1. LNG Transportation and Storage
William Guo
10/11/2005

2. Overview Introduction Background Challenges Economic Feasibility
Government Policy
Conclusion

3. Introduction Increasing natural gas demand and cost
Source for reliable, affordable energy
Relatively mature technology
Cooling natural gas to -260° F, changes it from a vapor into a liquid
Reduces the space natural gas occupies by more than 600 times, making it a practical size for storage and transportation

4. Background Special designed LNG tankers with double hulls
Ships unload LNG at specially designed terminals where the LNG is pumped to insulated storage tanks
Converted back to gas at the terminal, which is connected to natural gas pipelines
LNG is stored in double-walled, insulated tanks

5. LNG Tanker

6. LNG Terminal

7. LNG Tank

8. Challenges High initial cost ($5 Billion +)
Lack of existing facilities and domestic markets
Supplier reliability
Transportation security

9. Producers & Markets

10. Economic Feasibility
Costs (Two 3 trains facility, 6,500 miles distance, 10 TCF reserve for 20 years)
Source gas: $1.3 Billion
Liquefaction: $1.4 Billion
Transportation: $1.8 Billion
Re-gasification: $0.5 Billion
Feasible with >3,000 mile distance and $5/MSCF outlet gas price

11. Government Policy
Confirmed supports from federal, state, and local level
FERC’s policy (2002) intends to remove economic and regulatory barriers to the development of onshore LNG import terminals

12. Conclusion In transition stage
High potential due to increasing gas demand
Largest risk is supplier stability
Currently only feasible with long transporting distance

13. Questions?