LNG Import Research Articles

GNOME: A Dynamic Dispatch and Investment Optimisation Model of the European Natural Gas Network and Its Suppliers

As indigenous production declines, the European gas market is becoming increasingly dependent on imports. This poses energy security questions for a number of countries, particularly in the north-east of Europe. A suite of mathematical models of the European natural gas network has been borne from these concerns and has traditionally been used to assess supply disruption scenarios. The literature reveals that most existing European gas network models are insufficiently specified to analyse changes in supply and demand dynamics, appraise proposed infrastructure investments, and assess the impacts of supply disruption scenarios over a range of time horizons. Furthermore, those that are suited to these applications are typically proprietary and therefore publicly unavailable. This offers an opportunity to present a new model. The Gas Network Optimisation Model for Europe (GNOME) is a dynamic, highly granular mixed-integer linear optimisation model of the European natural gas network and its exogenous suppliers. GNOME represents demand and supply for all EU-27 Member States except Cyprus, Luxembourg, and Malta. The UK, Norway, Switzerland, Belarus, Ukraine, and Turkey are also included. Russia, the Southern Corridor suppliers, Qatar, North Africa, Nigeria, and the Americas are modelled as supply-only regions. GNOME satisfies gas demand in each country by generating a cost-minimal mix of indigenous gas production, pipeline flows, LNG imports, and storage use. If demand cannot be met using existing infrastructure, GNOME will generate a cost-optimal investment strategy of pipeline, LNG regasification, and gas storage capacity additions. The model solves on a monthly basis, from 2025 to 2040, in 5-year steps. The capabilities of GNOME are demonstrated by tasking it to analyse the impacts of a failure to complete the upcoming Nord Stream 2 pipeline between Russia and Germany. The complete formulation of GNOME including input files, equations, and source code is provided.

Current situation and solutions to accelerate the implementation of gas projects in Vietnam to effectively exploit domestic resources

Ensuring the implementation progress of Vietnam's major gas projects (Block B, Ca Voi Xanh and Ken Bau) with early gas flow to the shore not only provides gas for power projects on time in accordance with the draft National Power Development Master Plan for the 2021 - 2030 period, with a vision to 2045 (draft Power Master Plan VIII), but also maintains the momentum of economic growth and increase revenues for the State budget.
 Vietnam needs solutions to accelerate the progress of projects to bring gas to shore to ensure energy security (meeting the increasing domestic gas demand), and to convert gas resources into national budget in the trend of energy transition and efficiency of investment capital (for projects having state-owned enterprise’s capital).
 The article analyses the fluctuation of State budget revenue when gas projects are slow to be put into operation, compares the national benefits of gas extraction projects with LNG import, and thereby recommends solutions to put gas projects into early operation.

Potential role of natural gas infrastructure in China to supply low-carbon gases during 2020–2050

As natural gas (NG) demand increases in China, the question arises how the NG infrastructure fit into a low greenhouse gas (GHG) emissions future towards 2050. Herein, the potential role of the NG infrastructure in supplying low-carbon gases during 2020–2050 for China at a provincial resolution was analyzed for different scenarios. In total, four low-carbon gases were considered in this study: biomethane, bio-synthetic methane, hydrogen, and low-carbon synthetic methane. The results show that the total potential of low-carbon gas production can increase from 1.21 EJ to 5.25 EJ during 2020–2050, which can replace 20%–67% of the imported gas. In particular, Yunnan and Inner Mongolia contribute 17% of China’s low-carbon gas production. As the deployment of NG infrastructure can be very different, three scenarios replacing imported pipeline NG were found to reduce the expansion of gas infrastructure by 35%–42%, while the three scenarios replacing LNG imports were found to increase infrastructure expansion by 31%–53%, as compared to the base case. The cumulative avoided GHG emissions for the 6 analyzed scenarios were 6.0–8.3 Gt CO2. The GHG avoidance costs were highly influenced by the NG price. This study shows that the NG infrastructure has the potential to supply low-carbon gases in China, thereby significantly reducing GHG emissions and increasing both China’s short- and long-term gas supply independence.

