The Future of LNG
By Johnny Wood
In this era of unprecedented uncertainty in the energy industry one thing is clear: the world needs more power. But the days of energy at any cost are over, as countries seek cheaper energy supplies that also demonstrate their green credentials.
The global drive towards cleaner alternatives to coal-fired and oil-fired power-generating capacity has elevated liquefied natural gas (LNG) to play an important role in the transition towards a zero-carbon energy future. Alongside the growing influence of renewables like wind and solar, the next generation of gas technology is bringing trimmed-down, low-cost power production capabilities to the market on a large scale.
Fired Up
Seen as a cleaner alternative to oil and coal, the market for natural gas has been invigorated by a glut of supply hitting the market. A growing number of LNG exporters - particularly the US - are being met with increasing demand from Asia and other emerging markets.
Large shale gas reserves mean America has much more natural gas than it consumes, making it a net gas exporter. Burgeoning supply from exporters has brought greater flexibility to the global market and made natural gas an attractive proposition for many countries.
New exporters have also made the global gas market more stable by providing established buyers in mature markets like Europe with alternative supply channels. US gas exports are followed by the Middle East, Africa and Russia, with increased competition driving down the price of gas. The BP Energy Outlook predicts that the US and Qatar will account for 40% of all LNG exports by 2040.
But the price of gas is only half of the story.
Large-scale adoption of LNG will also depend on lifetime cost of infrastructure. Many emerging economies have legacy commitments to fossil-fuel power plants, some of which are relatively new, so replacement costs can act as a major barrier to investing in new technology.
The drive to lower the cost of building and operating infrastructure is key to expanding the reach of natural gas.
Trimmed Down
High quality, low-cost LNG solutions can trim down existing gas infrastructure to achieve economies of scale and reduce both capital costs and operational expenditure.
As part of its investment in next-generation LNG technology, Mitsubishi Heavy Industries (MHI) Group has developed a reduced-lifetime cost infrastructure solution that combines high efficiency H-100 gas turbines and compressor units.
The package simplifies gas-powered LNG liquefaction operations, requiring no external helper motor or intercooler, contributes to footprint and space savings. The streamlined turbine and compressor combination does not only contribute to high reliability of the liquefaction facility but also lowers capital costs and associated labor expenses, which provides more cost-effectiveness to LNG operators.
It is a solution that has been adopted by ExxonMobil and its co venture partners for the Rovuma LNG Phase 1 project, that it is building in Mozambique. Subject to final investment decision on the project, Mitsubishi Heavy Industries Compressor Corporation (MCO) will supply the main liquefaction compressors, and Mitsubishi Hitachi Power Systems, Ltd. (MHPS) will provide dual-shaft, 120 megawatt H-100 gas turbines as the mechanical drivers.
The oil major has selected MHI's turbine and compressor technology for what will be one of the world's largest natural gas liquefaction plants, located in Mozambique's remote northern area. Rovuma LNG has two liquefied natural gas trains, each expected to produce at least 7.6 million tons per annum (MTA). Access to lower- lifetime cost infrastructure such as MHI's solution, together with cheaper and more abundant supplies of natural gas, helps make LNG an increasingly attractive proposition for fast growing economies – particularly in Asia - aiming to transition to a cleaner energy landscape.
Demand for gas in the emerging markets of Asia is booming: the region is set to fuel 50% of growth in global gas demand by 2022, according to a McKinsey report. By 2030, Asia is expected to account for 65% of the world's total gas demand.
China leads the charge to adopt LNG in Asia, backed by policy initiatives that aim to combat air pollution by shifting resources away from coal-fired power generation. LNG imports into China grew 52% year-on-year in the first half of 2018.
Air quality is a big issue in countries like China and India, where large-scale projects are underway to clean up power generation by developing gas and renewable energy infrastructure projects. But the region's attraction to LNG goes beyond Asia's powerhouses, to include smaller nations like Bangladesh and Vietnam, where affordability is an important consideration.
For both emerging economies and developed nations, the mix of inexpensive gas and affordable LNG infrastructure is a winning combination in the drive towards a cleaner energy future.
In its role supporting the energy transition from coal and oil to renewables and beyond, gas has a bright future.
Press Info: MHI Technology Selected for Rovuma LNG Project, Mozambique
Johnny Wood has been a journalist for over 15 years working in different parts of the world – Asia, Europe, and the Middle East. As well as an accomplished features writer he has edited several prestigious lifestyle magazines and corporate publications.
Why the President Faces a Dilemma on Energy Policy
When president-elect Joe Biden takes office on the 20th January, his administration faces the daunting task of making energy affordable and sustainable, while maintaining America's status as a global energy leader. Cheap oil prices in the aftermath of the pandemic offer a quick-fix route to economic recovery, but failing to invest in clean energy now could prove costly in the long term.
What Is the Oil Industry's "New Normal"?
The global oil and gas sector has been hit hard by the COVID-19 fall-out, accelerating long-term trends that will fundamentally reshape the industry's future. As the transition to more sustainable energy gains pace − with spending on renewables outstripping oil and gas exploration for the first time − oil's position in the global energy mix is coming under increasing threat.
The Energy Transition Depends on These Three Trends
The COVID-19 crisis has helped lower our energy usage and emissions dramatically. Now is our window of opportunity to avoid a 'carbon throwback'. Yasushi Fukuizumi, VP of Energy Systems at Mitsubishi Heavy Industries, looks at how the pandemic is accelerating three trends already transforming the energy industry: decarbonization, decentralization and digitalization.
What Does the Future Hold for Crude Oil Prices?
Price volatility has gone into overdrive as a pandemic-ravaged oil market looks to the future. But what will that future look like? While nobody knows for sure what lies over the horizon, some industry experts give their thoughts on global oil's prospects as the market battles the ups and downs of both demand and supply swings, and an energy mix deep in transition.
MHI Energy Transition provides news and views on energy trends and technologies as the energy sector seeks to address climate change and other forces driving its transition to becoming a more digital and decentralized industry, with a smaller carbon footprint.
© Mitsubishi Heavy Industries, Ltd.