Abstract
Natural gas can be transported either in the gaseous state in a pipeline (system) or in liquefied form (as LNG) by trucks or ships. Truck- and ship-based transportation is also possible for compressed natural gas (CNG).
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Compare to storage, Sect. 8.1.
- 2.
In addition, sometimes ‘gas-to-wire’, i.e., natural gas transformed to electricity and then transporting the electricity; ‘gas-to-liquids’ (GTL), i.e., natural gas transformed to liquid hydrocarbon products as, e.g., kerosene or diesel, and then transporting the liquids; or ‘gas-to-solids’, i.e., natural gas hydrates, transported by ship or truck, are referred to as methods of natural gas transportation. As natural gas (itself) is not transported, such methods shall not be discussed subsequently.
- 3.
See British Petroleum (2016), p. 29.
- 4.
Whereby offshore pipelines may have inlet pressures as high as 150 bar, see Chandra (2006).
- 5.
See, e.g., Keyaerts et al. (2008), p. 2. This equation is an approximation only: compressibility, temperature, and specific gravity are assumed constant (and included in const); the exponent of the diameter is not exactly = 5, but better described by (2.x * 2), with (typically) 0.4 < x < 0.7 (see also calculation of costs in Sect. 7.3.1.1). For the approximate calculation of flows of (natural) gas in pipeline, inter alia, also the Panhandle equation or the Weymouth equation are used. This approximation is also used to determine the capacity of the pipeline.
- 6.
See also Sect. 4.1.2.
- 7.
Neither the decrease nor the increase are linear. For further reference, see, e.g., Hairston and Moshfeghian (2013).
- 8.
As a rule of thumb, it is often assumed that the fuel gas consumption in long-haul transportation pipelines is typically lower than 0.5%/100 km.
- 9.
In general, velocity has to be considered already when constructing the pipeline. Typically, velocities are approximately 20–30 m/s. There is no uniform opinion on the maximum velocity of natural gas flowing in a pipeline.
- 10.
Such compressors may either be equipped with either a wet- or dry-seal configuration to prevent natural gas leakage. While wet seals use oil around the rotating shaft, dry-seal compressors use the opposing forces created by hydrodynamic grooves and springs.
- 11.
For a detailed discussion of all technical aspects of LNG, see, e.g., Mokhatab et al. (2014).
- 12.
See, e.g., Chandra (2006), p. 49.
- 13.
However, some industry players regard LNG as a separate ‘product’, traded on its own ‘commodity’ market.
- 14.
See further description in Sect. 8.3.1.4.
- 15.
In some cases, when transportation distances are relatively short and the quantities to be transported are small, specially designed trucks might be used transportation. Recently, also tests with trains commenced [LNG World News (2016)].
- 16.
Typical boil-off rates are at approximately 0.15% per voyage day. Obviously, this factor depends on several factors such as ship’s and tank’s design, outside temperatures, etc. As already described in Sect. 4.1.2, LNG changes its chemical composition due to boil-off.
- 17.
One nautical mile corresponds to 1852 m.
- 18.
Calculated for a density of 450 kg/m3. Then, as shown above, 1 tonne of LNG corresponds to 1400 Nm³ of natural gas.
- 19.
Heel defines a minimum volume of LNG that remains in the vessel after discharging. It remains there to keep the tanks cold for the ballast voyage back to the loading port.
- 20.
Some regasification capacities do have reloading capacities for LNG. These facilities allow the reloading of LNG to other (smaller) vessels or to trucks.
- 21.
Costs could increase by 1.5–3%. See Chandra (2006), p. 64.
- 22.
- 23.
To be exact, this equation applies to isolated pipelines only. For pipeline systems, i.e., networks, the equations are more complex. Nonetheless, for the prevailing explanation, the simplification is regarded as sufficient.
- 24.
See Cerbe et al. (2004), p. 234, Fig. 5.50 for pipelines in distribution networks: \( {\text{c}}_{{{\text{Pipeline}} - 1}} = 0.46*{\text{D}}_{\text{Pipeline}} + 92 \) [€/m],
see Füg (1999), p. 9, 10 for national transportation: \( {\text{c}}_{{{\text{Pipeline}} - 2}} = 0.73*{\text{D}}_{\text{Pipeline}} + 111 \) [€/m] (p. 9) and: \( {\text{c}}_{{{\text{Pipeline}} - 3}} = 0.79*{\text{D}}_{\text{Pipeline}} + 120 \) [€/m] (p. 10), with \( {\text{D}}_{\text{Pipeline}} \) = diameter of pipeline [mm].
- 25.
