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Energy 35 (2010) 4383–4391

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Energy

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LNG (liquefied natural gas): A necessary part in China’s future energyinfrastructure

Wensheng Lin a,*, Na Zhang b, Anzhong Gu a

a Institute of Refrigeration and Cryogenics, Shanghai Jiao Tong University, Shanghai 200240, Chinab Institute of Engineering Thermophysics, Chinese Academy of Sciences, Beijing 100080, China

a r t i c l e i n f o

Article history:Received 3 July 2007Received in revised form7 December 2008Accepted 24 April 2009Available online 30 June 2009

Keywords:LNGNatural gasLiquefaction plantReceiving terminalProspect

* Corresponding author. Tel.: þ86 21 34206533; faxE-mail address: linwsh@sjtu.edn.cn (W. Lin).

0360-5442/$ – see front matter � 2009 Elsevier Ltd.doi:10.1016/j.energy.2009.04.036

a b s t r a c t

This paper presents an overview of the LNG industry in China, covering LNG plants, receiving terminals,transportation, and applications. Small and medium scale LNG plants with different liquefactionprocesses have already been built or are being built. China’s first two LNG receiving terminals have beenput into operation in Guangdong and Fujian, another one is being built in Shanghai, and more are beingplanned. China is now able to manufacture LNG road tanks and containers. The construction of the firsttwo LNG carriers has been completed. LNG satellite stations have been built, and LNG vehicles have beenmanufactured. LNG related regulations and standards are being established. The prospects of LNG inChina are also discussed in this paper. Interesting topics such as small-scale liquefiers, LNG cold energyutilization, coal bed methane liquefaction, LNG plant on board (FPSO – floating production, storage, andoff-loading), and LNG price are introduced and analyzed. To meet the increasing demand for natural gas,China needs to build about 10 large LNG receiving terminals, and to import LNG at the level of more than20 bcm (billion cubic metre) per year by 2020.

� 2009 Elsevier Ltd. All rights reserved.

1. Introduction

With the rapid economic development in Mainland China, itsdemand for energy supply is also increasing at the rate of more than10% per year. China relies heavily on its coal supply, although naturalgas consumption has been growing quickly in recent years. Accordingto the data in Table 1, which is drawn from BP’s statistical review [1],the total fossil fuel consumption in China was 1491.1 Mtoe (millionton oil equivalent) in 2006. The proportions of coal, oil, and natural gaswere 73.2%, 23.5%, and 3.3%, respectively. Meanwhile, natural gasaccounted for 26.9% of the world fossil fuel consumption.

Natural gas is a kind of clean and efficient energy resource. Toensure a cleaner future, China has realized the importance ofutilizing more natural gas. China has relatively abundant reservesof natural gas. The reserves/production ratio of natural gas was 41.8in 2006, compared to that of oil of 12.1, a very low ratio. Yet, Chinastill needs more natural gas to fulfill its energy requirement.According to an estimation [2], the natural gas consumption willreach 100 bcm (billion cubic metre) and 200 bcm in 2010 and 2020,respectively, but the production will only reach 80 bcm and

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120 bcm, respectively. This means that about 20% and 40%,respectively, of the consumption will be imported.

Besides, importation through pipelines from Russia and somefrom the Central Asian countries, natural gas can also be importedin liquefied form known as liquefied natural gas (LNG). Well puri-fied and condensed, LNG is easily transported across the sea. Alsofrom BP’s statistical review [1], 28.2% of the international naturalgas trade movement was in the form of LNG in 2006. Assuming thesame proportion for China’s import, 5.6 bcm and 22.6 bcm naturalgas will have to be imported as LNG in 2010 and 2020, respectively.Considering the capacity of an LNG terminal is 3 Mt/a, it wouldmean at least ten receiving terminals need to be built by 2020.

The arrival of the first LNG carrier at Shenzhen Dapeng LNGterminal on June 2006 marked a new era in China’s energy supplyhistory. It was the first time that natural gas was imported intoChina, and the day its first LNG receiving terminal was put intooperation.

Every aspect of the LNG chain in China has developed signifi-cantly over the last few years. By far, several natural gas liquefactionplants, LNG receiving terminals, and LNG satellite stations havebeen built or are being built. More are being planned. Several LNGfueling stations and LNG-fired power plants have also been built.Several LNG-fueled buses are running. Many LNG road tankers andcontainers have been manufactured. Two LNG carriers have been

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Table 1Summary of fossil fuels in China and the world [1].

Oil Proved reserves (Mt) Production (Mt) Consumption (Mt) R/P ratio

China 2200 183.7 349.8 12.1World total 164,500 3914.1 3889.8 40.5Coal Proved reserves (Mt) Production (Mtoe) Consumption (Mtoe) R/P ratioChina 114,500 1212.3 1091.3 48World total 909,064 3079.7 3090.1 147Natural gas Proved reserves (bcm) Production (Mtoe) Consumption (Mtoe) R/P ratioChina 2450 52.7 50.0 41.8World total 181,460 2586.4 2574.9 63.3

W. Lin et al. / Energy 35 (2010) 4383–43914384

constructed and more have been ordered. China’s LNG industrystarted late. However, it has been growing very fast.

2. Current status of LNG in China

2.1. Natural gas liquefaction plants

China began its LNG plant research in the late 1980s. Two sets ofLNG plants were then developed by the Cryogenic Center of theChinese Academy of Science (CAS). Their production capacitieswere 0.3 m3/h and 0.5 m3/h, respectively. These plants were toosmall and were only in operation for a very short duration.

