Liquefied natural gas

Figure 1. An LNG carrier. Note the size of the LNG ship compared to the size of the one to the right of it, the LNG ship is enormous!

Liquefied natural gas or LNG is a colorless and odorless liquid that contains 85-95% methane with trace amounts of ethane, propane, butane and nitrogen. The worldwide liquefied natural gas industry is growing rapidly. Global LNG trade enables development and is able to supplement domestic production to regions that lack natural gas reserves or infrastructures. LNG has been used and traded worldwide for more than 50 years, but many organizations are expecting this trade to increase dramatically in the coming years.

Liquefied natural gas is made by cooling natural gas to -162°C (-259°F) at 1 atm. As often happens with phase changes, this process of going from gas to liquid makes the volume decrease considerably, often over 600 times smaller. This reduced volume makes it easier to store and transport. This allows natural gas to be transported to markets that lack natural gas reserves.

The concept of converting natural gas into LNG was developed in Germany in 1893, but the first commercial LNG plant not built until 1941 in Cleveland, Ohio. The advancement in LNG technologies and practices for liquefaction and degasification processes has transformed the LNG market into a more efficient and global business. There are currently 18 exporting countries and 25 importing countries that have proposed LNG plants and units in operation.

Use of Liquefied Natural Gas

Natural gas has been used for various applications (e.g. home heating) for many years. The availability of LNG as a way of moving natural gas around is making other uses more feasible like using it in natural gas vehicles.

• Trucks: LNG can be used as a transportation fuel because of its energy density. This could be cheaper than conventional diesel, quieter engine operation, and modest reduction in greenhouse gas emissions (30-40% reduction).

• Shipping: LNG is a potential solution for the shipping industry as an alternative fuel source to power vessels. LNG is not only cleaner-burning, but also cost-saving as the vessel can hold a greater volume of LNG than diesel fuel. However, the challenge is to retrofit a vessel that uses LNG, which cost between $10 to $50 million.

LNG Value Chain

The major stages of the LNG value chain consist of the following and can be seen in Figure 2:

1. Exploration and Production (E&P) - Upstream industry that focuses on the search for hydrocarbons in favorable geological conditions for extraction. Once a promising location has been identified a natural gas reserve is developed. Natural gas is extracted by drilling holes in to the reservoir follow by treatment such as removal of impurities and separation of hydrocarbons for end market use.
   
2. Liquefaction - Treated natural gas is transported to LNG liquefaction plant site by pipeline and is converted into its liquid state.
   
3. LNG Storage - To maintain LNG at its low temperature state, double walled LNG tanks with good insulation are used.
   
4. Transporting LNG - Transportation of liquefied natural gas involves shipping LNG over long distances in a special purpose LNG carrier, which includes good insulation and a double hull design to provide more strength and safety.
   
5. Re-gasification - Upon arrival, LNG is converted from the liquefied phase to the gaseous phase, where it is transported through natural gas pipeline system for distribution to businesses and homeowners.

Figure 2. LNG Supply Chain Model - Source: PPT, LNG.