater unit modules; six integrated liquefaction unit modules; three integrated LPG recovery units. While I note from the evidence that it would have been a matter of routine to size the cryogenic heat exchangers and compressor / compressor driver units at substantially MPE, this is not sufficient to deem it inherent to D6. Regarding other equipment, such as the gas treater modules, I consider it likely that they were sized to match the capacity of the liquefaction unit modules and would not necessarily have been sized substantially at their respective MPEs.

   Comparison to the claims

7. Regarding the independent claims:

   ·     Claims 1-5 and 73 – it is not established that any PUM is sized at substantially MPE, therefore the claims are novel.

   ·     Claim 6 – it is not established that each expansion involved the addition of a PSPUM for some, but not all PSPUMTs, therefore the claim is novel.

   ·     Claim 7 – plant availability during the years 1984 and 1986 were 94.84% and 93.70% respectively. I therefore infer that the additional liquefaction units and gas treatment units were constructed while the plant was in operation. Claim 7 is not novel.

   ·     Claim 8 – D6 does not disclose an integrated refrigeration circuit. Claim 8 is novel.

   ·     Claim 9 – it is not established that expansion involved the addition of at least one PUM for all PUMTs of the pre-existing plant. Claim 9 is novel.

   ·     Claim 68 – D6 does not disclose the comparative capacity of, for example, the gas treatment units and the liquefaction units. Claim 68 is novel.

   I am satisfied that claim 7 lacks novelty in view of D6.

8. Claims 39, 40, 44-50, 74, and 76 rightly append off claim 7 (to explain my meaning of “rightly” – while for example, claim 10 formally appends off claim 7, it defines “said substantially maximum processing efficiency” for which no antecedent basis is found in claim 7. I therefore do not construe claim 10 as appending off claim 7). Regarding these claims:

   ·     claims 39, 40 and 76 – the LPG recovery units may be viewed as a third integrated process unit module type. Claims 39, 40 and 76 are not novel.

   ·     claims 44-47 – I am satisfied that placing the additional liquefaction and gas treatment units in service at least partly occurred while LNG was being produced. It is however not clear to be whether they were completely placed in service while the plant operated or whether the plant was shut down for a short while. Claim 45 is not novel. Claims 44, 46 and 47 are novel.

   ·     claims 48-50 – it is not established that the additional liquefaction units were sized at substantially MPE. Claims 48-50 are not novel.

   ·     claim 74 – D6 discloses an internally integrated PUM, by including: parallel beds for mercury removal.

   I am satisfied that appended claims 39, 40, 45, 74 and 76 are not novel in view of D6.

9. In so far as claim 7 is not novel I further find that omnibus claim 78 (relating to a method of operating an LNG plant) is also not novel.

   D7

10. D7, similar to D6, relates to operation of the Arun LNG plant and outlines a “wish list” of LNG plant design parameters based on experience operating the LNG plant. It provides a simplified block diagram of the Arun LNG plant similar to that provided in D6 and refers to: condensate recovery unit, gas treating unit, the LPG recover unit and the gas liquefaction unit.

    The liquefaction process

11. D7 provides further detail as to the liquefaction process. The liquefaction process uses a Propane / Multi-Component Refrigerant (MCR) cooling cycle with Air Products and Chemical Inc. (APCI) spiral bound main heat exchanger. One General Electric Frame 5 gas turbine is used for the propane refrigeration system and two similar gas turbines are used for the MCR refrigerant system. It appears to me that each heat exchanger was provided with one of these propane / MCR systems.

    Utility sparing

12. D7 also provides further detail regarding the utilities systems. The utilities systems consist of: electric power generation, a low pressure steam system, a sea water cooling system; nitrogen production systems, and instrument air. An “N+2 sparing philosophy” was used in design of major utility systems such as the electricity generators and the steam boilers. This philosophy allows one piece of equipment to be out of service for maintenance and still keep a spare unit available for immediate use if required. Therefore the electrical power plant consisted of eight generators for the LNG system and 3 generators for the LPG system. Each of these generators are “GE Frame V Single shaft gas turbine driven”.

    Discussion

13. Similar to D6, I am satisfied that D7 discloses an LNG plant comprising: six integrated gas treater unit modules; six integrated liquefaction unit modules; and three integrated LPG recovery units. Additionally, D7 discloses that the plant comprises eight integrated LNG electricity generators and three integrated LPG electricity generators. For the same reasons as for D6, I am not satisfied it is inherent to that any PMU was sized at substantially MPE.

    Comparison to the claims

14. As D7 provides a largely similar disclosure to D6 it generally discloses information anticipating similar claims. The one exception is that D7 does not disclose the plant availability during the years 1984 and 1986, making it difficult to necessarily infer from D7 alone that the expansion units were constructed while the existing plant operated. Based on the above discussion I am not satisfied that any claim lacks novelty in view of D7.

    D12

15. D12 is similar to D1 in that it provides an introduction to modular engineering. It describes modular engineering as a methodology for achieving the lowest cost plant commensurate with satisfying design and operation requirements. Similar to D1, D12 discloses that the steps taken to realise modular engineering objectives are:

    • Elimination of equipment;
    • Combining two or more pieces of equipment into a single integral unit;
    • Improved equipment configuration and arrangement; and

    ·Appropriate arrangement of individual process modules.

16. D12 relevantly discloses:

    “Another feasible concept is to design the process modules such that a single acid gas removal system serves two or more trains, a single dehydration system serves to or more trains, and so on. In the extreme case, this will be equivalent to combining two or more process trains into one, with the use of parallel multiple equipment being confined to areas where equipment size is the limiting factor…Fig. 1 illustrates one possible arrangement. In the conventional scheme the three trains are completely independent. In the alternative modular scheme, the feed preparation modules of the individual trains are unified into a single common process module, and the three liquefaction trains are reduced to two. Determining the number of trains and the optimum arrangement of the process modules is an exercise that must be undertaken for each project. Factors like the anticipated production build-up and the possibility of future expansion will often dictate how the process modules are to be defined.”

