Need Gas?
Natural gas or methane, the cleanest burning of all fossil fuels, has a simple molecule, with four hydrogen atoms arrayed around an atom of carbon (CH4). The resulting CO2 from combustion of natural gas is far lower than that of coal or oil, making it more manageable. But in addition to combustion, methane is also an important source for hydrogen, via steam methane reforming. Most significantly, natural gas has become the fuel of choice, as more and more countries plan to meet their future energy needs via gas. So gas pipelines criss-cross the globe. But pipelines can only go so far before transport costs become prohibitive, and that’s where Liquefied Natural Gas (LGN) comes into the picture.

LGN is by no means new, but is growth is approaching exponential. A majority of the world’s LNG supply comes from countries with large natural gas reserves, including Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, and Trinidad and Tobago. Before too long, Norway will be added to the list. As most of these areas are far from the major consumers, the pipeline problem is only exacerbated.

As LNG occupies only a fraction (1/600) of the volume of natural gas, it is more economical to transport across large distances and can be stored in larger quantities. Double-hulled ships – specifically designed and insulated to handle the low-temperature of LNG – provide the solution to the gas pipeline problem. The carriers, which are up to 1000 feet long and require a 40-foot minimum water depth when fully loaded, transport more than 120 million metric tons of LNG every year.

Together with Norway, new projects under construction in Australia, Russia and Egypt, including expansions of existing facilities throughout the world, will increase annual liquefaction capacity by 58 million tons by 2007, increasing global capacity to 197 million tons per year. Yet this only represents 10 percent of 2002 global natural gas consumption.

It won’t be much longer before LGN production becomes a reality in the North Sea, particularly on the Norwegian Continental Shelf. Statoil’s Snøhvit project, including the Melkøya processing and liquefaction plant, is more than half-way there, with first LGN exports expected to begin late next year.

According to Statoil, the unprocessed wellstream will arrive at Melkøya (outside Hammerfest), where it will be separated before the gas can be cooled down to liquid form and exported via carriers. Carbon dioxide removed from the wellstream will be returned offshore for storage underground. Condensate, and natural gas liquids – butane and propane – will also be separated out for export by sea. After this process, the resulting lean gas is cooled to –163 degrees C in the liquefaction plant. The liquefied natural gas will be stored in dedicated tanks before being shipped out.

Since the Norwegian Parliament gave the Snøhvit project the green light in May 2002, much has been done, both on Melkøya and out in the Barents Sea. Although the project is only a little more than half finished, there is already talk of future expansion, which is not surprising considering Russia’s development in the area.

So Europe’s first export facility for LNG will supply the markets in the USA and countries in southern Europe. Statoil is to market 2.4 billion cubic metres of gas annually to the USA. The Spanish company Iberdrola SA is to purchase 1.6 billion cubic metres annually. The French licensees, Gaz de France and Total, will organise the marketing of their own share of the gas. This amounts to 1.7 billion cubic metres per year.

So the industry’s hot topic, somewhat ironically, is measured at –163 degrees C. But consider this: LNG is simply a means of transporting gas, and if there is this much being done to enable the transport of gas, it emphasises just how vital it has become as a source of energy.