The LNG virtual pipeline: getting natural gas to places other pipelines can’t reach

What is the LNG virtual pipeline? It is a substitute for a physical pipeline whereby gas that would typically be conveyed through a conventional gas pipeline is instead transported as LNG (liquefied natural gas) to the point of use by sea, road, rail or a via a combination of one or more of these transport modes.

LNG is natural gas that has been refrigerated to -260°F (-162°C). It is a clear, colourless, non-toxic liquid and occupies 1/600 of its original gas volume making it economic to transport and store.

The LNG is loaded into cryogenic containers for transportation from its source, which can be an import terminal, distribution hub or liquefaction plant, to the point of use.

At the point of use a regasification station, also referred to as an LNG satellite station – a multi-purpose facility incorporating LNG storage, vaporisation, pressure regulation and control systems – delivers natural gas exactly as if it were from a physical pipeline.

For users who aren’t connected to a physical pipeline and looking to switch to natural gas from diesel, oils, LPG and propane, the virtual pipeline model simply mimics their current supply solution: liquid fuel is delivered to their site where it is off-loaded and stored for immediate use.

For users who are connected to a gas grid but are looking to supplement insufficient or unreliable pipeline capacity to meet additional load and seasonal variations or provide emergency fuel back-up during outages, the virtual pipeline solution has a number of advantages over diesel or LPG back-up as the enterprise is simply using stored natural gas to augment pipeline natural gas and can utilise the same delivery system. 

Remote locations and islands

Access to reliable energy means empowerment and increased living standards. With 80% of the world’s population that still have little or no access to electricity living in remote areas the potential for LNG is huge. Society is committed to a low carbon energy future anyway and regions that rely on imported energy favour LNG because of its relative price stability.

Chart has already made significant contributions to projects that use LNG to fuel megawatt scale power stations in the Caribbean and on Madeira island. Using cryogenic ISO containers to transport LNG means it can be delivered from source to site efficiently and safely via a variety of modes, for instance road and sea. A full-for-empty swap system provides greater cost efficiencies.

Diesel, propane, LPG and oil displacement

Diesel, propane, LPG and oil displacement is typically of interest to medium to large scale industrial enterprises that aren’t connected to the grid and are currently using one of these fuels for primary power. Generally, a business switching to LNG will make financial savings as well as significantly reducing its environmental footprint.

Chart’s recommendation for this particular application is generically referred to as a ‘Compact’ LNG satellite station because it’s designed and built as a full plug and play solution that can be installed, commissioned and made fully operational inside a couple of days with minimal preparatory civil work required. Compact stations are modular, so capacity can be added if demand increases, and relocatable, which means they can also be used as a temporary solution while a larger capacity installation is being constructed.

Peak shaving and curtailment

In 2014 the northeastern USA experienced an extended period of severely cold weather that resulted in pipeline natural gas supply to power stations being curtailed. In January 2018, a similar weather front proved to be equally disruptive and spot natural gas prices peaked as high as $175 per MMBTU compared with a prevailing Henry Hub price of around $3 MMBTU. In order to avoid penalties for disrupting electricity supply and take advantage of financial inducements for maintaining it, natural gas fired power stations are investing in back-up systems and LNG is the obvious choice. As mentioned earlier, the power stations are essentially still using the same natural gas fuel and therefore benefit from all the associated advantages including environmental compliance and reduced costs, while the virtual pipeline solution is already well proven.

Distributed generation

A combination of financial, economic and political considerations is driving the power generation industry towards small-scale gas fired power stations that are quicker to install, less capital intensive and offer a faster return on investment, particularly in North America. By utilising LNG as a back-up to conventional natural gas supply the plants are able to respond quickly to meet peak demand or when increased demand curtails pipeline supply. In addition, the plants can also use the LNG to take advantage of favourable prices as grid demand swings.

For a nameplate capacity of around 50 MW this type of project would typically require an LNG satellite plant with 100 000 gallons of LNG storage (a single Chart shop-built cryogenic tank) that can feed a number of rapid-start reciprocating engine based generator sets.

Temporary power

Potential applications for temporary power include oil and gas facilities, utility companies, major events (concerts, sporting), construction, mining and disaster relief. It’s a burgeoning market and currently dominated by diesel generators, but the concept of making use of cleaner burning natural gas in the form of LNG is already well proven.

Multifunctional import terminals

Small-scale LNG hubs combine several functionalities, including marine bunkering, truck loading, fuelling stations for LNG fueled vehicles and additional regasification in addition to power, to deliver an attractive business case despite not enjoying the economies of scale of much larger terminals. Configuring terminals to provide multiple revenue streams also delivers a low risk operational outlook.

Significant opportunities

In summary, with society committed to transitioning to a low carbon energy future and natural gas supply forecast to be stable and competitively priced for the foreseeable future, there are significant opportunities to extend the use of natural gas, as LNG, to communities and regions where there is no pipeline infrastructure and to augment pipeline supply for peak demand. Furthermore, the virtual pipeline, which takes LNG from its source all the way through to its point of end-use, is already a proven, well-established, viable and cost-effective solution for a range of power generation opportunities, from temporary to baseload. 

Author information: Erik Langeteig, Chart Inc, New Prague, MN, USA (LNG@ChartIndustries.com, www.ChartLNG.com)