Transportation of Natural gas T t ti fN t lPipelines vs Liquefied Natural Gas (LNG)• Pipelines are convenient and economical for onshore p transport of natural gas • Offshore, as the water depth and distance increase pipeline transport of gas becomes difficult. transport of gas becomes difficult• LNG for offshore transport of gas.• LNG is liquid at 260 oF and atmospheric presure LNG is liquid at –260 and atmospheric presure, transported in specially designed ships. • 25% of the trade movement of natural gas in 2002 was as 25% of the trade movement of natural gas in 2002 was as LNG. (BP Statistical Review, 2003)
Liquefied Natural Gas (LNG) Li fi d N t l G (LNG)• Liquefied gas is transported over long distances e.g., 2500 miles and more. 2500 miles and more LNG Technology• Capital intensive Capital intensive• Onshore and transportation needs• Good demand market is essential• Steady and large supply of reserves Steady and large supply of reserves
Estimate of LNG Cost Reductions 1970 s vs. 1970’s vs Today 2.53 0.49 30% decline of costs 1.54 1 54 0.50 1.80 into pipeline 0.40 1.00 0.40Lique-Lique- Trans- Trans- Regas- Regas- Total Lique- Lique- Trans- Trans- Regas- Regas- Totalfaction act o po tat o portation ification faction portation ification Source: McKinsey & Company / El Paso $/MMBtu—2,500 $/MMBtu 2 500 mile voyage
COMPRESSED NATURAL GAS (CNG) ( ) Advantages • Simplicity • Inexpensive onshore facilities • Can start with very modest transporting needs • Energy efficient E ffi i t • Can exploit isolated supply sources • Suitable for small demand markets Example: A 1200 MW plant requiring around 125 MMscf/d would be well suited for CNG import rather than LNG, which would require a well suited for CNG import rather than LNG, which would require a generating capacity of 5000 MW (!) of gas‐fired generation (if all used for that purpose).
Compressed Natural Gas (CNG) C d N t l G (CNG)• Compressed gas (1500 to 2500 psi and 0 to ‐ 40 F)• Two technologies for CNG transport Two technologies for a. The Cran & Stennings approach b. The Enersea approach b The Enersea approachExample: Consider the transportation of 300 MMscf of gas as CNGUsing the Cran & Stennings approach Actual volume of CNG: 1 76x106 ft3 Actual volume of CNG: 1.76x10Using the Enersea approach Actual Volume of CNG: 1.2x106 f 3 A lV l f CNG 1 2 10 ft
CNG Cargo Containment SystemCNG Cargo Containment System Courtesy Enersea
An Example Calculation for the CNG p Process• Assume two standard volumes of CNG that are to be transported• Calculate the actual volume of natural gas that would be stored at a range of pressures and temperatures.• Estimate the compression and refrigeration needs p q• Estimate the number of ships required• Calculate the final unit price of the gas delivered• Optimum condition is chosen by minimizing the final unit p y g price of the gas delivered
Transportation of the gas T t ti f th90% of the investment involved is in shipping of the gas. 90% f th i t t i l d i i hi i f thLoading and unloading is possible and easy with small facilities.
Estimated number of ships E ti t d b f hiFactors for determining the number of ships: loading rate of the gas, distance for which the CNG is transported and the time required for a ship to make one complete cycle. l t l Distance No. of ships miles 1000 4 1500 5 2000 6 2500 7 3500 8 to 9 5000 11 to 12
Cost of transportation C t ft t ti• For voyage distance of 2500 miles• C t f CNG t Cost of CNG transport: $1.86‐$2.43/Mscf t $1 86 $2 43/M f (depending on pressure and temperature)• Published Cost of LNG transport: $1.89/Mscf • A th di t As the distance decreases CNG becomes more d CNG b attractive than LNG
Comparison of CNG and LNG C i f CNG d LNGSize of investment for a 500MMscf/d plant CNG LNG CNG LNGReserves: Modest LargeProcessing cost: MM$30 40 MM$750 2000Processing cost: MM$30‐40 MM$750‐2000*Transportation costs: MM$230/ship MM$160/shipUnloading costs: MM$16‐20Unloading costs: MM$16 20 MM$500‐550 MM$500 550Total investment: $1‐2 billion** $2‐3 billion*** Depending upon the location of the production site** Depending upon the number of ships used for the transport of the gas. Depending upon the number of ships used for the transport of the gas.
