LNG chain regasification link could prove a bottleneck

Doris Leblond
OGJ correspondent

PARIS, Oct. 21 -- Regasification could well become the bottleneck at the end of the LNG chain as the lack of availability of worldwide LNG production and methane carriers is being curtailed by growing competition among regasification players as well as public opposition to terminal construction.

Such problems also could increase the cost of what is "a simple process, compared to liquefaction" and "a modest part of the LNG chain�only 10% of the overall cost of about 3.9 billion euros including eight 145,000 cu m carriers," according to Alain Goy, head of LNG for Gaz de France's Transport Directorate. Goy spoke at a recent conference in Paris organized by the Association Française du Pétrole.

France's LNG projects
GDF, Goy reminded his listeners, has 40 years of LNG experience, which includes the construction of three terminals in France since 1989 (of which only two remain), the safe uploading of 7,000 methane carriers, the supply of 25% of France's natural gas in the form of LNG, and various international partnerships where it has trained operators and taken part in LNG developments abroad.

GDF's most recent regasification involvements are the Dahej regasification terminal on India's northwest coast, where an innovative process was installed using ambient hot air. Also, GDF currently is involved with the construction of a new near-offshore regasification terminal at Fos Cavaou, which has a landing stage slightly off France's Mediterranean coast.

In Europe, where construction of about a dozen methane tanker terminals are being planned to be added to the 11 existing ones, the ongoing liberalization of the natural gas market is changing matters for receiving operators.

The unbundling of the gas sales and infrastructure businesses also includes LNG terminals.

There also is a regulated regasification tariff available for the cosigner client since 2000.

In addition, there is much pressure being exercised to achieve greater market fluidity. "Therefore", explained Goy, "terminals must have spare capacity available...with no guarantee at the design stage that it will be actually used. If a terminal's full capacity is not used, there cannot be a minimum cost for a regasification contract."

Competition is also growing at the regasification stage. Areas of competition include: similar projects that would serve the same geographic area; companies reserving LNG capacity; and upstream producers eyeing the downstream receiving link. All of these factors could produce bottlenecks until LNG production and the methane carriers to transport it become increasingly available.

Terminal installations
Goy also pointed to the mounting physical obstacles to the installation of regasification terminals.

Besides the "not in my backyard" mentality recently compounded by the public's increasing security fears and its sensitivity to possible pollution, there is the need to find sheltered harbors for importing countries given voluntary limits to eligible sites.

Goy listed the many failures in establishing regasification terminals: In 1995, the Italian public voted against the Montalto de Castro terminal siting as well as the planned Monfalcone terminal; in 1998, there was rejection of the offshore North Taiwan terminal; and in 2003, plans were withdrawn for US terminals in East Harswell, Me., and West Vallejo, Calif.

Implementation of some current projects also are far from clear, Goy noted. For example, a terminal in Long Beach, Calif., was stalled by conflicting jurisdictions; a terminal in Freeport, Tex., was held up by required design changes posed by the US Federal Energy Regulatory Commission; a terminal in Izmir, Turkey, was held up by delayed deregulation of the Turkish gas market; and a terminal in Baja California in Mexico was held up by a surfeit of projects there.

Clearing these obstacles has a cost, Goy pointed out. Projects are moved elsewhere, as from the US to Mexico, the Bahamas, or Canada, with an impact on network connections. Also, existing sites are extended with consequences on downstream networks, and sites are converted or industrial wasteland is reused.

In addition, new regasification models are being developed that are geared toward limiting their local impact. Examples include offshore terminal projects such as the gravity-based structures in the Gulf of Mexico's Port Pelican and Gulf landings.

Regarding tanker design, the regasification methane carrier now being developed for spot gas sales uses a floating umbilical that hooks to the underside of the vessel.

One disadvantage to the new carrier is that it is required to be immobilized for 130 hr during the regasification and transfer process. This compares with the 12-hr turnaround time of a conventional carrier.

According to Goy, there are two such regasification carriers now being built in South Korea, both due on stream sometime in 2005.

Related Articles

Woodside delays Browse FLNG development schedule

12/17/2014 Woodside Petroleum Ltd. has reported it expects to enter front-end engineering and design phase for the proposed Browse floating LNG (FLNG) develop...

Woodside to buy Apache’s interests in Wheatstone, Kitimat LNG for $2.75 billion

12/15/2014 Woodside Petroleum Ltd. has agreed to acquire interest in the Wheatstone LNG and Kitimat LNG projects, respectively in Western Australia and Britis...

Watching Government: Russia: On the ropes?

12/15/2014 Russia's Dec. 1 cancellation of its South Stream natural gas pipeline was not surprising. European nations have signaled for years that they intend...

Canada Briefs

12/12/2014

Kinder Morgan to deliver natural gas to Corpus Christi Liquefaction

12/11/2014 Kinder Morgan Inc. (KMI) companies Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, and Tennessee Gas Pipeline Co. (TGP) have entered in...

Magnolia LNG lets EPC contract to SK E&C USA

12/03/2014 Magnolia LNG LLC parent-company Liquefied Natural Gas Ltd. agreed to an engineering, procurement, and construction contract with SK E&C USA cov...

Pipeline leak dampens Atlantic LNG production

12/01/2014 Atlantic LNG (ALNG) reported a 35% reduction in LNG production because of insufficient natural gas supply from Trinidad and Tobago’s National Gas C...

Real-time monitoring improves LNG inventory measurement

12/01/2014 Kogas has improved the calculation method for determining stocks at its LNG terminals, changing from a sampling method to a real-time monitoring sy...

Watching Government: Greece and energy in Europe

11/24/2014 Amid growing energy supply geopolitics, Greece is a stable anchor within a rapidly destabilizing region, Yannis Maniatis, its Environment, Energy, ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected