2014 Archives

One Key to Exports: Liquid Gas

Excerpt

The following is from the Oct. 7, 2014, edition of The News York Times. Bruce Bullock, director of SMU's Maguire Energy Institute, provided expertise for this story.

October 13, 2014

By CONRAD DE AENLLE

New methods of producing natural gas are expected to turn the United States from an importer into a large exporter in less than a decade, assuming that the gas can be exported in sufficient quantities cheaply enough to compete on world markets.

That is likely to happen, industry authorities say, because the technology for liquefying gas — essential for taking it across oceans — also continues to improve, making the process more economically efficient and environmentally safer. With exports virtually nil now, the Energy Department forecasts shipments abroad of liquefied natural gas equivalent to two trillion cubic feet by 2020, roughly 7 percent of expected domestic production. Target markets would be Western Europe and Asia, where gas costs more to produce. . . 

“The technology has been around for quite some time, but for it to be economically viable requires significant scale,” said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University. “To convert gas into liquid form, put it in containers and ship it is an expensive process.”

But a necessary one. Turning methane into a liquid conveys several advantages, especially for transporting over long distances. Liquefied gas occupies about one six-hundredth the space as the same quantity does in gaseous form, and it is nontoxic and nonflammable.

There are various benefits to shrinking gas in an expansive way. One refrigeration unit, called a train, costs $2 billion or more. But as a plant installs more trains (so called because they are narrow and tend to be arranged sequentially), they become cheaper because the high cost of planning, engineering and construction is spread out over more units, and supplies can be sourced cheaper in larger quantities. The cost to build other parts of liquefaction facilities — storage tanks, jetties where ships are loaded, the initial planning, site preparation and so forth — is also spread out.

Once a plant is open, more trains mean lower operating expenses because the plant can be put to fuller use. Having two trains instead of one cuts the cost of liquefying each cubic meter of gas by nearly 30 percent, Mr. Bullock said, and plants can have up to eight trains — which should further lower expenses.


Read the full story.

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