More companies are stepping up to produce and distribute liquefied natural gas (LNG) from small-scale facilities to points throughout the Northeast and the Mid-Atlantic as pipeline projects face pushback in the region.
“Small-scale LNG and distributed LNG is becoming much more predominant” in discussions of how growing natural gas production can be matched with demand throughout the country, said Stabilis Energy LLC COO Jim Aivalis, who spoke at LDC Gas Forums Northeast in Boston last week. Stabilis, a small-scale producer and distributor of LNG with operations in Texas, has delivered about 200 million gallons of LNG across the country.
While attendees were urged to push back against growing opposition to infrastructure projects in the Northeast, especially as natural gas demand is expected to grow with much larger gas export projects that could require additional capacity in the coming years, small-scale LNG has an important role to play too.
Rev LNG LLC CEO David Kailbourne, whose company is Pennsylvania-based, noted that from 2000-2018, U.S. natural gas consumption increased by about 28%, which he said demonstrates a clear need for more delivery options. It’s one reason he co-founded Rev in 2012 to offer mobile fueling units that provide LNG to operations in remote areas without pipeline access.
A lack of pipeline capacity in some areas of New England has prevented the region from tapping abundant Appalachian supplies. New York has repeatedly denied key approvals for pipelines that would get more gas into the state and New England, while other major infrastructure projects such as the Atlantic Coast, Mountain Valley and PennEast pipelines continue to be slowed by environmental opposition.
Speakers also said many rural areas in the country are unlikely to ever get pipelines because there’s little demand to justify the costs.
“We field calls every day on new opportunities. People calling and saying, ‘hey, have you ever supplied gas for this?’” said Steve Toelke, who oversees virtual pipeline operations for California-based Quantum Fuel Systems LLC. Quantum manufactures compressed natural gas (CNG) and LNG tanks for filling and delivery to remote locations. The company offers 10- to 45-foot trailers that can hold anywhere from 63,234 Scf to 534,379 Scf of gas.
Quantum also gets calls for hydraulic fracturing (fracking) and completions operations, Toelke said. “To be honest with you, I think the biggest call we’re getting these days is to supply gas for fracking sites, and I think a close second -- based on changes in legislation across the country -- is for marijuana grow facilities.
“Generally, they’re not in highly dense areas; they’re kind of out in the middle of nowhere,” Toelke told the LDC Forums crowd, saying he’s had recent discussions with roughly a dozen companies about the opportunity. “They need a lot of gas, they need a lot of heat, they generally do all their power generation through a CNG generator and they use the carbon dioxide from the generator to recirculate through the growth center.”
Virtual pipelines, or gas “service on wheels” as Toelke called it, can also fill the void during pipeline maintenance and supply interruptions.
The biggest space for Quantum, which has delivered LNG across the country, is the oil and gas industry itself. Customers can use Quantum trailers to capture flare gas at one well site and those can then be transferred to another site to fuel power generation, he said. Quantum has provided such services in Colorado, North Dakota and Texas.
In related news, Edge Gathering Virtual Pipelines 2 LLC said Tuesday it started producing LNG at Marcellus Shale well sites in Pennsylvania last month for distribution throughout the region and the Mid-Atlantic. The company is backed by a subsidiary of one of the world’s largest utilities, NextEra Energy Inc.
One of Edge’s first customers was Emera Energy Services Inc. in New England, which received 30,000 gallons of LNG from on-site Marcellus production.
Another benefit of small-scale production and distribution is cost-efficiency, according to Edge and panelists at the LDC Forums event. Without gathering, processing and pipeline transportation expenses, truck-delivered LNG is a competitive solution for stranded gas and remote areas.