Editorial Comment

Adrienne Blume, Managing Editor

A. Blume, Editor

The $26-B small-scale LNG market is gaining exciting traction this year. The first small-scale LNG facility in the US commenced operations in May in Jacksonville, Florida (see News section of this issue for more information), small-scale LNG shipments are ramping up from Canada to China, and several companies have banded together to study small-scale FLNG offshore Australia (also see News).

However, the small- and mid-scale LNG sectors have until recently been limited by a lack of adequate and suitable bunkering infrastructure. New solutions, such as modular, floating LNG transfer systems, are expanding the ability to load and offload smaller volumes of LNG at ports not served by pipelines.

Integrated networks for large-scale LNG are still developing, but are virtually nonexistent for small- and mid-scale LNG. This makes it difficult to cost-effectively transport and distribute gas produced from small and stranded reserves to LNG customers, including power producers, metals manufacturers and a growing number of shipowners.

Certainty of supply is paramount to expanding gas-to-power applications and the use of LNG as a marine fuel. Growth of import and storage capacity is needed to expand the availability of LNG. With IMO 2020 sulfur regulations looming in January, more shipowners with the ability to capitalize on natural gas are eyeing LNG as a permanent fuel switch. The approximately 20% price discount for LNG vs. high-sulfur fuel oil will further encourage this switch, if differentials remain steady. GP


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