SPE 114935

Gas Transportation: Present and Future

J. Rajnauth, K. Ayeni, and M. Barrufet, SPE, Texas A&M University

Copyright 2008, Society of Petroleum Engineers

This paper was prepared for presentation at the CIPC/SPE Gas Technology Symposium 2008 Joint Conference held in Calgary, Alberta, Canada, 16–19 June 2008.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its
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Abstract
Natural gas is a versatile form of non-polluting fuel. With just over a dozen nations accounting for 84% of the world-
wide production, access to natural gas has become a significant factor in international economics and politics. The major
difficulty in the use of natural gas is transportation and storage because of its low density. Despite this, natural gas production
has seen tremendous growth over the years. This has been due to large amount of natural gas reserves, the wide variety of
uses of natural gas and carbon dioxide emissions from natural gas energy generation are far less.
In the past, the natural gas recovered in the course of producing petroleum could not be profitably sold, and was simply
flared. This wasteful practice is now illegal in many countries. The most common method for transporting natural gas was
high pressure in underground pipelines. Additionally, countries now recognize that value for the gas may be achieved with
LNG, CNG, or other transportation methods to end-users in the future. In many cases the gas is now re-injected back into the
formation for later recovery. Transportation is now a very important and key role in the supply chain for natural gas and the
big challenge is to transport gas to markets at the lowest cost without too much environmental risks. Now re-gasification at
the market is important when selecting the mode of transportation of natural gas.
This paper reviews, analyzes and provide insight to present and future gas transportation methods. These options of
transporting gas from oil and gas field to markets include pipelines, liquefied natural gas, compressed natural gas, gas to
solids (hydrate), gas to liquids, gas to wire and other gas to commodity methods. The paper provides an overview of the
challenges facing present transportation modes, and discussion on possibilities for improvement via new technology or new
gas transport options. Another focus of the paper is to compare and highlight some critical factors affecting the different
means of transportation of natural gas. These include economics, markets, gas concentrations, environmental risks and re-
gasification issues.

Introduction
The efficient and effective movement of natural gas from producing regions to consumption regions requires an
extensive and elaborate transportation system. In many instances, natural gas produced from a particular well will have to
travel a great distance to reach its point of use. Transportation of natural gas is closely linked to its storage, as well; should
the natural gas being transported not be required at that time, it can be put into storage facilities for when it is needed.
The factors affecting the type of gas transportation used include gas reserves, time frame to monetize the gas, the
distances to the markets, investments and infrastructure available and gas processing. Stricter environmental laws’ including
the prevention of flaring gas has now pushed for ways to monetize associated gas. The possible ways of transporting natural
gas to markets are pipelines, liquefied natural gas, compressed natural gas, gas to solids (hydrate), gas to liquids, gas to wire
and other gas to commodity methods. Table 1 shows the stages of the different gas transportation methods.
Gas reserves (2005) are in the range of 6500 tcf but what is extremely significant is the 40% or 2500 tcf that is
considered stranded gas. These small pockets of gas reserves are found mainly in Russia, Qatar, Australia, Alaska and
Trinidad (Fleisch). There is normally a large amount of associated gas that is re-injected or flared however nowadays many
countries have banned the flaring of natural gas in large quantities. There is therefore a thrust for economic ways of
transported stranded gas.
2 SPE 114935

Table 1-Stages of present gas transportation modes

Mature Developing Future
Pipeline GTL Gas Hydrate
LNG CNG
Gas to Products Gas to Wire

Pipelines
For many years pipelines have been the most convenient way to transport natural gas. Today pipeline transportation still
remains a significant mechanism for gas delivery to markets. The transportation system for natural gas consists of a complex
network of pipelines, designed to quickly and efficiently transport natural gas from its origin, to areas of high natural gas
demand. Compressor stations are positioned along the pipeline route to maintain an efficient gas transportation process.
Pipelines can measure anywhere from 6 to 56 inches in diameter. The completion of the 56” Cross Island Pipeline (CIP) in
Trinidad makes it one of the largest diameter pipelines in the world. Pipelines are operated at pressures normally > 700 psig
and this depends on the age of the pipeline and construction material used. The installation cost of pipelines range from US
$1-6 million per mile. The actual price depends on factors such as the diameter, whether offshore or onshore, mountains or
flat land, distance etc.
Natural gas may be transported in pipelines underground, above ground and subsea. Export pipeline inland is extensive
throughout Europe, and North America. Constructing natural gas pipelines requires a great deal of planning and preparation.
In addition to actually building the pipeline, several permitting and regulatory processes must be completed. The technology
for pipeline has evolved in terms of pipeline material, installation techniques, Supervisory Control and Data Acquisition
(SCADA), surveillance, and automation systems (Verghese, 2003). New pipelines are being constructed in several regions
around the world.
Table 2 is a compilation of some current and proposed gas pipeline projects by regions. Pipeline transportation of natural
gas is still a very popular means of transporting gas.

