LNG: a flexible fuel with geopolitical impact [Gas Expert Insights]
The process of liquefying natural gas involves cooling it to minus 162°C (-260°F), transforming the gas into a liquid that occupies about 1/600th of its original volume. This reduction in volume enables efficient storage and transportation, making LNG a vital component in the global energy supply chain.
The production of LNG begins with natural gas, either extracted directly from underground reservoirs or drawn from a national gas pipeline network. Natural gas in its raw form is primarily composed of methane, along with smaller amounts of heavier hydrocarbons, water vapor, carbon dioxide, and other impurities. Before liquefaction, these impurities must be removed to ensure frozen solids do not form during the process. The purified natural gas is then cooled through a series of refrigeration cycles, typically using refrigerants like propane and ethylene. This cooling process, which uses a similar thermodynamic concept to a domestic refrigerator, progressively reduces the temperature of the gas until it reaches the liquefaction point.
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Once liquefied, the LNG is stored in insulated tanks designed to keep the product in liquid form at its boiling point. From these storage tanks, LNG can be loaded onto specially designed tankers or transported via pipelines to distribution terminals. The LNG tankers are equipped with insulated containment systems to minimise the amount of LNG that boils off during transportation and any LNG that is vaporised is either used in the ship’s engines or re-liquefied.
Upon arrival at the destination, the LNG is stored in insulated tanks before being turned back into gaseous form and used for power generation, city gas supply or industrial processes.
The expansion of LNG infrastructure has had significant economic and geopolitical implications. Countries with abundant natural gas reserves, such as Qatar, Australia, and the United States, have invested heavily in LNG infrastructure to tap into international markets.
The flexibility of LNG, which can be sent to any LNG terminal in the world, versus pipelines that have only one destination, has helped integrate global gas markets. It has allowed producers in regions like the Middle East, Australia, and the United States to supply consumers in Europe, Asia, and other parts of the world. This has led to the emergence of a more dynamic and interconnected global gas market, with prices influenced by supply and demand dynamics across different regions.
Geopolitically, LNG has altered energy dependencies and trade relationships.
For example Europe, which has historically relied heavily on pipeline gas from Russia, has turned to LNG imports from the United States and other sources to diversify its energy supply and reduce dependence on a single supplier.
There have also been significant strategic investments in LNG infrastructure, such as the construction of new regasification facilities to allow customers to source supply from multiple suppliers. This diversification greatly improves energy security.
From an environmental perspective, while the liquefaction and transportation process may use up to 10 per cent of the feed gas, when LNG is used instead of coal to generate electricity, overall emissions can be reduced by up to 50 per cent. The displacement of coal-fired power can also have a significant impact on air quality in highly urbanised areas.
The ability to switch out coal for gas in power generation is particularly important in Asia, where more than 50 per cent of electricity currently comes from coal. This is the highest proportion for any region and, if it continues to become entrenched, a significant challenge to worldwide emissions reduction efforts.
Notwithstanding the environmental benefits of natural gas over coal, LNG producers, shippers and consumers are focused on reducing, and where possible eliminating, emissions and leakages of greenhouse gases from the LNG supply chain.
Liquefied natural gas has become a critical element in the global energy landscape, enabling the transportation of natural gas across vast distances and contributing to the diversification of energy sources.
Its economic, geopolitical, and environmental impacts are profound, shaping the energy policies of nations and influencing global trade patterns. As the world grapples with the challenges of climate change, energy security and energy affordability, the role of LNG will increase, balancing the needs for affordable, secure and clean energy to fuel economic growth.
Neil Theobald
This article was reprinted with the permission of ANGEA an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Neil Theobald has more than 40 years’ experience in the oil and gas industry, including 17 years at Chevron, where he was Vice President, Global LNG, Gas Supply & Trading. He has been a Senior Advisor to ANGEA since 2021.
The statements, opinions and data contained in the content published in Gas Expert Insights are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.