05.07.2009

In the 1980s the world’s annual natural gas consumption was 42.5 bcm. In 2008 global natural gas consumption stood at 85 bcm. Reserves also took a similar path. In 1988 reserves were 110 tcm and by 2008 reserves stood at 185 tcm

From wellhead to burner tip is what is known as from the reservoir to the burner tip and includes exploration and production, transmission, through pipeline systems or LNG transportation, sale and marketing, distribution and gasfired power generation. >

As the most versatile of the fossil fuels, gas lends itself to a range of decentralized applications, including devices called fuel cells, which use hydrogen and oxygen to create electricity through an electrochemical process.

In addition, natural gas as the most flexible and sustainable fuel source is also the best back up for unpredictable supply patterns of renewable supply energy sources, such as wind and solar and it thus is the cornerstone of sustainable energy. In the long run, natural gas is likely to become a “bridge” to non-polluting hydrogen fuels and renewable energ.

In addition, the great flexibility of gas enables to use it for both baseload and peak electricity power station and also allows the establishment of small scale, non coastal based power stations. In many countries, including in Israel, coal is the mainstay fuel and whenever coal is cheaper it is dispatched for base load operation before gas fired units. Coal is thus used as base load operation because it has lower variable operating costs than alternative fuels. Capital costs considerations dominate the choice of power plants at peak load operation because it is used for only a short time. In Israel, peak load operation natural gas fired power plants have displaced liquid fuels.
Gas fired power plants have a capital cost advantage over coal fired power plants and are cheaper than liquid fuels. Natural gas is a reliable, environmentally friendly and cost-effective fuel. It has significant advantages over coal (a low quality fuel) and is often a particularly attractive option because of its relatively low capital construction cost; its lower operating and maintenance costs – it costs more to run a coal plant because it is a more complex technology requiring more employees, more costly equipment to maintain and purchase of more commodities such as limestone to remove sulphur dioxide; its shorter construction lead times (which is important in countries where there is an expected deficit in generation capacity); its relatively high fuel conversion efficiency; its lower environmental impact; its higher flexibility of operation; the fact that smaller plants can be constructed, even plants dedicated in the back yard of industrial consumers; natural gas plants can be established in-land and not solely on the restricted coastal plains where coal stations must be constructed (need coal jetty)

Natural Gas Regulator within the Ministry of National Infrastructures. The Natural Gas Authority was established in accordance with the Natural Gas Sector Law, 2002. The Natural Gas Authority is the regulatory body of the industry. The tasks of the authority are as follows: (1) Supervision of license holders, (2) Approval of engineering specifications for the purpose of awarding building permits, (3) Approval of tariffs, (4) Coordination of the staff work in the Ministry of National Infrastructures regarding natural gas, (5) Providing entry permits to land for license holders, (6) Publication of tenders and preparation of licenses, (7) Formulation of a transportation agreement for all consumers, (8) Setting up arrangements and determination of fees for connection of consumers to the transportation system > >

Before 2003, gas was primarily a regional commodity, transported by pipeline and consumed near where it was produced. Often, it would be simply flared (burned off as waste) at oil wells, since transportation was so difficult. With advances in LNG over the last few years and economies of scale LNG has become more of a globally traded commodity

Natural gas is a mixture of various hydrocarbon and inorganic gas compounds that have been produced over thousands of years by the de-composition of carboniferous material trapped in underground formations. Natural gas is a combustible mixture of hydrocarbon gases formed primarily of methane (70-90%) but it can also include ethane, propane, butane and pentane. It is colorless, shapeless and odorless in its natural form and is a much cleaner source of fossil fuel. Natural gas is the portion of petroleum that exists either in the gaseous phase or is in solution in crude oil in natural underground reservoirs and which is gaseous at atmospheric conditions of pressure and temperature. Natural gas may include amounts of non hydrocarbons. In order In order to be able to transmit and use this natural gas, it must be processed to remove any undesirable components and render it safe for transmission and consumption. The first process to be carried out is the removal of bulk liquids from the gas stream, utilizing a separation process that removes both hydrocarbon liquids and water, using a simple heat exchange mechanism. Depending on the gas composition, it may then be clean enough to compress and transport to a remote processing plant or may require further processing to remove contaminants such as the inorganic gases and heavy hydrocarbons prior to compression and transportation. Wherever the processing occurs, the objective is always the same – to produce a gas suitable for high-pressure transportation and with the appropriate chemical and physical characteristics to render it suitable for sale and for combustion. The determining parameters in terms of the gas quality are many and varied, but essentially are based around two main criteria – safety and value. In terms of safety, the gas must not be overly corrosive or introduce risk of pipeline, plant or domestic appliance failure. In practice this means that corrosive components such as hydrogen sulphide and carbon dioxide must be removed and that excess water and condensable hydrocarbon content must be reduced to a level that will prevent condensation anywhere in the downstream pipeline system. Removal of water and heavy hydrocarbons is particularly important as an excess of these components, leading to condensation in adverse conditions, can cause hydrate formation within the pipeline leading to excessive pressure drop and potential blocking of the pipe. In terms of value, the equation is simple: the gas is processed to give it the best balance of value (measured by it’s calorific value) against processing cost. Removal of water and heavy hydrocarbons costs money, but both processes improve the value of the gas at fiscal transfer. So control of the water dew-point and hydrocarbon dew-point reduction processes will produce an optimal gas composition that meets the fiscal requirements of seller and buyer and minimizes the safety risks involved in transporting the gas at high pressure.