- The role of small-scale LNG in expanding the reach of lLNG to a broader audience and facilitating its development into large-scale LNG ventures is increasingly evident.
- IGU report concludes that small-scale LNG plays a pivotal role in extending LNG’s reach to diverse markets and applications, driving economic growth, and mitigating environmental impacts.
Small-scale LNG can be the teaser to pull the development of larger-scale facilities, according to the 2023 edition of the Global Gas Report from the International Gas Union, reports Riviera Maritime Media.
Expanding the reach of LNG
The role of small-scale LNG in expanding the reach of liquefied natural gas (LNG) to a broader audience and facilitating its development into large-scale LNG ventures is increasingly evident. The versatility of LNG has been underscored in various scenarios, notably during the conflict in Ukraine, where the United States escalated its LNG exports to Europe by 159% from 2021 to 2022. This shift in traditional LNG trade routes from Asia to Europe, as discussed previously, highlights LNG’s adaptability.
The 2011 Fukushima nuclear disaster in Japan further emphasised the criticality and flexibility of LNG. Japan’s gas imports surged following the catastrophe, demonstrating LNG’s capability to swiftly offset the loss of key power-generation resources. Consequently, Japan emerged as the world’s largest LNG importer, showcasing LNG’s pivotal role in ensuring energy accessibility and security.
The scalability of LNG is a key driver of its flexibility. It can be sourced from large liquefaction and regasification facilities serving major cities and regions, or from small-scale terminals catering to remote settlements, transport and maritime needs. In regions with limited gas demand and logistical challenges for large-scale distribution, such as small settlements or islands, small-scale LNG emerges as a reliable, cost-effective energy solution, displacing higher-emissions alternatives like diesel and traditional biomass.
Sub-Saharan Africa, heavily reliant on oil for decentralised power generation, presents a prime example. The region’s significant diesel capacity underscores the urgent need for cleaner energy sources. Moreover, the evolving energy landscape, characterised by the rise of renewables and decentralised systems, amplifies the relevance of small-scale LNG in meeting fluctuating and distributed energy demands.
Furthermore, small-scale LNG offers advantages in terms of investment and lead time compared with traditional LNG projects, making it particularly appealing in developing regions. As marginal gas resources become accessible and smaller demand centres emerge, small-scale LNG plays a crucial role in expanding LNG production and utilisation.
For instance, projects such as the Port Edward LNG facility in Canada exemplify the efficiency and cost-effectiveness of small-scale LNG. With shorter construction times and lower capital investments compared with larger facilities, small-scale LNG projects like Port Edward are poised to serve both export markets and domestic consumers in remote areas.
Moreover, small-scale LNG serves as a sustainable fuel option on land and at sea, offering significant environmental benefits over oil and diesel. In shipping and heavy road transport, LNG’s lower emissions make it an attractive alternative, especially in regions grappling with air pollution concerns.
Adoption of LNG as a marine fuel
Government regulations and initiatives further drive the adoption of LNG as a marine fuel, with significant investments and a growing orderbook for LNG-fuelled vessels. Nigeria’s experience illustrates the potential of small-scale LNG to drive domestic market growth and private sector investment, leveraging LNG’s cleaner and more affordable attributes to replace emissions-intensive fuels like diesel.
Private players like Greenville LNG in Nigeria have invested in mini-LNG facilities, enabling the distribution of LNG via cryogenic-equipped trucks to various regions. This approach not only monetises associated gas from oil production but also democratises access to energy, fostering economic development and industrial growth.
In summary, the IGU reports concludes that small-scale LNG plays a pivotal role in extending LNG’s reach to diverse markets and applications, driving economic growth, and mitigating environmental impacts. Its versatility, cost-effectiveness, and environmental benefits position small-scale LNG as a cornerstone of the evolving energy landscape, facilitating a transition towards cleaner and more sustainable energy systems.
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Source: Riviera Maritime Media
