The global LNG business is in the early stages of a significant expansion. Predictions are that the volumes in the LNG industry will more than double in the next ten years. Production capacities of liquefaction trains are increasing and the LNG fleet is growing in numbers and in ships' cargo capacities. The growing scale of facilities and the technical improvements being incorporated in them are materially reducing the unit costs associated with the LNG trade. However, the traditional tank based LNG receiving terminal, because of the cost of the cryogenic storage tanks, does not benefit greatly from increased scale.
North America which is expected to go from one of the smallest importers of LNG to the largest importer of LNG. The US needs to significantly expand its ability to import natural gas in the form of LNG, and in so doing to develop more economical, more secure, and larger scale alternatives to the traditional tank based import terminal.
This article describes a research project of the US Department of Energy (DOE) in cooperation with 30 energy industry participants. The research was led by Conversion Gas Imports and was completed in August, 2005. The final report describes an import terminal design using salt caverns rather than LNG tanks. This design is advantaged by the significantly lower costs of salt cavern gas storage compared to LNG tank storage, and the larger scale of storage and deliverability that can be achieved using caverns. Large volume underground gas storage at a receiving terminal provides great security and flexibility for the producer, shipper, terminal operator and gas marketer. Salt caverns can immediately deliver gas at high rates to pipelines – a capability important in natural gas distribution for response to seasonal and daily demand fluctuations. Salt caverns can also "decouple" the activities of receiving of LNG and the send-out of gas reducing the possibility of "tank topping" and reducing the "just-in-time" LNG delivery requirements.
Salt caverns are utilized to store a wide-variety of products including hydrogen, natural gas, liquefied petroleum gases, olefins, crude oil and refined products. The US Strategic Petroleum Reserve uses man made salt caverns to securely store over 700 million barrels of crude oil. Salt caverns provide about five (5%) percent of the natural gas storage capacity and 15% of the deliverability from storage in the United States, but none of these caverns are associated with the LNG receiving terminals currently in operation.