Natural gas can be transported via pipelines, as liquefied natural gas (LNG), or compressed natural gas (CNG). Pipelines are the most common method and have high reliability but lack flexibility. LNG and CNG allow for transportation of remote gas reserves but require large investments for processing infrastructure. Natural gas can also be converted to liquids (gas-to-liquids) or used to generate electricity on-site (gas-to-wire) to enable transportation. Underground storage plays a key role in meeting seasonal demand fluctuations and peak loads.

1. GAS TRANSPORTATION
AND STORAGE
Dr Sourav Poddar
Department of Chemical Engineering
National Institute of Technology Warangal
TS, India

2. Natural Gas (NG) Transportation

3. Types of Natural Gas Transportation Systems

4. Types of Natural Gas Transportation Systems cont…

5. Pipelines Method of Natural Gas Transportation
• Pipelines are a very convenient method of transport but are not
flexible as the gas will leave the source and arrive at its (one)
destination.
• There are three major types of pipelines along the transportation
route:
– Gathering system
• The gathering system includes low pressure small pipelines that transport
raw natural gas from the wellhead to the processing plant.

6. – Intrastate/interstate pipeline system
• Transport natural gas from the processing plant to the centers of its
consumption.; and
– Distribution system.
The distribution pipeline system has the purpose of delivering gas to the
end/consumers.
Natural Gas must be highly pressurized to move it along the pipeline.
To ensure that the Natural Gas remains pressurized, compressor stations are
installed in intervals along the pipeline.

8. Advantages :
– Reduction in cost of transportation is very significant.
– Supply through pipelines is very reliable. It is free from
obstacles in road and rail transport.
– In case of underground pipelines, the land in which pipeline is
laid can still be used for agricultural use.
– It ensures supply in remote areas where road ways are not
very good.

9. Disadvantages :
– It is not flexible, i.e., it can be used only for a few fixed
points.
– Its capacity cannot be increased once it is laid.
– It is difficult to make security arrangements for pipelines.
– Underground pipelines cannot be easily repaired and
detection of leakage is also difficult.
– Any leak can cause a accident, e.g Buguruni-Dar-Es
Salaam.

10. Limitation for pipelines application:
– For offshore stranded Natural Gas,
• Pipelines it is economical viable to a distance less than
700 miles.
– For onshore pipelines,
• The breakeven point is about 2,200 miles (Mokhatab
and Purewal, 2006).

12. LNG Model of Natural Gas Transportation

13. LNG Loading

18. Limitation of LNG mode of Natural Gas Transportation
– Long contract ~20 years or more
– Large Natural Gas reserves >=3TCF
– ~US$ 1 billion investment for a train processing around
500 million CF/day
This makes it difficult for LNG to use smaller isolated
(offshore) reserves and to serve markets commercially
Thus small volumes of intermittent gas are not economically
attractive to the major gas sellers for LNG facilities.

19. Compressed Natural Gas, CNG Model of NG
Transportation
Compressed Natural Gas (CNG) is filled via a compressor into
pressurized steel gas cylinders and transported to the site of the
consumer by truck in bundles of up to 25 cylinders.
– At a pressure of 200 bar CNG reaches approximately 35 % of the energy to
volume ratio of LNG.
– Gas at these pressures is termed as Compressed Natural Gas’ (CNG).
– CNG is used in some countries for vehicular transport as an alternative to
conventional fuels (gasoline or diesel).

20. CNG Filling Station

21. Compressed Natural Gas, CNG cont..
Advantages of CNG
– Environmentally Friendly
• Compressed natural gas (CNG) is the cleanest burning transportation fuel on
the market today.
– Reduced Maintenance Cost
• CNG does not contain lead, so spark plug life is extended because there is no
catching.
– Safety Advantage
• Compressed natural gas (CNG) fuel storage tanks are stronger and safer than
gasoline or diesel tanks reducing the likelihood of accidental release.

