Peiyang Chemical Equipment Co., Ltd.
The Cost Analysis of Each Link of the LNG Industry Chain
The Cost Analysis of Each Link of the LNG Industry Chain

1. The cost composition of each link of LNG industry chain

The natural gas supply cost of LNG (Liquefied natural gas) project is mainly composed of the cost of gas extraction, the cost of purification, the cost of transportation and receiving and revaporization. According to the resource situation, the different distance, the proportion of the cost change in a large range.

1) The relationship between the extraction and purification of LNG, the cost of liquefaction link and the FOB price in the international market

The price of LNG gas processing plant in international market, whether long-term contract price or spot or futures price, is the FOB price of LNG (FOB price). The FOB price is made up of the cost of exploitation of natural gas, the purification of the cost of liquefaction, the tax of the resource state and the profit of the company. In the 10 years of 1993-2003, gas production costs vary greatly depending on the field. With the development of technology, the costs of natural gas purification and liquefaction have been reduced by 35% ~ 50%. But the FOB price of LNG is the same as the international crude oil price, change with the international geopolitics, economic and trade relations and climate. The purification and liquefaction costs of LNG are relatively stable, and it is the profits of the developers and the tax revenue of the gas producers.

2) The transportation cost of LNG

The transportation cost of LNG mainly includes the depreciation expense, fuel cost, management and personnel expenses of LNG carrier. With the development of LNG trade, the transportation cost of LNG has decreased by 40%. Special vessels of 138,000 tons, which cost $280 million in 1995, were reduced to $500 million to $160 million by 2003. The design of the LNG tanker sailing life is 20 years, if the ship without major fault occurs during operation, even 40 years sailing belong to normal, so the ever-decreasing cost of depreciation of the LNG carrier. In 2003, the transport cost of imported LNG in the form of chartered shipping contract was about 0.6 USD/million British thermal unit, equivalent to 0.16 yuan/m3. The proportion of depreciation, fuel and management fee is roughly (3 ~ 4) : (2 ~ 3) : (3 ~ 4). This ratio obviously varies with the cost of shipbuilding, the distance of transportation and the fluctuation of fuel prices. However, it is certain that the higher fuel costs of LNG will not have much effect on transport costs.

3) The cost of the receiving station and the evaporation and transmission

The cost of LNG receiving station and vaporization and pipe loss mainly includes the depreciation cost of receiving station and pipeline facilities, the cost of revaporization and the labor management fee. The total investment in a LNG project line of millions of tons a year will cost billions of yuan. The depreciation cost is equal to 0.04 ~ 0.08 yuan/m3 in 20 years. The energy cost, management expenses and financial expenses of vaporization and transportation are closely related to the factors such as the evaporation scheme and the operating management level of the company. If conventional seawater/reheating boilers are used to fuel heating vaporization schemes, the two charges will total about 0.3 yuan per cubic meter or a little more.

2. Reducing the cost of vaporization by using cold energy

LNG can release about 860 ~ 830 kJ/kg of cold energy in the process of vaporization. If you take advantage of these cold energy, you can save a lot of electricity. LNG can be used widely, but it can be restricted by the user market near the receiving station. The specific utilization plan and utilization efficiency are different, and the economic benefits are different. From low temperature below 150 ℃ to room temperature of LNG, the value of his cold can calculated by equivalent electricity price is about 420 yuan/ton. If the cold can be fully utilized, the economic benefits of 0.3 yuan/m3 will be obtained, which can offset the evaporation cost of LNG. Even if the cold energy utilization is only 50%, the economic benefit of reducing the cost of evaporation is considerable.

3. Reduce the cost of downstream gas supply by using the cold quantity of the wet air source

According to the size of ethylene, propane, butane and other heavy hydrocarbons (C2 + light hydrocarbon) in LNG, LNG can be divided into moisture and dry gas, the content of C2+ light hydrocarbon is above 10 %, can be regarded as moisture. The heat value of the LNG is higher than the dry gas. The development of the natural gas industry requires the establishment of a uniform thermal standard, which is a very economical and effective method of heat adjustment to separate the C2+ light hydrocarbon from the moisture. At the same time, light hydrocarbon is a very high quality chemical raw material, it can produce high value added chemical products. Therefore, the use of LNG cold quantity to isolate the C2 + light hydrocarbon, it can not only adjust the calorific value of LNG and make it match the pipeline gas calorific value, it can also replace naphtha restructuring, such as raw material to produce ethylene, reduce the cost of ethylene industry, and then generates considerable economic benefits. According to the price difference between C4 and C4 in Saudi Arabia in recent years, when the content of C2+ light hydrocarbon is 15%, the net income will be about 150 yuan, excluding the investment and operating expenses of the separation facility. It can lower downstream air supply costs 0.09 ~ 0.10 yuan/m3. The higher the C2+ content, the greater the benefit. It can be seen that the separation of light hydrocarbon from moisture can greatly reduce the downstream gas supply cost of LNG project.

4. Using volatile LNG as tanker fuel to reduce transport costs

The natural gas after liquefaction at low temperature is 625 times lower than the atmospheric pressure, and the temperature of liquid in the tank is generally -162. With low temperature adiabatic technology, the volatilization of liquids during LNG transportation is very small. If the tank is powered by a LNG engine, the volatile LNG can be used as a tank fuel. At present, the fuel cost for LNG transportation per 100 km is about 0.03 yuan per cubic meter.

The LNG FOB price of $4 per million British thermal units as an example, the dollar exchange rate of 8 after the conversion price of 1597 yuan / ton, 1.16 yuan / cubic meter, plus shipping costs 0.16 yuan / cubic meter, investment management, depreciation and vaporization receiving station and pipeline fee of 0.35 yuan / cubic meter, the profit of LNG project company is 0.11 yuan/m3, and the supply price of downstream gate station is 1.78 yuan/m3. The cost of downstream links after offshore is increased by 0.62 yuan/m3. It must be stated that the current state supports the LNG project, import materials and equipment duty-free, VAT, LNG import duties, moreover, the "two free three reduction" policy (two years of exemption from the two years and the three years in half of the enterprise income tax) is carried out by the income tax, so the cost is not included in the tax cost. In this way, the cost of the downstream link is 35%. If the FOB price of LNG goes up to $6 per million British thermal units, the dollar is still at 8.0, or 1.747 yuan/m3. If the cost of downstream links remains unchanged at 0.62 yuan/m3, the price of the gate will be 2.37 yuan/m3, or about 33%, which is much less than the increase of FOB price. But the proportion of the cost of the downstream link has decreased to 26%.

According to the cost analysis of the downstream components of the above LNG, it can be seen: 1) the cost of shipping is increased by the increase of the FOB price of LNG, i.e., the increase of 0.016 yuan/m3, the rest of which remains unchanged; 2) the cost of evaporation can be changed from positive to negative, and it is not difficult to achieve the cooling efficiency of 0.10 yuan/m3. In this way, the cost of the downstream parts of LNG can be reduced by 0.084 yuan/m3 to 0.536 yuan/m3, and the gate price is 2.286 yuan/m3. The cost of each link in the lower reaches is 23 per cent of the price of the gate. If the LNG cooling measures can be further adopted, the C2+ light hydrocarbon of the two can be separated, and the downstream gas supply cost will be further reduced.

From the above analysis, it can be concluded that: 1) the cost of the downstream parts of LNG is relatively stable, which does not increase with the increase of FOB price, so the increase of gate price is less than the increase of FOB price. 2) the cold energy in LNG can be utilized to separate the light hydrocarbon contained in the wet gas source LNG, which can help further reduce the cost of the downstream parts of LNG.

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