Demand For Liquefied Natural Gas Research Articles

The emergence of China as an LNG super user

China has recently undergone a period of rapid industrialisation and growth. In 2009 the country became the world’s largest energy consumer, with much of this demand being historically met by coal. This heavy reliance on coal, coupled with rapid urbanisation, resulted rising smog levels and deteriorating air quality. In response to public health concerns, the Chinese government introduced several policies to transition to lower polluting fuels, with natural gas being the main beneficiary. In 2017 China’s liquefied natural gas (LNG) imports grew by an enormous 46%, to 38 Mt, as the government ordered heavy manufacturers in two provinces and 26 cities to switch from coal to gas and households to cut coal use for winter heating. Although government air quality targets were met, it resulted in severe winter gas shortages particularly in northern China. A more measured coal-to-gas switching program was undertaken in 2018 and LNG imports continued to surge reaching 54 Mt, another 41% year-on-year increase. Going forward Chinese LNG growth is expected to face competition from increased pipeline gas imports and indigenous gas production. However, there are still many risks to these forecasts, and much to play out as the market continues to be liberalised. As such, Chinese LNG demand presents an enormous opportunity for LNG suppliers both now, and well into the future.

The assessment of liquefied natural gas (LNG) demand reversibility in selected OECD countries

Experience has shown that there is a relationship between demand and price, contrary to the short-term mode, which is expected to be inverted between price and value, and the effects of lowering and rising prices follow reverse. But symmetric results; in the long run, there may be unlawful reactions It would seem that the effect of the price increase and its effect on the amount with its photo mode is not the effect of the price decline. To illustrate the effects of price symmetry, the price can be broken down into three parts, the maximum price, the lowering price, and the increasing price, according to the Getely method. The main objective of this paper is to investigate the effects of the LNG product in the OECD countries. The study uses seasonal data from 2011–2015 for selected countries (Japan, South Korea, United States, United Kingdom, and Spain). Dynamic panel method is also used to estimate the model of this research. According to research findings, long-term and short-term elasticities of effective factors on LNG demand in selected countries have been calculated. The results show that LNG demand in the selected importing countries is relatively reversible in the short and long-term.

US liquefied natural gas (LNG) exports: Boom or bust for the global climate?

Abstract Due to surging natural gas production, the United States is now a growing exporter of liquefied natural gas (LNG) to overseas destinations. However, the potential greenhouse gas implications from increased US natural gas remain unclear. Through a hybrid lifecycle energy strategy analysis, we investigate potential greenhouse gas scenarios of US LNG exports to Asia, the largest source of global LNG demand. We find that the climate impacts of US exports to China, Japan, India, and South Korea could vary tremendously. Annual global lifecycle emissions range from −32 to +63 million metric tons CO2e per billion cubic feet (Bcf) per day of exports. Despite this range, emissions are not likely to decrease and may increase significantly due to greater global energy consumption, higher emissions in the US, and methane leakage. However, international climate obligations are a critical uncertainty underlying all emissions estimates. Our results indicate the need for further research into quantifying the climate impacts of LNG exports, and energy exports more generally.

Will Australian liquefied natural gas demand soar under the 21st Annual Conference of the Parties (COP21) targets?

The ambitious 21st Annual Conference of the Parties (COP21) targets of over 200 countries to limit global warming require a significant reduction in green house gas (GHG) emissions by signatories; these reductions will require major shifts in the way that countries think about their supply mix. Although renewables are often the primary focus of emissions reductions, the role of natural gas in GHG emissions warrants consideration. Gas is ‘triple A’: affordable, abundant and available. It is also lower in GHG than other fossil fuel alternatives. The future success and price stability of liquefied natural gas (LNG) projects is intrinsically linked to the success of natural gas as a bridge fuel to a lower carbon future; although there was initial optimism about the potential of natural gas as a bridge fuel under COP21, further analysis shows that forecast demand for natural gas and LNG in new policy scenarios is likely lower than original forecasts, placing Australian producers’ existing and future projects in a challenging position; moving down the cost-curve where possible is the best way to ensure resilient demand even in a slower growth future environment.

