{"id":29713,"date":"2012-05-17T15:30:01","date_gmt":"2012-05-17T19:30:01","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/05\/cng-the-missing-link-for-natural-gas-transportation\/"},"modified":"2012-05-17T15:30:01","modified_gmt":"2012-05-17T19:30:01","slug":"cng-the-missing-link-for-natural-gas-transportation","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/05\/17\/cng-the-missing-link-for-natural-gas-transportation\/","title":{"rendered":"CNG: The Missing Link for Natural Gas Transportation"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

\"CNG:<\/p>\n

Gas drillers and other companies are looking with intense interest at CNG-based transport and storage technology.<\/p>\n<\/div>\n

Pity the poor North Slope of Alaska…<\/p>\n

The region produces 600,000 barrels of oil a day, accruing millions of dollars for the state\u2019s treasury as the crude is pumped through the Trans-Alaska Pipeline System. But its 35 trillion cubic feet in natural gas reserves are essentially a wasted resource.<\/p>\n

For years, Alaskan authorities hoped a 1,700-mile natural gas pipeline, costing up to $40 billion by some estimates, might be the answer for tapping U.S. energy demand. Alas, gas in the Lower 48 is too cheap, and the pipeline too expensive. The overland-to-Alberta project was scrapped earlier this month. For now, the North Slope\u2019s gas reserves remain in the ground, without a viable way to get to market.<\/p>\n

It\u2019s not just Alaska\u2019s problem…<\/p>\n

Stranded Gas<\/strong><\/h2>\n

A 2007 EIA study concluded that, out of an estimated 6.1 trillion cubic feet of global natural gas reserves, roughly one-half is considered \u201cstranded.\u201d Remote and lightly populated regions like eastern Canada, northern Australia, Vietnam, Indonesia and parts of Russia\u2019s Siberia are all mentioned as having massive reserves of stranded gas.<\/p>\n

And then there\u2019s the problem of \u201cassociated gas.\u201d That\u2019s the name drillers give for the stuff that comes up the pipe in oil drilling operations. In 2010, one French oil company estimated that 30% of its greenhouse gas emissions \u2013 about 15 million metric tons of \u201ccarbon equivalent\u201d – were the result of flaring off associated gas at its drill sites. There just isn\u2019t an economical and safe way to do anything else but burn it as a waste by-product.<\/p>\n

But new transport and storage technologies for CNG might just offer new answers to these old problems\u2026<\/p>\n

Enter the Coselle<\/strong><\/h2>\n

Coselle \u2122 stands loosely for \u201ccoiled pipe in a carousel.\u201d It\u2019s being commercialized by Alberta-based Sea NG<\/strong>. What exactly is the system? Imagine a giant hexagonal-shaped garden hose reel, around 50 feet wide and 10 feet tall. Let\u2019s fill that \u201creel\u201d with 13 miles<\/em> of tightly wrapped six-inch diameter steel pipe, capable of holding four million cubic feet of compressed natural gas. That\u2019s \u201ca Coselle.\u201d<\/p>\n

Still with me? If you stack a bunch of these \u201cCoselles\u201d inside the hull of a specially-built \u201cCoselle Ship,\u201d you have a vessel capable of carrying up to 500 MMcf of CNG.<\/p>\n

That\u2019s smaller than what an LNG ship carries. But here\u2019s the trade-off: LNG requires a large technical infrastructure, mainly because of the liquefaction facilities necessary to convert the gas to liquid form. Liquefaction plants are the biggest cost component of any LNG project, with a price tag of up to $4 billion. For those reasons, LNG ships are used mainly for high volume, high-demand shipping routes. CNG ships of the kind envisioned for these new transport technologies are positioned for shorter, lower volume transits of up to 1,200 miles.<\/p>\n

So are Coselle-equipped ships the \u201cmissing link\u201d to the problem of stranded natural gas? Perhaps. Sea NG<\/strong> is a private firm, but it has two publicly-held heavyweights in pipeline and ocean transport: Enbridge<\/strong> (NYSE: ENB<\/a>) and Teekay Corp.<\/strong> (NYSE: TK<\/a>) as investors.<\/p>\n

It\u2019s also why gas drillers and other companies are looking with intense interest at this CNG-based transport and storage technology:<\/p>\n