In this three-part series, we ask AvantiGas Engineering Manager Stephen Hallett to assess the potential of LNG – Liquefied Natural Gas – for UK industry.
In part 1, Stephen focuses on the role of LNG in the wider energy mix for industrial businesses which are off the mains gas grid. In part two, he explains how LNG can help both industry and Government to improve competitiveness and meet environmental decarbonisation targets. In the final part, he talks about the technical characteristics of LNG and the installation concerns a business may have when considering an LNG solution.
Part 1: Liquefied Natural Gas (LNG) and its role in the wider energy mix. Could LNG be the right off-grid fuel solution for your industry?
As a major worldwide energy solution, natural gas is the cleanest-burning hydrocarbon and is among the most economical.
But as AvantiGas Engineering Manager Stephen Hallett says: “Countries such as the UK rely on imports to meet demand. Major producers such as the US, Australia and the Middle East export natural gas in liquefied form to shrink its volume, for safe, easy and economical storage and shipment.”
So what is Liquefied Natural Gas (or LNG)? “LNG is a clear, colourless, non-toxic liquid formed when ambient pressure natural gas is cooled to -162oC or -260oF, shrinking the volume of gas by around 600 times. In liquid form, natural gas is not flammable, but the vapour that is released burns just like the natural gas you use on a hob or in a boiler at home. With LNG, the product is turned to vapour en-masse at re-gasification plants, so it can then be piped to domestic, commercial and industrial properties via the national grid.”
But what are the options for businesses not connected to the mains grid? This is where AvantiGas comes in to play as one of the UK’s major off-grid energy suppliers, serving domestic, commercial and industrial customers via a network of distribution centres. Products include Liquefied Petroleum Gas (LPG) in both bottled and bulk form as well as aerosol propellant, biomass, natural gas and of course Liquefied Natural Gas or LNG. Steve again:
“As Engineering Manager leading the Projects team at AvantiGas, I’m responsible for large industrial installations and the application of LNG where it proves viable. I’ve worked on hydrogen applications in both academia and industry and, as a senior LNG development engineer, I’ve managed projects varying from small, two-tonne installations all the way up to multiple vessel (nearly 50-tonne) installations serving industrial supply schemes and heavy goods vehicle refuelling stations.
“A current oversupply of LNG worldwide has seen the product price fall, fuelling demand for it as an alternative energy source. LNG supply globally is changing and it’s a complex topic, because of fracking in the US and LNG assets coming on line in Australia, Algeria and across the Middle East. The US has flipped from being a net importer of LNG to a net exporter. If you imagine how much liquefied natural gas the USA uses, you’ll see this has a massive effect on the world market.”
Steve points out that the UK has always been a spot market, which puts us in a strong negotiating position to get the best possible price when buying, allowing AvantiGas to pass on the benefit to our customers in a number of applications:
“LNG can also be used as a fuel for transport – both road (especially HGVs) and marine, but developing this application is likely to take a back seat while oil prices remain depressed. That position could change rapidly if oil prices start to move upwards, giving LNG (which incidentally is currently exempt from duties imposed on other road fuels) a boost in the process.
“Marine bunkering is increasing in popularity as vessel owners are facing pressures to cut operational costs in the light of weak freight rates and stricter environmental emission legislation. The biggest barrier in both sectors (particularly marine) is the development cost (of the engines and supporting technologies) and CAPEX of infrastructure.
“With the increase in exploitable LNG-producing assets, global supply will be more stable and secure, which will ensure that supply can continually meet demand. With many analysts and producers predicting significant growth in the LNG market in the coming decades, as the world fights climate change and as individual countries set and strive to meet their own environmental and carbon targets, the role of LNG in the energy mix is going to be increasingly important and competitive.”
Click here to part two which shows how LNG can help both industry and Government to improve competitiveness and meet environmental decarbonisation targets.
Thinking about converting your business energy to LNG?
Click here to learn more and request a free copy of our LNG Whitepaper.