Dominion Resources: Cove Point

The treasurer for Dominion Resources Inc. (Dominion), a major U.S. diversified producer and distributor of energy, was heading to meet with the company's investment bankers to discuss the impact of a large project upon Dominion's financing strategy for the next five years. The Cove Point liquefied natural gas (LNG) project would require $3.6 billion to build and represented one of the largest single capital investments in the company's 100-plus year history. Excerpt UVA-F-1740 Rev. Feb. 18, 2016 Dominion Resources: Cove Point Scott Hetzer quickly shoved his notes and laptop into his briefcase and slipped on his suit jacket. Hetzer, the treasurer for Dominion Resources Inc. (Dominion), a major U.S. diversified producer and distributor of energy, was heading to meet with the company's investment bankers to discuss the impact of a large project upon Dominion's financing strategy for the next five years. The Cove Point liquefied natural gas (LNG) project would require $ 3.6billion to build and represented one of the largest single capital investments in the company's 100-plus year history. It was February 15, 2013, and the recent boom in hydraulic fracturing (fracking) had turned the U.S. natural gas market on its head, creating the opportunity to transform Cove Point from an importer of natural gas into primarily an exporter. In the company's 2012 annual report, CEO Thomas F. Farrell II highlighted the project by stating, “We firmly believe that incorporating liquefaction and export capability into our Cove Point LNG import terminal located on the Chesapeake Bay in Lusby, Maryland, can be beneficial both to you, our shareholders, and to gas producers operating in the eastern half of the U.S.” The surging demand for LNG had allowed Dominion to sign long-term contracts for 100% of Cove Point's projected capacity, mitigating the project's financial risk. By mid-2014, Dominion expected to receive the final required permits from the regulatory authorities, such that the only remaining task was to revise the company's financing strategy from 2013 to 2017 to include the $ 3.6billion investment. After settling into the meeting room in Dominion's Richmond, Virginia, headquarters across from the team of bankers, Hetzer began, “Cove Point represents a terrific opportunity for all Dominion's stakeholders, but financing this sizable project clearly presents multiple financial challenges.” Hetzer knew that determining the optimal mix of debt and equity would need to address the impact upon Dominion's credit ratings as well as regulators and Dominion's existing stock and debt holders. . . .

Forecasting port-level demand for LNG as a ship fuel: the case of the port of Antwerp

From a European, regional and local perspective, as well as from the point of view of port authorities, it is important that waterborne transport should be sustainable. In this context, liquefied natural gas (LNG) is often put forward as a viable alternative fuel for deep-sea, shortsea and inland navigation. The present paper develops a forecasting method for determining potential LNG bunker volumes at port level. The proposed method is based on a review of the literature, historical data on technological innovation in shipping (i.e. the transitions from sail to steam and marine diesel engines), expert opinions and present-day bunker volumes. The forecast obtained was subsequently validated by shipping companies, bunker companies and fuel suppliers operating in the port of Antwerp. In addition, a sensitivity analysis was conducted to assess the impact of a number of relevant independent variables on the forecast. Overall, it is found that switching to LNG as a ship fuel, like any innovation, exhibits a slow adoption pattern, with sluggish growth initially but picking up some speed with time. At the same time, there is evidence of a chicken-and-egg dilemma, with shipping companies unwilling to invest in LNG-powered ships as long as supply is insufficient or uncertain, and fuel suppliers not willing to provide storage and bunker facilities as long as demand is low. Our analysis points at many uncertainties, which are used as discriminating factors between the different scenarios tested. However, whichever scenario is played out, the indications are that LNG bunkering volumes in Antwerp will not increase sharply between now and 2050. The volume growth under the strong development scenario is about four times greater than that under the weak development scenario, but remains modest.

A STOCHASTIC PROGRAMMING APPROACH TO LIQUIFIED NATURAL GAS PLANNING

This work reports on modeling and numerical experience in solving the liquefied natural gas (LNG) planning for an oil and gas company. We developed a model to optimize said purchase, optimizing the amount of LNG bought on the spot and on the long-term markets, based on the predicted demand for the planning horizon. A stochastic approach to address uncertainties related to the LNG demand and spot prices is presented. The expected cost of the operation is minimized, considering stock costs and the possibility to export the surplus gas. Numerical experiments in a real-life case are assessed.