Evolution laws and new trends of global LNG pricing and their implications

Natural gas is of great significance to ensuring China's energy security and achieving “carbon neutrality” by 2060. However, the lack of power to decide LNG import pricing and the high resource cost bring challenges to the stable supply of natural gas in China. In this regard, after analyzing the historical evolution laws of global LNG pricing, this paper systematically summarizes the pricing trends of newly signed contracts in 2020, and comparatively analyzes China's long-term LNG import pricing modes and its problems. And the following research results were obtained. First, the global LNG pricing mechanism is more diversified, regional characteristics and “Asian premium” problems are obvious, and different pricing mechanisms complement each other. Second, the newly signed long-term LNG agreement is linked with oil prices to play a dominant role again, and the oil-linked slope declines continuously and presents a dynamic mixed S-curve. Third, China's long-term LNG agreement is linked with oil prices at a high proportion, so there are no market conditions of gas–gas competition and the price review period is long. Finally, several suggestions were proposed for China's LNG import pricing. Firstly, stick to the principles of “short-term flexibility” and “long-term stability”, and make use of multiple modes comprehensively, e.g. gas–gas competition and Brent price linked, instead of completely decoupling oil prices. Secondly, referring to global newly signed contracts and Asian reviewed contracts, adhere to the principle of market parity, improve the price review terms and shorten the review period. Thirdly, the government shall support the construction of natural gas trading centers and futures markets and form the internationally recognized regional benchmark price as soon as possible. Fourthly, make a plan in advance, establish a risk hedging mechanism and control the overall cost of imported LNG resources.

Analysis of Changes in Natural Gas Physical Flows for Europe via Ukraine in 2020

The main objective of the paper was comparative analyses of natural gas quantities delivered through the existing pipeline capacities in the last decade and new pipeline capacities for the prediction of possible future flows of gas import to Europe. Changes in physical flows have been influenced by European energy strategies that became green oriented resulting with a high amount of non-utilized transmission capacities. The research findings have shown that there is a significant decrease observed in transit of Russian gas through Ukraine in 2020 than previously. Concerning the high increase of LNG import to Europe in the same year, the start of operation of TurkStream, planned start of operation of Nord stream 2, authors project the gradual decrease of transit of Russian gas through Ukraine until the year 2025 with the total stop of transit of Russian gas until the year 2030. The change of supply routes will be also under the economic influence of low gas prices and coal and gas fuel switch until 2030 in the West EU, and after 2030 in the South Eastern European region. In the short-term period transit system for natural gas from Russia via Ukraine will be necessary for supplementing coal with natural gas in the energy mix.

A multi-period linear programming model for the natural gas distribution network of Thailand

ABSTRACT As a consequence of the impending gas shortages from sources in the Gulf of Thailand, the country will be obliged to switch to imports of LNG to achieve energy security. The gas system of Thailand is constructed as a mathematical model. In the simulation, the output shows that reserves gas of Thailand is insufficient to face the demand in 2015–2036, while the consumption of natural gas reserves continues at a rate that indicates that LNG imports will become the primary supply in the future to meet rising demand. The linear programming approach indicates patterns in the supply of gas which will see imports of LNG expanding at a rate lower than that predicted in the plan, thus undercutting the figures for the 2021 MMSCFD under the Gas Plan. The programming described in this study, however, may serve as the foundation for further examinations of Thailand’s situation regarding energy security.

Does ‘more’ equal ‘better’? – Analyzing the impact of diversification strategies on infrastructure in the European gas market

The paper investigates investments in gas infrastructure considering uncertainties in European gas markets. Furthermore, the study addresses the question of whether (more) diversification provides a (better) security of supply improvement. Thus, a stochastic optimization approach is introduced. The uncertainties focus on 2030 and 2045 in three dimensions, namely the Ukraine gas transit, future LNG prices, and the expected gas demand. Considering three diversification strategies, the model GAMAMOD-EU.sto optimizes investments in pipelines, LNG import terminals and gas storages as well as the gas dispatch. Results illustrate trade-offs between optimal gas supply and diversification strategies. Investments in pipelines to North African suppliers are made across all strategies, while the building of the Nord Stream 2 pipeline depend on the respective diversification strategy. Diversification through LNG quota changes the dispatch results significantly. Investments in storages are almost not necessary over all strategies, however, storages provide flexibility to prevent supply shortages, when diversification strategies are applied. Conclusion for policy makers regarding what is needed for preventing malinvestments and high costs in the European gas market are: an enhanced relationship between Russia and the EU and a clear vision on the role of gas in the future European energy system that reduces demand uncertainty.

