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Alaska Support Industry Alliance releases final LNG 101

This is the last in the Alaska Support Industry Alliance's LNG 101 Series. All volumes of the series can be found below and on the Alliance's website. Stay tuned for future educational series by the Alliance.

LNG 101 week ten: Outlook for the Future

LNG 101 week ten: Outlook for the Future

The future of LNG can be looked at from a global, national and Alaskan perspective. As we have discussed in many of the previous issues, the global demand for LNG has risen very quickly. From 1990-2010, gas rose from 19 percent to 22 percent of global energy supply. LNG is the fastest growing segment within gas. In that same time period, the gas share of the global electric supply has risen from 15 percent to 24 percent. The advantages of LNG as a fuel are more pertinent now than ever before. Japan needs new sources of power generation after...

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LNG 101 week nine: Spot Market Pricing and Economics

LNG 101 week nine: Spot Market Pricing and Economics

Spot Market: A public financial market in which financial instruments or commodities are traded for immediate delivery. Spot markets can operate wherever the infrastructure exists to conduct a transaction. The LNG spot market began to develop in the 1990s. Extra capacity caused by the start-up of new projects and the expiration of old contracts at existing facilities led to LNG cargo becoming available for purchase on a short-term basis. The use of LNG to meet seasonal demand by countries like Spain and Korea also contributed to the growth of...

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LNG 101 week eight: Buyers and Sellers

LNG 101 week eight: Buyers and Sellers

Buying LNG is usually accomplished through a short-, medium- or long-term contract. LNG may be purchased as an “individual cargo” — also called a spot transaction. Buyers and sellers each can handle the shipping of the LNG once a contract is in place. “Free on Board,” or FOB, describes a sale where the buyer arranges for the shipping. CIF, or Cost, Insurance, Freight, describes a transaction where the seller arranges for shipping. DES, or Delivered Ex Ship also describes a transaction where shipping is arranged by the seller. In 2012, there...

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LNG 101 week seven: Role of LNG in world energy supply

LNG 101 week seven: Role of LNG in world energy supply

International Energy Outlook 2013 projects that world energy consumption will grow by 56 percent between 2010 and 2040. Much of the growth in energy consumption is projected to occur in countries outside the Organization for Economic Cooperation and Develop­ment known as non-OECD. In these non-OECD countries, demand is driven by strong, long-term economic growth, and is expected to increase by 90 percent. In OECD coun­tries, the increase is predicted to be 17 percent. China accounts for the largest share of the growth in global energy use,...

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LNG 101 week six: terminals: operating & under construction

LNG 101 week six: terminals: operating & under construction

As of October 2013, there are 32 on-stream LNG liquefaction plants in the world, with 13 under construction and 17 others planned.  There are 96 on-stream regasification terminals, with 18 under construction and 25 others planned. The global list of regasification terminals in the planning stage has shrunk from an all-time high of 47 to 25 in the last year, as several potential projects have either been suspended or canceled. Liquefaction plants in the planning stage were reduced from 21 to 17 in the same time period. Australia and Malaysia...

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LNG 101 week five: Regasification Process and Terminals

LNG 101 week five: Regasification Process and Terminals

The LNG chain ends with the unloading, storage and vaporization of the gas in a regasification terminal. Liquefied natural gas is received and offloaded from an LNG carrier into storage tanks ranging in capacity from 100,000 to 160,000 cubic meters. These maintain the gas in the liquid state at minus-163° Celsius. Regasification involves gradually re-warming the liquefied gas until its temperature rises above 0° Celsius. The process takes place at high pressure through a series of evaporators, the most energy-efficient technique when the...

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LNG 101 week four: Shipping LNG around the globe

LNG 101 week four: Shipping LNG around the globe

Natural gas is normally shipped by pipeline, but it is impractical to build a pipeline from the Middle East or Africa to the United States and other locations. This logistical challenge has led to the creation of special ships capable of carrying the liquid form of natural gas — LNG. LNG carriers are “tank ships” — merchant vessels designed to transport liquids in bulk. The first LNG carrier was launched from the Calcasieu River on the Louisiana Gulf coast in January 1959 with the world’s first ocean cargo of LNG and it sailed to the UK where...

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LNG 101 week three: The Upstream Chain

LNG 101 week three: The Upstream Chain

The LNG process, one that is much more complex than pipeline transportation, is often referred to as the “LNG chain.” It is made up of distinct parts: upstream, liquefaction plant, shipping, regasification and gas distribution. In this issue, we’ll discuss the gathering and processing aspects of the chain (upstream), as well as the liquefaction plants. Of course, the entire process begins with a decision to develop a gas field. That decision is typically related to the distance from the gas field to market, if a pipeline is available or if...

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LNG 101 week two: Global demand on the rise

LNG 101 week two: Global demand on the rise

Why is there a global demand for LNG? The answer is simple. The world needs more energy and wants clean energy, safe energy and affordable energy. The global population is predicted to rise from 7 billion to 9 billion in 2050 and the world will obviously need more energy. LNG is a safe, clean, and efficient energy source and is already part of the global energy mix. According to the International Group of Liquefied Natural Gas Import- ers, since 2006, China, Brazil, Chile, Dubai, Kuwait, the Netherlands, Canada and Mexico all became...

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LNG 101: What it is, who uses it, and why

LNG 101: What it is, who uses it, and why

Liquefied natural gas, or LNG, is natural gas converted to its liquid form. When natural gas is cooled to minus-259 degrees Fahrenheit, it becomes a clear, colorless, odorless liquid. LNG is produced by taking natural gas from a production field, processing it to remove impurities, and then liquefying the processed gas. LNG isn’t corrosive or toxic. It doesn’t explode or burn as a liquid. Natural gas is primarily methane, with low levels of other hydrocarbons, water, carbon dioxide, nitrogen, oxygen and some sulfur compounds. During the...

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