Liquefied Natural Gas (LNG)

In this lesson, 
I'll cover the basics of Liquefied Natural Gas or what is commonly referred to as LNG. 
LNG is natural gas that is super cooled to negative 260 degrees Fahrenheit. 
By super cooling the natural gas, 
we reduce its volume to 1/600th of the original size. 
For example, if we had 600,000 cubic feet of natural gas and super cool it, 
we'll end up with 1,000 cubic feet of LNG. 
Natural gas can also be compressed and when it is, 
it's called compress CNG. 
When compressed, its volume is reduced to 1/200th of the original volume. 
CNG is easily recognized by 
the blue CNG diamond that you may see on many CNG fuel buses in big cities. 
Remember that in both cases, 
we compress or super cool natural gas to make it easier to transport. 
So, we can put it on a truck, ship, 
or a railroad car, 
providing if we have the proper container. 
Now, lets turn to what drives people to use LNG. 
We know that natural gas is abundant and we 
have a considerable amount of reserves for years to come. 
We have a growing capability to produce LNG in the US instead of importing it. 
It also burns much cleaner than diesel fuel or gasoline. 
That makes it much easier to meet 
the government's current and future air emissions requirements. 
However, the biggest driver of using LNG is the price. 
Anyone thinking about switching from 
diesel or gasoline fuel to LNG is comparing the price of each. 
It varies, but generally, 
LNG is less expensive than either of the two fuels currently. 
When oil prices go up, 
LNG becomes more attractive. 
It's not corrosive. 
It won't mix with water, 
but instead, floats in it. 
If spilled, it quickly vaporizes and rises, 
and it leaves no residue, 
and is odorless, and non-toxic. 
When producing LNG, we have to take a look at the LNG supply chain. 
This is divided into about five large parts. 
Number one, natural gas production. 
Two, processing and liquefaction of the gas, 
that is super cooling it. 
Number three, shipping. 
Four, regasification, and five, 
it's actual use by customers. 
The LNG cycle is similar to the LNG supply chain and 
involves pre-treating a natural gas to remove more natural gas liquids, 
super cooling it, and storing it until it is 
used directly by customers or regasifiying it.
 LNG Exports Terminals

In this lesson, we're going to learn about LNG export terminals.

LNG export terminals produce LNG for global buyers, 
which is shipped on LNG carriers.
Most of the LNG export terminals are land based. 
The LNG is flowing from the shore to ship.

You'll notice that natural gas that goes to an LNG export terminal undergoes 
pretreatment to remove even more of the NGLs from the gas before it is liquified.

Once liquified, the LNG is stored in large tanks above ground until ready for export.
When it's ready to be loaded on an LNG carrier, 
the LNG is then pumped through pipes onto an LNG carrier. 
Currently, the United States is producing LNG in Alaska and in Texas for export.
Once LNG is produced, it can be loaded and 
transported to customers via ships, railroads, and trucks.
LNG can be transported anywhere in the world on LNG carriers and 
within 225 miles by truck.
The Japanese transport LNG throughout their country via rail, 
since they have special containers to hold it. 
US LNG companies are also transporting LNG and ISO containers to the Caribbean.

There are three types of liquefaction plants. 

You have large baseload plants like Sabine Island and Cove Point, 
which are designed to liquefy natural gas from large gas fields. 

Then you have peak-shaving plants that are used to store LNG for 
use during the winter or summer.

The LNG peak-shaving plants are much smaller than the baseload plants. 
They are only used to cushion against supply shortages of natural gas.
They require a good supply of LNG and 
a sufficient trucking system to get the LNG to the peak-shaving plants.
Finally, you have small-scale LNG plants, which serves the transportation market. 
The transportation market uses LNG as a fuel for, 
not only trucks, but also for heavy machinery and ships.
All land-based LNG export terminals are designed 
along the concept of what's called a train. 
Yes, you heard me correctly, I did say train.
Each train has a pretreatment of natural gas liquid 
removal and liquefaction facilities. 
Multiple trains are usually constructed in LNG export plans. 
That way, if one train is down for maintenance or 
suddenly stops operating, the others can continue to operate. 
So production is not stopped entirely.
To get an idea of the LNG supply chain in action, take a look at the next figure. 
You'll see all sorts of LNG ships in the harbor, 
including large LNG carriers bringing LNG to a port.
There are also LNG fueled ferry boats and 
cruise lines and an LNG bunker facility to fuel them.
On shore, we have regasification terminals and LNG peak-shaving terminals as well, 
and smaller LNG fueling stations for trucks and fleets. 
Let's take a look at an LNG carrier close up. 
There are actually three types, which you'll later see in the next lesson. 
But for now, you only need to know what a Moss spherical type looks like.
Believe me, once you've seen one of these ships you're never going forget it.
 LNG Import Terminals