Exhaust emissions of buses LNG and Diesel in RDE tests

Abstract The article compares the exhaust emissions in road conditions of city buses: LNG and Diesel. Both buses met the Euro VI exhaust emission norm. The current strong drive to diversify fuels in Poland and the creation of a large gas port in Świnoujście for LNG imports creates an excellent opportunity to use this fuel, also in road transport. Therefore, the attempt to identify the emission in operation, in first place possible applications, i.e. an LNG bus, comparatively with the emission of a Diesel bus. The operational research carried out concerned such a bus and has not yet been carried out in the country, hence their innovation, also methodological. The conducted research, in particular, was aimed at verifying differences in exhaust emissions of carbon dioxide and nitrogen oxides. The study was carried out on one urban bus route performing trips on consecutive days in similar environmental conditions. The performed tests were not strictly type approval tests but only used for comparative purposes. Hence, it was necessary to determine the compliance factor for the relevant exhaust gas substances, with the use of an evaluation algorithm based on measurement windows. Based on these results, the assumption regarding compliance with the emission requirements for the tested buses was verified in real traffic conditions. The exhaust emission values (emission indicators) determined in this way did not exceed the permissible emission limit values for carbon monoxide, while for nitrogen oxides and non-methane hydrocarbons certain exceedances were found.

The LNG trade between Qatar and East Asia: Potential impacts of unconventional energy resources on the LNG sector and Qatar's economic development goals

The successful emergence of Qatar into the LNG market is one of the most interesting cases in developmental studies, because of its strategy, planning, and implementation to take advantage of a fossil resource: The North Gas Field. Since the 1990s, the natural gas production enabled an exemplary development in Qatar based on the LNG trade to reach remote markets such as the East Asian basin, a region of the largest LNG importers. However, the technological and commercial disruption emerging from new and unconventional gas resources has started changing the market conditions globally, which could affect the well-established energy trade between Qatar and its East Asian customers, hence its economic development prospects. This paper analyses the market changes on power and position from different players in that trade, with relation to Qatar. The analysis on the demand and supply sides indicates how deep the new resources act as market game-changers such as shale gas did in the US in the past decade, shifting the power balance towards a buyer's market approach. The new balance creates new market conditions towards the flexibilization/globalization of the LNG as a commodity and the evolution of the market, forcing Qatar to design and implement necessary adaptations to maintain its position and importance as a reliable LNG supplier in different levels. The strategic considerations of Qatar are crucial to avoid negative impacts, in an increasingly complex and dynamic market, under heightened conditions of competition never seen on the LNG trade, in addition to the unforeseeable changes brought by climate change, trade barriers and global outbreaks. Such changes call for smart, progressive, and adaptive transitionary energy policies and strategies for Qatar and similar exporters.

Viability of seasonal natural gas storage in the Saudi energy system

We assess the geological and economic viability of underground natural gas storage in Saudi Arabia under different scenarios: with and without LNG imports allowed, and under low and high domestic gas production. Depleted oil fields or aquifers are best suited for gas storage in the Kingdom. Using a model of the country's energy system, we show that in the case of high gas production, storage capacity would be built to bypass the gas transport limit for use in electricity generation in the summer. In the low production case, gas storage would facilitate optimal gas use among sectors throughout the year. The net present gain – defined as the discounted sum of the annual differences in benefits and costs – is used to determine the economic viability of gas storage.Overall, gas storage in the high gas supply case would deliver a positive gain of nearly 900 million dollars throughout the energy system. With low gas supply, the cost of gas storage for the upstream sector would exceed the benefit of lower costs realized in other sectors. The results indicate that gas storage installations are only favorable in the case of high domestic gas production. If production turns out to be low, LNG imports would instead be more sensible.

