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Classification: Internal Status: Draft

LNG Shipping

TEP 10 Gas Processing and LNG - 2008

Trygve G. Egge

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Topics• Why LNG?

• Historic overview

• Commercial fundamentals

• Technical aspects

• Operational aspects

• Technology trends

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Why LNG?

• LNG is mainly produced for transportation purposes.

• More economical to transport gas as LNG compared to pipelines over long distances

• Volume ratio between natural gas and LNG is approximate 600:1.

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European Cryogenic Courses

• Commercial fundamentals

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LNG chain & cost - indications

Gas Production

$ 0.5-1.5 Bill.

$ 0.5-1.5/MMBtu

Liquefaction

$ 1-1.5 Bill.

$ 1-1.5/MMBtu

Receiving Terminal

$ 0.5-0.7 Bill.

$ 0.5-0.7/MMBtu

Transportation

$ 0.6-1.2 Bill.

$ 0.4-1.5/MMBtu

Total Chain Cost

$ 3.25-4.5

per MMBtu

US Average forward HH

gas price 2008-2012

= USD 10 MMBtu

Source: Source: FearnleyFearnley Consultants ASConsultants AS

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LNG trade routes

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Development of LNG carrier fleet

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Newbuilding prices LNGC & VLCC

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Newbuilding acquisition schedule

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LNG transportation – safety record

• LNG shipments started experimentally in the mid 1950’s, but the main trades

did not begin until late 1970’s.

• To date there have been close to 40,000 LNG voyages (80,000 loaded port

transits) with no loss of cargo!

• There have been two serious groundings, both in the late 1970’s, but neither of

these resulted in cargo loss.

• As the ‘El Paso Kayser’ event was very serious, striking a rock at 19kts, and

the ‘LNG Taurus’ grounding at 12 kts, these events are good confirmations of

the inherent strength of this type of vessel with its additional barriers and

physical separation of the cargo to the sea.

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European Cryogenic Courses

• Technical aspects

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Design Code• Design, construction and operation of gas

carriers are regulated through UN’sshipping organisation IMO (International Maritime Organisation).

• The regulations are given in the publication International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (‘Gas Code’).

• Ships intended for carrying liquefied gases in bulk are categorised in three different types (type 1G, 2G/2PG and 3G) according to the product’s hazard potential.

• LNG is classified as requiring type 2G ship

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LNG transportation – technical aspects• LNG is transported at – 163 deg. C and at atmospheric pressure

• This extreme low temperature require that the LNG is transported and handled with special consideration, i.e.

– Completely separated from the ship’s hull

– LNG temperature must be maintained during the voyage – requiring efficient insulation of the cargo tanks

– All cargo handling equipment must be able to operate at the extreme low temperature of -163 degr. C

• Two basically different cargo containment systems are used:

– Self supported independent tanks (Moss Rosenberg spherical tanks, IHI SPB, cylindrical tanks)

– Membrane tanks (Gaz Transport and Technigaz (GTT))

• Market share between the two concepts has been ab. 50/50 - but the membrane concept has been increasingly selected for recent newbuilding orders.

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Spherical tank cargo containment systems (Moss Rosenberg )

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Spherical LNG cargo tanks – pros & cons• Advantages

– Independent from the ship’s hull – hull stresses not transferred into the cargo tanks

– Very robust design

– No sloshing problems

– Can operate with partly filled tanks

– Allow simultaneous building of hull and cargo tanks

– Easy to inspect

– Easy to detect and repair leakages

• Disadvantages

– Low volumetric utilisation of the hull

– Larger physical dimensions for same capacity compared with prismatic tanks

– Visibility from bridge reduced compared with ships with prismatic tanks

– Require return cargo (‘heel’) on ballast voyage to keep cargo tanks cooled

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Upper half of spherical cargo tank

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IHI SPB Tank

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SPB cargo containment system – pros & cons• Advantages

– Independent from ship’s hull

– Robust design

– No sloshing problems/ no filling restrictions

– High utilisation factor of the ship’s hull

– Allow simultaneous construction of hull and tanks

– Smaller physical dimensions for same capacity compared to spherical tank design

• Disadvantages

– Costly to manufacture the cargo tanks

– Require heel on ballast voyage to maintain cooled down tanks

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Ocean LNG Cylindrical Independent Tank

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LNGC – Membrane cargo containment system(GT No. 96, MK I and MK III, and CS1)

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Mark III (Technigaz) Membrane system

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Membrane cargo containment system (GTT) – pros & cons

• Advantages

– High volumetric utilisation of ship’s hull

– Less sensitive to temperature changes as inner membrane (invar steel) has very low thermal contraction coefficient

– Limited need for heel on ballast voyage

• Disadvantages

– Cargo tanks are an integrated part of the ship’s hull - hull stresses transferred to cargo tanks

– Does not allow simultaneous construction of hull and cargo tanks

– Difficult to detect and costly to repair leakages

– Restricted filling ratio

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LNG CarriersCargo containment systems

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European Cryogenic Courses

• Operational aspects

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LNGC – operating particulars• During transit voyages, boil off gas (BOG) is either used

as fuel in the boilers for generating steam (steam ship)

or re liquefied

• A small amount of LNG is retained onboard after

discharging (‘heel’) and is used for cooling the cargo

tanks during the ballast voyage

• Measurements (custody and fiscal) of LNG is

performed on board the ship after loading and

discharging. LNG ‘used’ by the ship is determined for

each voyage

• Total port time is 20 – 24 hours including port

clearance, safety checks, loading/discharging, cargo

measurements, connection/disconnection of cargo

arms

• Transit speed between 19 – 20 knots

• Fuel consumption about. 150 – 200 t/24 h (steam ship)

• Complement 25 - 30 persons

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Ship/shore interfaces• In order to achieve safe and efficient loading and discharging

operation, standardised ship/shore interfaces are important.

