Liquified natural gas (LNG) is an energy commodity tradable in international markets. It is produced from natural gas fields using a number of technologies, including drilling, which involves high-pressure steam and water that is used to fracture the rock layer beneath the wellbore. The fractured layer, or flue, is then forced into the well bore where it is processed into gas. The gas is then delivered through the venture lines to the desired location. There are two types of LPG systems – one is to transport liquid fuel from a well to the desired location where it is used; the other is to transport the gas by means of a pipeline, which can be a choke point or transport line or a transport medium. Pipelines are often used to carry LPG from inland locations to coastal areas, while inland facilities are used to extract and refine LPG for resale.
Natural gas has the lowest volatility of all fossil fuels. Because the gas is in liquid form, the rate at which it vaporizes is much faster than that of oil. This means that when natural gas is moved through the system at a rate faster than the speed with which the oil in the oil tank moves, the gas in the LPG system can gain a “head start” of sorts before the oil in the tank evens out. When the gas in the LPG tank is pushed by the oil, the vaporization rate of the gas in the system is much faster than that of the oil in the tank. This means that the LPG will gain a lead over the oil before the first phase of the vapor compression has finished.
When a natural gas LPG tanker arrives at a destination, it takes up space. In most cases, it is quite large. The larger the tanker the larger the amount of fuel that must be stored onboard, and in many cases, this can mean a substantial increase in the price of the crude oil. It may also mean that the cargo being transported needs to be insured adequately against damage or loss.
It would seem that you cannot win with the liquefied natural gas price strategy. After all, they have been used for decades and there are so many of them around that competition has always been good for the consumer. Yet here we are nearly a decade later, and here we are questioning whether the prices charged to consumers are fair. It appears that the gas industry has long since mastered several myths that they may be using to keep their prices high.
– In an effort to make things more difficult for the consumer, some gas companies have been telling people that the liquified natural gas price is equal to the boiling point of water. This is a gross exaggeration. First of all, the boiling point of water is not nearly the same temperature as the natural gas at which it is compressed. Second, the temperature of the gases in question is lower than the boiling point of water.
– Another myth is that higher temperature energy densities are more valuable than lower temperatures. This is simply not true. In fact, in general, higher temperature gases retain more heat energy than do lower temperature gases. This means that the relatively small increase in temperature caused by the liquefied natural gases actually increases the amount of energy needed to make it to the boiling point of water instead of just slightly increasing it.
– Some people believe that the higher the energy density of a gas, the higher the price is. This is simply untrue. Again, due to the nature of the relationship between temperature and pressure, higher temperature gases have less influence on the pressure at which they are compressed. As a result, the higher the energy density of the gasses, the smaller the amount of gas needed to achieve the desired temperature. Consequently, the LPG or liquefied natural gases at low temperatures generally have a lower cost per unit of energy than do the higher temperature gases.
– When there is a higher demand for LPG, the price of LPG generally goes up because demand exceeds the available supply. This is why you often see companies advertising ‘lowest price guaranteed’. However, while the advertised price may be lower than the actual price, there are no guarantees. Thus, the best way to get your hands on LPG is to choose an LPG combusted gas which has the least carbon emissions and therefore the lowest amount of methane in it.