17. Fig. 1 is reproduced below:

18. Similar to D1, while D12 discloses principles to apply to LNG plant design and further elaborates on the advantages and disadvantages of particular process equipment, it does not provide clear and unmistakeable directions necessarily resulting in any plant or plant design defined in the claims. From the above cited passage D12 does speculate on providing at least two PMUTs with integrated PMUs. However it does not clearly and unmistakably disclose a plant comprising: multiple MPUTs with MPUs sized at substantially MPE, expansion by addition of further MPUs, or providing a low cost PSPUMT at 10% greater maximum feed processing capacity than a high cost PSPUMT.

19. Woodside have not established that any claim lacks novelty in view of D12.

    D31

20. D31 is a patent document entitled “Modular LNG Process”. The field of the invention refers to

    “a method for liquefying variable selected quantities of light hydrocarbon gas to produce liquefied light hydrocarbon gas using plant facilities that comprise an initial light hydrocarbon gas liquefaction launch train with common shared facilities, which may be expanded by adding plant equipment associated with one or more optional expansion phases.

    D31 notes that previously known expansions of an LNG plant involved adding further trains duplicating all facilities required for each train (i.e. stand-alone trains). D31 instead teaches that some facilities are shared between the pre-existing launch train and subsequent modular expansions (at paragraph [0023]). The shared facilities are designed so as to either: be sized to handle the increased capacity expected by the subsequent expansions; or allow for expansion to that capacity (at Summary of the Invention).

    D31 provides three examples of shared facilities:

    • The acid gas absorption system – a shared acid gas absorption system comprises multiple integrated absorber vessels and a regenerator vessel sized to accommodate subsequent additional integrated absorption vessels as required by planned subsequent expansions (at paragraph [0020]).
    • The gas dehydration system – the gas dehydration system may be designed allowing for enough dehydration vessels to be integrated together to service both the initial train and subsequent expansions (at paragraph [0021]).
    • The liquefaction system - a gas stream that has been treated in an acid gas removal unit may be distributed to the initial cryogenic heat exchanger 15 and/or to subsequently provided expansion heat exchangers 115 and 215.

    Discussion

21. D31 teaches away from stand-alone train expansions toward a modular approach where facilities are shared between the existing launch train and subsequent expansions. Units may be added to the shared facilities during expansion, or the shared facilities may be initially constructed to handle the later expanded capacity. D31 discloses a theoretical rather than existing plant. I am not satisfied the person skilled in the art would infer anything about the sizing of particular pieces of equipment, in particular whether they would necessarily be sized at substantially MPE.

22. While D31 generally discloses that shared equipment may be initially provided at a capacity to suit later expansions, it does not provide guidance in the way of examples or the like of when one may elect this approach over allowing for subsequent expansion in the shared equipment. Clearly this approach could only be taken for some but not all equipment in the launch train. Otherwise the launch train would itself begin at the intended expanded capacity. Nevertheless, no explicit guidance is provided on whether one might take this approach for the liquefaction systems and not the dehydration systems, and/or vice versa. It is therefore difficult to determine anything specific on which units of the launch train may be initially provided at overcapacity.

    Comparison to the claims

23. Regarding the independent claims:

    ·     Claims 1-5 and 73 –the size of any PUM is not established. Therefore the claims are novel.

    ·     Claim 6 –As I have discussed above, D31 does not provide a clear and unmistakeable disclosure of which shared facilities would be initially built at a capacity to allow for later expansion, and which facilities would be later expanded. Such being the case I am not satisfied D31 discloses expanding the capacity of some but not all product sized PUMTs within the disclosed launch train.

    ·     Claim 7 – there is no disclosure that additional modules are constructed while the plant operates. Claim 7 is novel.

    ·     Claim 8 – D31 does not disclose an integrated refrigeration circuit. Claim 8 is novel.

    ·     Claim 9 – D31 does not clearly and unmistakeably disclose the addition of PUMs for each PUMT of the launch train. Claim 9 is novel.

    ·     Claim 68 – 31 does not disclose the comparative capacity of, for example, the gas treatment units and the liquefaction units. Claim 68 is novel.

    Woodside have not established that any claim lacks novelty in view of D31.

    Inventive Step

24. An invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art (s 7(2)).  A document is prior art for this purpose if “a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant” (s 7(3)). 

25. In Wellcome Foundation Ltd v V.R. Laboratories (Aust.) Pty Ltd [1981] HCA 12 at [45], 148 CLR 262 at 286 Aickin J stated the test for inventive step as:

    “whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not.”

26. Woodside submitted that claims lacked inventive step in light of: the common general knowledge alone; as well as in view of each of D1, D6, D6, D12 and D31. Woodside also submitted that claims lacked inventive step in light of

    ·D17      Sawchuk, J., et al., “BP’s Big Green Train: Benchmarking Next Generation LNG [Liquefied Natural Gas] Plant Designs”, GASTECH 2002 Conference, 13 October 2002 (Paper No. PS2-4; 15pp)

    The problem to be addressed

27. I have previously discussed the general state of the art and identified the general aim of the invention to be: to improve upon one or more of the: cost effectiveness, flexibility, and expandability of traditional train style LNG plants.

    In light of the common general knowledge alone

    I note I have discussed the established common general knowledge above. This discussion should be taken into account when considering my conclusions on inventive step.