22. Disadvantages of CNG:
– CNG Gas stations have limited availability.
So if your country or state doesn’t have CNG stations, it is of no use.
Examples in Tanzania few cities have good CNG Stations network.
– CNG tank requires need large space and it is heavy.
So it affects reliability and car performance.

23. Note:
• Compressed Natural Gas (CNG) systems would make transport
possible either for:
– Stranded gas (i.e. in places where there is no current market or no export
pipeline)
– Smaller quantities of associated gas which cannot be flared or re-injected.

24. Natural Gas to Liquid (GtL)
• In gas to liquids (GtL) transport processes, the Natural Gas (NG)
is converted to a liquid, such as:
– Diesel
– Syncrude methanol,
– Ammonia, etc.,
• The liquid is shipped in a suitable tanker.
– Qatar may soon be producing clean fuels commercially this way

25. Gas as a Liquid Fuel, (GtL)

26. Advantages of GtL
– Transportation
• Natural gas reserves are often too far from gas pipelines.
• Transporting liquid or electricity is more feasible.
– Environmental
• GTL naturally produces extra low-sulfur diesel.
– High Fuel Quality
• High cetane numbers for GTL diesel.
• Low aromatic and olefin content.

27. Disadvantages of GtL
– GTL plants are complex and capital-intensive.
– Syngas production accounts for about 30% and
the Fischer-Tropsch synthesis process itself about
15% of capital costs, with other processing units,
power generation and ancillary services making up
the rest (IEA, 2003).

28. Natural Gas to Wire (GtW)
• Gas-to-Wire (GtW)
– is the process of generating electricity from natural gas at the field, a different
approach than producing electricity at a centralized power plant.
• In the Gas-to-Wire process a gas motor (gas turbine) is placed close to the field
and the gas is directly converted into electricity for own use or for sale to the
local market (eventually transported by cables to the destination).

29. • To generate electricity, the gas turbine heats a mixture of air and fuel
at very high temperatures, causing the turbine blades to spin.
• The spinning turbine drives a generator that converts the mechanical
energy into electricity

30. Advantages
– Best applicable in places where there is a need
for heat combined with electricity.
– No intensive capital required for installation of
raw Natural Gas transportation system.

31. Disadvantages
– Installing high-power lines is expensive
– Significant energy loss when converting it to low
voltages for consumers over cable lines.
– In the case of associated gas, there is a risk that if
a generator error or shutdown occurs, then the
whole Natural Gas production facility might also
have to be shut down, unless there exists another
gas outlet.
For these reasons, the use of gas to wire (GtW) has not proved very popular.

32. Natural Gas Hydrate
• Natural Gas Hydrates (NGH)
– Natural gas hydrate is an ice-like substance that is formed by mixing natural gas
with liquid water and cooling it.
The process of gas delivery as NGH involves three steps;
• Hydrate formation/production,
• Transportation to the demanding place and
• Dissociation/regasification of the hydrate structure.

33. Natural Gas Hydrate

34. Advantages
Natural Gas Hydrates can be suitable in:
– Small reservoirs
– An associated gas
– Stranded gas and
– other unconventional gas.
Pilot projects have demonstrated that hydrate production is not as simple as it
seems.
The behavior of hydrates is still not completely understood, making it too
dangerous to make on large scale.

35. Natural Gas (NG) Storage
Before 1992, the natural gas market was regulated, and natural
gas storage had two main purposes:
• To provide baseload storage to meet seasonal,
weather-sensitive, demands above normal pipeline
delivery capability
• To provide peak (or peak shaving) storage to
smooth out the demand curve

36. Services Arranged and Coordinated in Market Hub Centers
• Transportation/wheeling—Transfer of gas from one interconnected pipeline to
another through a header (hub), by displacement (including exchanges), or by
physical transfer over the transmission of a market-center pipeline.
• Parking—A short-term transaction in which the market center holds the
shippers gas for redelivery at a later date. Often uses storage facilities, but may
also use displacement or variations in linepack.
• Linepack—Refers to the gas volume contained in a pipeline segment. Linepack
can be increased beyond the pipeline’s certificated capacity temporarily and,
within tolerances, by increased compression.
• Loaning —A short-term advance of gas to a shipper by a market center that is
repaid in kind by the shipper a short time later. Also referred to as advancing,
drafting, reverse parking, and imbalance resolution.

