1 Introduction

As the world moves toward reducing carbon emissions and a greener economy, the demand for natural gas has steadily been increasing.  A significant driver behind this is the environmental benefits of natural gas compared to other fossil fuels motivating governments to develop natural gas facilities instead of other alternative energy generation options. One of the areas of development is the rise of small-scale natural gas solutions, including natural gas, liquified natural gas (LNG), and compressed natural gas (CNG).

This article explores what small-scale LNG (SSLNG) is, what it is typically used for and the technology options available for these applications compared to conventional LNG facilities.

1.1 What is SSLNG?

It is important to understand what is meant by SSLNG solutions and how this is different from conventional processes. Although no strict rules or conditions define what constitutes a small-scale facility, it can broadly be defined as a natural gas value chain (or portion thereof) that processes volumes below 500 000 tons per annum [1]. Compared, conventional facilities are much larger, with throughputs as high as 11 million tons per annum. Typically, vessels transporting LNG for small-scale applications have a capacity below 30 000 m3.

The purpose of a facility can often determine whether small-scale or conventional processes should be used – as some applications lend themselves more to small-scale operations (this is discussed in more detail below [2]). As an example, small scale is often applied for rapid development and small plants for specific end-users. They are typically developed using modular facilities, enabling more flexibility and easy scale-up should the demand for LNG increase as more off-takers use the network.

One concept used to achieve this high flexibility and rapid development is creating a virtual pipeline. The concept is built on a continuous supply of a product similar to what is achieved through a physical pipeline, except containers are used to transport the product via trucks or vessels forming a “pipeline”. This solution offers significant flexibility, and the supply can easily be increased while avoiding the massive capital expenditure of building a pipeline. The transportation of LNG via trucks and vessels and permanent pipelines is expanded in more detail in the Technology Options Section of this article.

Small-scale facilities are often built on the back of conventional facilities. For instance, a conventional large LNG liquefaction plant could supply a portion of the gas to a small-scale regasification and storage facility and its surrounding infrastructure, which would all be small-scale.

1.2 Application of SSLNG

Small-scale applications are frequently used in off-grid and remote locations where other energy sources are also scarce. It is often employed in areas with a low demand, for which conventional sized facilities are not feasible. In some cases, SSLNG is used initially in a project and is then replaced with a more conventional-sized facility as the demand increases.

The gas at SSLNG facilities is mainly used for power generation or fuel supply to marine, trucks, and railroads. This can be either directly as LNG, natural gas, or CNG. Typically for coastal areas, the gas is sourced offshore if no domestic gas is available. In other instances, the gas is supplied via pipelines or trucks to inland countries or countries with neighbouring states with access to gas.

1.3 Drivers, Enablers, and Challenges

This section seeks to explore the key drivers, enablers, and challenges faced by SSLNG.

The main drivers for SSLNG are shorter lead times, reduced costs, and environmental considerations. Often small scale can be developed quicker, and because facilities are smaller, the CAPEX and OPEX are reduced. The smaller facilities also have a much smaller carbon footprint than conventional plants purely due to the smaller volumes processed.

Key enablers of the technology are:

  • There is a great demand for power generation and fuel sources in remote locations where other fuel sources are unavailable. This is especially true in many African countries.
  • SSLNG has shorter lead times, allowing faster development and a quicker return on investment, making it more attractive to investors.
  • Small-scale can also be used as a temporary solution during natural gas as production volumes are ramped up, as mentioned previously.

Some of the challenges are listed below:

  • A key challenge for small scale is cost. Although the CAPEX and OPEX are less than conventional size facilities, the lack of economies of scale increases the price point per cubic meter of gas significantly.
  • Due to economies of scale, these projects only become profitable for complete supply chain solutions. An SSLNG total value chain increases the project’s complexity and is more challenging to execute while ensuring profitability. This is expected to improve as more and more development occurs.
  • Safety is a concern due to the rapid development of the new technology, often by smaller players in the market. Therefore, it is critical to ensure that the necessary regulations are in place and enforced to maintain safe and sustainable operations for the newer technologies.
  • The balancing of supply and demand is challenging as consumers want confirmation of sustainable supply, and at the same time, suppliers want to confirm sufficient off-takers before investing. This is exacerbated by the fact that small-scale applications usually have multiple stakeholders. In addition, large LNG suppliers are often reluctant to supply for small-scale developments if they can secure more extensive offtake agreements with other third parties, making it challenging to secure supply. [3]

Several of the challenges currently faced is due to the novelty of SSLNG. Time, experience, and development are set to increase the enablers for small-scale solutions and reduce and mitigate some of the challenges currently faced by the development. [4]

2 Technology Options

To fully understand the various technology options for SSLNG, it is necessary to understand the complete value chain of an LNG system. As with most systems, the various sections are highly dependent on the upstream and downstream operations. Figure 1 provides a visual illustration of the entire value chain. You can read more about the natural gas value chain in these two articles, Natural Gas and LNG.


