LNG FACTS AND INFORMATION

Liquefied natural gas (LNG) is natural gas (NG) cooled by process down to its boiling point temperature of approximately –160C or -260F at atmospheric pressure to reach cryogenic liquid condition. LNG has a density of 420 to 490 kg/m3.

LNG is produced for the purpose of efficient storage and transportation of NG. By converting natural gas to liquid by liquefaction process reduces its volume nearly 600 times (a 600:1 ratio). In a physical comparison, the same amount of NG held in a beach ball can be stored and transported in a ping pong ball as LNG, this highly demonstrates LNG’s high density storage ability, and benefit.

LNG is stored and transported in cryogenic tanks (thermos flask principle).

LNG because of its high-energy density storage capacity it is more efficient and cost-effective (low cost) for transporting NG, particularly over long distances, by sea or road and rail transportation.

NG can be efficiently transported as LNG and then can be converted from storage into NG by regasification (vapourising) process for: pipeline transmission system injection (NG grid), fuel for power generation and industrial use, town gas reticulation, converting into CNG for supplying CNG vehicle refuelling stations - LCNG refuelling stations provide both LNG fuel or trucks and CNG fuel for cars.

Feedstock gas for liquefaction and exporting by sea (export LNG) is sourced from an offshore or onshore natural gas field or a coal mine as coal-seam-methane (CSM) where it is delivered by pipeline to the liquefaction plant (LNG plant) normally located at the export port. For domestic use (domestic LNG) land distribution, feedstock gas for a liquefaction plant can be sourced from an onshore natural gas field, existing natural gas transmission pipelines and pressure letdown stations, coal mines (CSG), biogas (eg from landfill gas, LFG), and can also be from the diversion of flare-gas.

Liquefaction plants can be categorised into micro, mini, small, medium and large scale. Micro, mini and small scale are normally associated with land-based applications (distribution by LNG trucking and railing) and medium and large scale to marine applications (distribution by LNG shipping). Liquefaction plant technology can now cost-effectively produce LNG down to just one-tonne or around 2,400-litres per day (micro plant). There are several liquefaction technologies available.

LNG MARINE – SEA TRANSPORTATION

NG liquefied as LNG is transported in an LNG Carrier (LNGC) a ship specially designed to transport LNG. The LNG is stored in a special containment system and maintained at around –160C or -270F at around atmospheric pressure.

LNGC cryogenic cargo tanks are functionally big thermos containers where the LNG remains boiling at a constant pressure for the duration of the voyage - some gas is removed to prevent a build-up in pressure – this is known as boil-off-gas or BOG and can be used as fuel for ship propulsion or re-liquefied and returned to the cargo.

LNG can be transported by sea for any project market distance – short, medium or long sea shipping. However it is the most economic for transporting NG to market over long distances (eg Australia to USA or Japan, Qatar to UK).

Currently a common size LNGC has an average cargo space storage volume of around 140,000m3 (cargo deadweight about 64,000 tonnes LNG). A smaller size LNGC is down to 1,100m3 (500 tonnes). Large LNG Carriers (L-LNGCs) are now being built for a cargo space storage volume of 266,000m3 (cargo deadweight about 122,000 tonnes LNG – Q-Max class) to reduce delivery costs.

Given the capital investment involved, normally LNGCs are built for a specific project for long-term employment, up to 30 years to match the market contract. There are very few LNGCs currently available on the spot market for short-term charter.

LNG shipping services are normally arranged by either the exporter / seller or the importer / buyer depending on the gas sales agreement (GSA) arrangements, that is FOB or CIF ex-ship terms. Although some LNG sellers and buyers elect to acquire ownership (or lease) of LNGCs, LNG shipping is usually arranged with and acquired from a third-party shipowner under long-term time charter arrangement (charter parties).

The LNG supply (or value) chain for a sea delivery application comprises basically three components.

1. Upstream Export: the export liquefaction plant and on-site storage tanks, and the ship loading terminal (onshore or offshore).

2. Midstream Transport: LNG shipping service.

3. Downstream Import: the import ship unloading terminal (onshore or offshore), on-site storage tanks and the regasification (vapourisation) plant.

The midstream shipping costs can represent about 10-30% of the total costs in the value chain of an LNG supply project.

NEW LNG TECHNOLOGIES

NEW GENERATION LNG CARRIER – THE HIGH SPEED LNGC

A new technology next generation LNGC is about to be developed. This is a shallow draft High Speed LNG Carrier (HS-LNGC), capable of 60-75 knots service speed, three times the speed of a conventional LNGC of 19 knots.

CNGI is associated with the proprietary ship design owners on this project for developing HS-LNGC (and CNGC) project applications.

