Natural gas deposits are often located in isolated areas, creating transportation challenges. Oil and gas companies have turned to Liquefied Natural Gas (LNG) to distribute the valuable energy resource. In China alone imports have increased by 25 per cent in the last year. Effective transportation of natural gas will be essential for promoting productivity and profitability in the industry.
What is LNG and why is it used?
LNG occurs when natural gas is cooled to -260°F (-160°C), enabling it to be safely and cost-effectively transported via tankers. It takes up 1/600th the volume of natural gas, making it incredibly dense. LNG weighs less than half the equivalent volume of water at 485Kg/M2, is non-corrosive, non-toxic, and is unable to explode in an unconfined open environment.
When did LNG usage start and what did it do?
Originating in the 19th century, LNG did not see commercial use until 1959 when the world’s first LNG tanker – The Methane Pioneer – carried eight cargoes of LNG from Lake Charles to Canvey Island. Half a century later and LNG global sales have reached 258 million tonnes per annum (mtpa), as the gas is imported to meet growing global energy needs.
What does the future hold?
LNG global trade is expected to grow to 350 mtpa by 2020. An energy staple of Asia-Pacific countries for decades, more nations are adopting LNG to diversify their energy mix. A less polluting fuel source than oil and coal, it allows countries to reduce their carbon footprint and meet emissions reduction goals.
China and India’s growing economies could influence LNG. These countries are looking to supplement domestic production while diversifying energy sources away from pipeline import gas, making LNG a strong choice.
Floating Storage and Regasification Units (FSRUs) are vital to these new markets. Able to deliver LNG to remote sites, FSRUs are equipped with facilities that regasify LNG on the tankers, saving more than half of the cost of an onshore facility. This infrastructure has introduced LNG to the Caribbean, South America, Pakistan and parts of the Middle East.
Innovation in the Oil & Gas Industry has transformed LNG from an occasional storage option to the desired method for the transportation, sale and distribution of natural gas. The opportunity for LNG to cater to remote environments means oil and gas operations can grow and prosper, increasing productivity while reducing risk.
For an in-depth look at how the world’s major oil companies are transitioning to natural gas, click here.