Typical cost components for LNG projectT i l t t f LNG j t Unloading 11% Liquefaction 50% Shipping 39%
Typical cost components for CNG projectT i l t t f CNG j t Unloading 6% Compression and loading 5% Shipping 89%
Comparison of LNG and CNG C i f LNG d CNG Price of the delivered gasLNG value chain per MMBTU pExploration and Production: $0.5‐1.0/MMBTULiquefaction: $0.8‐1.2/ MMBTU.Shipping: $0.4‐1.5/ MMBTU*.Shi i $0 4 1 5/ MMBTU*Regasification and Storage: $0.3‐0.5/ MMBTU.$$1.00 as netback for the investors Final price of LNG: $3.00‐5.20/MMBTU.* For transport distances from 1000 miles to 5000 miles
Comparison of LNG and CNG C i f LNG d CNGCNG value chain per MMBTUExploration and Production: $0.5‐1.0/MMBTUExploration and Production: $0 5‐1 0/MMBTUProcessing and transportation: $1.08‐3.82/MMBTU*$1.00 as netback to the investor$1 00 tb k t th i tFinal unit price of CNG: $2.58‐5.82/MMBTU * For transport distances from 1000 miles to 5000 miles
Comparison of gas prices C i f iDistance LNG CNG (Case I) CNG (Case II) miles $/MMBTU $/MMBTU $/MMBTU 500 3.55 2.72 2.72 1000 3.65 2.74-2.84 2.82-2.90 1500 3.75 3.06-3.10 3.15-3.26 2000 3.85 3.30-3.37 3.11-3.62 2500 3.95 3 95 3.44 3.90 3 44-3 90 3.50 3.98 3 50-3 98 3500 4.25 4.08-4.43 3.98-4.34 5000 4.65 4.84-5.49 4.70-5.43Case I: Transported Volume = 3.5×106 ft3Case II: Transported Volume = 5.0×106 ft3Price of gas: $0.75/MMBTU, Liquefaction: $1.0MMBTU, Regasification: $0.4/MMBTUUsage of water‐cooled compressor raises the unit price of the gas by0.01/MMBTU.
Comparison of CNG and LNG C i f CNG d LNGAdvantages of CNG over LNG• Requirement of lower throughput of gas for a project• I l Involvement of lower capital fl i l• Ease of deployment … faster implementation of a project• Ability to access stranded reserves and monetize them Ability to access stranded reserves and monetize them• Majority of the investment is in the shipping, making the assets movable and reducing the risk involvedDisadvantagesInability to transport large volumes of gas such LNGDisparity in the volume transport hinders commercial possibility of CNG
Comparison of CNG and GTL C i f CNG d GTL• GTL (Gas‐to‐liquids) technology converts natural gas into hydrocarbon liquids. into hydrocarbon liquids• Impetus for the GTL technology: Clean fuel obtained as product and easy transportation• Main products: Middle distillates like gasoline Main products: Middle distillates like gasoline, kerosene, jet fuel,naphtha and diesel
Role the GTL technology can playR l th GTL t h l l
Gas to Liquids G t Li id• The Fischer‐Tropsch synthesis (F‐T synthesis) is one of the most important technologies for GTL. of the most important technologies for GTL.• A main advantage of the F‐T products is the absence of sulphur, nitrogen and complex cyclic hydrocarbons of sulphur nitrogen and complex cyclic hydrocarbons resulting in almost no emissions of sulfur dioxide, nitrous oxides and unburned hydrocarbons. nitrous oxides and unburned hydrocarbons• For 100 barrels of liquids 1 MMscf of gas is needed
Project Constraints P j tC t i t LNG GTL CNG LNG GTL CNGReserves Large Large Medium to SmallInfrastructure Large Large Small f llInvestment Large Medium* Medium to LargeTransportation Large Medium* Large* Depending upon the number of ships required.
Worldwide areas of interest for application of CNG technology
ACKNOWLEDGEMENTS (PHOTOGRAPHS; ARTICLES & PRESENTATION….)· ABS· Shell· FPC· Technip· FlexLNG· QG· ConocoPhillips· Saipem· DNV· Aker· Waller Marine· EnerSea Votrans· E & P (Brian)· Asim Deshpande & Michael Economides· CE & CG Team (Bill / Milind) & others