Monetizing Natural Gas: GTW, GTL, LNG, and CNG

Prof. Michael Nikolaou

Nikolaou

GTW, GTL, LNG, CNG

Gas Transportation & Storage: The Alphabet Soup

Gas to wire (GTW)

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Gas to liquids (GTL)

Chemical reactions 10 bcf/d ~ 1MMb/d

Liquefied natural gas (LNG)

Freezing (-162C, -260F)

Compressed natural gas (CNG)

Compression (150-250 atm) Possibly chilling

Nikolaou

GTW, GTL, LNG, CNG

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Nikolaou

GTW, GTL, LNG, CNG

Gas to Wire (Electricity)

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts
Combined Cycle Gas Turbine (CCGT) Efficiency ~ 60 %
Typical: 1000 MW power plant (CCGT) Minimum: 450 MW (~13 Bcf/y)

Source: Intl Gas Union

Nikolaou

GTW, GTL, LNG, CNG

Gas to Wire (Electricity): Setting the US Clock back to 1992

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Nikolaou

GTW, GTL, LNG, CNG

Jethro Tull and Shale Gas

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Sources: http://collectorsfrenzy.com/details/310384181238 , Holditch Source: and Associates YouTube

Nikolaou

GTW, GTL, LNG, CNG

George Mitchell & the Shale Gas Revolution

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Nikolaou

GTW, GTL, LNG, CNG

George Mitchell & the Shale Gas Revolution

George Mitchell [1917- July 26, 2013], the Texas oilman who pioneered fracking, did as much to change the world as anybody in the [Silicon] Valley.
The Economist July 20th, 2013

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Nikolaou

GTW, GTL, LNG, CNG

US Natural Gas Production 1990-2035

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Source: U.S. Energy Information Administration. Annual Energy Outlook 2012 Early Release Overview. January 2012

Nikolaou

GTW, GTL, LNG, CNG

Spreading the Secret

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

10

10

Nikolaou

GTW, GTL, LNG, CNG

Could Change the World

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

11

11

Source: McKinsey Global Institute, Game changers: Five opportunities for US growth and renewal, July 2013

Nikolaou

GTW, GTL, LNG, CNG

US Oil Recently: Impact of Shale Oil

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

12

12

Nikolaou

GTW, GTL, LNG, CNG

A Long Time Coming

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

13

Nikolaou

GTW, GTL, LNG, CNG

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

14

Nikolaou

GTW, GTL, LNG, CNG

Natural Gas to Chemicals: Needs Energy

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

15

15

Nikolaou

GTW, GTL, LNG, CNG

Gas to Chemicals: Natural Gas-Based vs. Oil-Based Routes

Steam Cracker Feedstock Breakdown
Asia European Union
Middle East

Overview

GTW
GTL LNG

NG NG
NG

Oil Oil
Oil

US

NG 0% 20% 40% 60% 80%

Oil 100%

CNG Comparisons Closing Thoughts

16

16

Chemicals

Nikolaou

GTW, GTL, LNG, CNG

Gas to Liquids (GTL): Gas to Chemicals & Fuels

Methane Reforming

GTL
Steam, Air

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Natural Gas

Syngas (H2 + CO)

Fischer-Tropsch, Upgrading Naphtha, Diesel, Waxes,

Natural Gas Processing

Ammonia Methanol Ethane, Liquids Crude Oil Naphtha, Gas Oil Olefins, Aromatics Benzene, Toluene, Xylenes

Refinery

17

17

Nikolaou

GTW, GTL, LNG, CNG

Gas to Liquids (GTL): Very-Large or Very-Small Scale

Pearl integrated gas and GTL (Qatar)
1600 MMscf/d of gas resulting in:
140 kbo/d of gas-to-liquids products (2 trains) 120 kbo/d of natural gas liquids and ethane

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

$19 billion

Sasol Louisiana

18

18

Source: shell.com

Nikolaou

GTW, GTL, LNG, CNG

Gas to Liquids (GTL): Mini GTL & Compact GTL

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

2-50 MMscf/d
19
19 Source: T. H. Fleisch, Small Scale Gas Monetization via miniGTL Options, GGFR

