Economics of Gas Transportation by Pipeline and LNG

Abstract

Abstract The relatively low energy density of natural gas on a volumetric basis—almost 1000 times lower compared to crude oil—makes it one of the most challenging and expensive primary fuels to transport from the wellhead to the burner tip of end-consumers. Internationally traded natural gas is typically transported either in gaseous form via long-distance pipeline systems or in the form of liquefied natural gas on ships (LNG carriers). This chapter provides a focus on the economics and commercial aspects of these large, often multibillion-dollar infrastructure projects characterized by high upfront investment costs—and requiring complex risk-sharing mechanisms between all parties involved.

Topics & Concepts