    Independent claims

    ·     Claims 1, 2 and 73 - the evidence establishes that it is a typical goal to size the compressor / compressor driver units and the cryogenic heat exchangers at substantially their MPE to determine the capacity of an LNG train. The evidence also establishes that it is common to share utilities facilities such as electricity generator banks between LNG trains. Reviewing the entirety of the evidence I am satisfied that the person skilled in the art would as a matter of routine size electricity generators substantially at their MPE in the same way as they would size compressor drivers (e.g. gas turbines) at their MPE (see for example “Optimisation of Power Generation” in D17 referenced below). Regarding the sharing of compressor strings between trains, Dr Stone’s evidence repeatedly acknowledges this is known in the art and would be done to reduce costs. Compressor strings shared between trains would routinely comprise a number of integrated compressor / compressor driver units which each in part support the cooling of the cryogenic heat exchangers. The evidence therefore establishes that the person skilled in the art would as a matter of routine arrive at the subject matter of claims 1, 2 and 73 using traditional design principles.

    ·     Claim 3 - it is known and common in the art to add additional trains to a pre-existing LNG plant in order to increase the processing capacity of the plant. Additional trains are designed consistent with principles I have set out above. Claim 3 lacks an inventive step.

    ·     Claim 4 – I am satisfied that a person skilled in the art would be led to operate a plant at full capacity by operating all required equipment (thereby maximising the offset of capital costs – Fletcher 2, at paragraph 12). Claim 4 lacks an inventive step.

    ·     Claims 5 and 8 – I am satisfied it was a matter of routine to provide electricity to a pre-existing plant via a bank of integrated generators. I am further satisfied that it was a matter of common general knowledge to increase capacity by installation of additional trains and, where the installation of further trains meant the plant required additional electricity, it would be a matter of routine to install additional generators integrated with the existing generators. A similar approach would apply to a shared compressor string and the requisite compressor / compressor driver units. Claims 5 and 8 lack an inventive step.

    ·     Claim 6 - claim 6 requires expanding the capacity of a plant by at least 10%, comprising the addition of PUMs to at least one but not all pre-existing PSPUMTs. While it may be established that some pre-existing PSPUMTs would be routinely oversized by 10%, this approach has an established purpose in terms of maintaining flexibility within the plant. I am not satisfied that the person skilled in the art would be led to remove that flexibility by addition of equipment in other process areas of the plant. Claim 6 does not lack an inventive step in view of the common general knowledge

    ·     Claim 7 – I have previously discussed with regard to claim 5, that I consider it known to provide additional generators to a group of integrated electricity generators and/or to provide additional compressor / compressor drivers to a shared refrigeration string when constructing an additional train for during expansion. I further consider it would be obvious to construct these units while the original plant was operational in order to minimise operational losses during an expansion (Fletcher 1, at paragraph 59; Fletcher 3, at paragraph 109). Claim 7 lacks an inventive step.

    ·     Claim 9 - the evidence does not establish that it would be obvious to install at least one additional PUM for each PUMT found in a plant. The evidence suggests to me that this would involve installation of PUMs that would be redundant in view of existing facilities.

    ·     Claim 68 – the evidence establishes that claim 68 lacks an inventive step. It is known, in order to provide flexibility to an LNG train, to provide lower cost equipment at above 10% overcapacity in comparison to higher cost equipment. It is relatively cheap to provide overcapacity to less expensive equipment and allows the train to continue running at capacity where the less expensive equipment is not running at optimum efficiency.

1. In view of the common general knowledge I am satisfied that independent claims 1-5, 7, 8, 68 and 73 lack an inventive step.

   Appended claims

2. Claims 10-37, 39-41, 44-61, 69-72 and 74-77 rightly append off one or more of claims 1-5, 7-9, 68 and 73. Considering these claims:

   ·Claims 10-12 – the person skilled in the art would be led to try sizing the cryogenic heat exchanger, refrigeration compressors units, and electricity generators at a size that minimises life-cycle cost per unit capacity to balance and minimise capital and operational costs.

   ·Claim 13 – all LNG plants comprise a multitude of process unit module types, the number depending only on how one elects to categorise processes and equipment.

   ·Claim 14 – it is obvious, in view of the common general knowledge, to “at least” match the respective overall capacities of the refrigeration string and the cryogenic heat exchangers and the electricity generators.

   ·Claim 15 – it is inevitable, being two different pieces of equipment, that the cost per unit of maximum feed processing capacity of the cryogenic heat exchangers would not be the same as that of the compressor / compressor driver units.

   ·Claim 16-18 – I have discussed how it would be obvious to provide a number of, for example, electricity generators integrated and in parallel. It would be a matter of routine to provide each generator at the same size and configuration and at substantially MPE (as exemplified in D7 and D17).

   ·Claims 19-21 – each of the cryogenic heat exchangers, compressor drivers, and electricity generators would respectively comprise equipment types. Regarding claims 20 and 21, I construe the claims as requiring at least some equipment be equally configured across the PUMTs. I do not consider this to be necessarily obvious. Claim 19 lacks an inventive step.

   ·Claims 22-26 – based on the evidence the electricity generators (e.g. gas turbines) are a high cost item. It is nevertheless standard practice to allow for spinning reserve (Fletcher 1, at paragraph 49) which would mean that respective maximum feed processing capacities differ by more than 10-15 percent to that of the compressor / compressor driver units and cryogenic heat exchanger units.

   ·Claims 27-31 – As I have noted above, I am satisfied it is obvious to provide a refrigeration string which is shared between multiple parallel LNG trains, each LNG train necessarily comprising its own cryogenic heat exchanger. Such a refrigeration string would comprise compressors arranged in parallel.

