Introduction to LNG - The Center for LNG USA

8/3/2019 Introduction to LNG - The Center for LNG USA

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LiquefiedLiquefiedNaturalNaturalGasGas

L N GN GA safe and c lean fue l

Essent ia l t o m eet ing U.S. energy needs

Help ing d rive ec onomic g row t h

THE CENTER FOR

Liquef ied Nat ura l Gas


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THE CENTER FORLiquef ied Nat ura l Gas

Broad coalition: energy providers, trade

associations and end users

Mission Statement:

The Center for LNG strives to be a one-stop information source

that distributes educational and technical information. The

Center also seeks to facilitate rational issue discussion and the

development of public policies that support LNGs increasing

contribution toward meeting the nations energy needs and

supporting economic growth.


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THE CENTER FOR

Liquef ied Nat ura l Gas

What is LNG?

Why t he U.S. needs LNG

A proven safe ty rec ord

Si t ing and permi t t ing


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What is LNG?hat is LNG?LNG is nat ura l gasin i t s l iqu id form

LNG is the liquid form of the same natural gas60 million U.S. consumers use daily to heat and

cool their homes; that industry uses; and that isused for electric power generation

LNG is not new -- it has been safely and securelytransported and used for over 40 years

LNG is converted to liquid by cooling to -260o F

LNG is 1/600th the volume of gas, allowing formore efficient and economic transportation


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LNG c harac t e r i st i c sOdorless, non-toxic and non-corrosive

Less dense than water -- evaporates if spilled

LNG vapors are more difficult to ignite than othercommon fuels

LNG is not under pressure for shipping andstorage

LNG spills would not pollute land or water


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LNG -- Br inging i t t o m arke tNatural gas is produced in countries that have vast

supplies of gas with little demand

The gas is condensed to a liquid and transported

overseas by ship

When it reaches the receiving terminal, LNG is re-gasified

and is distributed via pipeline as ordinary natural gas

Upon reaching the receiving terminal, LNG is turned back into a

gas and sent out via pipelines as ordinary natural gas.


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There are over 100 LNG peak-shaving, production, transport and storage

facilities across the country. Only four of those are receiving terminals.

LNG -- long, safe h is t ory in U.S

* Peak-shaving facilities are used for storingsurplus gas to meet requirements of peakconsumption during winter or summer

Receiving terminalsPeak-shaving facilities*, other


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Aver age Annual U.S. Energy Use

NUCLEAR

8%

HY DROELECTRIC &

RENEWABLES

7%

COAL

23%

NATURAL

GAS

24%

PETROLEUM

38%

Nat ura l Gas -- k ey t o U.S. energy m ix

LNG


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Natura l gas -- m eet ing t he demand cha l lengeU.S. 1970 - 2025 (b i l l ion c ub ic feet / day)Natura l gas -- m eet ing the demand c ha l lengeU.S. 1970 - 2025 (b i l l ion c ub ic feet / day)

30

40

50

60

70

80

90

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Source: EIA Energy Outlook 2004

Consumption

Production

GAP

History Projections

North American supply cannotkeep pace with demand

1 BCF = enough to supply 4.3 million homes each day

EIA 2004 Winter Energy Outlook forecasts a 15% increase in naturalgas prices due to tight supplies and increasing demand

All domestic gas sources plus additional LNG imports are essential

to meet Americas growing natural gas needs


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LNG supply growing

Geographically diverse supply sources

Long-term LNG supply outlook robustSource: EIA

LNG -- d iverse g loba l supp l iesNew Global LNG Export Capacity Proposed or Under Construction


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Source: EIA Energy Outlook 2004

Grow ing U.S. LNG im port s

0

2

4

6

8

10

12

14

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

History Projections

LNG

Net U.S. Imports of Liquefied Natural Gas, 1970-2025(billion cubic feet/day)


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Robust training, standards, procedures and regulations for LNGoperations

Multiple layers of containment and security for LNG shipsMultiple containment and security layers for LNG storage

facilities, which are designed and constructed using proven

technology and materials

Collaboration with expert agencies: USCG, DOE, FERC, DHS, etc.

World has changed since 9/11

Multiple agencies working intensely and cooperatively to mitigate risksoverall and on site-specific basis

Safe and secure LNG imports ensure our future energy security

Safet y & Sec ur i ty Top pr io r i t ies fo r t he LNG indust ry

Industry and governments apply strict safety and security standards to

the construction of facilities, and the transportation and storage of LNG.


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Mar ine sa fe t y feat uresDouble-hull construction:6-10 ft between hulls

Cargo tanks provide 3rd

layer of protection

Gas detectors and safetyalarms for continuous

leak detection andmonitoring

Safety and security zonesin established port areas

Excellent safety record more than 40,000 voyages covering more thanthan 90 million miles without a major incident in LNGs 40+ year history.


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Robust LNG s t orage t ank des ign

Typical LNG storage tank design features multiple

containment measures.


