International Journal of Oil, Gas and Coal Engineering

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Economic Comparison of Storage of Natural Gas as Liquefied Natural Gas and Compressed Natural Gas: A Niger Delta Case Study

Received: 30 July 2023    Accepted: 3 November 2023    Published: 22 December 2023
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Abstract

The worldwide demand for a safe and unpolluted climate combined with the need of adapting stranded gas fields to fulfill the developing need for Natural gas on the planet today has required comprehension of the scope of potential for business acknowledgment of Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) facilities. This places a significant weight on the monetary assessment measure which will give the most extreme knowledge into the reason for a choice to put or not to put resources into the LNG or CNG. In this study, an economic comparison was conducted between LNG and CNG as gas storage methods. The economic indicators utilized in this project were the Net Present Value (NPV), the Internal Rate of Return (IRR), and the payback period (PBP). The LNG and CNG cases had plant capacities of 5.2MMTPA and 2.6MMTPA respectively, a discount rate of 15 %, and a project life of 24 years. Results from economic analysis depict NPV, IRR, PBP, and profitability index values of $14,000,000, 15%, 7 years 6 months, and 1.76 for CNG and $3,077,000,000, 26%, 5 years, and 4 months, and 1.01 LNG respectively. It can be inferred from the results of this study that when the same amount of feed gas is supplied to an LNG and a CNG facility, an LNG was found to be more profitable than CNG as a gas storage method. This is because the LNG method resulted in a higher NPV, a higher IRR, a lower PBP, and a higher profitability index than that obtained for the CNG method. Based on the results of this study, natural gas should be stored as LNG rather than as CNG.

DOI 10.11648/j.ogce.20231105.11
Published in International Journal of Oil, Gas and Coal Engineering (Volume 11, Issue 5, September 2023)
Page(s) 79-85
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This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Liquefied Natural Gas, Compressed Natural Gas, Net Present Value, Internal Rate of Return, Payout Period, Profitability Index

References
[1] Wikipedia.org (2021) Compressed Natural Gas. Retrieved from: https://en.wikipedia.org/wiki/Compressed_natural_gas
[2] Mokhatab, S., William, A., Poe, A., Mak, J. Y. (2019). Handbook of Natural Gas Transmission and Processing. Fourth Edition. ISBN: 978-0-12-815817-3 DOI: https://doi.org/10.1016/C2017-0-03889-2
[3] Lazson, N. D., & Ikiensikimama, S. S. (2013). Economic Analysis of Liquefied Natural Gas Floating Production Storage and Offloading Plant (LNG FPSO) Using Probabilistic Approach. Advances in Petroleum Exploration and Development, 5 (1), 42-50. DOI: http://dx.doi.org/10.3968/j.aped.1925543820130501.1007
[4] Nagy, M. (2016). Techno-Economic Analysis of LNG Production Alternatives.
[5] Hönig, V., Prochazka, P., Obergruber, M., Smutka, L., Kucerová, V. (2019). Economic and Technological Analysis of Commercial LNG Production in the EU. Energies 2019, 12, 1565; DOI: 10.3390/en12081565.
[6] Khalilpour, R., SPE, Karimi, I. A. (2009). Evaluation of LNG, CNG, GTL and NGH for the Monetization of Associated Gas with Incentive of Carbon Credit.
[7] Thomas, S., & Dawe, R. A. (2003). Review of ways to transport natural gas energy from countries that do not need the gas for domestic use. Energy 28 (2003) 1461–1477. DOI: 10.1016/S0360-5442(03)00124-5
[8] Wikipedia.org (2021). Liquefied Natural Gas. Retrieved from: https://en.wikipedia.org/wiki/Liquefied_natural_gas
[9] Petrowiki.com (2019) Compressed Natural Gas. Retrieved from: https://petrowiki.spe.org/Compressed_natural_gas(CNG)
[10] Adesina, E., Asante, B., Camba, N., Delano, F., Donohoe, R., Fulford, N. J., Gregorio, P., Jewell, J., Jones, U. H. P., Eng. Joyce, K., Kornfeld, S., Lee, N., Lovatt, M., Mauel, J., Sakmar, S., Sullivan, H., Viot, T. (2018). Global LNG Fundamentals.
[11] Osokogwu, U., Ademujimi, M., Ajienka, J. A. (2011). Economic Analysis of GTP, GTL, CNG, NGH for Offshore Gas Development in Nigeria. SPE 150756.
[12] Gnap, J. & Dočkalik, M. (2021). Impact of the operation of LNG trucks on the environment. Open Engineering, 11(1), 937-947. https://doi.org/10.1515/eng-2021-0096
[13] Arskayan, M. (2022). Storage of Natural Gas by CNT’s, in book Natural Gas – New Perspectives and Future Developments. IntechOpen. DOI: 10.5772/intechopen.103814.
[14] Deneb Peredo-Mancilla, Imen Ghouma, Cecile Hort, David Bessieres, Camélia Matei Ghimbeu. Gas storage. Mejdi Jeguirim; Lionel Limousy. Char and Carbon Materials Derived from Biomass. Production, Characterization and Applications, Elsevier, pp. 341-382, 2019, 978-0-12-814893-8.
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    Ogbaegbe Chikwe, A., Ivan Nwanwe, O., Emeka Odo, J., Elechi, D., Emelu Okalla, C. (2023). Economic Comparison of Storage of Natural Gas as Liquefied Natural Gas and Compressed Natural Gas: A Niger Delta Case Study. International Journal of Oil, Gas and Coal Engineering, 11(5), 79-85. https://doi.org/10.11648/j.ogce.20231105.11

