Title: Understanding Natural Gas and LNG Options

Language: English

Type: Document

Nature: Other PPP Reference

Published: December 20, 2019

Region: Global

Country: Global / Non-Specific

Sector: Energy and Power

Topic: Climate-Smart

Keywords: Climate Smart, Energy and Power, Energy and Power Core

Document Link(s):

Document Summary:

Liquefied Natural Gas (LNG) trade is poised to be an important catalyst for economic growth in many countries. Natural gas and LNG development can enable economic development and stimulate further investment in national infrastructure.

Large natural gas discoveries have focused the attention of the international oil and gas industry on LNG export projects that are essential to monetize these resources. Large gas resources are expensive to develop and projects may not be able to clear investment hurdles if dedicated solely to the domestic gas market in many developing countries. Developing an LNG export project and reserving a portion of the gas production for the domestic market - with the full support of the host government - can make natural gas available for local use in addition to earning revenue through export. This can enable the development of a diverse market for gas including power generation, local and regional industrial and commercial enterprises, transport, feedstock for petrochemical manufacturing, and other domestic uses of gas for the local population. LNG imports could also enable the development of domestic gas markets.

Document Details:

This handbook attempts to cover a broad spectrum of topics involved with developing and financing an LNG project, covering in depth the considerations for an LNG export project and development of a diverse domestic market. The book also addresses LNG import projects for local LNG sales as an alternative to country-to-country pipelines. We discuss the decisions that need to be made and the lenses through which to view the factors leading to these decisions. Each country will need to make its own decisions based on its specific national priorities, trade agreements, GDP goals, and assessments of changing political and market dynamics.

In the following chapters, the reader will find overviews of the global gas market, LNG and domestic gas value chains, and domestic and interconnected regional markets for LNG and natural gas. We discuss project structure, government roles, capacity building, LNG export project development, environment, social impact, and safety. We also review pricing, contracts, financing, risk management, local content, LNG import projects, and new and emerging markets and technologies for natural gas and LNG - touching on successes from more mature markets such as the EU, Asia and the U.S. that might inform future natural gas and policy decisions.

This reference is not intended to be comprehensive governments would wisely employ the services of experienced advisors in legal, contractual, financial, technical and strategic areas. This advice should be directed at rapidly promoting the training of governmental staff, using all means available, including well-established academic institutions which focus on the oil and gas or LNG sectors.

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Updated: October 25, 2021