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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2012

Vol. 17, No. 45 Week of November 04, 2012

The cold facts about a hot commodity: LNG

Bill White

Researcher/writer for the Office of the Federal Coordinator

The cryogenics craze

As an export product, LNG dates back less than 50 years, to 1964.

That year, as Ford rolled out its new sports car, the Mustang, a British shipyard launched the Methane Princess, a tanker that carried the first commercial load of LNG, from a new plant in Algeria to a gas-hungry United Kingdom.

Within a few years, Algeria was sending LNG to France, too, and Libya was exporting it to Italy and Spain. In 1969, a new Phillips and Marathon plant in Nikiski, Alaska, started shipping LNG made of Cook Inlet natural gas to Japan, inaugurating LNG trade to Asia. Japan is the world’s top LNG consumer today.

But the true history of LNG dates to 100 years earlier as scientists studied how very low temperatures changed matter, a specialty called cryogenics.

In the 1870s, German engineer Carl von Linde’s pioneering work in compressed refrigeration found a ready market among breweries and slaughterhouses. Von Linde’s technique for chilling air to extract the oxygen, developed around the turn of the century, also was a transforming moment. Isolating oxygen led to development of a torch that revolutionized metal cutting as well as welding for skyscrapers.

Other scientists and engineers hopped aboard the cryogenics craze.

Ethane for plastics, chlorine for sanitizing sewage, oxygen for hospital patients, nitrogen for cryosurgery are among the thousands of products and uses that trace their origins to chilling gases to isolate their components.

The gas that wouldn’t burn

The birth of liquefied methane stemmed from work that used cryogenics to isolate helium.

Helium is a marvelous gas that has been adapted to many uses today, such as cooling superconducting magnets in medical MRI scanners.

If helium isolation has a Eureka! moment, it arguably is a 1903 event in a small flatland town called Dexter, Kan.

A driller hit a “howling gasser” of a well there. Nine million cubic feet of gas spit to the surface each day before the well could be capped. Dreams of riches infused the locals. Ore smelters. Brick and glass plants. Soon they would be wildly prosperous.

To celebrate, the town tossed a huge party, the climax of which was to be lighting the gas jet. After speeches, a bale of burning hay was nudged to the escaping gas to produce a promised “great pillar of flame.” But the gas failed to ignite. To everyone’s surprise, the burning bale got snuffed instead.

A geologist and a chemistry professor soon teamed to solve the mystery of the gas that wouldn’t burn.

They discovered the gas was mostly nitrogen. The amount of methane present wasn’t enough to combust given all the non-flammable nitrogen — just as trace quantities of methane in the Earth’s air don’t burst into flame every time someone lights a cigarette.

They also found “inert residue” present in the Dexter gas. After further analysis, they learned this residue included helium.

This discovery was astonishing. To that time, helium was considered a rare element. But now it seemed helium could be found in an ordinary natural gas stream. As for Dexter, it was located in the planet’s great cradle of helium: The natural gas deposits of the U.S. plains.

The scene then shifted to the lab of Dutch physicist Heike Kamerlingh Onnes. In 1908, he was the first to liquefy helium, chilling helium through a series of stages until getting it to minus 452 degrees, at which point the vaporous helium transformed into liquid helium, reaching its boiling point. It was the coldest temperature ever achieved on Earth. Onnes won the Nobel Prize in Physics five years later for his work.

World War I, with cryogenic isolation, became the great leap forward for helium and led eventually to the liquefaction of methane.

During the war, airships — dirigibles, zeppelins and the like — became a novel innovation of combat. Germans dropped bombs from them. The British hunted U-boats. A downside was hydrogen, the lighter-than-air gas used to float most airships. Hydrogen is spectacularly flammable, as the famous 1937 Hindenburg disaster demonstrated.

But helium isn’t flammable. The U.S. launched a crash research program in 1917, as the country entered World War I, to find cheap ways to extract large volumes of helium from natural gas and stockpile it.

This research led the U.S. Bureau of Mines in 1924 to produce the first liquid methane as a byproduct of helium separation.

LNG’s early years

During the ensuing years, techniques for liquefying methane were refined and ideas for storing and transporting LNG were patented.

A public revulsion toward flaring natural gas as a waste product of oil production helped propel the industry. Better ways had to be found to move the gas from where it was produced and not needed to where it could be used. The solutions included long-distance pipelines for domestic transport and, much later, LNG for cross-ocean transport.

By 1941, science and capitalism converged to make commercial use of LNG.