Table 2-Some current and new gas pipelines projects by regions

Asia Middle East/North Americas North Sea/Europe Africa
Africa
Kazakhstan gas Hamriyah gas Western US gas Medgaz pipeline- Mozambique to
pipeline pipeline project pipeline Algeria-Spain South Africa gas
pipeline
Statoil Hydro Arab gas pipeline- Phoenix area Hungary to
Trans-Adriatic Egypt to Jordan pipeline expansion Romania gas
pipeline pipeline
Sri Lankan Abu Dhabi- Greece to Italy
pipeline Fujairah pipeline Pipeline

In general, natural gas pipelines can be classified in three categories depending on purpose:
(i) Gathering Pipelines - Group of smaller interconnected pipelines forming complex networks with the purpose of bringing
the natural gas from several nearby wells to a treatment plant or processing facility. In this group, pipelines are usually short
(couple of hundred meters) and with small diameters. Also, sub-sea pipelines for collecting product from deep water
production platforms are considered gathering systems.
(ii) Transportation Pipelines – These are mainly long pipes with large diameters, moving products between cities, countries
and even continents. These transportation networks include several compressor stations in gas lines.
(iii) Distribution Pipelines – Pipelines composed of several interconnected pipelines with small diameters, used to take the
products to the final consumer. Feeder lines distribute gas to homes and businesses downstream. Pipelines at terminals for
distributing products to tanks and storage facilities are included in this group.

Pipeline Transportation Process

Pipeline networks are composed of several pieces of equipment that operate together to move products from location to
location. The main elements of a pipeline system are shown in Fig. 1 and these include:
(i) Initial Injection Station - is the beginning of the system, where the product is injected into the line. Storage facilities,
pumps or compressors are usually located at these locations.
(ii) Compressor/Pump Stations - Pumps for liquid pipelines and compressors for gas pipelines are located along the line to
move the product through the pipeline. The location of these stations is defined by the topography of the terrain, the type of
product being transported, or operational conditions of the network.
(iii) Partial Delivery Station or Intermediate Stations - these facilities allow the pipeline operator to deliver part of the product
being transported.
(iv) Block Valve Station - These are the first line of protection for pipelines. With these valves the operator can isolate any
SPE 114935 3

segment of the line for maintenance work or isolate a rupture or leak. Block valve stations are usually located every 20 to
30 miles (48 km), depending on the type of pipeline. The location of these stations depends exclusively on the nature of the
product being transported, and the trajectory of the pipeline and/or the operational conditions of the line.
(v) Regulator Station - This is a special type of valve station, where the operator can release some of the pressure from the
line. Regulators are usually located at the downhill side of a peak.
(vi) Final delivery station or Outlet stations/terminals - this is where the product will be distributed to the consumer. It could
be a tank terminal for liquid pipelines or a connection to a distribution network for gas pipelines.

Fig. 1- Pipeline Transportation Schematic (http://en.wikipedia.org/wiki/Pipeline_transport)

If there is a shut down of the pipeline, the production from the well, processing and receiving terminals will also be shut
down. Pipelines transportation faces risk of sabotage, other human and natural destruction. It is believed that pipeline
transportation is uneconomic for small amount of reserves.

Economics
Table 3 shows some of the proposed pipeline infrastructure around the world. This data compiled gives the sizes of
pipeline, length of pipeline and the estimated cost.

Table 3-Some proposed pipelines with estimated cost

Pipeline Size/ inches Length / mile Cost/ US million
Trinidad to Tobago 176 550
Trans-Afghanistan 56 1044 3,500
Pipeline
Trans-Saharan Gas 2734 10,000
pipeline
Kazakhstan gas 3,800
pipeline
Medgaz pipeline- 48/24 470 1,350
Algeria-Spain
Turkmen-China gas Pipe network 4161 13,000
pipeline
4 SPE 114935

Estimated Cost vs Length of Pipeline y = 3.2842x

2
R = 0.9875
16000

14000

12000

Cost US $ Million 10000

8000

6000

4000

2000

0
0 500 1000 1500 2000 2500 3000 3500 4000 4500
Lenght of pipeline / mile

Fig. 2 – Estimated Pipeline Cost

The graph above was constructed from data in table 3 above. The estimated current pipeline cost is approx. US$3.28
million/mile. Again this cost is dependent on several variables cited above.

Storage Capabilities
Gas can be temporarily stored in the pipeline system itself, through a process called line packing. This is done by
packing more gas into the pipeline via an increase in the pressure. During periods of high demand, greater quantities of gas
can be withdrawn from the pipeline in the market area, than is injected at the production area. The process of line packing is
usually performed during off peak times to meet the next-day’s peaking demands. This method, however, only provides a
temporary short-term substitute for traditional underground storage.

Environment
Pipelines conveying flammable or explosive material, such as natural gas pose special safety concerns. Pipelines can be
the target of vandalism, sabotage, or even terrorist attacks. In war, pipelines are often the target of military attacks, as
destruction of pipelines can seriously disrupt enemy logistics. Since gas pipelines are an important asset of the economic
development of almost any country, it necessary to have policies to ensure the safety of these assets, the population and
environment where these pipelines run. Leak detection systems are necessary for gas pipeline systems.
There are also social problems that affect the operation of pipelines. In many countries, product theft is a problem for
pipeline companies. It is often to find unauthorized extractions in the middle of the pipeline. In this case, the detection levels
should be under 2 percent of maximum flow, with a high expectation for location accuracy. Different types of technologies
and strategies have been implemented, from walking the lines, up to satellite surveillance. The most common technology to
protect these lines from occasional leaks is known as Computational Pipeline Monitoring System.