37. • Storage—Storage that is longer than parking, such as seasonal storage. Injection and withdrawal
operations may be separately charged.
• Peaking —Short-term (usually less than a day and perhaps hourly) sales of gas to meet unanticipated
increases in demand or shortages of gas experienced by the buyer.
• Balancing—A short-term interruptible arrangement to cover a temporary imbalance situation. The
service is often provided in conjunction with parking and loaning.
• Title transfer—A service in which changes in ownership of a specific gas package are recorded by
the market center. Title may transfer several times for some gas before it leaves the center.
• Electronic trading —Trading systems that either electronically match buyers with sellers or facilitate
direct negotiation for legally binding transactions.
• Administration—Assistance to shippers with the administrative aspects of gas transfers, such as
nominations and confirmations.
• Compression—Provision of compression as a separate service. If compression is bundled with
transportation, it is not a separate service.
• Risk Management—Services that relate to reducing the risk of price changes to gas buyers and sellers,
for example, exchanges of futures for physicals.
• Hub-to-hub transfers—Simultaneous receipt of a customer’s gas into a connection associated with one
center and an instantaneous delivery at a distant connection associated with another center.

38. • Storage types
porous rock storage: aquifer / depleted field
salt cavern storage
leaching facilities (during creation)
gas facilities (during operation)
• Surface facilities
compressors
gas treatment

39. Important Terminology for Underground Storage
Total gas storage
capacity
Maximum volume of gas that can be stored in an underground
storage facility
Total gas in storage Volume of storage in the reservoir at a particular time
Cushion gas (or base
gas)
Volume of gas intended as a permanent inventory in a storage reservoir to maintain
adequate pressure and deliverability rates throughout the withdrawal season
Working gas
capacity
Total gas storage capacity minus cushion gas
Deliverability Most often expressed as measure of the amount of gas that can be delivered (withdrawn)
from a storage facility on a daily basis; deliverability is variable and depends on such
factors as the amount of gas in the reservoir at any time, the reservoir pressure, and
compression capability available to the reservoir
Injection capacity
(or rate)
Amount of gas that can be injected into a storage facility on a daily basis; injection rate is
also variable; depends on the same factors as deliverability.
Source: Energy Information Administration (2004).

40. • Created in a depleted oil or gas field.
• Gas is re-injected into a porous rock formation -> like
a sponge absorbing water.
• Gas is kept in place thanks to impermeable cap rock.
• Geological properties determine the characteristics of
the reservoir:
Porosity - determines the capacity of the rock to
hold gas.
Permeability - determines the ability of the rock to
transmit gas.
Porous rock storage : depleted field

41. Porous rock storage : aquifer
• Located in geological formations similar to those
of depleted fields (porosity, permeability).
• Unlike in depleted fields, pores are filled with
water.
• In injection, water is pushed down the formation.
• In withdrawal, the reverse happens.
• Operation is more complex -> gas may migrate
into the water-bearing strata.
• Upon extraction, gas requires further
dehydratation.

42. However, aquifer storage is usually the most expensive and, thus, the least desirable underground storage method for six
reasons (NaturalGas.org, 2004):
• Geologic characteristics of a specific aquifer are generally not well known, which is
usually not the case with a depleted gas or oil field, and, consequently, considerable
resources must be expended to determine the suitability of the aquifer for gas storage.
• Infrastructure (wells, pipelines, dehydration facilities, compression equipment, etc.) is
unavailable at the aquifer site, whereas a depleted gas reservoir would have most of this
infrastructure in place.
• Considerable injection pressure may be required to displace the water with gas.
• Withdrawn gas requires dehydration.
• Aquifer formations generally require a much higher level of cushion or base gas (up to
80% of the total gas volume) than do depleted fields or salt caverns, and, thus, less of
the reservoir volume is usable.
• Environmental regulations govern the use of aquifers for gas storage.

