MARINTEK has developed a competitive concept for small-scale, short-sea based distribution of LNG, which could make natural gas available in regions where demand is less than is commercially viable using pipelines or large vessels. Figure 1 illustrates how the concept could be developed on the western coast of Norway.

Figure 1. Kystgass - small-scale, short sea distribution of LNG.

The main requirement for trading natural gas is efficient transportation to client locations. The most efficient method of distributing natural gas is by pipeline, provided the volume is sufficient and the distances involved are not too great. In Norway the energy market for natural gas is small and cannot justify the cost of pipelines. For this reason, gas distribution is currently limited to some small pipelines close to the landing sites for gas from the North Sea. Conversion to LNG is an alternative to pipelines and is normally considered when the distances involved are too long for pipelines. KYSTGASS is a cost-effective concept, which opens up quite new possibilities for the distribution of LNG in outlying areas.

An LNG production and distribution system is a huge investment and has traditionally been developed on the basis of long-term contracts. Small-scale distribution of LNG is a new approach. The source of LNG could be a small-scale LNG production facility, either a base-load LNG plant or an LNG receiving terminal.

The concept is based on a multi-modal distribution chain for LNG, comprising the following elements;

Small LNG vessels (5000-10000 m3).
Modular seaside storage facilities receiving LNG from the vessels.
Final distribution to end-users via railway tankers, tanker trucks, tank containers or low-pressure pipelines.

The small LNG vessels are a vital link in the distribution chain. The number of vessels, their capacity and routes would have to be designed to guarantee a high frequency of calls at storage tank facilities. With short replenishment intervals the capacity and thus the investments in the local tank facilities could be kept at a minimum.

The final distribution of LNG to end-users may be based on any of several methods such as low-pressure pipelines to individual customers within a limited area, or by tanker truck, tank container or railway tanker for site-specific demands further from the storage facilities on the coast.

The KYSTGASS concept would make natural gas commercially viable in regions with limited needs. The concept as developed is commercially robust, since the main investments are the vessels and the modularised storage facilities. The number of vessels and the capacity of each storage facility could be developed in step with the development of market demands. Initial investments costs could thus be kept to a minimum, scaling options would be retained.

Contacts at MARINTEK: Bjørn Egil Asbjørnslett / Per Magne Einang

(This article is presented in MARINTEK Review No 3 - June - 2003)

Published January 26, 2005