Liquefied Natural Gas LNG

Liquefied natural gas or LNG is natural gas that has been converted to liquid form for ease of storage or transport. LNG
is gas cooled to temperature of about -162 oC and has a volume of 1/600 that of the gas at room temperature. LNG can be
transported on land or by sea. It can be transported by specially designed cryogenic sea vessels (LNG vessels) or cryogenic
road tankers. The liquefaction process removes oxygen, carbon dioxide, sulfur compounds and water. LNG is loaded onto
ships and delivered to a regasification terminal, where the LNG is reheated and turned into gas. Regasification terminals are
usually connected to a storage and pipeline distribution network to distribute natural gas to local distribution companies
(LDCs) or Independent Power Plants (IPPs). A full LNG chain consists of a liquefaction plant, low temperature and
pressurized transport ships and a regasification terminal. LNG provides a safe and efficient way of transporting natural gas
over long distances, particularly from gas producing nations with insufficient pipeline infrastructures.
Natural gas liquefaction dates back to the 19th century, when British chemist and physicist Michael Faraday
experimented with liquefying different types of gases, including natural gas. German engineer Karl van Linde built the first
practical compressor refrigerator machine in Munich in 1873. Among the first companies to recognize the potential of gas,
the Ohio Company discovered large reservoirs of gas in remote areas of Wyoming in 1915. As early as 1917, the liquefaction
method was proven and in 1920 they pioneered the development of natural gas pipelines which brought the gas to consumers.
In the 1920's, Frank Phillips, founder of Phillips Petroleum, recognized the importance of natural gas as a source of valuable
liquid by-products such as propane and butane.
SPE 114935 5

Based on experiments begun in 1937, the first large-scale cryogenic liquefaction project began in 1941 in Cleveland,
Ohio. The first ship transport of LNG began in 1954 on an experimental basis with shipments from Louisiana to Canvey
Island (UK) where the first LNG import terminal was established by British Gas. The first large-scale trade began in 1964
when British Gas began importing by ship from Algeria.
This first commercial base-load international LNG project was for 40 billion cubic feet (bcf) per annum over a 15-year
contract period.
The LNG supply chain includes:
Gas Production – the process of transporting gas from the reservoir to the LNG Plant.
LNG Production – the conversion of the natural to a liquid
Shipping – Transporting the LNG from the plant to the markets by specialized ships
LNG regasification terminals – the conversion of the LNG back to the gaseous phase
Gas Utilization – distribution of the gas to end users.
The established process technologies are Conoco Phillips (Optimized Cascade) and APCI (Propane Precooled). New
Processes technologies include: APCI (AP-X), Linde (MFC), Shell (PMR), IFP (Liquefin) (Morgan).
One of the popular processes is the Phillips Optimized Cascade Process which was developed by Phillips Corporation.
This process involves cooling the gas and running it through successive levels of propane, ethylene and methane
refrigeration. Each chilling cycle reduces the temperature of the gas until it eventually liquefies. The liquefaction plant is
somewhat like a huge refrigerator with giant compressors, condensers, pressure expansion valves and evaporators. A single
liquefaction unit or train may contain hundreds of meters of cold-resistant piping. As a liquid, the LNG is processed to
atmospheric pressure. Heavy hydrocarbon liquids removed during liquefaction are passed on for further processing.
Offshore floating LNG production has generated interest and large floating production, storage, and off-loading (FPSO)
facilities appears to be increasingly more likely in the future. Offshore natural gas liquefaction has different process
requirements to the traditional on-land base load plants. While thermodynamic efficiency is arguably the most important
process selection criteria for large onshore natural gas liquefiers, other factors become more important for offshore projects.
Thermodynamic efficiency is likely to remain critically important. However, for offshore applications criteria such as
compactness and process safety become more significant considerations. The high efficiency pre-cooled mixed refrigerant
cycles that dominate onshore LNG installations will likely not meet the needs of the future mobile and offshore liquefaction
projects.
Below shows several tables of LNG information by export region.

Table 4-Atlantic Basin Exporters of LNG

Country No of LNG Possible New Present Total Total Cost of
Trains Trains Capacity Present Trains/
MMT/Year US $ billion
Trinidad 4 14.8 3.6
Algeria 3 (3 other trains 3 3.3
were destroyed in
2004)
Nigeria 6 2 22 5.1
Equatorial 1 1 3.4 1.0
Guinea
Libya 1 2.7
Egypt 1 1 5 1.3
Norway 1 4.1
Peru 1 4.4 2010 start up

Table 5-Pacific Basin Exporters of LNG

Country No of LNG Possible New Present Total Total Cost of
Trains Trains Capacity Present Trains/
MMT/Year US $ billion
Indonesia 14 2 34
Malaysia 8 22
Australia 4 3 13.1
Brunei 5 7.2
Darussalam
USA 1 1
Russia 1 2 7.5
6 SPE 114935

Table 6-Middle East Basin Exporters of LNG

Country No of LNG Possible New Total Capacity Total Cost of
Trains Trains Present Trains/
US $ billion

Qatar 5 2 20.7

Oman 2 3.3 2

United Arab 3 5.7

Emrates

There are presently approximately 49 existing regasification terminals and 28 proposed terminals. LNG activities have been
expanding and continue to expand.

