|Liquefied petroleum gas (LPG; also known as liquid petroleum gas, LP Gas, or autogas) is a mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles, and increasingly replacing chlorofluorocarbons as an aerosol propellant and a refrigerant to reduce damage to the ozone layer.
What are some of the available LPG mixes?
LPG bought and sold includes mixes: primarily propane, primarily butane, and the more common mix includes propane (60%) and butane (40%), depending on the season. Propane is more dominant in the winter, while butane is used in the summer months. LPG is manufactured during the refining of crude oil, or extracted from oil or gas streams as they emerge from the ground.
How is LPG bottled and stored?
LPG will evaporate at normal temperatures and pressures, and as a result it is supplied in pressurized steel bottles. These bottles are not filled completely so as to allow for thermal expansion of the liquid. Generally, the bottles are filled to between 80% and 85% of their capacity. The ratio between the volumes of the vaporized gas and the liquefied gas varies depending on temperature, pressure, and composition. It is generally around 250:1. The pressure at which LPG becomes liquid (vapor pressure) also depends on the temperature and composition.
How is LPG transported?
LPG is carried by sea in an LPG vessel that carries it as a liquid and for the most part in large quantities. The liquid may be under pressure, semi pressurized, or fully refrigerated. On average, large gas carriers may carry about 80,000 cubic metres of LPG.
Generally this will be in a fully refrigerated state where the cargo is cooled to boiling or bubble point, and the cargo is kept cool by the reliquefaction of the vapours produced once the LPG is in the cargo tanks. The vast majority of cargoes are either propane or butane, but it is common for LPG ships to carry ammonia which, due to its toxicity, is regarded as a chemical rather than LPG. Carriage temperatures are around minus 44 degrees Celsius for propane and minus 5 degrees Celsius for butane.
Did you know LPG:
- Is synthesized by refining petroleum or natural gas;
- Was first produced in 1910 by Dr. Walter
- Commercial products first appeared in 1912;
- Currently provides about 3% of the energy consumed in the U.S.;
- Is often referred to as autogas, and is used to fuel internal combustion engines;
- Since the 1940s, has been used by some countries as an alternative fuel for spark ignition
engines, and lately it is being used in diesel engines; and
- In Brazil’s urban areas, is the most common cooking fuel; the Brazilian government provides poor families with the "Vale Gás" grant that is used to acquire LPG.
What is LNG?
Liquefied natural gas (LNG) is a natural gas that has been processed to remove components such as helium, or impurities that could cause difficulty downstream (i.e., water and heavy hydrocarbons) and is then condensed into a liquid at almost atmospheric pressure (Maximum Transport Pressure set around 25 kPa) by cooling it to approximately -163 degrees Celsius.
How is LNG transported?
LNG is transported by cryogenic sea vessels and road tankers. LNG is stored in specially designed tanks; and since it is about 1/614th the volume of natural gas at (standard temperature and pressure; STP) it is more cost-efficient to transport over long distances where pipelines do not exist. Where moving natural gas by pipelines is not possible or economical, it can be transported via LNG vessels.
LNG offers an energy density comparable to diesel and petrol fuels; more importantly, it also produces less pollution. Additionally, LNG shipping projects generally have:
- Solid contracts in place for construction and operation;
- A sound, long-term charter/hire agreement, through debt maturity;
- A lending structure limiting business activities, restricting additional debt, and preserving liquidity;
- Use of proven containment and ship designs;
- Reliable operations and maintenance providers;
- A legal structure supporting contract enforceability and limiting credit risk events from sponsors;
- Cash flow that remains robust; and
- Association with an investment grade LNG plant.
What facilities are needed for LNG?
The most important infrastructure needed for LNG production and transportation is an LNG plant consisting of one or more LNG trains, each of which is an independent unit for gas liquefaction. Other facilities needed are load-out terminals for loading the LNG onto vehicles, LNG vessels for transportation, and a receiving terminal at the destination for discharge and regasification, where the LNG is reheated and turned into gas. Regasification terminals are usually connected to a storage and pipeline distribution network to distribute natural gas to local distribution companies (LDCs) or Independent Power Plants (IPPs).
Trading LNG involves:
Signing a sale and purchase agreement (SPA) between a supplier and receiving terminal, as well as signing a gas sale agreement (GSA) between a receiving terminal and end-users completes a LNG trade. The agreements for LNG trade used to be long-term portfolios that were relatively inflexible both in price and volume. If the annual contract quantity is confirmed, the buyer is obliged to take and pay (TOP) for the product, or pay for it even if not taken.
Did you know:
- In 1964, France and the U.K. were the LNG buyers under the world’s first LNG trade from Algeria.
- The largest LNG train is the SEGAS Plant in Egypt with a capacity of 5 million ton per annum
- The construction of an LNG plant costs
USD 1 billion to USD 3 billion.
- A receiving terminal costs
USD 0.5 billion to USD 1 billion.
- LNG vessels cost
USD 0.2 billion to USD 0.3 billion.