16 May 2013
Category: Commodity News
16 May 2013,
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Within the last few years, natural gas production (UNG) has increased significantly in the U.S. As a matter of fact, this source of energy is now more accessible and cheaper than 30 years ago with the profusion of shale gas that has been discovered throughout North America and with a relatively new technology, hydraulic fracturing and horizontal drilling which improved significantly the performance and efficiency of recovered gas.

The abundance and the increasing demand for this resource caused the commodity price to go down as a result. New applications for natural gas appeared, assuring a more constant demand. Actually, natural gas is cheaper in the U.S. than in much of the rest of the world. Emerging markets are in great need of energy to sustain its swift growth and natural gas represents an alternative to oil. For more information about the shale gas revolution, please take a moment to read my article discussing about the possible greatest boom ever for the U.S. economy here.

In the first article of this series, I will discuss about the rising demand for LNG (liquefied natural gas) and why some specific companies making business with natural gas are set to benefit from this great opportunity. Finally, a thorough analysis of the top three promising U.S. LNG exporters will be assessed, starting with the third U.S. promising player in this article.

A Fast Increasing Demand For LNG

LNG is the fastest-growing part of the global natural gas market, increasing at a 6% annual rate over the last decade. It represents a fast and cost-effective way for countries lacking natural gas resources and delivery infrastructure to inject this source of energy as an alternative to more expensive fuels or energy sources.

(click to enlarge)

Source: Chevron

LNG is a clear, colorless, non-toxic liquid that can be transported and stored more easily than natural gas because it occupies up to 600 times less space. When LNG reaches its destination, re-gasification facilities return it to gas. It is then moved through pipelines to homes, businesses and industries.

How Natural Gas Is Processed Into LNG

(click to enlarge)

Source: Coroflot

LNG has been transported for more than 50 years and has a strong safety record. A LNG spill would not damage the ground or leave any residue as it evaporates. In water, LNG is insoluble and would simply evaporate, making water-spill cleanup unnecessary. LNG is not stored under high pressure and is not explosive. Although a large amount of energy is stored in LNG, it cannot be released rapidly enough into the open environment to cause the overpressure associated with an explosion. LNG vapors (methane) mixed with air are not explosive in an unconfined environment.

In 2007, 17 countries were importing LNG. Currently there are 25 LNG-importing countries in Europe, Asia, South America, Central America, North America and the Middle East. Numerous developing countries including Poland, Croatia, Bangladesh, Jamaica, Colombia, Panama, El Salvador, Costa Rica and Lebanon among others, are considering plans to build new LNG terminals and enter the global LNG trade.

Worldwide, there are 91 import terminals designed to receive LNG shipments, 28 LNG liquefaction export terminals and more than 200 LNG storage facilities. Japan, with more than 29 LNG import terminals, has gone without a major safety incident since it began receiving LNG shipments 35 years ago.

Read the rest of this article here

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