In recent years we have seen extraordinary technological developments in the production of natural gas, which has lead to a significant increase in supply and a sharp drop in prices. As natural gas prices have decreased by more than half in the past five years, production has moved in the opposite direction. In 2011 it totaled 3,276 billion cm, which is about a third more compared to ten years ago. [1]

According to many forecasts, the price of natural gas will stay low, as supplies will surge higher. The International Energy Agency stated in 2011 that the world is entering a “golden age of natural gas.” According to WTRG Economics as of last month, the price of natural gas stood at about 4 $/MMBtu, whereas the price of crude oil was around 99 $/bbl, which translates to 15 $/MMBtu.
A boom in the production of natural gas inevitably means a rise in its transport as well. However, increasing transport capabilities can be complicated as new pipelines and LNG facilities require huge investments. Not to mention that the construction of new pipelines can become complicated, politically, if pipelines cross international borders. This raises a need to explore alternative ways to export natural gas energy.

Pipeline
The fire that results from lightening striking natural gas bewildered ancient civilizations. In 500 B.C the Chinese discovered how to benefit from these fires. They built pipelines out of bamboo shoots to transport gas from its ground sources to waterways in order to separate salt and water, essentially a primitive form of desalination. [2] As such pipelines are the oldest method of transporting natural gas. Pipeline transport is still the most common method of transporting natural gas. Although the construction of pipeline is complicated and expensive, once in place, they are an easy and cheap way to transport large volumes of gas. Additionally, pipeline transport is relatively safe and reliable.

Pipeline transport does have distinct disadvantages primarily related to reserves and production output. Infrastructural investment in pipeline transport only makes economic sense when transporting vast and relatively stable amounts of gas to a given destination and market over a long period of time. The cost of building and maintaining a pipeline is directly related to its length. Therefore, it is expensive to transport gas over long distances via pipelines, especially if they have to run below the seabed. Pipelines are also very vulnerable to sabotage, a significant factor when navigating the implicit geopolitics of a pipeline that runs thousands of miles through several countries.  An attack on a pipeline can stop the transport of huge amounts of gas for a long period of time significantly impacting a country of regions energy supply.  Recent shortages in Jordan resulting from attacks on the Arab Gas Pipeline serve as evidence of this point.

Liquefied natural gas (LNG)
Currently the most common method of transporting natural gas is via its liquid form. In order to liquefy natural gas, it has to be cooled to around -162C. LNG, which has a volume 1,600 times less than gas at room temperature, is transported by specially designed cryogenic sea vessels or road tankers and then re-gasified. Re-gasification terminals, where LNG is allowed to expand and then reconverted into gas, are connected to a storage and pipeline distribution network.

LNG and re-gasification processes are complex and expensive. Natural gas liquefaction technology was developed in the 19th century and in 1964 the first significant commercial transport of LNG occurred. LNG infrastructure developed slowly and has currently attained a high level of sophistication as LNG shipments are growing fast. [3] In 2011, global LNG shipments grew by 10.3%, whereas pipeline shipments increased by just 1.3%.

Transport via LNG has a distinct cost advantage when gas needs to be transported over long distances. LNG transport may be better than pipelines for distances over 2000 miles, according to Richard Dawe, Professor Emeritus in Petroleum Studies at the University of West Indies. LNG requires huge initial investments for necessary infrastructure. In addition to this, maintenance of conventional LNG facilities is rather expensive; as such LNG projects require established and expansive reserves, long-term commitment chains and substantial markets to guarantee profitability. [4]

Cheaper technologies for producing and transporting smaller amounts of LNG have been developed in recent years enabling the development of small remote gas fields and the importation of gas to smaller markets outside pipeline networks. The popularity and viability of small-scale LNG is reflected by the recent agreement of Volvo Trucks, Mack Trucks and Shell Oil Company to collaborate supporting the wider use of LNG as a fuel for heavy-duty trucks. [5]
According to BP’s World Energy Report global LNG shipments totaled 331 bn cm while pipeline shipments were at 695 bn cm in 2011. Despite the popularity of pipeline and LNG transport there are alternative methods to transport natural gas.  In many cases, gas is not even transported as gas, but is transformed into other substances or is converted to energy and transported in the form of other products.  

Compressed natural gas (CNG)
CNG can be used as an alternative transport fuel.  CNG has less energy than traditional gasoline, which is a distinct disadvantage, as vehicles powered by CNG require frequent refueling. Not to mention the pressurized fuel tanks used in vehicles that run on CNG also constitute a safety concern. However, CNG does have positive applications, the combustion of CNG produces much less greenhouse gas emissions compared to gasoline. [6] According to Dawe producing and transporting CNG is simpler and cheaper than LNG as it does not require extreme temperatures.