Technology Focus: Gas Production Technology (November 2015)

Technology Focus Only 2 years ago, the conventional wisdom was that oily or liquids-rich plays were the only place to put capital. Gas assets, especially conventional gas, were for true contrarians. While worldwide oil prices have fallen 60% since their 2014 peak, diverse natural gas prices swing between USD 2 and 4/million Btu in the US, USD 8/million Btu in central Europe, and USD 15/million Btu for delivered liquefied natural gas (LNG) in Asia. Depending on your timing and cost structure, gas assets may be a rare highlight in your business in 2015. Conventional wisdom implies that natural-gas demand will continue to grow, especially in locations where coal is being phased out, nuclear growth has slowed/reversed, and renewables remain a small and intermittent energy source for the foreseeable future. The underlying fundamentals may tell another story: LNG plants in progress will increase supply by 122 million t/a by 2020, while LNG demand is expected to grow much slower. Even though more LNG import terminals will be completed in the next several years, global regas-facility utilization is only 33% of capacity. Because markets need to balance eventually, will demand grow to soak up the excess supply or will the new volumes be slow to come online? In free and unregulated markets, the “invisible hand” first described by Adam Smith ultimately guides producers and consumers to a price and quantity that satisfy both parties. Unfortunately, oil and gas markets are far from free and unregulated, so investment time lag, regulations, and politics tend to delay and distort the inevitable balance that must exist in markets. Opinions on the outcome of all these competing factors tend to converge to a group consensus, which is usually just an extrapolation of “more of the same.” In 1986, we were all convinced there would never be another boom and the then-current bust would last forever. Thirty years, and several boom-and-bust cycles later, we are still making straightline projections, even though it is clear that the only thing that stays the same … is change. JPT Recommended additional reading at OnePetro: www.onepetro.org. IPTC 18050 Real-Time Blending Optimization in Upstream—Operating on the Edge by Claudia Zuluaga, Sarawak Shell, et al. SPE 172528 Use of Technology To Enhance Gas Production in Saudi Arabian Carbonate Reservoirs—Key Enablers by Zillur Rahim, Saudi Aramco, et al. SPE 173606 Post-Fracturing Gas Production Through Shale Capillary Application by A. Hayatdavoudi, University of Louisiana at Lafayette, et al.

Floating Liquefied Natural Gas Comes of Age

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper OTC 24800, “Floating LNG Is Coming of Age,” by Michael S. Choi, SPE, ConocoPhillips, prepared for the 2014 Offshore Technology Conference Asia, Kuala Lumpur, 25–28 March. The paper has not been peer reviewed. There are already many floating liquefied-natural-gas (LNG) receiving terminals operating successfully in the world. The economics of floating LNG (FLNG) is compelling. Major cost savings can be achieved by the streamlining allowed by FLNG processes. There are also intangible cost savings, such as increased efficiency owing to construction of the entire system in a shipyard, improved material and manpower logistics, and shorter project duration. Introduction Global LNG trade is expected to more than double by 2020. As consumers and governments around the world recognize the environmental advantages of power generation with natural gas, demand for LNG has increased significantly. Some new projects will be developed with FLNG technologies, perhaps even with a full FLNG chain: floating production, storage, and offloading (FPSO) for LNG production in the field; offshore LNG transfer to shuttle tankers; and floating receiving and storage units that serve to vaporize the LNG and export the gas to the eventual gas-distribution grid and consumers. Compelling Economics Of the 2,500 Tcf of gas available around the world, nearly half is reportedly located offshore in a water depth of more than 200 m and farther than 250 km from land. For some of these offshore fields, potential cost savings of 35–50% have been estimated for FLNG alternatives compared with a conventional development with a land-based plant. The cost savings are achieved with an all-purpose FLNG system located in the offshore field by eliminating wellhead/production platforms; processing platforms that facilitate gas treating, liquid recovery, and stabilization; floating storage and offtake vessels for condensate and natural-gas-liquid (NGL) products; and gas compressors and pipelines for transport gas to onshore LNG plants. Even onshore gas production can benefit from FLNG. Many in-shore discoveries are located in river deltas where LNG export by tankers requires long and costly jetties to reach acceptable water depth. When combined with extensive site preparation and continuous dredging to maintain a viable shipping channel, the economics and safety of an onshore plant are severely impaired. These challenges can be eliminated by piping the gas to an FLNG vessel moored at a near-shore location with convenient tanker access. With the rapid growth of LNG projects, labor and logistical infrastructures are severely challenged in some productive regions. An example is western Australia, where multiple projects in remote locations have created a shortage of resources of every kind. The results are large cost overruns and significant delays. FLNG can ease the burden by offering established organization and a disciplined workforce, existing supply-chain infrastructure, and efficiency of construction in a shipyard.