2.1.1. Shanghai peak-shaving LNG plantLocated near the sea, Shanghai LNG plant is a peak-shaving one

[3]. It was commissioned in March 2000, and is the first industry-scale LNG plant in China. It is the primary part of the East seanatural gas project. It receives natural gas from gas fields in the Eastsea through underwater pipelines, liquefies the gas, and supplies itto Shanghai in case of typhoons and underwater pipeline accidents.

The natural gas at 1.5 MPa from the main line is filtered, gauged,and compressed to 5 MPa. CO2 and H2S in the natural gas areremoved by MEA (mono ethanol amine), H2O is removed by zeolite,and the purified natural gas is liquefied and stored in two 104-m3tanks. LNG is then regasified, odorized, and regulated to the city gasnetwork on demand. The evaporated gas in LNG tank is introducedinto the main line after boil-off-gas (BOG) treatment.

The main parameters of this plant are as follows: (1) volume oftank, 20,000 m3; (2) daily evaporation rate of LNG tank, 0.08%/d; (3)LNG production, 165 m3/d; (4) regasifying capacity, 120 m3 (LNG)/h; (5) refrigerant components, N2: 7.145%, CH4: 35.17%, C2H6:45.588%, C3H8: 7.259%, n-C4H10: 2.34%, i-C4H10: 0.923%, n-C5H12:0.361%, i-C5H12: 1.215%.

The refrigeration cycle of the process is the integral incorporatedcascade (CII) cycle developed by Gaz De France. The main

Fig. 1. CII cycle for the Shanghai LNG plant: 1 - fractionation column, 2 - cold box,3 - compressor (low pressure stage), 4 - compressor (high-pressure stage), 5–8 - liquidvapor separator, 9–11 - throttling valve, 12, 13 - cooler.

equipments of the cycle are the compressor, the fractionation unit,and the cold box (see Fig. 1). The CII cycle is characterized by thefollowing features: (1) concise process requiring less equipment;(2) the cold box adopts a plate-fin heat exchanger which is small insize and convenient to install; (3) a simple and reliable compressoras well as driving engine was chosen.

2.1.2. Zhongyuan LNG plantThe successful start-up of the LNG plant at Zhongyuan oil field in

2001 symbolizes an important milestone for the Chinese LNGindustry. It is the first commercially operated LNG plant in China.Unlike the Shanghai LNG plant, which does not sell any LNGoutside, this plant sells most of its LNG to customers in Shandong,Jiangsu, and other provinces by LNG tank trucks.

Zhongyuan LNG plant has a production capacity of 15,000 Nm3/d.Natural gas is supplied at 12 MPa and 30 �C, with methane molepercentage of 93.35w95.83%. It adopts the cascade refrigerationcycle with propane and ethylene as refrigerants. The flowchart of theliquefaction process is shown in Fig. 2 [4].

LNG produced by the liquefaction plant is stored in tanks. Eachtank contains seven small tanks and an outer shell. Insulatingmaterial fills the space between the outer shell and the small tanks.Nitrogen is filled into the insulation layer to prevent entry of air andwater into this layer.

2.1.3. Xinjiang Guanghui LNG projectThe first phase of the Xinjiang Guanghui LNG plant was put into

operation in 2004. Located in Shanshan city, the plant obtains itsnatural gas resource from the Tuha gas field. With its1,500,000 Nm3/d capacity to treat feed gas, it is by far the largestLNG plant in China. The expected on-stream time is 330 days peryear, and the design hourly liquefaction capacity is 54 t/h, whichmeans the annual production of the plant is 0.43 Mt/a.

The storage capacity is 30,000 m3 in liquid form of LNG based on10 days storage time. The LNG send-out and distribution systemcapacity meet the requirement of loading 100 trucks/movable

Fig. 2. Cascade cycle for the Zhongyuan LNG plant: 1 - separator, 2 - filter, 3 - CO2removing unit, 4 - water removing unit, 5, 6 - propane heat exchanger, 7, 11, 14 - throttlingvalve, 8, 12, 15 - NG separator, 9 - ethylene heat exchanger, 10, 13 - natural gas heatexchanger, 16 - LNG tank.

Fig. 3. Liquefaction process of the Xinjiang Guanghui LNG plant.

Table 2Summary of LNG plants in China.

Project Location Type Capacity (Nm3/d) Status

W. Lin et al. / Energy 35 (2010) 4383–4391 4385

containers within 16 h. The split is 30% in trucks and 70% inmovable containers. LNG is sent to central- and southern China,including Guangdong, the most remote province from Xinjiang.

This plant is comprised of five major parts: purification, lique-faction, LNG tank, LNG send-out, and flare tower.

Fig. 3 shows a sketch of the mixed-refrigerant cycle for theXinjiang LNG plant. The cooling is provided by a closed multi-component mixed-refrigerant cycle, developed by Linde AG [5]. Themixed-refrigerants consist of nitrogen, methane, ethylene,propane, and pentane.

2.1.4. Summary of LNG plantsBesides the three LNG plants mentioned above, two other plants

have been built in Hainan and Guangxi provinces. Both adopted theexpander cycle for refrigeration.

In recent years, a kind of small LNG plant has been developed inChina, which adopts direct expansion of natural gas from a high-pressure main line. Two plants of this type have been built in theprovinces of Sichuan and Jiangsu, with capacity of about50,000 Nm3/d.

Three LNG plants are being built in Erdos (Inner Mongolia),Dazhou (Sichuan), and Zhuhai (Guangdong). All these plants adoptthe PRICO process [6] developed by Black and Veatch. The PRICOprocess uses a single mixed-refrigerant loop and a single refriger-ation compression system, greatly simplifying the piping, controls,and equipment for the liquefaction unit. Chemtex is constructingthese three plants.

