Comparative cost analysis of Synthetic Natural Gas distribution pathways in the context of Nepal

Abstract

Synthetic Natural Gas (SNG) produced using Green Hydrogen, and carbon dioxide not only helps to reduce the harmful greenhouse gas emission but also can help Nepal to reduce its dependency on imports for fuel used in the industrial sector. For Nepal to utilize its full potential in Green Hydrogen for industries and household cooking, SNG can be an attractive alternative due to its storage, transmission, and controlled combustion advantages. Europe has been a frontier in SNG production, relying on its already-built Natural Gas network for distribution. Unlike Europe, Nepal doesn’t have any previously built gas pipeline network. Large biogas plants distribute the produced gaseous bio-CNG in cylinders. But unlike LPG, which can be liquified through pressurization (836 kPa at 20°C) only, SNG can only be liquified cryogenically (-162°C at 20 kPa), which requires a tremendous amount of energy. This study compares the costs of the distribution of SNG in gaseous form through gas pipelines and cylinders. A case study is performed in the Butwal Industrial Area of Nepal, in which data is gathered from primary and secondary sources to design the gas pipeline network and estimate the costs associated with distributing SNG using both pipelines and cylinders. It has been found that the capital cost (CAPEX) and the annual operating cost (OPEX) are significantly lower for pipeline distribution compared to the distribution using cylinders. The Net Present Value (NPV) of total costs for pipeline distribution was found to be NPR 12,002,821 compared to NPV of NPR 35,417,390 for cylinder distribution. Hence, distributing produced SNG using pipelines is more cost-effective than distributing using cylinders inside the industrial area of Nepal.