43. Salt cavity storage
• Formed out of salt deposits by dissolving and
extracting salt (leaching).
• Resilient and watertight -> reduced gas migration.
• Salt properties determine, inter alia:
cavern diameter and height
max and min operating pressure.

44. Different types of storage:
different characteristics and use

45. Surface facilities: schema

46. Compressor units

47. II. Dynamics of Natural Gas Storage

48. Examples of injection and withdrawal
curves : aquifer

49. Examples of injection and withdrawal
curves : salt cavity

50. III. Natural Gas Storage: constraints management

52. Sand production in aquifer
due to pressure variation cycles and deterioration of safety components
(valves)
decreases well productivity
Viscous fingering in aquifer
may occur in the injection phase and affects diffusion of gas
caused by flow instability (interface gas –water)
gas forms “fingers” extending into water (gas trapping)
leads to loss of working volume

53. Viscous manipulating phenomenon

54. Key Facts – Natural Gas Sector in India
Today about 6% share in primary
energy mix; government targets to
increase it to 15% by 2030
Several new LNG capacity
addition being planned; from current
capacity of ~31.0 MTPA to 78 MTPA
in 2021-22
50-50% share of LNG and
domestic gas in overall consumption
in 2017-18
50% of current consumption
from prime consuming sectors Power
and Fertilizer, declining or stagnating
CGD and industrial use growing sectors
and likely to emerge as key drivers.
Existing pipeline connectivity of
over 16,000 km; plans to
increase to over 30,000 km

55. The 15% Vision
• Current gas share in energy mix
India 6.2% World average 23%
• Per capita gas consumption
India 35 SCM World 441 SCM
For 15% gas share, gas consumption needs to quadruple by 2030

56. Increasing infrastructure to support the 15% vision
•Pipeline length/capacity
~17000 km/ 374 MMSCMD
•Additional 15000 km pipeline
coming up
•Sufficient to handle about
three times current
consumption

57. LNG driving consumption; pricing holds the key
• LNG imports rising 50% of consumption
• LNG regas capacity current 31 MMTPA
to increase to 60-70 MMTPA
• Most additionally capacity planned along East Coast
27
65
78
0
10
20
30
40
50
60
70
80
90
2017-18 2019-20 2021-22
LNG Capacity (MMTPA)

58. Rising gas consumption supporting the 15% vision
• 15% growth in gas consumption since 2014-
15 ~ 145 MMSCMD
• Shift in consumption pattern away from
conventional segments
• CGD now the fastest growing segment,
holds the most potential
• Refinery and petrochemicals are other two
small but rising segments

59. • 17% share in overall consumption at 24 MMSCMD
• Over 100 % increase in no. of GAs (179) in last two years
• Over 50% in no. of CNG stations (1528) since 2014-15
• About 30% increase in no. of CNG vehicles since 2014-15
at 3.26 million
• About 65% increase in PNG connections since 2014-15 at
4.81 million
• CNG PNG almost equal consuming segments in sales at
45: 55
CGD Prime Growth Driver of Gas Consumption

60. Gas demand would depend on …
• Marketing and pricing freedom for
natural gas
• Hydrocarbon Exploration Licensing
Policy (HELP)
• Setting-up of Natural Gas Trading
Exchange
• Ban on polluting fuels such as petcoke
and FO
• Promotion of CNG/ LNG vehicles

61. Source: PPAC
▪ Declining domestic gas production is being complemented by increasing LNG imports to meet the current demand level
▪ India has 5 operating LNG Terminals importing about 20 MTPA. 11 additional terminals are being planned which will take the regas capacity to 78 MTPA by
2022-23
Gas production / consumption / imports (mmscmd)
LNG imports rising with declining production

