Saturday, October 30, 2010

Liquid natural gas is key to Cuba's energy plans

Liquid natural gas is key to Cuba's energy plans
By Jorge Piñón

Natural Gas (methane) is one of the world's most plentiful, cleanest,
safest, and most useful of all energy sources; and Cuba is about to
increase its role as part of the country's future energy mix.

Cuba produces today approximately 1.155 million m³ of associated
natural gas per year, an increase of 55 percent from 2005 levels of .743
million m³. Cuba's natural gas production is all associated natural gas
found within the crude oil reservoirs. The island's geology to date has
not proven to be a major source of dry, non associated natural gas

Associated natural gas production is being used as fuel for onsite power
generating plants of 400 mw total capacity owned and operated by
Energas, a joint venture between Canada's Sherritt and Cuba's Cupet and
Unión Eléctrica.

A LNG re-gasification facility to receive Venezuelan-sourced LNG is
currently being planned for the southern coast port city of Cienfuegos
by CuvenPetrol, a joint venture between Venezuela's PdVSA (51%) and
Cuba's Cupet (49%). Two 1-million-ton re-gasification trains are planned
for 2012 at a cost of over $400 million. The natural gas is destined as
fuel for that city's thermoelectric power plant, and as a feedstock
(hydrogen) for the Cienfuegos refinery and future
petrochemical/fertilizer plants.

Liquefied Natural Gas

LNG is natural gas that has been super cooled to minus 260 degrees
Fahrenheit (minus 162 degrees Celsius). At this temperature, natural gas
condenses into a liquid taking up to 600 times less space than in its
gaseous state, which makes it feasible to transport over long distances.

The chilled natural gas, now LNG, is then loaded onto specially designed
tankers where it will be kept chilled until it reaches its final
destination. The typical LNG carrier can transport about 125,000-138,000
cubic meters of LNG.

Once the tanker arrives at the regasification terminal, the LNG is
offloaded into large storage tanks, built with full-containment walls
and systems to keep the LNG cold until it is turned back into a gaseous
state and moved into pipelines which will deliver the natural gas to the
various end-users.


It is estimated that Venezuela has 176 trillion cubic feet (Tcf) of
proven natural gas reserves the second largest in the Western hemisphere
behind the United States. Venezuela's PdVSA plans to build three
liquefaction trains at the Gran Mariscal de Ayacucho natural gas complex
in Guiria. The project would source gas from the Plataforma Deltana and
Mariscal Sucre natural gas projects. Total investment in the three
projects could approach $20 billion, with first exports by 2013.

Atlantic Basin LNG exporters such as Trinidad and Tobago (the only
country in Latin America with liquefaction facilities), Nigeria,
Equatorial Guinea, Algeria and possibly Angola could supply Cuba with
LNG if Venezuela's supplies are not available at the time of the
completion of the Cienfuegos facility.

Cuba's neighbors, the Dominican Republic and Puerto Rico are the only
other Caribbean countries with LNG regasification facilities.


Natural gas, as the cleanest of the fossil fuels, emits fewer harmful
pollutants, and helps to reduce greenhouse gas emissions such as carbon
dioxide, sulfur dioxide, nitrogen oxides, and mercury.

Smog and poor air quality is a pressing environmental challenge in Cuba
where high-sulfur (3%) crude oil and fuel oil are burned as electric
power plant and industrial fuel for the cement, nickel and steel
industries. In 2009, high-sulphur fuel oil accounted for 64 percent of
Cuba's petroleum consumption.


Cienfuegos is fast becoming Cuba's oil refining and petrochemical center.

The CuvenPetrol refinery is in the process of a $3 billion expansion
project which would double its processing capacity to 150,000 barrels
per day as well as improving the quality of its refined products production.

The Carlos Manuel de Cespedes electric power plant in Cienfuegos is
already in the middle of an upgrading and revamping project which will
allow her to burn natural gas in its 158 mw generating capacity unit
number 3.

Natural gas will provide fuel to the refinery as well as hydrogen for
the upgrading units scheduled to be completed by 2013. Natural gas will
also be used as a feedstock for a planned $1.3 billion petrochemical
complex which will include ammonia and urea producing facilities which
will provide Cuba with much needed fertilizers for its agricultural

All seems to indicate that Cuba is moving forward toward an energy
policy which embraces energy conservation, modernization of the energy
infrastructure and a balance sourcing of oil and natural gas in a way
that protects the island's environment.

Jorge Piñón is a former president of Amoco Oil Latin America who now
works as a consultant in Miami

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