Given the same LNG cargo capacity with combination of speed and the same fuel consumption to that of a conventional LNGC of service speed 19 knots, effectively the HS-LNGC could reduce the number of ships in an LNG delivery system by two-thirds. For example, a three ship LNGC service could be reduced to one HS-LNGC thus giving both capital investment and overall cost savings in the shipping delivery component of the supply chain in an LNG contract.

A HS-LNGC project case example in point:

Gladstone, Queensland, Australia north east coast - or Port Moresby, PNG - to Los Angeles. Pacific Ocean route (trans-Pacific) distance 6,400 nautical miles.

HS-LNGC same cargo capacity as LNGC of 138,000m3 / 63,000 tonnes LNG.

§ HS-LNGC voyage speed 60 knots = 33 deliveries per year = 2,079,000 tonnes LNG per year.

§ Conventional LNGC voyage speed 19 knots = 12 deliveries per year = 756,000 tonnes LNG per LNGC per year = 3 LNGCs needed to deliver 2,268,000 tonnnes LNG.

Two HS-LNGCs could deliver 4,000,000 tonnes (4.0MMtpa) LNG replacing six LNGCs that normally would be needed for the contract.

For smaller delivery contracts, of say 1.0MMtpa, a HS-LNGC could possibly service two similar but different markets alternatively at the same time.

One HS-LNGC of capacity 63,000 tonnes LNG could deliver annually around the same LNG as a large-LNGC of capacity 122,000 tonnes LNG over a delivery distance of 10,000 nm. The HS-LNGC has an advantage of shallow draft capability.

FLOATING LNG (FLNG)

FLNG is an LNG-FPSO (floating-production-storage-offloading) platform, a new technology that offers a solution for commercialising offshore gas fields that would otherwise be uneconomical to commercialise by constructing a long pipeline to shore. An LNG-FPSO incorporates the technologies of LNG plants and FPSO platforms.

A fully FLNG (all at sea) system comprises the offshore LNG-FPSO platform for the export gas production - the shipping transportation by LNGCs - and at the import end the delivered LNG is transferred ex-ship direct to an LNG-FSRU platform (Floating-Storage-Regasification-Unit) moored offshore/inshore, where the LNG is stored, regasified (vapourised) and sent ashore by demand through a connecting undersea pipeline. Or vapourised gas could be used as fuel for generating electricity in a power station plant installed on the FSRU and sent ashore via power lines (oversea or undersea) to a land electricity grid.

The FSRU can be a Barge in a LNG ATB system (LNG Articulated Tug and Barge system). The Tug and Barge combined is an LNG Carrier. This type of LNG delivery system can be a cost-effective solution in a small-scale LNG project for short distance routes. The Barge is used as a practical and cost-effective downstream storage facility (and so doing away with land-based storage tanks) at the unloading location while the empty Barge is taken away for refilling. The LNG can be transferred ashore in liquid form into LNG trailers, or railcars or gaseous form into a pipeline, for transport to the end use facility. Through technology partners CNGI has access to a proprietary LNG ATB system - Barge capacities are available from 1,500m3 to 10,000m3. There are many advantages with employing an ATB system for a project. The whole ATB system is a transportable or take-away system and can be deployed to other projects very quickly.

Offshore LNG terminal facilities are becoming more popular to accept as the public fears onshore LNG facilities could become terrorist targets, or could have catastrophic accidents.

LNG LAND – ROAD AND RAIL TRANSPORTATION

An LNG solution can be applied to all projects, but is most suited to longer route distances, and particularly if considerable NG storage is required on-site at the delivery end.

For onshore distribution, storage and intermodal road and rail transporting, LNG is stored in cryogenic tanks typically at low pressure of between 3.5 bar and 10.3 bar or 50 psi to 150 psi. Compared to CNG, LNG is around 3.5 times the density. Cryogenic tanktainers will hold for up to 80 days without venting.

The LNG supply (value) chain for land delivery of LNG (road and rail) comprises basically five operational components.

§ Supply end: (1) liquefaction plant and (2) storage tanks

§ Transport distribution: (3) haulage service (road/rail)

§ Delivery end: (4) storage tanks and (5) regasification (vapourisation) plant

Liquefaction plant capacity and storage tankage each end for land applications will vary to suit the particular project case requirements.

LNG for road distribution can be loaded direct into road-tankers from a LNG plant loading terminal located at the liquefaction site or a satellite terminal where LNG is first delivered from the LNG plant.

For road distribution, the LNG transportation can be either by LNG tanktainer of gross capacity up to 47,000 litres loaded onto a trailer chassis for transporting or can be permanently secured to become an LNG road trailer – or a conventional LNG road-tanker having gross capacity of up to 57,000 litres. LNG tanktainers can also double as both transport and site storage.

For rail distribution, the LNG can be transported in same LNG tanktainers as for road - or a dedicated railcar with gross capacity of up to 76,000 litres.

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