Natural Gas

Natural gas The composition of natural gas is 95% methane, almost 4% ethane and nitrogen, and 1% carbon dioxide
and propane. It is produced by the natural transformation of organic materials over millions of years.
Methane: the simplest hydrocarbon Methane gas belongs to the hydrocarbon family. A hydrocarbon is an organic composition that contains only carbon and hydrogen atoms. With just one carbon atom and four hydrogen atoms, methane (CH4) is the simplest hydrocarbon.
Some other hydrocarbons are: propane (C3H8), ethane (C2H6) and butane (C4H10).
Benefits of Natural Gas

Natural gas is increasingly the fuel of choice in today's homes. Below are the top reasons to choose natural gas for your home.
1 | Affordability Natural gas costs less to use in your home than electricity, heating oil, propane or kerosene. On average, electricity costs almost four times more than natural gas. 2 | Convenience and reliability Natural gas is piped directly into your home. It's always there when you need it, and you never have to worry about running out of fuel or arranging for deliveries. 3 | Comfort Natural gas heat feels warmer than heat produced by an electric heat pump. 4 | Domestic supply Nearly 100% of the natural gas consumed in the U.S. is produced in North America with 90% coming directly from the U.S. 5 | Environmental impact Simply put - natural gas is the cleanest-burning energy source for your home. The combustion of natural gas emits 45% less carbon dioxide than coal. 6 | Energy efficiency Natural gas is highly efficient. About 90% of the natural gas produced is delivered to customers as useful energy. In contrast, only about 27%of the energy converted to electricity reaches consumers. 7 | Safety The U.S. natural gas industry spends more than $4 billion per year on safety-related programs and is proud of its outstanding safety record.
Natural Gas 101

Natural gas is increasingly the fuel of choice in todays homes with nearly 95% of new homes in the Midwest choosing to install natural gas service. Find out more about this optimal energy source through the Q & A section below. What is natural gas? Natural gas is a combustible, gaseous mixture of simple hydrocarbon compounds, usually found in deep underground reservoirs formed by porous rock. Natural gas is a fossil fuel composed almost entirely of methane, but does contain small amounts of other gases, including ethane, propane, butane and pentane. What does natural gas smell like? In its most pure state, natural gas has no odor. Thats why we add a chemical with a very distinctive odor. In fact, it smells like rotten eggs. Click here for more information about natural gas safety. How is natural gas delivered to my home? Three segments of the natural gas industry are involved in delivering natural gas from the wellhead to the consumer. Production companies explore, drill and extract natural gas from the ground. Transmission companies operate the pipelines that link the natural gas fields to major consuming areas. Distribution companies, such as Vectren Energy Delivery, are the local utilities that deliver natural gas to the customer. Natural gas is then delivered to your home through Vectrens system of pipelines and mains to your gas meter. How safe is natural gas? The 2.1 million-mile underground natural gas delivery system has an outstanding safety record. Likewise, you can depend on your natural gas utility to bring you Americas best energy value regardless of weather. However, it is flammable and, like any burning fuels, can produce carbon monoxide. Therefore, it is highly recommended that you have your natural gas appliances inspected yearly to prevent improper combustion. Do natural gas appliances produce carbon monoxide? A natural gas furnace, water heater or other equipment that is properly installed and regularly maintained should not release carbon monoxide (CO) into your home. But, to operate safely and efficiently, any fuel-burning appliance or equipment must have a good supply of air. It must also have proper and effective venting to carry the exhausts outdoors. If anything interferes with the air supply or the venting of exhaust gases, incomplete or faulty combustion may occur. This could cause CO to be produced. For more information on CO safety, click here. What are the environmental impacts involved in consuming natural gas? Simply put - natural gas is the cleanest-burning energy source for your home. Natural gas has fewer impurities, is chemically less complex and its combustion generally results in less pollution than other fuels. In most applications, the use of natural gas produces less sulfur dioxide, less nitrogen oxides and less particulate matter than oil and coal.
Natural Gas Appliances
Home Heating with Natural Gas

Heating your home with natural gas is the most affordable and cost-efficient method. Todays gas furnaces are now up to 98% efficient, thus providing substantial savings that will quickly pay for the cost of the unit.
Natural gas furnace: produces heat that feels warmer than electric models at a much more affordable price. Plus, natural gas furnaces are typically more efficient and last longer than electric models. Natural gas fireplace (logs): provides instant on an off controls to quickly warm up the room faster than a wood-burning fireplace. Plus, you can
say goodbye to hauling or storing wood. Natural gas space or garage heater: produces efficient gas heat for smaller spaces, such as garages or pool houses. These convenient can be wallmounted and can operate during a power outage given they require not electricity to operate.
Water Heating with Natural Gas

Heating water with natural gas costs roughly half as much as an electric model. Plus, natural gas units recover up to 40% faster than electric models and ensures a hot water supply even if the electricity is out. While there are literally hundreds of models available, water heaters come in two basic styles:
Storage or tank-style: is the most common type of water heater currently in the U.S. Tank water heaters store hot water on a standby basis, heating and reheating the same water so it will be ready for you. The tank size typically ranges from 40 gallons to 100 gallons depending on the hot water demand. Tankless style: are becoming more widespread in the U.S. because they provide endless hot water, take up less space and save energy. Unlike tank-style water heaters that heat water in a storage tank, tankless water heaters heat water only when you need it. Tankless water heaters cost more than a tank model to purchase and install. However, the energy saved typically results in paybacks of a few years or less for a family of four. Tankless hot water heaters also last twice as long as a tank model, up to 20 years, and they take up less space in your home.
Clothes Drying with Natural Gas

Natural gas clothes dryers cost about half as much to operate as a comparable electric dryer and produce less static cling. Todays models include moisture sensors for the best results on fabrics.
Cooking with Natural Gas

Because of its precision, cooking with natural gas is preferred by restaurant chefs across the country. Even better, it costs about half as much to cook with a gas range compared with a similar electric range. Theres a vast range of options for your kitchen or patio.
Natural gas cooktop: is easily installed against walls or into a free-standing island. A separate wall oven is typically located in another area of the kitchen. Cook tops usually match the depth of most cabinetry for easy installation. Natural gas free-standing gas range: combines the cook top and oven into one affordable appliance. You can choose a stand-alone or built-in look without remodeling. Natural gas stove: is available in wall or under-counter models for baking, roasting, broiling and grilling. And theyre easy to access, without stooping over conventional range ovens. You can even order a double oven stacked top to bottom or side by side. This comes in really handy if you have a larger family or entertain frequently. Natural gas outdoor grill: offers precise temperature control with no tank to refill, unlike propane.
Outdoor Living with Natural Gas

