1. LNG & Hydrates Jennifer Reese October 20, 2005

2. Non-Traditional Hydrocarbon At higher oil and gas prices, more projects become economical –Coal Bed Methane –Tar Sands –LNG –Hydrates

3. LNG, LPG, NGL, CNG? LNG – Liquefied Natural Gas –Gas depleted of water & high MW gases cooled to –270ºF –95% Methane LPG – Liquefied Petroleum Gas –Liquid at room temperature & pressures less than 200 psi –95% Propane & Butane NGL – Natural Gas Liquids –Extracted to meet pipeline specifications –95% Ethane, Propane & Butane CNG – Compressed Natural Gas –Gas compressed at high pressure –being used as car fuel –Pipeline Natural Gas Composition

4. Pros and Cons of LNG Pros –Can get stranded gas reserves to markets –Reduces gas volume to 1/600 of its original volume Cons –Massive investment required

5. LNG Transport vs. Pipeline

6. LNG Trade

7. Gas Hydrates Gas hydrates –crystalline solid –Methane molecule caged by water molecules –Similar to ice –Stable at high pressure

8. Hydrates Contain great concentrations of methane –Potential future energy resource Reserve supply close to home 14.1 mole % methane concentration 1m 3 of hydrate contains about 170m 3 of methane gas Hydrates effectively cement formations, creating gas traps below

9. Where are hydrates found?

10. Hydrates and Global Climate Methane is a greenhouse gas ~20 times more effective than CO2 Breakdown of hydrates can cause stability issues

11. Government Policies LNG –Regulated by FERC Gas Hydrates –Methane Hydrate Research and Development Act of 2000 Begin hydrate R&D program –Energy Policy Act of 2005 Amendment extends funding for methane R&D through 2010