All the technology options available to the different sections in the value chain are highly dependent on the location and environment where the solution is implemented. In this article, marine infrastructure (such as the mooring mechanisms) is not discussed, as this is highly dependent on the offshore conditions in each specific case.

The sections of the value chain considered are:

  • Transport (onshore and offshore)
  • Storage
  • Regasification

It is important to note that the storage and regasification steps are combined into one infrastructure called Floating Storage and Regasification Unit (FSRU) for some offshore solutions.  Therefore, the storage and regasification solutions are evaluated in tandem.


2.1 Transport

The first section is the transportation of natural gas. The natural gas can either be transported onshore (via pipeline or truck) or offshore (pipelines or vessels). It is essential to be aware that the gas can be transported in a gaseous or liquid state. When transportation is by trucks or vessels, the gas is usually transported as a liquid since LNG significantly reduces the storage volume required.

2.2.1 Pipelines

In pipelines, the gas can be transported in a gaseous or liquid state. The decision on how to transport gas via pipeline is usually dependent on the distance involved. Gas pipelines are significantly larger due to the larger volume (compared to a liquid). Therefore, more infrastructure is required, although the pipe itself is less expensive compared to cryogenic pipelines. Cryogenic pipelines are used for LNG and insulate the LNG preventing it from vaporizing in the lines. For small scale, gas pipelines are more feasible than cryogenic lines due to the increased cost and complexity of cryogenics. However, vessels are preferred for long distances as a more economical and lower-risk transportation medium, specifically for SSLNG.

In general, pipelines require a lot of infrastructure and takes a long to develop due to permits and similar approvals that need to be obtained. Physical construction is also time-consuming. In addition, gas pipelines are typically routed underground, requiring additional infrastructure, which is very costly. Pipelines are also not scalable, and if the demand increases and more natural gas is required, the pipeline will need to be replaced.

2.2.2 Trucking

Trucking is often cheaper compared to a pipeline and is preferred for small-scale applications. In addition, it has a short turnaround time making it ideal for rapid small-scale development. Typically, the fleet would be leased, allowing more flexibility to adjust to a change in the gas demand. This makes it ideal for temporary solutions as the lease can be cancelled once it is not required or the demand has increased to validate a pipeline. This is a low-risk option and allows maximum flexibility.

The following types of trucking solutions exist:

  • Fixed chassis
  • ISO containers
  • Semi-trailers

The specific type of trucking technology utilized depends on the conditions. Fixed chassis trucks have an LNG capacity between 3000 L to 28 000 L and are suitable to transport the fuel up to a range of 1200 km.

An ISO container is an LNG storage tank that can move through the entire value chain as a storage unit; from the vessel, the container can be loaded onto a flatbed truck to transport it to the end-user and offload the container. This forms a virtual pipeline of supply. The LNG can be stored with minimal losses for up to 80 days in one of these containers; typical volumes are between 20 000 L – 40 000 L. The technology is quite expensive and requires additional infrastructure such as cranes to lift the container onto and from the flatbed.

LNG Semi-trailers are trailers that include an LNG tank and benefit from acting as both storage and transport medium. Larger volumes can also be tracked at a time of up to 58 000 L. This is also more costly than fixed chassis trucks due to the containers being more expensive and a crane required to load the container onto the truck.

Trucking is often the preferred onshore transport mechanism compared to pipelines for small-scale solutions. However, it is highly dependent on the specific conditions of the application and country, as various regulations impact the different solutions.

2.2.3 Vessels

Once the natural gas is liquified to LNG, it is transported via cryogenic pipelines to either a jetty or trestle, where it is loaded onto a vessel through-loading arms.

LNG carriers are ships specifically designed to transport LNG. It is fitted with a containment system to store and carry the LNG to its destination safely. These vessels are equipped with a propulsion system typically fueled by natural gas, although older vessels use steam or other fuels. However, in general, the industry is shifting towards natural gas as these have lower carbon emissions [4].

Should the consideration be to buy an existing carrier, conditions and availability will be the main driving factors between the various vessel container systems. The most critical element is to reduce boil-off gas (BOG), resulting in product loss. The containers are kept under high pressure and low inner temperatures. Two types of storage tanks are used to accomplish this; Membrane and IMO (cryogenic pressure vessels).

