LNG (Liquefied Natural Gas)
LNG (Liquefied Natural Gas) Definitions
Base Gas (or Cushion Gas) is the minimum volume of gas required in a gas store or an underground storage reservoir to provide and maintain the necessary pressure and deliverability rates throughout the withdrawal season. The Base Gas or Cushion Gas is initially established and un-produced reserves left in a partly depleted field, and may finally be used when the store is decommissioned. The Base Gas is typically 50% of the total stored volume that could be a large part of the capital cost.
Boil Off Gas (BOG) is the continuously evaporated or boiled LNG vapor that causes the pressure inside the tank to rise due to heat entering the cryogenic tank during storage and transportation, which changes the quality of LNG over time. This BOG is generated primarily due to heat leakage from the atmosphere through tank insulation, loading, unloading and recirculation pipeline system insulation, and it is re-routed through a boil off gas refrigeration compressor and re-pressurized for designated service to the storage tank or other utility systems.
Heel LNG is the LNG cargo retained in the cargo tanks on completion of discharge that is left in ship and shore storage tanks to maintain their cryogenic temperatures.
LNG (Liquefied Natural Gas) Project (LNG Business Value Chain) includes from the wellhead to end users (the production, processing, conversion of natural gas to LNG, storage, long-distance transportation, storage and regasification), and supply: Liquefaction plant (LNG Producing); LNG Storage Tank; LNG Terminal (Export (Loading) and Import (Unloading)); Regasification; LNG Carrier, etc.
LNG Membrane Containment Systems of the design, generally fall into two categories that were originally designed by the two separate companies, GAZ Transport (GTT) and Technigaz. Both are similar in that they comprise of primary membrane barrier, insulation, secondary membrane barrier and further insulation in a sandwich construction. The membrane may be Invar (Gaz Transport) or stainless steel (Technigaz) – the Northwest Swan is of the GTT NO96 design with Invar primary and secondary barriers. The membranes in the NO96 design are 0.7mm thick, each layer of insulation is about 300mm thick. The tanks are not self supporting as in the Moss design, they are built against the inner (double) hull of the vessel. Nitrogen is purged through the insulation layers and a gas detection system is installed. (Source: www.nwsssc.com/)
Spot LNG is defined as cargoes delivered the Liquefied Natural Gas (LNG) through contracts of four years or less that refers to the trade of large physical cargoes or parcels in one-off transactions for near-term delivery. The Spot LNG market accounts for a small portion of overall LNG transactions but plays a critical role in setting prices for most other transactions. The International Group of Liquefied Natural Gas Importers defines “true spot volumes” as those delivered within three months of the transaction date. Prices in the spot market can be fixed or tied to oil or gas.
LNG Storage Tank
Global LNG Carriers
LNG Carrier is fitted with independent cargo tanks or with membrane tanks. LNG carriers are generally specialised ships transporting LNG at its boiling point of -162 °C, depending on the cargo grade. independent tanks are completely self-supporting and they do not contribute to the hull strength of a tanker. As defined in the IGC Code, and depending mainly on the design pressure, there are three different types of independent tanks for gas carriers: these are known as Types 'A' (fully refrigerated condition), 'B' (LNG tankers), and 'C' (fully pressurised). The Membrane Containment system is based on a very thin primary barrier (membrane - 0.7 to 1.5 mm thick) which is supported through the insulation. (e.g., GTT NO96 Membrane system, GTT Mark III & V system, etc.) The Semi-Membrane concept is a variation of the membrane tank system. The primary barrier is much thicker than that in the membrane system, having flat sides and large radiused corners.