• For LNG ships, the ship/shore interfaces are designed according to the following standards:

– SIGTTO (Society of International Gas Tanker and Terminal

Operators)

– OCIMF (Oil Companies International Maritime Forum)

– EN 1532 (European Norm)

• Typical Ship/Shore interfaces include:

– Ship size (max/min)

– Arrangement of loading arms

– Fender arrangement

– Mooring arrangement

– Shore gangway

– ESD (Emergency Shut Down System)

– Normal and emergency communication system

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European Cryogenic Courses

• Technology trends

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Market and Technology trendsShipping demand is driven by:

• New trading routes

• Increased trading volumes

• Increased trading distances

New vessels are adapting:

• New areas – harsh environment – arctic design conditions

• Increased vessel size

• Alternative propulsion system

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LNG trade – the past situation

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LNG trade – the future

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New LNG trades – harsh environment• New LNG projects are being developed in

remote and environmentally sensitive areas.

– Snøhvit

– Sakhalin

– Shtokman

• For ‘arctic’ projects, the transportation will require special consideration wrt:

– Low sea and air temperatures

– High wind velocity

– High sea states

– Reduced visibility

– Long duration of adverse weather

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LNG ships – design aspects• To secure the required off-take and

transportation regularity with the highest level of safety, the following design aspects need to be considered:

– Structural safety (ice strengthening, fatique, extended FEM calculations).

– Environmental and safety features

– Navigation

– Winterisation (enclosed working areas, heat tracing of equipment).

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Increased ship sizes

• The increasing demand for LNG, especially in the US and Europe, and the

need to reduce long haul transportation costs from the Middle East to

US/Europe, is driving the current increase in ship size.

• While max. ship size for existing terminals is ab. 155 000 m3, sizes in excess of

200 000 m3 has recently been ordered.

• These bigger sizes are limited to specific projects which involve either the

construction of new terminals or the construction of offshore terminals ( ‘Energy

Bridge’, SRV, etc.)

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LNG CarriersGrowth in the average capacity

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Illustration of relative size of LNG carriers

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Alternative propulsion system

• For the larger ship sizes, propulsion system has become an issue. The draft limitation makes it difficult

to design an efficient propeller and hull form for a single screw vessel.

• This has led to the development of a twin-skeg, twin-screw propulsion arrangement as a design

solution for maintaining normal trading speed ( ab. 20 kn).

• In turn, this has led the industry to look for alternative propulsion systems to the commonly used steam

turbine plant. Systems considered are:

– Dual – fuel diesel electric

– Twin slow speed diesel engines with reliquefaction of boil off gas

– Gas turbine

• Of these alternatives, the two first have already been selected for recent large size newbuilding orders.

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Alternative propulsion system, cont.

• The main advantage of the diesel alternatives over steam turbine is the improvement in fuel

efficiency. Diesel engines have 20 % better thermal efficiency compared to steam turbines.

• For a diesel LNGC with reliquefaction of BOG, this results in fuel saving of ab. 50 t HFO pr. day

(24 h) for a Snøhvit size LNGC. In addition, a full cargo of LNG will be delivered (and paid for)!

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Steam turbine

• Advantages

– Low vibrations

– High proven reliability

– Low maintenance cost

– Dual fuel capability

– Low NOx emission

• Disadvantages

– Low fuel efficiency (ab 30 %)

– High CO2 emission

– Large engine room space

– Few makers

– Reduced number of skilled engineers

S/T

Boiler

FO BOG

R/G

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Dual Mode Gas/Diesel engines• Advantages

– Environmentally friendly by using gas (no SOx , reduced NOx , reduced amount of particles)

– High redundancy of propulsion and power generating system

– Reduced total power installed due to flexibility in different operating modes

• Disadvantages

– High initial cost

– Reduced delivered cargo – LNG used as fuel

– Require high quality fuel (LNG/MDO)

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Slow speed diesel engines with re-liquefaction system (twin screw)

G

G

FO Tank

G

G

FO Tank

BOG Cycle

C

CE

N2 Cycle

C

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Slow speed diesel engine with re-liquefaction plant

• Advantages

– High overall fuel efficiency

– Proven propulsion system with high level of reliability

– No ‘loss’ of cargo – 100% delivered to customer

– Lower initial cost

– Reduced CO2 emission

• Disadvantages

– Slightly higher vibration compared to steam and diesel-electric propulsion

– Need separate auxiliary generators – therefore high total installed power

– High NOx emission

– Single fuel capability

– High maintenance cost

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Gas turbine & electric motors• Advantages

– Reduced engine room space

– Low level of vibration and noise

– Redundant propulsion

– Reduced maintenance

– Low NOx emission

• Disadvantages

– Not used in LNGC yet

– High initial cost

FO BOG

Gas turbine

Exh.gas

Boiler

S/T

Motor

MGO BOG

R/G

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Arctic Shipping

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Shipping distances and unit cost