Is this essential for Japan to changes its LNG import policy? Some evidence of the OPEC crude oil price shocks

In this study, Japan's LNG import contracts are discussed. Given the importance that these contracts are oil-indexation, the impact of crude oil price volatility (emphasizing OPEC oil basket) on LNG prices was studied using a structural VAR model from January 1997 to October 2017. Also, the Hodrick-Prescott filter was used to separate positive and negative shocks to investigate the effect of oil price shocks on LNG prices. The results showed that the relationship between LNG and crude oil prices has increased over time and that the effect of price shocks was asymmetric so that the impact of positive shocks was more lasting and more significant than negative shocks. This imbalance indicates that the basic oil contracting mechanism generally works to secure sellers' rights. So Japan needs to reform its contracts. Looking at gas sales contracts elsewhere in the world, it seems that the best alternative to current contracts would be the formation of an LNG hub in the North and East Asian region with the focus on Japan or Singapore.

Development of the Arctic gas industry and prospects for the Russian LNG market in the Asia-Pacific region

The article is devoted to the study of the development of the Arctic gas industry and the prospects of LNG sales in the market of the Asia-Pacific region. It is shown that the largest projects for the production of liquefied natural gas in Russia are concentrated in the Yamal-Nenets Autonomous district - “Yamal LNG” and “Arctic LNG - 2”. The growth of economies, partial abandonment of nuclear energy and coal contributes to the growth of natural gas consumption in the countries of the Asia-Pacific region. Japan, China and South Korea remain the largest LNG importers. The analysis showed that South Korea and Japan, despite all efforts to reduce energy consumption, are interested in increasing the volume of purchases of Russian liquefied natural gas. To meet their needs, Japanese companies “Jogmeg” and “Mitsui” purchased a 10% stake in the “Arctic LNG - 2” project for $ 25 billion. China, having concluded a trade agreement with the United States, will try to meet the growing demand for oil and gas through the supply of American energy resources. However, given the decline in the number of operating rigs in the United States, it is not certain that China will not need additional supplies from other exporters.

Viability of Seasonal Natural Gas Storage in the Saudi Energy System

Saudi Arabia expects to double its natural gas production within the next decade. This increased domestic supply is expected to meet the demand for gas from Saudi Arabia’s industrial development and, most importantly, to displace liquid fuels in its electricity sector. Given the strong seasonal variability of the latter, underground gas storage (UGS) can help ensure the availability of gas to meet peak power load. In this vein, we assess the geologic and economic viability of UGS in Saudi Arabia under different scenarios: with and without LNG imports allowed, and under low and high domestic gas production. Depleted oil fields or aquifers are best suited for gas storage in the Kingdom. Using a model of the country’s energy system, we show that in the case of high gas production, storage capacity would be built to bypass the transport limit for gas for use in electricity generation in the summer. In the low production case, gas storage would facilitate optimal gas use among sectors throughout the year. The net present gain – defined as the discounted sum of the annual differences in benefits and costs – is used to determine the economic viability of gas storage.

Life Cycle Assessment of LNG Fueled Vessel in Domestic Services

This research was focused on a comparative analysis of using LNG as a marine fuel with a conventional marine gas oil (MGO) from an environmental point of view. A case study was performed using a 50K bulk carrier engaged in domestic services in South Korea. Considering the energy exporting market for South Korea, the fuel supply chain was designed with the two largest suppliers: Middle East (LNG-Qatar/MGO-Saudi Arabia) and U.S. The life cycle of each fuel type was categorized into three stages: Well-to-Tank (WtT), Tank-to-Wake (TtW), and Well-to-Wake (WtW). With the process modelling, the environmental impact of each stage was analyzed based on the five environmental impact categorizes: Global Warming Potential (GWP), Acidification Potential (AP), Photochemical Potential (POCP), Eutrophication Potential (EP) and Particulate Matter (PM). Analysis results reveal that emission levels for the LNG cases are significantly lower than the MGO cases in all potential impact categories. Particularly, Case 1 (LNG import to Korea from Qatar) is identified as the best option as producing the lowest emission levels per 1.0 × 107 MJ of fuel consumption: 977 tonnages of CO2 equivalent (for GWP), 1.76 tonnages of SO2 equivalent (for AP), 1.18 tonnages of N equivalent (for EP), 4.28 tonnages of NMVOC equivalent (for POCP) and 26 kg of PM 2.5 equivalent (for PM). On the other hand, the results also point out that the selection of the fuel supply routes could be an important factor contributing to emission levels since longer distances for freight transportation result in more emissions. It is worth noting that the life cycle assessment can offer us better understanding of holistic emission levels contributed by marine fuels from the cradle to the grave, which are highly believed to remedy the shortcomings of current marine emission indicators.