62. LNG Infrastructure in India
Source: KPMG Analysis

63. Pipeline Infrastructure in India
Gujarat
CGDs
Legends
Existing Pipelines
Under Cons. P/L – work under progress
Approved P/L – work yet to start
Existing LNG Terminal
Proposed LNG Terminal
CGD Network
Proposed CGD Network
(105 Nos.) on GAIL PLs
▪ Authorisation granted for additional
14,500 Kms of new gas pipelines
Gas pipeline network (as on 1.1.2019)
Total Length (km) 16793
Capacity (mmscmd) 374
Average flow during Apr-Sep 2018 (mmscmd) 293.4
Capacity utilisation during 2017-18 (%) 79.73

64. Sector Wise Natural Gas Consumption in India
▪ The natural gas consumption in
the country has been tepid in
last 5-7 years.
▪ Except for petrochemical and
CGD sector the consumption of
natural gas has not witnessed a
steady trend.
▪ Power, fertilizer, CGD, Refinery
and petrochemical sector
contributes to ~85 - 87 percent
of the total gas consumed in
the country.
Historical Gas Consumption (MMSCMD)
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Power 62 44 31 29 30 32 33
Fertiliser 38 40 43 42 44 42 40
CGD 15 16 16 15 15 20 24
Refinery 12 11 11 13 14 15 18
Petrochemical 5 7 7 8 10 11 11
Sponge iron 4 3 1 0 1 2 4
Industrial 1 1 0 1 1 2 2
Misc 29 26 25 20 15 14 13
Total 166 148 134 128 131 139 145
Sector-wise Gas Consumption (2017-18): 144.75 MMSCMD

65. CGD to be primary growth driver of gas
▪ Clearly the sector has grown, both geographically and in volume terms. The significant growth in the sector has been largely due to government
initiatives with the CGD sector (CNG and PNG for residential) being accorded the highest priority for allocation of domestic gas.
▪ With 179 GAs now and 10th round with 50 more areas is on offer, the coming years should see lot of investment in the CNG and PNG
infrastructure. The sector is pegged to see an investment of Rs 70, 000 crore.
CGD growth story
2011-
12
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
Jan
19
Total gas consumption by CGD
(mmscmd) 15.34 15.84 16.18 14.84 14.97 21.19
24
25
CNG Sales 6.46 7.17 7.61 8.04 8.5 9.33 10.5
PNG consumption 8.88 8.67 8.57 6.8 6.47 11.86 13.5
domestic 1.779 -
ind/com 10.081
-
Number of GAs 52 64 78 93 179
CNG Stations (at March end) 1010 1081 1233
1424
1528
CNG Vehicles (million) 2.55 2.56 3.05 3.09 3.26
PNG Connections (million) 2.94 3.16 3.62
4.32
4.81
Source: MoPNG, PPAC

66. Maharashtra, Goa,
Gujarat, Rajasthan,
Delhi NCR, Haryana,
Punjab, MP, etc
Present
Future

67. PROMOTING USE OF CNG – DEVELOPING THE INFRASTRUCTURE
80% of CNG Cluster
in Maharashtra,
Gujarat & Delhi-NCR
LNG Terminals
Existing CGD
Areas

