SECTION ONE: INTRODUCTION 1
What are Natural Gas and Liquefied Natural Gas? 1
Why Do We Need LNG? 2
How LNG is Made and Delivered to Consumers 3
Measuring LNG 5
A Brief History of LNG 7
The Current LNG Marketplace 9
SECTION TWO: WORLD SUPPLY AND DEMAND 13
World Natural Gas Demand 13
World Natural Gas Supply 14
Matching Supply and Demand 15
Supply and Demand in Europe 16
Supply and Demand in North America 17
Supply and Demand in Asia, the Pacific and the Middle East 18
Supply and Demand in South and Central America 20
Supply and Demand in Africa 21
Summary of World Supply and Demand 22
SECTION THREE: LIQUEFACTION 25
Liquefaction Technology 25
Removal of Impurities and Recovery of NGLs 25
Liquefaction of the Methane 27
Storage and Pumping the LNG into Tankers 28
Ship Loading Facilities 29
Liquefaction Plant Costs 29
Capital Costs 29
Variable Costs 30
Liquefaction Infrastructure 30
Existing Plants 30
Proposed and Future Plants 32
Key Issues 32
SECTION FOUR: SHIPPING 35
Ship Technology 35
The Hull and Containment System 36
Vapor Capture and Cargo Monitoring 38
Propulsion 39
Loading and Unloading 40
Ship Certification 41
Shipping Costs 41
Capital Costs 41
Variable Costs 42
The LNG Fleet 43
The Existing Fleet 43
Future Fleets 44
Key Issues 46
SECTION FIVE: REGASIFICATION 49
Regasification Technology 49
Berthing and Unloading 49
Storage 50
Vaporization 52
Delivery into the Pipeline Grid 53
Offshore Regasification Technology 54
Onshore Regasification Plant Costs 55
Capital Costs 55
Operating Costs 56
Regasification Infrastructure 56
Existing Terminals 56
Future Terminals 57
Future Storage Development 57
Future Offshore Terminals 58
Key Issues 60
SECTION SIX: SAFETY AND ENVIRONMENTAL CONCERNS 63
Safety Issues 63
Physical Properties of LNG 64
Specific Safety Concerns 64
Pool Fires 65
Vapor Cloud Fires 65
Rapid Phase Transition Explosion 66
Additional Hazards of Leaking or Spilled LNG 66
LNGand Terrorism 67
Risks Relative to Other Industries 68
The Historical Safety Record of LNG 69
Handling Safety and Security Issues 70
Environmental Issues 72
Conclusions 72
SECTION SEVEN: REGULATION AND PERMITTING 75
Regulation 75
Liquefaction Facilities 77
Shipping 78
Regasification Facilities 79
Offshore Facilities 82
Permitting 83
SECTION EIGHT: MARKET DYNAMICS 87
The LNGValue Chain 87
Market Participants 90
Contract Structure 91
Risk Management in the LNGMarketplace 96
Financing LNGProjects 98
The Current State of the LNGMarket 100
SECTION NINE: THE FUTURE 105
Technology Issues 105
Geopolitical Issues 107
Market Issues 108
Will LNG Demand Continue to Grow? 109
Will Investment be Available to Construct the Necessary Infrastructure? 109
How Will the LNG Business Adapt to Short-term Markets? 110
How Will Future Prices be Determined? 110
Who Will Dominate the Future Marketplace? 111
Global Gas 111
APPENDIX A: GLOSSARY 115
APPENDIX B: LNGUNITS 125
APPENDIX C: ACRONYMS 127
APPENDIX D: WORLDWIDE LIQUEFACTION TERMINALS 131
APPENDIX E: WORLDWIDE REGASIFICATION TERMINALS 137
APPENIDX F: INDEX 143