Zeus Development Corp. said last week that after extensive research it has concluded that compressed natural gas (CNG) ocean transport is competitive with liquefied natural gas (LNG) and subsea pipelines for gas reserves containing 0.3 to 3 Tcf and located 300 to 1,500 nautical miles from market. The Houston-based independent energy research firm said conclusions were drawn from analysis conducted during a joint industry project by18 companies completed earlier this month.

“The exciting aspect of CNG is that it will broaden the number of participants in the global gas marketplace. Nations that have too little natural gas to justify an LNG export plant, and cities with too little demand to warrant an import terminal may be able to trade CNG,” said Bob Nimocks, president of Zeus.

Nimocks explained that LNG export plants require huge reserves over their lives of 25 to 30 years, generally more than 10 Tcf. Likewise, pipeline projects extending several hundred miles undersea require more than a half billion cubic feet per day — 5 Tcf of reserves. “CNG technology, on the other hand, might reach reserves producing as little as 30 MMcf/d — 0.3 Tcf total,” Nimocks estimated.

As part of the study, Zeus compared the economics of CNG to LNG, pipelines and reinjection. The company identified and ranked 16 gas basins and markets where CNG appears well suited.

“We obtained estimates from numerous offshore pipeline, LNG and marine construction authorities, as well as nine CNG designers,” Nimocks said. “CNG barges may augment transport on the small end of the reserve-distance scale, while ships will reach mid-range reserves at longer distances. Gas produced in association with oil offers the best returns.”

Many of the conclusions in Zeus’ report were arrived at during its June conference to discuss the issues and challenges that remain for CNG advancement (see NGI, July 8). One conclusion is that standards need to be developed to ensure that the technology is safe and environmentally friendly, yet competitive. According to Zeus, U.S. regulators are receptive to ideas for CNG to diversify natural gas supplies.

Participants in the study included ATP Oil & Gas, Barnes & Click, Bluewater Offshore, BP, ChevronTexaco, DNV, Enbridge, Freeport-McMoRan, Leif Hoegh, Marathon, Mitsubishi, NYK Line, PTL Associates, Shell, Teekay Shipping, World Bank, TransCanada, UOP and Nelson Engineering.

For more information on acquiring a copy of the report, computer model and conference proceedings, contact Zeus’ Mark Voss at (832) 200-3701.

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