See Fasold and Wahle (1996) p. 118. See also Sect. 7.2.1, where the flow, dependent on the diameter of the pipeline and the pressure, was approximated. For simplicity, \( \upgamma = 2.5 \) was assumed. In this section, the pressure at the delivery and the redelivery point is assumed to be given. Hence, not the flow, \( \varphi \), but the capacity, \( \upkappa_{\text{Pipeline}} \), is the quantity used.
- 26.
For purposes of the calculation of costs this, further simplified, approach for the pipeline capacity is chosen.
- 27.
The costs of compressors, as well as the costs of planning, can be neglected in the prevailing context; for further explanation, see Pustišek (2005), p. 45 et seq.
- 28.
See Sect. 7.3.1. Again, as a rule of thumb, it is generally assumed that the break-even point of LNG and pipeline transportation is to be found at a distance between 4000 and 7000 km. That is, up to this distance pipeline transportation may be more economic than transportation in form of LNG. Yet, such ‘estimation’ does not consider political, technical, and other economic restrictions and is, therefore, not suited to be applied for practical purposes.
- 29.
See Songhurst (2014), p. 29.
- 30.
Groupe International des Importateurs de Gaz Naturel Liquéfié (GIIGNL) (n.d.), p. 3.
- 31.
See Dunkerque LNG (2011).
- 32.
As, e.g., pension funds or hedge funds or insurances.
- 33.
Capacity-reservation systems are also referred to as ‘capacity type’ and pricing systems as ‘tariff type’; see Lapuerta and Moselle (2002), p. 56.
- 34.
The following definition refers to Lapuerta and Moselle (2002), p. 56 et seq.
- 35.
However, as described, e.g., by Lapuerta and Moselle (2002), p. 62, there are modifications of the point-to-point capacity reservation system, applied, e.g., in the US: “Many contracts in North America allow shippers to designate several ‘primary’ and ‘secondary’ entry and exit points. In the above example, a shipper might be allowed to designate A and B as its primary entry points. If so, then it would have a firm right to switch from A to B. The same shipper may be permitted to choose either C or D as a primary exit point, but the other one would be a ‘secondary’ exit point. If such a shipper wanted to switch deliveries from C to D, then the TSO would allow the switch if feasible. Typically the secondary exit point has priority over simple interruptible service.”
- 36.
The more customers a shipper serves, the more likely it is that such shipper will profit from equilibration of deliveries.
- 37.
See another example at, e.g., Lapuerta and Moselle (2002), p. 58 et seq.
- 38.
The proof may be omitted.
- 39.
This was confirmed in reality: after changing from the point-to-point system to the entry-exit system in Germany, the total firm capacity available was reduced.
- 40.
This ‘market value’ is not necessarily reflected in the actual market prices.
- 41.
As ‘tariff‘ is often referred to as taxes and duties, the term shall not be used in this book.
- 42.
See Sect. 5.3.
- 43.
The types of auctions implemented vary.
Regulators and carriers, in addition, frequently also promote and conduct so-called ‘open-season’ procedures, e.g., for new pipelines to be constructed.
- 44.
Expressed in units of, e.g., [€/a] or [€/month].
- 45.
However, it should noted that the distance between a delivery and a redelivery point can be defined and/or measured in different ways. For details, see Pustišek (2005), p. 76 et seq.
- 46.
It is assumed that the entry-capacity equals the exit capacity.
- 47.
Rounded to zero decimal places.
- 48.
Prete (1998), p. 7.
- 49.
Rounded to zero decimal places.
- 50.
Prete (1998), p. 7; also these prices are expressed, e.g., in units of [€/(m³/h)/ a] or of [€/(kWh/h)/a].
- 51.
For the definition of these terms, see Fig. 7.11.
- 52.
Whereby other costs, as, e.g., storage costs, are neglected for the simplicity of the argument.
- 53.
Whereby the term ‘transportation contract’ is used as equivalent to ‘network-access contract’ or ‘grid-access contract’.
- 54.
Whereby this is a ‘contractual assumption’.
- 55.
The so-called ‘quantity-transportation agreements’, in which the carrier and the shipper agree upon the transportation of a defined (annual or total) quantity to be nominated, and the shipper will pay the price to the carrier according to the quantity of natural gas transported, are less important in today’s markets.
- 56.
The same (physical) result could be achieved by the parties using a ‘buyback’ model, whereby the carrier buys natural from a shipper at the delivery point at a defined price (e.g., p) and the carrier re-sells the natural gas to the shipper at the redelivery point at a (higher) defined price (e.g., P + X).
- 57.
See Sect. 5.1.1.
- 58.
In several regulated systems, carriers are permitted to ‘socialize’, i.e., include in the regulated asset base, such losses from over-capacities.
- 59.
Many transportation-price formulae are simpler, as no average values but single distinct values are used. In case an average value is calculated, see Sect. 6.3.2.2.3 for further details.