Outdoor living natural gas appliances can easily and affordably integrate natural surroundings into your everyday life. You can even transform your patio, porch or deck into an outdoor room with the comfort and convenience of natural gas. Consider the following options:
Natural gas grill or barbeque: provides convenience and flexibility when compared to charcoal and propane units through an endless supply of natural gas with no tanks to refill. And youll enjoy no warm-up time on your gas grill - takes as few as 6 minutes to reach 600 F. Natural gas firepit or patio heater: offers a convenient and simple alternative to building a campfire with no wood to store or replenish. Gas firepits and patio heaters are safe for use on wood decks with no burning embers, smoke or campfire smell. Natural gas pool or spa heater: provides comfort and warmth to your outdoor spa or pool year-round by heating twice as fast as electric models. Choose from gas-fire storage, instantaneous, circulating or immersion systems. Natural gas outdoor lighting: adds charm and value to your home through modern or traditional lighting. Gas lighting wont create harsh shadows like flood lighting and wont attract insects. Plus, gas lighting requires little maintenance and remains lit through electric power outages.
Natural gas
From Wikipedia, the free encyclopedia
For other uses, see Natural gas (disambiguation).
Natural gas extraction by countries in cubic meters per year.
Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, with other hydrocarbons, carbon dioxide, nitrogen and hydrogen sulfide.[1] Natural gas is an important energy source to provide heating and electricity. It is also used as fuel for vehicles and as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals. Natural gas is found in deep underground natural rock formations or associated with other hydrocarbon reservoirs in coal beds and as methane clathrates. Petroleum is also another resource found in proximity to and with natural gas. Most natural gas was created over time by two mechanisms: biogenic and thermogenic. Biogenic gas is created by methanogenic organisms in marshes, bogs, landfills, and shallow sediments. Deeper in the earth, at greater temperature and pressure, thermogenic gas is created from buried organic material.[2][3] Before natural gas can be used as a fuel, it must undergo processing to clean the gas and remove impurities including water to meet the specifications of marketable natural gas. The by-products of processing includeethane, propane, butanes, pentanes, and higher molecular weight hydrocarbons, hydrogen sulphide (which may be converted into pure sulfur), carbon dioxide, water vapor, and sometimes helium and nitrogen. Natural gas is often informally referred to simply as gas, especially when compared to other energy sources such as oil or coal.
Contents
[hide]
1 Sources
o o o o
1.1 Natural gas 1.2 Town gas 1.3 Biogas 1.4 Crystallized natural gas hydrates
2 Natural gas processing 3 Depletion 4 Uses
o o o o o o o
4.1 Power generation 4.2 Domestic use 4.3 Transportation 4.4 Fertilizers 4.5 Aviation 4.6 Hydrogen 4.7 Other
5 Storage and transport 6 Environmental effects
o o o
6.1 CO2 emissions 6.2 Other pollutants 6.3 Extraction
7 Safety concerns
o o
7.1 Production 7.2 Use
8 Energy content, statistics, and pricing
o o o o
8.1 European Union 8.2 United States 8.3 Canada 8.4 Elsewhere
9 Natural gas as an asset class for institutional investors 10 See also 11 References
[edit]Sources
See also: List of natural gas fields, List of countries by natural gas proven reserves, and List of countries by natural gas production
[edit]Natural
gas
Natural gas drilling rig in Texas.
In the 19th century, natural gas was usually obtained as a by-product of producing oil, since the small, light gas carbon chains came out of solution as the extracted fluids underwent pressure reduction from the reservoir to the surface, similar to uncapping a bottle of soda where the carbon dioxide effervesces. Unwanted natural gas was a disposal problem in the active oil fields. If there was not a market for natural gas near the wellhead it was virtually valueless since it had to be piped to the end user. In the 19th century and early 20th century, such unwanted gas was usually burned off at oil fields. Today, unwanted gas (orstranded gas without a market) associated with oil extraction often is returned to the reservoir with 'injection' wells while awaiting a possible future market or to repressurize the formation, which can enhance extraction rates from other wells. In regions with a high natural gas demand (such as the US), pipelines are constructed when it is economically feasible to transport gas from a wellsite to an end consumer. Another possibility is to export natural gas as a liquid. Gas-to-liquids (GTL) is a developing technology that converts stranded natural gas into synthetic gasoline, diesel, or jet fuel through the FischerTropsch process developed during World War II by Germans. Such fuel can be transported to users through conventional pipelines and tankers. Proponents claim that GTL burns cleaner than comparable petroleum fuels. Major international oil companies use sophisticated technology to produce GTL. A worldscale (140,000 barrels (22,000 m3) a day) GTL plant in Qatar went into production in 2011. Natural gas can be "associated" (found in oil fields), or "non-associated" (isolated in natural gas fields), and is also found in coal beds (as coalbed methane). It sometimes contains a significant amount of ethane, propane, butane, and pentaneheavier hydrocarbons removed for commercial use prior to the methanebeing sold as a consumer fuel or chemical plant feedstock. Non-hydrocarbons such as carbon dioxide, nitrogen, helium (rarely), and hydrogen sulfide must also be removed before the natural gas can be transported.[4]
Natural gas is commercially extracted at oil fields and natural gas fields. Gas extracted from oil wells is called casinghead gas or associated gas. The natural gas industry is extracting an increasing quantity of gas from challenging resource types: sour gas, tight gas, shale gas, and coalbed methane. The world's largest proven gas reserves are located in Russia, with 4.7571013 m (1.681015 cubic feet). With Gazprom, Russia is frequently the world's largest natural gas extractor. Major proven resources (in billion cubic meters) are world 175,400 (2006), Russia 47,570 (2006), Iran 26,370 (2006), Qatar 25,790 (2007), Saudi Arabia 6,568 (2006) and United Arab Emirates 5,823 (2006). It is estimated that there are about 900 trillion cubic meters of "unconventional" gas such as shale gas, of which 180 trillion may be recoverable.[5] In turn, many studies from MIT, Black & Veatchand the DOE -- see natural gas -- will account for a larger portion of electricity generation and heat in the future.[6] The world's largest gas field is Qatar's offshore North Field, estimated to have 25 trillion cubic meters[7] (9.01014cubic feet) of gas in placeenough to last more than 420 years[citation needed] at optimum extraction levels. The second largest natural gas field is the South Pars Gas Field in Iranian waters in the Persian Gulf. Located next to Qatar's North Field, it has an estimated reserve of 8 to 14 trillion cubic meters[8] (2.81014 to 5.01014 cubic feet) of gas. Because natural gas is not a pure product, as the reservoir pressure drops when non-associated gas is extracted from a field under supercritical (pressure/temperature) conditions, the higher molecular weight components may partially condense upon isothermic depressurizingan effect called retrograde condensation. The liquid thus formed may get trapped as the pores of the gas reservoir get deposited. One method to deal with this problem is to re-inject dried gas free of condensate to maintain the underground pressure and to allow re-evaporation and extraction of condensates. More frequently, the liquid condenses at the surface, and one of the tasks of the gas plant is to collect this condensate. The resulting liquid is called natural gas liquid (NGL) and has commercial value.
[edit]Town
gas
Main article: History of manufactured gas Town gas, a synthetically produced mixture of methane and other gases, mainly the highly toxic carbon monoxide, is used in a similar way to natural gas and can be produced by treating coalchemically. This is a historical technology, not usually economically competitive with other sources of fuel gas today. But there are still some specific cases where it is the best option and it may be so into the future. Most town "gashouses" located in the eastern US in the late 19th and early 20th centuries were simple byproduct coke ovens which heated bituminous coal in air-tight chambers. The gas driven off from the coal was collected and distributed through networks of pipes to residences and other buildings where it was used for cooking and lighting. (Gas heating did not come into widespread use until the last half of the 20th century.) The coal tar (or asphalt) that collected in the bottoms of the gashouse ovens was often used for roofing and other water-proofing purposes, and when mixed with sand and gravel was used for paving streets.
[edit]Biogas
Main article: biogas When methane-rich gases are produced by the anaerobic decay of non-fossil organic matter (biomass), these are referred to as biogas (or natural biogas). Sources of biogas include swamps,marshes, and landfills (see landfill gas), as well as sewage sludge and manure[9] by way of anaerobic digesters, in addition to enteric fermentation, particularly in cattle. Methanogenic archaea (bacteria) are responsible for all biological sources of methane, some in symbiotic relationships with other life forms, including termites, ruminants, and cultivated crops. Methane released directly into the atmosphere would be considered a pollutant. However, methane in the atmosphere is oxidized, producing carbon dioxide and water. Methane in the atmosphere has a half life of seven years, meaning that if a tonne of methane were emitted today, 500 kilograms would have broken down to carbon dioxide and water after seven years.
U.S. natural gas extraction, 19002005. Source: EIA.
Other sources of methane, the principal component of natural gas, include landfill gas, biogas, and methane hydrate. Biogas, and especially landfill gas, are already used in some areas, but their use could be greatly expanded. Landfill gas is a type of biogas, but biogas usually refers to gas produced from organic material that has not been mixed with other waste. Landfill gas is created from the decomposition of waste in landfills. If the gas is not removed, the pressure may get so high that it works its way to the surface, causing damage to the landfill structure, unpleasant odor, vegetation die-off, and an explosionhazard. The gas can be vented to the atmosphere, flared or burned to produce electricity or heat. Experimental systems were being proposed for use in parts of Hertfordshire, UK, and Lyon in France. Once water vapor is removed, about half of landfill gas is methane. Almost all of the rest is carbon dioxide, but there are also small amounts of nitrogen, oxygen, and hydrogen. There are usually trace amounts of hydrogen sulfide and siloxanes, but their concentration varies widely. Landfill gas cannot be distributed through utility natural gas pipelines unless it is cleaned up to less than 3 per cent CO2, and a few parts per million H2S, because CO2 and H2S corrode the pipelines.[10] The presence of CO2 will lower the energy
level of the gas below requirements for the pipeline. Siloxanes in the gas will form deposits in gas burners and need to be removed prior to entry into any gas distribution or transmission system. It is usually more economical to combust the gas on site or within a short distance of the landfill using a dedicated pipeline. Water vapor is often removed, even if the gas is combusted on site. If low temperatures condense water out of the gas, siloxanes can be lowered as well because they tend to condense out with the water vapor. Other non-methane components may also be removed to meet emission standards, to prevent fouling of the equipment or for environmental considerations. Co-firing landfill gas with natural gas improves combustion, which lowers emissions. Gas generated in sewage treatment plants is commonly used to generate electricity. For example, the Hyperion sewage plant in Los Angeles burns 8 million cubic feet (230,000 m3) of gas per day to generate power[11] New York City utilizes gas to run equipment in the sewage plants, to generate electricity, and in boilers.[12] Using sewage gas to make electricity is not limited to large cities. The city of Bakersfield, California, uses cogeneration at its sewer plants.[13] California has 242 sewage wastewater treatment plants, 74 of which have installed anaerobic digesters. The total biopower generation from the 74 plants is about 66 MW.[14] Biogas is usually produced using agricultural waste materials, such as otherwise unusable parts of plants and manure. Biogas can also be produced by separating organic materials from waste that otherwise goes to landfills. This method is more efficient than just capturing the landfill gas it produces. Using materials that would otherwise generate no income, or even cost money to get rid of, improves the profitability and energy balance of biogas production. Anaerobic lagoons produce biogas from manure, while biogas reactors can be used for manure or plant parts. Like landfill gas, biogas is mostly methane and carbon dioxide, with small amounts of nitrogen, oxygen and hydrogen. However, with the exception of pesticides, there are usually lower levels of contaminants.
The McMahon natural gas processing plant in Taylor, British Columbia, Canada.[15]
[edit]Crystallized
natural gas hydrates
Huge quantities of natural gas (primarily methane) exist in the form of hydrates under sediment on offshore continental shelves and on land in arctic regions that experience permafrost, such as those in Siberia.
Hydrates require a combination of high pressure and low temperature to form. However, as of 2010 no technology has been developed yet to extract natural gas economically from hydrates. In 2010, using current technology, the cost of extracting natural gas from crystallized natural gas is estimated to 100200 per cent the cost of extracting natural gas from conventional sources, and even higher from offshore deposits.[16]
[edit]Natural
gas processing
Main article: Natural gas processing The image below is a schematic block flow diagram of a typical natural gas processing plant. It shows the various unit processes used to convert raw natural gas into sales gas pipelined to the end user markets. The block flow diagram also shows how processing of the raw natural gas yields byproduct sulfur, byproduct ethane, and natural gas liquids (NGL) propane, butanes and natural gasoline (denoted as pentanes +).[17][18][19][20][21]
Schematic flow diagram of a typical natural gas processing plant.
[edit]Depletion
See main article, Gas depletion