With the delivery of 35 vessels in 2020, the global LNG carrier fleet consisted of 572 active vessels1 at the end of last year, including 37 floating storage and regasification units (FSRUs) and four floating storage units (FSUs). This represents a 7% growth from 2019, which can be compared to a 1% growth in number of LNG voyages, a figure that was lower than expected, largely due to COVID-19 demand disruption. The virus has also resulted in increased use of floating LNG storage2, new ways of working, and delays in newbuild deliveries. (Source: IGU World LNG report - 2021 Edition)
There were a total of 525 vessels in the LNG fleet by the end of 2018, including those vessels actively trading, sitting idle available for work, and acting as FSRUs. Of the total global LNG leet, there are 31 FSRUs and five floating storage units. The overall global LNG fleet grew by 11.5% in 2018, as 53 carriers were added to the fleet, including four FSRUs. The global LNG fleet growth was matched by 26.2 MTPA of new liquefaction capacity in 2018. (April 1, 2019)
Liquefied Natural Gas Carrier (LNGC) is a specialised tank ship used to transport Liquefied Natural Gas (LNG) that is fitted with independent cargo tanks or with membrane tanks at its boiling point of -162 °C, by which independent tanks are completely self-supporting and they do not contribute to the hull strength of a tanker (three different types of independent tanks for gas carriers (IGC Code): Type 'A' (fully refrigerated condition), 'B' (LNG tankers), and 'C' (fully pressurised)). A Membrane Containment system is based on a very thin primary barrier (membrane - 0.7 to 1.5 mm thick) which is supported through the insulation. (e.g., GTT NO96 Membrane system, GTT Mark III & V system, etc.) A Semi-Membrane concept is a variation of the membrane tank system. LNGCs are to prevent leaks and keep the LNG at the cold temperature to keep the liquid form in the 200,000 M3 capacity range.
Floating Liquefied Natural Gas (FLNG) is a floating production unit of LNG (Liquefied Natural Gas) that is the use of purpose built or converted ships to enable regasification and liquefaction of the LNG to be carried out offshore. A FLNG has the advantage that can start more quickly LNG production and importation.
Floating Production Storage and Offloading (FPSO) is a floating vessel that acts as a mobile offshore production and storage facility, where oil is processed and stored until it can be transferred to a tanker for transporting and additional refining. A FPSO system is used extensively by oil companies for the purpose of storing oil from the oil rigs in the middle of the ocean and in the high seas that is one of the best devised systems to have developed in the oil exploration industry in the marine areas.
Floating Storage and Regasification Unit (FSRU) is a special type of ship used for the LNG transportation, which is capable of transporting, storing, and regasifying LNG onboard. Floating regasification also requires either an offshore terminal, which typically includes a buoy and connecting undersea pipelines to transport regasified LNG to shore, or an onshore dockside receiving terminal. Compared to conventional onshore regasification terminals, FSRUs offer more flexibility, with the option to be deployed anywhere along the shore. A FSRU is one of the fastest growing shipping sectors at present which is the dedicated fleet of specialist ships carrying liquefied natural gas (LNG).
Floating Storage Unit (FSU) is capable of storing Liquified Natural Gas (LNG) in the large tanks on top of the vessel. A FSU is to supply LNG safely to a regasification facility and occasionally to play a role as a temporary terminal in order to redistribute LNG cargo to small scale LNG carrier.
FLPS stands for Floating LNG (Liquefied Natural Gas) Power Station.
Geology of Natural Gas Resources
Gas Industry Value Chain
Global Gas Production Growth
LNG Regasification Capacity
2023 World LNG Report
This is the 14th annual edition of the World LNG Report, the world’s most comprehensive public source of information on key developments and trends in Liquefied Natural Gas (LNG). ... (more about ...)
LNG Trade - Global LNG trade grew by 6.8% between 2021 and 2022 to about 401.5 million tonnes (MT). The pipeline gas supply shock following the onset of the Russia-Ukraine conflict led to a surge in LNG demand in Europe, where high prices pulled marginal cargoes away from Asia. The growth in exports from 2021 to 2022 was mainly driven by the US (+10.5 MT, +15%), following the start-up of the Sabine Pass Train 6 and Calcasieu Pass projects. The US overtook Qatar as the world’s second-largest LNG producer last year, exporting 80.5 MT in 2022 compared to 70 MT in 2021. Russia exported an additional 3.4 MT (+11.6%) in 2022, with Qatar exporting an additional 3.1 MT (+4%), as facilities attempted to maximise production in response to the high prices. Last year also saw Mozambique join the LNG exporters’ club with the first shipment from Coral South FLNG in November.
