LNG Industry Research Articles

LNG Sale and Purchase

In light of the fact that the initial development of the LNG industry depended upon the development of a large gas reserve and the construction of a suitable liquefaction facility, the LNG industry traditionally has been a seller-driven market dominated by long-term LNG sale-and-purchase contracts that do not provide any flexibility to the consumer and require dedicated LNG tankers and a strict framework governing the shipping of LNG. However, the future projections of the international LNG industry indicate a rapid increase in liquefaction and shipping capacity that may lead to greater short-term LNG sales and could result in the shifting of the LNG industry from being seller-dominated to one that is equally controlled, if not driven by, the buyers and end consumers of LNG. In addition to discussing such trends, this article describes the LNG chain and the way it is financed, project structure and documentation for upstream and downstream LNG projects, and typical LNG purchase and sale agreements.

AUSTRALIAN GTL CLEAN DIESEL: A STRATEGIC OPPORTUNITY FOR AUSTRALIA’S STRANDED GAS RESERVES

Australia’s lack of gas supply infrastructure and market opportunities means that in the northwest of our nation more than 100 trillion cubic feet of gas remains uncommitted to customer contracts.Because of Western Australia’s relatively small domestic gas markets and the long transport distances to larger markets, the belief has been that only the LNG industry has the scale to monetise the large volumes of gas required to underpin greenfield developments and expansion of gas supply infrastructure.Changing fuel specifications around the world, combined with the limited opportunities for new LNG contracts, has renewed interest in gas-to-liquids (GTL) technology as an alternative to crude oil refining for a source of clean and efficient transport fuels. GTL is an exciting new market opportunity for Australian gas.Exploration interest in Australia appears to be waning. Declining opportunities for oil discoveries and the lack of markets for natural gas make investments in Australia’s upstream sector unattractive compared to other locations around the world.In addition, Australia has dwindling crude oil supplies and faces the prospect of increasing reliance on imported crude oil and refined products. An Australian GTL Clean Diesel industry can help overcome these hurdles by creating a designer blendstock and a valuable new GTL Clean Diesel export industry.A GTL Clean Diesel industry would not only help resolve many of Australia’s current upstream and downstream problems in the petroleum industry, but would also provide massive economic benefits to Australia.This paper will look not only at the making but also the marketing of this fuel of the future.

POTENTIAL IMPACTS OF GAS-TO-LIQUIDS ON THE OIL AND GAS INDUSTRY

Over the past decade interest in gas-to-liquids (GTL) technology within the oil and gas industry has been on the rise. Depending on the level of cost reductions obtained, this technology has the potential to create a significant change in the oil and gas industry. In an effort to consider these changes, this paper will address the following issues:Can GTL technology redefine the energy industry’s present structure and give rise to a broad range of new competitors and/or products? If so, how and when is it likely to happen?Our answer to the first part of the question is, simply, yes. GTL technology certainly has the potential. However, the depth and breadth and timing of GTL’s penetration into the industry will be driven by forces of cost, price and environmental regulations. The depth of penetration depends on the answers to the following questions: Can GTL plants be built for US$25,000/bpd or less? What impact will scale and learning curve have on cost reductions? What premium will the consumer market give for GTL products? Is the peak production for conventional oil production on the horizon?If the development of the LNG industry is representative of the potential growth in the GTL industry, we could project a GTL production rate of 1,000,000 bpd in 2025, or about 1.3% of the world’s current production rate.

00/03194 The growth of Japan's LNG industry: lessons for China and Hong Kong

00/03194 The growth of Japan's LNG industry: lessons for China and Hong Kong

The growth of Japan's LNG industry: Lessons for China and Hong Kong

About 30 years ago, the Japanese government decided to import LNG from other countries. Since then, the LNG trade in Asia has been growing rapidly. Electric utilities in Japan have cooperated with the major gas companies to construct LNG receiving terminals and to import LNG from foreign countries. In China, the government is planning to construct the country's first LNG terminal in Shenzhen, a municipality across the border from Hong Kong. The development of LNG projects will help overcome the problem of the security of supply of natural gas in South China. While mainland China can provide land and labour for the construction of LNG terminals, Hong Kong can provide capital and a market. China and Hong Kong can learn from Japanese experiences of introducing LNG for power generation, gas production and other non-utility uses.

THE KYOTO PROTOCOL- THREATS AND OPPORTUNITIES

In 1997, Australia signed the Kyoto Protocol under which it had been assigned what will become a legally binding emissions cap of 108% of its 1990 emissions. This target may be appropriate for our national circumstances but will be challenging to meet. This paper examines the way Woodside Energy Ltd is addressing the threats and opportunities raised by the Kyoto Protocol.The major risk to Woodside's business arises from the division of the Protocol into Annex B and non-Annex B. Australia is in Annex B, which is composed primarily of developed countries that have assigned emission amounts that will be legally binding when the protocol comes into force and is ratified.Meeting the Australian target and the global greenhouse emission reduction objective will require increasing the substitution of gas into national fuel mixes. Natural gas, including LNG, has the lowest lifecycle emissions of any fossil fuel.The Australian LNG industry is the only major Annex B supplier of LNG to Japan and thus would be at a severe competitive disadvantage if the costs of unilaterally imposed abatement policies and measures were applied to the industry in Australia that were not applied to its international competitors. The LNG industry is seeking differential treatment to alleviate this risk. Woodside has proposed a solution, put forward in this paper, that a scheme be negotiated into the Protocol at CoP6, allowing for the repatriation of credits from the LNG fuel cycle to the exporting country. This would permit fair competition across all LNG exporters.Woodside is keen to undertake its fair share of emission reduction and has already implemented some projects that have been successful in this regard. Further implementation of beyond no regrets projects relies on the Commonwealth resolving the recognition for early action question. A trial framework for making decisions on early abatement projects is described.Woodside is also investigating potential opportunities arising from the Protocol. Progress is reported on early investigation into clean development mechanism (CDM) projects and greenhouse abatement research and development (R&D). Sink enhancement studies are nearly complete and a detailed business case is under preparation.

