Small scale LNG is currently in a rapid developing phase. This report focused on the detailed analysis of small scale LNG cost structure and its advantages in comparison to large scale LNG projects in the context of the present outlook for global LNG pricing. Based on their research, the Capstone team concluded that small scale LNG liquefaction is not economically competitive relative to larger liquefaction plants. However, the research also showed that small scale LNG liquefaction units can thrive in specific segments of the market where conventional large scale LNG is not a suitable option.
In the future, small scale LNG will be positively influenced by stricter emission regulations for ships and by a positive price development of gas compared to oil. In the coming years, ship and truck owners, and LNG infrastructure suppliers will need to invest substantially in order to fully benefit from the advantages that small scale LNG offers. However, there are still many challenges for small scale LNG. For new players entering the market, maintaining safe and reliable operation can be difficult when lacking LNG experience. In the coming years, the development of cost-effective, modularized and standardized supply networks will be essential to ensure all elements within the supply chain are being operated and designed effectively and competitively.