Offshore liquefied natural gas (LNG) and compressed natural gas (CNG) terminals came closer to reality last Tuesday with the passage of H.R. 3983 by the House of Representatives. If the Maritime Transportation Antiterrorism Act of 2002 becomes law in its current form, among other things it would allow the Department of Transportation to license offshore port facilities for both LNG and CNG, an option currently reserved only for oil.

Technological advances, many just in the last few years, and improved economics in natural gas shipping have made commercial trade and sea transportation of natural gas, including CNG, more viable. Multiple LNG facilities, most of them onshore projects, have been announced on every U.S. coastline and in Mexico, but recently CNG shipping has become more than just a possibility.

Companies such as EnerSea Transport LLC are developing ways of compressing gas on ships to increase volumes and make transportation more efficient and economic. Williams also is in the process of developing new CNG shipping technology. EnerSea says it hopes to have ships in the water by 2005. The legislation, however, will remove a major regulatory roadblock that has been standing in the way of offshore facilities.

“In addition to reducing port vulnerability and protecting coastal communities, it is equally important to improve upon our energy security by increasing access to sources of clean-burning natural gas in the Western Hemisphere and meet our growing demand for energy,” said Paul Britton, EnerSea’s managing director. “This bill provides a mechanism to develop and bring to U.S. consumers natural gas that currently is stranded. In fact today, up to 80% of the natural gas fields worldwide have yet to be developed — potentially a tremendous resource.”

Traditionally, energy experts have planned on development of the deepwater Gulf of Mexico, unconventional onshore gas resources, gas from Alaska’s North Slope and imported liquefied natural gas (LNG) to help meet growing demand for natural gas. To complement these resource options, the new legislation will allow EnerSea Transport to move forward with unique CNG technology that will unlock stranded gas supplies and provide transport, storage and marketing services for CNG in a cost-effective and safe manner, the company said.

EnerSea has developed a way to increase the amount of natural gas that can be transported on a vessel in compressed form by 60-80%. Those larger volumes could make CNG competitive with deepwater pipelines and LNG. EnerSea has optimized the way the gas is loaded and unloaded using pressure and temperature. Depending on the size of the vessel, 200 MMcf to 2 Bcf of CNG could be transported, said Kyle Simpson, president of Morgan Meguire Energy Technologies, a partner with EnerSea in CNG technology development. EnerSea also has a contract with South Korea’s Hyundai, the world’s largest ship builder, to complete the plans for building CNG vessels.

The range on CNG transport is 4,000 to 6,000 miles in contrast to the longer hauls possible with LNG. Simpson said gas in compressed form probably would come from Trinidad to the Gulf or East Coast, from Cook Inlet in Alaska to Hawaii or California or even from Newfoundland to the Northeast.

The CNG terminals won’t be large facilities, said Simpson. “They will be off-loading turreted buoys that the ship will come up and attach to. The buoy will have a flexible pipe going down to a subsea pipeline. In the Gulf of Mexico, for instance, there are lots of underutilized gas pipes and you could just attach an off-loading buoy to that and send the gas right into the pipe system. It’s very inexpensive compared to LNG. You could do an off-loading facility for $30 million.” Simpson said CNG shipping from Trinidad to the Gulf would beat LNG economics by 50 to 75 cents.

“The technology was invented in 1996, but it’s really not new technology per se; it’s just putting together some very standard processes in a different order and combining them into what is now a new system,” he said. Details and contact information about Houston-based EnerSea Transport can be found at https://www.enerseatransport.com.

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