Episode 44 | Global Gas | Freeport LNG

I've been wanting to do a Liquefied Natural Gas (LNG) export story for a while. Thankfully Christian Goff at Pure Energy PR was able to put me in contact with Freeport LNG, one of the first and largest operators in the United States.

 

I've always thought Liquefied Natural Gas was simply more compressed than Compressed Natural Gas (CNG).  My years in the CO2 sequestration sector pointed to this.  However, while CNG is compressed to about 3,000 psi, LNG is chilled, similar to how you don't make ice by squishing it.

 

At -260°F, LNG takes up 1/600 the room it takes at atmosphere.  It's also 2.5x more energy-dense than CNG.  However, LNG is only about 70% the energy density of gasoline, despite all the effort to get it liquefied.  Transporting gas in this manner is the only way to make it cost-competitive.

 

Liquefaction takes a little work.  First off, there are a lot of impurities in the gumbo we call "natural gas" that will freeze and damage the LNG infrastructure if it were also chilled to -260°F.  An entire "Pre-treatment" facility must be built to remove water, CO2, H2S, and even other hydrocarbons.  Therefore, LNG is almost entirely Methane.

 

A Liquefaction facility chills the gas using a propane-based method developed by Air Products.  Because the facility is located in Houston's non-attainment air quality zone, the compressors must be electric- rather than diesel-driven.

 

Based on FERC Data, the number of U.S. LNG terminals is about to double.  It shows:

 

  • Existing Terminals
    • Export - 3
    • Import/Export - 3
    • Import - 9
  • Approved Terminals
    • Export - 16
    • Import - 0

 

Other FERC Data shows the "Landed Prices" of LNG around the world are lowest in the U.S., around $2.75/MMBtu, whereas South America, Central Europe, India, South Korea, and Japan are about $11.50.

 

Freeport LNG was founded in 2002, and like another company we profiled in Episode  14, Cheniere Energy, the project was originally envisioned as an import terminal.  Freeport's Import Facility was completed in 2008, but by then the Shale Boom was in full swing and this country needed to export gas.

 

The company currently has three trains under construction and should have all of them ready by 2019.  A fourth train is under development with plans to go online around 2023.

 

My guest this week, Aaron Neus, SVP Strategy & Development, began working on this project as the managing director overseeing the capital-raising effort.  He transitioned to Freeport in 2015.

 

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