Natural gas has been known about for thousands of years. The ancient Greeks used the subtance to fuel the "eternal flames" at shrines. But it wasn't until the middle of this century that gas began to come into prominence as a source of energy.
Natural gas is formed by the same geological processes as oil, and sometimes occurs with oil deposits as associated gas. It is a mixture of light hydrocarbons, mainly methane.
Associated gas used to be flared off as a useless by-product, until ways were developed to make it useful like restoring pressure to oil wells or using it to produce electricity.
Pure gas fields (called non-associated gas fields) vary considerably in size, and reserves are still being discovered. Proven reserves of gas have increased rapidly in recent years, and, as surveying techniques improve, increasingly small, gas-only fields are found.
Natural gas composition varies between different fields, and it has to be processed before distribution to consumers . The gas is predominantly methane, but also contains various amounts of other components such as ethane, propane and butane—collectively known as natural gas liquids (NGL).
Natural gas and its components can be used for a range of purposes, including heating and power generation, or as a feedstock to produce liquid fuels and base chemicals for the petrochemical industry.
Around 95 percent of gas is transported by pipeline. The remainder is carried by special LNG tankers as liquefied natural gas.
Pipelines transport sometimes quite remote gas production to markets where it is consumed. For example, the trans Siberian gas pipeline is over 5,000 km long. Approximately 5 percent of natural gas is also transported as liquefied natural gas (LNG) at 1/600th of the original gas volume.
Investment in capital intensive transportation infrastructure is one reason why, unlike oil, gas is typically sold by long-term contracts into the various end-use markets, rather than traded as a commodity.
Today there are networks of pipelines right across the United Kingdom, Europe, North America, South America, the CIS, China and many other Asian countries.
Transmission systems are major pipelines that deliver gas from the point of production into regional networks, or direct to major industrial consumers such as power stations. Typically, pipes have diameters ranging from 24 to 47 inches, and operate at high pressures, from 40 to 100 bar (around 1,000 psi, about 15 times a truck tyre's pressure). Exceptionally, for instance with the transmission lines from Western Siberia to Europe, these pipelines can be as long as 5,000 km and measure 55 inches in diameter.
Distance is an important factor in the design of a pipeline, because the further gas travels, the more its pressure drops. Doubling the length of a pipeline will double the friction—so the pressure drop is greater. To ensure that the gas is delivered to the customers at the right flow rate and pressure, compression stations may be added at intervals along the route. These stations are gas-fuelled and simply raise the pressure inside the pipeline back to the desired levels.
At the delivery point into the regional system, the natural gas is metered and its pressur adjusted.
Regional systems transport gas to local distribution grids. Regional pipelines are often 60 cm in diameter and handle pressures up to 40 bar. Increasingly, these systems are laid in rings around communities. This means that supply is much more reliable if a section of the pipeline has to be closed down for any reason, the flow of gas around the ring can be reversed and the supply maintained. Methane has no smell, so at the point of entry into the regional system it is odorised to enable leaks to be detected.
Local grids consist of a network of supply pipes that deliver gas into customers' homes, as well as into offices, hospitals and factories. Pressure inside local grids is gradually reduced to around 25 millibars above atmospheric pressure, before delivery into the home or workplace.
The largest international network for natural gas is in Western Europe. A network of gas pipelines stretches from the toe of Italy to Norway, and from Western Siberia, across the Urals to the Atlantic. The four main supply sources which feed into this network are the CIS, the Netherlands, Algeria and Norway. Together they supply more than 120 billion cubic meters of gas every year. Of these, the largest supplier is the CIS. In addition to supplying Western Europe, the CIS is also a major exporter to Eastern Europe.
Pipeline gas exports from North Africa to Europe started in 1983 with the 'Transmed' pipeline linking fields in Algeria to southern Italy via Tunisia and this will increase further with the opening of the Trans-Mahgreb line from Algeria, through Morocco to Spain, in 1996. Current exports from Algeria amount to more than 45 million cubic metres a year.
The development of the LNG business has transformed gas from a more or less regional energy into a world-wide resource. Many nations, particularly in the Far East, which were once too remote to benefit from the versatility of gas, are now supplied by LNG. pecialised equipment, such as insulated marine tankers, is required.
Many of the world's gas fields are located in areas remote from their potential customers. One solution to the transportation problems is to liquefy the gas by refrigerating it to below -161.5 C.
The world's first gas liquefaction plant was started in 1912 in West Virginia, USA. However, it was not until the first deliveries of LNG from Algeria to the UK in 1964, that the modern industry became genuinely established. Other larger projects have since been developed to the extent that over 80 billion cubic metres of gas are now shipped as LNG every year.
In recent years, LNG plant design and reliability have improved considerably. Current real costs of liquefaction are some 30 percent lower than in the 1960s, through developments such as the use of very large gas turbines.
Each liquefaction is plant is unique, reflecting technological developments over time as well as different feed gas compositions, local site conditions and the design and process preferences of the plant owners. Many components or units, each with a specific treatment purpose, are joined together to make a 'train'.
Almost all LNG plants in the world now incorporate at least two trains (Qatar for instance has three trains in Ras Laffin and a fourth train is planned), which are operated in parallel and can be shut down sequentially for periodic maintenance and repair. Provided the plant is well designed and constructed, propertly maintained and refurbished as necessary, it should have a useful operating life of 40 or 50 years, possibly longer.
Despite the unique nature of each plant, the process of liquefaction always has certain aspects in common. There are four main stages involved: First, any impurities, such as carbon dioxide and sulphur compounds, are removed. Then any water in the gas is extracted, Finally, most of the heavier hydrocarbons are removed, leaving mainly methane and ethane. The resulting gas is then progressively cooled, usually by a two-cycle refrigeration process, until it falls below minus 161.5°C, when it becomes a liquid at atmospheric pressure.
LNG projects are extremely large undertakings, both in terms of the engineering as well as financial investment. Investment runs into billions of dollars over the life of the project.
Typically, a six million ton a year LNG project will cost around $5 billion, depending on the site.
Ten years or more may elapse between the conception of a project and first deliveries of LNG.
Thereafter an LNG supply contract would usually cover at least a 20 year period. For these reasons, most LNG projects are primarily undertaken as joint ventures involving a number of different partners, each of whom will bring different skills to the project. Frequently, these will be a combination of organisations involved in gas supply, complemented by companies who are either direct customers for the LNG or are closely associated with its ultimate market.
All LNG projects are international in scope, both in terms of the production partners involved and in the markets supplied. Historically, most LNG projects have been aimed at markets in the Far East (a region that does not have natural gas fields located close to the main markets). These include projects in Brunei, Malaysia, Indonesia, Australia, Alaska and Abu Dhabi. Others, in Oman, Qatar, Yemen and Sakhalin, are still under evaluation. Europe is currently supplied with LNG from Algeria together with small amounts from Libya, and LNG shipments from plants now under construction in Nigeria and Trinidad will commence by the year 2000.
© 2000 Mena Report (www.menareport.com)