Price Trends - The LNG market experienced a tumultuous year in 2022. The emergence of market tightness in late-2021 continued and accelerated through 2022 following the onset of the Russia-Ukraine conflict at end-February. Europe’s sudden and urgent need to replace Russian piped gas with short-term LNG deliveries, coupled with forced gas demand destruction to ensure stock-filling ahead of the northern hemisphere winter, created an imbalanced and volatile global LNG market.
Liquefaction Plants - In 2022, a total 19.9 million tonnes per annum (MTPA) of liquefaction capacity was brought online to reach a global total of 478.4 MTPA, across 22 markets. New liquefaction capacity in the US market accounted for 75% of the capacity increase in 2022. Sabine Pass LNG T6 (5.0 MTPA) and Calcasieu Pass LNG T1-T18 (10 MTPA) in the US became operational in February and May 2022 respectively, giving the US the largest operational liquefaction capacity worldwide in 2022 with total of 88.1 MTPA.
Proposed New Liquefaction Plants - Currently, 997.1 MTPA of aspirational liquefaction capacity is in the pre-FID stage. Most proposed capacity is in North America (611.4 MTPA), with 333 MTPA situated in the US, 229.6 MTPA in Canada, and 48.8 MTPA in Mexico. This is followed by Africa (101.9 MTPA), Russia (137 MTPA), Asia Pacific (68.9 MTPA) and the Middle East (71.5 MTPA). About 6.4 MTPA of liquefaction capacity is proposed in the rest of the world. Overall, the market upheaval caused by the RussiaUkraine conflict has stimulated interest in liquefaction facilities as markets seek to re-establish energy security priorities, while balancing decarbonisation goals. Global liquefaction capacity would increase three-fold if all these projects materialise. However, a fair portion of pre-FID projects are unlikely to progress due to the weak economic or political landscape in some proposed areas, combined with difficulties to access financing for fossil fuel projects.
Regasification Terminals - Global regasification capacity reached 970.6 MTPA across 48 markets as of end-April 2023. In 2022, the highest capacity additions were in Europe, which saw an additional 14.5 MTPA of regasification, followed by Asia Pacific with 8.5 MTPA of new regasification, Asia with 6 MTPA and Latin America with 2.2 MTPA. Of the 31.2 MTPA regasification capacity additions in 2022, more than 80% came from new terminals. Nine new terminals were commissioned globally, with an unprecedented growth in Europe. Another three expansion projects were brought online in the Netherlands, China and Croatia. Project-specifically, the largest new capacity addition in 2022 was the 7.5 MTPA Nong Fab onshore LNG project in Thailand, followed by the 5.9 MTPA Eemshaven FSRU in the Netherlands, and the 5.5 MTPA Wilhelmshaven FSRU in Germany. Wilhelmshaven FSRU became the first LNG terminal in Germany, with terminals at another three sites planned or under construction
Floating and Offshore Regasification - As of end-April 2023, there are 44 floating and offshore terminals around the world with a total import capacity of 177.2 MTPA, accounting for around 18% of global regasification capacity. There are 16 floating and offshore terminals under construction, with total regasification capacity of 58.3 MTPA. Five new markets – Vietnam, Estonia, Senegal, Ghana and Nicaragua – are expected to emerge this year if floating terminal projects progress as planned. In the past two years, four new markets started importing LNG following the commissioning of FSRU-based terminals, including Croatia in 2021, El Salvador and Germany in 2022, and most recently as of April 2023, the Philippines.
LNG Shipping - There were 668 active vessels as of end-April 2023, including 45 FSRUs and eight floating storage units (FSUs). The global fleet grew by 4% with the delivery of 27 carriers in 2022. Most vessels delivered last year were in the 170,000 to 180,000 cubic metres (cm) size range. The second generation of X-DF and the new generation M-type electronically controlled gas admission (ME-GA), which are advanced propulsion systems for LNG carriers, have gained in popularity, with 146 X-DF systems across both generations and 122 ME-GA systems on the order book, making up a large share of the total 312 vessels on order as of end-April 2023.