[edit]Uses [edit]Power
generation
Natural gas is a major source of electricity generation through the use of gas turbines and steam turbines. Natural gas is also well suited for a combined use in association with renewable energysources such as wind or solar and for alimenting peak-load power stations functioning in tandem with hydroelectric plants.[22] Most grid peaking power plants and some off-grid engine-generatorsuse natural gas. Particularly high efficiencies can be achieved through combining gas turbines with a steam turbine in combined cycle mode. Natural gas burns more cleanly than otherhydrocarbon fuels, such as oil and coal, and produces less carbon dioxide per unit of energy released. For an equivalent amount of heat, burning natural gas produces about 30 per cent lesscarbon dioxide than burning petroleum and about 45 per cent less than burning coal.[23] [24] Coal-fired electric power generation emits around 2,000 pounds of carbon dioxide for every megawatt hour generated, which almost double the carbon dioxide released by a natural gas-fired electric plant per megawatt hour generated. Because of this higher carbon efficiency of natural gas generation, as the fuel mix in the United States has change to reduce coal and increase natural gas generation carbon dioxide emissions have unexpectedly fallen. Those measured in the first quarter of 2012 were the lowest of any recorded for the first quarter of any year since 1992.[25] Combined cycle power generation using natural gas is currently the cleanest available source of power using hydrocarbon fuels, and this technology is widely and increasingly used as natural gas can be obtained at increasingly reasonable costs. Fuel cell technology may eventually provide cleaner options for converting natural gas into electricity, but as yet it is not price-competitive.
[edit]Domestic
use
The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (December 2010)
Natural gas dispensed from a simple stovetop can generate heat in excess of 2000F (1093C) making it a powerful domestic cooking and heating fuel.[26] In much of the developed world it is supplied to homes via pipes where it is used for many purposes including natural gas-powered ranges and ovens, natural gasheated clothes dryers, heating/cooling, and central heating. Home or other building heating may include boilers, furnaces, and water heaters. Compressed natural gas (CNG) is used in rural homes without connections to piped-in public utility services, or with portable grills.[citation needed] Natural gas is also supplied by independent natural gas suppliers through Natural Gas Choice programs throughout the United States. However, due to CNG being less economical than LPG, LPG (propane) is the dominant source of rural gas.
A Washington, D.C. Metrobus, which runs on natural gas.
[edit]Transportation
CNG is a cleaner alternative to other automobile fuels such as gasoline (petrol) and diesel. As of 2008 there were 9.6 million natural gas vehiclesworldwide, led by Pakistan (2.0 million), Argentina (1.7 million), Brazil (1.6 million), Iran (1.0 million), and India (650,000).[27][28] The energy efficiency is generally equal to that of gasoline engines, but lower compared with modern diesel engines. Gasoline/petrol vehicles converted to run on natural gas suffer because of the low compression ratio of their engines, resulting in a cropping of delivered power while running on natural gas (10%15%). CNG-specific engines, however, use a higher compression ratio due to this fuel's higher octane number of 120130.[29]
[edit]Fertilizers
Natural gas is a major feedstock for the production of ammonia, via the Haber process, for use in fertilizer production.
[edit]Aviation
Russian aircraft manufacturer Tupolev is currently running a development program to produce LNGand hydrogen-powered aircraft.[30] The program has been running since the mid-1970s, and seeks to develop LNG and hydrogen variants of the Tu-204 and Tu-334 passenger aircraft, and also the Tu330 cargo aircraft. It claims that at current market prices, an LNG-powered aircraft would cost 5,000 roubles (~ $218/ 112) less to operate per ton, roughly equivalent to 60 per cent, with considerable reductions to carbon monoxide,hydrocarbon and nitrogen oxide emissions. The advantages of liquid methane as a jet engine fuel are that it has more specific energy than the standard kerosene mixes do and that its low temperature can help cool the air which the engine compresses for greater volumetric efficiency, in effect replacing an intercooler. Alternatively, it can be used to lower the temperature of the exhaust.
[edit]Hydrogen
Natural gas can be used to produce hydrogen, with one common method being the hydrogen reformer. Hydrogen has many applications: it is a primary feedstock for the chemical industry, a hydrogenating agent, an important commodity for oil refineries, and the fuel source in hydrogen vehicles.
[edit]Other
Natural gas is also used in the manufacture of fabrics, glass, steel, plastics, paint, and other products.
[edit]Storage
and transport
Polyethylene plastic main being placed in a trench.
Because of its low density, it is not easy to store natural gas or transport by vehicle. Natural gas pipelines are impractical across oceans. Many existing pipelines in America are close to reaching their capacity, prompting some politicians representing northern states to speak of potential shortages. In Europe, the gas pipeline network is already dense in the West.[31] New pipelines are planned or under construction in Eastern Europe and between gas fields in Russia,Near East and Northern Africa and Western Europe. See also List of natural gas pipelines. LNG carriers transport liquefied natural gas (LNG) across oceans, while tank trucks can carry liquefied or compressed natural gas (CNG) over shorter distances. Sea transport using CNG carrier ships that are now under development may be competitive with LNG transport in specific conditions. Gas is turned into liquid at a liquefaction plant, and is returned to gas form at regasification plant at the terminal. Shipborne regasification equipment is also used. LNG is the preferred form for long distance, high volume transportation of natural gas, whereas pipeline is preferred for transport for distances up to 4,000 km (2,485 mi) over land and approximately half that distance offshore. CNG is transported at high pressure, typically above 200 bars. Compressors and decompression equipment are less capital intensive and may be economical in smaller unit sizes than liquefaction/regasification plants. Natural gas trucks and carriers may transport natural gas directly to endusers, or to distribution points such as pipelines.
Peoples Gas Manlove Field natural gas storage area in Newcomb Township, Champaign County, Illinois. In the foreground (left) is one of the numerous wells for the underground storage area, with an LNG plant, and above ground storage tanks are in the background (right).
In the past, the natural gas which was recovered in the course of recovering petroleum could not be profitably sold, and was simply burned at the oil field in a process known as flaring. Flaring is now illegal in many countries.[32]Additionally, companies now recognize that gas may be sold to consumers in the form of LNG or CNG, or through other transportation methods. The gas is now re-injected into the formation for later recovery. The re-injection also assists oil pumping by keeping underground pressures higher. A "master gas system" was invented in Saudi Arabia in the late 1970s, ending any necessity for flaring. Satellite observation, however, shows that flaring[33] and venting[34] are still practiced in some gas-extracting countries. Natural gas is used to generate electricity and heat for desalination. Similarly, some landfills that also discharge methane gases have been set up to capture the methane and generate electricity. Natural gas is often stored underground inside depleted gas reservoirs from previous gas wells, salt domes, or in tanks as liquefied natural gas. The gas is injected in a time of low demand and extracted when demand picks up. Storage nearby end users helps to meet volatile demands, but such storage may not always be practicable. With 15 countries accounting for 84 per cent of the worldwide extraction, access to natural gas has become an important issue in international politics, and countries vie for control of pipelines. [35] In the first decade of the 21st century, Gazprom, the state-owned energy company in Russia, engaged in disputes with Ukraine and Belarus over the price of natural gas, which have created concerns that gas deliveries to parts of Europe could be cut off for political reasons.[36] Floating Liquefied Natural Gas (FLNG) is an innovative technology designed to enable the development of offshore gas resources that would otherwise remain untapped because due to environmental or economic factors it is nonviable to develop them via a land-based LNG operation. FLNG technology also provides a number of environmental and economic advantages:
Environmental Because all processing is done at the gas field, there is no requirement for long pipelines to shore, compression units to pump the gas to shore, dredging and jetty construction, and onshore construction of an LNG processing plant, which significantly reduces the environmental
footprint.[37] Avoiding construction also helps preserve marine and coastal environments. In addition, environmental disturbance will be minimised during decommissioning because the facility can easily be disconnected and removed before being refurbished and re-deployed elsewhere.
Economic Where pumping gas to shore can be prohibitively expensive, FLNG makes development economically viable. As a result, it will open up new business opportunities for countries to develop offshore gas fields that would otherwise remain stranded, such as those offshore East Africa. [38]
Many gas and oil companies are considering the economic and environmental benefits of Floating Liquefied Natural Gas (FLNG). However, for the time being, the only FLNG facility now in development is being built by Shell,[39] due for completion around 2017.[40]
[edit]Environmental
effects
See also: Environmental issues with energy

