LNG in Scotland research study

The report provides an assessment of the total potential market demand for Liquified Natural Gas (LNG) for 2025 and 2040 in Scotland, and explores the related potential economic development impacts and infrastructure issues. It also provides a brief overview of the environmental impacts and considerations of using LNG.

The research utilised both empirical and secondary data sources. Secondary information was collected and consultation conducted with stakeholders from the following key groups: investors and port operators; Scottish Government and Government stakeholders, including Scottish Enterprise and Transport Scotland; energy businesses in Scotland; and specialists in the energy and marine consultancy. Informal face to face and telephone interviews were conducted with 15 stakeholders, and a review of available industry, academic literature and reporting from Atkins’ previous work on LNG projects was obtained. Data was also collected from a range of secondary sources including Scottish Enterprise and BEIS. The report also has a case study identifying the requirements for an importation port location. This case study uses Hunterston Port as the example.

The research found that demand for LNG as fuel for transportation was expected to increase rapidly, but from a very low base. The adoption of LNG powered vessels will, in part, be dependent on the availability of the appropriate bunkering infrastructure. It points out that despite encouragement from the EU, there is only 22 LNG fuelling stations in the UK – only one of which is in Scotland. However, there is potential for road transport to see a rapid conversion to LNG. The potential gap in Scotland’s power generation capability caused by the decommissioning of nuclear power stations could be filled by an LNG gas powered station. There is also potential for large industrial users of energy/gas, such as distilleries, to be supplied with LNG. Investment in LNG could create many new jobs (up to 350 gross temporary construction jobs and up to gross 150 operational jobs), and contribute to productivity growth through a further GVA (up to £38 million gross GVA contributions annually including direct and indirect) to the economy.

A number of recommendations were made. These include: to consider the need for further research on energy generation (LNG Power Station); further research on the environmental impact of LNG compared to other fuels; to assess in more detail the potential users of LNG; to review and identify the new infrastructure needed to enhance the LNG prospects in Scotland; to assess how investments in the existing gas networks or transport infrastructure could support LNG take up; to assess the potential for further bio-LNG take-up or technologies, drawing on international examples; and to review and identify the infrastructure needed to enhance the LNG prospects in Scotland.