Extending life of LNG facilities

Jivanshi Arora's picture
Jivanshi Arora, Senior Officer, GAIL India
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LNG, a lower carbon fuel, can play an important role in the global energy mix. LNG is emerging as a cost competitive and cleaner burning fuel as compared to heavy fuel oil and diesel for shipping, heavy duty road transport and industrial applications. Since LNG occupies only a fraction (1/600) of the volume of natural gas and takes up less space, it is more economical to transport across large distances and can be stored in larger quantities. Demand for LNG as a fuel in the shipping industry is increasing in part due to emissions reduction requirements which came into force in January 2015.

In order to make it practical and commercially viable to transport natural gas from one country to another, its volume has to be greatly reduced. To obtain maximum volume reduction, the gas has to be liquefied by refrigeration to less than -161 °C (the boiling point of methane at atmospheric pressure). This process also requires very strict safety measures and precautions during all liquefaction stages, due to the flammable nature of the gas involved.

LNG is quickly gaining market share at the expense of other hydrocarbon resources, while coal fights back, renewable fuels support the change of energy mix, and nuclear shows signs of life. Expectations for the potential of renewable fuels associated technologies are often overstated, and reducing coal’s environmental impact is not a small undertaking. Growing interest for LNG supply is caused by increased energy demand and the need for diversification and security of supply. LNG provides flexibility in procurement similar to traded oil because buyers can, individually or jointly, contract, buy, and transport LNG from several suppliers. In addition, LNG is more attractive because LNG prices are more competitive than natural gas transported by pipeline. The LNG industry allowed the process of transporting natural gas to become more efficient.

LNG now accounts for about 11% of the 348 Bcf/day global gas market and is the reason why the three regional gas markets, Asia-Pacific, Europe and North America will continue to converge. LNG demand is expected to increase 50% by 2020 alone, with the U.S. and Australia expected to be the main new suppliers. Rising oil prices in recent years have had importing countries gearing up to import LNG.

Land based liquefaction facilities are the most common in the LNG industry. They are onshore facilities that liquefy natural gas (feed gas) produced either onshore or offshore (transmitted through pipelines to the onshore facility in the case of offshore production). Locating the LNG production facilities offshore provides the liquefaction “onsite” at offshore production fields of natural gas, gives the possibility of economic development of smaller natural gas fields and fields remote to pipeline infrastructure (i.e., “stranded gas”), potential monetisation of associated gas previously flared or re-injected, and may address onshore restrictions of land use for onshore facilities.

It’s concluded that LNG facilities are considered evergreen. Enhanced safety and environmental standards also push the need for life extension initiatives. Replacement of unsuitable, obsolete, unreliable and un-repairable equipment also drove life extension activities for LNG. LNG exhibits comparative economic advantages to pipeline supplies of natural gas over long distances and comparative environmental advantages relative to the competing power generation primary fuels such as coal. Throughout its history, LNG has demonstrated an exemplary safety record and continually strives to maintain the highest levels of safety in operations.

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If you’d like to know more about the topic “Extending Life of LNG Facilities” attend our upcoming Gas Asia Summit (GAS) which takes place from 26 to 28 October in SingaporeGAIL India is also presenting a case-study on bridging the gap between large and small scale LNG players. For further details of the programme, please download the event brochure.

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