Lng Presentation

U.S. Department of Energy

What is LNGProperties, Safety and

Performance History of LNG

NARUC LNG SessionJuly 29, 2003 -----Denver, CO

Donald JuckettOffice of Fossil EnergyUS Dept. of Energy

U.S. Department of Energy

LNG and Natural Gas

• Physical properties and behavior

• Hazards - Risks

• Myth and Legend - Knowledge and Common Sense

“It’s all about the chemistry and physics”

U.S. Department of Energy

LNG Properties

• Liquefied Natural gas is a Cryogenic Liquid

– LNG Density - 26.5 LB./Cu. Ft.

• Lighter than water (65 LB/Cu. Ft.)

• Other Cryogenic Liquids in our daily environment

– LNG Boiling point - (-259o F)

• Liquid Nitrogen - (-320o F)

• Liquid Oxygen - (-297o F)

U.S. Department of Energy

Natural Gas Properties

• Natural gas is lighter than air– Natural Gas Density - 0.47 [above (–)1400F]

– (Air - 1.0)

• Natural gas is buoyant under normal atmospheric conditions

U.S. Department of Energy

How is LNG manufactured?

• All existing commercial processes involve gas compression and refrigeration - – SMR – Single Mixed Refrigerant– PPMR – Propane Pre-cooled Mixed Refrigerant– Cascade Process – Discrete Cooling Circuits(3)

• Liquefy natural gas > 86% CH4, N2, C2, C3, C4

U.S. Department of Energy

LNG Storage Tanks

• DOT – OPS - RSPA

• Title 49--Transportation CHAPTER I--RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION, DEPARTMENT OF TRANSPORTATION

• PART 193--LIQUEFIED NATURAL GAS FACILITIES: FEDERAL SAFETY STANDARDS

There are more than 100 storage facilities in the U.S.

U.S. Department of Energy

LNG Transportation

• LNG is transported very near atmospheric pressure (typically 5 psi back pressure)

• At sea - in tankers of 100, 000 cubic meters or larger

• On land in specially constructed trucks

U.S. Department of Energy

LNG Tanker at Loading Berth

Photo: Courtesy of Phillips Petroleum

U.S. Department of Energy

Cross Section of LNG Tanker

U.S. Department of Energy

Myth and Legend

• “Catastrophic release of LNG creates a BLEVE -- boiling liquid expanding vapor explosion”

NOT TRUENOT TRUE

– In laboratory and open ocean combustion tests, there have been no documented cases of LNG BLEVEs

U.S. Department of Energy

Assessing The Hazard30 Years of LNG Experience

• LNG history in the US dates back to 1940’s• LNG tanker trade initiated with exports in 1969 • Eight marine incidents have resulted in spillage of

LNG - some hull damage due to cold fracture and no cargo fires

• Eight incidents not involving spillage - two from grounding - no significant cargo loss

• “LNG carriers are inherently much more robust than typical crude, fuel, and chemical tankers”

U.S. Department of Energy

Assessing The Hazard

• The opinion of experts indicate that a catastrophic failure caused by collision or terrorist act would result in numerous ignition sources close to the vessel and ignition and burn down would occur

U.S. Department of Energy

What Has Changed Since Sept. 11, 2001?

• Everyone is looking at their environment differently

• Potential threat to infrastructure has increased - Responsible parties are reacting

• Assumptions about what constitutes threats are being reassessed

U.S. Department of Energy

Assessing the risk

• Models

• Analogs

• Other related hydrocarbons/chemicals

U.S. Department of Energy

Assessing the risk

• Following suspension of LNG tanker dockings at the Distrigas (Tractebel) facility in Boston Harbor DOE, working with FERC, DOT (OPS), USCG, local and state public safety officials, commissioned a series of model runs intended to mimic a serious and catastrophic breaching of a single tank of an LNG carrier.

U.S. Department of Energy

Summary

• Fundamental properties and behavior of LNG and natural gas remain the same

• Risk scenarios do not produce results outside of those contemplated in previous EIS documentation for siting facilities and transportation of LNG

U.S. Department of Energy

Summary

• The US market for natural gas is growing - • Part of that market demand will be met by LNG• The experience of the LNG industry suggests that

hazards are manageable • 30+ years of experience with marine transport of

LNG - no major failures carriers and cargo inherently safer than other hydrocarbon fuels transported by ship

• Post September 11, 2001- new risk not new hazard

U.S. Department of Energy

1970’s and 2000’sWhat is different about this Market?

• US Gas market largely deregulated– Buyers and sellers dominate market

• Power market deregulation – new participants– Power utilities are entering the gas market

• Cast of players in US LNG market– Majors/Large non-integrated– Pipeline companies– Construction/shipbuilders

• More competitive LNG value chain– Value chain costs reduced

U.S. Department of Energy

1970’s and 2000’sWhat is different about this Market?

• Difficulty siting pipe to demand areas

• Projected increases in power needs with greater environmental sensitivities

• Worldwide LNG market

• Recent gas trading issues

• Technology, innovation – cost reduction

U.S. Department of Energy

Looking Forward – Issues and Opportunities

• New and diverse supply– Competition for capital – not every opportunity will materialize– Corporate portfolios – investment priorities compete internally

• Demand - Supply proximity– Is there a new paradigm for LNG use? - Boston example

• Market development– Base load demand?– Commodity trade development?

U.S. Department of Energy

Looking Forward – Issues and Opportunities

• Regulatory environment– Open access – Managed Access

– New technology options

– CZM

• Public perceptions– Siting

– Safety and Security

• National Petroleum Council Study

U.S. Department of Energy

Information Sources

• FERC documents• DOT documents• DOE National Laboratories• US Coast Guard• Energy Information Administration• SIGTTO Society of International Gas Tanker and

Terminal Operators• Various consultant reports• Industry sources• Other literature