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Supply chain and infrastructure

Supply chain and infrastructure

The LNG supply chain consists of the following steps:

Exploration and production of natural gas

The first step in the supply chain of LNG is exploration and production of natural gas, which is collected and treated to remove several impurities and other substances and transported to the liquefaction plant. According to the IGU World LNG Report, Qatar was by far the largest LNG exporter in 2013 (32.6% of global supply). Other major exporting countries are Malaysia, Australia and Nigeria. 

Liquefaction plants

According to available statistics, in 2013 there were approximately 30 liquefaction plants for LNG export in operation worldwide. Total global liquefaction capacity is set to grow significantly in the short term, because a number of new terminals are already planned. A good example is Australia, where about 10 terminals are currently under construction or planned. Compared with the three plants currently in operation, this can be regarded as a massive increase in supply.

 

There are also small-scale plants and terminals in use for LNG as a fuel. Along the coast of Norway a network of LNG plants and terminals has been built, with LNG being distributed from larger liquefaction plants to smaller intermediate terminals by tank truck or LNG carrier.

Shipping

After liquefaction, the LNG is exported overseas by LNG carrier. The total fleet presently comprises approximately 360 ships. Of these, around 70 are over 20 years old and these will probably need to be replaced over the next 10 years. The 60 ships on order today are therefore required as fleet replacement and will not result in any growth of the fleet. As the LNG market continues to develop and expand, though, there will be growing demand for LNG and thus LNG carriers over the next decade.

Regasification terminals

Following transport overseas, regasification terminals regasify the LNG back into the gaseous state, to feed into the national gas grid. Like liquefaction terminals, regasification terminals can also offer bunkering facilities for shipping or other transport modes prior to the regasification process.

 

In 2013 there were about 85 regasification terminals worldwide, a figure that includes a number of regasification vessels in South America. With 27 regasification plants, Japan has the largest number of plants of any country. In other countries the number of regasification plants is often limited to one or two.

Intermediary terminal/storage

Liquefaction plants and regasification terminals both can provide LNG bunkering facilities, but additionally the LNG can be distributed for storage at intermediary terminals or dedicated storage facilities. These can function as peak-shaving plants, where LNG can be stored for periods of peak demand and higher gas prices (especially in winter). In some ports the LNG terminal is also used as a peak shaving plant.

 

                                                                        LNG supply chain (CNSS)

Further reading

LNG bunkering already possible

LNG is currently available as a bunker fuel for maritime and inland shipping at the WPCI ports of Antwerp, Amsterdam, Rotterdam, Zeebrugge and Stockholm. In addition, LNG can be bunkered at several Norwegian ports.