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06.02.2018 13:43

Next-wave LNG Terminals Get Smaller to Offer Flexible Supply Deals

AUTHOR: publics.bg

© Lock the Gate Alliance, flickr.com

The liquefied natural gas market is growing every year, but the terminals that ship and receive the fuel are shrinking, Reuters reported.

The booming sector’s next-generation infrastructure is being designed for an emerging-market buyers that want smaller volumes on shorter, more flexible contracts.

LNG export terminals, where the gas is liquefied and put on vessels for shipping, have traditionally been massive, custom-built facilities that cost tens of billions of dollars. And so to justify the investment, they have typically required equally massive, long-term supply deals, often lasting a decade or more.

Numerous terminal projects on the horizon, by contrast, are new modular-style designs built to snap together like Legos, allowing for small to mid-scale liquefaction or regasification plants that can be expanded if and when demand grows.

The first next-generation liquefaction plant is under construction in the U.S. state of Georgia and is expected to begin operating mid-year.

These facilities, with far smaller liquefaction units are “more consistent with market conditions,” said John Baguley, chief operating officer of Australia-based LNG Ltd, which has proposed mid-scale LNG plants in the United States and Canada.

The new designs reflect a maturing market with a more diverse base of customers that will drive future growth.

While modular designs allow more flexibility, some experts question whether they will ultimately cost less to build and be as easy to expand as promised, noting the technology is unproven.

The technology is attractive enough that Cheniere wants to test it by proposing a cluster of seven 1.36-Mtpa trains for a project being constructed in Corpus Christi, Texas, in addition to other, much larger liquefaction units, Reuters further noted.