[edit]CO2
emissions
Natural gas is often described as the cleanest fossil fuel, producing less carbon dioxide per joule delivered than either coal or oil[23] and far fewer pollutants than other hydrocarbon fuels[citation needed]. However, in absolute terms, it does contribute substantially to global carbon emissions, and this contribution is projected to grow. According to the IPCC Fourth Assessment Report (Working Group III Report, chapter 4), in 2004, natural gas produced about 5.3 billion tons a year of CO2 emissions, while coal and oil produced 10.6 and 10.2 billion tons respectively (figure 4.4). According to an updated version of the SRES B2 emissions scenario by 2030 natural gas would be the source of 11 billion tons a year, with coal and oil now 8.4 and 17.2 billion respectively because demand is increasing 1.9 per cent a year.[41] (Total global emissions for 2004 were estimated at over 27,200 million tons.) In addition, natural gas itself is a greenhouse gas more potent than carbon dioxide. Although natural gas is released into the atmosphere in much smaller quantities, methane is oxidized in the atmosphere into CO2, and hence natural gas affects the atmosphere for approximately 12 years, compared to CO2, which is already oxidized, and has effect for 100 to 500 years. Natural gas is composed mainly of methane, which has a radiative forcing twenty times greater than carbon dioxide. Based on such composition, a ton of methane in the atmosphere traps as much radiation as 20 tons of carbon dioxide; however, it remains in the atmosphere for 840 times less time. Carbon dioxide still receives the lion's share of attention concerning greenhouse gases because it is released in much larger amounts. Still, it is inevitable when natural gas is used on a large scale that some of it will leak into the atmosphere. (Coal methane not captured by coal bed methane extraction techniques is simply lost into the atmosphere. Current estimates by the EPA place global emissions of methane at 3 trillion cubic feet (85 km3) annually,[42] or 3.2 per cent of global production.[43] Direct emissions of methane represented 14.3 per cent of all global anthropogenic greenhouse gas emissions in 2004.[44]
[edit]Other
pollutants
Natural gas produces far lower amounts of sulfur dioxide and nitrous oxides than any other hydrocarbon fuel (fossil fuels).[45] Carbon dioxide produced is 117,000 ppm vs 208,000 for burning coal.Carbon monoxide produced is 40 ppm vs 208 for burning coal[citation needed]. Nitrogen oxides produced is 92 ppm vs 457 for burning coal. Sulfur dioxide is 1 ppm vs 2,591 for burning coal. Mercuryis 0 vs .016 for burning coal.[46] Particulates are also a major contribution to global warming. Natural gas has 7ppm vs coal's 2,744ppm.[47] Natural gas also has Radon, from 5 to 200,000Becquerels per cubic meter.[48]
[edit]Extraction
According to Business Week, scientists at the National Oceanic and Atmospheric Administration (NOAA), which conducts much of the climate science of the United States, then surprised nearly everyone in February when they revealed that air samples from an area of Colorado with a lot of wells contained twice the amount of methane the United States Environmental Protection Agency(EPA) estimated came from that production method.[49]
[edit]Safety
concerns
A pipeline odorant injection station
[edit]Production
In mines, where methane seeping from rock formations has no odor, sensors are used, and mining apparatus such as the Davy lamp has been specifically developed to avoid ignition sources. Some gas fields yield sour gas containing hydrogen sulfide (H2S). This untreated gas is toxic. Amine gas treating, an industrial scale process which removes acidic gaseous components, is often used to remove hydrogen sulfide from natural gas.[50] Extraction of natural gas (or oil) leads to decrease in pressure in the reservoir. Such decrease in pressure in turn may result in subsidence, sinking of the ground above. Subsidence may affect ecosystems, waterways, sewer and water supply systems, foundations, and so on. Another ecosystem effect results from the noise of the process. This can change the composition of animal life in the area, and have consequences for plants as well in that animals disperse seeds and pollen. Releasing the gas from low-permeability reservoirs is accomplished by a process called hydraulic fracturing or "hydrofracking". To allow the natural gas to flow out of the shale, oil operators force 1 to 9
million US gallons (34,000 m3) of water mixed with a variety of chemicals through the wellbore casing into the shale. The high pressure water breaks up or "fracks" the shale, which releases the trapped gas. Sand is added to the water as a proppant to keep the fractures in the shale open, thus enabling the gas to flow into the casing and then to the surface. The chemicals are added to the frack fluid to reduce friction and combat corrosion. During the extracting life of a gas well, other low concentrations of other chemical substances may be used, such as biocides to eliminate fouling, scale and corrosion inhibitors, oxygen scavengers to remove a source of corrosion, and acids to clean the perforations in the pipe. Dealing with fracking fluid can be a challenge. Along with the gas, 30 per cent to 70 per cent of the chemically laced frack fluid, or flow back, returns to the surface. Additionally, a significant amount of salt and other minerals, once a part of the rock layers that were under prehistoric seas, may be incorporated in the flow back as they dissolve in the frack fluid.
[edit]Use
In order to assist in detecting leaks, a minute amount of odorant is added to the otherwise colorless and almost odorless gas used by consumers. The odor has been compared to the smell of rotten eggs, due to the added tert-Butylthiol or t-butyl mercaptan. Sometimes a related compound, thiophane may be used in the mixture. Situations in which an odorant that is added to natural gas can be detected by analytical instrumentation, but cannot be properly detected by an observer with a normal sense of smell, have occurred in the natural gas industry. This is caused by odor masking, when one odorant overpowers the sensation of another. As of 2011, the industry is conducting research on the causes of odor masking.[51]
Gas network emergency vehicle responding to a major fire in Kiev, Ukraine
Explosions caused by natural gas leaks occur a few times each year. Individual homes, small businesses and other structures are most frequently affected when an internal leak builds up gas inside the structure. Frequently, the blast will be enough to significantly damage a building but leave it standing. In these cases, the people inside tend to have minor to moderate injuries. Occasionally, the gas can collect in high enough quantities to cause a deadly explosion, disintegrating one or more buildings in the process. The gas usually dissipates readily outdoors, but can sometimes collect in dangerous quantities if flow rates are high enough. However, considering the tens of millions of structures that use the fuel, the individual risk of using natural gas is very low.
Natural gas heating systems are a minor source of carbon monoxide deaths in the United States. According to the US Consumer Product Safety Commission (2008), 56 per cent of unintentional deaths from non-fire CO poisoning were associated with engine-driven tools like gas-powered generators and lawn mowers. Natural gas heating systems accounted for 4 per cent of these deaths. Improvements in natural gas furnace designs have greatly reduced CO poisoning concerns. Detectors are also available that warn of carbon monoxide and/or explosive gas (methane, propane, etc.).
[edit]Energy
content, statistics, and pricing
Main article: Natural gas prices See also: Billion cubic metres of natural gas
Natural gas prices at the Henry Hub in US dollars per million BTUs ($/mmbtu) for 20002010.
Quantities of natural gas are measured in normal cubic meters (corresponding to 0 C at 101.325 kPa) or in standard cubic feet(corresponding to 60 F (16 C) and 14.73 psia). The gross heat of combustion of one cubic meter of commercial quality natural gas is around 39 megajoules (10.8 kWh), but this can vary by several percent. This comes to about 49 megajoules (13.5 kWh) for one kg of natural gas (assuming 0.8 kg/m^3, an approximate value).[citation needed] The price of natural gas varies greatly depending on location and type of consumer. In 2007, a price of $7 per 1,000 cubic feet (28 m3) was typical in the United States. The typical caloric value of natural gas is roughly 1,000 British thermal units (BTU) per cubic foot, depending on gas composition. This corresponds to around $7 per million BTU, or around $7 per gigajoule. In April 2008, the wholesale price was $10 per 1,000 cubic feet (28 m3) ($10/MMBTU).[52] The residential price varies from 50 per cent to 300 per cent more than the wholesale price. At the end of 2007, this was $12$16 per 1,000 cu ft (28 m3).[53] Natural gas in the United States is traded as a futures contract on theNew York Mercantile Exchange. Each contract is for 10,000 MMBTU (~10,550 gigajoules), or 10 billion BTU. Thus, if the price of gas is $10 per million BTUs on the NYMEX, the contract is worth $100,000.
[edit]European
Union
As one of the world's largest importers of natural gas, the EU is a major player on the international gas market. Gas prices for end users vary greatly across the EU.[54] A single European energy market, one of the key objectives of the European Union, should level the prices of gas in all EU member states.
[edit]United
States
U.S. Natural Gas Marketed Production (cubic feet) 1900 to 2011 US EIA
In US units, one standard cubic foot of natural gas produces around 1,028 British thermal units (BTU). The actual heating value when the water formed does not condense is the net heat of combustion and can be as much as 10 per cent less.[55] In the United States, retail sales are often in units of therms (th); 1 therm = 100,000 BTU. Gas meters measure the volume of gas used, and this is converted to therms by multiplying the volume by the energy content of the gas used during that period, which varies slightly over time. Wholesale transactions are generally done in decatherms (Dth), or in thousand decatherms (MDth), or in million decatherms (MMDth). A million decatherms is roughly a billion cubic feet of natural gas. Gas sales to domestic consumers may be in units of 100 standard cubic feet (Ccf).
[edit]Canada
Canada uses metric measure for internal trade of petrochemical products. Consequently, natural gas is sold by the Gigajoule, a measure approximately equal to 1/2 of a barrel (250lbs) of oil, or 1 million BTUs, or 1000 cu ft of gas, or 28cu metres of gas.
[edit]Elsewhere
In the rest of the world, natural gas is sold in Gigajoule retail units. LNG (liquefied natural gas) and LPG (liquefied petroleum gas) are traded in metric tons or mmBTU as spot deliveries. Long term natural gas distribution contracts are signed in cubic metres, and LNG contracts are in metric tonnes (1,000kg). The LNG and LPG is transported by specialized transport ships, as the gas is liquified at cryogenic temperatures. The specification of each LNG/LPG cargo will usually contain the energy content, but this information is in general not available to the public. In the Russian Federation, Gazprom sold approximately 250 billion cubic metres of natural gas in 2008.
[edit]Natural
gas as an asset class for institutional investors
Research conducted by the World Pensions Council (WPC) suggests that large US and Canadian pension funds and Asian and MENA area SWF investors have become particularly active in the fields of natural gas and natural gas infrastructure, a trend started in 2005 by the formation of Scotia Gas Networks in the UK by OMERS and Ontario Teachers' Pension Plan.[22]
Liquefied natural gas