   ·Claims 32-34, 58-60 –modular, plate-fin, and spiral wound are each known (Tsesmelis 1, at paragraph 2.1.3; D17 – as cited below) and well established configurations of heat exchangers used in the industry. The selection of one of these types does not involve an inventive step.

   ·Claims 35, 36, 41 – in a plant comprising multiple trains it is possible and likely inevitable to take one or more trains offline. Therefore, in a plant with three trains, two trains are capable of being taken offline thereby running the plant at ⅓ capacity. I consider claim 41 includes within its scope the taking offline of a train due to servicing and maintenance. In such a case an operator would naturally continue operating other trains to provide a second plant feed processing rate (see paragraph [0005] of the application).

   ·Claim 37 – variable speed compressors and expanders are known and established equipment (Fletcher 3, at paragraph 111) such that their use in an LNG plant as claimed cannot confer an inventive step.

   ·Claims 39, 40 – as I have discussed, it would be obvious to construct an LNG plant with an integrated refrigerant string and electricity generator grouping. Other units routinely shared between trains include: the slug catcher, condensate recovery units and fractionation sections. I am however not satisfied the person skilled in the art would be necessarily led to providing these services as multiple integrated PUMs. Claim 40 lacks an inventive step. It is not established that claim 39 is lacks an inventive step in view of the common general knowledge.

   ·Claims 44-47 – I am satisfied it would be obvious to minimise or prevent offline time during plant expansion. Therefore, with regard to the installation of electricity generators as discussed above, one would attempt to prevent offline time or, if this were not possible, minimise offline time. Claims 44-47 reflect nothing more than this obvious line of thinking. I am satisfied claims 44-47 lack an inventive step.

   ·Claims 48-50 – I have discussed previously that I am satisfied it is obvious to provide additional integrated electricity generators and compressor / compressor driver units at MPE during an expansion. I am not satisfied it would be obvious to provide generators or compressor / compressor driver units which are of substantially the same configuration and yet comprise different equipment types. Claims 48 and 49 lack an inventive step. Claim 50 comprises an inventive step.

   ·Claims 51-55 – I am satisfied it is obvious to provide each compressor at substantially MPE and equally configured. Where MPE is less than the capacity of the largest available compressor unit, it would be obvious to nevertheless use MPE.

   ·Claims 56 and 57 – both electric drive and gas turbine drive are known drive systems for compressors in LNG plants (Fletcher 3, at paragraph 111). The selection of either does not confer an inventive step.

   ·Claim 61 – I refer to my discussion of claim 1 where I note that the sizing of compressor / compressor driver units, cryogenic heat exchangers and electricity generators are routinely sized at substantially their respective MPEs.

   ·Claim 69-71 – it is inherent that high construction cost PSPUMs, such as the refrigerant compressor / driver units, have a construction cost per unit of maximum feed processing capacity that is 25% greater than that of low cost PSPUMs.

   ·Claim 72 – as discussed above, it is routine practice to provide compressor / compressor driver units and cryogenic heat exchangers at MPE.

   ·Claims 74 and 75 – it is standard practice to internally integrate equipment such as acid gas removal vessels and dehydration vessels within the respective acid gas removal and dehydration units (as exemplified by D31).

   ·Claims 76 and 77 - it is not established that it would be obvious to provide an LNG liquefaction plant with two or more parallel integrated process unit modules as defined at paragraph [0071] of the present specification.

   I am satisfied that appended claims 10-19, 22-37, 40, 41, 44-49, 51-61, 69-72, 74 and 75 lack inventive step in view of the common general knowledge.

   Omnibus claims

3. In so far as independent claims 1-5, 7, 8, 68 and 73 lack an inventive step I find that omnibus claims 78-82 lack an inventive step.

   In light of the prior art documents

4. It appears agreed between Exxon and Woodside that documents D1, D6, D7, D17 and D31 could be reasonably expected to be ascertained, understood and regarded as relevant by the person skilled in the art. I again note I have discussed the established common general knowledge previously and this discussion should be taken into account when considering my conclusions on inventive step.

   D1 and D13

100. I have discussed the disclosure of D1 previously. While D1 sets out some general principles for modular plant design I am not satisfied it would necessarily lead a person skilled in the art, over and above what is understood as common general knowledge, toward an LNG plant as designed, expanded and/or operated in any particular claim. It follows that no claim lacks an inventive step in view of D1.

101. D13 speculates on sharing processing facilities between trains such as acid gas removal and dehydration systems. This approach follows through to Fig. 1 where feed preparation is provided in a single train connected to two liquefaction trains. It is difficult to infer much of the design of equipment in either the feed preparation or gas liquefaction trains, other than that they are intended to replace three traditional trains. It is in particular unclear whether any PUMT (other than gas liquefaction trains taken as a whole) would comprise integrated PUMs or PUMs sized at substantially MPE. Reviewing this disclosure of D13 I find that the person skilled in the art would consider it speculative to the extent that he or she may contemplate, but would not necessarily be led to try departing from traditional train design approaches with a reasonable expectation that it would lead to benefits in cost efficiency, expandability or flexibility. It follows that no claim lacks an inventive step in view of D13.

