Biogenic gas (methane) can be feedstock for LNG. In fact, LNG becomes mostly methane as most of the heavier hydrocarbons are stripped out during the cryogenic process. The heavier hydrocarbons, however, have more caloric (energy) value and therefore command a higher price. Gas is usually sold based on its energy value i.e. btu/cubic foot . Since methane has the lowest BTU value of all hydrocarbons, it realizes the lowest market price. This makes economics for purely biogenic sourced LNG project commercially more difficult. Since the Chinese are most interested in securing energy for national security, I am hoping the poor economics of biogenic LNG does not deter them from development provided sufficient resources are found. If thermogenic gas and oil are found, things get much better. Since ERHC will have to pay for its proportionate share of development, the product price must be sufficient for it to make a profit on its development investments. If not, there will be significant conflict among the partners. Most production contracts do not allow for a party to commercialize its resources without the approval of its partners. I have suffered through such negotiations....not fun.
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