That year the East Ohio Gas Co. built a plant in Cleveland that could process about 4 million cubic feet of gas per day into LNG. The company installed three insulated storage tanks to keep the LNG cold. The gas utility regasified LNG when customer demand peaked during winter.

This “peak shaving” concept is a key function of LNG today, the little publicized cousin of making large quantities of LNG for export. Small peak-shaving liquefaction plants and storage sites exist across the world.

The Cleveland operation ran smoothly for three years, until 1944 when the utility installed a fourth storage tank. It was war time, and many metals were in scarce supply for civilian use. The metals on this tank were inferior and failed on Oct. 20, 1944.

An estimated 1.2 million gallons of LNG spilled, so much that it flowed over the protective dike.

The liquid spread like batter on a griddle. Some dropped into the sewers, which filled with methane vapor as the LNG warmed above methane’s boiling point. Gas seeped into basements. Houses blew apart as the gas contacted hot-water heater pilot lights.

The Cleveland catastrophe killed 128 people; 14,000 became homeless.

The LNG industry went dormant, except for a liquefaction plant Dresser Industries built for the Soviet Union in 1947.

Headed to sea

The idea of water-borne LNG deliveries started to get traction in the mid-1950s.

A joint venture of Continental Oil Co. (Conoco) and Union Stock and Transit Co., a Chicago stockyards operation, did pivotal work on how this idea could work. The venture’s name was Constock, a blend of the partners’ names.

Union originally wanted Gulf Coast methane barged as LNG to Chicago for refrigeration at its slaughterhouses. But in the late 1950s, with the United Kingdom, Japan and other countries expressing interest in LNG, the focus turned to trans-ocean shipments.

Constock worked on designing the entire system, from liquefaction to regasification. In 1959, a test shipment of LNG left a new plant near Lake Charles, La., and sailed to a new receiving terminal on Canvey Island, down river from London. The ship — and its LNG cargo — weathered the rough Atlantic well. More test shipments ensued, proving that international trade of LNG could work.

New gas discoveries in Algeria made that country the first mover in LNG exports. The Methane Princess, carrying the world’s first commercial load to Canvey Island, was small by today’s standards. It could carry up to about 500 million cubic feet of gas (after regasification). The average LNG tanker today is five times larger.

But the Methane Princess proved to be a workhorse through the early years of LNG export. The vessel was finally scrapped in India during the mid-1990s. Another tanker with the same name sails in the LNG trade today.

Part 1 of this story ran in the Oct. 28 issue of Petroleum News.

Editor’s note: This is a reprint from the Office of the Federal Coordinator, Alaska Natural Gas Transportation Projects, online at www.arcticgas.gov/lng-cold-facts-about-hot-commodity.





LNG industry: Today’s operations are safe

As tragic as the Cleveland disaster was, it did imbue the LNG industry with a culture of safety.

If you’ll give them time, people from the industry will talk endlessly about safety within the entire LNG value chain, from liquefaction to storage, tankers and regasification. These operations are heavily regulated for safety across the world, and industry members will even boast about that regulation and insist that potential hazards are manageable.

To illustrate the concept of safety, visitors to ConocoPhillips’ plant in Nikiski see a series of demonstrations aimed to demystify LNG, including:

A plant manager pours LNG on the floor. Instantly, the gas forms into clear beads then — poof — vaporizes as it warms while absorbing heat from the carpet and air.

The manager dunks graham crackers in LNG then invites guests to eat them. They do so warily, misty vapor wafting from their mouths as they chew. This stunt can be an acutely effective in LNG-leery towns when the people consuming the crackers are children of community leaders and opponents.

The LNG industry does have a strong safety record, marred mainly by the Cleveland disaster, a fire and death at a Maryland import plant in 1979 and an explosion that killed 27 people at an Algeria liquefaction plant in 2004.

As an industry website puts it: “LNG is transported many miles as it crosses the ocean, transferred to storage tanks, converted back to natural gas and then sent to market. The LNG industry has spent a considerable amount of time analyzing and assessing the hazards along the way and has either eliminated or developed mitigation techniques to reduce risks. As a result, in more than 50 years of commercial LNG use, no major accidents or safety or security problems have occurred, either in port or at sea.” (The Maryland accident actually was 33 years ago.)

The site stresses that “LNG is not explosive.” But the vapors are flammable — if they comprise 5 to 15 percent of the air and something ignites them. U.S. regulations require safety zones around LNG facilities so that any vapors accidentally released get fully diluted before they reach the property line.

University of Texas researchers concluded that although “LNG operations are industrial activities,” LNG can be safely transported and used if regulators hold the industry to the safety standards and protocols that have developed over time.

—Bill White


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