LNG, a timely solution for power crisis

By L.S. Ananda WEDAARACHCHI

The timely solution to the country's power crisis lies in Liquid Natural Gas (LNG) from fuel and Liquid Petroleum Gas (LPG), said former Laboratory and Technical Head of the Ceylon Petroleum Corporation (CPC) Oil refinery and former Acting Chairman of CPC S.K. Cyril Suduwella.

The domestic energy supply is based on three primary sources - hydro electricity, petroleum and biomass. In 2010, Sri Lanka used around 10.7 million tons of oil in primary energy. Close to half of this was in the form of fire wood and other non-commercial sources, the remainder being provided by imported oil (39.4 percent), imported coal (0.6 percent) and indigenous hydro power (12.8 percent), Suduwella said in an interview with the Sunday Observer.

Excerpts of the interview:

Q: The receding water reservoirs due to the current dry spell and the price hike of fuel oil, coal, diesel and Naptha have caused a difficult situation. How do you assess this situation?

A: Even before the 2007-2008 oil price shock, there had been increased concerns over the growing dependence on oil for power generation and its increasing cost.

Oil is the country's largest single import and a major contributor to the island's balance of payments deficit. Net petroleum imports accounted for 21 percent of total imports and almost 44 percent of the 2011 trade deficit. The cost of net petroleum imports absorbed 40 percent of the export earnings. Coal prices are also increasing. The Norochcholai power generation plant is also subjected to public criticism due to its frequent breakdowns.

Q: Could you describe what this National Energy Policy and strategy is about?

A: The goal of the National Energy Policy is to ensure the availability of economically low cost energy supplies that are secure, sustainable, reliable and clean to provide affordable energy services to ensure the socially equitable development of all people. The proposed policy statement has clearly identified the energy demand, supply and sector management. In energy demand, apart from the desire to ensure 100 percent access to electricity, the adoption of a cost reflective pricing policy and the promotion of energy efficiency and conservation are key elements.

However in the case of energy supply, the key elements are ensuring energy security at the lowest cost of the economy while diversifying energy sources, the promotion of energy production through cleaner sources and the promotion of energy self-reliance through the greater use of indigenous energy resources where viable.

Q: The Mahinda Chinthana states that the high cost oil fired operation technology in thermal plants should be replaced by low cost Liquid Natural Gas. Could you explain this?

A: LNG is natural hydrocarbon gas, predominently methane, that has been converted temporarily to liquid form for ease of storage and transport. It is the lightest component among all hydrocarbons. Liquefied natural gas takes up about 1/600th the volume of natural gas in the gaseous state. It is odourless, colourless, non-toxic and non-corrosive. Hazards include flammability, freezing and asphyxia. LNG is considered the cleanest fuel among all petroleum products.

The natural gas is first extracted and transported to a processing plant where is is purified by removing any condensates such as water, oil, mud, as well as other gases such as CO2 and H2S.

An LNG process train will also typically be designed to remove trace amounts of mercury from the gas stream to prevent mercury amalgamating with aluminium in the cryogenic heat exchangers. The gas is then cooled down in stages until it is liquefied. LNG is finally stored in storage tanks and can be loaded and shipped.

Q: Who are the potential users of LNG, in the event it is available in Sri Lanka?

A: Even today, methane and ethane imported along with crude oils, and subsequent production of light gases, are being used as a fuel at the Sapugaskanda refinery.

If LNG is freely available in Sri Lanka, it can be used for power generation, by replacing expensive liquid hydrocarbons and environmentally non-friendly coal. It also could be used for domestic purposes as cooking gas, in the transport sector as auto-gas and in the petrochemical industry as a feed stock.

Compared with the crude oil market, the natural gas market is about 60 percent of the crude oil market (measured on a heat equivalent basis), of which LNG forms a small but rapidly growing part. Much of this growth is driven by the need for clean fuel and some substitution effect due to the high price of oil (primarily in the heating and electricity generation sectors).

Q: From where do you get LNG into Sri Lanka's energy market?

A: Out of all possibilities, the Hambantota Port is the best option for construction of cryogenic LNG tanks, gasification facilities and tanker unloading facilities due to various reasons. In view of the fact that Hambantota is situated very close to international shipping routes and is already available, receiving LNG to shore tanks at low cost and supply of LNG to new generation of seagoing vessels as a bunker fuel are a few advantages. The cross-country supply pipeline could be easily constructed along with the Southern Expressway.

Q: How safe is the storage and use of LNG?

A: Natural gas is a fuel and a combustible substance. To ensure safe and reliable operations, particular measures are taken in the design, construction and operation of LNG facilities.

In its liquid state, LNG is not explosive and cannot burn. For LNG to burn, it must first vaporise, then mix with air in the proper proportions (the flammable range is five to 15 percent), and then be ignited.

In the case of a leak, LNG vaporises rapidly, turning into a gas (methane plus trace gases), and mixing with air. If this mixture is within the flammable range, there is a risk of ignition which would create fire and thermal radiation hazards.LNG tankers have sailed over 100 million miles without a shipboard death or even a major accident.

Q: While India, Pakistan, Bangladesh, Malaysia, Japan, Philippines, Thailand, Indonesia and Korea have been using LNG and CNG for power generation, domestic use, transport sector and petrochemical industry for a considerable period of time, why did Sri Lanka get delayed?

A: At the first instance, Sri Lanka lagged behind in many technological developments due to the war against terrorism which lasted more than 30 years. Today the situation is extremely productive.

Most of the Asian countries produce their own natural gases and Sri Lanka too may be lucky to be in the same status in the near future. Our oil exploration data indicates positive signs of a significant quantity of natural gas reserves, hence the Hambantota LNG facility, if constructed will be an excellent facility for integration and appropriate consolidation in the LNG business in Sri Lanka.

Q:Is LNG cheaper than coal?

A: No. Coal is cheaper in respect of direct cost of production. Nevertheless, if all aspects such as environmental cost, health effects and their cost, machinery and maintenance are taken into account, LNG is the better option.