The Prospects for Liquefied Natural Gas in the European Energy Market

Abstract

On Oct. 12, 1964, the "METHANE PRINCESS". six days out of Arzew in Algeria, arrived at Canvey Island in the Thames Estuary with a cargo of liquefied natural gas. Years previously all the basic techniques embodied in her had been tested and proven in the swamp areas of South Louisiana. Her forerunner, the "METHANE PIONEER", gained further experience on the high seas in 1959 and made seven trips from Lake Charles, La., to Canvey Island with liquefied natural gas aboard. But the "METHANE PIONEER" was the "trial" or prototype ship. The "METHANE PRINCESS", about five times the capacity of the "METHANE PIONEER", a true tanker and a commercial carrier, was delivering a commercial cargo. Thus, you can mark Oct. 12, 1964, as the date upon which, for the first time anywhere, liquefied natural gas entered world trade. A very satisfying day for William Wood Prince, the pioneer of liquefied natural gas ocean transportation, and for the Gas Council, particularly its Chairman, Sir Henry Jones, and Deputy Chair. man, Sir Kenneth Hutchison who, with Michael Milne-Watson, formerly Chairman of the North Thames Gas Board, had gambled on an idea destined to stimulate a revolution in the British Gas Industry. The "METHANE PRINCESS" and her sister ship, the "METHANE PROGRESS", operating under the house flag of British Methane Ltd., owned equally by the Gas Council of the United Kingdom and Conch International Methane Ltd., each made five trips from Arzew to Canvey Island to the end of 1964, delivering liquefied natural gas. The commencement of this project has been remarkably free of those initial difficulties Chat frequently attend the inauguration of enterprises considerably less complex than this one. The customer, the eight area Gas Boards serviced by the 250 mile long Gas Council pipeline, has absorbed Algerian natural gas with extraordinary ease and appetite. The natural gas which has now found its way into British homes comes from Hassi R'Mel, one of the largest gas fields in the world, Hassi R'Mel was found and is being developed by S.N. Repal and Compagnie Francaise des Petroles d'Algerie. The two companies have built a 320 mile pipeline from the field to Arzew, the site of the liquefaction plant. Compagnie Algerienne du Methane Liquide (C.A.M.E.L.), owned 40 per cent by Conch International Methane Ltd., 40 per cent by French interests and 20 per cent by the Algerian Government, has constructed a three stream plant capable of liquefying 150 million cu ft of gas per day. All work has been essentially completed. The third stream is scheduled for commissioning early in Feb., 1965. The first stream was put in operation on Sept. 26, 1964. and the second stream on Nov. 29, 1964. Each stream liquefies 50 million cu ft/ day. The Gas Council will receive two-thirds or 100 million cu ft/day from the Arzew plant. Gaz de France will take the remaining 50 million which will enter France via Le Havre finding its way to Paris through a newly-laid 119 mile pipeline. Regular deliveries to France by the' French carrier, the "JULES VERNE", will begin later this year. The success of the Algerian Project has significance. A new factor has been introduced into the European Energy Market: liquefied natural gas transported by sea from remote production centers. The inevitable question is, "What are the prospects for it in this market?".The European Energy Market is extremely complex, and generalizations about it do not always hold up under close examination. The contrasts between it and the Energy Market in the United States are, however, most striking. A few figures tell an illuminating story. For Europe (and Europe in this context includes the United Kingdom, West Germany, the Netherlands, Belgium, France, Spain, Austria and Italy) natural gas accounted for 2.5 per cent of all energy consumed in 1962. P. 103^