[Bioman]

Hi, sorry for this very basic question, but can anyone help me with a quick answer on medium term LNG outlook as it relates to global potential? (Let's say between 2007-2017).

And does anyone have an idea of the costs of LNG compared to NG? How much, roughly speaking, is added to the LNG price in order to write off the investments of expensive LNG facilities?

As I understand it, huge amounts of LNG are coming online soon, with new plants being built in Angola, Equatorial Guinea, Papua New Guinea, Chile and possibly Bolivia.

Finally, is there any serious technological advantages to be expected in the coming decades that would reduce liquefaction costs?

Thanks.

[Concerned]

$this->bbcode_second_pass_quote('Bioman', 'H')i, sorry for this very basic question, but can anyone help me with a quick answer on medium term LNG outlook as it relates to global potential? (Let's say between 2007-2017).

And does anyone have an idea of the costs of LNG compared to NG? How much, roughly speaking, is added to the LNG price in order to write off the investments of expensive LNG facilities?

As I understand it, huge amounts of LNG are coming online soon, with new plants being built in Angola, Equatorial Guinea, Papua New Guinea, Chile and possibly Bolivia.

Finally, is there any serious technological advantages to be expected in the coming decades that would reduce liquefaction costs?

Thanks.

[mgcardin]

http://www.statesman.com/business/content/business/stories/other/05/09/9lng.html

ENERGY FIRMS MAKE ROOM FOR LIQUEFIED NATURAL GAS

Storage terminals are on the rise amid concerns about safety and the environment.

By Alan Syre
ASSOCIATED PRESS
Wednesday, May 09, 2007

HACKBERRY, La. — Just down the road from this fishing hamlet in the bayou country of southwestern Louisiana, a massive complex is rising to handle the nation's growing demand for natural gas.

Cranes tower over arena-size containers that are 170 feet tall and 250 feet in diameter. Sempra Energy Inc. expects the $750 million terminal to begin operating next year as the arrival point for tankers carrying liquefied natural gas, or LNG.

Although the energy industry regards LNG as a vital step in keeping up with the demand for natural gas in the United States, proposals to build terminals are raising environmental and safety concerns.

Not widely used until natural gas prices jumped in recent years, gas cooled to minus 260 degrees and turned into liquid is the only practical way to import supplies from overseas.

Energy companies have proposed building 35 terminals in Texas and nine other states and five offshore areas near the coast. The Federal Energy Regulatory Commission has approved 18 terminals.

Most of the projects are proposed for the Northeast, which has seen huge price increases for heating oil; California, where natural gas is in high demand for power generation; and the Gulf Coast, where LNG processors can easily pump the finished gas product into interstate pipelines.

Among the projects are a $700 million terminal near Freeport, being built by Freeport LNG Development LLC; McMoRan Exploration Co.'s Main Pass offshore terminal off Louisiana with a $1 billion price tag; and Hess LNG LLC's terminal proposed to go near Fall River, Mass.

As the nation's thirst for energy grows, market prices have sparked new interest in natural gas.

In 1999, gas traded on the New York Mercantile Exchange at an average of $2.35 per million British thermal units. Last year, the price averaged $9.20. In between, there were spikes as high as $20.

The United States consumes about 60 billion cubic feet of gas per day, about a quarter of its energy consumption. Gas heats more than 60 million U.S. homes and is the fuel of choice for generating power in many areas.

At the same time, supplies are getting tighter.

In the Gulf of Mexico, production has declined by more than 4 billion cubic feet per day since 2001, while production in the North Sea is dropping 15 percent a year as easy-to-reach deposits run out. Alternatives such as deepwater drilling in the Gulf are more expensive.

Importing natural gas in its compressed liquid state often is a cheaper alternative, said Darcel Hulse, chief executive officer of Sempra Energy.

Natural gas is important for more than home heating and production of electricity. The chemical industry uses natural gas as a raw ingredient in products and to generate steam and power.

But with LNG plant construction comes fears of accidents or terrorist attack. Although natural gas is not flammable in its liquid state, opponents worry about leaks at terminals and on tankers that would allow the liquid to heat up quickly and return to its flammable gas form.

Environmental concerns also have flared. On March 28, Shell Oil Co. dropped plans to build a terminal in the Gulf of Mexico after opposition from fishermen, who opposed Shell's plans to use millions of gallons of seawater in the process. Opponents feared that would kill fish larvae.

But the biggest concern centers on safety.

In 2004, an explosion at an LNG plant in Algeria killed 30 people. The worst accident on record happened in 1944, at a Cleveland LNG plant that burned and killed 128 people after a tank leaked LNG into the sewer system where it became a flammable vapor and exploded.

A congressional study in March said fire from a terrorist attack on an LNG tanker could cause the gas to ignite so fiercely that it would burn people a mile away. The General Accountability Office, which is the investigative arm of Congress, urged the Energy Department to perform new research on the risks for such ships.

Tim Riley, a lawyer and consumer advocate in Oxnard Shores, Calif., said not enough is known about the potential hazards of an LNG spill for the government to continue licensing terminals safely.

"The sheer volume is what makes it eminently dangerous," said Riley, co-producer of a film titled "The Risks and Danger of LNG."

Industry advocates say the safety fears are exaggerated.

Sempra said its storage tanks are designed to withstand winds of 150 miles per hour and are elevated nine feet off the ground for flood protection at its Hackberry project.

In addition, LNG tankers have booked 100 million sailing miles without a death or major accident, and modern storage tanks are built with aluminum alloys and reinforced with concrete to withstand LNG's frigid temperatures, said Bill Cooper, executive director of the Center for Liquefied Natural Gas.

LNG tankers have double hulls, with 6 to 10 feet of space between the two hulls and an insulation layer around the storage tanks, he said.