Table 2 gives details of most of the LNG plants in China that havebeen built and those being built.

East sea Shanghai Peak-shaving 1.0� 105 BuiltZhongyuan Henan Base load 1.5� 105 BuiltGuanghui Xinjiang Base load 1.5� 106 BuiltHairan Hainan Base load 1.5� 105 BuiltBeihai Guangxi Base load 1.5� 105 BuiltErdos Inner Mongolia Base load 6.0� 105 Under constructionDazhou Sichuan Base load 6.0� 105 Under constructionZhuhai Guangdong Base load 6.0� 105 Under construction

2.2. LNG receiving terminals

2.2.1. Shenzhen Dapeng LNG terminalThe Shenzhen Dapeng LNG terminal is China’s first LNG

receiving terminal [7]. It began receiving LNG product from an LNGcarrier (LNGC) in June 2006. It is located on the Western Dapeng

peninsula to the east of Shenzhen. The site is 33 km south-east fromdowntown Shenzhen and 40 km from the eastern side of HongKong island. The terminal will send-out natural gas to the PearlRiver Delta, including the cities of Shenzhen, Dongguan, Guangz-hou, Foshan, and Hong Kong.

The project has the capacity to receive, store, regasify, anddistribute 3.7 Mt/a of LNG. Two full containment concrete-roof LNGstorage tanks have been built, each with a net capacity of160,000 m3. The normal vaporizing operation is carried out withfive ORVs (open rack vaporizers), each capable of a send-out of180 t/h.

The marine works and unloading facilities consist of an all-weather, deep-sea, single-berth jetty with a 296-m long approachtrestle and jetty head; unloading facilities were designed todischarge a 145,000-m3 LNGC in 12 h into a single tank.

The Australian company ALNG NWS venture was selected as theLNG supplier. The LNG supply contracts were signed with Guang-dong province with contracting fees ranging from 20 billion to 25billion Australian dollars. Beginning in the year 2006, LNG will beimported from Australia for a period of 25 years.

The total estimated cost of the project is about US$900 million.The terminals are owned by China National Offshore Oil Company(CNOOC, 33% share), BP (30% share), and several other sponsorsfrom Guangdong and Hong Kong.

W. Lin et al. / Energy 35 (2010) 4383–43914386

Phase II of the project will be completed in 2008 and the annualimport capacity will increase to 5 Mt/a.

2.2.2. Fujian Putian LNG terminalChina’s second LNG importation terminal is being built in

Putian, Fujian province. It is intended to supply two major newpower plants, Songyu II (1800 MW) in Xiamen, and Nanpu(1800 MW) in Quanzhou, together with the five major coastal citiesof Fuzhou, Xiamen, Quanzhou, Zhangzhou, and Putian. Theconstruction of the Putian terminal started in 2004 and theterminal is scheduled to be commissioned in late 2007. Thisterminal is controlled by CNOOC.

The LNG Sales and Purchase Agreement was signed betweenBPMIGAS (Implementing Agency for the Upstream Oil and Gassector in Indonesia) and CNOOC. According to the agreement,Indonesia will supply 2.6 Mt/a of LNG to Putian LNG terminal fora 25-year period. The LNG will be produced at the Tangguh LNGproject. This project, which is located in Irian Jaya Barat, Indonesia,is to develop, build, and operate gas production wells, platformsand an LNG facility to export gas initially to China, Korea, and theWest Coast of North America.

2.2.3. Shanghai LNG terminalShanghai began to construct China’s third LNG receiving

terminal in early 2007. The Shanghai LNG terminal is located atthe Yangshan Deepwater port, 30 km away from the mainland.The project is an important step of the city’s efforts to diversityits energy supply. It is expected to go into operation in the firsthalf of 2009, when it will start processing imported LNG fromMalaysia.

Shanghai plans to use 6 bcm of natural gas by 2010, representingabout 7% of its primary energy consumption, according toa government white book. The ratio for 2005 was 3.1%. Shanghai’snatural gas demand is now met by supplies from the country’swest-east pipeline and from reserves in the East China sea. TheShanghai LNG terminal project will help to ease Shanghai’s tightnatural gas supply situation, improve energy security, reduceemissions, and boost efficiency.

The first phase of the Shanghai LNG terminal project, which willcost 7 billion CNY (900 million USD), will have the capacity tohandle 3 Mt/a LNG, or 4 bcm/a of natural gas. It features threetanks, each capable of holding 165,000 m3 of LNG and a berth toaccommodate a supply ship. The second phase of the project willdouble LNG handling capacity to 6 Mt/a.

The Malaysian energy company Petronas will supply theShanghai terminal under a 25-year contract signed in July 2006.Petronas will start shipping LNG to Shanghai in mid-2009, startingwith 1.1 Mt/a and gradually increasing the load to 3 Mt/a in 2012.

Table 3Summary of LNG receiving terminals in China.

Province Location Capacity (Mt/a)

Liaoning Dalian 3.5Hebei Tangshan 3.5Tianjian Tianjin portShandong Qingdao 3.3Jiangu Rudong 3Shanghai Yangshan port 3Zhejiang Ningbo 3Fujian Putian 2.6Guangdong Shenzhen 3.7Guangdong Zhuhai 3.4Guangxi BeihaiHainan Wenchang

Note: CNPC¼ China National Petroleum Corporation, Sinopec¼ China Petroleum aGDYD¼Guangdong Yudean Group Co. Ltd.

The Shanghai terminal will be operated by Shanghai LNG Co.Ltd, a joint venture between Shenergy (55% share), a local state-owned energy corporation, and CNOOC.

