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LNG-A Proven Stranded Gas Monetization Option

IP.com Disclosure Number: IPCOM000182757D
Publication Date: 2009-May-05
Document File: 14 page(s) / 1M

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SPE 84251

LN~: A Proven Stranded Gas Monetization Option

David Coyle, Kellogg Brown & Root; Charles Durr * , Kellogg Brown & Root; and Pankaj Shah, Kellogg Brown & Root

currently are too small or too remote from sizable population centers to be developed economically. Estimates of remote or stranded gas reserves range from 40 to 60% of the world's proven gas reserves (2. 3). This massive global gas reserve is largely untapped, and conventional means of development face logistical and economic barriers. Natural gas is of little value unless it can be brought from the wellhead to the customer, who may be located several thousand kilometers from the source. As natural gas is relatively low in energy content per unit volume, it is expensive to transport. The most popular way to move gas from the source to the consumer is via pipelines. For onshore and near-shore gas, pipeline is an appropriate option for transporting natural gas to market. However, as transportation distances increase, pipelines become uneconomical; Liquefied Natural Gas (LNG), Gas to Liquids (GTL) and chemicals are more viable options.

    LNG is an odorless, colorless, non-corrosive, non-toxic liquid that is produced when natural gas is cooled to a temperature of -161°C at atmospheric pressure. The liquid takes up about 11600th of the volume of natural gas in its gaseous form. This enormous change in volume enables the gas to be transported economically over long distances as a liquid. Over the past 30 years, a considerable world trade in LNG has developed. LNG today is a proven and mature stranded gas monetization option.

Brief history of LNG. Godfrey Cabot submitted a patent for a barge to carry liquid gas in 1914. Although there is no evidence that this was ever built, it is the first ~ention of LNG in the US. As early as 1917, liquefaction was used in the United States for the extraction of helium. However. it was not until 1959-60, the Methane Pioneer, a converted cargo vessel, first demonstrated the technique of bulk LNG transport (by sea) by suceessfully and safely carrying seven LNG cargoes from Lake Charles, Louisiana in the United States, to Canvey Island, in the UK. The first commercial LNG plant in Algeria became operational in 1964 and exported LNG to Western Europe. In 200 I, twelvc countries have liquefaction facilities with 64 LNG trains, and thirty-eight receiving terminals are operating in 10 countries {4). KBR has been involved in one or

more phases of all grassroots LNG liquefaction facilities that have been competitively bid since 1976.

    The total LNG traded as of year 2002 is about 150 billion cubic meters . LNG accounts for onlv 6.0(7c of the total gas consumption, but some 25% of interna~ionally traded gas, Asia remains a dominant player in the world LNG

KBR Paper No, 1756

Ccpyright 2003, Society of Petroleum Engineers Inc,