While natural gas’s role in tomorrow’s electricity systems is being debated in Europe, the gas industry is busy dealing with growth in emerging energy markets. That doesn’t mean it’s all business as usual, though. Gas sector infrastructure providers such as the Spanish firm Sener are gearing up for fuel that is more liquid, mobile and, perhaps one day, renewable.
Infrastructure providers such as the Spanish firm Sener are looking to a future where gas is more liquid, mobile and, potentially, renewable. At the industry conference Gastech, in Barcelona, Spain, last month, Sener was one of several infrastructure providers focusing on liquified natural gas (LNG), and how to move it about.
Juan Carlos García Vila, Sener’s director of oil and gas, told Energy Post that LNG was the “star” of Gastech. Other infrastructure providers also pointed to a growing focus on LNG. The German industrial giant Siemens, for instance, said: “The demand for LNG has rapidly increased, primarily due to substantial price disparities between diesel fuel and low-priced natural gas, especially given the expanding development of global shale gas.”
While pipelines remain the preferred way of moving gas around, shipping LNG is also increasingly giving the industry a way to overcome uncertainty over the feasibility and timelines for major pipeline projects. “Large infrastructures need a lot of time, time and effort in terms of permits, so investors need to think about them carefully,” García said.
Because it can be transported by sea, LNG allows gas suppliers to reach previously untapped markets, such as islands. Many island communities currently rely on expensive diesel imports for energy generation. The communities are keen to move to alternatives, and renewable energy sources such as solar and wind are obvious candidates. But LNG could play a role, too. Gas remains an abundant and therefore potentially cheap source of fuel, and burns cleaner than diesel, releasing less sulphur and nitrogen oxides.
According to research comparing diesel and LNG as a vehicle fuel, switching to gas could also cut carbon emissions by 6% or more. These benefits are leading some emerging market policy makers to see gas as a potential replacement for diesel, much as European lawmakers see it as a stopgap substitute for coal.
There is growing interest in developing small-to-midsize bunkering vessels and LNG plants
In Indonesia, for example, the state-owned utility PLN this April announced plans to reduce its reliance on diesel by fifth-sixths between now and 2022. By 2027, it said, diesel would make up just 0.4% of the electricity production mix. While Indonesia is still looking to rely on coal for large-scale generation and predicts coal-fired power will make up more than 54% of the electricity mix in 2027, the energy for its many small island grids will increasingly come from a mix of renewables and gas.
LNG is well placed to occupy this niche, particularly if it can be delivered on a scale similar to that used for diesel generation. And as it happens, there is growing interest in developing small-to-midsize bunkering vessels and LNG plants. Sener’s announcements at Gastech, for example, included a combined LNG-fuelled tractor tug and non-propelled bunkering pontoon, for shipping firm Rimorchiatori Riuniti Panfido, and DNV GL approval in principle for two new LNG bunkering vessel designs.
The company is also pushing floating storage and regasification units (FSRUs) and combined-cycle power plants. Large FSRUs, with capacities of around 150,000 cubic metres, have been on the market for some time, García said. What Sener and other infrastructure developers are now focusing on are smaller units, of around 30,000 cubic metres, he said. This could keep a 250-megawatt combined-cycle gas turbine ticking over for a fortnight.
These floating systems are attractive to investors because they can be deployed even in risky emerging markets, said García. If there is a threat to the infrastructure, say because of political unrest, the plant can simply sail off elsewhere. Equally, floating plants could potentially be used to provide emergency energy supplies to places where the local grid has been knocked out, as happened in Puerto Rico during Hurricane Maria in 2017.
Sener, and other companies like it, are not developing these products for the European market but for regions such as the Caribbean and Asia Pacific. “Europe is where we’re seeing the least movement,” said García. “In Europe natural gas is seen as a transition fuel.”
The big question for the industry is how it can adapt to a low or zero-carbon energy environment
However, there may still be an expanding role for gas in certain parts of Europe. The economics of replacing diesel with LNG apply to European islands just as much as they do to island grids in Indonesia. And although many European island communities, such as those in the Spanish Canary Islands or the Portuguese Azores, are moving to boost the proportion of renewable energy on the grid, diesel remains a mainstay for baseload electricity production in most cases.
Switching entirely to intermittent renewables could be a problem for islands because of the small size of their grids, which exacerbates the challenges associated with locally produced renewable energy intermittency. But combining a high renewable fraction with a small gas turbine could help many European islands to cut energy costs and emissions, without necessarily increasing the risk of blackouts. And building gas plants is not a problem, said García.
An engineering, procurement and construction firm could easily knock out a combined cycle plant in between 24 and 30 months. For LNG, a greater challenge is creating liquefaction plants. These are more expensive and take longer to build, typically 40 months or more, García said. But the Siemens subsidiary Dresser-Rand is touting a small-scale natural gas conversion system called LNGo, capable of producing up to 30,000 gallons of LNG per day.
Siemens said an LNGo system could be “ready to rumble within a few weeks.”
Such developments all point to a bright immediate future for gas, particularly in emerging energy markets. Longer term, though, the big question for the industry is how it can adapt to a low or zero-carbon energy environment. This debate is already ongoing in Europe and, as Energy Post has pointed out, decarbonising gas may not be a simple affair.
Nevertheless, Sener sees at least one potential route, involving carbon-free production of hydrogen, as a critical ingredient in the future energy mix. The company is working on how to produce hydrogen using photocatalysis or electrolysis powered by renewable energy. Renewably-produced methane could be plugged straight into existing gas infrastructure, García said. And the hydrogen required to make it could in itself become a significant transportation fuel. García agreed that the transition might not be easy, though.
“It will require a series of technical advances,” he said. “But I think it’s always good to have an objective.”