Economics
The most important infrastructure needed for LNG production and transportation is an LNG plant consisting of one or
more LNG trains, each of which is an independent unit for gas liquefaction. Until 2003, LNG prices have closely followed oil
prices. Since then, LNG prices to Europe and Japan, have been lower than oil prices, though the link between LNG and Oil is
still strong In contrast, recent prices in the US and UK markets have skyrocketed then fallen as a result of changes in supply
and storage.
Price arbitrage has not yet led to a convergence of regional prices and to a global market. For the time being, the market
is a seller’s market (hence net-back is best estimation for prices). The balance of market risks between the buyers (taking
most of the volume risks through off-take obligations) and the sellers (taking most of the value risks through indexation to
crude oil and petroleum products) is changing.
LNG projects are billion dollar projects. An estimated break down of the cost is shown below (Morgan)

Table 7- Breakdown of LNG Costs

Average Cost/ US Billion
Gas Gathering 1-1.5
Liquefaction (1 train) 1-1.5
Ships (5) @ $180 million 0.9
Regasification 0.5
Total 3.4 -4.4

Fig. 3 below was constructed from data compiled in Table 4. It shows that a construction of a 5MMT/y LNG plant would
cost approximately US $1.45 billion.

Estimated Cost vs Capacity for LNG Plants

y = 0.2903x

2.5

2
US $ Billion

1.5

0.5

0
0 1 2 3 4 5 6 7 8 9
Capacity (MMT/Y)

Fig. 3 – Estimated LNG Costs for different Plant size (Liquefaction)

SPE 114935 7

Environmental
LNG is non-toxic, odorless, non-explosive and non-flammable in its liquid state. In fact, it will only burn after it has
been re-gasified and mixed in the proper proportion with air. Natural gas burns only within the narrow range of a 5 to 15
percent gas-to-air mixture. Liquefied natural gas has about 45 percent the density of water, so if spilled onto a waterway, it
will stay on top of the water until it evaporates into the atmosphere. Maintaining LNG safety is a top priority for several
federal and state agencies, including the U.S. Coast Guard.
Some environmental groups argue strongly against the use of LNG. One (unspecified) study concluded that a proposed
LNG terminal proposed near California will emit 25 million tons of greenhouse gases per year. On the West Coast of the
United States where up to five new LNG importation terminals have been proposed, environmental groups, such as Pacific
Environment, Ratepayers for Affordable Clean Energy (RACE) and Rising Tide have moved to oppose them.

Regasification
Regasification terminal are very costly and countries have to consider this huge investment cost. There are now ships that
have regasification capabilities. Recently ship-to-ship transfer transfers have been carried out and involved the transfer of
LNG from the LNG regasification vessel (LNGRV) to a conventional LNG carrier.

Gas to Wire
Gas to wire has an option given much consideration by many researchers and countries. In the process, natural gas is
converted to high voltage direct current and then transported to markets. For offshore operations, high power lines to reach
the shoreline seem to be very costly at this time. For long distances, DC cables are recommended since DC requires less core
number (Watanabe, 2006). Developments in AC to DC conversion technology can change the entire economic picture for
Gas to Wire. In this system, a generator shut down should not cause the entire production facility to shut down especially
when using associated gas. If there is a problem with the operations, the system must allow for a safe, quick shut down and
equivalent quick and easy start up.
There are some proposals to have the gas transported by pipe from offshore field to onshore where power generation at
much higher efficiencies can be done and then transported to customers. This has several advantages including reducing
operating costs and risks.
Japan Oil, Gas and Metals National Corporation (JOGMEC), Hitachi Ltd., JGC Corporation, Toyohashi University of
Technology and Arabian Oil Company have completed a research project and feasibility study into the Gas to Wire system
concept. This project utilized a high efficiency of totally 50% thermal efficiency, low cost and low emission GTW by
applying Gas Turbine Combined Cycle System (GTCC). Converter stations are necessary and are equipped to convert from
AC to DC and from DC to AC. The design of a practical low cost gas treatment facility and a new small burner were done in
this study. Results from the study suggested that Gas to Wire may be viable for small gas fields and associated gas with
reserve of 10 bcf to 1 tcf. GTW makes a marginal field valuable and energy loss for transportation is less (Watanabe, 2006).
Algeria has been involved in GTW technology and is set to increase GTW schemes in the future.

Compressed Natural Gas (CNG)

CNG is presently used in some country for vehicle transport as an alternative to conventional fuel such as gasoline and
diesel. CNG can now be a useful for monetizing offshore gas reserves and provides an effective way for short transportation
distances. Compressed natural gas is gas compressed at high pressures. Typical ranges of pressures are 1800 psig for rich gas
to 3600 psig for lean gas.
The CNG supply chain includes:
Gas Production
Compression facilities
Refrigeration/ Ship loading facilities
Transportation
Ship receiving facilities
Storage facilities (if the vessel is not used as storage)
Downstream gas distribution facilities
CNG is technically simple, requiring lower requirements for facilities and infrastructure. Several high pressure and
containment technologies have been proposed. The CNG concepts that are found in the literature include:
Coselle by Cran & Stenning
VOTRANS by Enerseas
GTM by TransCanada
CRPV Technology
PNG Technology
8 SPE 114935

Coselle by Cran & Stenning

The first design is the Coselle concept that consists of long coils of small diameter pipes in a carousel (Fig. 4). This
configuration allows stacking of 6-8 units and also protects the pipe from damage. A typical single Coselle consists of 10
miles of 6” diameter high-strength line pipe that has been coiled into a reel-like support structure called a carousel. Natural
gas is contained in the pipe at a pressure of about 3300 psig. Each Coselle can contain approximately 3.3 MMscf of natural
gas at near ambient temperature. This is an extremely large amount of gas for a single container. Several coselle ship designs
(Fig. 4) have been developed, ranging from a 16-coselle ship transporting about 50 mmscf of gas up to a 144-coselle ship
transporting about 450 mmscf of gas.