LNG demand: do we have enough gas? Our gas prices? Our gas future? Somebody help!

These are interesting times for the eastern Australian gas market with Liquefied Natural Gas (LNG) projects coming online. The previously steady and long-term contract market for domestic gas supply on the east coast will be subject to market forces that are in part determined on the global stage. How will the market respond to these changes? The answer requires a comprehensive analysis of several scenarios and sensitivities around market models, as well as sophisticated modelling to capture these possibilities. This requires a tool that allows detailed modelling of the physical delivery of gas from producing fields, through pipelines and storages (including linepack) to demand points, with the capability to model any physical/financial constraint along the supply chain. The future lies in these scenarios and sensitivities. Employing a model developed through PLEXOS® gas module, this extended abstract analyses the effect of LNG on the domestic gas prices and supply in the short-to-medium and long-term. To establish any potential risk of gas shortage or particularly high prices, an analysis of the market was carried out from 2014-2023. Running several sensitivities on the demand forecast in this period, LNG effects on the market operations are examined.

8.1.2 Quantifying the Value of Flexibility in Design and Management of Onshore LNG Production System

AbstractThis paper presents the results of an analysis focusing on the evaluation of a large‐scale onshore liquefied natural gas (LNG) project under market uncertainty and flexibility. Market studies have shown increasing trends in LNG demand in the next few decades in the transportation sector. A proprietary technology has been developed as a solution for offshore associated gas applications for small‐to‐medium scale capacity (~0.2 to 1 million ton per annum or MPTA). This technology is also suitable for onshore micro‐LNG applications as a company is evaluating business opportunities in the transportation industry. This study is concerned with the long‐term design and deployment of the technology in a growing market to provide LNG for transportation purposes. There are currently two designs considered: 1) small micro‐LNG production facilities combined with fueling stations, and 2) a big centralized production facility with satellite fueling stations along the pipeline. A third design alternative is developed based on a flexible phasing deployment strategy to improve the economic performance in comparison with other design strategies. To compare the design alternatives under uncertainty, a structured methodology is introduced and applied based on several economic lifecycle performance indicators (e.g. Net Present Value, Initial Capital Expenditure (CAPEX), etc.). Different demand scenarios are incorporated explicitly in the project evaluation procedure. The final results demonstrate about 36% value improvement for the flexible design as compared to a centralized inflexible design strategy, increasing as uncertainty in parameter estimation increases. A Graphical User Interface (GUI) is developed to simplify evaluation procedures, and provide better support for decision‐making and dissemination across a major company's activities. The flexible design helps deliver more value to the clients.

Spinning Liquid Gold

This article discusses the economic growth opportunities due to liquefied natural gas (LNG) in the United States. Advanced drilling and production techniques have given the United States more natural gas than its markets can handle. Converting that bounty into liquefied natural gas promises to transform the U.S. gas industry into a global energy power. LNG is the generally preferred form of natural gas for use in long-haul heavy-duty trucks, because liquefying it reduces volume. More fuel can be loaded into the tank. Local-use vehicles, which operate from a central yard, often use CNG. For LNG, the only serious limits that people are talking about today are related to infrastructure costs, particularly in the development of exports. Even if the international demand for LNG stays high, exports from the United States cannot happen for a few years because of the time needed for plant construction. Optimism reigns among players throughout the natural gas industry.