D6 and D7

102. The person skilled in the art designing a plant in view of that disclosed in either of D6 or D7, applying traditional principles discussed above, would as a matter of routine be led to size each of the cryogenic heat exchangers, the compressor / compressor driver units, and the electricity generators at within 10% of actual MPE to ensure efficient design practices. As a result independent claims 1-3 and 73 lack an inventive step. A person skilled in the art would further seek to run the plant at 100% of capacity and use equipment as necessary to achieve that result (for example not necessarily using the spare generators or spare cryogenic heat exchanger). As a result claim 4 lacks an inventive step. D6 and D7 each further teach that a plant may be expanded by installing units such as the cryogenic heat exchangers integrated with the existing heat exchangers. As a result claim 5 lacks an inventive step. Regarding claim 6, the disclosed expansion appears to involve the addition of extra PUMs for all PSPUMTs. As a result I am not satisfied that claim 6 lacks an inventive step. Regarding claim 7, I consider it obvious to construct at least some of the PUMs while the original plant was operating. As a result claim 7 lacks inventive step against D6 and against D7. Regarding claim 8, neither D6 nor D7 disclose expanding an integrated compression circuit. While it is known to provide a shared refrigeration string I am not satisfied one would necessarily alter the Arun plant design in this way. Regarding claim 9, I am not satisfied it would be obvious to provide additional PUMs for each PUMT, in particular for non-PSPUMTs. I am not satisfied claim 9 lacks an inventive step in view of D6 or D7. Regarding claim 68 I consider that the person skilled in the art, in view of the common general knowledge, would be led to size equipment within the disclosed gas treater units at 10% or more greater capacity than the cryogenic units with a reasonable expectation that it would improve flexibility within the plant.

103. I am therefore satisfied that claims 1-5, 7, 68 and 73 lack an inventive step in light of each of D6 and D7.

104. Claims 10-37, 39-41, 44-50, 69-72 and 74-77 rightly append off one or more of claims 1-5, 7, 68 and 73. My reasoning in relation to these claims is consistent with that I gave in relation to the common general knowledge except as follows:

·Claim 16-18 – the 6 liquefaction units each have the same capacity as I can infer from the expansion in capacity set out in Table 3 of D6. I further consider it an obvious alternative in view of the common general knowledge for D7.

·Claims 27-34 – D7 discloses that the liquefaction process uses a propane/ multi-component refrigerant cooling cycle with a spiral wound heat exchanger. One GE frame 5 gas turbine is used for the propane system and two similar turbines are used for the MCR system. Claims 27-29 lack an inventive step in view of D7. Such a system would also be considered obvious for the purposes of D6. Regarding claims 30-34, while integrated compressor strings are known, I am not satisfied one would be led to modify the disclosed compression string by sharing it across trains.

·Claims 39 and 40 – D6 and D7 each disclose integrated liquefaction units, gas treater units and LPG recovery units. Claims 39 and 40 therefore lack inventive step in view of either D6 or D7.  

·Claims 44-47 – I am satisfied it would be obvious to prevent or otherwise minimise offline time during expansion of a plant. Therefore, with regard to the installation of the additional liquefaction, gas treater, or LPG recovery units, one would attempt to prevent offline time or, if this were not possible, minimise offline time. Claims 44-47 reflect nothing more than this obvious line of thinking. I am satisfied claims 44-47 lack an inventive step.

·Claims 48-50 – It is clear from D6, and otherwise obvious in view of D7, to provide each of the liquefaction units at the same capacity. It is further obvious or inherent to configure them the same.

·Claim 72 – it is obvious to size compressor turbines and cryogenic heat exchangers at substantially MPE. The cryogenic heat exchangers are integrated.

·Claims 74 and 75 – D6 and D7 each disclose an internally integrated PUM, by including parallel beds for mercury removal.

·Claims 76 and 77 – each of the gas treater units, the liquefaction units and the LPG recovery units are “parallel integrated” in that units share a common feed and a common outlet header.

105. I am satisfied appended claims 10-19, 22-29, 35-37, 39-41, 44-49, 69-72 and 74-77 lack an inventive step in view of each of D6 and D7.

Omnibus claims

106. In so far as independent claims 1-5, 7, 8, 68 and 73 lack an inventive step I find that omnibus claims 78-82 lack an inventive step in view of each of D6 and D7.

D31

107. I am satisfied it would be obvious, in view of the teaching of D31 and the common general knowledge, to initially construct a plant having cheaper facilities such as the gas absorption system and the gas dehydration system, each comprising integrated PUMs, at a capacity to match later planned expansions; the overdesign of cheaper facilities being known as a cost effective method of providing process flexibility as well as expandability. It would, for example, be counter-intuitive to instead construct expensive facilities such as liquefaction facilities at a capacity to match later expansions. Later expansion, according to the teaching of the specification, would involve the addition of modules which would for example necessarily include liquefaction modules. It would be a matter for routine to provide a liquefaction module with a cryogenic heat exchanger and a compressor / compressor driver unit at substantially MPE, as well as the inherent electricity generators. The additional liquefaction module, sharing a common feed as taught in D31, would provide an integrated PUMT at substantially MPE.

108. As a result of the above I am satisfied that claims 1-3, 5, 6, 68 and 73 lack an inventive step in view of D31. The operation of such an expanded plant as described above at 100% capacity is further obvious such that claim 4 lacks an inventive step. Regarding claim 7 – I am satisfied it would be obvious to for example construct an expansion liquefaction unit during operation of the pre-existing plant. Regarding claims 8 and 9 – I am not satisfied it is obvious to alter the design to provide an integrated string of compressors, nor am I satisfied it would be obvious to install an additional PUM for each pre-existing PUMT.

109. Claims 10-50, 69-72and 74-77 rightly appended off one or more of claims 1-7, 68 and 73. My reasoning in relation to these claims is consistent with that I gave in relation to the common general knowledge except as follows:

·Claims 10-12 – the person skilled in the art would be led to try sizing the liquefaction units and electricity generators to minimise life-cycle cost per unit capacity in order to minimise plant costs.

·Claim 14 – it is obvious, in view of the common general knowledge, for the capacity of the electricity generators to “at least” match the respective overall capacities of the liquefaction units.

·Claim 15 – it is inevitable that the cost per unit of maximum feed processing capacity of the liquefaction units would not match that of the electricity generators.

