GAS AND LIQUEFIED FUELS
Natural Gas: A mixture of hydrocarbons in the gaseous state, consisting primarily of methane with the remainder consisting of small quantities of ethane, propane, butane, gaseous substances like carbon dioxide, nitrogen, hydrogen sulphide. Before being processed for use, natural gas is treated to eliminate carbon dioxide and nitrogen, making it less flammable, and hydrogen sulphide, which is a toxic and corrosive gas. What remains is primarily methane. For this reason, natural gas is commonly called “methane” whose molecule is formed by one atom of carbon and four atoms of hydrogen (CH).
Liquefied Natural Gas (LNG): After the extraction and elimination of impurities, natural gas can be cooled to –162°. This is the temperature at which it turns into a liquid, reducing its volume by 600 times. In the liquid state it can be stored in tanks, loaded into LNG carriers and transported over long distances to reach its end-use consumers, where it is re-gasified and distributed.
Non-Conventional Gas (NCG): As there is no single definition, NCG is generally identified on the basis of geological features that differentiate it from conventional gas. NCG has the same properties as conventional natural gas but it is found in less permeable geological sites requiring special extraction techniques (“fracking” or hydraulic fracturing. NCG is natural gas contained in shale (shale gas), compact sand (tight gas) and coal layers (coal bed methane).
Natural Gas Liquid (NGL):Liquid or liquefied hydrocarbons generated by natural gas in separation equipment or natural gas treatment plants. They are part of natural liquid gases like propane, normal butane and isobutane, isopentane and pentanes plus, sometimes defined as “natural gasoline” or plant condensate.
Liquefied Petroleum Gas (LPG): Mixture of light petroleum fractions, gaseous at atmospheric pressure and easily liquefied at room temperature through limited compression.
THE LNG INDUSTRY
Gas Pipeline (or methane pipeline): Conduit for the transportation of fuel gas at high pressure and over long distances. Pipeline transmission can be national or international and may serve one or more countries.
National Pipeline Network (NPN): It is essentially made of pipes, usually with a large diameter, with the function of transferring gas quantities from the entrance points of the system (imports and main national productions) to the interconnection points with the Regional Transportation Network and storage structures. The National Pipeline Network also includes some inter-regional pipelines used to reach key areas of consumption. The National Pipeline Network includes over 11 gas compression plants. In Italy, Snam Rete Gas owns 9,559 kilometers of the 10,115 kilometers in the National Network.
Liquefaction: The passage of natural gas from the gas state to the liquid state. The liquefaction of natural gas takes place through a cooling process (at about –162°C). At this temperature and at atmospheric pressure, the gas is in the liquid state, with a volume reduced by 600 times, thus enabling its passage from producers to users.
Liquefaction Train: The liquefaction plants are organized in parallel processing units called trains, each of which treats a portion of gas to be liquefied. The gas originating from deposits or other sources is first of all treated for the removal of condensates, acid gases like carbon dioxide, water, propane, heavier hydrocarbons and other impurities (which could cause a liquefaction plant malfunction or solidify at low temperatures) and subsequently brought to liquefaction temperature. LNG is fed into storage tanks, ready to be loaded on LNG carriers for its transportation.
Regasification: Industrial process of heating liquefied natural gas to the point where it returns to the gaseous state.
Regasification Terminal: Infrastructure that converts LNG into gas, compresses it to the pipeline pressure, measures and then injects it into the pipeline. When LNG reaches the regasification terminal through its carriers, it is unloaded and stored in insulated tanks at about –162°C and at atmospheric pressure. After that, it is sent to the regasification plant where it is reconverted to the gaseous state through a controlled heating process (aka “vaporization” process), which expands its volume. At the end of this process, the gas is channeled into the national pipeline network through a natural gas pipeline.
- Onshore: on land, along coast areas
- Offshore gravity based: on a platform resting on the seabed
- Floating Storage and Regasification Unit (FSRU): conversion of an LNG carrier anchored to the seabed.
Vaporizer: A heat exchanger in which LNG is converted to the gaseous state through thermic exchange with a heating fluid that may be sea water, a mixture of water heated by means of heat recycling or burners, or intermediate fluid (e.g., propane).
Open Rack Vaporizers (ORV): Consist of vertical panels of aluminum alloy tubing which transport LNG to be vaporized, and which flows from bottom to top. Sea water pours down on the external surface of the vaporizers, providing the necessary heat to regasify LNG. This technology has been widely tested in the LNG industry and is largely used in Europe, as it allows for reduction of CO2 emissions into the atmosphere.
