Canadian Power Supply - About LNG

Why liquid natural gas ?

Natural gas (NG) is the best alternate for crude oil. It is a safe, efficient and environmentally friendly energy source. Developing of gas reserves throughout the world and its low emission characteristics and cost effectiveness are making natural gas the fuel of the future. Its green benefits, not only in comparison with other fossil fuels but also oil, classifying natural gas as one of the nation’s best upcoming alternatives. Consequently, it is correct to presume that natural gas will play a major role in world energy supplies during the next decade and beyond. New producers entering the market are influencing developments in this industry.

The liberalization of Europe's energy markets and the development of new technologies boosted the role of liquefied natural gas (LNG) as an alternative to pipeline gas. Because natural gas in its liquid form has a reduced volume, the process of liquefaction allows for an easy way to transport the once-stranded fuel to remote destinations.

Total natural gas consumption worldwide increases 44 percent in the IEO 2010 reference case*, from 108 trillion cubic feet in 2007 to 156 trillion cubic feet in 2035. this kind of demand could not be reached from domestic production within local markets of natural gas. Domestic producers are at the limits of production capabilities, and lng trading a global distribution networks are playing an increasingly important role. In order to achieve energy independence and energy security in various markets, new trends in lng trading and lng supply lines are developed on a global scale. The competitive advantage of increased liquefied natural gas (LNG) imports is being utilized in the global markets through new trading and import routes and increased volume in traditional supply networks.


Where Does LNG Come From?

World natural gas reserves are abundant. However, much of this natural gas is considered “stranded” as it is located in regions distant from consuming markets (e.g. Trindad and Nigeria).

Liquefying natural gas and shipping it overseas provides an opportunity for these regions to economically develop their natural gas reserves.

In 2011, 18 countries produced and shipped a combined 241.5 million tonnes of LNG:

“Others” include Yemen, Egypt, United Arab Emirates, Equatorial Guinea, Peru, Norway, the United States* and Libya.

* Until 2012, small quantities of LNG have been produced in Alaska by Kenai LNG (located in Cook Inlet) for export to Japan.

Where is LNG Delivered?

In 2011, 25 countries imported a combined 241.5 million tonnes LNG:

“Others” include Turkey, Belgium, Argentina, Mexico, Chile, Canada, Kuwait, Portugal, United Arab Emirates, Greece, Dominican Republic, Thailand, Brazil, the Netherlands and Puerto Rico.

In general, the countries listed above import LNG for one of two reasons:

  1. Domestic supplies of natural gas are not readily available; or,
  2. Demand for natural gas exceeds what can be produced domestically.

LNG Supply Chain

The LNG supply chain (as illustrated in the figure below) consists of several interconnected elements.

Liquefaction plants are built at marine terminals so the LNG can be loaded onto special tankers for transport overseas. After tankers deliver the LNG cargo to import terminals, the LNG is stored, regassified and injected into pipeline systems for delivery to end users.