Page 60 - Handbook of Natural Gas Transmission and Processing Principles and Practices

are yet to make serious inroads into the challenges of developing remote gas fields. Fig. 1.12 shows
that as the distance over which natural gas must be transported increases, usage of LNG has
economic advantages over usage of pipelines. As can be seen, for short distances, pipelines—where
feasible—are usually more economical. LNG is more competitive for long-distance routes
particularly those crossing oceans or long stretches of water since the overall costs are less affected
(Economides and Mokhatab, 2007).
LNG, an effective long-distance delivery method, constitutes only 25% of global gas movement.
However, LNG can offer flexibility, diversity, and security of supply advantages over pipeline
alternatives. Traditional LNG projects require large investments along with substantial natural gas
reserves and are economically viable for transporting natural gas in offshore pipelines for distances

of more than 700 miles or in onshore pipelines for distances greater than 2200 miles (Mokhatab
and Purewal, 2006). However, lower cost mid-scale LNG technologies have been developed for the
smaller natural gas reservoirs, such as the shale gas fields, which will become more prevalent in the
coming years.

FIGURE 1.11 Production volume versus distance to market framework for gas technologies (Wood and
Mokhatab, 2008).

Note, CNG is an economic alternative to monetize stranded gas reserves and creates new market
where pipelines and LNG deliveries are not practical. The CNG technology provides an effective
way for smaller volumes and shorter-distance transport of gas. The results show that for distances

up to 2200 miles, natural gas can be transported as CNG at prices ranging from $0.93 to $2.23 per
MMBTU compared to LNG, which can cost anywhere from $1.5 to $2.5 per MMBTU depending on

the actual distance. At distances above 2200 miles the cost of delivering gas as CNG becomes
higher than the cost for LNG because of the disparity in the volumes of gas transported with the
two technologies (Economides et al., 2005). Also, unit gas transportation comparisons for pipeline,
LNG, and CNG (see Fig. 1.13) suggest that pipelines will match the CNG costs at transportation
volumes of about 750 MMcf/d or greater over intermediate distances. At lower volumes below this,
CNG will offer lower unit transportation costs. LNG will match CNG unit transportation costs at
larger volumes or longer distances. Therefore, the CNG technology may have the potential to
challenge LNG transportation for some niche markets. CNG can start with much smaller initial

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