The global and local natural gas and liquefied natural gas (LNG) industries are changing and the global influx of supply, lower prices and environmental benefits of natural gas are driving consumers to convert from other fossil fuels, says natural gas solutions provider Volco Power.
The company notes that natural gas consumers on pipeline systems currently have the ability to benefit, but for those not connected, or what it refers to as a “stranded market”, LNG may be the only opportunity to convert to natural gas.
Volco says that, as this market evolves, a unique opportunity is emerging for participants in the LNG market and could lead to a shift in business focus.
Traditionally, natural gas has been used for heating, power generation and industrial process purposes. There has been limited use of natural gas in the transportation sector, but it has been localised and minor in relation to the overall trade.
With the possibility of conversion to natural gas by consumers, a new market is developing for both the traditional natural gas sector and LNG, says Volco.
It notes that, owing to the increasing flexibility in its logistical chain, in combination with the advantages of gas, such as its environmental benefits and a large and growing resource base, LNG is a natural choice to help meet the world’s growing energy needs.
“The permanence of the LNG market as a major contributor to the global energy balance is evident,” acclaims the company.
The growth of the global natural gas market, and in particular the distribution of LNG to smaller end-users, has provided access to natural gas to a range of energy consumers.
While relatively small in comparison to the volumes traded within the traditional LNG value chain, the volumes traded within the “virtual pipeline” LNG value chain have allowed consumers to take advantage of new possible solutions to meet their energy needs. Building upon decades of safe, reliable and efficient transportation, LNG is shipped all over the world, making it a truly global resource, enthuses Volco.
The company notes that early adopters have already started to capitalise on the availability of LNG to make a fuel switch to natural gas.
Commercial and industrial users who are not connected to pipeline networks can now move away from the historical use of petroleum-based fuels and can install LNG storage and re-vaporisation facilities to serve their energy needs, posits the company.
As the use of LNG increases in the transportation, marine, commercial and industrial markets, many others are realising the benefits and investigating ways to use LNG in their applications.
Volco expects natural gas to continue to be a major fuel source for the foreseeable future, driven by a combination of cost, environmental benefits and abundance.
Therefore, it says LNG is set to play an important role in the expansion of the traditional uses of natural gas and in the challenge of reducing over-dependence on petroleum-based fuels.
The commercial case for LNG rests on a number of economic and regulatory factors, says Volco.
It explains that the economic factors include the price differential, or spread between fuels compared with the additional investment, the capital cost of equipment and infrastructure, the availability of LNG supply and the increase in demand that will determine not only the growth of the local market but also the value to participants.
SOUTH AFRICAN PROPOSITION
Highlighting the current South African power supply crisis and the need for dispatchable power to stabilise the electricity grid, Volco says natural-gas-to-power plant solutions are expected to be favourably considered by the Department of Mineral Resources and Energy (DMRE), State-owned power utility Eskom and other role-players.
“South Africa is facing a growing energy crisis. In the absence of significant proven gas reserves, it will need to import LNG to support the development of the natural gas market and, in the case of the proposed gas-to-power programme, the power generation capacity.
"With the growth in worldwide LNG supply, now is the optimum time for South Africa to launch into the LNG market,” the company emphasises.
Volco holds licences to import and supply LNG to industry for use, which it posits will provide a cleaner and more efficient fuel source in the country for industry and power generation.
Owing to all these necessary licences and approvals for the importation of LNG having been achieved, Volco says the company is in a strategic position to enable the supply of LNG to power solutions and industry in South Africa.
With LNG to industrial and power applications of all sizes available within relatively short time frames, and mobile solutions available for rapid deployment, Volco power enthuses that it is ready to engage and to embark on these activities.
The company has a number of technologies and services available and ready to be deployed.