- 60.
See Sect. 6.3.2.2.3.
- 61.
Contractual congestion should be distinguished from physical congestion. While the latter describes a situation in which the physical pipeline capacity does not suffice to meet the requirements of users, the former describes a situation where capacity in a pipeline is fully booked but (physically) not utilized.
- 62.
See Agency for the Cooperation of Energy Regulators (2015).
- 63.
- 64.
For these, predominantly, legal clauses see, e.g., Roberts (2014).
- 65.
See Sect. 5.1.1.
- 66.
See Sect. 6.3.4.
- 67.
In both cases, the crew is usually provided by the ship-owner. Only a bareboat charter, a subtype of the time charter, permits the charterer to provide the crew.
- 68.
The IMO number is a unique ship-identification number assigned by the International Maritime Organization (IMO).
- 69.
See Sect. 7.2.2.2.
- 70.
- 71.
- 72.
See Association of International Petroleum Negotiators (AIPN) (2016).
- 73.
See Baltic and International Maritime Council (BIMCO) (2016).
- 74.
To be more complete, a further distinction between high and medium pressure, equivalent to national and regional systems, may be introduced, but usually the features of these systems are similar enough to summarize them in one group.
- 75.
As, e.g., hybrid forms of partly flexible transportation services (offered, e.g., in the US). These shall not be discussed subsequently.
- 76.
Such circumstances are usually neither controlled nor triggered.
No pipeline can provide an absolute guarantee of physical delivery …. Physical firmness is inherently a probabilistic concept: what a pipeline defines as “physically firm” service is in reality service with a very low probability of interruption.
Lapuerta and Moselle (2002), p. 4; and similar p. 24, 25.
An example for the distinction of such circumstances was specified by the Bulgarian carrier in its standard gas transportation
contract:
15.1. The Transmission Operator shall have the right to interrupt the performance of contracted interruptible capacity transmission services, as well as to terminate or limit natural gas transmission in the following cases:
15.1.1 in case of immediate threat to the life, health or property of people and during prevention of such circumstances;
15.1.2 in case of Force Majeure;
15.1.3 at the time of planned reconstructions and planned repairs of the gas transmission system equipment;
15.1.4 in case of failures or other technological reasons beyond the operator’s control;
15.1.5 in case of unscheduled repairs of the gas transmission system equipment;
15.1.6 in case of enforcement of the sanctioning measures under item …;
15.1.7 in case of an enforced limiting regime;
15.1.8 in case that the Client fails to comply with the requirements for natural gas quality and pressure at the entry points, set out in …;
15.1.9 in cases threatening the integrity of the transmission network;
15.1.10 in case that the exit point is no longer operating (the Client guarantor has no valid contract for balancing);
15.1.11 in case that the Client has no valid contract for the purchase/sale of balancing energy;
15.1.12 in case of fulfillment of the obligations imposed to the Operator by an Emergency Plan in accordance with Regulation (EU) No 994/2010 of the European Parliament and of the Council, approved by an Order of the Minister of Economy, Energy and Tourism. Bulgartransgaz (2013), p. 17
Similar rules apply for other pipelines, see, e.g., GazSystem (2014), p. 63. The Yamal pipeline connects the Russian natural gas pipeline system with the Polish, via the Belarusian.
- 77.
An example of such restriction may be:
if the average daily temperature at XXX falls below Y °C on a day between October 1 and March 31 of any year, then the transportation capacity made available by the transporter to the shipper may be interrupted for ZZZ consecutive days (hours) starting on TTT, given that the transporter informs the shipper with HHH prior notice.
Generally, however, such a rule imposes a restriction for interruption on the carrier but does not increase (mid- or long- term) predictability for the shipper. The temperature has to be regarded as being unpredictable in the long-term and, therefore, a statistical variable.
- 78.
Yet, it has to be noted that, in reality, not all of the listed parameters are included in each interruptible transportation contract.
- 79.
See KEMA (2009), p. 11.
- 80.
For example, in Austria transit tariffs for interruptible capacity are indeed the same as firm tariffs, with network users being compensated in case of interruptions. Similar mechanisms are also widely used in Germany.
KEMA (2009), p. 12.
- 81.
RWE Energy offers interruptible contracts at the same price as firm contracts, if all firm capacity has been sold, and there is a rebate if the customer is curtailed.
Arthur D. Little (2004), p. 19.