·Claims 27-34 – Fig. 4 of D31 discloses compressor units provided in parallel, but not shared between liquefaction units. Claims 27-29 lack an inventive step. Claims 30-34 are inventive in view of D31.

·Claims 35, 36, 41 – in a plant comprising multiple liquefaction units it is obviously possible and likely inevitable to take one or more units offline. Therefore, in a plant with three units, two units could be taken offline thereby running the plant at ⅓ capacity. I consider claim 41 includes within its scope the taking offline of a unit due to servicing and maintenance. In such a case an operator would naturally continue operating other units to provide a second plant feed processing rate.

·Claim 38 – providing a plant with an overall capacity of more than 4 million tons per year is a matter of routine design choice and does not confer an inventive step.

·Claims 39, 40 – the expanded plant would comprise more than three integrated PUMTs applying the teaching of D31.

·Claims 42, 43 – the disclosed PSPUMTs include the acid gas removal units, dehydration units and liquefaction units comprising cryogenic heat exchangers and compressor / driver units.

·Claims 48-50 – it would be obvious to, for example, provide liquefaction units at the same size and configuration as existing units. Regarding claim 50 – I am not satisfied it would be obvious to provide units which are of substantially the same configuration and yet comprise different equipment types. Claims 48 and 49 lack an inventive step.

·Claim 72 – be a matter for routine to provide a liquefaction module with a cryogenic heat exchanger and a compressor / compressor driver unit at substantially MPE, as well as the inherent electricity generators. Claim 72 lacks an inventive step.

·Claims 74 and 75 – it is disclosed in D31 to internally integrate equipment such as acid gas removal vessels and dehydration vessels within the respective acid gas removal and dehydration units.

·Claims 76 and 77 – D31 discloses providing acid gas and dehydration units as multiple parallel integrated units.

I am satisfied appended claims 10-19, 22-29, 35-49, 69-72, and 74-77 lack an inventive step in view of D31.

Omnibus claims

110. In so far as independent claims 1-7, 68 and 73 lack an inventive step I am satisfied that omnibus claims 78-82 lack an inventive step in view of each of D6 and D7.

D17

111. Woodside, as part of its submissions in reply, introduced D17 as prior art for the purposes of inventive step. I incidentally note that D17 was filed as the priority document for D31. D17 provides details of BP’s “Big Green Train” LNG plant project, with which it seeks a bigger, more environmentally friendly, and cost efficient LNG plant design. Principles discussed in D17 include: use of bigger compressor driver systems where the three options considered where: two Frame 7E gas turbines, four LM6000 gas turbines; and an all-electric motor driver system. D17 also considered the technical limits for sizing equipment such as heat exchangers. D17 further discussed modular design principles and alluded to prebuilding a plant with expansion in mind. While D17 discusses principles broadly understood by the person skilled in the art, and provides a detailed evaluation of different refrigeration compressor configurations, I am not satisfied it would lead a person skilled in the art toward the subject matter of any of the claims.

Manner of Manufacture

112. Woodside submitted that the claims lacked a manner of manufacture for reasons set out below.

On the face of the application

113. Woodside submitted that all claims of the application lacked the requisite quality of inventiveness on the face application (NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1995] HCA 15; (1995) 183 CLR 655). While I have found that many claims lack an inventive step upon review of the evidence regarding the common general knowledge, I am not satisfied that any claim lacks the requisite quality of newness based only on what is disclosed and admitted in the specification.

Methods of designing an LNG plant

114. Woodside submitted that the design claims (which I take to mean independent claims 2, 3, omnibus claims 79 and 80, and claims rightly appending to claims 2 or 3) lack a manner of manufacture as they relate to matter which is either a “mere scheme” or “plan”.  Referring to Grant v Commissioner of Patents [2006] FCAFC 120 (“Grant”), a design per se constitutes no more than “intellectual information” and a method which results only in a design and not in any “physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation” is not a manner of manufacture (Grant [2006] FCAFC 120, paragraphs [29]-[32]). While Exxon noted that the claims relate to an LNG plant, that relationship is not sufficiently direct as to involve any physical effect. Design, theoretically, may be achieved as simply as via drawing or thought. Claims 2, 3, 76 and 79 (and claims 10-37, 40, and 74 in so far as they append from claims 2 or 3) do not define a manner of manufacture.

Methods of operating an LNG plant

115. Referring secondly to the “operating claims” (which I take to mean independent claim 4, omnibus claim 81, and claims rightly appending from claim 4) Woodside submitted at the hearing that these claims lack a manner of manufacture as they relate to a “mere working direction”. The title “mere working direction” encapsulates a class of non-patentable subject matter where the “invention” relates to a mere variation in the working of an existing apparatus or process to produce an identical product. A variation will be a “mere” variation where it involves no inventive ingenuity. Relevant case law includes: Commissioner of Patents v Lee [1913] HCA 22; and Rolls Royce Ltd’s Application [1963] RPC 251.

116. In view of my discussion of the common general knowledge I am satisfied that the plant defined in claim 4 is a “known apparatus”. I am further satisfied that the defined method of operating the plant defines a mere variation in the working of the plant to provide an identical product (LNG) wherein the variation involves no inventive ingenuity. In view of my discussion of inventive step in light of the common general knowledge I am further satisfied that claims 41 (and claims 10-37, 40, 74, and 81 in so far as they relate to a method of operating a plant according to claim 4) relate to the operation of a known LNG plant configuration in a way that constitutes no more than a mere working direction. 

