Global energy use is expected to grow by 56 percent from 2010 to 2040, and there aren’t enough vessels to meet the fast-growing global demands for LNG. Ninety-six vessels were on order last year—representing a 25 percent growth to the global fleet of around 370 vessels.
As gas’ importance in fulfilling global energy needs grows, so too will the need for LNG transport to reach markets like India and China, which are both expected to have the top growth rates for LNG imports through to 2030.
Historically the process of liquefying natural gas, involving chilling the gas to -162 degrees Celsius and keeping it cold and pressurized through transport, was relatively expensive compared with other modes of fossil fuel extraction and transport.
We rarely find a gas reservoir under an industrial site, a city, or transportation hub that needs it. In many cases, a reserve may not merit the investment required to bring it into the supply chain via a pipeline, and therefore either faces up to being left unexploited or wasted. Alternatively, these sites may be operating at low efficiency, delivering low energy-density fuel to market (compressed natural gas has an energy density around two and a half times lower than LNG).
Therefore, in connecting gas reservoirs to transportation networks, and in trying to capitalize on the gas produced at industrial, mining or landfill sites, the cost of the infrastructure needed to transport that gas is a key factor.
But a few key developments in recent years have transformed the potential for LNG to be more easily transported across the energy infrastructure—namely, electrification.
Electrical drills are smaller, more efficient, require less maintenance, and have a smaller impact on the environment resulting in the advent of small-scale LNG plants. In the past, deploying this kind of electrical infrastructure was technically challenging, but the last few decades of innovation have seen efficiency gains in electrification, as well as the reduction of physical footprints and environmental impact.
Small-scale plants can be used to support and supplement other distribution networks, for example liquefying gas at existing pipeline network for both industrial and residential sites, for sea transport, or for storage at a truck transportation hub. In essence, liquefaction could take place anywhere in the gas distribution network.
Electrification has therefore played a dramatic part in the economics of LNG extraction. The electrical processes can fit aboard a seaborne vessel—admittedly a very large one, the size of four soccer fields or more—but one that is nonetheless a quarter the size of a land-based gas liquefaction plant. The onboard electrical systems are also so resilient that they may only require maintenance every four to five years.
The vessels can also be moved, completely shifting the economics of LNG production and allowing LNG to be shipped directly to markets around the world—cutting time to market by 30 to 40 percent.
The advent of small-scale LNG plants—made possible through more efficient electric motors, pumps and drives—extends the opportunities of transporting natural gas. Small-scale LNG has shifted the dynamics of developing LNG distribution networks, and allows liquefaction to take place anywhere in the gas distribution network.
And this fact is what’s crucial in evaluating the potential of small-scale LNG. It can reduce the impact of long distance fuel transport. It also gives huge flexibility in planning a gas distribution network. These are particularly vital as gas looks set to become more strategically important in terms of reducing pollution, providing stability to grids using variable renewable power, and in meeting growing global energy needs.
Electrification will power small-scale LNG, which will undoubtedly have a dramatic impact on the viability of LNG as a fuel source in heavy industry and transportation. Wider access to LNG makes good economic sense: LNG imports doubled between 2000 and 2012, and the increasing scarcity of natural resources will continue.
As producers continue to look harder at the potential of gas to meet our energy needs, small-scale LNG will be the catalyst enabling wider availability and more efficient delivery to customers and end users.
Editors Note: This piece is condensed from a series of articles written by Francesco Falco, General Manager of the Oil & Gas vertical for GE’s Power Conversion business. You can find the original series on GE’s Inspire blog.