LNG as marine fuel –The market and Technologies · Oil price –Shale oil and gas production...
Transcript of LNG as marine fuel –The market and Technologies · Oil price –Shale oil and gas production...
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LNG AS MARINE FUEL –THE MARKET AND TECHNOLOGIES
OTMW-N 14-16.09.2015 GLASGOW
Tomas AminoffDirector, Vessel Integration
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Alternative fuels and engine development
• The market of LNG
• Technologies
• Tank technologies
• Engine technologies
• Q&A
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Global energy demand and supply
45082%
102%
9016%
Global Energy DemandOther
Shipping
Transportation
All units in Quadrillion BTU
Quadrillion = 1015
BTU = British Thermal Unit, amount of energy needed to cool or heat one pound of
water by one degree Fahrenheit, approx. 1055 joules
Other228,541%
Oil18534%
NG12523%
LPG102%
Methanol1,50%
Supply per fuel type
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Natural gas – a strongly growing market
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Future gas trade
Global gas supply forecast
Source: IEA Medium Term Gas Report 2012
DisappearsReduces
• GEOSTRATEGIC: Russia, Australia, Qatar, East Africa
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Weekly oil and gas prices
WTI Brent Henry Hub
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Oil production
OPEC N. America World supply
Oil price – The world is drowning in oil
• Saudi Arabia has not been willing to give up
its strategy to regain market share
• This means that more of the high-cost oil
production from Canada, Russia and
Norway and US shale oil are squeezed out
of the market.
• OPEC has finally said it’s ready to talk to
other global producers to achieve ‘fair
prices’ and the U.S. government reduced
its crude output estimates.
• OPEC won’t agree to carry the burden
alone in propping up oil prices by cutting
supply; non-member nations would have to
share the burden
• Why is it so hard to cut production for
OPEC? If Saudi Arabia cuts back on its
production again and the oil price
increases, shale oil production in the US
will increase significantly within a period of
12-24 months.
Weekly oil and gas prices
Oil production (Mb/d)
Source: Clarksons, OPEC, Nordea Markets
Q1 Q2 Q3 Q4 Year
2014 108 110 103 77 100
2015E 55 64 50 47 54
2016E 50 53 56 59 55
2017E 60 63 67 70 65
Brent oil price forecast (USD)bbl)
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Oil price – Shale oil and gas production declining
• As expected, onshore shale projects are taking the hardest hit on E&P cuts
• Natural gas production across all major shale regions in EIA’s Drilling Productivity Report is projected to decrease for the
first time in September.
-
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
Jan
-07
Jun
-07
Nov-0
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Ap
r-08
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p-0
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b-0
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l/d
US Shale oil production
Bakken Region Eagle Ford Region Haynesville Region
Marcellus Region Niobrara Region Permian Region
Utica Region
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5.000.000
10.000.000
15.000.000
20.000.000
25.000.000
30.000.000
35.000.000
40.000.000
45.000.000
50.000.000
Jan
-07
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-07
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r-08
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Jul-0
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Mcf/
d
US Shale gas production
Bakken Region Eagle Ford Region Haynesville Region
Marcellus Region Niobrara Region Permian Region
Utica Region
Source: EIA, Nordea Markets
Structural changes in the oil market are likely to keep the oil price low for a longer period.
The US shale oil production, the lifting of sanctions against Iran and the rivalry between Iran and Saudi Arabia
could actually lead to a price war. On top of that, growth in China’s demand for oil is declining. All this makes it hard
to see a sustainable oil price level of around USD 100/barrel over the next few years.
US Shale oil production US Shale gas production
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Oil price – Most analyses expect rebound. Timing?
Producer economies need $100 oil
New discoveries not compensating for natural decline
Oil demand is slowly increasing and will continue to do so
China economic growth?
Well decline rates and the need to maintain production
New finds in 2014 lowest for 60 years
More and more wells needed for less and less production
Why must activity increase?
Why will the oil prices recover?
Why did the oil price crash?
