Small-Scale Gas: Virtual Pipelines

For much of the last 50 years the natural gas industry has operated on a major industrial scale – with gas produced at large gas fields, transported by pipeline or via large LNG tankers for delivery to market, as demonstrated by the huge Qatari LNG facilities of the last decade. However, in addition to ongoing large projects, interest is growing in alternative small-scale approaches and technologies. Small-scale gas [1] is a principle that is in a period of growth and invention at the moment, but what is it? Our definition is this: small-scale gas is a way of getting natural gas to places where pipelines or normal LNG large-scale carriers are inefficient, by transporting the gas in smaller quantities.

This article concentrates on one transportation concept for small-scale gas, virtual pipelines. So what are they and why are they being used?

What are Virtual Pipelines?

One of the most common forms of small-scale gas is the virtual pipeline where vehicles carry the gas over regular routes, normally replacing standard pipelines. Virtual pipelines are not a new concept, as they have been in use since at least 1970 when Spain started trucking gas to its northeastern area, but they are currently in a period of expansion as most large scale (and therefore more efficient to supply) demand is already being met. This is emphasised by the present gas glut.

Virtual pipelines could be carrying CNG or LNG. [2] CNG is cheaper to transport per load, as it doesn’t need to be chilled to approximately -162°C, but only contains approximately 40% of the energy of an equivalent volume of LNG. We will take a look at LNG first and then CNG.

In a virtual pipeline carrying LNG, the LNG will be taken from a liquefaction plant where it was cooled to a regasification terminal. Once regasified, the gas will be distributed to its end users. The consumption of this gas might be domestic, industrial, electricity generation or others depending on the demand in the destination.

Why Virtual Pipelines?

Virtual pipelines open up markets where limited or nonexistent gas supply prevented the demand from previously being realised. An example would be eastern Indonesia where the terrain, particularly the sea floor, makes the laying of pipes very expensive. There, ships are being used to distribute the gas among many of the islands, though this project is still in its infancy.

Virtual pipelines are relatively cheap to setup and much of the investment is not tied to a specific route as the vehicles’ routes can be changed. This gives flexibility as routes can be altered depending on demand. Compared to pipelines, virtual pipelines have a much smaller upfront cost, but somewhat greater overheads due to fuel costs.

Virtual pipelines typically do not need as much time to set up as traditional physical pipelines, both because the facilities are smaller and often modular in design, and the transports themselves are inherently flexible. This shorter time scale makes them attractive in the short term.

Types of Virtual Pipeline

Figure 1 - Small-scale LNG carrier [3]
LNG virtual pipelines can first be divided into specialised carrier vehicles systems and modular container systems. Specialised carriers are mostly ships; the majority appear like LNG tankers in miniature, as seen in figure 1. They tend to carry more LNG than a modular tank, perhaps in the range of 5,000m³ to 30,000m³ and may use boil-off from the LNG as fuel lowering costs. One disadvantage is the limitation of places where the vessels can load and unload to ports or floating structures.

One place using purpose built small-scale carrier ships is Norway where LNG is produced in the large-scale Snøhvit LNG facility at Melkoya and a number of smaller liquefaction plant further south and west. [4] From these facilities LNG is taken to 30 terminals, some direct and some via depots. As well as facilitating marine bunkering and gas/LNG supply near to the plant, the terminals can supply LNG to more distant customers by truck, train or pipeline.

Figure 2 - ISO LNG container
Modular systems mean that design costs are likely to be minimal as the design is likely to be used in many places and that construction tends to be relatively cheap and straightforward.

Modular LNG containers can be transported by barge, lorry, train or even a large container ship and different parts of the same journey can easily use different vehicles. Each of these is likely to be better in different circumstances, for instance trains are fast and don’t get caught in traffic like trucks might, but they need rail lines to be of any use which might not be available.

In Indonesia modular LNG transport has been done with trucks in the Eastern Kalimantan Region, transporting LNG from Bontang liquefaction plant, where there is an LNG truck loading facility, to towns in the area. [5] The demand for gas in this region is mostly from coal mines, with some demand for domestic power generation.

Requirements of Virtual Pipelines

While a normal pipeline merely compresses gas for transportation and storage, most virtual pipelines carry gas in a liquid state, this requires large amounts of cooling, done before loading at a liquefaction plant. On arrival at destination the LNG must be regasified at a pressure where it can be used. To regasify at a useful pressure also requires a regasification terminal. While LNG naturally regasifies as it warms, creating the boil-off effect used as fuel for some LNG carriers, the resulting gas is not at sufficient pressure for many pipeline, power generation and industrial applications.

CNG Virtual Pipelines

CNG only needs to be compressed at dispatch, it will be used in the compressed form so there are minimal facilities required at destination, the compressing facilities are both standard and much cheaper than liquefaction plants. CNG virtual pipelines tend to use modular setups though there are specialised CNG carrier ships.

CNG virtual pipelines are likely to be used when there are low amounts of energy required, both because of the lower amount of energy to volume than LNG and because in low use situation the higher upfront and lower unit cost of LNG becomes less attractive. Some power stations compress gas during non-peak hours to supply more remote power plants.

In Argentina, a modular system is used to supply CNG. [6] The overall operation is around 4,500,000 m³ per month carried in tanks of 1500m³. Each truck carries four of these tanks, delivering full and replacing them with empty tanks. Destinations include fuel stations and domestic supply.

Figure 3 - CNG transportation in Argentina [7]


Virtual pipelines can supply gas almost anywhere that road or sea reaches, along with the modular style of virtual pipelines, this flexibility is perhaps virtual pipelines’ greatest strength allowing virtual pipelines to be useful in a very wide range of circumstances from supplying power generation to an area for the first time, use in industry, to providing or supplementing supply for remote pipeline grids.

There are many places around the world, where there is unfulfilled demand for natural gas and for many of those the solution is not found in orthodox methods, due to isolated location, small-scale demand or geophysical issues. Small-scale gas provides opportunities for innovative, and potentially less costly, solutions to gas supply. Until this demand is mostly satisfied, we anticipate significant growth in the virtual pipeline sector.

August 2016


  1. Small-scale gas is more commonly referred to as small-scale LNG or modular LNG, but technically CNG (compressed natural gas) may also be included, therefore we prefer the term small-scale gas.
  2. LNG is natural gas that has been cooled to -161°C to liquefy it. CNG is natural gas compressed to high pressure, typically 200 to 250 bar.
  3. Source:
  7. Source:

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