Houston-based EnerSea Transport LLC, a player claiming a technological advantage in the budding compressed natural gas (CNG) oceanic transportation and storage business, announced Tuesday it was forming a strategic partnership with Tanker Pacific in the development of what EnerSea envisions as a portfolio of niche natural gas transportation and storage projects that can both complement and compete with liquefied natural gas (LNG).

Mercuria Holdings Limited, a principal of Tanker Pacific Group, a leading gas storage player, purchased an equity stake in EnerSea, which said the added investment should strengthen its strategic position in the still ill-defined CNG oceanic transport/storage business.

Mercuria spokesperson Samuel Norton said his company expects CNG to emerge as a “complementary solution” to LNG, allowing “monetization of potentially hundreds of stranded gas fields that do not justify the capital investment required for LNG.”

With its own patented technology, “VOLTRANS” (Volume-Optimized Transport and Storage), EnerSea is betting it can use the cost and flexibility advantages that CNG holds over the capital-intensive upstream LNG production and processing equipment to bring stranded supplies to markets around the globe at up to almost half the volume of LNG tankers via CNG. EnerSea hopes to offer flexible and less costly offshore storage and re-gasification processing for under-sea pipelines that would eventually take the supplies to market.

A combination of software, hardware, materials and processing advances allow EnerSea’s equipment to store 40-60% more gas-per-pound of steel, a company spokesperson said. It is a proprietary, patented process owned by the company, which was founded by a group of upstream oil/gas industry veterans that have deep-water engineering/operating expertise.

“If existing LNG projects are in provinces where there is more gas than can be economically handled by the LNG system and they want to monetize that, we can offer a solution that might be an interim step for volumes or market demand that isn’t quite sufficient to support additional trade as LNG,” said John Dunlop, a Houston-based spokesperson with EnerSea.

“But we don’t spend a lot of time targeting that [LNG-related] market because we see a lot of supplies and markets around the world that are in need of their own solutions, and presently don’t have any. Even offshore [gas] accumulations are a potential market. We can take gas at offshore production facilities — particularly in the deep water — and provide storage and transport solutions.”

At this time, EnerSea has no talks ongoing with proponents of various onshore and offshore LNG projects along the Southern California coast. The firm is focused on the Gulf of Mexico and has a proposal for the Atlantic-Canada LNG project in the northeastern United States or Nova Scotia, along with interests in Southeast Asia and Australia, said Dunlop.

“You put a liquefaction plant on the ground, you have made your investment and it is not going anywhere,” Dunlop said. “It is the same way with the pipeline going from Point A to Point B; it is fixed in capacity and location. A lot of gas sources around the world are found in places where you might have commercial or political risks that make the financing of such an investment very problematic.

“On the other hand, our system is almost entirely on the water, and most of the capital required in CNG is in the ships. The terminals that we have to move the gas and deliver it to the market are a very small fractions of that [ship cost], compared to LNG projects. So, with CNG, you’re not necessarily putting as much investment at risk. We can also redeploy and scaleup very easily.”

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