LNG industry opening to new competition
8th February, 2008
While large capital investments were required in the past to set up liquefied natural gas (LNG) supply chains, limiting investors to large oil and gas companies and utilities, the global LNG industry will open to a new class of competitor in the next decade due to manufacturing efficiencies for smaller plants being achieved, according to a study authored by Houston-based Zeus Development Corp."Not since the maiden voyage of the Methane Pioneer has this industry been so open," said Bob Nimocks, leader of the survey and chief executive of Zeus. "Some 23 developers are currently planning, constructing and operating more than 50 small- to medium-scale LNG plants aimed at monetizing smaller, cheaper reserves."
"These new firms with balance sheets in the tens of hundreds of millions, not billion, are focusing on standardising designs and business practices so they can do one project after another," said Chris Williams, one of the research analysts who worked on the study. "They intend to go after the thousands of mid-tier gas fields between one and ten trillion cubic feet instead of the far fewer mega fields."
Another conclusion of the survey is that cost curves for project development have flattened as manufacturers, not construction firms, gear up to build modularized plants in assembly fashion.
One proponent of medium-scale, Black & Veatch, has likened the trend to what happened in cryogenic-gas processing in the 1990s. The Zeus survey found that LNG from small- to medium-scale projects will grow sevenfold in the next three years as 18 under-construction units are completed.
Source: Energy Current News