LNG Bunkering Vessels and Terminals - In 2022, global LNG bunkering activity declined as oil-based fuels traded at significant discounts to global LNG prices. Any dual-fuel vessels that could switch to fuel oil did so. However, as of early 2023, LNG prices have once again become competitive with fuel oil, while the longer-term fundamentals of a rapidly expanding LNG-fueled orderbook and accelerating decarbonisation measures remain robust. As a result, 2023 is widely expected to be a revival year for the LNG bunkering market. As the global shipping fleet turns to LNG to decarbonise and adhere to stricter environmental regulations, the case for LNG bunkering remains strong. As of end-April 2023, the global operational LNG bunkering and bunkering-capable small-scale vessel fleet has reached 35 units, including both self-propelled and tug-propelled vessels and barges.
Decarbonisation of LNG - Decarbonisation is becoming a more prominent feature in recent developing and newly proposed projects. Decarbonising the liquefaction segment of the LNG value chain offers a significant opportunity to minimise lifecycle emissions today. There is a positive trend with numerous projects globally incorporating decarbonisation in operations. Cedar LNG and Woodfibre LNG in Canada, for example, are prioritising decarbonisation using renewable hydroelectricity to power their liquefaction operations. Cheniere, Sempra Energy, Egyptian LNG are also considering using carbon capture, utilisation and storage (CCUS) in their liquefaction plants to reduce carbon emissions. As demand for low-carbon LNG grows, more stakeholders in the industry are expected to prioritise the decarbonisation of their operations. It is important for this trend to continue yet keeping in mind that it will generally tend to increase project development cost, hence prudent policy and effective emission pricing schemes are
going to play an important role strengthening the business case for decarbonisation investments.
LNG Price Formation Mechanism
The 10 Countries With The Largest Natural Gas Reserves
Natural gas has been hailed as the bridge between a fossil fuel past and a low-carbon future. It has also been demonized as a Trojan horse for the fossil fuel industry to continue to be relevant in that low-carbon future envisioned by the architects of the transition. Over the past year, events in Europe made it quite clear that envisioning a future may be a noble thing but energy needs are immediate, and gas is perfect for meeting them with a lower emission footprint than fellow fossil fuels oil and coal. It is a bit unfortunate for Western gas consumers, then, that the countries with the biggest gas reserves in the world happen to be Russia and Iran. Fortunately, the United States is also on the list of the top 5 biggest gas reserve holders, as are several Middle Eastern countries. (By Irina Slav for Oilprice.com 0n 1 May 2023)
1 Russia: Russia has natural gas reserves of as much as 38 trillion cubic meters, according to the 2020 edition of BP’s Statistical Review of World Energy. Production last year totaled 573 billion cubic meters, down by 13.4% on the year. Historically, Europe and Turkey were Russia’s biggest gas buyers, but after last year’s events, Turkey has remained the only big consumer of Russian gas with any footprint in Europe. Today, China is the main destination for Russian pipeline gas. Russia also exports LNG, and, in an ironic twist, European imports of Russian LNG rose strongly last year.
2 Iran: The world’s second-largest natural gas reserves also happen to be in a country that doesn’t see eye to eye with the West, which is one of the biggest consumers of gas. With 32 trillion cubic meters, Iran is home to 16% of the global total. A lot of Iran’s gas reserves are concentrated in the South Pars offshore field in the Persian Gulf, which it shares with Qatar. Total production for 2020 reached 234 billion cubic meters or a daily average of 645 million cubic meters. Development of the country’s massive gas reserves has been challenging because of the pullout of Western supermajors such as TotalEnergies in the wake of the reinstated U.S. sanctions against Tehran.
3 Qatar: Iran’s neighbor Qatar, which calls its part of the massive Persian Gulf field the North Field, is a notch below Iran in terms of gas reserves, with 24.7 trillion cubic meters. Until recently, the largest LNG exporter in the world, Qatar, was expanding its production capacity, aiming for 126 million tons annually from the current 77 million tons. Qatar was a first choice for European gas buyers in the wake of the anti-Russian sanctions that saw gas flows decimated, but it turned out sealing a deal would be tougher than expected: Qatar turned out to like long-term purchase commitments, and Europe has an aversion to those.
4 Turkmenistan: Little known outside Central Asia but one of the biggest states there, Turkmenistan is home to the world’s fourth-largest natural gas reserves, with a total of some 19.5 trillion cubic meters, according to BP’s statistical review. Production is low, however, at just some 59 billion cubic meters in 2020, most of which was exported to China because domestic consumption is also relatively low. The country also exports gas to its Central Asian neighbors.