"We're talking about a very robust, sturdy ship design," Cooper said.

[dissident]

Of course no mention of where the LNG is supposed to come from. Algeria, Qatar, Iran and Russia. Good luck!

[Newsseeker]

They'll need the terminals if the LNG shortage predicted by the IEA is true. Gas has to come from somewhere.

[Concerned]

Bring it on

Compressing and uncompressing alone costs 30% of the energy in the gas.

Full steam ahead over the cliff !

[pea-jay]

Brilliant. Following an LNG strategy will:

1) make us dependent on the smooth functioning of these terminals
2) source an increasing percentage of gas from outside the continent. Currently it is 3%. Could increase to 10-20%.

It operates smoothly until:

- a hurricane damages one or more gulf facilities, dropping the US gas supply by several BCF, leaving us short when we are stocking up for winter.
-we are in winter and Algerian Tankers destined for the US are outbid by Europe and divert there. Or China locks up the Asian gas supply so it cant reach california.
-Quatar and other gas rich states realize GTL will command a higher premium than LNG and abruptly shift.

Where does that leave the US?

Brilliant.

[Newsseeker]

The tankers that bring the stuff to the LNG terminals are just accidents waiting to happen.

[Concerned]

$this->bbcode_second_pass_quote('Newsseeker', 'T')he tankers that bring the stuff to the LNG terminals are just accidents waiting to happen.

[Tanada]

$this->bbcode_second_pass_quote('Newsseeker', 'T')he tankers that bring the stuff to the LNG terminals are just accidents waiting to happen.

[Ferretlover]

SOUND ENERGY Solutions (SES) Oct 24 announced that a 14-month demonstration project utilizing liquefied natural gas (LNG) in two yard tractors at Yusen Terminals Inc. in the Port of Los Angeles has shown initial favorable results.
The demonstration project, conducted from October 2005 through December 2006 at Yusen’s facility on Terminal Island, found that particulate matter emissions were 93% cleaner than a standard diesel engine and 90% cleaner than an on-road diesel engine using ultra-low sulfur diesel fuel. …
link

[Tyler_JC]

$this->bbcode_second_pass_quote('Ferretlover', 'S')OUND ENERGY Solutions (SES) Oct 24 announced that a 14-month demonstration project utilizing liquefied natural gas (LNG) in two yard tractors at Yusen Terminals Inc. in the Port of Los Angeles has shown initial favorable results.
The demonstration project, conducted from October 2005 through December 2006 at Yusen’s facility on Terminal Island, found that particulate matter emissions were 93% cleaner than a standard diesel engine and 90% cleaner than an on-road diesel engine using ultra-low sulfur diesel fuel. …
link

[gnm]

Well Duh its cleaner than diesel... It also has a much lower energy density, did they mention that?

Tyler, I think you are correct that there will be more built...

But a couple things to keep in mind...

Even one accident would take a good chunk of the port/city hosting it out.

I hardly think the "flood" will be able to compensate for the losses in available higher density refined fuels like gasoline and diesel. So still a net decrease in available energy and ever increasing price with the commensurate drag on the economy.

-G

[FoxV]

I'm sure we'll see more of them in the future, but keep in mind that the US uses 635B m3 of nat gas a year.

and the current largest tankers carry the equivalent of 90M m3 of natural gas (gaseous state). So with a very conservative decline rate of 2% (using Oil's predicted decline rate, NA nat gas I think is suppose to a be 5% decline rate but I forget)

thats 140 shipments a year per year (ie next year requires 280 shipments) just to keep nat gas at a standstill.

So you can see just after a few short years you'll never be able to build ports or ships fast enough to keep up (as a best case).

A "more practical" solution would be a pipeline across the Bering Strait to get Russian Gas (which could easily be connected to Iranian Gas as well). All it would take is Coni Rice doing some fast talking and we're all set

[Tyler_JC]

Natural gas is burned off as a waste product in many oil producing countries.

The problem isn't a lack of gas.

Russia is top offender in gas-flare emissions

$this->bbcode_second_pass_quote('', '
')The report was completed by scientists at the US National Oceanic & Atmospheric Administration in Colorado using Air Force meteorological satellite images dating to 1995. It reveals that the amount of carbon dioxide emitted from Russia's gas flaring alone equals the combined emissions from all cars and trucks in New York state and New England.

In all, the emissions from global gas flaring send 400 million tons of carbon dioxide into the atmosphere every year -- equivalent to the emissions from all the vehicles in Great Britain, France, and Germany.

The World Bank is convening a meeting today in Rome to discuss the 108-page report's findings. Experts estimate that the amount of gas released and burned at oil installations is equivalent to a quarter of the US natural gas market, potentially worth $69 billion annually at current prices.

[Keith_McClary]

$this->bbcode_second_pass_quote('Tyler_JC', '
')Natural gas will flood American markets for decades to come and continually put a ceiling on prices, IMHO.

[TheDude]

Dave Cohen wrote a good article for TOD: Empire on the Edge - Betting on LNG. He references Harold York's Limited Availability for "Cheap" LNG,which is available from EB. Excellent pieces both. Didja know much of the LNG available for import has the wrong heat content for the US infrastructure?

$this->bbcode_second_pass_quote('Tyler_JC', 'T')he problem isn't a lack of gas.

[Aedo]

$this->bbcode_second_pass_quote('gnm', '.')..
Even one accident would take a good chunk of the port/city hosting it out.
...

[copious.abundance]

Here she is.

http://edition.cnn.com/video/#/video/bu ... etfuel.cnn

[Tanada]

$this->bbcode_second_pass_quote('OilFinder2', 'H')ere she is.

http://edition.cnn.com/video/#/video/bu ... etfuel.cnn