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CNG ships an option Newfoundland university sets up research center for CNG development Petroleum News
Compressed natural gas carriers, operating without the super-cold temperatures, high pressure and expensive liquefaction and regasification terminals required for liquefied natural gas, could be an answer for moving stranded gas short distances, though proponents say the first full-scale commercial operation is five or six years away.
Most of the investment would be in ships, not immovable terminals to turn gas into and out of its liquid state, a plus for CNG transport from smaller fields, supporters say. Although the ships wouldn’t be able to carry as much gas as an LNG tanker, at shorter distances CNG could be an affordable answer, advocates say.
Cooling the gas below zero, but nowhere near the minus 259 degrees required for LNG, and pumping it into shipboard tanks at 1,300 to 1,800 pounds per square inch wouldn’t require much more than a compressor operation at an offshore loading terminal, said John Dunlop, vice president for business development at EnerSea Transport LLC in Houston.
Deliveries also would occur at offshore receiving terminals, avoiding all of the community controversy of LNG regas terminal site selection, Dunlop said.
“We’ve been going full tilt on this about three years now,” he said. And although no one has built any CNG tankers or signed up for a commercial project, the company is optimistic of future prospects, Dunlop said. EnerSea is one of several companies pursuing CNG development.
“We see CNG as being a good, regional solution” for moving stranded gas to nearby markets, he said. “We don’t see ourselves as competing head to head with LNG,” which can be shipped economically thousands of miles to market. CNG carriers would store gas in rows of large pipes EnerSea’s design is comprised of rows and rows of CNG bottles, essentially large-diameter steel pipe segments. By linking the bottles, or closed pipes, into modules connected by piping, ships could be sized to meet individual market needs.
There’s enough interest in the technology that gas production companies and the province of Newfoundland have joined with the Memorial University of Newfoundland to create the Centre for Marine CNG.
“It’s about a month old, officially,” said Jim Wright, director of major research partnerships at the St. John’s, Newfoundland-based university. “The stimulus for this really came from the provincial government.”
With government and private funding, the center established itself as a nonprofit corporation — the world’s first research and development center for large-scale CNG marine transport and storage technology. Partners include the Maritimes & Northeast Pipeline, which went online in 1999 to move 530 million cubic feet of gas per day to New England states. The pipe carries Sable Island offshore gas from its undersea pipe landing at Nova Scotia south into Massachusetts.
Though CNG tankers could conceivably carry more than 1 billion cubic feet of gas, most expect the typical ship to hold about 700 million to 800 million cubic feet of gas, Wright said. That compares to almost 3 bcf aboard a typical LNG tanker. CNG ships probably would cost about the same as an LNG tanker, he said, which is why it’s important to keep the delivery distance within an affordable range. Short distance is best for CNG ships For example, it would take two CNG tankers to average 500 million cubic feet of gas per day from the offshore fields east of Newfoundland to the end of the pipe system in Nova Scotia, Wright said. From there, a pipe could take the gas to U.S. East Coast markets. Shipping the gas by CNG carrier directly to Boston or New York City would take three or four ships, he said.
Anything farther could mean too much of an investment in the ships.
“For CNG, the economics are very strongly correlated with distance,” said Matthew Palmer, CNG project manager for ChevronTexaco Global Gas, based in San Ramon, Calif.
LNG projects tie up 80 percent of their investment in the liquefaction and regas facilities, Palmer said. “With CNG, it’s just the opposite. … You have very small investments at the two ends of the chain.”
Because 90 percent of the cost of a CNG project is tied in the ships, it’s essential to keep the tankers moving and making money with short deliveries instead of sailing long distances at sea as LNG tankers, he said.
And because most of the investment is in ships, not shore-based facilities, the assets could be moved to new markets to follow the need or as smaller fields stop producing. ChevronTexaco following CNG development ChevronTexaco believes a small, barge-mounted CNG prototype could be operational in maybe two years, but it will be 2008 to 2010 before a full-size commercial venture could get under way, Palmer said. “I would hope ChevronTexaco would be an early mover.”
Although the company isn’t doing its own research into CNG transport, it is following the work of others and sees possible applications in moving gas between African nations, within the Mediterranean Sea, from Caribbean production fields to U.S. markets and possibly from East Asia sources to Far East buyers.
“The main advantage of CNG is the low cost at which it can transport gas over distances … more cost-effective than LNG,” said a 2003 research paper at the University of Houston.
EnerSea’s Dunlop also sees 2008 as the earliest in-service date for a full-size CNG operation. In addition to developing the loading and unloading technology, the company is working on tanker design, too.
While EnerSea said CNG might be able to compete at distances of up to 3,500 miles and ChevronTexaco’s Palmer said 2,500 miles is the outer range, Wright cautions both those numbers are optimistic. “I would say under 500 nautical miles works best.” Newfoundland interested in moving its gas Newfoundland is taking a hard look at CNG because it could help get its 10 trillion cubic feet of discovered offshore reserves to market, Wright said. Ice, remoteness and cost make it hard to build pipe from the offshore fields, he said.
Husky Energy Inc.’s White Rose field, for example, is more than 220 miles from shore. An undersea pipe to landfall would be an extremely costly proposition, the university official said.
White Rose holds an estimated 2.7 tcf of gas. Husky Energy last month asked for proposals to develop the gas field, stating that CNG transport “has potential.” CNG tankers could shuttle back and forth from an offshore production platform to shore, feeding the gas into a pipeline for delivery to consumers down the Eastern seaboard.
The Sable Island fields, which are less than 140 miles from shore, use an undersea pipe to move gas to landfall.
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