Natural Gas consists mainly of Methane and small amounts of ethane, propane and butane. It is transported through pipelines but is extremely bulky. A high-pressure gas pipeline can transport in a day only about one-fifth of the energy that can be transported through an oil pipeline.
LNG is the liquid form of natural gas, the main component of which is methane. In the liquefied form, at atmospheric pressure, LNG occupies only 1/600th of its volume at gaseous state under normal temperature and atmospheric pressure and is therefore more economical to store and transport over long distances in contrast to the traditional pipeline delivery of natural gas.
LNG is produced by cooling natural gas to -162 °C (-260 °F) through a liquefaction process. Prior to cooling and condensing the natural gas into LNG, impurities such as carbon dioxide, water and sulphur are removed. The end result of this process is an odourless, colourless fuel consisting mostly of methane (approximate range 85% to 99%) with small amounts of ethane, propane, butane and pentane.
Regasified LNG is safe, cost effective and environment friendly as compared to other fuels.
Regasified LNG is clean burning, producing virtually no particulates and less NOx and CO2 than other fossil fuels. Since sulphur is almost entirely removed as part of the liquefaction process, combustion of regasified LNG emits negligible amounts of sulphur dioxide.
LNG is stored at near atmospheric pressure, reducing the storage hazard compared with pressurised fuels.
LNG, when released to the atmosphere at normal temperatures, will evaporate and disperse quickly, leaving no residue behind and therefore requiring no environmental clean-up.
LNG vaporises when warmed and the resulting natural gas is lighter than air and therefore rises when released.
LNG is non-corrosive and non-toxic.
The LNG industry can be described by an LNG value chain consisting of 5 key elements:
- Field Development (Exploration, development and production of gas)
- Unloading, Storage and Regasification
- End use (e.g. fuel for power generation, feedstock for fertilizers & chemicals, Industries, transportation and City Gas Distribution etc.)
Each of these elements has its own technological and investment requirements, but they share a common characteristic. They all require long project lead time and significant resources and investment commitment. Each element of the chain must be carefully planned and integrated with other elements; hence the supply chain requires long term sales and purchase relationships between each participant.