2.2.4. Summary of LNG receiving terminal detailsBesides the three terminals mentioned above, there are about 10

other receiving terminalsdplanned or proposed. Some of theprojects are very likely to begin construction soon, such as the onein Ningbo, Zhejiang province. Some others are simply not inprogress. There was once a rough plan that each of the 11 coastalprovinces will have one LNG receiving terminal. These details aresummarized in Table 3, which also include the terminal in Zhuhai,and the second one in Guangdong province. Some information inTable 3 is taken from Ref. [8].

2.3. LNG transportation

2.3.1. LNG tank trucks and tank containersAt present, the transportation of LNG from production sites to

users takes the form of LNG tank trucks or tank containers that havebeen manufactured by firms in Sichuan, Jiangsu, and Hebeiprovinces.

There are two kinds of tank trucks in China, 27 m3 and 40 m3.Due to the cryogenic nature of LNG, the tanks are thermally insu-lated with vacuumed fiber. The inner shell and pipeline are made ofaustenitic stainless steel, and the outer shell of low alloy steel. Thesupport between the inner and outer shells is epoxy glass fiber-reinforced plastics, which are suited for providing thermal insu-lation at cryogenic temperatures.

Since LNG is a combustible liquid, the truck is equipped withsuch safety facilities as an emergency shutdown switch, a quickmelting plug, fireproofing equipment, a nitrogen flashing- andfilling system, grounding, and a fire hydrant.

The sizes of LNG tank containers fall into three types by volu-metric capacity: 17.5 m3, 40 m3 and 43.9 m3. They have highvacuum multi-layer insulation that provides good insulation. Theyare also capable of long-term ventless storage while boasting ofvery lightweight. LNG tank containers provide flexible modes oftransportation, either by road, water, railway or combinationsof the three, and can be used directly as storage tanks.

2.3.2. LNG carrierLNG ships are considered high-tech products with high-added

value, which were only built so far in Japan, Korea, and severalEuropean countries. China has invested more than 100 million CNYin research and technology development over the past few years inorder to gain a share in the global LNG market. This commitmentand efforts led to the country’s first contract for LNG carriers in

Main owner(s) Operation Status

CNPC 2011 Full feasibility studyCNPC 2012 Full feasibility studySinopec Pre-feasibility studySinopec After 2010 Full feasibility studyCNPC 2011 Full feasibility studyShenergy/CNOOC 2009 Under constructionCNOOC After 2010 Full feasibility studyCNOOC 2008 Construction completedCNOOC/BP 2006 BuiltGDYD/CNOOC 2012 Full feasibility studyCNPC Not in progressCNOOC Not in progress

nd Chemical Corporation, CNOOC¼ China National Offshore Oil Corporation,

W. Lin et al. / Energy 35 (2010) 4383–4391 4387

August 2004. The Shanghai Hudong-Zhonghua Shipbuilding Groupnow shares an order for five LNG vessels.

The construction of the first two LNG carriers worth $400million was completed and they were delivered to the buyer inApril and July 2008, respectively. These events symbolize theChinese ship manufacturing industry’s entry into a brand-newtechnological field. Both carriers are GTT No. 96 type witha capacity of 147,200 m3, and are 292 m long, 43.35 m wide. Thecryogenic inner wall is supported directly within a double layershell composed of two layers of films made of the same materialand two independent insulating layers. The inner wall is made of0.7 mm non-expansion type steel (36% Ni alloy steel).

2.3.3. Energy losses due to transportationUnlike coal and oil, which remain almost the unchanged after

long distance transportation, LNG may suffer some losses intransportation.

For large LNG carriers, the evaporation rate is usually between0.05 and 0.1%/d. Assume that the LNGC (LNG carrier) has thecapacity of 150,000 m3, and it is a 10-day voyage, the total boil-off-gas (BOG) will reach 45,000w90,000 Nm3. The BOG may beconsumed by the carrier itself, causing loss of LNG due to trans-portation. Otherwise, the BOG may be re-liquefied. In this case, LNGmay remain its initial quantity, at the expense of powerconsumption for liquefaction and the initial cost of the liquefyingfacilities.

For LNG transported by land vehicles, it is usually stored incryogenic pressure vessels. Although heat leakage into the vesselsmay cause LNG vaporization at the rate of about 0.5%/d, thevaporized natural gas is retained in the vessels. As long as thepressure in the vessel does not exceed its design pressure, there isproduct loss during transportation.

2.4. LNG applications

2.4.1. LNG satellite stationsMore than 10 LNG satellite stations, which receive LNG from

LNG plants such as Zhongyuan and Guanghui have been built.Take the Suzhou LNG satellite station as an example. It has the

following functions: (1) LNG unloading and storage; (2) regasifi-cation, regulation, blending with water gas and coal gas, andtransportation to city pipelines; (3) LNG loading and transportationto community gas stations and LNG vehicle fueling stations. So far,the first two functions have been realized.

The station has a gas supply ability of 20,000 Nm3/d. The futuregas supply ability will be 30,000 Nm3/d and will cover the gas forthe community and LNG vehicle refueling. The peak supply volumeis 1200 Nm3/h.

The main facilities of the satellite station are as following: (1)two cryogenic tanks, of 100 m3 each, the space between inner shelland outer shell is vacuumed and filled with pearlite; (2) twopressuring evaporators which help to pressurize and dischargefluids in the tank, the output gas rating is 150 kg/h; (3) two air-heated evaporators and one steam-heated evaporator, each ofwhich has a production rating of 600 Nm3/h; (4) a BOG heaterwhich can produce 400 Nm3/h of natural gas.