From Wikipedia, the free encyclopedia
Not to be confused with Natural gas processing or Liquefied petroleum gas.

This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (February 2008)
Liquefied natural gas or LNG is natural gas (predominantly methane, CH4) that has been converted to liquid form for ease of storage or transport. Liquefied natural gas takes up about 1/600th the volume of natural gas in the gaseous state. It is odorless, colorless, non-toxic and non-corrosive. Hazards include flammability, freezing andasphyxia.
A typical LNG process. The gas is first extracted and transported to a processing plant where it is purified by removing any condensates such as water, oil, mud, as well as other gases such as CO2 and H2S. An LNG process train will also typically be designed to remove trace amounts of mercury from the gas stream to prevent mercury amalgamizing with aluminium in the cryogenic heat exchangers. The gas is then cooled down in stages until it is liquefied. LNG is finally stored in storage tanks and can be loaded and shipped.
The liquefaction process involves removal of certain components, such as dust, acid gases, helium, water, and heavy hydrocarbons, which could cause difficulty downstream. The natural gas is then condensed into a liquid at close to atmospheric pressure (maximum transport pressure set at around 25 kPa/3.6 psi) by cooling it to approximately 162 C (260 F). LNG achieves a higher reduction in volume than compressed natural gas (CNG) so that the energy density of LNG is 2.4 times heavier than that of CNG or 60% of that of diesel fuel.[1] This makes LNG cost efficient to transport over long distances where pipelines do not exist. Specially designed cryogenic sea vessels (LNG carriers) or cryogenic road tankers are used for its transport. LNG is principally used for transporting natural gas to markets, where it is regasified and distributed as pipeline natural gas. It can be used in natural gas vehicles, although it is more common to design vehicles to use compressed natural gas. Its relatively high cost of production and the need to store it in expensive cryogenic tanks have hindered widespread commercial use.
The Economist Intelligence Unit brought out a report in August 2012 entitled "Tankers on the horizon: Australias coming LNG boom" on the dominant trends in the development of Austral ia's gas resources and details the LNG projects that will unlock these resources for export to markets in Asia. Download the complimentary report.
Contents
[hide]
1 Energy density and other physical properties 2 Production 3 Commercial aspects 4 Trade
o o o
4.1 Imports 4.2 Cargo diversion 4.3 Cost of LNG plants
4.3.1 Small-scale liquefaction plants
5 LNG pricing
o o
5.1 Oil parity 5.2 S-curve
5.2.1 JCC and ICP 5.2.2 Brent and other energy carriers
5.3 Price review
6 Quality of LNG 7 Liquefaction technology
o o
7.1 Storage 7.2 Transportation
7.2.1 Terminals
7.3 Refrigeration
8 Environmental concerns
8.1 Safety and accidents
9 See also 10 References 11 External links 12 Other sources
[edit]Energy
density and other physical properties
The heating value depends on the source of gas that is used and the process that is used to liquefy the gas. The higher heating value of LNG is estimated to be 24 MJ/L. The lower heating value of LNG is
21 MJ/L or 563623 BTU/ft3. For the purpose of comparison of different fuels the heating value is also known as the energy density expressed in MJ/L or the gasoline gallon equivalentexpressed in BTU/ft3. The energy density of LNG is 2.4 times greater than that of CNG which makes it economical to transport natural gas by ship in the form of LNG. The energy density of LNG is comparable to propane and ethanol but is only 60% that of diesel and 70% that of gasoline.[2] The density of LNG is roughly 0.41 kg/L to 0.5 kg/L, depending on temperature, pressure, and composition, compared to water at 1.0 kg/L. One million BTU is 32.76kg.[3]
[edit]Production
The natural gas fed into the LNG plant will be treated to remove water, hydrogen sulfide, carbon dioxide and other components that will freeze (e.g., benzene) under the low temperatures needed for storage or be destructive to the liquefaction facility. LNG typically contains more than 90% methane. It also contains small amounts of ethane, propane, butane, some heavier alkanes, and Nitrogen. The purification process can be designed to give almost 100% methane. One of the risks of LNG is a rapid phase transition explosion (RPT), which occurs when cold LNG comes into contact with water.[4] The most important infrastructure needed for LNG production and transportation is an LNG plant consisting of one or more LNG trains, each of which is an independent unit for gas liquefaction. The largest LNG train now in operation is in Qatar. Until recently it was the Train 4 of Atlantic LNG in Trinidad and Tobago with a production capacity of 5.2 million metric ton per annum (mmtpa),[5]followed by the SEGAS LNG plant in Egypt with a capacity of 5 mmtpa. The Qatargas II plant has a production capacity of 7.8 mmtpa for each of its two trains. LNG is loaded onto ships and delivered to a regasification terminal, where the LNG is allowed to expand and reconvert into gas. Regasification terminals are usually connected to a storage and pipeline distribution network to distribute natural gas to local distribution companies (LDCs) or independent power plants (IPPs). Information for the following table is derived in part from publication by the U.S. Energy Information Administration.[6]
Plant Name Location Country Startup Date Capacity (mmtpa) Corporation
Qatargas II
Ras Laffan
Qatar
2009
7.8
Arzew GL4Z
Algeria
1964
0.90
Arzew GL1Z
Algeria
1978
Plant Name
Location
Country
Startup Date
Capacity (mmtpa)
Corporation
Arzew GL1Z
Algeria
1997
7.9
Skikda GL1K
Algeria
1972
Skikda GL1K
Algeria
1981
Skikda GL1K
Algeria
1999
6.0
Lumut 1
Brunei
1972
7.2
Bontang A-B
Indonesia
1977
Bontang A-D
Indonesia
1986
Bontang A-E
Indonesia
1989
Bontang A-F
Indonesia
1993
Bontang A-G
Indonesia
1998
Bontang A-H
Indonesia
1999
22.6
Point Fortin
Trinidad and Tobago 1999
Atlantic LNG
Point Fortin
Trinidad and Tobago 2003
9.9
Atlantic LNG
Damietta
Egypt
2004
5.5
Segas LNG
Idku
Egypt
2005
7.2
Bintulu MLNG 1
Malaysia
1983
7.6
Plant Name
Location
Country
Startup Date
Capacity (mmtpa)
Corporation
Bintulu MLNG 2
Malaysia
1994
7.8
Bintulu MLNG 3
Malaysia
2003
3.4
Nigeria LNG
Nigeria
1999
23.5
Northwest Shelf Venture Karratha
Australia
2009
16.3
Withnell Bay
Karratha
Australia
1989
Withnell Bay
Karratha
Australia
1995
(7.7)
Sakhalin II
Russia
2009
9.6.[7]
Yemen LNG
Balhaf
Yemen
2008
6.7
Tangguh LNG Project
Pappua Barat Indonesia
2009
6.7
Qatargas I
Ras Laffan
Qatar
1996
(4.0)
Qatargas I
Ras Laffan
Qatar
2005
10.0
Qatargas III
Qatar
2010
7.8
Rasgas I and II
Ras Laffan
Qatar
1999
6.6
Qalhat
Oman
2000
7.3
Das Island I
United Arab Emirates 1977
Das Island I and II
United Arab Emirates 1994
5.7
Plant Name
Location
Country
Startup Date
Capacity (mmtpa)
Corporation
TOTAL
WORLD
1990
50[8]
TOTAL
WORLD
2002
130[9]
TOTAL
WORLD
2007
160[8]
As most LNG plants are located in "stranded" areas not served by pipelines and the costs of LNG treatment and transportation are huge, development was slow during the second half of the last century. The construction of an LNG plant costs at least $1.5 billion per 1 mmtpa capacity, a receiving terminal costs $1 billion per 1 bcf/day throughput capacity, and LNG vessels cost $200-300 million. In the early 2000s, as more players invested, both in liquefaction and regasification, and with new technologies, the prices for construction of LNG plants, receiving terminals and vessels have fallen, making LNG a more competitive means of energy distribution, but increasing material costs and demand for construction contractors have driven up prices in the last few years. The standard price for a 125,000 cubic meter LNG vessel built in European and Japanese shipyards used to be USD 250 million. When Korean and Chinese shipyards entered the race, increased competition reduced profit margins and improved efficiency, costs were reduced by 60%. Costs in US dollar terms also declined due to the devaluation of the currencies of the world's largest shipbuilders, Japanese yen and Korean won. Since 2004, ship costs have increased due to a large number of orders which have increased demand for shipyard slots. The per-ton construction cost of an LNG liquefaction plant fell steadily from the 1970s through the 1990s. The cost reduced by approximately 35%. However, recently, due to materials costs, lack of skilled labor, shortage of professional engineers, designers, managers and other white-collar professionals, the cost of building liquefaction and regasification terminals has doubled. Due to energy shortage concerns, many new LNG terminals are being contemplated in the United States. Concerns over the safety of such facilities has created extensive controversy in the regions where plans have been created to build such facilities. One such location is in the Long Island Sound between Connecticut and Long Island. Broadwater Energy, an effort of TransCanada Corp. and Shell, wishes to build an LNG terminal in the sound on the New York side. Local politicians including the Suffolk County Executive have raised questions about the terminal. In 2005, New York Senators Chuck Schumer and Hillary Clinton have both announced their opposition to the project.[10] Several terminal proposals along the coast of Maine have also been met with high levels of resistance and questions. The commercial development of LNG is a style called value chain, which means LNG suppliers first confirm sales to the downstream buyers and then sign 2025 year contracts with strict terms and structures for gas pricing. Only when the customers are confirmed and the development of a greenfield project deemed
economically feasible could the sponsors of an LNG project invest in their development and operation. Thus, the LNG liquefaction business has been regarded as a game of the rich, where only players with strong financial and political resources could get involved. Major international oil companies (IOCs) such as ExxonMobil, Royal Dutch Shell, BP, BG Group; Chevron, and national oil companies (NOCs) such as Pertamina, Petronas are active players. Reflecting slowdown in the economy, the growth rate of eight infrastructure sectors in India slowed down to 2.2% in April 2012 because of poor performance of crude oil, natural gas, petroleum refinery products and fertilizers.[11]
[edit]Commercial
aspects
This section does not cite anyreferences or sources. (April 2008)