This lesson is on LNG import terminals, 

which receive LNG from ships called LNG carriers. 
When a ship unloads its cargo at an LNG import terminal, 
LNG is pumped from the LNG carrier to a large LNG storage tank, 
where it is then stored over time. 
The LNG is then pumped out of the LNG storage tank to a regasification unit, 
where it is heated up and turned back into a gas. 
At that point, it enters 
the country's natural gas pipeline system 
where it can be used by many different types of customers. 
Those customers can include 
LNG peak shaving facilities which are operated by a natural gas utility company, 
trucking fleets that use LNG directly 
by UPS and smaller trucks that use compressed natural gas. 
We spoke briefly about LNG peak shaving plants during the last lesson. 
Here I will show you two types of facilities that exist. 
The first is what's called a satellite LNG peak shaving plant, 
you'll notice the prominent bullet tanks which can be manufactured in any standard shop. 
These bullet tanks store the LNG which is received by truck, 
when a gas utility wishes to use the LNG it simply vaporizes 
the LNG using ambient vaporizers to change the liquid into a gaseous form. 
The gas then enters the pipeline or utilities distribution system. 
Satellite LNG peak shaving plants are relatively 
inexpensive and cost approximately 12 million dollars. 
They only provide though, 
LNG storage and have no ability to produce LNG. 
Some natural gas utilities require 
liquefaction capability if they are located very far from LNG suppliers. 
In other words, they have a ready source of 
natural gas and can liquefy and store it for use later on. 
A typical LNG peak shaving plant with 
liquefaction capability will cost about 200 million dollars. 
That's four less than the 20 billion dollars that it 
usually costs to construct an LNG export terminal. 
As you can see from the picture, 
the prominent feature here is still 
a large LNG storage tanks and the liquefaction facility in the foreground. 
What you can't see in this picture is 
the natural gas pipeline that feeds into the peak shaving facility. 
The railroads have been very interested in converting 
their fleets to liquefied natural gas instead of diesel fuel. 
Their interest peaked in 2013 when crude oil prices were at a 100 dollars a barrel. 
However, they lost interest when oil prices declined to 
less than 50 dollars a barrel and diesel prices declined as well. 
Nevertheless, some were railroads like 
the Florida East Coast railroad have adopted LNG for their entire locomotive fleet. 
Truck owners have also continued to investigate using LNG as a fuel for their fleets. 
Now, that crude prices have increased, 
there is renewed interest in converting fleets to LNG. 
A number of companies including Clean Energy, 
have begun to construct LNG fueling stations across 
the United States to accommodate a growing LNG truck fleet. 
CNG use of the small trucking fleets is also growing in popularity. 
So now, there are more CNG fueling stations. 
There are about 122 existing and planned LNG fueling stations in the United States. 
Bunkering is a term used to denote providing fuel to 
ships what marine fuels such as heavy oil. 
LNG bunkering is growing more popular as we 
try to reduce pollution from traditional marine fuels, 
especially fuels like heavy oil and diesel fuel 
which are very high in carbon dioxide and mercury. 
LNG export and import terminals are increasingly opposed by 
environmental groups and the public who are against fracking natural gas. 
There is also a growing keep it in the ground movement in the United States, 
when it comes to using fossil fuels like natural gas and oil. 
These environmental groups oppose projects both at the FURC as well as in the courts.
 Utility Basics

