There is an increasing demand world wide by the United Nations and other global organizations and fora, local governments, environmental organizations and the oil and gas industry itself for better use of natural gas resources and to combat greenhouse gas emissions resulting from flaring or venting of natural gas; and of coal bed methane (CBM) and coal mine methane (CCM) emissions.
If oil or coal is produced in areas of the world which lack natural gas infrastructure or a nearby gas market, a significant portion of this associated gas may be released into the atmosphere, un-ignited (vented) or ignited (flared). The gas is alternatively re-injected into the reservoir to help maintain pressure. Flaring and venting of natural gas from oil wells and coal mining represents a significant source of greenhouse gas emissions. Flaring alone contributes to more than 1% to global emissions of CO2 .This represent about 13% of committed emission reductions by developed countries under the Kyoto Protocol for the period 2008-2012. The World Bank estimates that over 150 billion cubic meters (bcm) of natural gas are being flared and vented annually. That is the equivalent of the combined annual natural gas consumption of Germany and France. And the 40 billion cubic meters of gas flared in Africa is equivalent to half of the continent’s power consumption.
Many places there are also reserves of stranded natural gas-resources that are abandoned because currently there is no economical way to get it to the markets. With natural gas becoming such an important and marketable commodity, producers would like to recover and get some value out of these resources which to a certain degree already are partly processed.
As a way to meet these demands there is a growing interest in small scale LNG process and plant solutions to help solve the challenges mentioned above from a number of countries on almost all continents. Production capacities of small scale LNG plants vary in the range from 2000 up to 1 million tons of LNG per year. By comparison, a typical large scale plant has a production capacity of between 2.5 and 15 million tons of LNG per year. As already pointed out in Small is beautiful – LNG your life small-scale LNG applications had been successfully introduced as industrial applications in mid-90ies, pioneered by Norway.
As for today – and started since the new millennium – size matters even more and small-scale LNG plant became even smaller; now called mini-LNG, creating and carving new markets with a plethora of possibilities to think about. New gas sources, i.e. biogas, landfill gas, even coal bed methane gas became interesting for liquefaction, energy storage and distribution. Shortcuts like liquefied biogas (LBG) and liquefied methane gas (LMG) were introduced and became pending slogans in the industry and among customers.
LNG, another general-purpose-fuel
On the supply side, stranded gas reserves, flare gas, landfill, coal bed methane, or biogas are abundant but had not been economical viable in recent years. Turning these reserves of gas into value-added general-purpose-fuel seem to be both economically feasible and very attractive for an environmental stand point. What is a general-purpose-fuel? Regarding today’s infrastructure, and due to inter-dependencies between producers and customers gasoline, diesel and natural gas are considered general-purpose-fuels, enabling a non-disruptive mobility market, constant heat and electricity production and – above all – energy storage. Many business venture are spinning around general-purpose-fuels. The major disadvantage of natural gas, compared to gasoline and diesel, is its inherent low energy density, which, in fact, is simply implied by its gaseous character. LNG on the other side, turned into liquid state is comparable to gasoline or diesel, regarding energy density.
Small-scale LNG or, to bluntly spoken, small-scale LMG applications may become everybody’s darling in the industry, simply because the proof is in the pudding, which, in fact, is response time. Business is strongly related to response time, as already pointed out in the article Another day before the energy crisis? and short response time in the market is the key to satisfy customers and secure further investments. In short, small-scale LNG applications require upstream, midstream and, of course, downstream players. Methane gas will be pre-treated, liquefied, stored and distributed and, as it reaches its final destination, regasified. Most interestingly, the appeal of LNG is the use of the existing infrastructure for the before mentioned general-purpose-fuels, today’s gasoline stations to secure mobility and, decentralized energy productions applications in form of gas-turbines, gas motors or, even fuel cells, to constantly provide electricity and heat, where it is locally required. As we reexamine the scope of LNG it can be noticed, that LNG may help markets to undergoes a more moderate shift away from oil, coal and nuclear power, prior to entering renewable energies.