LNG is shipped around the world in specially constructed seagoing vessels. The trade of LNG is completed by signing a sale and purchase agreement (SPA) between a supplier and receiving terminal, and by signing a gas sale agreement (GSA) between a receiving terminal and end-users. Most of the contract terms used to be DES or ex ship, holding the seller responsible for the transport of the gas. With low shipbuilding costs, and the buyers preferring to ensure reliable and stable supply, however, contract with the term of FOB increased. Under such term, the buyer, who often owns a vessel or signs a long-term charter agreement with independent carriers, is responsible for the transport. LNG purchasing agreements used to be for a long term with relatively little flexibility both in price and volume. If the annual contract quantity is confirmed, the buyer is obliged to take and pay for the product, or pay for it even if not taken, in what is referred to as the obligation of take-or-pay contract (TOP). In the mid 1990s, LNG was a buyer's market. At the request of buyers, the SPAs began to adopt some flexibilities on volume and price. The buyers had more upward and downward flexibilities in TOP, and short-term SPAs less than 16 years came into effect. At the same time, alternative destinations for cargo and arbitrage were also allowed. By the turn of the 21st century, the market was again in favor of sellers. However, sellers have become more sophisticated and are now proposing sharing of arbitrage opportunities and moving away from S-curve pricing. There has been much discussion regarding the creation of an OGEC, the OPEC equivalent of natural gas. Russia and Qatar, countries with the largest and the third largest natural gas reserves in the world, have finally supported such move.[citation needed] Until 2003, LNG prices have closely followed oil prices. Since then, LNG prices in Europe and Japan have been lower than oil prices, although the link between LNG and oil is still strong. In contrast, prices in the US and the UK have recently skyrocketed, then fallen as a result of changes in supply and storage.[citation needed] In late 1990s and in early 2000s, the market shifted for buyers, but since 2003 and 2004, it has been a strong seller's market, with net-back as the best estimation for prices.[citation needed]
Receiving terminals exist in about 18 countries, including India, Japan, Korea, Taiwan, China, Belgium, Spain, Italy, France, the UK, the US, Chile, and the Dominican Republic, among others. Plans exist for Argentina, Brazil, Uruguay, Canada, Greece, Ukraine and others to also construct new receiving (gasification) terminals.
[edit]Trade
In 1970, Global LNG trade was of 3 billion cubic metres.[12] In 2011, it was 331bcm.[13] In 2004, LNG accounted for 7% of the worlds natural gas demand.[14] The global trade in LNG, which has increased at a rate of 7.4 percent per year over the decade from 1995 to 2005, is expected to continue to grow substantially during the coming years.[15] The projected growth in LNG in the base case is expected to increase at 6.7 percent per year from 2005 to 2020.[15] Until the mid-1990s, LNG demand was heavily concentrated in Northeast Asia Japan, Korea and Taiwan. At the same time, Pacific Basin supplies dominated world LNG trade.[15] The world-wide interest in using natural gas-fired combined cycle generating units for electric power generation, coupled with the inability of North American and North Sea natural gas supplies to meet the growing demand, substantially broadened the regional markets for LNG. It also brought new Atlantic Basin and Middle East suppliers into the trade.[15] By the end of 2007 there were 15 LNG exporting countries and 17 LNG importing countries. The three biggest LNG exporters in 2007 were Qatar (28 MT), Malaysia (22 MT) and Indonesia (20 MT) and the three biggest LNG importers in 2007 were Japan (65 MT), South Korea (34 MT) and Spain (24 MT). LNG trade volumes increased from 140 MT in 2005 to 158 MT in 2006, 165 MT in 2007, 172[16] MT in 2008 and it is forecasted to be increased to about 200 MT in 2009 and about 300 MT in 2012. During next several years there would be significant increase in volume of LNG Trade and only within next three years; about 82 MTPA of new LNG supply will come to the market. For example just in 2009, about 59 MTPA of new LNG supply from 6 new plants comes to the market, including:
Northwest Shelf Train 5: 4.4 MTPA Sakhalin II: 9.6 MTPA Yemen LNG: 6.7 MTPA Tangguh: 7.6 MTPA Qatargas: 15.6 MTPA Rasgas Qatar: 15.6 MTPA
In 2006, Qatar became the world's biggest exporter of LNG,[17] As at 2012, 25% of the world's LNG exports are from Qatar.[18]
[edit]Imports
In 1964, the UK and France made the first LNG trade, buying gas from Algeria, witnessing a new era of energy. Today only 19 countries export LNG.[19] Compared with the crude oil market, the natural gas market is about 60% of the crude oil market (measured on a heat equivalent basis), of which LNG forms a small but rapidly growing part. Much of this growth is driven by the need for clean fuel and some substitution effect due to the high price of oil (primarily in the heating and electricity generation sectors). Japan, South Korea, Spain, France, Italy and Taiwan import large volumes of LNG due to their shortage of energy. In 2005, Japan imported 58.6 million tons of LNG, representing some 30% of the LNG trade around the world that year. Also in 2005, South Korea imported 22.1 million tons and in 2004 Taiwan imported 6.8 million tons. These three major buyers purchase approximately two-thirds of the world's LNG demand. In addition, Spain imported some 8.2 mmtpa in 2006, making it the third largest importer. France also imported similar quantities as Spain.[citation needed]
[edit]Cargo
diversion
Based on the LNGSPAs, LNG is destined for pre-agreed destinations, and diversion of that LNG is not allowed. However if Seller and Buyer make a mutual agreement, then the diversion of the cargo is permitted subject to sharing the profits from such a diversion. In some jurisdictions such as in the European Union, it is not permitted to apply the profit-sharing clause in the LNGSPAs.
[edit]Cost
of LNG plants
For an extended period of time, design improvements in liquefaction plants and tankers had the effect of reducing costs. In 1980s the cost of building an LNG liquefaction plant cost $350 per tpa (tonne per year). In 2000s, it was $200/tpa. In 2012, the costs can go as high as $1000/tpa, partly due to the increase in the price of steel.[20] As recently as 2003, it was common to assume that this was a learning curve effect and would continue into the future. But this perception of steadily falling costs for LNG has been dashed in the last several years.[15] The construction cost of green-field LNG projects started to skyrocket from 2004 afterward and has increased from about $400 per ton per year of capacity to $1000 per ton per year of capacity in 2008. The main reasons for skyrocketed costs in LNG industry can be described as follows: 1. Low availability of EPC contractors as result of extraordinary high level of ongoing petroleum projects world wide.[7] 2. High raw material prices as result of surge in demand for raw materials. 3. Lack of skilled and experienced workforce in LNG industry.[7] 4. Devaluation of US dollar.
Recent Global Financial Crisis and decline in raw material and equipment prices is expected to cause some decline in construction cost of LNG plants, however the extent of such a decline is still unclear.
[edit]Small-scale liquefaction plants
Small-scale liquefaction plants are advantageous because their compact size enables the production of LNG close to the location where it will be used. This proximity decreases transportation and LNG product costs for consumers. The small-scale LNG plant also allows localized peakshaving to occur balancing the availability of natural gas during high and low periods of demand. It also makes it possible for communities without access to natural gas pipelines to install local distribution systems and have them supplied with stored LNG.[21]
[edit]LNG
pricing
There are three major pricing systems in the current LNG contracts:
Oil indexed contract used primarily in Japan, Korea, Taiwan and China; Oil, oil products and other energy carriers indexed contracts used primarily in Continental Europe;[22] and
Market indexed contracts used in the US and the UK.;
The formula for an indexed price is as follows: CP = BP + X
BP: constant part or base price : gradient X: indexation
The formula has been widely used in Asian LNG SPAs, where base price refers to a term that represents various non-oil factors, but usually a constant determined by negotiation at a level which can prevent LNG prices from falling below a certain level. It thus varies regardless of oil price fluctuation.
[edit]Oil
parity
Oil parity is the LNG price that would be equal to that of crude oil on a Barrel of oil equivalent basis. If the LNG price exceeds the price of crude oil in BOE terms, then the situation is called broken oil parity. A coefficient of 0.1724 results in full oil parity. In most cases the price of LNG is less the price of crude oil in BOE terms. In 2009, in several spot cargo deals especially in East Asia, oil parity approached the full oil parity or even exceeds oil parity.[23]
[edit]S-curve
Many formula include an S-curve, where the price formula is different above and below a certain oil price, to dampen the impact of high oil prices on the buyer, and low oil prices on the seller.
[edit]JCC and ICP
In most of the East Asian LNG contracts, price formula is indexed to a basket of crude imported to Japan called the Japan Crude Cocktail (JCC). In Indonesian LNG contracts, price formula is linked to Indonesian Crude Price (ICP).
[edit]Brent and other energy carriers
In the continental Europe, the price formula indexation does not follow the same format, and it varies from contract to contract. Brent crude price (B), heavy fuel oil price (HFO), light fuel oil price (LFO), gas oil price (GO), coal price, electricity price and in some cases, consumer and producer price indexes are the indexation elements of price formulas.
[edit]Price
review
Usually there exists a clause allowing parties to trigger the price revision or price reopening in LNGSPAs. In some contracts there are two options for triggering a price revision. regular and special. Regular ones are the dates that will be agreed and defined in the LNGSPAs for the purpose of price review.
[edit]Quality
of LNG
LNG quality is one of the most important issues in the LNG business. Any gas which does not conform to the agreed specifications in the sale and purchase agreement is regarded as off -specification (off-spec) or off-quality gas or LNG. Quality regulations serve three purposes:[24] 1 - to ensure that the gas distributed is non-corrosive and non-toxic, below the upper limits for H2S, total sulphur, CO2 and Hg content; 2 - to guard against the formation of liquids or hydrates in the networks, through maximum water and hydrocarbon dewpoints; 3 - to allow interchangeability of the gases distributed, via limits on the variation range for parameters affecting combustion: content of inert gases, calorific value, Wobbe index, Soot Index, Incomplete Combustion Factor, Yellow Tip Index, etc. In the case of off-spec gas or LNG the buyer can refuse to accept the gas or LNG and the seller has to pay liquidated damages for the respective off-spec gas volumes. The quality of gas or LNG is measured at delivery point by using an instrument such as a gas chromatograph. The most important gas quality concerns involve the sulphur and mercury content and the calorific value. Due to the sensitivity of liquefaction facilities to sulfur and mercury elements, the gas being sent to the liquefaction process shall be accurately refined and tested in order to assure the minimum possible concentration of these two elements before entering the liquefaction plant, hence there is not much concern about them. However, the main concern is the heating value of gas. Usually natural gas markets can be divided in three markets in terms of heating value:[24]
Asia (Japan, Korea, Taiwan) where gas distributed is rich, with an GCV higher than 43 MJ/m3(n), i.e. 1,090 Btu/scf,
