About Pipelines 101: What is LNG?

Canada has an abundance of cleaner-burning natural gas. Energy markets around the world are changing and demand for natural gas is growing – this is especially true in countries needing to replace high-emission fuels with cleaner alternatives to address air pollution.

“LNG” is an acronym for liquefied natural gas – natural gas that has been cleaned and cooled to minus 162 degrees celsius, bringing it to a liquid form.

Liquefying natural gas reduces its volume 600-fold – some companies compare it to shrinking a beach ball to the size of a ping pong ball. This decreased volume makes it easier to transport the gas overseas using special tankers.

 

Why LNG – and why now?

 

In their June 2019 annual market report, Gas 2019, the International Energy Agency notes global demand for natural gas grew 4.6 per cent in 2018, its fastest annual pace since 2010, with growth of 40 per cent forecasted for China alone in the next five years. Many countries in Asia need cleaner burning fuels, such as natural gas, as they seek to improve air quality.

Traditionally, Canada has sold our natural gas to U.S. markets. But, since 2007, U.S. demand has fallen due to their own shale gas production boom. As a result, the price for western Canadian natural gas is among the lowest in the world.

LNG is a key answer to finding new markets … but that requires building new processing facilities to liquefy natural gas, so it can be shipped to growing markets in Asia.

 

Steps to converting natural gas to LNG

 

Because Canadian LNG would be transported to European and Asian markets by ship, processing facilities are generally located next to waterways near an LNG loading terminal. The facility consists of a number of units, or ‘trains’ as they’re referred to in the industry. Each train has the capacity to produce a certain specified volume of LNG. Here’s an overview of the steps involved:

  • Producers use pipelines to move the natural gas from the production fields to LNG processing facilities.
  • Once at the facility, the gas goes through additional processing to remove any additional impurities left behind after field processing. The gas is also dehydrated to remove water vapour.
  • The dry gas then goes through refrigeration systems where it is liquefied into LNG. LNG is odourless, colourless, non-toxic, non-corrosive, and non-flammable.
  • The LNG is then pumped to insulated storage tanks, where it’s held until loading on to specially equipped, double hulled LNG carriers designed to maintain the low temperature.
  • Once the LNG arrives at its destination terminal, the liquid gas goes through a regassification process (returned to natural gas at atmospheric temperature) and is sent to consumers.

 

Opportunities for economic growth and employment

 

Canada’s LNG capacity is poised to grow. There are several LNG projects in the proposal stages, which, if realized, would create significant economic growth and employment for Canadians. At the time of writing this blog, LNG Canada (a joint venture among Shell, PETRONAS of Malaysia, PetroChina, Mitsubishi of Japan and KOGAS of South Korea) is the first of those projects to make a final investment decision. That decision will see two trains of an LNG processing and export facility built at Kitimat, British Columbia, with an approximate annual capacity of 12 million tonnes. Stay tuned for more.

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