Record high US supply
No OPEC cuts (for a change)
Return of off-market crude e.g. Libya
Slow-down in Chinese demand growth
Industry is confident of oil price recvery
Half of the market is supportive of > $100 oil by 2020
But others, including OPEC, are preparing for a new price floor < $80
Long-term confidence is High
Source: Douglas-Westwood
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LNG - China to cut gas prices to stimulate weak gas
demand, planned LNG import terminal is delayed
• Gas demand in China is the weakest in over a decade, which could trigger significant oversupply
• Low oil prices prompting industries to switch back to cheaper oil and LPG
• As a result of the exceptionally weak demand in North China gas markets, Chinese NOC Sinopec will delay the start-up
of its 2.2mn tons/year (t/y) LNG import terminal in Tianjin to 2017.
• According to Wood Mackenzie, despite the outlook for global LNG demand looking increasingly subdued, the number of
LNG projects proposed to take a final investment decision in 2015 and 2016 has not reduced significantly, in contrast to the
45 upstream oil & gas projects which have postponed FID so far in 2015.
Source: LNG Insight, Wood Mackenzie
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2009 2010 2011 2012 2013 2014 2015
LNG, $/MMBtu
China $/MMBtu USA $/MMBtu EU-28 $/MMBtu Japan $/MMBtu
LNG Price
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95.625
124.000
109.000
68.000
30.500
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LNG 160K CBM Spot rate
LNG – Spot rates declining, prospects of oversupply
China is the fastest expanding major LNG market. Weakness in China comes at a difficult time
for sellers in the global LNG market with 50mn t/y of new capacity due on line next year. With
demand in Japan and South Korea remaining soft, the slowdown in China raises the prospect
of a global glut in LNG.
*Most LNG traded with long-term contracts
Aug 2014
Aug 2015
Aug 2012
Aug 2013
Source: Clarksons, LNG Insight, Hoehg LNG, Douglas-Westwood
Aug 2011
SHORT-
TERM
LNG demand is expected to grow by 4,5 % p.a. from 2013 toi 2035. The number of LNG
importing countries is expected to reach 48 in 2025 in from 29 in 2014 and 12 in 2000.
As such the need for FSRUs and FLNGs will increase dramatically
LONG-TERM
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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Num
ber
of vessels
LNG carrier deliveries and orderbook
Fleet Orderbook
Enough
work for all
scheduled
deliveries?
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Market summary
• There is enough hydrocarbons in
gaseous stage to satisfy the energy
demand
• Price of LNG is a question mark
• The global price spread has reduced
• More geographical areas will get LNG
import
• The energy market is in chaos
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LNG as marine fuel –The market and Technologies
LNG STORAGE TANK TECHNOLOGIES
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Gas storage onboard ships
“IMO Type C”“Membrane” “IMO Type A - B”
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Comparison of IMO IGC Code independent tanks
Tank Type Description Pressure Advantages Disadvantages
A Prismatic tank adjustable
to hull shapes. Full
secondary barrier
< 0,7 barg Space efficient Boil-off gas handling
More complex fuel system,
(compressor required)
B Prismatic tank adjustable
to hull shapes. Partial
secondary barrier
< 0,7 barg Space efficient Boil-off gas handling
More complex fuel system
(compressor required)
B Spherical (Moss type). Full
secondary barrier
< 0,7 barg Reliable / proven
system
Boil-off gas handling
More complex fuel system
(compressor required)
C Pressure vessel
(cylindrical shape with
dished ends).
No secondary barrier
required
< 10 barg Allows pressure
increase
Very simple fuel
system
Little maintenance
and easy installation
Space demand on board
the ship comparatively
large
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IGF Code
6.9 Regulations for the maintaining of fuel storage condition
6.9.1 Control of tank pressure and temperature
6.9.1.1 With the exception of liquefied gas fuel tanks designed to withstand the full gauge
vapour pressure of the fuel under conditions of the upper ambient design temperature,
liquefied gas fuel tanks' pressure and temperature shall be maintained at all times within their
design range by means acceptable to the Administration, e.g. by one of the following methods:
.1 reliquefaction of vapours;
.2 thermal oxidation of vapours;
.3 pressure accumulation; and
.4 liquefied gas fuel cooling.