2.4.2. LNG vehiclesTo reduce the air pollution brought about by waste emission

from fuel cars, China is positively accelerating the research on LNGvehicles. The Clean Vehicle Plan initiated by the National Ministryof Science and Technology proposes a demonstration project ofLNG-powered buses. The project is intended to extend the appli-cation of LNG to cars in China and to encourage the development ofdomestic LNG vehicle technology.

Zhongyuan Green Energy Science and Technology Companyconducted research into LNG-powered buses jointly with Beijingmunicipality. The results showed that LNG vehicles score overothers in the following seven aspects: (1) the construction of LNGfueling stations is not affected by the natural gas system and is easyfor networking sites; (2) longer driving distances of LNG vehiclethan that of CNG (compressed natural gas) vehicle, each refueling ofLNG vehicle can support trips of 400–600 km, almost triple of thedriving distances of CNG vehicle; (3) LNG fueling stations requireless land, do not need large-scale power equipments, noise level islow, and are suitable for urban locations; (4) convenience of storageand transportation, economical; (5) easy loading and the samedriving requirements as for conventional vehicles; (6) LNG is free ofpossible solid matter produced during the deep cryogenic process,and, therefore, is more purified and environment-friendly; (7) LNGcan be evaporated directly into CNG and used to refuel CNG vehicles.

Sponsored by the Shanghai Science and Technology Depart-ment, a prototype bus powered by LNG has developed by ShanghaiJiao Tong University and Shanghai Sunwin Bus Corporation. LNGbuses are robust, powerful and conform to the European III Emis-sion Standards.

At present, LNG-fueled vehicles are running on the streets ofBeijing, Urumchi (Xinjiang), and Changsha (Hunan).

China has a long history of adopting NGV (natural gas vehicle).In cities of the western provinces, where natural gas is cheap,drivers tend to convert their gasoline-fueled vehicles into naturalgas-fueled ones. With the domestic availability of LNG fuel tanks,the cost of an LNGV (liquefied natural gas vehicle) becomes onlymarginally higher than a gasoline-fueled vehicle. As the oil pricekeeps rising, the alternative of an LNGV is becoming competitiveeven in the eastern provinces. What restrains the development ofLNGV is not the cost of the vehicle or the price of LNG, but theunavailability of enough LNG resources.

2.5. LNG standards

A few years ago, it was often embarrassing to discover that therewere almost no suitable Chinese standards and regulations whenan LNG project had to be designed and constructed. Now thingshave changed. Some new standards have been proposed whilesome previous standards have been revised to include LNG relatedtopics. This is very important for safe operation of LNG facilities.Here is a brief review of some LNG related standards.

(1) JB/T 4780-2002: Tank containers for liquefied natural gas.(2) GB/T 19204-2003: General characteristics of liquefied natural

gas.

This standard details the general characteristics of LNG, as wellas cryogenics materials employed in the LNG industry. It alsooutlines the guidance on health and safety relating to LNG. Itreferences the international standard EN 1160-1997.

(3) JTJ 304-2003: Design regulation for liquefied natural gaswharves.

(4) GB50183-2004: Fire prevention standards for design of oil andnatural gas projects.

A new chapter was added in this version to deal with LNG issues.It defines the layout-, spacing-, fire prevention-, and safetyrequirement of LNG stations.

(5) QC/T 755-2006: Technical specifications of special equipment forLNG vehicles.

(6) QC/T 754-2006: Testing regulation for LNG vehicle approval.

W. Lin et al. / Energy 35 (2010) 4383–43914388

(7) GB/T 20734-2006: Installation requirement of special equipmentfor LNG vehicles.

(8) GB/T 20603-2006: Refrigerated light hydrocarbon fluids –Sampling of liquefied natural gas – Continuous method.

(9) GB50028-2006: Design standards for city gas.

A new chapter on LNG supply was added in this version. Itmainly includes the requirements of fire prevention spacingbetween LNG tanks in the regasifying station and buildings outsidethe station, fire prevention spacing for the layout of the station, andfire prevention equipment.

(10)GB/T 20368-2006: Production, storage and handling of liquefiednatural gas (LNG).

This is a comprehensive LNG standard adapted from the well-known US standard NFPA 59A-2001.

There will be 24 standards included in the series of LNG stan-dards planned, some of which have been issued and are listedabove. These standards fall into four categories: general/product,analysis and instrumentation, production and storage, HSEmanagement. Besides the standards already issued, the others willfollow in the near future.

In general, those entrusted with developing China’s standardstend to maintain consistency with international equivalents. Moreand more well-known international standards are directly adoptedas Chinese standards.

The situation is almost the same in the LNG field. The LNGrelated standards listed above have no major differences with theircorresponding international equivalents. Whereas, due to totalabsence of LNG practices in the past, there are still some require-ments that tend to be stricter than those prevailing in the inter-national standards are. Take GB/T 20368-2006 as an example; thisis the same as the NFPA 59A-2001. In this standard, the safetydistance between an LNG site and nearby residential and publicfacilities is not defined by specific measurements. However, GB/T20368-2006 is a recommendatory standard in China. In themandatory standard GB50183-2004, the distance for an LNG sitewith storage capacity equal to or larger than 30,000 m3 is set asgreater than 500 m. The requirements in GB50183-2004, instead ofGB/T 20368-2006 must be met when constructing an LNG facility.

