OREANDA-NEWS. June 01, 2015. Laurent Vivier, Vice President Strategic Planning, Markets and LNG within Total Gas & Power,?presents the strengths of liquefied natural gas and discusses the Group's strategy in this area for the years ahead. 

What are the advantages of liquefied natural gas (LNG)?

LNG has two major advantages. First, it provides a way to transport gas over very long distances. When resources are far from the point of consumption, the only solution is to liquefy gas at -160°C, load it onto carriers and deliver it to terminals for regasification, rather than build pipelines over thousands and thousands of kilometers. Second, LNG offers a great deal of flexibility in terms of destination. Unlike with pipelines, we can re-route LNG carriers in relation to demand around the world and respond swiftly to periods of peak consumption. This was the case, for example, after the Fukushima disaster, when Japan shuttered all of its nuclear power plants and depended heavily on LNG to generate electricity.

Have new uses for LNG emerged in the last few years?

Yes. We're currently seeing greater use of LNG in maritime transportation, notably for ships like ferries that are on commercial routes with increasingly stringent regulations for particulate emissions. On land, an estimated 140,000 LNG-powered vehicles were on the road in China in early 2015, representing around 6% of the country's natural gas vehicle fleet. ?We're seeing similar trends in the United States, but this time for economic reasons, as the shale gas revolution has brought prices down in relation to oil.

What role does LNG play within Total's production?

Total was a pioneer in LNG, helping for example to launch the liquefaction plant in Bontang, Indonesia in the 1970s. This was one of the first plants to supply Japan, and it's still in operation. Today, Total is present across the entire LNG industry. We are a global producer with interests in ten plants in the Middle East, Asia, Europe and Africa. We also market LGN and have interests in regasification terminals in India and Europe.

While we're less known for it among the general public, Total is now as much a gas company as an oil company. LNG alone accounts for 20% of our oil and gas production and around 30% of Upstream profit, making us the second largest integrated global player in the industry.

Do you think that the proportion of LNG in the energy mix will increase in the years ahead?

Yes. The global market will be driven by Asia, where demand for LNG will double between now and 2030. While we're expecting demand for natural gas to grow by 2% a year, demand for LNG should expand twice as fast. The potential is enormous, because LNG will help make the gas market more global and more flexible by creating flows between markets that are still regional.  That said, its growth will depend on that of natural gas and on the level of demand for residential and industrial needs and for electricity generation.

Is that why you are investing massively in LGN?

Yes, we currently have two projects in Australia. The first, a complex offshore project known as Ichthys, involves developing multiple subsea wells that will be connected to a huge liquefaction plant in Darwin by a 900 km pipeline. The second, the Gladstone project (GLNG) to produce LNG from coal seam gas, will come on stream in a few months. And don't forget Yamal LNG in Russia, one of the largest industrial undertakings in the sector. The cost of building installations in this region stands in the tens of billions of dollars. The project is located onshore in the estuary of the Ob river, which is ice-bound nine months of the year. It demonstrates our ability to produce and transport LNG in the Arctic cold using high performance technologies.