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Hawaii to increase fuel diversity with LNG imports

LNG Industry,


Hawaii and other US territories are looking to increase their fuel diversity with LNG imports, according to the latest analysis from the US Energy Information Administration (EIA).


Graph of share of total energy consumption by fuel.
Source: US Energy Information Administration, State Energy Data System and International Energy Statistics.
Note: 2012 shares for Puerto Rico, U.S. Virgin Islands, Guam, and American Samoa based on 2011, the most recently available data. Data for the Northern Mariana Islands were unavailable.

Diversification

Unlike the rest of the US, energy consumption in island states and territories is almost entirely petroleum-based. These islands may soon be able to diversify their energy sources to include natural gas, because relatively low natural gas prices and new shipping technology may allow these islands to import LNG.

Energy challenges

America's islands - the state of Hawaii and the territories of Guam, the Northern Mariana Islands, and American Samoa in the Pacific and Puerto Rico and the US Virgin Islands in the Caribbean - face unique energy challenges because of their physical isolation and lack of fossil fuel resources. They have long depended on imported petroleum products, which are easier to transport than other fossil fuels, to meet most of their energy needs, including electricity generation. As a result, given relatively high crude oil prices in recent years, residential electricity prices on the islands have been three to five times the average residential prices of electricity on the mainland (Lower 48 states).


Graph of residential electricity prices.
Source: U.S. Energy Information Administration and Guam Consolidated Commission on Utilities.
Note: *Shows data for 2011, most recently available year.

Coal and LNG

Both Hawaii and Puerto Rico have diversified their electric generation mix with the addition of coal plants, and Puerto Rico has one independent power plant operating on natural gas, imported as LNG at a terminal adjacent to the plant.

Puerto Rico

The Puerto Rico Electric Power Authority has also converted a nearby petroleum-fired generating station to use LNG imported to that terminal and is planning to convert a second petroleum-fired station if federal approvals are received for a separate floating off-shore LNG receiving terminal. However, LNG has not been an option for most islands because it is typically shipped in bulk carriers in quantities far greater than many island economies could absorb. Furthermore, LNG requires expensive regasification and distribution infrastructure.

Cryogenic containers

The combination of relatively low natural gas prices and the development of standardised cryogenic shipping containers means small amounts of LNG can now be trucked, railed, and shipped like other containerised cargo. Once received by ship, the LNG is connected to portable regasification units adjacent to electric power plants or industrial facilities. The containers are typically filled on the mainland at utility peak-shaving units or, more recently, at small-scale liquefaction plants built to serve transportation, industrial, and marine uses.

Small-scale LNG

Utilities in Hawaii and industry in Puerto Rico are now testing the economics of small-scale LNG imports. Hawaii's first shipment using a standardised cryogenic container was completed in April, taking approximately 7100 gallons (0.67 million ft3) of LNG from a liquefaction plant in Boron, California, through the port of Los Angeles to Honolulu, where it was regasified and injected into the Hawaii Gas distribution system.

Hawaii

Earlier this year, Hawaiian Electric also took bids on having LNG delivered in similar standardised containers to eight generating plants on Hawaii's five main islands, requesting 800,000 tons (approximately 39 billion ft3) annually. The utility is evaluating whether LNG prices are sufficiently favorable to justify switching away from diesel and residual fuel oils currently used at some of its generating capacity.

Future?

Later in 2014, in Puerto Rico, two privately owned bottling plants in the island's industrial north will begin receiving containerised LNG shipments. The LNG will be procured through third-party suppliers from southeastern US peak-shaving plants, shipped from Jacksonville, Florida.


Source: US Energy Information Administration.

Edited by Katie Woodward

Read the article online at: https://www.lngindustry.com/lng-shipping/19082014/hawaii-and-us-territories-to-increase-lng-imports-1242/


 

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