Submerged Combustion Vaporizer: Made up of a tube bundle through which LNG flows and immersed in hot water (25 – 35 °C). The LNG, passing through the immersed tube system is heated to the gaseous phase using the heat transmitted from the water bath. The water is kept warm by the heat provided by direct contact with the warm gases produced by the combustion of a small part of natural gas (generally 1.5 % of vaporized gas). The fuel and the air channeled from a compressor react in the submerged flame burner; the generated warm gases are channeled through a distribution system within the water bath where the heat is transferred by direct contact. The gas used as a fuel in the vaporizers is heated in a preheater located upstream of the vaporizers.
Heat Recovery Vaporizer: Uses - as means of thermic exchange - a liquid (formed by a mixture of water and glycol) which, in a closed circuit, is heated by the exhaust gases emitted by gas turbines. The heat from the mixture of water and glycol warms the LNG, returning it to gaseous state. The gas is channeled into a collector outside the vaporizer while the cooled mixture of water and glycol is returned into the turbines to be once again overheated by the exhaust gases.
THE GAS MARKET
Agency for the Cooperation of Energy Regulators - ACER: This body belongs to the European Community and is headquartered in Ljubljana (SLO). It is a legal entity, established by EC Regulation n. 713/2009, to assist national authorities in their regulatory functions and, if necessary, to coordinate their actions in order to provide further contribution to the effective functioning of the internal market in electricity and natural gas.
Thermic Year: A period of time included between 6:00 a.m., October 1st of any calendar year and 6:00 a.m., October 1st of the calendar year immediately following.
Authority for the Electric Energy and Water System: This is an independent body, legally established on November 14th 1995 by law n. 481, with the task of protecting the interests of consumers and to promote competition, efficiency and distribution of high quality services through the activity of regulation and control. The Authority also acts as consultant for the Parliament and the Government, and may make recommendations and proposals. It publishes an Annual Report on the status of services and activities.
Regasification Capacity exempted by legislation regulating the right of third party access:: Regasification companies may apply to the Institutions (the Authority for Electric Energy, Gas and Water System, the Ministry for Economic Development and the EU Commission) for exemption from the requirement to allow the right of access of third parties and to establish and negotiate the price of regasification service directly with a user. The regasification capacity necessary for this service is called “exempted capacity.”
Regulated Capacity (of regasification): This is the terminal capacity offered to the market according to the discipline that regulates the right of access of third parties, based on the fees approved by the Authority of Electric Energy, Gas and Water system.
Regasification Code: It contains the terms and conditions for access and supply of the regasification service, based on norms and regulations issued by the Authority of Electric Energy, Gas and Water System and the Ministry of Economic Development. Any changes in the Code must be subjected to regulated procedures and should comply with the norms adopted by the Authority.
Gas Hubs: These are wholesale gas trading points, connected to a number of market territories. The prices depend on the balance between supply and demand. Hubs can be physical or virtual. Physical hubs have sprung up at the intersection points of import gas pipelines or LNG terminals, as a natural evolution of the exchange volumes among the various operators in the area (ex. Zeebrugge in Belgium, Baumgarten-CEGH in Austria). Virtual hubs are conventional virtual trading places within the national transportation system, created to facilitate gas buying and selling, such as the British National Balancing Point, the Dutch Title Transfer Facility (TTF) or the Italian Punto di Scambio Virtuale (PSV).
Gas Balancing Market: It is the market that, through virtual platforms, manages financial offers for the purchase or sale of resources necessary to balance the system, to ensure the constant balance of the network for security purposes. The Gas Balancing Market is organized and managed by the Manager of Electric Markets.
Natural Gas Storage: This is the storage of natural gas in subsoil structures (e.g., depleted fields), after the gas has been collected by the National Transportation Network and then fed back into the network, according to market demands. Natural gas storage aims to meet different needs such as: responding in real time to the demands of the gas market, maintaining a high margin of flexibility in the management of production facilities and transport, to ensure the maintenance of “strategic” reserves to be used exclusively in exceptional situations (special weather conditions like intense cold, or international crises preventing access to supplies from abroad; the latter represent over 90% of the gas used in Italy). The main elements of a storage site are: the field, the storage center with compression and treatment plants, and wells.
Variable storage: Storage designed to be distributed as needed according to hourly, daily and seasonal demand.
Mine storage: Necessary, for technical and economic reasons, because it enables the optimal development of natural gas fields in a territory.
Strategic storage: This is the phase of storage that aims to provide for the lack or reduction of imported supplies or at safeguarding the gas system during periods of crisis.