Fig. 4-Coselle CNG Transportation System (www.coselle.com)

In 2006, the world’s first CNG carrier ship was approved for construction and since then, flexible CNG fleets consisting
of ships that contain 16, 25, 84, and larger numbers of Coselle transportation and storage modules have been evaluated. The
storage capacity of these ships, range from 50 mmscf to 275 mmscf.

VOTRANS by Enerseas
Another proposal for CNG transportation is the Votrans (Volume Optimized Transport and Storage) concept. In this
design, ships carry straight, long large diameter pipes in an insulated storage package (Fig. 5). Votrans technology provides
the unprecedented capability of moving up to 2 billion cubic feet of CNG per ship over distances up to 4,000 miles.

Fig. 5-Votrans Concept (www.enersea.com)

Over the last several years, rigorous testing of the CNG Votrans cargo tanks included the manufacture of several full-
scale CNG cylinders. Votrans CNG vessels can accept a wide variety of gas compositions directly from production facilities,
thus minimizing costly field gas processing.

GTM by TransCanada
The Trans Canada Gas Transport Module (GTM) (Stephen, 2006) uses composite reinforced pressure vessel technology
lining a steel hull with a glass fiber laminate. The vessel can be used to transport natural gas by rail, marine and road services.
The general layout is shown in the fig. 6 below. The technology is a proven one and it’s been applied to the design of
underground gasoline storage tank, fireman breathing tanks etc.
SPE 114935 9

Fig. 6- GTM concept by TransCanada (http://www.transcanada.com)

Transcanada Barge Mounted Modules

Table 8 below shows pressure vessel specifications for this concept. A 42” GTM prototype was built and tested. Other
sizes are possible but the sizes shown below are based on optimal economics.

Table 8- GTM vessel specifications

Nominal 80-ft Nominal 40-ft Iso 40-ft Tube Iso 20-ft Tube
Weight (lbs) 38,135 20,285 19,345 9,951
Volume (ft3) 693 355 338 160
Dimensions 42” dia X 76 ft. 42” dia X 38 ft. S/S 42” dia X 36 ft. S/S 42” dia X 16 ft. S/S
S/S
Volume Carried @ 3000 172,000 88,000 84,000 40,000
psi (lean Gas) (scf)

Conceptual design of ship, barge, truck, and rail car mounted modules are available but a marine barge based pilot
project is presently in the design stage. GTM provide more market flexibility and have ~ 40% less weight per volume
transported than competing CNG transport alternatives built to the same standards.

PNG Technology
Pressurized Natural Gas vessel (PNG) (Spano, 2006) is being developed by Knutsen OAS. This technology is made up
of vertical pipe-type steel CNG bottles stacked in the holds of a ship (Fig. 7). The gas is stored at extremely high pressure
(greater than 3500 psig) and at ambient temperature. Three different carriers have been designed.

Fig. 7- Knutsen Vertical Steel Cylinders

CRPV Technology
The Composite Reinforced Pressure Vessel (CRPV) is developed by Trans ocean gas. The technology is based on the use
of fiber reinforced plastic (FRP) vessels to transport CNG by ship. The composite pressure vessels are lighter than steel
10 SPE 114935

vessels. Steel truss frames are used to house and store a number of FRP bottles in modules. The bottles are connected with
stainless steel manifolds. This is shown in Fig. 8.

Fig. 8- Storage Module with CRPV

The table below (Spano, 2006) shows a comparison of the five different concepts for transporting CNG
Table 9
Characteristics Coselle VOTRANS GTM PNG CRPV
Capacity 50 mmcf – 1.2 bcf 200 mmcf – 2 bcf 1 bcf 2 MMSm3 / 30 150 mmcf – 1.2
MMSm3 bcf
Distance 0 – 2000 miles 200 – 4000 miles 0 – 3000 miles
Concept About 144 coils of Tubes of large HSLA Steel Steel cylinders of Vessels in PEAD
small diameter, diameter vessels coated 1m diameter and with stainless steel
typically built contained in with glass fibers length 19 – 38 m ends coated with
with 1,600 km pf insulated boxes glass or carbon
tubes 6” Diameter and filled with fibers
Nitrogen
Pressure 3,600 psi 1,300 psi 3,600 psi 250 bar 3,600 psi
Temperature 0oC -30oC ambient ambient 5 oC
Ship Dimension Panamax Aframax 32,000 dwt 20,000 dwt Panamax
570 mmcf 300 - 500 mmcf 500 mmcf

It is also possible to truck the compressed natural gas to land base markets. Production from the Galt field in Quebec was
initiated by using the compressed natural gas (CNG) trucking system. Daily production of natural gas from this field by the
Galt #1 and Galt #3 wells have a productive capacity of approximately 37 thousand cubic feet a day. Due to the lack of a
pipeline infrastructure, the trucking of compressed natural gas was a viable and economic alternative in this case study
(Aguilera, 2006).