Alternative natural gas contract and pricing structures and incentives for the LNG industry

Gas conversion to liquefied gas (LNG) and transport by LNG tankers is one option for meeting expanding gas consumption and for gas traded internationally. This paper examines the impact of the traditional gas contract provisions of indefinite pricing, market out price ceilings, and take-or-pay requirements on the profitability of LNG projects in the context of markets characterized by price and quantity uncertainty. Simulation experiments are used to examine and calibrate the effects of those provisions. The results provide guidance to operators, host countries and purchasers in structuring such contracts. The paper also assesses prospects of future expansion of world LNG capacity.

LNG trade in the Asia-Pacific region: Current status and future prospects

In only two decades, the Asia-Pacific region has become the most important region in the international LNG scene. Today, despite existing high potential for additional market penetration in Asia-Pacific, the LNG industry is standing at the crossroads. With the number of participants increasing, and a series of (so far long-term) LNG contracts expiring in the early 1990s, market participants need to reconsider contractual approaches if LNG is to further contribute to growing energy requirements and reduction of oil-dependency and environmental pollution. In addition to contract stability, flexibility will be a crucial factor in the future.

Cryogenic spill protection and mitigation

A range of practical measures are reviewed which can be adopted for preventing detecting, or mitigating against spillages of cryogenic liquids from containment. Specific examples of such measures are examined which are drawn from experience within the LNG industry and which may also find application within other industries.

Design Considerations for Liquefied Natural Gas Plants in South East Asia

Design Considerations for Liquefied Natural Gas Plants in South East Asia

The role of LNG in energy supply

This paper reviews the current status of base-load LNG plants involved in international trade. In the historical review of the development of of the LNG industry brief references are made to peak-shaving LNG plants. The paper also describes the complex co-operative effort required to organize international LNG projects, and presents technical information concerning the refrigeration aspects of base-load LNG projects. The information includes brief reviews of liquefaction cycles, storage tanks, types of ships, receiving terminals, and the potential for utilizing the refrigeration available in revaporized LNG.

Nonlinear taylor instability of a plane interface between two incompressible fluids with interfacial mass transfer

AbstractA principal mechanism for rapid mixing and fragmentation in vapor explosions, such as have occurred in the LNG, aluminum, steel and paper industries, is thought to be nonlinear Taylor instability. An analysis, based on a generalized coordinate method developed by Dienes for a fluid with an arbitrary constitutive law, is here extended to a two‐fluid model, with or without mass transfer between the fluids. Numerical results indicate that in a steam‐water system entrainment starts in times of order 10−4s at 100 G acceleration normal to the interface. For gas‐liquid systems the presence of the second fluid changes the instability growth only slightly. Condensation of steam, even when limited only by the kinetic theory interfacial resistance, also has minor effects on the growth rate. However, condensation on the entrained drops will have a major effect on the acceleration.

LNG Industry of Overseas Transport Type

The LNG technology and project scale differ from each other depending on the type of LNG industry. The Libya to Spain and Italy LNG project belongs to overseas transport type, not to peakshaving type. The associated gas from the Zelten and Raguba oil field is transported by the main gas pipeline to Marsa el Brega. Startup and testing of the Brega LNG facilities and the LNG tankers have been concluded successfully. This paper also gives a general outline of LNG terminal at Barcelona and La Spezia.

Underground Storage of LNG

The LNG industry requires a huge amount of investment in the facilities for liquefaction and marine transportation. In addition, the storage of LNG has posed a serious problem for both shipping and receiving points from technical and economical points Of view.The storage of LNG was normally made in double-wall metal tanks in the initial stage. However, this method was comparatively higher in cost and required highly advenced techniques in the construction. Furthermore it had another detrimental factor that a suitable location was not always readily available. As a counter-measure to this, an underground storage technique was developed and has since been gradually industrialized on a commercial basis.Additionally, instead of storing LNG in liquefied form, the underground storage of LNG in regasified form has come into wide use as a large-scale storage method.Japan is regarded to grow to the world largest importing country of LNG in the near future and, as her consumption of LNG increases she will be faced with the problem of how and where to keep these large supplies stored. A reasonably possible answer to this question will be an underground storage method of LNG in the Pacific belt regions of Japan which will be the principal areas to receive LNG import from abroad.Also, when the utilization of natural gas becomes prevailing, large scale storing of LNG will be a requisite for the purpose of peak-shaving. The most practical method for this will be underground storage in regasified form and for this purpose those depleted gas (oil) reservoirs located in the northern part of Japan on the Japan Sea will no doubt be most useful.