3. New aspects of LNG in China

3.1. Small-scale LNG plant

Cryogenic liquefaction plants have been utilized in thecommercial natural gas liquefaction field where liquefactioncapacities are very large. For instance, the capacity of single productline of base load LNG plant goes up to 3.4 Mt/a, and that of the peak-shaving LNG plant is about 0.9 Mt/a. Cryogenic liquefiers arecommercially available for natural gas liquefaction. These liquefiersare normally custom-made, permanent large capacity plantsintended for natural gas utility peak-shaving and transcontinentalnatural gas shipping. The developing market for natural gas vehiclesprovides an opportunity for LNG and L-CNG fueling stations. Othermarkets for smaller-scale LNG liquefiers include onshore gas wells,customer sites that are remotely situated from current gas pipelines,and industrial customer peak-shaving installations. Continuedcommercial development of LNG vehicles creates opportunities fordeveloping small-scale natural gas liquefaction plants.

Comparing with medium-sized or large-scale liquefactionplants, the key characteristics of small-scale ones are simpleprocess, low investment, miniature size, and skid-mounted

packages. Almost all types of liquefaction processes can be adoptedin small-scale LNG plants, so it is not always easy to select the mostsuitable process for a given project. Investigations indicate that theexpander cycle precedes the mixed-refrigerant cycle on thepremise of lacking propane pre-cooling. The role of propane pre-cooling is very important in the mixed-refrigerant cycle. It shouldbe considered for its energy saving characteristics in the develop-ment of small-scale natural gas liquefaction processes for skid-mounted packages [9].

The small-scale LNG plant is a type that is suitable for adoptionin China for stranded natural gas. It is widely accepted that theexpander cycle is a good choice for the small skid-mounted packagefor its simplicity and flexibility. However, it is worthwhile to carryon more work on the MRC cycle, the dominant one for large baseload plants because of its energy efficiency, which consumes only60w80% power compared to the expander cycle.

3.2. LNG cold energy utilization

LNG is a mixture of cryogenic liquid (�162 �C) produced bycryogenic refrigeration and liquefaction processes. It takes about850 kWh of electricity in power plants and public facilities toproduce 1 tonne of LNG; while at LNG receiving terminals, it needsto be evaporated through vaporizers before being put to use. Duringthe evaporation process, it releases a large amount of cold energy(about 830 kJ/kg). Cold energy from LNG can be utilized throughcertain processes to recover energy and enhance economicperformance. Studies indicate that the LNG cold energy can be usedin power generation, food storage, air liquefaction, dry iceproduction, and cryogenic pulverization. The technology of LNGcold utilization should be utilized in China’s current effort to buildLNG receiving terminals.

3.2.1. Air separationIn the thermodynamic point of view, air separation is almost the

best way to utilize LNG cold energy, because the exergy containedin the cold liquid can be efficiently utilized in the air separating unit(ASU).

A joint venture between CNOOC and Air Products and ChemicalsIncorporation has been set up to build an ASU utilizing LNG coldenergy for the Putian terminal. The ASU project is scheduled to becompleted in April 2009. It consumes the cold energy contained inthe 50w70 t/h LNG flow, approximately 10w18% of total LNG flow.The estimated cost of the ASU project is about 215 million CNY. Theinvestment is estimated to be recovered in 8.64 years.

The Ningbo LNG terminal has not started operation yet, but landis reserved for an ASU project, which will be very similar to that ofthe Putian terminal.

The Shenzhen and Shanghai terminals are also considering thepossibility of building ASUs to recover LNG cold energy.

3.2.2. Power generation with CO2 captureWith a properly designed thermal power cycle using the LNG

evaporator as the cold sink, the cryogenic exergy from LNGevaporation process can be withdrawn for power generation.Power generation from fossil fuels, however, is also an importantsource of greenhouse gas emissions. The conventional CO2 capturetechnologies such as chemical/physical absorption, adsorption,membrane- and cryogenic separation, are all energy-consumingprocesses. The LNG deep low storage temperature makes it a verygood cold sink for both power plants and CO2 cryogenic separa-tion. Zhang and Lior [10] proposed a novel zero CO2 emissionpower system. The plant is operated by a CO2 quasi-combinedtwo-stage turbine cycle with natural gas burning in an enrichedoxygen and recycled-CO2 mixture (see Fig. 4). By integrating with

Fig. 4. LNG-fueled power plant with CO2 recovery.

W. Lin et al. / Energy 35 (2010) 4383–4391 4389

the LNG evaporation process, the CO2 condensation and cycle heatsink are at temperatures much lower than ambient. In addition,the combustion-generated CO2 is separated from the mainworking fluid without additional energy consumption. This cyclehas both high power generation efficiency and extremely lowenvironmental impact.

Funded by Statoil, the University of Pennsylvania, Institute ofEngineering Thermophysics of Chinese Academy of Sciences, andShanghai Jiao Tong University are working to improve the above-mentioned cycle. The research aims to analyze the possibility ofbuilding such a power plant at Shanghai LNG terminal.

3.3. Liquefaction of coal bed methane

On one hand, China has the third largest coal bed methane(CBM) resources in the world. The total reserves are about36,000 bcm, almost the same quantity as its natural gas reserve. Onthe other hand, CBM explosions cause 70–80% of the coalmineaccidents in China. In addition, coal-related methane emissions dogreat harm to the environment, because methane is a powerfulgreenhouse gas with a greenhouse warming potential (GWP) of 21.Recovery of CBM has vital importance not only for energy utiliza-tion, but also for safety and environment protection.

At coalmines that are not close to natural gas networks andwhere the CBM production is not very large, liquefaction of CBM isa good recovery option [11]. For CBM with high nitrogen content,enrichment of methane is needed. Methane enrichment can beachieved in two ways. The first is to separate nitrogen from CBMand then liquefy the enriched gas. The second method is to firstliquefy CBM, and then separate nitrogen by distillation.