Gas to Liquids
In the gas to liquid technology, natural gas is converted to a liquid such as syncrude (synthetic crude oil), methanol and
urea and then transported. In this way, natural gas can be use to produce bulk petrochemicals, including methanol and
ammonia, however these are generally for small users of the gas reserves with limited markets. GTL technology can be useful
because liquid is cheaper to transport, market, and distribute to large markets. These can be moved in existing pipelines or
products tankers and even blended with existing crude oil or product streams.
GTL projects are scalable, allowing design optimization and application to smaller gas reserves. The key influences on
their competitiveness are the cost of capital, operating costs of the plant, feedstock costs, scale and ability to achieve high
SPE 114935 11

utilization rates in production. GTL should not compete with conventional oil production unless the gas has a low
opportunity value and is not readily transported.
GTL not only adds value, but capable of producing products that could be sold or blended into refinery stock as superior
products with less pollutants for which there is growing demand. It is technically feasible to synthesize almost any
hydrocarbon from any other; and in the past five decades several processes have been developed to synthesize liquid
hydrocarbons from natural gas.
There are two broad technologies for gas to liquid (GTL) to produce a synthetic petroleum product, (syncrude): a direct
conversion from gas, and an indirect conversion via synthesis gas (syngas). The direct conversion of methane, (typically 85
to 90 per cent of natural gas), eliminates the cost of producing synthesis gas but involves a high activation energy and is
difficult to control. Several direct conversion processes have been developed but none have been commercialized being
economically unattractive. Indirect conversion can be carried out via Fischer-Tropsch (F-T) synthesis or via methanol.
The syngas step converts the natural gas to hydrogen and carbon monoxide by partial oxidation, steam reforming or a
combination of the two processes. Conversion of the syngas to liquid hydrocarbon is a chain growth reaction of carbon
monoxide and hydrogen on the surface of a heterogeneous catalyst. The catalyst is either iron- or cobalt-based and the
reaction is highly exothermic. The temperature, pressure and catalyst determine whether a light or heavy syncrude is
produced. This process is shown in the schematic in Fig. 9 below

Diesel
Synthesis FT (Fischer-
CH4 Upgrading
Gas CO + Tropsch) Naphtha
H2
Syncrude

Fig. 9- GTL Simplified Process Schematic

Diesel, Naphtha and Syncrude are liquid products from the GTL conversion process. Challenges of this process have
been the very capital expensive nature of the conversion from the following three processes: an oxygen supply plant, a unit
for CO2 separation from natural gas and a H2 separation unit to optimize syngas composition. A Japanese consortium studied
and proposed a new GTL technology which is able to utilize the CO2 (up to 30%) contained in the natural gas and do not
require any O2 (Suehiro, 2005). Table 10 below is a compilation of some current and proposed GTL projects around the
world. It gives a good indication of the activity in the GTL world.
Table 10- Some Current and Proposed GTL Projects
Country Company Project Capacity/bpd Cost of Project US Status
$ mm

Qatar Sasol Oryx 35000 1200 Start in 2006

Qatar Shell Pearl 140,000 15000 estimated Start up in 2010

Qatar Exxon Mobil 150,000 7000 estimated in Start up in 2011

2004

Malaysia Shell Bintulu 14,500 Start in 1993

Nigeria Sasol/Chevron Escravos 35,000 1700 Start up in 2009

Algeria Tinrhert 35,000 Cancelled in 2007

Trinidad World GTL 4,000 125 Start up in 2008

South Africa Petro SA Mossel Bay 1,000 50 Start in 2004

12 SPE 114935

Economics
The plot below shows cost versus capacity for GTL projects using data from table 10 above.

Cost vs Capacity for GTL Projects

y = 0.1036x
16000

14000

12000

10000
US $Million

8000

6000

4000

2000

0
0 25000 50000 75000 100000 125000 150000
bpd

Fig. 10 – Estimated GTL Costs for different Plant size

Estimating the cost of a project based on capacity can be done using above plot. For example a GTL plant with a 75,000
bpd capacity may cost approx. US $7.8 billion.
Environment
A Gas to Liquids (GTL) plant produces extremely clean products, mainly middle distillates (diesel factions), for markets
traditionally supplied by refineries. Compared with conventional oil refining, a GTL plant does not produce the heavier
products such as heavy fuel oil and bitumen.
Virtually free of sulfur, nitrogen and aromatics, both in production and usage, GTL products offer significant
improvements in air quality, without contributing any further to global warming than existing alternatives.
GTL products are virtually pure paraffinic hydrocarbons that have excellent combustion properties and burn with a
smooth, controlled flame. GTL Fuel has a cetane number of 75-80, much higher than the typical refinery diesel range of 45-
50. The higher the cetane number, the more complete the combustion and the less waste is produced.

Outlook
Use of GTL for chemicals and energy production is forecasted to advance rapidly with increasing pressure on the energy
industry from governments, environmental organizations and the public to reduce pollution, including the gaseous and
particulate emissions traditionally associated with conventional petroleum-fuelled and diesel-fuelled vehicles.
However, it is also clear that the commercial success of GTL technology has not yet been fully established. Returns from
GTL projects will depend on projections of market prices for petroleum products and presumed price premiums for the
environmental advantages of GTL-produced fuels.

Gas to Products
Gas to products can be considered as all chemical gas conversion today. These include Gas to liquids, Gas to Methanol
and DME (Dimethyl Ether), Gas to Ammonia and others, Gas to gasoline and hydrogen and Gas to Olefins (Feisch). Coal,
pet coke and biomass can all be used as feedstock instead of methane to produce all of the above products. Gas to products
allows the transportation of high value products and avenues for new markets for gas.
Fig. 11 below is a schematic depicting the several chemical products from the gas to chemical process. These include
methanol, DME, olefins and ammonia.
SPE 114935 13

Methanol and DME

O2
Synthesis Gas CO + H2
CH4 Gasoline, Hydrogen
H2O

Olefins

Ammonia and others

Fig. 11- Gas to Chemicals Process Schematics

Dimethyl Ether (DME) is becoming a very useful product. Its properties are very similar to Liquefied Petroleum Gas
(LPG) and can be used as a multipurpose fuel. DME can be used in vehicles as a diesel fuel, in commercial application as a
LPG extender and in power production. The DME/Methanol technology in China is expected to see tremendous growth and
over the next couple of years. China’s output by 2010 is expected to be 8355 thousand metric tonnes per year (Fleisch).
Trinidad is fast becoming one of the largest methanol producers in the Western Hemisphere with a net installed capacity
of over 6 million metric tons. Trinidad is considered the GTP (gas to products) capital of the world.
Fig. 12 shows the export of methanol from Trinidad to several markets around the world. Presently, Trinidad has 7
methanol producers and 8 ammonia plants.