68. Key Drivers for Gas Demand in India
✓ Marketing and pricing freedom for natural gas
• Marketing and pricing freedom to sell at arm’s length price in the domestic market for oil and gas produced from
acreages awarded under OAL (HELP) and DSF regime
1) Upstream – Investment Reforms
✓ Hydrocarbon Exploration Licensing Policy (HELP)
• The salient features of the policy are Open Acreage Licensing (OAL), single uniform license for conventional and
unconventional hydrocarbons, simpler and easier revenue sharing contract, full freedom for marketing and market
pricing for crude oil and natural gas and Low royalty rates.
2) Downstream - Market Reforms
✓ Setting-up of Natural Gas Trading Exchange
• The government has announced setting up of a gas trading exchange in the country which will enable transparent price
discovery and enable small consumers source gas as per their consumption requirement, moving away from the
current rigid gas contracts
3) Clean and Sustainable Energy Reforms
✓ Ban on polluting fuels such as petcoke and FO
• The government has banned usage of petcoke and FO in northern states of the country
✓ Promotion of CNG/ LNG vehicles
• In order to facilitate early roll-out of CNG/ PNG network in country, Government has accorded prioritized domestic gas
allocation to meet the full gas requirement of CNG and PNG (Domestic) consumer segments

69. Indian market deregulation
Indian Gas Market is highly regulated. The gas market is regulated by the Petroleum and Natural Gas
Regulatory Board (PNGRB). It was established in 2006 to regulate the refining, processing, storage,
transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas so as to
protect consumer interest, ensure uninterrupted and adequate supply and promote competitive markets. The
key functions of the Board are –
• Authorize entities to lay, build, expand or operate pipelines and city gas distribution networks (CGD)
• Determination of tariffs for transportation of gas in common or contract carrier pipelines and CGDs
• Regulate access to pipelines and CGD as per access code, for fair trade and fostering competition
amongst operating entities
• Formulate and enforce service obligation for marketing entities
• Prevention of restrictive trade practices
• Formulation of technical standards and safety norms for construction and operation of gas
infrastructure and ensuring compliance by all entities
• Complaint and dispute resolution
• Maintain a data bank of information on activities relating to petroleum, petroleum products and
natural gas

70. Indian market deregulation…
• Currently, the gas produced in India has a variety of different prices at the wellhead and the pricing is primarily segmented under three broad
regimes: Nomination regime (also known as the Administered Pricing Mechanism or ‘APM’), Discovered Fields regime (also known as the Pre-
New Exploration Licensing Policy regime or ‘Pre-NELP’), and the New Exploration Licensing Policy (NELP).
▪ The Government is making efforts to
provide marketing and pricing freedom
to the gas that would be produced from
the new gas field ensuring the gas
produces a fair price of the gas produced
and at the same time ensuring that the
end consumers get the gas at affordable
rates

71. Gas prices in India/International
▪ Gas prices have been rising, both
domestically and internationally
▪ They have to compete with alternate
fuels in the consuming sectors.
▪ Domestically, gas competes very well
with alternate fuels in transport and
industrial sectors.
5.05
4.66
3.82
3.06
2.5 2.48
2.89 3.06 3.36
0 0 0
6.61
5.3 5.56
6.3
6.78
7.67
0
1
2
3
4
5
6
7
8
9
Nov 14-Mar
15
Apr-Sep 15 Oct 15-Mar
16
Apr-Sep 16 Oct 16-Mar
17
Apr 17-Sep
17
Oct 17-Mar-
18
Apr 18-Sep
18
Oct 18-Mar
19
Domestic gas price ($/mmbtu)
Domestic gas price (GCV basis) Price cap for deepwater, ultra deepwater, high temp high pressure areas
0.00
5.00
10.00
15.00
Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
Eurpoean spot Indictaor 5.96 6.92 7.90 7.05 7.35 7.38 7.13 7.42 7.32 7.53 8.76 9.47 8.76 8.28 8.16
Henry Hub 2.88 2.98 2.78 3.66 2.66 2.66 2.76 2.77 2.94 2.81 2.94 2.95 3.23 4.05 4.21
East Asian Delivered LNG indicator 8.15 8.23 8.73 9.87 9.35 8.82 8.74 8.96 9.11 9.47 9.85 10.14 10.82 9.96 9.41
Japan LNG contract price 8.20 9.00 10.20 11.00 10.60 8.80 9.10 8.20 9.30 10.00 10.70 10.60 10.70 10.80
International Gas/LNG prices ($/mmbtu)

72. Thank You