While compressed natural gas (CNG) is little known in Australia, overseas it has been used as a successful method of transporting gas on land for over 40 years. Recently, CNG technology has also been applied to marine transportation.
CNG is natural gas compressed for the purpose of simplified transport and storage. Gas is compressed into special gas containment tanks (GCTs) normally to a pressure of 2,900 to 3,600 pounds per square inch (psi). The capacity of a GCT depends on the volume of the tank, working pressure, temperature and composition of the natural gas. GCTs are predominantly cylindrical, varying in diameter and length, and can be made of steel or lighter-weight composite materials.
Feedstock gas for compression can be sourced from a natural gas field (onshore or offshore), an existing natural gas transmission pipeline, coal seam gas, biogas, and flared gas.
CNG on the high seas
CNG marine transportation is a new concept in gas shipping, at a stage similar to that of liquefied natural gas (LNG) approximately 50 years ago.
The first CNG carrier was built and trialled in the late 1960s, but because of the high capital cost of the ship combined with very low gas prices at the time, the project was abandoned. The mode of transport is now being pursued with great interest and CNG shipping is at the threshold of being commercialised.
The technology has a wide scope for commercial applications in major worldwide natural gas markets. Several marine CNG projects are now pending, following classification society approvals for ship design and CNG containment system technology. Two CNG technology providers have set up manufacturing facilities for their gas containment tanks, with one already in production.
CNG marine technology is suited to both onshore and offshore reserves that cannot be produced because a pipeline solution is uneconomic or because an LNG option is too costly.
CNG has a market niche between pipelines and LNG. A CNG project is quicker to implement than LNG. CNG shipping can also monetise stranded gas reserves quickly and provide a temporary solution – creating a market history in order to justify a pipeline or LNG transportation later.
CNG technology is best suited for short to medium distance projects. The considered economic range for a marine CNG project is up to 2,000 nautical miles one-way, although up to 2,500 nautical miles can be an extreme range for chilled CNG shipping.
The gas reserves needed for a viable CNG shipping operation vary, depending on the volume per day to be supplied over the market distance.
For marine CNG projects, only modest gas reserves are needed – they can be as low as around 20 million cubic feet per day (MMcf/d). In addition, a CNG shipping project can have a shorter contract term of 10–15 years compared to LNG projects, which can be up to 30 years. Indicatively, the cost of CNG shipping typically can range from $US1 to $US2.50/million British thermal units (MMBtu) depending on the distance and the number of ships needed in a fleet. For small volumes and distances barge shipping may be the appropriate method.
The marine CNG supply chain consists of three main components:
The export upstream loading compression station with loading terminal (onshore or offshore)
The midstream shuttle shipping (re-deployable or movable assets)
The import downstream unloading terminal (onshore or offshore) and the unloading decompression station.
The biggest investment cost in the CNG supply chain is the midstream shipping component, contributing up to 85–90 per cent of the capital investment needed. This is compared to around 25–35 per cent of the total investment for LNG shipping, making CNG projects less risky as most of the investment is in the ship assets that can be supplied by a shipping contractor. This means less investment for a project is needed for the upstream and downstream fixed end assets than would be required for an LNG project, which involves expensive liquefaction and regasification facilities.
The CNG supply system is optimised, modelled and designed for each specific project case as each project requirement is different.
CNG carriers have a gas cargo containment system (GCS) comprising GCTs installed in a host ship hull. The system can contain many thousand GCTs of up to 30 metres in length arranged either horizontally or vertically, depending on the GCS technology design. One technology provider’s GCS consists of coiled pipe or wound pipeline.
CNG is normally carried in the GCSs at ambient temperatures – one displacement technology carries CNG at chilled temperatures, -20°F to -40°F, which may allow greater economic distances or more capacity of CNG cargo to be loaded. There are several GCSs on, or in the process of being developed for, the CNG shipping market.
CNG shipping services
Most GCS technology providers partner with a credentialed LNG shipping company and shipbuilder. This allows the shipping company the flexibility to offer a CNG or LNG shipping service, or both, to suit a natural gas delivery project.
CNG carrier cargo capacity is normally designed and optimised for a specific project – small, medium or large. A representative median cargo size is considered to be around 500 MMcf, however there are CNG carrier designs proposed for cargo capacity of 1 billion cubic feet (Bcf).
A small-scale GCS, for small ships or barges, can be with CNG skids, which are GCTs fitted with an ISO container or frame that can also be used for on-land storage – an advantage for an intermodal transport (sea and road) project requirement.
A disadvantage of a CNG solution may be the land storage for the delivered CNG – depleted gas fields are one storage solution for CNG. Canadian company TransCanada has developed a land storage system using pipeline technology. CNG is best delivered on a continuous, uninterrupted, basis. If storage is an issue in a natural gas delivery project, then small-scale LNG may be the alternative solution to consider.
Regional opportunities for marine CNG transportation
Opportunities for marine CNG transportation are worldwide, but predominately in Indonesia and South East Asia, the Caribbean, the Mediterranean, Sakahlin, Japan and Korea.
Several case studies for CNG transportation in Australasia have been completed in the past.
Between Papua New Guinea and Gladstone as an alternative or temporary gas supply solution to the proposed Papua New Guinea to Queensland gas pipeline project;
Between Gladstone and Bass Strait to New Zealand as a natural gas import alternative to LNG; and,
Between Papua New Guinea and Gove, Northern Territory for the Alcan Gove plant extension.
Next generation CNG – the high speed CNG carrier
A new technology using low drag naval architecture is being developed in the United States as the next generation CNG carrier that would enhance the transport CNG shipping economies. This is a high speed CNG carrier capable of 60+ knots service speed, three times that of a conventional type CNG carrier – capable of around 19 knots.
Given their high speed and a fuel consumption comparable to that of a conventional carrier over the same distance, the high speed CNG carriers could advantageously increase the economic range of CNG delivery by around three times, up to 4,500–7,500 nautical miles, thereby opening up potential new markets not previously considered within reach. Australian natural gas exporters would then have the option of a CNG or LNG supply system solution.
The high speed carriers could also reduce the number of carriers in a CNG delivery system, giving significant savings on the capital investment and overall costs.
There has been much interest shown in the high speed CNG carrier from the gas transport industry and a first shipbuilding order is currently pending. With natural gas energy in sustained demand despite the global financial situation, gas shipping has not been, and most likely will not be, affected by the downturn in trades as has conventional cargo shipping.