Liquefied natural gas

6.5

New technologies
The slow pace of development of LNG projects, and high commodity prices, means
that new technologies are being seriously canvassed, such as the use of coal bed
methane to supply LNG plants and floating liquefaction facilities and storage and
regasification facilities.

(a)

Coal bed methane10 (CBM) to LNG

As the natural gases stored in coal beds or coal seams typically have a higher
concentration of methane than conventional natural gas (often more than 95%),
and usually do not contain hydrogen sulphide or other sulphur components, coal
bed methane represents an alternative to conventional natural gas as a feedstock in
the production of LNG.
Coal bed methane is a form of natural gas, generated during the process of
coalification (the progressive conversion of plant materials to coal), that attaches to
coal surfaces and coal fractures and is held in place by hydraulic pressure. Coal bed
methane is typically produced by removing the water from a coal bed (a process
referred to as dewatering), which depressurises the coal bed and eventually causes the
methane stored on the coal surfaces to separate from the coal. The methane then
flows through the fractures and cleats which exist in the coal bed, before being
extracted by gas production wells. The production of coal bed methane occurs as the
water is continually removed from the coal bed. The process of dewatering and
depressurisation may need to be conducted for some time (potentially as long as
three or four years, or more) before the realisation of stable commercial coal bed
methane production.
At the time of writing, a number of LNG projects have been proposed in
Queensland, Australia,11 in an attempt to monetise the substantial coal bed methane
reserves which exist in the Bowen and Surat basins of central and south-east
Queensland, and to market these reserves to the higher-value international LNG
market. The Queensland projects have received much international attention and
have attracted participation and significant investment from major international
LNG players including BG, Shell, Petronas and Sojitz, who will separately partner
with Australian-based energy companies including Santos, Queensland Gas
Company and Arrow Energy. The initial design capacities of these projects is varied,
ranging from 0.5mpta to 1mpta to 3mpta to 4mpta, with expansion plans for some
projects of between 10mpta and 12mtpa having been suggested.12
The development and production of coal bed methane differs in a number of

10
11

Coal bed methane is also referred to as coal seam methane or coal seam gas.
The coal bed methane produced as part of these projects is intended to be piped (over 400km in some
cases) from the inland coal fields to the central coast port of Gladstone where the LNG terminals are
proposed to be built. Given the close proximity of the proposed sites for certain of these projects, there
may be potential for the sharing of infrastructure and facilities between the different projects.
In contrast to the projects mentioned above, another coal bed methane to LNG project has been
proposed in Queensland by Liquegas Energy, a subsidiary of the Norwegian-based AGR Group, which
intends to market LNG from a 100 tonne per day plant, to be transported by road to industrial and power
generators in Queensland and New South Wales.

12

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