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The Sandia report provides a scientifically supported validation of ourview that the risks of LNG are very low and manageable

- Pat Wood III, Chairman of the FERC

Safet y & Sec uri t y K ey Conc lus ions f romDOE Report by Sand ia Nat i onal LabSafe t y & Sec uri t y K ey Conc lus ions f romDOE Report by Sand ia Nat i onal Lab The study provides guidance on risk-based approaches for assessing

and managing risks of LNG spills on water

Key Conclusions: Risks from accidental events are small and manageable

Risks from intentional events can be significantly reduced throughsecurity, planning, prevention and mitigation measures

Risk prevention and mitigation measures should be based onsite-specific conditions

The most significant security measures are proposed for areaswhere ships are within 1,600 ft (500 m) of critical infrastructure

and population centers


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Cove Point, Maryland

Current ExpandedSendout (Bcf/d) 0.750 1.500Storage (Bcf) 6.800 7.800

Lake Charles, LouisianaCurrent Expanded

Sendout (Bcf/d) 0.630 1.800Storage (Bcf) 6.300 9.000

Elba Island, GeorgiaCurrent Expanded


Total U.S. LNGreceivingcapacity(2004):

2.36 Bcf/d Everett, MassachusettsCurrent Expanded


Ex is t ing U.S. rec e iv ing t erm ina ls

Source: DOE

More receiving terminals needed to meet growing gas demand


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Nor th Am er ica LNG Term inal St a t us -- August 2004

Source: DOEFall 2004

Market will determine how manywill be built, but 7-9 new receivingterminals are expected by 2025(NPC)


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Requirements

LNG receiving terminalsneed:

Federal, state and local

support

Adequate market

Deepwater accessibility &

harbor facility

Existing pipeline network

Si t ing LNG t erm ina lsIssues

Public perception Safety & security

Investment costs

Long lead times (5-7 years)

Permitting

NEPA, CWA, CAA, CZMA,

dredging


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Rigorous 12-18 month process- FERC lead for onshore terminals

- USCG lead for offshore terminals

NEPA Environmental ImpactStatement drives project

- Collaboration with state and federal

agencies

- Multiple opportunities for public input and

community meetings

13 resource reports required forterminal; 12 more for associatedpipelines

- Engineering design

- Impacts on fish, wildlife, vegetation

- Air and water quality and water usage

- Terminal and ship safety and security

- Impact on cultural resources;

socioeconomic effects

LNG projec t perm i t t ingState Agencies

Public Utility Commission,General Land Office,

Environmental Agencies,Historical Agencies, etc.

Federal AgenciesFERC, Coast Guard, MMS, etc.

Wheel shows 18 primary agencies for a terminal projectin Texas with pipeline extending into Louisiana

RRC

Parks & Wildlife

GLO

DWF

Cultural Development

Eco. Dev.

EPA

FWS

COE

MMSUSCG

DNR

Historical

Commission

DEQ

CEQ

CCC

NOAA FERC


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More LNG is needed to meet increasing U.S. demands for

natural gas

LNG will supplement, not replace, domestic gas production

Additional LNG receiving terminals are required in order to

accommodate growing demand

LNG is an extensively regulated industry with a proven

safety recordU.S. consumers and industry will benefit from new LNG

supplies

U.S. needs LNG for reliable

and affordable energy

Summary


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For more information contact or visit:For more information contact or visit:

www.LNGFacts.org 202-289-2253

Dick Sharples, Executive Director

Other resources:

www.FERC.gov www.DOE.gov

www.USCG.mil www.energy.uh.edu/lng

THE CENTER FORLiquef ied Nat ura l Gas


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Energy c onsum pt ionnergy c onsum pt ion

Americans consume 62 Bcf/D(Billion cubic feet per day)

1 Bcf = enough to supply4.3 million homes each day


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Power generation is a key driver for naturalgas demand growth

Nat ura l gas usage

Industrial 36%(Includes agricultural use)

Power 28%

Residential 22%

Commercial 14%


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LNG Global Demand in 2001 (Bcf/D)Total ~ 14 Bcf/d

Projected LNG Global Demand in 2020 (Bcf/D)Total ~ 55 Bcf/d (4 times increase)

Japan and Korea rely almost entirely on LNG for their naturalgas needsAnticipated rapid growth in LNG shipments to U.S., Europeand Asia to meet rising natural gas needs

U.S. offers the worlds most attractive market for LNG becauseof our existing nationwide pipeline infrastructure

Global LNG Use


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1.388

..627.672.619

.049 .110.213 .234

.448

1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: DOE

Bcf/d

1.723

2004*

U.S. LNG im port s - H ist o r ic a l2.0

1.5

1.0

0.5

*Through 2Q


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U.S. / Canada Na t ural GasMajor Transmission Lines

Source: NPC

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Introduction to LNG - The Center for LNG USA

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