North American LNG 2006: Market and Offshore Regasification Technology Analysis
Utilis Energy, LLC, February 2006
LNG is an increasing important fuel for supply constrained US markets. Imports, both contract and spot, continue to grow and are expected to eclipse 1 trillion cubic feet over the next few years.
Our new study, North American LNG 2006: Market and offshore regasification technology analysis examines the current state of US natural gas and LNG market fundamentals and provides insight into the development of offshore regasification technologies.
This study examines:
- Changing LNG economics and pricing
- The status of FERC and US Coast Guard LNG terminal approvals
- The impact of the Energy Policy Act on US LNG development
- LNG spot market imports and cargo diversions
- Advantages and disadvantages of four competing offshore regasification technologies: Gravity-Based Systems, Platforms, Floating Storage Regas Units, and Regasification Vessels
North American LNG 2006: Market and offshore regasification technology analysis is a timely and comprehensive review of this critical market.
The study has particular value for:
- Strategic planners
- Project and infrastructure developers
- Commodity analysts
- Financiers who are actively involved with or have exposure to US natural gas markets
Executive summary
Introduction
Existing import terminals
US natural gas market fundamentals
LNG economics
Import terminal cost considerations
US natural gas demand
US natural gas production
US natural gas prices
US LNG demand
LNG pricing
Global natural gas demand
Conclusions
US LNG developments
Introduction
Energy Policy Act
Conclusions
North American LNG project summary
Gulf Coast projects
East Coast projects
West Coast projects
LNG project overview
Project opposition
Conclusions
Offshore regas technologies
Introduction
Catalyst for development
Offshore LNG receiving technologies
Gasification systems utilized by offshore facilities
Offshore economics
Conclusions
Gravity-based systems
Key points
Introduction
GBS engineering
Conclusions
Existing oil/gas platforms
Key points
Introduction
Platform conversion projects
Conclusions
Floating Storage & Regasification Units (FSRU)
Key points
Introduction
Operational issues
FSRU projects
FSRU economics
Conclusions
Regasificaiton vessels
Key points
Introduction
Excelerate Energy – Energy Bridge System
Advanced Production and Loading
Hoegh LNG
Conclusions
Conclusions
Introduction
Summary of offshore LNG strengths and weaknesses
FIGURES
Figure 1: US natural gas production, 1990-2004
Figure 2: US wellhead natural gas prices, 1990-2004
Figure 3: US LNG sector demand, 2015
Figure 4: Flow of US natural gas imports/exports, 2004
Figure 5: US LNG imports by terminal, 2004
Figure 6: US LNG imports by country of origin, 2004 (MMcf)
Figure 7: Average price of LNG imports, 1990-2004 ($/Mcf)
Figure 8: Current/planned deepwater LNG ports
Figure 9: Proposed/existing North American LNG projects, Jan. 2006
Figure 10: Offshore LNG facilities
Figure 11: LNG regas import terminals segmented by water depth
Figure 12: Offshore LNG regasification systems
Figure 13: Gravity based LNG regas structure
Figure 14: Isola di Porto Levante LNG receiving terminal
Figure 15: Aker Kvaerner depiction of a GBS LNG facility
Figure 16: Saipem offshore GBS LNG facility
Figure 17: Existing platform conversion to LNG terminal
Figure 18: Crystal Energy's Platform Grace
Figure 19: Crystal Clearwater Port Project
Figure 20: Elevation view of Crystal Clearwater LNG project
Figure 21: MPEH LNG receiving terminal
Figure 22: MPEH - upper deck configuration
Figure 23: MPEH - middle deck configuration
Figure 24: MPEH - lower deck configuration
Figure 25: MPEH - elevation view
Figure 26: Spectrum Energy Services – Apollo LNG terminal
Figure 27: LNG carrier berthed to an FSRU
Figure 28: LNG containment systems
Figure 29: FSRU - side by side offloading configuration
Figure 30: FSRU to shore LNG pipeline interface
Figure 31: Sloshing phenomena shown in membrane tank
Figure 32: Location of BHP Billiton's Cabrillio Port LNG project
Figure 33: FSRU vs. Onshore LNG regas operating costs
Figure 34: Excelerate Energy – Energy Bridge System 83 Figure 35: Excelerate EBRV pipeline interconnections
Figure 36: APL submerged offloading buoy
Figure 37: Energy Bridge mooring system components
TABLES
Table 1: Summary of offshore regas characteristics
Table 2: Existing US LNG terminals
Table 3: Basic LNG Economics
Table 4: US monthly waterborne LNG imports (Bcf)
Table 5: US LNG imports, monthly averages (Bcf/day)
Table 6: LNG cargo diversions from US terminals, 2005 (Bcf)
