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

Anthony Ogbaegbe Chikwe; Onyebuchi Ivan Nwanwe; Jude Emeka Odo; Dominic Elechi; Christian Emelu Okalla

doi:doi:10.11648/j.ogce.20231105.11

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

Anthony Ogbaegbe Chikwe, Onyebuchi Ivan Nwanwe^*, Jude Emeka Odo, Dominic Elechi, Christian Emelu Okalla

Published in International Journal of Oil, Gas and Coal Engineering (Volume 11, Issue 5)

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.

Published in	International Journal of Oil, Gas and Coal Engineering (Volume 11, Issue 5)
DOI	10.11648/j.ogce.20231105.11
Page(s)	79-85
Creative Commons	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

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[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
PY  - 2023
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
IS  - 5
ER  -

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Author Information

Anthony Ogbaegbe Chikwe

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Onyebuchi Ivan Nwanwe

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

Contact Email
Jude Emeka Odo

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Dominic Elechi

Department of Petroleum Engineering, Federal University of Technology, Owerri, Nigeria
Christian Emelu Okalla

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

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APA Style

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

Copy | Download

@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}
}

Copy | Download

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
PY  - 2023
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
IS  - 5
ER  -

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