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    ACS Style

    Ogbaegbe Chikwe, A.; Ivan Nwanwe, O.; Emeka Odo, J.; Elechi, D.; Emelu Okalla, C. Economic Comparison of Storage of Natural Gas as Liquefied Natural Gas and Compressed Natural Gas: A Niger Delta Case Study. Int. J. Oil Gas Coal Eng. 2023, 11(5), 79-85. doi: 10.11648/j.ogce.20231105.11

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    AMA Style

    Ogbaegbe Chikwe A, Ivan Nwanwe O, Emeka Odo J, Elechi D, Emelu Okalla C. Economic Comparison of Storage of Natural Gas as Liquefied Natural Gas and Compressed Natural Gas: A Niger Delta Case Study. Int J Oil Gas Coal Eng. 2023;11(5):79-85. doi: 10.11648/j.ogce.20231105.11

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  • @article{10.11648/j.ogce.20231105.11,
      author = {Anthony Ogbaegbe Chikwe and Onyebuchi Ivan Nwanwe and Jude Emeka Odo and Dominic Elechi and Christian Emelu Okalla},
      title = {Economic Comparison of Storage of Natural Gas as Liquefied Natural Gas and Compressed Natural Gas: A Niger Delta Case Study},
      journal = {International Journal of Oil, Gas and Coal Engineering},
      volume = {11},
      number = {5},
      pages = {79-85},
      doi = {10.11648/j.ogce.20231105.11},
      url = {https://doi.org/10.11648/j.ogce.20231105.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ogce.20231105.11},
      abstract = {The worldwide demand for a safe and unpolluted climate combined with the need of adapting stranded gas fields to fulfill the developing need for Natural gas on the planet today has required comprehension of the scope of potential for business acknowledgment of Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) facilities. This places a significant weight on the monetary assessment measure which will give the most extreme knowledge into the reason for a choice to put or not to put resources into the LNG or CNG. In this study, an economic comparison was conducted between LNG and CNG as gas storage methods. The economic indicators utilized in this project were the Net Present Value (NPV), the Internal Rate of Return (IRR), and the payback period (PBP). The LNG and CNG cases had plant capacities of 5.2MMTPA and 2.6MMTPA respectively, a discount rate of 15 %, and a project life of 24 years. Results from economic analysis depict NPV, IRR, PBP, and profitability index values of $14,000,000, 15%, 7 years 6 months, and 1.76 for CNG and $3,077,000,000, 26%, 5 years, and 4 months, and 1.01 LNG respectively. It can be inferred from the results of this study that when the same amount of feed gas is supplied to an LNG and a CNG facility, an LNG was found to be more profitable than CNG as a gas storage method. This is because the LNG method resulted in a higher NPV, a higher IRR, a lower PBP, and a higher profitability index than that obtained for the CNG method. Based on the results of this study, natural gas should be stored as LNG rather than as CNG.
    },
     year = {2023}
    }
    

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  • TY  - JOUR
    T1  - Economic Comparison of Storage of Natural Gas as Liquefied Natural Gas and Compressed Natural Gas: A Niger Delta Case Study
    AU  - Anthony Ogbaegbe Chikwe
    AU  - Onyebuchi Ivan Nwanwe
    AU  - Jude Emeka Odo
    AU  - Dominic Elechi
    AU  - Christian Emelu Okalla
    Y1  - 2023/12/22
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    N1  - https://doi.org/10.11648/j.ogce.20231105.11
    DO  - 10.11648/j.ogce.20231105.11
    T2  - International Journal of Oil, Gas and Coal Engineering
    JF  - International Journal of Oil, Gas and Coal Engineering
    JO  - International Journal of Oil, Gas and Coal Engineering
    SP  - 79
    EP  - 85
    PB  - Science Publishing Group
    SN  - 2376-7677
    UR  - https://doi.org/10.11648/j.ogce.20231105.11
    AB  - The worldwide demand for a safe and unpolluted climate combined with the need of adapting stranded gas fields to fulfill the developing need for Natural gas on the planet today has required comprehension of the scope of potential for business acknowledgment of Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) facilities. This places a significant weight on the monetary assessment measure which will give the most extreme knowledge into the reason for a choice to put or not to put resources into the LNG or CNG. In this study, an economic comparison was conducted between LNG and CNG as gas storage methods. The economic indicators utilized in this project were the Net Present Value (NPV), the Internal Rate of Return (IRR), and the payback period (PBP). The LNG and CNG cases had plant capacities of 5.2MMTPA and 2.6MMTPA respectively, a discount rate of 15 %, and a project life of 24 years. Results from economic analysis depict NPV, IRR, PBP, and profitability index values of $14,000,000, 15%, 7 years 6 months, and 1.76 for CNG and $3,077,000,000, 26%, 5 years, and 4 months, and 1.01 LNG respectively. It can be inferred from the results of this study that when the same amount of feed gas is supplied to an LNG and a CNG facility, an LNG was found to be more profitable than CNG as a gas storage method. This is because the LNG method resulted in a higher NPV, a higher IRR, a lower PBP, and a higher profitability index than that obtained for the CNG method. Based on the results of this study, natural gas should be stored as LNG rather than as CNG.
    
    VL  - 11
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Author Information
  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

  • Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria

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