Conclusion

117. The opposition succeeds on the grounds that: claims 7, 39, 40, 45, 74, 76 and 78 lack novelty; claims 1-8, 10-19, 22-49, 51-61 and 68-82 lack inventive step; and claims 2-4, 10-37, 40, 41, 74, 76, 79 and 81 define subject matter which is not a manner a manufacture. As these grounds can be overcome by amendment, I will allow the applicant an opportunity to amend. 

Costs

118. The opponent has been successful in the opposition. Generally costs should follow the event, and costs should be awarded against the applicant. I see no reason to depart from this approach. I will award costs against the applicant.

Rhys Munzel
Delegate of the Commissioner of Patents

Annex A – Dictionary Definitions

hydrocarbon fluid processing plant (paragraph [0030]): any processing plant that processes a hydrocarbon fluid feed into a product that is changed in some way from the feed.

LNG liquefaction plant (paragraph [0031]): a hydrocarbon fluid processing plant that includes processing a feed stream which comprises gaseous methane into a product stream that includes liquid methane.

equipment types (paragraph [0032]): any type of processing equipment used in any type of process unit module.

process unit module (paragraph [0033]): a single grouping of one or more equipment types that, when taken together, complete a specific process function in a hydrocarbon fluid processing plant or support the completion of that function in a hydrocarbon fluid processing plant

process unit module type (paragraph [0034]): the total amount of a particular type of process unit module in a hydrocarbon fluid processing plant

maximum feed processing capacity (paragraph [0035]): the maximum processing capacity of a particular process unit module type included in a hydrocarbon fluid processing plant on a hydrocarbon fluid processing plant feed basis

plant maximum feed processing capacity (paragraph [0036]): means the maximum feed processing capacity of the entire hydrocarbon fluid processing plant

plant minimum feed processing capacity (paragraph [0037]): the minimum feed processing capacity of the entire hydrocarbon fluid processing plant that can be run in a stable operating mode.

construction cost (paragraph [0038]): means the total cost for an item, for example a process unit module or a process unit module type, at a location such that the module is ready to be placed into service.

construction cost per unit of maximum feed processing capacity (paragraph [0039]): the construction cost divided by the maximum feed processing capacity for an item, for example a process unit module or a process unit module type.

maximum processing efficiency (paragraph [0040]): the process unit module capacity size for a process unit module type that minimizes its cost per unit of process unit module capacity, where the cost can be selected from the total process module construction cost, the total process unit module operating cost, the total process unit module lifecycle cost, or combinations thereof.

life cycle cost (paragraph [0041]): a combined measure of the construction cost, and operating cost of an equipment type or process unit module.

Integrated (paragraph [0042]): used with respect to process unit module types means that the process unit module type is composed of a plurality of process unit modules in parallel with each process unit module providing a portion of the process unit module type maximum feed processing capacity and the process unit module type being configured such that each process unit module is

a)able to process any portion of the hydrocarbon fluid processing plant feed, any portion of the hydrocarbon fluid processing plant product or any portion of a particular intermediate stream of the hydrocarbon fluid processing plant and/or

b)is able to complete any particular processing step in the hydrocarbon fluid processing plant, and/or

c)is able to complete any portion of a particular support service for a process unit module type, a plurality of process unit modules or a plurality of equipment types in the hydrocarbon fluid processing plant, in any of 1, 2 and 3 above without regard to the source of the respective feed, product, intermediate stream, processing step, process unit module type, plurality of process unit modules or plurality of equipment types.

product sized process unit module types (paragraph [0043]): means a process unit module type whose capacity (size) is determined principally by the most valuable product stream rate for the hydrocarbon fluid processing plant.

high construction cost product sized process unit module types (paragraph [0044]): an product sized process unit module type that represents more than 10 percent of the cost of constructing a hydrocarbon fluid processing plant containing such process unit.

low construction cost product sized process unit module types (paragraph [0045]): a product sized process unit module type that represents less than 7 percent of the cost of constructing a hydrocarbon fluid processing plant containing such process unit.

transportation vessel (paragraph [0046]): any vessel which is capable of transporting a hydrocarbon fluid product over land or water

capital cost basis (paragraph [0047]): means any cost basis that represents capital and non-capital costs on a capital cost equivalent basis.

modular heat exchanger (paragraph [0048]): a heat exchanger whose primary exchange function can be expanded easily by the addition of similar sized exchangers.

refrigerant circuit (paragraph [0049]): the processing steps performed to prepare a spent refrigerant for its subsequent use in performing a cooling function.

operating cost (paragraph [0050]): means any costs that are incurred during the routine operation of the plant.

Annex B – Independent and Omnibus Claims

1. A method of producing liquefied natural gas using a LNG liquefaction plant, wherein the LNG liquefaction plant includes a plurality of process unit module types, said plurality of process unit module types including at least a first process unit module type having one or more first process unit modules and a second process unit module type having two or more integrated second process unit modules, wherein further at least one of said first process unit modules and at least one of said second process unit modules are sized at their respective substantially maximum processing efficiency, said LNG liquefaction plant including two or more integrated process unit module types, said method comprising producing liquefied natural gas from said LNG liquefaction plant.

2. A method of designing a LNG liquefaction plant, including:

a)   providing the identity of a plurality of process unit module types included in said LNG liquefaction plant, said plurality of process unit module types including at least a first process unit module type and a second process unit module type;

b)   determining a first maximum processing efficiency for a first process unit module of said first process unit module type and a second maximum processing efficiency for a second process unit module of said second process unit module type; and

c)   designing said LNG liquefaction plant, said LNG liquefaction plant design including one or more first process· unit modules sized to substantially meet said first maximum processing efficiency and one or more second process unit modules sized to substantially meet said second maximum processing efficiency.

