THE ECONOMICS AND STRATEGY OF LNG

Abstract

The natural gas industry in Australia is growing rapidly and this is an opportune time to look at the possible place for Liquid Natural Gas (LNG) in this expanding field.

In general, as the demand for natural gas increases, and its distribution becomes more widespread, so the economics become more favourable for using LNG for peak shaving, standby purposes, or trucking to satellite vaporising stations. Apart from demand, however, a large number of other factors affect both the decision as to what type, if any, of LNG facility is warranted, and the selection of types and sizes of equipment for that facility. These factors include environmental considerations, calorific value (CV) and Wobbe Index limitations, purification problems, transport facilities, pipeline capacity limitations, climate, etc.

In the United Kingdom, the use of LNG is now well established in a number of different roles, and much experience has been obtained in the planning, design, construction and operation of LNG installations. Whilst the growth patterns in Australia and the UK are similar, however, the requirements for storage are substantially different.

It is concluded that, as the gas demand in Australia increases, and the distribution network becomes more widespread, LNG facilities may well become economic propositions to fulfil a number of combined roles.