Innovative design brings new flexibility to the LNG market
CHATHAM COUNTY—The liquefied natural gas market is growing every year, but some of the terminals that ship and receive the fuel are shrinking.
LNG export terminals, where gas is liquefied and put on vessels for shipping, have traditionally been large and expensive, custom-built facilities. To justify the investment, operators have typically required customers to sign on for long-term supply deals.
Now, a number of current and upcoming terminal projects are poised to change the status quo. They are based on a new modular design, featuring smaller-than-usual liquefaction units, or “trains,” that enable small- to mid-scale liquefaction or regasification plants to expand and adapt as demand grows. The first such liquefaction plant in the United States is under construction in Georgia’s Chatham County.
These modular facilities with smaller trains produce a fraction of the LNG produced by a traditional train. The innovative design, known as a Moveable Modular Liquefaction System, allows terminals to change their capacity as the market demands.
Demand for LNG has taken off in recent years. Overall global consumption rose to 33.1 billion cubic feet per day in 2016, about 10 percent of total natural gas usage. It is expected to grow by 75 percent by 2027. In addition, in 2005, only 15 countries imported LNG; today 39 do so, with another eight expected to join the market by 2022. The United States, with an abundant supply of pipeline gas and well-developed energy hubs, is emerging as a dominant global producer.
The United States’ first next-generation modular facility will be a test case for the future. The approximately $2 billion Elba Liquefaction Project, being built by Kinder Morgan, along with the associated upstream pipeline infrastructure, will have 10 small trains and an export capacity of just 2.5 Mtpa of LNG. The first liquefaction units are expected to be up and running by mid-year, with the final units coming online in the first half of 2019.