This article is part of a five-part series to be delivered by gasworld this week in the lead-up to World Environment Day 2021, taking place on Saturday 5th June.
In 1974 Finland gained access to a new source of energy – natural gas. Originally an industrial fuel, today natural gas is also used in energy production, industry and as a land and marine transport fuel. In its liquefied form (LNG), it can also be delivered outside the gas pipeline network because when natural gas is cooled to -162°C, it shrinks by 600 times in volume, meaning it can be transported by sea, road or rail.
LNG use has increased in recent years, particularly in maritime and heavy-duty road transport. It offers huge advantages, especially for ships in the light of ever-tightening emission regulations. In addition, LNG is also suitable for industrial use. When compared with oil, LNG provides industrial operators with the opportunity to achieve considerable reductions in emissions generated by their activities.
In an article for gasworld published in October last year, McKinsey company said that even before the Covid-19 pandemic, the liquefied natural gas (LNG) market was set for oversupply in 2020 and 2021 as new projects continued to grow capacity well beyond steady demand growth. The long-term outlook for LNG, however, is brighter than that of other fossil fuels because of its comparatively low cost and lower emissions from production and combustion.
Further to that, McKinsey wrote that a witch from more carbon-intensive fuels to gas can mean significant carbon abatement. In the US, for example, the switch from coal- to gas-fired power (facilitated by lower gas prices since 2008) abated more carbon emissions than all the renewable power capacity ever installed in the country.
There are significant variations in carbon intensity between gas supply chains, however, because of the different technologies used for gas production, liquefaction, and shipping. LNG buyers are increasingly concerned about these differences: 33% believe that emissions-intensity clauses will be standard within two to three years.
The LNG industry therefore has a strategic imperative to reduce emissions to sustain its role in decarbonising the energy sector. Using more energy-efficient equipment and reducing gas leaks are just some of the ways LNG players can decarbonise.
LNG producers can begin by quantifying their emissions in comparison to competitors and exploring the best options to reduce them. In many cases decreasing emissions and costs can go hand in hand by, for example, making energy-efficiency improvements. Plant electrification and renewable power supply typically have modest costs. And while emission offsets or carbon capture generally have higher costs, they may be justified by customer demand.
Read more: How to win in the new LNG environment
Today, news of new LNG developments, milestones and achievements are cropping up daily and many companies are now expanding and enhancing their LNG offers and capabilities. Focusing on a milestone that was achieved just yesterday, gasworld reports that Gasrec was celebrating the milestone of collecting the 10,000th tanker load of LNG from the National Grid facility on the Isle of Grain.
Across the pond into the US, gasworld also reported further LNG activity this week when Stabilis Solutions announced that it had acquired an LNG production facility in Port Allen, Louisiana. Strategically located in the eastern Gulf Coast region, the acquired facility has a nameplate production capacity of 30,000 LNG gallons per day, which will increase Stabilis’ total nameplate production capacity by approximately 30%.
Keeping to the US, and its commitment to LNG, gasworld also reported that JAX LNG is expanding its capacity by tripling liquefaction to 360,000 gallons a day and doubling LNG storage to 4 million gallons at its facility located along the St. John’s River in Jacksonville, Florida.
The expansion is expected to be ready by early 2022 and will support a new long-term LNG supply agreement with a major maritime company for its dual-fuelled ships. Announcing the news at the time, JAX LNG said the use of LNG as fuel allows maritime companies to move toward a cleaner energy future and comply with the International Maritime Organisation’s 2020 emissions regulations – further highlighting the fuels role in decarbonisation.