A Comparative Study of Liquefied Natural Gas: An Overview

Natural gas is the world’s fastest growing fuel and being produced by many countries of the world in the commercial quantities. Increasing natural gas price and new development in the technologies, liquefied natural gas industry is economically attractive in the major gas exporting countries. Liquefied Natural Gas (LNG) is an important energy source and continued to contribute the growth of natural gas industry. The new advance LNG technology is used for natural gas transportation for long distances. LNG can be transported by the large insulated cryogenic tankers at affordable cost. This study presents an overview of LNG liquidation facilities from natural gas as feed gas to LNG storage and transport. The main objective of the study is to highlight the current data for reviewers on LNG world market, mainly on LNG production, supply, demand, price and new development of LNG plants. The technology is growing gradually with increasing number of LNG consuming countries in overall the world. In the near future, LNG price may be affected by the advanced shale gas production in the United States of America and China. Australia becomes the world second largest exporter of LNG market after Qatar. Australia will increase LNG supply by 15 Bcf/day from 2014 and accounting for 25% of world LNG production by 2030. Global LNG production forecast will be reached 540 Bcm by 2020 and LNG trade will be reached 425 Mtpa by 2025. New countries are interested to enter in the LNG world market as importers and exporters.

Conceptual design of an offshore LNG bunkering terminal: a case study of Busan Port

This study proposes the conceptual design of an offshore liquefied natural gas (LNG) bunkering terminal that would play a critical role in the LNG supply chain for LNG-fueled ship propulsion. The principal functions of the LNG bunkering terminal include importing LNG from LNG carriers, storing it temporarily, and exporting the stored LNG to LNG bunkering shuttles or LNG-fueled ships. One of the critical issues facing cargo operation from a safety point of view is the treatment of boil-off gas (BOG) generated from several sources in the storage systems of the bunkering terminal. Several methods of handling BOG seem feasible. The employment of a pressure vessel with a re-liquefaction system is considered the most effective and safe alternative. As a case study, a conceptual design of Busan Port is carried out by analyzing the statistics of visiting ships, estimating the required LNG consumption, determining the hull structure, and anticipating the design cases. The results obtained include the number of target LNG-fueled ships and LNG bunkering shuttles, LNG demand, capacity, and type of hull structure for the bunkering terminal. To estimate the process specifications and equipment features of the topside system, the BOG generated from several sources is calculated.

Energy for the 21st century: opportunities and challenges for liquefied natural gas (LNG)

Contents: Preface Introduction 1. The Role of Natural Gas and LNG in the 21st Century 2. The LNG Value Chain 3. The Evolution of LNG Markets and Primary Demand Regions 4. Global LNG Supply 5. Global LNG Demand and Emerging Demand Markets 6. The Globalization of LNG: The Evolution of LNG Trade, Pricing and Contracts 7. Safety and Environmental Sustainability of LNG 8. Global LNG Mega Projects and Players - Qatar and Australia 9. New Players and Projects - Russia, Peru, Yemen and Papua New Guinea 10. The Role of Shale Gas in the Golden Age of Gas 11. The Impact of Shale Gas on Global Gas Markets and the Prospects for US and Canadian LNG Exports 12. Emerging Issues in the LNG Industry Conclusion

Meeting Asia's Future Gas Import Demand With Stranded Natural Gas From Central Asia, Russia, Southeast Asia, and Australia

Summary This analysis shows the important contribution that stranded gas from central Asia, Russia, Southeast Asia, and Australia can make in meeting the projected demand for gas imports of China, India, Japan, and South Korea from 2020 to 2040. The estimated delivered costs of pipeline gas from stranded fields in Russia and central Asia at Shanghai, China, are generally less than delivered costs of liquefied natural gas (LNG). Australia and Malaysia are initially the lowest-cost LNG suppliers. In the concluding section, it is argued that Asian LNG demand is price-sensitive, and that current Asian LNG pricing procedures are unlikely to be sustainable for gas import demand to attain maximum potential growth. Resource volumes in stranded fields evaluated can nearly meet projected import demands.

