Calgary Company Proves Small-Scale LNG Has Tremendous Potential
The oil and gas sector primarily views LNG as a large-scale play; massive facilities turn natural gas into millions of tonnes of chilly liquid that are then shipped to major utilities in Asia and Europe.
But, as outlined at a technical forum at the World Petroleum Congress in Calgary, significant opportunities exist for small-scale LNG plants around the world.
“There are one billion people on this earth with no electricity at all, and another 1.5 billion people with intermittent electricity,” notes Paul Doucette, Hydrogen Program Officer at the University of Houston, and chair of the forum. “That’s a ton of people who aren’t being served.”
Don Streu, president and CEO of Calgary-based Condor Energies, presented a paper outlining opportunities in Kazakhstan, in Central Asia. “Kazakhstan has been blessed with some of the largest critical resources,” he noted, including silver, molybdenum, gold and copper. “All of those minerals are necessary for the energy transition, for building batteries.”
Typically, open-pit mines use diesel-powered, 240-tonne trucks to haul the rock from ore-body face to the mill. While Kazakhstan has comprehensive oil and gas reserves, it lacks refining capacity, and much of the diesel fuel has to be imported at great expense. The government has also vowed to achieve net-zero carbon neutrality by 2060, making it all the more urgent to find substitutes to diesel.
LNG is a viable alternative to diesel. It has more energy-density than the latter fuel, meaning greater mileage per tank. When burned, it emits no sulfur or particulates, and is less stressful on an internal combustion engine, meaning less maintenance costs.
But a full-scale LNG plant takes years to permit and build and, when the costs of a pipeline and other associated infrastructure are added in, the total price tag can exceed $10 billion.
Condor Energies is partnered with NuBlu Energy, a Texas-based company that has been building small-scale LNG modules that can produce from 50 - 1,000 tonnes per day (tpd). Their process is relatively simple and energy-efficient; after the gas has been cleaned of impurities (such as sulfur and water), it is introduced to a compressor where all refrigeration energy is generated by let-down pressure.
The skid-mounted plants can be installed and operational in a matter of months, not years, and the costs are much lower; capex for a 200 tpd module is under $50 million, and a 50 tpd system is $15-18 million.
In Kazakhstan, mine operators have already expressed keen interest in LNG as a means of saving money. “There are over 1,600 mine haul trucks worldwide using LNG, with over 10 million hours of usage logged,” says Streu. “They are reporting 70 per cent less maintenance and longer engine life.”
But Condor is also looking to Kazakh rail operators, where engines can haul heavier loads longer distances. The company has plans to build up to six, small-scale LNG plants throughout Kazakhstan, close to industrial consumers. “When all phases are complete, up to 600,000 tonnes of LNG could be produced annually, displacing 670,000 tonnes of diesel fuel and reducing CO2 emissions by over 250,000 tonnes annually,” says Streu.
Doucette envisions that the technology could have widespread applications in developing countries where stranded gas assets can be leveraged to deliver electricity to remote communities that have traditionally relied on diesel to generate power. “By using small-scale LNG, you can leapfrog high-emission sources.”
While small-scale LNG may be ideal for developing countries, Condor sees economical, environment-friendly applications closer to home. “In northern Canada, you can use it in isolated communities and mines to displace diesel,” says Streu. “This is not new technology, it is proven technology.”
- International LNG