Table 7: Source of US LNG Imports, 1995-2000 (Bcf)
Table 8: North American LNG project details, Jan. 2006
Table 9: Offshore/Onshore LNG regas terminal cost comparison
Table 10: Benefits of concrete and steel LNG storage
Table 11: MPEH operational expectations
Table 12: Typical FSRU design and operating specifications
Table 13: FSRU operating costs (US $)
Table 14: Summary of offshore regas characteristics 9
North America, the US in particular, requires additional sources of energy to meet expected increases in demand during the coming decades. While it is commonly known that the US has imported the majority of its crude oil for some time, it is a lesser known fact that US natural gas production has also been unable to keep pace with domestic demand and that incremental increases in natural gas imports from Canada are not expected to offset future demand growth.
Such market fundamentals, in addition to recent price increases, create a favorable environment for increased imports of LNG – which, during 2004, amounted to 652 Bcf, roughly half the expected future demand. However, greater reliance on LNG is stymied by the lack of sufficient capacity at US regasification terminals. Only five such terminals are currently operation in the US and regulatory hurdles and opposition from both public and private bodies has hindered the construction of additional regasification infrastructure.
The US LNG market underwent a fundamental change when in August 2005, President George W. Bush signed the Energy Policy Act. This Act clarified the Federal government's role in the siting and operation of onshore and near shore LNG import terminals and gives the FERC the ultimate authority over states on LNG issues. By the end of 2005, the FERC had approved twelve LNG terminals and the US Coast Guard had approved two. Most of these proposed LNG terminals will be sited in the Gulf of Mexico, causing relatively little opposition from a region already accustomed to abundant petroleum industry infrastructure. Twenty more facilities are currently proposed, twelve under the authority of the FERC and the eight offshore under the authority of the Coast Guard.
To facilitate the importation and regasification of LNG there has been a rapid expansion in the range of alternative offshore LNG importation methods. These new methods are expected to compete with conventional onshore regasification terminals. The catalyst for alternative, offshore LNG regasification centers on several issues and concerns shared by individuals, communities and governments. These can be broadly defined as:
- Environmental;
- Security and safety; and
- Regulatory.
One of the most appealing features of offshore LNG import terminals is their lack of environmental impact on shorelines and population centers. An offshore LNG import terminal is a relatively small and isolated installation and in the unlikely event of an accident, few would be affected.
The enhanced security and safety of offshore LNG infrastructure is the result of their remoteness. Access to offshore LNG facilities can be monitored and restricted to a much greater extent than onshore installations.
US offshore LNG facilities are under the jurisdiction of the US Coast Guard not the FERC. The US Coast Guard is less bureaucratic and more efficient than the FERC generally, approving LNG project applications in one year, while it usually takes the FERC 18 months or more to approve an onshore facility.
Offshore receiving technologies can be defined by the following categories:
- Offshore gravity based structures (GBS) - A GBS LNG import terminal consists of concrete or steel caissons located on the seabed. This type of installation is totally self supporting with respect to its operation, utilities and power generation;
- Platform based import terminals – The utilization of existing oil and gas platform structures, converting them to accommodate LNG deliveries;
- Floating storage regas units (FSRU) – An LNG import terminal concept consists of a purpose built, permanently moored steel structure with LNG carriers shuttling between an export facility and the import site; and
- Regasification vessels - A standard LNG carrier modified in order to enable the vessel to discharge regasified LNG to a subsea pipeline, through an internal turret arrangement connected to an offshore mooring buoy.
Each of these offshore regasification technologies have their own specific merits and disadvantages and their use will be highly dependent on various environmental factors, such as water depth and other logistics.
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