Modelling cost-effective pathways for natural gas infrastructure: A southern Brazil case study

Currently, natural gas in Brazil represents around 12.9% of the primary energy supply, with consistent annual growth during the last decade. However, Brazil is entering a time of uncertainty regarding future gas supply, mainly as import from Bolivia is being renegotiated. As such, diversification of gas supply sources and routes need to be considered. Energy systems and infrastructure models are essential tools in assisting energy planning decisions and policy programmes at regional and international levels. In this study, a novel combination of a simulation-based integrated assessment model (MUSE-South_Brazil) and the recently-developed Gas INfrastructure Optimisation model (GINO) is presented. The Brazilian region represented by the five southern states served by the Bolivian gas pipeline (GASBOL) has been investigated. Modelled projections suggest that regional gas demand would increase from 38.8 mcm/day in 2015 to 104.3 mcm/day by 2050, mainly driven by the increasing demand in the industry and power sectors. Therefore existing regional gas infrastructure would be insufficient to cover future demands. Three different renegotiation scenarios between Brazil and Bolivia were modelled, obtaining distinct cost-optimal infrastructure expansion pathways. Depending on the scenario, the model expects gas demand to be covered by other supply options, such as an increase in pre-salt production, LNG imports and imports from a new Argentinian pipeline.

A Strategic Perspective on Competition between Pipeline Gas and LNG

Global gas markets feature two types of suppliers: piped gas and LNG exporters. Pipelines have a high degree of “asset specificity” : once built, they are physically bound to a particular route. LNG is transported by tanker, with a choice of export markets. Put simply: LNG is mobile, pipelines are not. This paper uses game-theoretic modelling to show how its commitment to serving a single market confers a strategic advantage on piped gas. By “overinvesting” in its own market, a pipeline exporter can induce LNG rivals to shift sales to their other markets. The model helps understand competition between Russian piped gas and Qatari LNG. It shows how Russia’s dependence on Europe can be good news for gas buyers, why these nonetheless strongly benefit from diversifying into LNG imports, and how the Herfindahl index of imports can mismeasure “supply security”. The paper also discusses Russia’s evolving gas export strategy, including gas deals with China.

Numerical Simulation of the Water Temperature in the Al-Zour Area of Kuwait

The Al-Zour coastal area, located in southern Kuwait, is a region of concentrated industrial water use, seawater intake, and the outfall of existing power plants. The Al-Zour LNG import facility project is ongoing and there are two issues regarding the seawater temperature in this area that must be considered: variations in water temperature under local meteorology and an increase in water temperature due to the expansion of the thermal discharge of expanded power plant. MIKE 3 model was applied to simulate the water temperature from June to July, based on re-analysis data from the European Centre for Medium-Range Weather Forecasts (ECMWF) and the thermal discharge input from adjacent power plants. The annual water temperatures of two candidate locations of the seawater intake for the Al-Zour LNG re-gasification facility were measured in 2017 and compared to the numerical results. It was determined that the daily seawater temperature is mainly affected by thermal plume dispersion oscillating with the phase of the tidal currents. The regional meteorological conditions such as air temperature and tidal currents, also contributed a great deal to the prediction of seawater temperature.

Spatial planning and optimisation for virtual distribution of BioCNG derived from palm oil mill effluent to meet industrial energy demand

