LNG stands for liquefied natural gas. The gas is cooled to temperatures as low as minus 164 degrees Celsius, compressing it to 1/600th of its original volume. This enables it to be efficiently transported by ship or truck.
As with oil, most natural gas deposits are located far away from the actual point of use. Traditionally, the vast majority – around 90 percent – of natural gas is pipelined over long distances to power plants, industrial facilities and homes. However, pipelines become uneconomical if the reserve is small or very distant from customers. The costs for pipelaying, materials and compressor stations are just too high, calling for new strategies to overcome the distance challenge. One solution is liquefaction. It enables this raw material to be cost-effectively transported over thousands of kilometres in liquid state. Up until now, massive tankers have mainly been used for large-scale LNG transport. Today, LNG is proving an increasingly popular and cost-effective way of getting natural gas from source to market. It allows smaller reserves to be cost-effectively developed and brings gas to more remote regions not connected to a pipeline grid.
In 2010, natural gas covered around 24 percent of global demand for primary energy (excluding biomass), making it the world's third most important energy carrier. Although natural gas extraction fell in 2009, in response to a drop in demand, it increased by around 200 billion cubic metres in 2010 to a record high of 3.2 trillion cubic metres. As with crude oil, naturally occurring gas deposits are unevenly distributed. In 2010, around 975 billion cubic metres of natural gas (around 30 percent of the total market volume) was traded across borders. 69.5 percent of gas exports were pipelined, clearly outweighing the LNG share at 30.5 percent. Almost a third of global gas exports went to the US (10.8 percent), Japan (9.6 percent) and Germany (9.5 percent).
At the end of 2010, global natural gas resources amounted to around 531 billion cubic metres. The largest share of these is located in the Russian Federation, followed by the United States, China, Canada, Argentina and Mexico. Substantial shale gas potential has catapulted Argentina and Mexico into the ranks of the world's ten most resource-rich countries for the first time. In 2010, extraction rates soared, particularly in the Russian Federation and Qatar, which produced around 30 percent more natural gas than in 2009. The United States also raised production levels, primarily through non-conventional gas extraction, making it the world's biggest natural gas producer alongside the Russian Federation. The two countries accounted for almost 38 percent of natural gas extracted worldwide in 2010. The US and Russia are also the largest natural gas consumers, followed by Iran and China, with China consolidating its position as Asia's main natural gas consumer.
Sources: Reserves, Resources and Availability of Energy Resources 2010, German Federal Institute for Geosciences and Natural Resources; Statistical Review of World Energy 2011, British Petroleum (BP)
The release of greenhouse gases such as carbon dioxide (CO2) cannot be stopped overnight. However, by turning to natural gas, we can already achieve significant reductions in emissions from private households, industrial companies and the transport sector. This is the most climate-friendly of the fossil fuels, releasing less CO2 on combustion than either coal or hydrocarbons such as heating oil, diesel or LPG. And it is estimated that our gas reserves will last several hundreds of years, in contrast with just 40 years for oil. Natural gas can also play an important role in generating electricity. Gas-fired power stations allow rapid start-up and shut-down, so are flexible enough to help counterbalance fluctuations in wind power, for example. In a nutshell, natural gas is a key stepping stone on the pathway towards more climate-friendly energy choices. It is similar to oil in terms of its versatility but generates significantly lower levels of CO2, at least 20 to 30 percent less than other comparable fuels. Innovative natural gas technologies can thus play a key role in the transition to a zero-carbon economy.
Across the globe, The Linde Group is playing a major role in unlocking the benefits of this primary energy carrier at all key steps in the value chain, from the source to the point of use. Converting natural gas to LNG requires the latest cryotechnology, and the company is a specialist in this field. Linde engineers have been able to adapt liquefaction systems to even the most challenging environmental settings, as seen at the most northerly LNG plant in the world – Hammerfest in Norway. Before LNG can be transported, many elements – such as heavy hydrocarbons, CO2, nitrogen, sulphur compounds and water – have to be separated from the methane. Cryogenic heat exchangers lie at the heart of Linde's liquefaction plants. Most world-scale LNG plants use coil-wound heat exchangers that are up to 70 metres high. Linde is one of just two companies in the world to master this technology. Its heat exchangers are not only used in the Group's own LNG facilities, but also by companies such as Shell, Woodside and ConocoPhillips. Linde also provides innovative LNG transport solutions and is actively contributing to the ever-expanding LNG infrastructure. Linde engineers have developed storage tanks for ports and ships, for instance. The Linde Group also designs, builds and operates LNG microplants to supply truck fuelling stations or other local needs.
The main cause of rising gas prices is increased global demand across the entire energy sector. Ongoing political instability in various producing countries and immense economic growth in nations such as India and China have sent demand for all the key energy carriers skyrocketing on the global market – and this has already lead to several massive surges in price. However, the price rises for natural gas remain significantly more moderate than for other energy carriers.
Unconventional natural gas does not differ in composition from its 'conventional' counterpart – it is actually the technology used to extract it that is unconventional, rather than the gas itself. Conventionally, vertical drilling is all that is needed for gas to flow to the surface due to natural pressure within the reservoir. Unconventional gas, on the other hand, is trapped between layers of stone, such as sandstone, siltstone or coalbeds. So additional technology is required to release this gas from the bedrock. First, the gas-containing layers are vertically drilled, and then the drilling continues horizontally, into the stone. Finally, to extract the gas, a mixture of water, sand and various chemicals is pumped into the boreholes at high pressure, breaking up the stone and freeing the gas. This high-pressure process is known as fracking. Some of the mixture is subsequently removed through the boreholes. Breaking up the stone by horizontal drilling unlocks huge reservoirs of natural gas. The International Energy Agency estimates that unconventional extraction processes will open up reservoirs amounting to 921 billion cubic metres of gas throughout the world – five times as much as we can access with traditional methods. In the US, unconventional extraction has gained so much ground within just a few years that the country is now the world's largest producer of natural gas alongside the Russian Federation. In addition, natural gas costs a third less than petroleum-based fuels on an energy equivalent basis.
Biogas is often referred to as the raw gas resulting from the anaerobic digestion of biomass. This gas consists mainly of methane and CO2 and has a high humidity level. Water, CO2 and other unwanted substances are removed so that the biomethane stream is pure enough for the target application. Once purified, the gas can be liquefied or pumped directly into the grid network. It can also be used as a fuel for vehicles such as waste collection trucks, buses and cars. As long as the biogas is sufficiently pure, it can be easily mixed with natural gas. This is already common practice in regions with natural gas pipeline systems.