Nikolaou

GTW, GTL, LNG, CNG

Mini GTL: Evolving

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

20

Source: T. H. Fleisch, Small Scale Gas Monetization via miniGTL Options, GGFR

Nikolaou

GTW, GTL, LNG, CNG

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

21

Nikolaou

GTW, GTL, LNG, CNG

The LNG Chain

International trade
70% Pipeline 30% Liquefied Natural Gas (LNG)

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Sweetener

Dehydrator

Ethane Propane

22

22

Source: www.total.com

Nikolaou

GTW, GTL, LNG, CNG

Liquefaction Module = LNG Train: Size Matters

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

23

Sources: Tusiani & Shearer, LNG: A Nontechnical Guide (2007) Shively et al., Understanding Todays Global LNG Business (2010)

Nikolaou

GTW, GTL, LNG, CNG

LNG Tanker
Moss tank tank Moss

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Membrane tank

24

Sources: http://gazprom-sh.nl, www.weaverscove.com

Nikolaou

GTW, GTL, LNG, CNG

Size Matters
LNG Carriers Built and Scheduled for Delivery
250

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

200
150 100

Small (<100 kcm) Standard (100 to 200 kcm) Q-Flex (200 to 250 kcm) Q-Max (250 to 300 kcm)
1960s 2010 2011 2013 2014 1970s 1990s 2000s
1980s

50
0

25

Sources: http://shipbuildinghistory.com (updated 2/29/2012); IGU LNG Report 2010

2016

2012

2015

Nikolaou

GTW, GTL, LNG, CNG

The LNG Chain

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts
Dehydrator Sweetener

Ethane Propane
26 Source: www.total.com

Nikolaou

GTW, GTL, LNG, CNG

Floating LNG: Regasification

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

27

Source: http://www.worldoil.com/November-2011-Energy-Issues.html

Nikolaou

GTW, GTL, LNG, CNG

Floating LNG: Liquefaction

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

28

Sources: Shell; BBC

Nikolaou

GTW, GTL, LNG, CNG

Mini LNG: Cost and Energy

Capacity: 2,000-500,000 tons/y (vs. MTPA)

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

29

Source: Kunert and Larsen, Small is Beautiful Mini LNG

Nikolaou

GTW, GTL, LNG, CNG

LNG: Export Potential in North America...

Sabine Pass, Louisiana Regasification Terminal

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Liquefaction Terminal

30

30

Source: Cheniere

Nikolaou

GTW, GTL, LNG, CNG

Complementing Global Gas Trade Flows

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

31

31

Source: BP Statistical Review (2011)

Nikolaou

GTW, GTL, LNG, CNG

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

32

Nikolaou

GTW, GTL, LNG, CNG

Compressed Natural Gas (CNG)

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

33

Sources: Knutsen; SeaNG

Nikolaou

GTW, GTL, LNG, CNG

CNG: Compressing & Chilling

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

34

Nikolaou

GTW, GTL, LNG, CNG

LNG or CNG?

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

35

Nikolaou

GTW, GTL, LNG, CNG

LNG or CNG?
Both
Primary differentiator: Distance Secondary differentiator: Scale-up/down differences
CNG M etal LNG

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

36

Source: Nikolaou et al., 2013

Nikolaou

GTW, GTL, LNG, CNG

LNG or CNG? Effects of Scale

LNG: Scale-up strong
Doubling liquefaction capacity -25% CAPEX

Overview

GTW
GTL LNG CNG

CNG: Scale-down strong

Ship capacity increase: Modular
Lines of NPVCNG
500 400

NPVLNG

Metal Containers

Gas rate, q Bcf y

Comparisons Closing Thoughts

300 200 100 0 0

Composite Containers

10
Source: Nikolaou et al., 2013

Distance , L kmiles
37

Nikolaou

GTW, GTL, LNG, CNG

LNG or CNG? Effects of Uncertainty

CNG: No commercial project yet LNG: Cost variability

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

38

Sources: Cheniere; Nikolaou et al., 2013

Nikolaou

GTW, GTL, LNG, CNG

Closing Thoughts
Monetizing natural gas
Room for multiple technologies (pun intended!)

Overview

GTW
GTL LNG CNG Comparisons Closing Thoughts

Exploring new twists on old ideas

Pioneers vs. creative imitators

39