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Natural gas and LNG

Natural gas and liquefied natural gas (LNG) are cost-effective, competitive and less harmful to the environment energy sources. Here we outline the journey of Eni gas around the world.

Purifying and transporting gas

On extraction, natural gas is a mix of hydrocarbons, including methane, ethane and propane, and chemical compounds such as water, nitrogen and carbon dioxide. Once purified, the gas is fed into the distribution network. Most gas reserves are a long way from the refineries and from where the gas will be consumed. It is transported via natural gas pipelines and, for longer distances, on LNG carriers. Efficient transport, storage and conservation of gas is fundamental as demand fluctuates due to climatic, productive and domestic factors.

Transforming gas for transport

Gas is transported from production sites to consumer markets either on LNG carriers or via pipelines for distant and inaccessible places. This accounts for the price variations between different markets. To transport gas in this way, it must first be liquefied at very low temperatures (-160°) and then stored. 

In its liquid state, the volume of the gas is reduced by up to 600 times, enabling transportation of large quantities. At the arrival terminals, the liquid gas is regasified before being fed into the distribution network, which enables it to reach consumer markets, large industrial consumers and local distribution networks – sometimes thousands of kilometres apart.

Given the significant investments required to build liquefaction and regasification plants, most of the LNG sold by gas producers must be under long-term contracts (20 years) before a final investment decision (FID) can be made. Eni has a global LNG portfolio of long-term purchase contracts with reliable suppliers, along with a worldwide network of end customers and traders.

The role of LNG in the energy transition

The potential that gas, as a clean source, represents with regard to the energy transition is even greater today thanks to the growth in the transportation of liquefied gas. Our long history in the gas industry, which has led us to make a number of great discoveries, means that we now play a leading role in the LNG market. The integration with the Upstream sector in 2019, which made it possible to maximise synergies and promote equity gas, that is the gas extracted from our fields, allowed our LNG portfolio to reach approximately 9.5 million tonnes/year of contracted volumes, up 76% on 2014.

Given the significant investments required to build liquefaction and regasification plants, most of the LNG sold by gas producers must be under long-term contracts (20 years) before a final investment decision (FID) can be made. Eni has a global LNG portfolio of long-term purchase contracts with reliable suppliers, along with a worldwide network of end customers and traders.

”We have set ourselves the goal of reaching 16 million tonnes of contracted LNG portfolio by 2025, over 70% of which will come from equity projects", explains Chief Gas & LNG Marketing and Power Officer Cristian Signoretto, “and in order to achieve this we are developing our presence in key markets where we expect to see the highest growth in demand for LNG, particularly in Asia through medium to long-term sales, as well as in the spot market".

LNG’s journey around the world

In October 2016, Eni and its partners from Area 4 in Mozambique (in the Rovuma offshore basin, where from 2011 and in 2014 we discovered supergiant natural gas resources in the Coral, Mamba and Agulha fields) signed an agreement with BP for the sale of all the LNG produced by Coral South in the country – around 3.3 million tonnes a year or 5 billion m3 – for more than 20 years. In 2019 we started assembling the hull for the Coral Sul FLNG unit, a floating facility for processing and liquefying gas. It will allow us to start producing from the resources we have discovered in the country, which total 450 billion m3 just in the Coral field. We expect to launch the hull in 2020.

The government of Mozambique has also approved development plans for the Rovuma LNG project to produce, liquefy and sell natural gas from three fields in the Mamba complex of Area 4. The project will enable up to 17,000 tonnes of LPG to be supplied to Mozambique every year, with significant benefits for the local community.  We are going ahead with selling LNG by negotiating on binding trading agreements and finalising the plan for development and project funding. The final investment decision (FID) is expected in 2020, with start-ups planned for 2024.

We are committed to further developing our integrated presence in LNG-related projects in Indonesia and Nigeria, where we will contribute to the new expansion of the Bonny terminal through the construction of the seventh liquefaction train. The first shipment took place in June 2017 when Eni delivered the first LNG produced at Jangkrik, in the deep waters of offshore Indonesia. More than 22,000 m3 set off from the liquefaction plant in Bontang, East Kalimantan, headed for Bali, where it was delivered under the long-term LNG supply contract agreed with PT Pertamina in June 2015. 

And even Egypt. Key projects like Zohr have transformed the country from an LNG importer into a gas exporter and we aim to relaunch the export of LNG here from the Damietta terminal.