For small-scale applications, the vessels vary between 3000 m3 – 30 000 m3. These smaller vessels have a much higher cost per cubic meter of gas than larger vessels. This introduces uncertainty for investors when comparing the cost between small vessels and the larger ones. In addition, the operational costs of these vessels are comparable to carriers closer to 50 000 m3. This further reduces any financial gains that small scale may present. It is often challenging to negotiate fair port costs since the smaller vessel still prevents another vessel from mooring, which results in similar port fees regardless of vessel size. Other factors to consider are the feasibility of mooring these smaller vessels to existing larger jetties and trestles. Sometimes modifications are required to allow a smaller vessel to moor to the structures.

A workaround to these concerns is using a larger carrier at a reduced capacity; however, this introduces the risk of sloshing due to only partially filling the containers. If membrane tanks are used, this is not an issue and can be addressed during the design period of a project.

Emerging technology is the use of Articulated Tug Barges (ATB). An application developed specifically for small-scale applications. The ATBs utilize a tug and are ocean-faring but are limited in how these vessels can effectively transport the LNG. This, however, poses a cost-effective method as these vessels are cheaper than a similar size LNG carrier. These vessels also function as storage and form another virtual pipeline similar to ISO containers.

Already mentioned above is the use of ISO containers for a virtual pipeline. These containers can also be loaded onto a standard shipping barge and offloaded at the end destination before being distributed via trucks. This is a desirable and feasible solution. The main challenges and economic costs to consider are the capital required to acquire sufficient ISO containers as these fulfil multiple roles as transport and storage. Therefore more containers are required to fill the value chain continuously. In addition, you need to appropriate infrastructure at the mooring facilities to offload the containers.  This poses a significant challenge in remote areas and therefore is not always a feasible solution for small-scale applications.

3 Storage and Regasification

The storage and regasification section of the value chain can be installed onshore or offshore. Both scenarios have their advantages and disadvantages. For small-scale applications, offshore is more costly, and due to the higher complexity, onshore solutions are often preferred. Offshore, however, does allow for more extensive flexibility and often faster development, which in most small-scale applications are more critical.

Table 1 lists some of the benefits and disadvantages of offshore vs onshore solutions.

Table 1: Offshore vs Onshore benefits and disadvantages.

An essential factor to consider is infrastructure availability. Due to the current low demand for small-scale LNG, very few existing vessels can be used for offshore regasification and storage. For large-scale LNG, there is an abundance of second-hand vessels that can be purchased and either used as is or retrofitted as an FSRU or Floating Storage Unit (FSU). This is not the case for small-scale, and most solutions require newly built facilities for offshore solutions. This increases the capital costs and lead times before operations can start. The main challenge with small-scale FSRU’s and FSU’s is the limited space to install the necessary infrastructure due to how small the vessels are. Similar to the LNG carriers, the CAPEX and OPEX are quite expensive per cubic meter.

The following technology options are available for small scale applications:

  • Storage
    • Onshore storage
    • FSU
  • Regasification
    • Onshore regasification
    • Regasification on platform
  • Storage and Regasification Combinations
    • Floating Storage and Regasification Unit (FSRU)

These only list the main categories of technology and various configurations and unconventional solutions developed for small scale. An example of such innovative solutions is the regastainer by AGPGlobal, which offers cost-effective containerized regasification which enables modular installation.

In summary, the challenges faced by small scale LNG solutions are:

  • Availability of offshore solutions. Due to the low demand, very few vessels are available to procure for an FSRU or FSU. This will therefore require a new build which requires some lead time and due to the low demand reselling of the infrastructure is more challenging
  • Since smaller vessels are required, existing jetty and trestle infrastructure can not always be used. This introduces additional offshore costs to allow a smaller vessel to more to existing infrastructure
  • Considering the OPEX and CAPEX of small-scale solutions, again, the economies of scale make it challenging. The operational costs of a small facility onshore or offshore are very similar to a larger facility. Per cubic meter of gas, this is therefore quite costly.

Considering the numerous challenges faced. Onshore infrastructure is often the most feasible solution for small-scale LNG. Alternatively, a solution such as ATB’s, which provides higher flexibility, can be considered.

4 Bibliography

[1] PWC, “Small going big: Why small-scale LNG may be the next big wave,” 2017. [Online]. Available: https://www.strategyand.pwc.com/fr/fr/media/small-going-big.pdf.

[2] J. Cocklin, “LNG 101: Defining Small-Scale LNG and its Advantages,” 2020. [Online]. Available: https://www.naturalgasintel.com/lng-101-defining-small-scale-lng-and-its-advantages/.

[3] International Gas Union, “Small Scale LNG,” in World Gas Conference, 2014.

[4] Liquified Natural Gas (LNG) Carriers,” [Online]. Available: https://marine-offshore.bureauveritas.com/ship-classification/lng-carriers.