LNG: Natural gas goes global

Through the use of ExxonMobil technology, we have been able to increase the size of liquefied natural gas (LNG) ships, such as the Q-Max LNG ship, and significantly reduce shipping costs.

Many of the technological advances that are enabling the creation of a global liquefied natural gas (LNG) market were developed by ExxonMobil, the global leader in LNG technology.

ExxonMobil is one of the few companies in the world with the expertise and financial strength to pursue an integrated approach to LNG, from well head to customer. With our state-of-the-art technology, we develop remote gas fields; build liquefaction facilities; design, construct and charter LNG tankers; and construct terminals needed to “regasify” the LNG in demand markets.

ExxonMobil, together with its partners, currently is producing nearly 35 million tons per year of LNG. We anticipate increasing our joint production to almost 65 million tons per year by 2010. And beyond 2010, we expect this to go up to around 100 million tons per year.

The world’s largest “trains”
In a cost-intensive business like LNG, economies of scale are critical. ExxonMobil engineers, working closely with joint-venture partners, have designed and are building the world’s largest LNG “trains.” The facilities used to convert natural gas to liquid are called “trains” because of the sequential arrangement of the equipment required to process the gas.

Over the past 10 years, the production trains that manufacture LNG have doubled in size from 2 million tons per year to 5 million tons per year, and new trains able to process 7.8 millions tons per year are under construction by ExxonMobil and our partners.

Today, RasGas and QatarGas – joint ventures including ExxonMobil and our partner Qatar Petroleum – are developing LNG trains in Qatar that each will be able to process 7.8 million tons per year. That’s equal to more than 1 billion cubic feet a day of natural gas, enough to meet, for example, the daily needs of about 5 million residential customers.

These Qatar trains will have the sufficient scale of efficiency to competitively reach North American markets.

The LNG trains are part of our work to support the development of Qatar’s North Field, the largest non-associated gas field in the world. ExxonMobil has been working with Qatar Petroleum to develop the field since the early 1990s. ExxonMobil and Qatar Petroleum, along with our respective affiliates and international coventurers, are building integrated LNG “chains” consisting of trains, ships and receiving terminals to serve customers in Europe, Asia and the United States.

A breakthrough in LNG tankers
Shipping accounts for a significant portion of the cost of bringing LNG to market, so finding ways to lower transportation costs helps make it possible to ship LNG longer distances.

The size of LNG ships had been virtually unchanged for more than 30 years. Working with our partner Qatar Petroleum, ExxonMobil developed a new generation of larger, more efficient ships. The Q-Flex and Q-Max designs can carry about 45 and 80 percent, respectively, more LNG than the average carrier operating today and can access LNG terminals in all of the world’s major LNG markets.

This landmark achievement will enable Qatar to send its abundant natural gas resources to markets well beyond its traditional customer base in Asia.

The breakthrough in LNG transportation was the result of efforts by teams of experts who developed larger cargo tank designs and optimized ship propulsion through use of more efficient power plants and hull configurations. In addition, the ships deliver more LNG to market, as processing technology has been installed on the ships to re-liquefy LNG that otherwise would convert back into a gaseous state and be used for ship fuel during the course of a long sea voyage.

ExxonMobil and Qatar Petroleum’s LNG fleet will include 27 Q-Flex and Q-Max ships, with the first ships having entered service in 2007 and all ships delivered by the end of 2009.

The UK, Italy and the U.S.
Once an LNG tanker reaches its destination, its cargo must then be turned back into gas so that it can be shipped via the pipeline network that reaches consumer markets. ExxonMobil is employing its technological expertise and long experience in LNG to develop regasification terminals.

For example, ExxonMobil’s Adriatic LNG terminal is the first offshore gravity-based regasification terminal in the world. The terminal was constructed in Algeciras, Spain, and transported in September 2008 to its final location off Italy’s northern Adriatic coastline where it commenced supply to Italy in August 2009. The main structure of this concrete-based terminal rests on the seabed in 95 feet of water, about 10 miles offshore, and out of sight of land. The terminal can supply the Italian gas market with up to 775 million cubic feet of gas per day, or about 10 percent of the country’s gas requirements.

ExxonMobil also is constructing onshore regasification terminals to bring LNG from Qatar to customers in the U.S. and Europe.

The Golden Pass LNG terminal being built near the Texas-Louisiana border will have a capacity of 2 billion cubic feet of natural gas per day. The facility will include unloading facilities for LNG ships, five large storage tanks, regasification equipment and a 78-mile pipeline to connect to several natural gas lines that feed Texas and much of the eastern United States. The Golden Pass facility is expected to begin operation in 2010.

Our South Hook terminal in Milford Haven, Wales received its first cargo in March 2009 and will have the capacity to deliver up to 2 billion cubic feet of natural gas daily into the UK gas grid.