The Potential of Compressed Natural Gas Transport in Asia

Abstract

Abstract Natural gas use is expected to increase dramatically in the world over the next two decades, especially in the two fastest growing countries in Asia: China and India. Japan is already greatly dependent on natural gas. In connecting sources with markets, natural gas is transported with two well-established technologies: 70 percent by pipeline and 30 percent by liquefied natural gas (LNG). Pipelines traversing land masses, when feasible, are the obvious option. However, offshore pipelines have a distance limit and a terrain restriction. LNG facilities (both the liquefaction process at the source and the re-gasification process at the receiving end) are expensive to construct and the entire process is complicated, costly, and energy wasteful. It is applicable for long haul sea distances and large volumes of gas. Waterways-going compressed natural gas (CNG) is an alternative that many people have proposed in recent years but has not made a substantial head start for two reasons. First, the emphasis for investments worldwide has been primarily on LNG and, second, CNG vessel designs and projects have been envisioned to eke a bite out of the LNG pie, which is not necessarily a good approach. CNG must make a substantial impact in shorter distances and smaller offshore markets which are not connected to large pipelines or baseload LNG accepting facilities. We show that for shorter distances (e.g., 1,000 km or 600 miles) LNG simply cannot compete with CNG. Even at longer distances (e.g., 2,000 km or 1,200 miles) CNG is still more attractive, assuming that offshore pipelines are not feasible. For smaller volumes, such as 1 to 2 Bcm/yr (35 to 70 Bcf/yr) CNG is the only solution to bring this energy source to many markets. We scope Asian potential for CNG by connecting suitable source and market candidates. In this paper, a particular feasibility study of CNG transport in domestic Indonesia is performed. Results show that CNG is an excellent solution to transport Indonesian natural gas from fields such as Arun, Bontang, and Tangguh to domestic customers in the areas of Jakarta and Bali, especially from smaller reservoirs not currently considered as attractive for LNG. On the other hand, it does make sense to export LNG from Brunei, Malaysia, and Indonesiato Japan, South Korea, and China. Introduction A significant portion of natural gas reserves worldwide is located relatively near population centers across bodies of water. In many cases, traditional natural gas transport methods such as pipelines or liquefied natural gas (LNG) are not feasible or are too expensive. A new application of an existing technology, CNG, provides a solution for shipping natural gas across water.