Current Status and Perspectives of Liquefied Natural Gas (LNG) Plant Design

Liquefied natural gas (LNG) is attracting great interest as a clean energy alternative to other fossil fuels, mainly due to its ease of transport and low carbon dioxide emissions, a primary factor in air pollution and global warming. It is expected that this trend in the use of LNG will lead to steady increases in demand over the next few decades. To meet the growing demand for LNG, natural gas liquefaction plants have been constructed across the globe. Furthermore, single train capacity has been increased to strengthen price competitiveness. To achieve greater capacity, more complex refrigeration cycle designs that combine two or more different conventional single refrigeration cycles are being developed to obtain synergistic effects in the liquefaction process. At the same time, a variety of recent studies have focused on designing suitable processes for offshore and small-scale plants to improve the profitability of stranded gas fields. LNG plants are known to be energy/cost-intensive, as they require ...

Travelling east: the great energy continental shift

The global energy industry is in the midst of the great energy continental shift from West to East. Leading this paradigm shift is the consuming power of China and the supply power of Australia. During the decade from 2000–2009, China spent an estimated US$115 billion on acquisitions and in 2008 alone, its investments abroad doubled from US$25 billion to US$50 billion. These acquisitions have provided the fuel that continues to push China’s economic growth forward. Based on recent forecasted economic growth in Asia Pacific and slower demand in the West, Australia is competitively positioned to become a leading regional supplier of oil, coal, iron ore and more recently, liquefied natural gas (LNG). Australia’s LNG sector is being driven in the short-term by strong LNG demand from traditional Asian buyers such as Japan and Korean utilities, and in the medium-term by China and India as part of their rapid industrialisation programs and substitution towards cleaner fuels. If all of the 15 multi-billion dollar LNG projects in Australia come to fruition, the country may supplant Qatar as the world’s leading LNG producer by 2020; however, this is a big “if.” The sector faces several risks and challenges—notably risk of global oversupply of LNG in Asia Pacific, risk of demand saturation, a critical skills shortage and cost overruns. Those LNG projects with first move advantage—those with long-term binding supply contracts and production infrastructure already in place—are most likely to be successful in the long-term.

A case study of the Flex LNG/Rift Oil floating LNG project in Papua New Guinea

Flex LNG Limited is a producer of units for the production, storage and off-take of liquefied natural gas (LNG). It currently has four of these units committed for construction by Samsung Heavy Industries in Korea, utilising the SPB LNG containment system. The world’s first floating liquefaction unit will be delivered to Flex in 2012. Floating LNG facilities have unique potential for monetising uncommitted gas reserves. In June 2008 Flex and Rift PLC entered into a co-operation agreement under which they agreed to work together to develop a floating liquefaction project offshore Papua New Guinea (PNG). The project will utilise Rift’s gas reserves and one of Flex LNG’s floating liquefaction units. Annual production capacity will be 1.5 million tonnes of LNG and start-up is targetted for 2012. The paper will be a case study of this project including: critical path, project structure and contractual matrix, upstream reserves and facilities, feed gas quantity and quality, pipeline issues and, key design parameters and liquefaction operations for the LNG producer. The paper will also cover: direct and indirect stakeholders in the project; economics and financing; PNG-specific issues such as geography, permitting, fiscal regime, local employment opportunities, marine conditions, infrastructure and sovereign risk; LNG demand in the Pacific and LNG marketing and off-take arrangements.

Risk assessment of LNG importation terminals using the Bayesian–LOPA methodology

In order to meet the fast growing LNG (Liquefied Natural Gas) demand, many LNG importation terminals are now in operation. Therefore, it is important to estimate potential risks of LNG terminals using LOPA (Layer of Protection Analysis), which can provide quantified results with less time and effort than other methods. For LOPA applications, failure data are essential to compute risk frequencies. However, available failure data from the LNG industry are sparse and often statistically unreliable. Therefore, Bayesian estimation, which can update generic failure data with plant-specific failure data, was used to compensate for insufficient LNG system failure data. This paper shows the need for the Bayesian–LOPA methodology, how to develop the method, and a case study to demonstrate application of the method. Finally, this paper proposes that the Bayesian–LOPA method is a powerful tool for risk assessment of not only the LNG industry but also in other industries, such as petrochemical, nuclear, and aerospace.