The method chosen shall be capable of maintaining tank pressure below the set pressure of
the tank pressure relief valves for a period of 15 days assuming full tank at normal service
pressure and the ship in idle condition, i.e. only power for domestic load is generated.
6.9.1.2 Venting of fuel vapour for control of the tank pressure is not acceptable except in
emergency situations.
This means that if you don’t have a Type C tank you must have some BOG
managements system onboard regardless if it is used or not21 September 2015 LNG as marine fuel –The market and Technologies15
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Heat leakage will leak into the LNG…
Atmospheric storage
Gas evaporates
maintaining constant
temperature and pressure
0 bar(g) - 161˚C
Heat flux from ambient into the
cryogenic LNG
In a pressurized tank, heat leak into the tanks increasing
the liquid LNG’s pressure and temperature
0..3 bar(g) - 161..-142˚C
LNG Terminal Bunker barge Transport / storage
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Tanks that cannot be pressurized
When bunkering with type A and B tanks:
• Maximum pressure in tank is limited to
0,7 bar(g)
• The bunkered LNG has to have a lower
pressure/temperature to avoid rapid
evaporation
• Depending on storage time, LNG saturation
temperature may be 3 bar(g) or even higher
• Bunkering hot LNG is like opening the lid of a
pressure cooker (while still boiling)
• Reducing the pressure from 3 bar(g) to
ambient pressure would result in 8 % of the
liquid has to be “boiled off” during bunkering
• Bunkering 200 ton during 1 hour would release
fuel adequate for 100 MW!
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Base case: Pressurized tank
1. Cylindrical pressurized tank
2. Tank pressure created by PBU
3. MGE for gas consumers
4. Sufficient solution for low pressure
engines with back-up fuel
Glycol/water mixture
To engines
Pressure Build up Unit
(PBU)
Operating pressure: 5 bar(g)
Maximum pressure: 9 bar(g)
Main gas heater (MGE)
Glycol/water mixture
Simple and Proven Concept > bunkering of all LNG qualities is possible
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Pressurized tank + centrifugal pump
1. Cylindrical pressurized tank
2. Gas pressure created by centrifugal
pump
3. LNG evaporated in MGE
4. Preferred solution for low pressure
engines without back-up fuel
5. Required solution for moderate and
high-pressure gas engines
• Second pressure control
method for low pressure aux
engines
Glycol/water mixture
To engines
Operating pressure: 5 bar(g)
Maximum pressure: 9 bar(g)
Main gas heater (MGE)
Identical tank pressure → bunkering of all LNG qualities is possible
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Pressurized rectangular tank + centrifugal pump
+ compressor
1. Rectangular pressurized tank
2. Gas pressure created by centrifugal
pump
3. LNG evaporated in MGE
4. Lower tank pressure might be
required
5. Further gas pressure management
might be required (gas
compressors)
6. Increased cost of steel structure
Glycol/water mixture
To engines
Operating pressure: 5 bar(g)
Maximum pressure: 6 bar(g)
Main gas heater (MGE)
Higher complexity → bunkering of all LNG qualities without BOG
management is challenging
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Atmospheric rectangular tank + centrifugal pump