CNG has been used as a transport fuel for decades, but its popularity is hindered by the lack of cars designed for CNG and the dearth of CNG dispensing stations. However, due to the imposition of restrictions on greenhouse gas emissions and increases in gasoline prices, the popularity of CNG vehicles has increased significantly in recent years. The Volkswagen Group has recently revealed plans to invest heavily in the development of CNG technologies. [7]

Gas to liquid fuels 
Natural gas can also be converted into other liquids such as methanol, syncrude and ammonia. Due to its toxicity and low energy content methanol is not used as a transport fuel. Methanol is primarily used for fuel for internal combustion engines and as a basic chemical feedstock for the manufacturing of plastics.
Other gas-to-liquids (GTL) processes are being developed to produce more environmentally friendly fuels such as syncrude and diesel. Using current technologies such processes are usually complex and expensive; today very few GTL plants operate commercially. However, potential for development exists.  Shell, for example, has been operating a GTL plant in Malaysia since 1993 and is currently building the world’s largest GTL plant in Qatar. [8]

Gas to wire
Another alternative to transport gas energy is to use it in the production of electricity that can be transmitted via cables. However this method is less popular due to high cost.
In the mid-90s the use of natural gas for electricity generation became quite popular. In many plants, the hot exhaust from gas turbines is passed through a heat recovery steam generator and the steam produced is then used to drive a conventional steam turbine. [9] Both gas and steam turbines are then used to drive electricity generators. The efficiency achieved with this technology is 55-60%. Cogeneration technology, which is being used more and more in places where there is a need for heat combined with electricity, can even reach efficiency of 80%. Additionally, producing electricity from gas is more environmentally friendly than conventional power generation.

However, transporting gas energy as electricity also has a number of disadvantages. Installing high-power lines is expensive, not to mention the significant energy loss when converting it to low voltages for consumers over cable lines. In the case of associated gas, there is a risk that if a generator error or shutdown occurs, then the whole oil production facility might also have to be shut down, unless there exists another gas outlet. [9]

For these reasons, the use of gas for power generation has not proved very popular. Nonetheless, it still exists to some extent. For example, in 2012, Iran started the implementation of its first gas-to-wire project, hoping to export the electricity generated to other Persian Gulf countries. [10]

Gas to hydrate
Another alternative for gas transport that is still in the experimentation phase is gas hydrate. Natural gas hydrate is an ice-like substance that is formed by mixing natural gas with liquid water and cooling it. Dawe explains that compared to alternative technologies such as LNG, conversion to hydrate is relatively simple, as it does not require extreme temperatures or pressure, potentially making it relatively cheap. Therefore, transportation as hydrate could be especially suitable for small reservoirs, associated gas, stranded gas and other unconventional gas.

Unfortunately, pilot projects have demonstrated that hydrate production is not as simple as it seems. The behavior of hydrates is still not completely understood, making it too dangerous to make on large scale.

The future
Each method of transporting gas energy has specific advantages and disadvantages. Therefore, the future popularity of each method depends on where gas will be transported and from where it’s coming. One factor that could have a huge impact on natural gas is the development of shale gas. If the US manages to make extensive use of its shale gas reserves, then the need for imported LNG will be drastically reduced in the US. Conversely, Japan, another major natural gas importer, is likely to stay a major importer as it relies heavily on Qatar and its LNG technology. The world’s largest gas producer Russia, will probably continue to rely on pipelines in the near future as it would be uneconomical to opt for other methods as pipelines are already in place.  The same goes for LNG facilities. Since pipelines and LNG facilities already exist, it will be difficult for other methods to come on the market. Even if their running costs are lower, they don’t have a chance, as their establishment requires large investments that have already been made in LNG.

However, Dawe argues that for green site developments and smaller niche markets – such as remote reservoirs on islands, small reservoirs, associated and stranded gas and gas production with highly variable volumes – other methods, especially CNG, can be strong options. Small volumes of intermittent gas at which CNG could have a competitive advantage are not economically attractive to major gas transporters and sellers, but could appeal to smaller companies, especially since CNG facilities require relatively small initial investments.

In conclusion, LNG and pipelines are not likely to face strong competition from other modes of gas energy transport on a large scale in the near future. However, small-scale gas transport may play a much greater role thanks to the development of CNG. Only time will tell if other technologies such as hydrates and GTL will revolutionize the transport of natural gas energy.

 1 BP, Statistical Review of World Energy (2012).
2 The Natural Gas Supply Association, Natural Gas History.
3 Kolb, R.W. The Natural Gas Revolution and the World’s Largest Economies (2012). 
4 Dawe, R.A. & Thomas, S. Review of ways to transport natural gas energy from countries which do not need the gas for domestic use (2003).
5 Bulk Transporter, Shell joining with Volvo, Mack to promote LNG fuel globally (April 10, 2013).
6 CarsDirect, Natural Gas Vehicles: Pros and Cons (June 4, 2010).
7 WhatCar?, Volkswagen commits to CNG future (10 December, 2012). 
8 The Christian Science Monitor, Gas-to-liquids is a risky investment (November 11, 2012).
9 Dawe, R.A. & Lucas A.G. (ed.) Modern Petroleum Technology, 6th Edition (2000). Institute of Petroleum
10 Press TV, Iran launches first gas-to-wire project (June 23, 2012).

By Laura Raus