|Alaska LNG could prove just the right fit for Asian markets|
August 14, 2013
Alaska North Slope gas exported to Asia could hold a key attraction over other U.S. LNG exports: The Alaska gas would burn hotter.
To adopt the gas industry's jargon, Alaska's liquefied natural gas would be somewhat "wet" or "rich" compared with the "dry" or "lean" gas other U.S. liquefaction plants will process into LNG.
And many Asian buyers love wet gas -- which is laced with gas liquids that raise the heat content. Especially in key markets such as Japan, South Korea and Taiwan, power-plant turbines, industrial furnaces and household appliances are calibrated to burn rich gas.
A gas-fueled kitchen stove built for a Japanese home could not be used in the United States without modification, and vice versa.
As the gas industry expanded by pipeline and by LNG tanker, different regional systems developed in isolation from one another, sort of how different languages emerged around the world. Each new gas system was a unit unto itself, based on the quality of local or regional gas supplies. In industrialized North America, dry gas was amply available, so that's what is piped to U.S. furnaces. Japan, South Korea and Taiwan built their systems on the wet-gas LNG blends from nearby Indonesia, Malaysia and Brunei.
For starters, let's put some numbers on the table to help explain wet gas vs. dry gas:
• 1.01 million British thermal units, or Btu -- This is the heat content of 1,000 cubic feet of methane, a standard measure of methane. Energy content is reported in Btus so that different fuels -- gas, oil, coal -- can be compared. Natural gas usually is priced in units of 1 million Btu.
• 1.022 million Btu -- The average heat content per thousand cubic feet of U.S. pipeline gas, the gas that goes to power plants and home furnaces. This pipeline gas is almost pure methane.
• 1.06 to 1.13 million Btu -- The heat content that Japanese and South Korean utilities expect from the gas they burn. (Some sources will show different ranges based on different assumptions about the temperature and pressure of the gas. The range given here serves to show that Japan and Korea use a higher-Btu gas than found in pure methane or U.S. pipeline gas.)
Liquefied North Slope Alaska gas should fall within the Btu window of Japan and Korea, with likely a minimum of about 1.07 million Btu of energy per thousand cubic feet. Certain decisions by the gas producers, their customers and others could push this Btu number higher.