Liquefied Natural Gas (LNG) dynamics will drive new port activity



Azfar Shaukat, Director – Oil & Gas, Mott MacDonald, Croydon, UK


The world is in turmoil, with major unrest in a number of strategically important countries. Conflicts in Iraq, Ukraine, Nigeria, Afghanistan and potential conflagrations in many other countries are affecting oil and gas supplies as well as consumer and investor confidence. The fragile world economy, painfully emerging from a well-set recession, cannot afford further energy supply interruptions and price shocks. It is no surprise therefore that energy supply security is high on the agendas of most governments and with that, diversity of supply from alternative sources of energy. Up to 2035, US$2 trillion per year will need to be spent to meet global energy needs, with more than half on new and alternative supplies to offset declining current production and replacement of existing assets.

Natural gas has had the highest demand growth of any fuel for several years and although the availability of large quantities of cheap US coal has slowed gas consumption, displaced by the rise of domestic shale gas in the US, the demand for gas is forecast to rise to 4,000 bcm per year in 2020.

The majority of gas is transported by long-distance pipelines and these are, by definition, fixed. In recent years pipelines have given rise to increasing concerns over security of supply and diversity of supply concerns. Thus, the need for diversified and flexible gas supply has seen an enormous increase in the number of Liquefied Natural Gas (LNG) import and storage terminals being built or planned, with almost every country with a coastline having at least considered such imports.

LNG is natural gas that has been compressed and cooled to -160ºC until it becomes liquid. In this state, one cubic metre of LNG is equivalent to six hundred cubic metres of natural gas, and it is this concentration that allows large quantities of natural gas to be transported costeffectively across the globe.

At present, there are almost 100 gas import terminals in operation worldwide, with another 150 bcm of LNG storage under construction. In addition, there are 29 liquefaction terminals in operation, with a further 24 planned. LNG is not new in Europe; there is already one production/ export facility in Norway, and 26 established import and storage facilities. Another seven are under construction with another 35 planned. All of these will require major infrastructure, principally new maritime, storage, pipeline and power facilities.

Cookie Policy. This website uses cookies to ensure you get the best experience on our website.