3. A method of designing an expanded processing capacity of a LNG liquefaction plant having an existing plant maximum feed processing capacity, including:

a)   providing the existing configuration of said LNG liquefaction plant, said LNG liquefaction plant Including a plurality of process unit module types;

b)   determining a first process unit module type requiring additional maximum feed processing capacity to increase said existing plant maximum feed processing capacity;

c)   determining the maximum processing efficiency of a first process  unit module of said first process unit module type; and

d)   designing an expanded LNG liquefaction plant, said design including the addition of one or more first process unit modules sized to substantially meet said maximum processing efficiency.

4. A method of operating a LNG liquefaction plant having a plurality of process unit module types, said plurality of process unit module types including at least a first process unit module type having one or more first process unit modules and a second process unit module type having two or more integrated second process unit modules wherein at least one of said first process unit modules and at least one of said second process unit modules are sized at their respective substantially maximum processing efficiency, said method comprising:

a)   determining a first plant feed processing rate;

b)   determining the number of process unit modules of each process unit module type required to meet said first plant feed processing rate;

c)   commissioning at least the number of each process unit module of each process unit module type required to meet said first plant feed processing rate determined in step a); and

d)   producing LNG.

5. A method of producing LNG using a LNG liquefaction plant, said LNG liquefaction plant comprised of a plurality of process unit module types, each of said plurality of process unit module types having one or more process unit modules, said method including:

a)   providing at least one original process unit module for each process unit module type included in said plurality of process unit module types, one or more of said original process unit modules sized at their respective substantially maximum processing efficiency, thereby providing a first phase LNG liquefaction·plant;

b)   providing one or more additional process unit module(s) for one or more process unit module type(s) included In said first phase LNG liquefaction plant, said additional process unit module being integrated with said original process unit module within said process unit module type, thereby providing a second phase LNG liquefaction plant; and

c)   producing LNG from said second phase LNG liquefaction plant.

6. A method of producing liquefied natural gas, including:

d)   providing an LNG liquefaction plant comprising a plurality of product sized process unit module types, said LNG liquefaction plant having a first plant maximum feed processing capacity;

e)   expanding the maximum feed processing capacity of at least one but less than all of said product sized process unit module types to achieve a second plant maximum feed processing capacity that is 10 percent or greater than said first plant maximum feed processing capacity wherein the expanding includes adding at least one additional process unit module; and

f)   producing LNG in said LNG liquefaction plant after initiation of said expanding step b).

7. A method of producing liquefied natural gas using an LNG liquefaction plant, said LNG liquefaction plant having a plurality of process unit module types, each of said plurality of process unit module types having one or more process unit modules, said method including:

a)   providing at least one original process unit module for each process unit module type included in said plurality of process unit module types, thereby providing a first phase LNG liquefaction plant;

b)   producing first LNG from said first phase LNG liquefaction plant;

c)   constructing one or more additional process unit modules for one or more process unit module types included in said first phase LNG liquefaction plant while completing at least a portion of said producing step b;

d)   placing said one or more additional process unit modules in service, said additional process unit modules being integrated with said original process unit module within said process unit module type, thereby providing a second phase LNG liquefaction plant; and

e)   producing second LNG from said second phase LNG liquefaction plant.

8. A method of producing liquefied natural gas, including:

a)   providing an LNG liquefaction plant including a plurality of process unit module types, said LNG liquefaction plant having at least a first refrigerant circuit, said first refrigerant circuit including at least one first refrigerant compressor service type, said first refrigerant compressor service type having oneor more original first refrigerant compressors in parallel, said LNG liquefaction plant having a plant maximum feed processing capacity;

b)   expanding the plant maximum feed processing capacity of said LNG liquefaction plant by adding at least one additional first refrigerant compressor to said first refrigerant compressor service type, said additional first refrigerant compressor being integrated with said one or more original first refrigerant compressors within said first refrigerant compressor service type; and

c)   producing LNG in said LNG liquefaction plant after initiation of said expanding step b).

9. A method of producing liquefied natural gas using an LNG liquefaction plant, said LNG liquefaction plant having a plurality of process unit module types, each of said plurality of process unit module types having one or more process unit modules, said method including:

a)   providing at least one original process unit module for each process unit module type included in said plurality of process unit module types, thereby providing a first phase LNG liquefaction plant;

b)   providing at least one second process unit module for each process unit module type included in said plurality of process unit module types, thereby providing a second phase LNG liquefaction plant;

c)   integrating one or more of said original process unit modules with one or more of said second process unit modules for two or more respective process unit module types; and

d)   producing LNG from said LNG liquefaction plant after initiation of said integrating step c).

68. An LNG liquefaction plant, including one or more high construction cost product sized process unit module types and one or more low construction cost product sized process unit module types, at least one of said low construction cost product sized process unit module types having a maximum feed processing capacity that is at least 110 percent of the maximum feed processing capacity of at least one of said high construction cost product sized process unit module types.

73. A LNG liquefaction plant comprising: a plurality of process unit module types, said plurality of process unit module types including at least a first process unit module type having one or more first process unit modules and a second process unit module type having two or more integrated second process unit modules, wherein at least one of said first process unit modules and at least one of said second process unit modules are sized at their respective substantially maximum processing efficiency; and two or more integrated process unit module types.

78. A method of producing liquefied natural gas using a LNG liquefaction plant as hereinabove described with reference to, and as shown, in the accompanying drawings.

79. A method of designing an LNG liquefaction plant as hereinabove described with reference to, and as shown, in the accompanying drawings.

80. A method of designing an expanded processing capacity of an LNG liquefaction plant as hereinabove described with reference to, and as shown, in the accompanying drawings.

81. A method of operating an LNG liquefaction plant as hereinabove described with reference to, and as shown, in the accompanying drawings.

82. An LNG liquefaction plant as hereinabove described with reference to, and as shown, in the accompanying drawings.