Fig. 12- Export of Methanol from Trinidad to Markets (http://www.ttmethanol.com/web/worldmap.html)

Table 11 depicts some of the major methanol and DME projects worldwide. There is tremendous growth and activity in
this industry.
14 SPE 114935

Table 11- Major Methanol and DME projects

Chemical Country Company Capacity/ TPD No of Plants

Methanol Trinidad Atlas Methanol 5000 2

Holdings
Methanol Qatar Qatar Methanol 7500 1
Methanol Oman Oman Methanol 3000 1
Methanol Iran Iran Methanol 5000 1
DME Qatar DME International 2500-4500 1
Corporation
DME Iran Iran DME 2500 1
DME Japan Japan DME Ltd 3000 1
DME Egypt Methanex Egypt 1
DME
DME Chile Methanex Chile 1
DME
DME China 50,000 by 2020 numerous
Methanol for Fuel, Iran Iran/Lurgi MTP 2500 1
Power/Olefins
Methanol for Fuel, Nigeria Nigeria/Eurochem 7500 1
Power/Olefins MTO
Methanol for Fuel, China 160,000 by 2020 numerous
Power/Olefins

Gas Hydrate
Gas hydrate is another possible form of natural gas transportation. Natural gas hydrate is a solid product formed from
mixing natural gas with water. It is a water crystalline ice like substance where the natural gas components stabilize the
hydrogen bonds within water.
Researchers believe that gas hydrates formation provides an easier to produce, safer and cheaper to store method of
capturing natural gas when compared to other transportation modes such as Compressed Natural Gas and Liquefied Natural
Gas. This can therefore be a promising and attractive method of gas transportation. Gas hydrate has a high gas to solid ratio.
1 m3 of hydrate contains 150-180 m3 of gas per m3 of water. The storage capacity depends on the structure of the hydrate
formed whether structure I, II or H. The formation of these structures is dependent on the natural gas composition and the
additive used. Some factors that affect storage capacity include incomplete cage filling, impurities and incomplete packing of
the hydrate. Gas hydrate self preservation effect is quite good. Once formed the hydrate can be stored at atmospheric pressure
and remain quite stable at -5 to -15 oC.
A Japanese company has clearly shown transporting gas hydrate is a possibility. They have demonstrated a plant
producing as much as 600 kilograms of hydrates per day, moving the methane through all the necessary phases: hydrate
formation, storage, pelletizing, and "controlled dissociation," or separation of the gas and water. Whereas a liquid natural gas
facility requires temperatures of -162 ºC, Mitsui’s plant operates at -10 ºC, which means huge savings in cooling costs. The
Japanese company is aiming to raise the NGH technology to supply 10 million metric ton/year (LNG equivalent) of natural
gas to global consumers in 2020-2030. To achieve this, they have set the milestone in approximately 2012-2013 as the time
for the transition to commercialization of NGH supply chain project. They are planning to conduct the feasibility study and
implement the pilot project to demonstrate the marine transportation and scale up the technology with some strategic
partners. It is believed from their initial work the initial capital expenditure for the facilities in the supply chain (production,
pelletizing, vessel, storage and re-gasification) is estimated to be 20-25% lower than that for LNG. (Rajnauth, 2008)
Gas hydrate can be transported to markets using special carriers that are either modification to existing carriers or new
carriers. These carriers would be designed to ship the slurry form, dry hydrate form or postulated form of the hydrate. The
dry solid could be transported at atmospheric pressure and a temperature range of -5 to -10 oC and therefore no refrigeration
is required in the insulated carrier. The metastability factor could further enhance the economics for transportation of the
hydrate especially at atmospheric pressure and zero degrees Celsius. Several types of carriers have been proposed. These
include bulk carriers, towed barges, LPG ships, detachable barges and truck transportation.
One major concern is in the dissociation process, where heat is required to dissociate the hydrate. However, re-
gasification plants could be in close proximity to power plants. In this case, there is the option of using waste heat from the
power plants to drive the dissociation process.
When compared to the transportation of natural gas by pipeline or LNG, some estimates show that the hydrate concept
has a lower capital and operating costs for the movement of quantities of natural gas. The lower cost difference is quite
SPE 114935 15

different (25% less than LNG) and the simplicity and flexibility of the process should make gas hydrate transportation very
competitive.

Summary
Gas Reserves
The amount of natural gas reserves available could determine the transportation mode chosen. Table 12 is a compilation
of the estimated amount gas reserves needed for each transportation method.

Table 12- Reserves required for gas transportation projects

Transportation Mode Amount of Gas needed for project
Pipeline depends on distance
LNG > 1-3 tcf
GTW 10 bcf - 1 tcf
GTL > 500 bcf
NGH > 400 bcf
CNG > 300 bcf
GTC < 1 tcf

Large amounts of gas reserves favors transportation by LNG. However for reserves less than 1 tcf, several methods of
gas transportation is available and selection depends on several criteria including markets and distance to be transported.