the UK and the US, where distributed gas is lean, with an GCV usually lower than 42 MJ/m3(n), i.e. 1,065 Btu/scf,
Continental Europe, where the acceptable GCV range is quite wide: approx. 39 to 46 MJ/m3(n), i.e. 990 to 1,160 Btu/scf.
There are some methods to modify the heating value of produced LNG to the desired level. For the purpose of increasing the heating value, injecting propane and butane is a solution. For the purpose of decreasing heating value, nitrogen injecting and extracting butane and methane are proved solutions. Blending with gas or LNG can be a solutions; however all of these solutions while theorically viable can be costly and logistically difficult to manage in large scale.
[edit]Liquefaction
technology
Currently there are 4 Liquefaction processes available: 1. C3MR (sometimes referred to as APCI): designed by Air Products & Chemicals, Incorporation. 2. 3. 4. Cascade: designed by ConocoPhillips. Shell DMR Linde
It is expected that by the end of 2012, there will be 100 liquefaction trains on stream with total capacity of 297.2 MMTPA. The majority of these trains use either APCI or Cascade technology for the liquefaction process. The other processes, used in a small minority of some liquefaction plants, include Shell's DMR technology and the Linde technology. These processes are less important than the APCI or Cascade processes. APCI technology is the most used liquefaction process in LNG plants: out of 100 liquefaction trains on-stream or under-construction, 86 trains, with a total capacity of 243 MMTPA have been designed based on the APCI process: the second most used is the Philips Cascade process which is used in 10 trains with a total capacity of 36.16 MMTPA. The Shell DMR process has been used in 3 trains with total capacity of 13.9 MMTPA; and, finally, the Linde/Statoil process is used only in the Snohvit 4.2 MMTPA single train. Floating liquefied natural gas (FLNG) facilities float above an offshore gas field, and produce, liquefy, store and transfer LNG (and potentially LPG and condensate) at sea before carriers ship it directly to markets. The first FLNG facility is now in development by Shell,[25] due for completion in around 2017.[26]
[edit]Storage
LNG storage tank at EG LNG
Modern LNG storage tanks are typically full containment type, which has a prestressed concrete outer wall and a high-nickel steel inner tank, with extremely efficient insulation between the walls. Large tanks are low aspect ratio (height to width) and cylindrical in design with a domed steel or concrete roof. Storage pressure in these tanks is very low, less than 10 kPa (1.45 psig). Sometimes more expensive underground tanks are used for storage. Smaller quantities (say 700 m (190,000 US gallons) and less), may be stored in horizontal or vertical, vacuum-jacketed, pressure vessels. These tanks may be at pressures anywhere from less than 50 kPa to over 1,700 kPa (7 psig to 250 psig). LNG must be kept cold to remain a liquid, independent of pressure. Despite efficient insulation, there will inevitably be some heat leakage into the LNG, resulting in vapourisation of the LNG. This boil-off gas acts to keep the LNG cold. The boil-off gas is typically compressed and exported as natural gas, or is reliquefied and returned to storage.
[edit]Transportation
Tanker LNG Rivers, LNG capacity of 135,000 cubic metres
LNG is transported in specially designed ships with double hulls protecting the cargo systems from damage or leaks. There are several special leak test methods available to test the integrity of an LNG vessel's membrane cargo tanks.[27] The tankers cost around $200 million each.[28] Transportation and supply is an important aspect of the gas business, since natural gas reserves are normally quite distant from consumer markets. Natural gas has far more volume than oil to transport, and most gas is transported by pipelines. There is a natural gas pipeline network in the formerSoviet Union, Europe and North America. Natural gas is less dense,
even at higher pressures. Natural gas will travel much faster than oil though a high-pressure pipeline, but can transmit only about a fifth of the amount of energy per day due to the lower density. Natural gas is usually liquefied to LNG at the end of the pipeline, prior to shipping. Short LNG pipelines for use in moving product from LNG vessels to onshore storage are available. Longer pipelines, which allow vessels to offload LNG at a greater distance from port facilities are under development. This requires pipe in pipe technology due to requirements for keeping the LNG cold.[29] LNG is transported using both tanker truck, railway tanker, and purpose built ships known as LNG carriers. LNG will be sometimes taken to cryogenic temperatures to increase the tanker capacity. The first commercial ship-to-ship transfer (STS) transfers were undertaken in February 2007 at the Flotta facility in Scapa Flow[30] with 132,000 m of LNG being passed between the vessels Excalibur and Excelsior. Transfers have also been carried out by Exmar Shipmanagement, the Belgian gas tanker owner in the Gulf of Mexico, which involved the transfer of LNG from a conventional LNG carrier to an LNG regasification vessel (LNGRV). Prior to this commercial exercise LNG had only ever been transferred between ships on a handful of occasions as a necessity following an incident.[citation needed]
[edit]Terminals
Main article: List of LNG terminals Liquefied natural gas is used to transport natural gas over long distances, often by sea. In most cases, LNG terminals are purpose-built ports used exclusively to export or import LNG.
[edit]Refrigeration
This section does not cite anyreferences or sources. (April 2008)
The insulation, as efficient as it is, will not keep LNG cold enough by itself. Inevitably, heat leakage will warm and vapourise the LNG. Industry practice is to store LNG as a boiling cryogen. That is, the liquid is stored at its boiling point for the pressure at which it is stored (atmospheric pressure). As the vapour boils off, heat for the phase change cools the remaining liquid. Because the insulation is very efficient, only a relatively small amount of boil off is necessary to maintain temperature. This phenomenon is also called auto-refrigeration. Boil off gas from land based LNG storage tanks is usually compressed and fed to natural gas pipeline networks. Some LNG carriers use boil off gas for fuel.
[edit]Environmental
concerns
Issues commonly referenced include: focus on climate forcing associated with carbon dioxide production in extraction (however, in reality carbon dioxide emissions in the LNG supply chain
are lower than in piping natural gas from remote fields when considering equivalent transport distances), liquefaction, gasification and transport;[31] Some groups have identified the plants' release of nitrogen oxide and particulate matter, known to aggravate asthma and respiratory disease as a particular issue. However, combustion emissions from LNG plants are no greater than from a similar energy-demand industrial plant burning natural gas;[32] environmental justice issues associated with site placement; [33] and that expensive infrastructure investment will displace cleaner alternatives.[34] A typical LNG liquefaction and export terminal exporting 4.5 million tonnes of LNG can be expected to produce in the order of 1.2 million tonnes equivalent carbon dioxide of direct emissions. The greenhouse gas emissions associated with the combustion of 4.5 million tonnes of LNG is approximately 12 million tonnes equivalent carbon dioxide. On the West Coast of the United States where up to three new LNG importation terminals have been proposed, environmental groups, such as Pacific Environment, Ratepayers for Affordable Clean Energy (RACE), and Rising Tide have moved to oppose them.[35] While natural gas power plants emit approximately half the carbon dioxide of an equivalent coal power plant, the natural gas combustion required to produce and transport LNG to the plants adds 20 to 40 percent more carbon dioxide than burning natural gas alone.[36] However, this assessment does not consider the life cycle emissions of natural gas production, which include significant carbon dioxide emissions from gas compression and transport. On a per kilometer transported basis, LNG carbon dioxide emissions are lower than piped natural gas emissions. Natural gas could be considered the most environmentally friendly fossil fuel, because it has the lowest CO2 emissions per unit of energy and because it is suitable for use in high efficiencycombined cycle power stations. On a per kilometre transported basis, emissions from LNG are lower than piped natural gas, which is a particular issue in Europe, where significant amounts of gas are piped several thousand kilometres from Russia. However, emissions from natural gas transported as LNG are higher than for natural gas produced locally to the point of combustion as emissions associated with transport are lower.
Green bordered white diamond symbol used on LNG-powered vehicles in China
[edit]Safety
and accidents
Natural gas is a fuel and a combustible substance. To ensure safe and reliable operation, particular measures are taken in the design, construction and operation of LNG facilities. In its liquid state, LNG is not explosive and can not burn. For LNG to burn, it must first vaporize, then mix with air in the proper proportions (theflammable range is 5% to 15%), and then be ignited. In the case of a leak, LNG vaporizes rapidly, turning into a gas (methane plus trace gases), and mixing with air. If this mixture is within the flammable range, there is risk of ignition which would create fire and thermal radiation hazards. LNG tankers have sailed over 100 million miles without a shipboard death or even a major accident.[37] Several on-site accidents involving or related to LNG are listed below:
1944, 20 October. The East Ohio Natural Gas Company experienced a failure of an LNG tank in Cleveland, Ohio.[38] 128 people perished in theexplosion and fire. The tank did not have a dike retaining wall, and it was made during World War II, when metal rationing was very strict. The steel of the tank was made with an extremely low amount of nickel, which meant the tank was brittle when exposed to the extreme cold of LNG. The tank ruptured, spilling LNG into the city sewer system. The LNG vaporized and turned into gas, which exploded and burned.
1979 October, Lusby, Maryland, at the Cove Point LNG facility a pump seal failed, releasing gas vapors (not LNG), which entered and settled in an electrical conduit.[38] A worker switched off a circuit breaker, igniting the gas vapors, killing a worker, severely injuring another and causing heavy damage to the building. National fire codes were changed as a result of the accident.
2004, 19 January, Skikda, Algeria. Explosion at Sonatrach LNG liquefaction facility.[38] 27 killed, 56 injured, three LNG trains destroyed, 2004 production was down 76% for the year. A steam boiler that was part of a liquefaction train exploded triggering a massive hydrocarbon gas explosion. The explosion occurred where propane and ethane refrigeration storage were located.
[edit]See
also
Energy portal
Compressed natural gas Gasoline gallon equivalent Industrial gas Liquefied petroleum gas
List of LNG terminals LNG spill Natural gas processing Natural gas storage Natural gas vehicle

