GPR has heard that a pending flood of liquefied natural gas (LNG) to the
Currently, more than 9 billion cfd of LNG production capacity is in development in
Proposed projects in six countries and potential projects in four others could add an additional 10 billion cfd into the Atlantic market in 2012-2014.GPR has heard insiders and outsiders to the LNG trade pine over the years for a bigger spot market. Salmon said this has been limited because capital costs at both ends of the value chain require long terms deals to meet financing obligations, and shipping costs are as much as a third of product value. Most LNG spot deals now are either diversions or sales of excess capacity. Salmon said the LNG spot market will develop further as the new trains begin production. Technology Improvements in LNG Trade Examining parts of the value chain, he added that the standard for new, land-based liquefaction trains is 1 billion cfd, larger than existing trains. And for years there have been substantial variations in LNG quality specifications, but that’s changing.
Higher LPG extraction rates can deliver LNG to meet target market specifications that are increasingly stringent. Meanwhile, Salmon said that offshore liquefaction is being actively investigated by a number of parties, and there is ongoing development of ship-to-ship transfer technology. In addition, LNG vessels have been ordered that do not rely on steam for propulsion, and new, larger diesel or diesel-electric ships can cut fuel costs significantly.
Shipping is often the single largest cost element in the LNG supply chain. Salmon also said that a number of existing terminals are being modified to accept larger vessels.The ability to accommodate large vessels, he added, can provide a terminal with a competitive advantage, since producers will be able to see the netbacks on their volumes.
Terminals being built on the U.S. Gulf Coast have substantially greater throughout capacity than traditional facilities. Air-to-air heat exchangers are being employed at new warm weather regas sites, Salmon said, providing an efficiency gain of about 1% of throughput over submerged combustion vaporizers. And the latest generation of regasification vessels utilizes intermediate fluid heat exchangers, boosting daily send out capacity to 1.2 billion cfd with minimal environmental impact. Meanwhile, Salmon said that offshore regas terminals are gaining support, since they reduce “not in my backyard” issues.
They have a minimal onshore footprint and can be located in remote, secure areas. At the same time, the concept of floating storage and regasification units requires ship-to-ship transfers, and has only been proven in minimal sea-state conditions.