Funded by the National Hi-Tech R&D Program (863 Program),Shanghai Jiao Tong University, together with Chongqing University,is carrying on research work on coal bed methane liquefaction [12].Both the liquefaction-distillation process and the adsorption-liquefaction process will be analyzed carefully.

Coalmines in China are interested in liquefaction of CBM. TheCBM liquefaction plants may be installed in Shanxi, Anhui, Liaon-ing, Chongqing, etc. China Gas from Hong Kong will build the firstcoal bed liquefaction plants in Shanxi province, with the capacity ofabout 250,000 Nm3/d.

3.4. LNG-FPSO

Much natural gas reserves are under the sea. In 2003, theproduction of offshore natural gas reached 685.6 bcm, a quarter of

W. Lin et al. / Energy 35 (2010) 4383–43914390

total natural gas production of the world. It is predicted that moreand more natural gas will be produced offshore.

With the realization of large floating production, storage, and off-loading (FPSO) facilities for oil production and more recently for LPGproduction, an LNG-FPSO project appears to be increasingly likely inthe future. Offshore natural gas liquefaction has different processrequirements from the traditional on-land base load plants [13].

China has large sea area, and the reserve of natural gas under thesea is huge. Therefore, it is natural for China to develop LNG-FPSO.

Funded by the National Hi-Tech R&D Program (863 Program),and also by CNOOC, Shanghai Jiao Tong University is carrying outresearch work on small-scale LNG-FPSO. Main areas includeselecting processes suitable for FPSO, heat, and mass transferequipment to withstand movement, sloshing, and LNG trans-mission [14].

3.5. Domestic design and production of equipmentin LNG industrial chain

There are various equipment involved in the LNG industrialchain, for example, compressors, expanders, pumps, heatexchangers, valves, etc. Advancing the domestic design andproduction of such equipment is critical to further lowering costand enhancing LNG technology in China.

The compressor is the key equipment for pressure boosting andtransmitting gas used in small-scale LNG plants. There are threetypes: reciprocating cycle, centrifugal cycle, and axial-flow.Compressors used in LNG plant should pay enough attention to thecombustible character of gases. No leakage is allowed and explo-sion prevention facilities are required in electrical and driving parts.Designs for compressors working under deep cryogenic conditionsshould also take into account the effect of cold on the performanceof component materials. In addition, the freezing of grease oilshould not be ignored. Natural gas compressors can be manufac-tured in China now, with almost the same efficiency as foreignbrands. However, it has not yet been possible to produce somespecial kinds of compressors such as compressors for boosting BOGat cryogenic temperatures.

Heat exchangers are an important part of LNG plant in theliquefaction process and in liquid–gas transfer. When used in LNGindustry, they mainly take the form of spiral-wound and plate-and-fin heat exchangers, which have been widely used in cryogenicliquefaction and air separation units. Chinese heat exchangermanufacturers are able to produce cryogenic plate-and-fin heatexchangers for pressure up to 6w7 MPa. In the case of higher-pressure levels, such as heat exchangers for LNG cold energyutilization at terminals delivering natural gas at pressure up to10 MPa, heat exchangers still need to be imported. The spiral-wound heat exchanger is still unavailable in China.

In LNG systems, there is another type of heat exchanger speciallyused for regasifying LNG, which is usually called vaporizer. It variesin types with different working conditions, heating methods,and the scale of gasification. For example, the heating method canbe divided into air heating, seawater heating, combustion heatingetc. Vaporizers for LNG satellite station are now widely manufac-tured in China, but open rack vaporizers (ORVs) in large receivingterminals need to be imported.

Besides pressure transportation, LNG transportation processesmust use LNG pumps under mass transportation and high pipepressure loss conditions. LNG pumps not only require to be used atcryogenic temperatures, but also require high sealing performanceand guaranteed electrical safety. There are special requirements forthe structure and material of the pumps to ensure the safe trans-portation of combustible cryogenic media. There’s a kind ofsubmersible electrical pump installed in a sealed tank, which is

widely used in LNG systems. In addition, some conventionalcentrifugal pumps can also be used in LNG transportation afterimprovement in sealing structure and material. Chinese companiesare now trying to develop LNG pumps; some of them have begun toproduce some small-scale LNG pumps, especially those used in LNGfueling stations.

The expander is the key equipment needed to obtain lowtemperature in LNG plants. In general, the turbo-expander is themost commonly used equipment in LNG plants. Chinese companieshave experience in supplying expanders for air separation units,but they are relatively short of experience in natural gas practices.

3.6. LNG price and energy security

LNG price is of vital importance when LNG competes with otherenergy resources, such as pipeline natural gas and oil.

For domestically produced LNG from the small-scale LNG plants,it is unlikely that this kind of LNG can compete with pipelinenatural gas. However, China is so large a country that many regions,even some rich areas in southeastern China, have no supply ofpiped natural gas. This explains why LNG produced in north-western Xinjiang province has to be transported several thousandsof kilometers to the southern Guangdong province, at a price morethan twice that in pipeline connected areas.

The situation is different for imported LNG, which must face thecompetition from both pipeline natural gas and oil. The price ofimported LNG has been changing very fast these years. TheAustralian LNG price for the Shenzhen Dapeng terminal, the firstone in China is only 3.15USD/MMBTU, roughly 0.80 CNY/Nm3. TheMalaysian LNG price for the Shanghai terminal, the third one inChina, is about twice that of the Shenzhen one, roughly 1.60 CNY/Nm3. The retail price of natural gas in Shanghai is now 2.10 CNY/Nm3, and that means little profit for the LNG company, unless theprice of natural gas increases.