5 United States: As with crude oil, the largest producers of gas are not necessarily the countries with the largest reserves. The U.S. has become the world’s top gas producer and LNG exporter, but it only ranks fifth in terms of reserves. At the end of 2020, these stood at 13.179 trillion cubic meters, according to the CIA’s World Factbook, or 625.4 trillion cubic feet at the end of 2021, according to the Energy Information Administration. Thanks to the abundance of shale gas, the United States has become a major LNG world power in a matter of years. It could cement its place as the number-one exporter within the next decade if all planned projects come online, for a total annual capacity of 169 million tons by 2027.
The rest of the top 10 countries with substantial gas reserves is dominated overwhelmingly by OPEC members. Saudi Arabia, the UAE, Nigeria, and Venezuela all boast abundant gas reserves, as does China, at number 10.
Saudi Arabia comes in at number 6 with 8.5 trillion cubic meters in natural gas reserves, which it only recently decided to develop more seriously in response to growing global demand.
The OPEC de facto leader is followed by its Gulf neighbor the UAE, which OPEC estimates has some 8.2 trillion cubic meters in natural gas reserves. The country’s state oil and gas company recently spun off its gas business, which turned into the biggest IPO for the year, fetching ADNOC $2.5 billion.
Nigeria is next on the top-ten list, with natural gas reserves of 5.85 trillion cubic meters. This makes it the country with the largest proven natural gas reserves in Africa, but utilizing these reserves has lagged behind the utilization of its oil reserves.
Venezuela is also among the world’s top natural gas reserve holders, with 5.54 trillion cubic meters in proven reserves. The exploitation of those reserves, however, is mismatched with the volume of gas it is sitting on, especially since 2019 when the U.S. slammed Caracas with sanctions specifically targeting its oil and gas industry.
The last entry on the top-ten list of gas reserve holders may be a bit surprising. It is China, the world’s largest energy importer and one of the largest consumers. The country, which imports massive amounts of oil and gas, has substantial reserves of its own, but it has been challenging to tap them in volumes large enough to satisfy its fast-growing demand.
Unit Conversion
Natural gas can be measured in metric or imperial units
by energy content: Gigajoules (GJ) or Million British Thermal Units (MMBtu)
or by volume: Cubic Metres (m3) or Cubic Feet (cf)
Global Gas & LNG Outlook to 2035
Mckinsey&Company
Energy Insights
Throughout 2018, increased liquefied natural gas flows from the United States and Australia impacted global gas dynamics while pipeline flows remained stable. On the demand side, Asia continued to dominate LNG import demand in the first half of 2018, with overall volumes increasing at least 12 percent year over year. In China alone, LNG import volumes grew 52 percent per annum during the first half of the year. For supply, new LNG projects are expected to add 48 billion cubic meters per annum of capacity, and LNG plant utilization has held stable at around 82 percent.
Going global with zero refrigerant modular LNG and small-scale iLNG
In addition to patents already held, further patents have been awarded for the ZR-LNG process in South Korea and Australia, and Gasconsult is working on further patents for the USA, Canada, Malaysia and India. Work is also proceeding well on their UK Government Innovate funded design work for nominal 1.4 million tonne/y and 1 million tonne/y FLNG modules. Gasconsult expect to complete the bulk of the technical work around end February 2018. The outcomes are presently very encouraging. Independent third party evaluation by recognised process design experts confirm ZR-LNG as a very efficient process with power demand equal or better than SMR configurations and substantially reduced complexity relative to DMR schemes. (Source: Gas Processing)
Floating LNG regasification is used to meet rising natural gas demand in smaller markets
Floating regasification is a flexible, cost-effective way to receive and process shipments of liquefied natural gas (LNG). Floating regasification is increasingly being used to meet natural gas demand in smaller markets, or as a temporary solution until onshore regasification facilities are built. Of four countries planning to begin importing LNG in 2015, three of them—Pakistan, Jordan, and Egypt—have chosen to do so using floating regasification rather than building full-scale onshore regasification facilities.