The world is currently facing two significant energy problems – alternative methods of energy production cannot effectively cater to the world’s ever-growing energy demand, nor can we continue to rely on the more environmentally destructive forms of fossil fuels.
SSLNG is seen as a transition fuel to a low-carbon economy that provides substantial environmental benefits over conventional fuels.
SSLNG infrastructure provides an adaptable framework to support transportation supply chains and power generation for a wide range of users. By combining the high availability of LNG with reduced infrastructure, SSLNG results in greater economic and operational efficiency.
BE&R Consulting considers Small Scale LNG to cover:
- All LNG Facilities that involve processing and storing between 0.05-1 million metric tons per annum.
- Vessels with a capacity of up to 60,000 cubic metres.
SSLNG allows for LNG to be effectively distributed to transportation, industrial and power generation customers that do not require the traditional volumes associated with large scale LNG production.
Overcoming Limitations To Traditional LNG Frameworks
Traditional large scale LNG frameworks, by their very nature, have limited application for the smaller volume user.
The use of pipelines as the standard means for gas distribution limits supply to areas of high population density. Typically installing pipelines out to remote locations with low levels of demand is not economically viable.
The purpose of small scale LNG is to create virtual pipelines to provide clean and economically sustainable energy to where it is most needed.
If the needs of these locations are going to be catered for, innovative small-scale thinking is needed in order to develop alternate methods of transporting LNG.
The growing popularity of LNG-powered vehicles is leading to the uptake of SSLNG as the resource of choice for remote industries and communities.
This, in turn, will require the creation of bunkering facilities, ports and vessels in order to facilitate the movement of LNG to meet this increased demand.
Climate & Environmental Policy As A Driver Of Change
Thanks to the rise of international climate agreements and policy, governments the world over are scrambling to reduce their nation’s carbon footprint.
This has spurred the creation of policies and initiatives aimed at reducing the consumption of oil and replacing it with renewables and low-carbon alternatives such as LNG.
The International Maritime Organisation has also set new emissions targets:
- Reduce sulphur emissions to 0.5% by 2020.
- Reduce GHG emissions by 50% by 2050.
As a result, there has been a rapid increase in demand for LNG as a cleaner and greener fuel source, and this has driven the uptake of gas-fired engines in the production of new ships, trucks and power generation.
In the immediate future, more SSLNG facilities will be needed to cater to all of the different segments of the market that will be using LNG as their primary source of fuel.
There are multiple options available to route LNG through the full value chain. The traditional option is to start at a large liquefaction facility loading LNG into a conventional LNG carrier and shipped intercontinental distances to large scale import terminals. These volumes are typically too large for the majority of industrial end users or distributors. The LNG is required to be “break-bulked” through either an onshore or offshore facility and loaded on small scale LNG carriers or trucks/rail cars with end users or distributors as the final destination. Depending upon the choices made for routing the LNG through the small-scale LNG value network, several parties will play a role in the process.
BE&R consulting play a vital role in Small scale LNG business process and value chain with their experience at each stage of the value chain along with the ability to make sure that all gaps are covered. This can include governments, and regulatory bodies which can have major influence on the overall costs if not properly included in the project development stages.
Major contributors to the small-scale LNG value chain are as below:
- Gas Suppliers and LNG Producers
- Ship Owners, Operators and Brokers
- Terminal Owner, Terminal Operator and Capacity Holders
- Off-Takers (Regasification and End-Users)
- Integrated Players
- Large LNG producers may participate across the value chain. International oil companies such as Shell and ExxonMobil supply the gas and produce the LNG in their own facilities, ship the LNG to downstream destinations and sell the LNG to larger downstream end users.
An Exciting Opportunity
By economic necessity, SSLNG technology has become markedly more efficient and cost effective. However, it still faces its fair share of challenges.
Unlike conventional LNG production – which can use economies of scale to improve profit margins – the implementation of SSLNG requires each project to be tailored to suit its specific demands.
Thanks to the growing demand for LNG resources, countries around the world are looking to expand their capacity to extract, liquify and export natural gas.
This growth represents an exciting opportunity for SSLNG to fulfill the needs of consumers who need cleaner, more efficient fuel, but don’t require the usage of full-scale facilities.