Modern Marine Transport of Compressed Natural Gas in 2010

Abstract

Abstract Worldwide natural gas is transported with two well-established technologies: 70 percent by pipeline and 30 percent by liquefied natural gas (LNG). For offshore transportation, pipelines have a distance limit and terrain restrictions. LNG is applicable for long-haul sea distances and large gas volumes, because the facilities at both ends are expensive to construct and the entire process is complicated, costly, and energy wasteful. We and others have proposed that compressed natural gas (CNG) transportation by boat is an alternative for shorter distances and smaller markets that are not connected to large pipelines or base load LNG accepting facilities. Although this approach has been proposed for years, it has not yet materialized into a sizeable project. The industrial emphasis on LNG has affected CNG projects and one of the reasons is that some proponents have attempted to take some market share from LNG. This is not a viable approach. In this paper, results show that for shorter distances (e.g., 1,000 km) and especially for the far lower natural gas prices that have emerged since the 2008 economic crisis, LNG simply cannot compete with CNG. Even at longer distances (e.g., 2,000 km) CNG is still more attractive, assuming that offshore pipelines are not feasible. For smaller volumes, such as 1 to 2 billion cubic meters per year (Bcm/yr) or even less, CNG is the only solution to bring this energy source to many markets. In other words, smaller and smaller markets are ideal for CNG. The preferred path for CNG transportation vessels may follow what we have called in earlier publications "hub -and-spoke" or cyclical "milk-run" patterns depending on market demands at the receiving sites. These findings suggest that many parts of the world (many markets in the entire Mediterranean basin, near Sakhalin Island, places in South-East Asia and the Caribbean) would be better served by CNG even if LNG projects have already been approved and under construction near them.