Unlike the relatively steady natural gas price, oil price variessignificantly with that in the international oil market. The retailprice of gasoline is now 6.05 CNY/L in Shanghai that means naturalgas is cheaper than gasoline. This will continue to be true if the oilprice stays high.

As large countries, such as India and China began to import LNG,the price of LNG has increased considerably. The traditional largeLNG consumers, such as Japan, Korea, and the United States, will besure to continue to import more and more LNG. The demand fromthe new large consumers will definitely continue to rise. It can beforeseen that the world LNG market will soon change from a buy-er’s market to a seller’s one. The LNG price is unlikely to decrease inthe future.

As LNG price rises, China slows down its policy to construct newLNG receiving terminals. While this may have some substantialinfluence on the decision of some terminals in the northern prov-inces, it has little influence on the appetite for LNG in the southernprovinces. Global oil and gas companies, such as Shell [15], believethat the demand for LNG in Asia Pacific area will continue to rise.

Therefore, the question is not if China will import more LNG. Thequestion is how to insure China’s energy security in the presence ofLNG. China will consume more and more natural gas. Imported LNGwill meet some of the demand, more should be met from domesticresources, including offshore natural gas and coal bed methane.LNG should be imported from different suppliers in the world toguarantee secure- and inexpensive supply.

Due to constant war-like situation in the Middle East and itslong distance from China, the risk of importing LNG from MiddleEast countries is relatively higher. Fortunately, unlike oil, there aresome alternative LNG suppliers in the Asia Pacific area.

W. Lin et al. / Energy 35 (2010) 4383–4391 4391

Safety is another important issue related to energy security. Infact, the LNG industry is proud of its safety record, which spans over40 years. After over 35,000 ocean voyages, LNG has proved itself asa kind of safe energy resource with no severe accidents recorded.The only significant accident may result from rollover of LNG inlarge tanks. This phenomenon has been studied and measures havebeen proposed to prevent stratification and rollover in LNG tanks.Other possible accident types like leakage of LNG into water or soil,as well as vapor clouds of LNG, have also been studied intensively,although they have never occurred before.

Public acceptance is also very important for the development ofLNG industry in China. Because few people know thoroughly aboutLNG, public education is important for their acceptance of LNG andthe related facilities. Fortunately, there has never been such strongresistance as in the United States. Chinese public tend to acceptthese types of new energy resources.

4. Conclusions

The LNG industry is relatively new in China. To meet theincreasing demand of natural gas, China needs to build about 10large LNG receiving terminals, and to import LNG at the level ofmore than 20 bcm per year by 2020.

While small-scale LNG plants may sell out their expensive LNGproduct, large-scale LNG receiving terminals must keep theirpurchasing price below a reasonable level, say 6USD/MMBTU, toface the competition from piped natural gas and oil.

There are many new aspects in China’s LNG industry, such assmall-scale liquefiers, LNG cold energy utilization, coal bedmethane liquefaction, LNG plant on board FPSO. While some ofthese have been utilized in industry, the others may be useful forfuture LNG practice.

LNG codes and standards are being established in China. Thesestandards must be reference as much as possible to correspondinginternational equivalents.

While LNG is contributing to China’s multi-energy resourcestructure to promote energy security of the nation, LNG supplyitself must be secure. When deciding LNG suppliers, it is wise toavoid politically sensitive areas and to choose suppliers situated nottoo far away from China.

Safety is an important issue even if the LNG industry has a rathergood safety record. Public education is also very important foracceptance of LNG and related facilities.

The future is clear. LNG, the clean, efficient, and safe energyresource, is definitely remain as a necessary part in China’s futureenergy infrastructure.

References

[1] BP. BP statistical review ofworld energy June 2007. London: BP p.l.c,2007. See also:http://www.bp.com/productlanding.do?categoryId¼6848&contentId¼7033471.

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[9] Cao WS, Lu XS, Lin WS, Gu AZ. Parameter comparison of two small-scalenatural gas liquefaction processes in skid-mounted packages. Applied ThermalEngineering 2006;26:898–904.

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[12] Gao T, Lin WS, Gu AZ, Gu M. CBM liquefaction processes integrated withadsorption separation of nitrogen. In: Proceedings of ASME’s 2nd EnergySustainability Conference, Jacksonville, USA: ASME; 2008.

[13] Barclay M, Denton N. Selecting offshore LNG processes. LNG Journal2005;10:34–6.

[14] Gu Y, Ju YL. LNG-FPSO: Offshore LNG solution. Frontiers of Energy and PowerEngineering in China 2008;2(3):249–55.

[15] Chadwick J. LNG in Asia Pacific: the tiger of many stripes. In: The 15th Inter-national Conference & Exhibition on Liquefied Natural Gas, Barcelona, Spain:GTI/IGU/IIR; 2007.

http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471

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LNG (liquefied natural gas): A necessary part in China’s future energy infrastructureIntroductionCurrent status of LNG in ChinaNatural gas liquefaction plantsShanghai peak-shaving LNG plantZhongyuan LNG plantXinjiang Guanghui LNG projectSummary of LNG plants

LNG receiving terminalsShenzhen Dapeng LNG terminalFujian Putian LNG terminalShanghai LNG terminalSummary of LNG receiving terminal details

LNG transportationLNG tank trucks and tank containersLNG carrierEnergy losses due to transportation

LNG applicationsLNG satellite stationsLNG vehicles

LNG standards

New aspects of LNG in ChinaSmall-scale LNG plantLNG cold energy utilizationAir separationPower generation with CO2 capture

Liquefaction of coal bed methaneLNG-FPSODomestic design and production of equipment in LNG industrial chainLNG price and energy security

ConclusionsReferences