Conditions
The condition required for transporting natural gas using some of the different methods are shown below. LNG requires
a temperature of -162 oC to transport gas. Using CNG as the transportation mode requires pressures > 2000 psia. NGH could
be transported at atmospheric pressure and temperature and could become a very competitive method for gas transportation.
This is shown in table 13. Comparison of the gas storage shows that 1 m3 of LNG stores 640 standard m3 of gas. For NGH,
160-180 sm3 of gas is stored in 1 m3 of hydrate. For CNG, 1 m3 of CNG stores 74 sm3 of gas.

Table 13 – Conditions and Storage capacity of some gas transportation modes

Transportation Mode Conditions to transport Gas Storage in 1 m3/ sm3
o
LNG - 162 C 640
CNG > 2000 psia 74
Gas Hydrate atmospheric T & P 160-180

Costs
Natural gas transportation require large investment simply because gas is not as easy to transport compared to oil. Table 14
below shows the range of investments required for the transportation methods.

Table 14 – Summary of Capital Investments and Plant Efficiency

Transportation Mode US$ M Plant Efficiency / %
LNG 1000-2000 per plant 85-90
Pipeline 1-3 per mile > 95
GTL 500 for 5000 bbls plant 70
CNG 90
Gas Hydrate est. 25% less than LNG estimated @ > 80
Gas to wire 300-1500 90
Methanol/DME 80

Output from Various Plants

If we consider production of 100 mmscf/d from a field, Table 15 compares the output from the plant and amount of
energy for each mode of gas transportation. LNG, pipeline and methane hydrate compares favorable in terms of energy. In
terms of output from the plant, LNG requires 2116 tonnes to transport 100 mmscf/d, while methane hydrate requires 15,666
tonnes to transfer the same amount of gas. However, if we consider transportation conditions, LNG is a transported at a
temperature of -162 oC while gas hydrate could be transported at atmospheric pressure and temperature. When considering
the conversion of natural gas to GTL, CNG and methanol, there is a significant reduction in the amount of energy in terms of
Btu (British thermal unit) in the product. This is also shown in Table 15.
16 SPE 114935

Table 15- Output from various plants for 100 mmmscf/d input gas
Transportation Mode mmscf/d Output from Plant mm btu
LNG 100 2116 tonnes 105000
Pipeline 100 103000
GTL 100 11000 bbls/d 88000
CNG 100 0.6 mmscf @ 2400 psi 89278
Methane Hydrate 100 15666 tonnes 103000
Methanol 100 3125 tonnes 59259

Transportation
The transportation efficiency for the different gas transportation modes are shown below. Pipeline transportation is suited for
short distances (<3000 km). LNG and Gas hydrate could be used for long transport distances. Gas to wire is also expected to
be favorable for short transport distances. Methanol and GTL can be used for transportation to large distances; however their
transportation efficiency is lower than LNG. Fig. 13 highlights the transportation efficiency of some of the gas transportation
methods.

Transportation Efficiency of Natural gas Transportation Modes

100
Gas Hydrate

90
LNG
Pipeline

80 Methanol
Efficiency %

CNG
70
Gas To Liquids
60

50

40
0 10000 20000 30000 40000 50000 60000 70000 80000
Km

Fig. 13- Transportation Efficiency for different gas transportation methods (Modified from Fleisch)

Below in table 16 is a short summary of the present status of the different natural gas transportation methods.

Table 16
Pipelines Still Popular- Limited to relatively short distances
LNG Most popular technology used today. Large capital costs
GTL Developing technology. Possibilities for stranded gas
Methanol/DME Gas to products transport high quality products and new market potential
CNG Great potential for small fields and short transportation distances
Gas to Wire Very costly however the DC transmission cost is expected to decrease
Gas Hydrates Great potential for stranded fields especially as transportation is possible at 0 C and atmospheric pressure

Future of Gas Transportation

There is need for ongoing research and development and value engineering to lower costs of plants and improve
efficiencies. New floating application and concept could become very useful in the future gas transportation industry. Natural
gas hydrate transportation could become commercial and great for stranded gas fields.
SPE 114935 17

Conclusions
Transporting natural gas is a capital intensive industry requiring billion US dollar investments.
Several methods are available for transporting natural gas to markets.
Based on transportation efficiency LNG and gas hydrate are suited for large transport distances. Pipeline and CNG are best
suited for shorter distances.
Gas Transportation technological advancement is required for monetizing stranded gas.
Natural gas transportation by LNG and pipelines continue to grow with several new projects under construction and
proposed.
Gas to products industry has seen growth with numerous methanol and DME plants being built.
Gas to Liquid has seen increases in number of plants and capacity worldwide and technological advancement have
contributed to this growth.
CNG transportation is expected to increase in the future however; technological advancement is required for continued
growth. Further research and development in CNG concept would be useful
Once Gas Hydrate technology becomes commercial, it can be a competitive gas transportation mode for stranded gas.

Nomenclature
ACPI = Atmospheric Pressure Chemical Ionization
CNG = Compressed Natural Gas
DME = Dimethyl Ether
GTC = Gas to Chemicals
GTL = Gas to Liquids
GTP = Gas to Products
GTM = Gas Transport Module
GTW = Gas to Wire
MW = Megawatts
LNG = Liquefied Natural Gas
LPG = Liquefied Petroleum Gas
NGH = Natural Gas Hydrate

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