Rise in energy prices and energy security concerns have become more crucial for the industrial sector to opt for an alternative fuel. Biogas could be used as fuel for electricity generation, boilers or upgraded and compressed as bio compressed natural gas (BioCNG) that can be utilised in various applications, such as transportation, fuel for industry and injected into a gas grid (as biomethane). Biogas, produced by anaerobic digestion (AD) of palm oil mill effluent (POME) can be used as a fuel substitute for natural gas in industry while reducing CO2 emission. Virtual distribution of BioCNG, which is from remotely located natural gas pipeline, has become economically attractive to the industry. However, this concept poses some issues concerning logistic due to the scattered spatial distribution of palm oil mills which discharge large quantities of POME for biogas recovery. Addressing these aspect require an integrated spatial planning and optimisation to synthesise location and allocation network of BioCNG virtual transportation to the respective industry. This paper presents the development of integrated spatial planning and optimisation of BioCNG supply and distribution network through virtual pipelines to meet the on-site energy demand of specific industry, while minimising the total operational cost. The data from network analysis of ArcGIS will be coded into the Generalised Algebraic Modelling System (GAMS) model to generate a supply cost curve for multiple sources of energy carrier, i.e., LNG, NG through pipeline network, BioCNG through virtual pipelines with and without upgrading. Two case studies were evaluated to determine the optimal energy supply allocation for demand location. This model is beneficial for BioCNG network management while reducing carbon emissions. Results showed the optimised combination of energy supply to meet energy demand of selected industries, which was 198.9 MW of BioCNG production and 401.1 MW of LNG import. The percentage cost reduction of the optimised energy supply is 36.3%.

A minimal simplified model for assessing and devising global LNG equilibrium trade portfolios while maximizing energy security

The global environmental concerns associated with the increased energy demand have promoted the use of natural gas as a low-carbon fuel. This caused an increase in LNG supply and demand coupled with the need for useful tools to devise secure LNG trade schemes. While most studies focused either on assessing the security of past/current LNG trade, or on extrapolating LNG trade trends in the future, this study introduces a new simplified coarse-grained model that devises optimized LNG import/export schemes ensuring secure trade for suppliers and markets. The model is based only on four variables: LNG demand, LNG liquefaction capacity, utilization of liquefaction capacity, and transport distance. First, the model was used to generate LNG trade portfolios for Asia Pacific and Europe between 2003 and 2016. The HHI index then showed that the model always devised a more diversified, secure LNG trade. The different import strategies of the two markets and their evolution with time was highlighted, revealing more secure import regulations by AP. Finally, the model was used to forecast LNG import portfolios for AP and EU in 2030, which emphasized a significant change in the market share of conventional exporters with the introduction of new US and Australian LNG.

Modeling the Geopolitics of Natural Gas: LNG Exports From the US to Eastern Europe

In the course of the crisis in the Ukraine, most leading politicians in Eastern European countries, such as Poland, the Baltic States and Ukraine itself, identified the high dependency on natural gas imports from Russia as a threat to energy security. Hopes of independence through extraction of domestic shale gas resources, which evolved after the US shale gas revolution and the substantial resource estimations for Polish shale gas (published by the EIA in 2011 and updated 2013), are more topical than ever. However, there are several factors, which dim the hope for repetition of the US “shale gas revolution” in Eastern Europe. First, international companies such as Shell, ExxonMobil or Chevron withdrew from Poland and Ukraine due to poor exploration results. Additionally, because of environmental legislation and population density, the obstacles for commercial shale gas production within Europe, compared to the US, are very high. In this paper, the Global Gas Model (GGM) (Egging, 2013) is used to simulate future patterns of the Eastern European gas supply. Shale gas scenarios show that Poland and the Baltic States would lower their dependency with an annual production of 8 bcm (Poland) and 2 bcm (Baltic States) because of their relatively low natural gas consumption. This means, conversely, that a failing production of shale gas would lead to ongoing dependence on natural gas imports. In Ukraine, however, a potential shale gas production of 5 bcm/a does not have major consequences with respect to an annual consumption of up to 60 bcm. As for LNG scenarios, US LNG exports do barely reach the Eastern European gas market in the Base Case scenario. Only in the projected period between 2035 and 2040 Poland receives 4.9 bcm of US LNG. However, the Polish natural gas market is sensitive to provided subsidies. A 30% subsidy on transportation increases the total amount of exported LNG to Poland up to 8 bcm. In contrast, the Ukrainian and Baltic natural gas market, however, barely react to subsidies from the US. A minimum of 60% is needed to export US natural gas under economically rational conditions to both regions. Modeling results show that the increasing natural gas demand in Ukraine, the Baltic States and Poland is in need of either domestic shale gas production or an increase of pipeline or LNG imports.