Marine CNG: Technically Sound, Commercially Viable, and Imminent

Abstract

Abstract One of the newest frontiers in the upstream energy sector is marine compressed natural gas (CNG), and the economic challenge of how to safely transport and market marine CNG on a regional or international basis. Stakeholders are working to meet these challenges head-on and are creating solutions for all aspects of development, transportation and delivery of a reliable CNG product to varied customers. Traditional concerns surrounding technical feasibility have given way to economic considerations on a project by project basis, with increased focus on the niche capabilities that marine CNG fulfills. Proponents have succeeded in overcoming the technical challenges and have attained regulatory approvals for their designs and are in a race to be the first successful application of this technology. The Centre For Marine CNG Inc. has been tracking the progress of all the proponents, while advocating for the technology as a whole. While research continues on the technical aspects of CNG, the gas owner/operators have recognized that the first project is imminent and are following the technology appropriately. This paper serves to provide an industry update, describing the niche that CNG fills in comparison to LNG or other natural gas monetization strategies, identification of thetechnology proponents and the relevant regulatory approvals, as well as some basic economic models to help validate the viability of marine CNG. Introduction From the Oil & Gas industry perspective, one of the obstacles to a stranded gas development is that marine CNG, as a monetization strategy, is not yet in commercial operation anywhere in the world. Many owners worldwide have struggled with how to monetize their gas reserves when the conventional options of a pipeline or LNG development do not fit the characteristics of their reseroirs. In general terms, marine CNG differs from LNG in that the natural gas is compressed, rather than liquefied for transport. Depending on the proponent, the gas is transported in a range of 1500 to 4000 psi to achieve energy densities of approximately 1/3 of their liquefied counterpart of LNG. The gas is stored in pressure vessels aboard a CNG ship that will then transport the gas to market. Depending on distance to market and the demands for non-interruptiple supply, multiple ships would be required to maintain "flow". One could consider the CNG solution comparable to a floating pipeline, with much less infrastructure required for exploitation of the natural gas reserve. Loading and unloading requirements are comparable to and adaptable from both LNG and oil transfer systems, while the transport vessel can range from a small volume barge to a large capacity LNG-sized vessel. Given the capability of marine CNG transport as amonetization strategy, one must ask why this method has not yet been implemented. The first and most obvious answer is the hesitation of any owner to be the first to employ a new and unproven technology on a large scale development project.