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Natural gas The composition of natural gas is 95% methane, almost 4% ethane and nitrogen, and 1% carbon dioxide

Benefits of Natural Gas

Natural Gas 101

Natural Gas Appliances

Home Heating with Natural Gas

Natural Gas Appliances

Water Heating with Natural Gas

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Clothes Drying with Natural Gas

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Cooking with Natural Gas

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Outdoor Living with Natural Gas

For other uses, see Natural gas (disambiguation).

Natural gas extraction by countries in cubic meters per year.

2 Natural gas processing 3 Depletion 4 Uses

5 Storage and transport 6 Environmental effects

6.1 CO2 emissions 6.2 Other pollutants 6.3 Extraction

7.1 Production 7.2 Use

8 Energy content, statistics, and pricing

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U.S. natural gas extraction, 19002005. Source: EIA.

natural gas hydrates

Schematic flow diagram of a typical natural gas processing plant.

See main article, Gas depletion

A Washington, D.C. Metrobus, which runs on natural gas.

Polyethylene plastic main being placed in a trench.

See also: Environmental issues with energy

A pipeline odorant injection station

Gas network emergency vehicle responding to a major fire in Kiev, Ukraine

content, statistics, and pricing

gas as an asset class for institutional investors

Liquefied natural gas

Not to be confused with Natural gas processing or Liquefied petroleum gas.

4.1 Imports 4.2 Cargo diversion 4.3 Cost of LNG plants

4.3.1 Small-scale liquefaction plants

5.1 Oil parity 5.2 S-curve

5.3 Price review

6 Quality of LNG 7 Liquefaction technology

7.1 Storage 7.2 Transportation

8.1 Safety and accidents

9 See also 10 References 11 External links 12 Other sources

density and other physical properties

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This section does not cite anyreferences or sources. (April 2008)

Market indexed contracts used in the US and the UK.;

The formula for an indexed price is as follows: CP = BP + X

BP: constant part or base price : gradient X: indexation

LNG storage tank at EG LNG

Tanker LNG Rivers, LNG capacity of 135,000 cubic metres

Green bordered white diamond symbol used on LNG-powered vehicles in China

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