References
Agency for the Cooperation of Energy Regulators (2015) ACER annual report on contractual congestion at interconnection points. Available at: http://www.acer.europa.eu/official_documents/acts_of_the_agency/publication/20150529_acer 2015 report on congestion at ips in 2014.pdf
Association of International Petroleum Negotiators (AIPN) (2016) Homepage. Available at: https://www.aipn.org/default.aspx
Baltic and International Maritime Council (BIMCO) (2016) Homepage. Available at: https://www.bimco.org
British Petroleum (2016) BP statistical review of world energy
Bulgartransgaz (2013) General terms and conditions of the transport contracts for natural gas transmission through Bulgartransgaz EAD gas transmission networks. (April). Available at: http://www.bulgartransgaz.bg/files/useruploads/files/general_terms_and_conditions_ngtn_gtntt.pdf
Cerbe G, Dehli M, Kätelhön JE, Kleiber T, Lehmann J, Lendt B, Mischner J, Mundus B, Pietsch H, Spohn D, Thielen W (2004) Grundlagen der Gastechnik – Gasbeschaffung, Gasverteilung, Gasverwendung, 6th edition, Munich
Chandra V (2006) Fundamentals of natural gas—an international perspective, Tulsa
Dunkerque LNG (2011) LNG terminal, Key points
European Federation of Energy Traders (2016) Gas & Gas Annexes. Available at: http://www.efet.org/Standardisation/Legal-EFET-Standard-Contracts-and-Documentation/GasAndGasAnnexes
Fasold H-G, Wahle H-N (1996) Einfluss der Rohrrauhigkeit und der Rohrreibungszahl auf die Transportkapazität und die spezifischen Kosten von Gasrohrleitungen. gwf-Gas/Erdgas, 137(3): 109–118
Füg T (1999) Zur Preisbildung in Erdgastransportsystemen, Idstein
GazSystem (2014) Transmission network code of the Polish section of the transit gas pipeline system JAMAL – EUROPE, (January). Available at: http://en.gaz-system.pl/fileadmin/pliki/sgt/en/TGPS_TNC_EN.pdf
Hairston D, Moshfeghian M (2013) Low pressure vs high pressure dense phase natural gas pipeline transportation, pp 2–8. Available at: http://www.jmcampbell.com/tip-of-the-month/2013/01/low-pressure-vs-high-pressure-dense-phase-natural-gas-pipeline-transportation/
International Energy Agency (IEA) (1994) Natural gas transportation—organisation and regulation, Paris
KEMA (2009) Study on methodologies for gas transmission network tariffs and gas balancing fees in Europe, submitted to: The European Commission, Directorate-General Energy and Transport, Arnhem. Available at: https://ec.europa.eu/energy/sites/ener/files/documents/2009_12_gas_transmission_and_balancing.pdf
Keyaerts N, Meeus L, D’haeseleer W (2008) Natural gas balancing: appropriate framework and terminology natural gas balancing: appropriate framework and terminology working paper, Leuven. Available at: http://www.mech.kuleuven.be/tme/research/
Lapuerta C, Moselle B (2002) Convergence of non-discriminatory tariff and congestion management systems in the European gas sector
Arthur D. Little (2004) Gastransport services—West European gas transmission tariff comparisons, Appendix to the report to Gastransport Services, Reference 17928/005rep/Apps
Groupe International des Importateurs de Gaz Naturel Liquéfié (GIIGNL), The LNG Process Chain, (LNG Information Paper 2)
Mokhatab S, Mak JY, Valappil JV, Wood DA (2014) Handbook of liquefied natural gas, Oxford
LNG World News (2016) Alaska railroad to begin LNG transport tests. LNG World News, pp 8–9. Available at: http://www.lngworldnews.com/alaska-railroad-to-begin-lng-transport-tests/?utm_source=emark&utm_medium=email&utm_campaign=daily-update-lng-world-news-2016-09-21&uid=19664
Prete L (1998) Transmission pricing issues for electricity generation from renewable resources
Pustišek A (2005) Untersuchungen der Struktur von Preissystemen für Erdgastransportkapazitäten. University of Münster, Germany
Roberts P (2014) Gas and LNG sales and transportation agreements, 4th edn, London
Songhurst B (2014) LNG plant cost escalation. Oxford Institute for Energy Studies (February), pp 8–10. Available at: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/02/NG-83.pdf
Wood DA, Mokhatab S, Economides MJ (2008) Technology options for securing markets for remote gas. Proceedings of 87th Annual Convention of the Gas Processors Association (GPA)
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2017 Springer International Publishing AG
About this chapter
Cite this chapter
Pustišek, A., Karasz, M. (2017). Transportation. In: Natural Gas: A Commercial Perspective. Springer, Cham. https://doi.org/10.1007/978-3-319-53249-3_7
Download citation
DOI: https://doi.org/10.1007/978-3-319-53249-3_7
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-53248-6
Online ISBN: 978-3-319-53249-3
eBook Packages: EnergyEnergy (R0)