In this lesson, 
I'm going to talk about natural gas pipeline and natural gas utility basics. 
Let us take a look at our natural gas supply chain chart again. 
We can see that what stands out are pipelines and natural gas utilities, 
which serve customers at the bottom of the supply chain. 
Natural gas pipelines are categorized as interstate or intrastate pipelines. 
Interstate pipelines transport natural gas across the country over long distances. 
It's best to think of these as the superhighways of 
the natural gas industry which pass through many states. 
The large pipelines move gas from production areas to urban areas. 
Intrastate natural gas pipelines operate within a given state, 
and do not cross a state boundary. 
They are comparable to state highways. 
FERC regulates interstate natural gas pipelines. 
However, PHMSA, deals with all safety matters on natural gas pipelines. 
The states and PHMSA regulate intrastate natural gas pipelines as well. 
Utility gas distribution lines are much smaller, 
and are comparable to city streets. 
PHMSA deals with the safety of all natural gas distribution lines. 
Now let's cover the major differences between 
natural gas pipeline companies and natural gas utilities. 
Pipeline companies just transport gas, 
they usually have large diameter steel pipe, 
operate under high pressure, 
and need large compression stations to move gas through the pipeline system. 
This is basically a wholesale market, 
and it's heavily regulated by FERC. 
If a company builds a natural gas pipeline and nobody uses it, 
the risk is with the investors of the pipeline. 
A natural gas utility provides gas service to residential, 
commercial, and industrial customers. 
They have smaller diameter pipe which is usually steel or plastic. 
Natural gas utilities deals strictly with retail sales, 
and the companies are regulated by 
State Public Utility Commissions or by local government agencies. 
Rate payers like you and I, 
of course assume the risks of a natural gas utility company. 
All natural gas utility companies put mercaptans in their distribution line. 
This chemical enables us to smell natural gas in our homes or workplaces. 
Remember that natural gas at the well-head, in processing plants, 
or in large pipelines is odorless, 
because it doesn't contain mercaptans. 
And these mercaptans in the distribution lines are detectable at very low levels. 
Construction of a natural gas pipeline is very involved and takes 
a great number of people to lay the pipe and construct compressor stations. 
Once the pipeline is constructed, 
the land is restored to its natural contours, 
and a 50 foot wide corridor is maintained for the life of the project. 
Vegetation is allowed to grow in the corridor, 
but no trees are allowed, nor, 
does the pipeline company allow construction of large structures within the corridor. 
In contrast, it's much easier to lay 
a distribution gas line than a large diameter natural gas pipeline, 
especially if it's plastic. 
There's no welding involved and the plastic pipe is much easier to handle. 
Natural gas utilities deliver natural gas to homes and businesses. 
The utilities buy their natural gas from a wholesale gas markets. 
They also make sure that the pressure is 
adequate to operate all of our appliances and equipment. 
They are also involved in reading our usage meters and billing us each month. 
If there's an emergency such as a loss of gas service or you smell gas, 
you should immediately call 
your natural gas utility since they handle these kinds of emergencies. 
Now there are literally hundreds of natural gas utilities in the US and Canada, 
and each has their own service territory within a given state or province. 
There are 11 natural gas utilities in New York state, 
especially in western New York and downstate. 
However, some areas are not served by any natural gas utilities, 
and have to rely on propane as a heating source. 
I wanted to show you 
a very large natural gas utility that is 
owned by the Southern Company which is based in Atlanta, Georgia. 
Its affiliate Southern Gas, 
serves customers in multiple states including Nevada and California. 
This completes the general overview of natural gas utilities. 
We'll get into greater detail in the next lesson.
 Utility Functions

In this lesson, we'll complete a discussion of natural gas utility functions. 

Natural gas utilities are generally investor-owned or municipally-owned entities. 
Some utilities deliver just natural gas while others do both natural gas and electricity. 
All investor-owned utilities are regulated by a State Public Utility Commission. 
Municipal natural gas utilities are not regulated by a State Public Utility Commission, 
but by the states that started them. 
Gas utilities own the infrastructure from 
the city gate to the customers home or business. 
There they measure the pressure and the quantity of gas entering the distribution lines. 
And they may also store gas to serve customers during winter. 
Gas can be stored underground and in LNG peak storage plants. 
Gas utilities reduce the pressure from the city gate to the customer's meters. 
They may also clean up the gas and usually add mercaptans to it to odorize it. 
The pressure of an interstate or intrastate natural gas pipeline is 
between 200 pounds per square inch and 1500 pounds per square inch. 
At the city gate, the natural gas utility reduces 
the pressure to 200 pounds per square inch. 
As gas travels to the customer, 
distribution lines turn into mains and then service lights. 
By the time the gas reaches a customer, 
the pressure has been reduced to a quarter to a half a pound per square inch. 
Eighty percent of the mains are less than four inches in diameter. 
Many early distribution lines were constructed of 
cast-iron pipe and operate below 60 pounds per square inch. 
Seventy percent of the service lines are less than one inch in 
diameter and are composed of steel and plastic pipe. 
Polyethylene plastic pipe was first introduced in the 1960s. 
It now makes up 90 percent of the 40,000 
moles of new mains constructed each year in the United States. 
PHMSA works closely with natural gas utilities to ensure that they are making 
progress and replacing their cast-iron pipe 
and are ensuring the safety of their distribution systems.