+ compressor + BOG management
1. Rectangular atmospheric tank
2. Gas pressure created by centrifugal
pump
3. LNG evaporated in MGE
4. Gas compressor + heater to handle
NBOG
5. Increased cost of steel structure
or membrane tanks
6. Vapor return line for bunkering?
7. Atmospheric tanks will require
Gas Combustion Unit or
reliquefaction plant
Glycol/water mixture
To engines
Operating pressure: 0-1 bar(g)
Maximum pressure: 0-1 bar(g)
Main gas heater (MGE)
Maximum complexity – minimum possible tank pressure
→ bunkering of all LNG qualities is starts to be questionable
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G1
M2
M1
LNGPac™ Simplified P&ID
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5
2
2. Collapse the gas pressure in the tank
Ba
r(g
)
Time
3. Open the main filling line
5. Inert the piping with N2
4. Close the filling line valves
1. Check that on board bunkering
line is inerted and cooled down
Bunkering procedure
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5
2
1. Open pressure control valve
Ba
r(g
)
Time
2. LNG flow by the hydrostatic pressure into the vaporizer
3. LNG is vaporized and gas is returned to the tank
Tank pressure increase
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LNG as marine fuel –The market and Technologies
NG ENGINE TECHNOLOGIES
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Engine Technologies
Dual – FuelLiquid and gaseous fuels
Low pressure gas
injection
Otto Principle
Bi-FuelLiquid and gaseous fuels
as an cocktail
Combine of Otto and
Diesel process?
Gas DieselLiquid and gaseous fuels
High pressure gas
injection
Diesel Principle
Gas onlyGaseous fuels only
Low pressure gas
injection
Otto Principle
Multi - Fuel Single Fuel
Lo
w P
ressu
reH
igh
Pre
ssu
re
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Dual – Fuel technology
+ Simple fuel handling
+ Meet all existing and agreed
international emission regulation
+ High efficiency on high loads
+ Wide fuel flexibility
+ HFO/MDO/MGO/Crude
+ LNG/Ethane
+ Simple to arrange redundancy for
single failure on fuel supply system
• Requirements on gas quality
• Power reduction
Wide experience from marine and land
base applications (medium speed)
First experience from marine low speed
applications coming on-line 2016
Dual – FuelLiquid and gaseous fuels
Low pressure gas
injection
Otto Principle
Makers
Medium SpeedWärtsilä, MAN,
MAK, HIMSEN
Low SpeedWINGD (former
Wärtsilä)
High Speed ?
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Gas Diesel technology
+ Wide fuel flexibility and tolerance
against various gas qualities
+ Simple to arrange redundancy for
single failure on fuel supply system
+ High efficiency on low loads
+ High power density
• Pressure must be built up to 300 bar
• Costly fuel handling system
• NOx not meeting IMO Tier 3
Experience from (marine and) land
base applications (medium speed)
First experience from marine low speed
applications coming on-line
Makers
Medium SpeedLand based only:
Wärtsilä MAN
Low Speed MAN
High Speed ?
Gas DieselLiquid and gaseous fuels
High pressure gas
injection
Diesel Principle
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Gas only technology
+ High efficiency
+ Meet all existing and agreed
international emission regulation
+ Simple engine technology
+ High efficiency
• Redundancy for single failure is costly
• Sensitive for abnormality in fuel supply
system
• Requirements on gas quality
• Power reduction
Wide Experience from marine and land
base applications (medium speed)
Makers
Medium Speed
Rolls-Royce
Land based only:
Wärtsilä, MAN,
Himsen, GE
Low Speed NA
High Speed
(Mostly) none
marine applications:
CAT, Cummins,
MTU
Gas onlyGaseous fuels only
Low pressure gas
injection
Otto Principle
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Bi-fuel technology
+ Certain fuel flexibility (cocktail)
+ Simple gas supply technology
+ Cheapest retrofit solution
+ Simple to arrange redundancy for
single failure on fuel supply system
• Performance?
• Emissions?
• Require a rather high amount of liquid
fuel (up-to 30%)
Wide Experience in China on in-land
waterways? Also on-line in Europe
Makers
Medium Speed NA
Low Speed NA
High Speed
Seems to be mostly
3rd party suppliers
doing retrofit
Bi-FuelLiquid and gaseous fuels
as an cocktail
Combine of Otto and
Diesel process?
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Technology summary
The right choice for you
Bunker process
Fuel supply system
Engine capability
Fuel availability
Also when
something not
go according to
plan
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Thank you
Tomas AminoffDirector, Vessel Integration