Gas 2023 Issue

Monetisation gas resources through LNG, hydrogen, and ammonia Capturing profitability in the downstream hydrocarbon processing industry’s transition to net zero emissions weights heavily on leveraging natural gas resources

Rene Gonzalez Editor, PTQ

LNG opportunities The global LNG market is expected to reach US$66.13 billion by 2027, at a CAGR of 6.92% during 2022-2027. Most capacity comes from mega-LNG facilities, while cer- tain niche margin opportunities comes from small-scale liquefied natural gas (ssLNG) operations. Overall, LNG mar - kets beyond 2023 are expected to grow and evolve as the industry matures and new technologies and applications emerge, with Qatar, Australia, and the US becoming the largest natural gas producers. Industry forecasts expect LNG demand to reach 650 to over 700 million tonnes a year by 2040. More investment in liquefaction projects is required to avoid a supply-demand gap expected to emerge by the late 2020s. Diverse new technologies to reduce emissions from gas and LNG supply chains will help consolidate its role in the energy transition. There is a growing industry focus on the development and deployment of decarbonised gases, including renewable natural gas, hydrogen, and ammonia, to deliver more sus - tainable energy security in the future. Due to well-acknowledged reasons ranging from low cost and emissions reductions, LNG from natural gas resources is rapidly taking a larger percentage of the energy mix options. For example, the IMO 2020 bunkering market (less than 0.5 wt% sulphur) has generated worldwide interest in supplying this market with LNG’s near-zero sulphur content, preferably from facilities strategically positioned to serve LNG-powered container ship bunkering operations. In remote areas, island nations, and regions where intense mining operations are occurring to supply precious metals for the electric vehicle market, small-scale facilities linked to microgrids are preferred as they require much less time for construction than mega-LNG facilities. Besides, the mega- LNG owners could be more exposed to price sensitivity with regard to long-term contracts and other tolling agreements. LNG technology enablers These bespoke developments are enabled by technological improvements at every stage across the natural gas value chain. Take, for example, one of the world’s largest oil and gas companies and a major player in the LNG industry. Shell has been exploring the potential of artificial intelligence (AI) to improve the efficiency and safety of its operations, includ - ing applications at its existing LNG plants.

One example of Shell using AI in its LNG operations is its partnership with technology firm C3.ai. Together, the companies have developed an AI-based predictive main - tenance system for Shell’s Prelude floating liquefied nat - ural gas (FLNG) facility, located off the coast of Western Australia. The system uses AI algorithms to analyse data from thousands of sensors throughout the facility, detecting anomalies or potential issues before they can cause serious problems. By proactively identifying and addressing main - tenance needs, the system can help to reduce downtime and improve the overall efficiency of the facility. LNG projects require complex technologies (see Figure 1 ) and related infrastructure against a moving target of constantly changing regulations. According to a report by Wood Mackenzie developed during the onset of the global pandemic in 2020, the new bar for future LNG proj- ects is around $4/MMBtu, or even lower. The report also Figure 1 World-scale LNG facilities benefit from highly automated MCHE systems to optimise compressor operations for each LNG plant’s liquefaction train Photo courtesy of Burckhardt Compression AG

Gas 2023