Timing is Everything De-risk major LNG projects with ...
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August 2019 Timing is Everything De-risk major LNG projects with smarter insulation choices. Photo courtesy of Kiewit
Transcript of Timing is Everything De-risk major LNG projects with ...
August 2019
Timing is EverythingDe-risk major LNG projects with smarter insulation choices.
Photo courtesy of Kiewit
ISSN 1747-1826
CONTENTS
Copyright © Palladian Publications Ltd 2019. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK.
ON THIS MONTH’S COVER
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LNG Industry is audited by the Audit Bureau of Circulations (ABC). An audit certifi cate is available on request from our sales department.
AUGUST AUGUST 20192019
Aspen Aerogels®’s Cryogel® Z aerogel insulation blanket is revolutionising cryogenic insulation for the LNG industry. Cryogel’s unique technology avoids the need for costly, complex expansion joints, simplifying installation methods and boosting labour productivity, up to 40% faster than rigid insulations on large bore pipes and vessels. Restore normal process conditions and de-risk the insulation phase of major LNG projects with Cryogel.
03 Comment
04 LNG news
33 More efficient green shippingPaul Atherton, Yaskawa Environmental Energy, Norway, provides an outlook on how energy efficient shipping can be achieved while simultaneously meeting ever-stricter environmental regulations.
37 Propelling profitAndreas Glud, Hempel A/S, Denmark, emphasises the importance of finding the right coating solution to keep vessel costs down and outlines how this can be achieved.
41 LNG coating challengesBas Hesselink, AkzoNobel, UK, describes the difficulties encountered during the coating selection process in the LNG industry and offers some solutions.
44 Do you know where your assets are sailing?Soili Städter, Valmet Automation, Finland, outlines a new solution to help providers locate and review real-time data on their cargo containers as they are transported around the globe.
47 A digital revolutionRobert D. Carrell, Hoffer Flow Controls, Inc., USA, analyses the shift towards digitalisation taking place in the LNG bulk delivery sector.
52 Conquering the coldPiet Tel, Cryonorm, the Netherlands, discusses the selection of a high thermal efficiency vaporiser for a Nordic mid scale LNG terminal.
56 15 facts on... Europe16 Shifting tariffs and shifting risksBrian A. Bradshaw, Sidley Austin, USA, discusses allocating the risk of increasing tarriffs on LNG supply arrangements.
21 Riding the global waves of changeAlap Shah, Black & Veatch, USA, outlines how big trends in gas-to-power are pushing LNG to prominence in the global power portfolio.
25 Small scale LNG set to power AsiaCarsten Dommermuth, MAN Energy Solutions SE, Germany, outlines the economic and environmental case for developing small scale LNG-to-power solutions in remote areas, such as islands in South East Asia.
29 Reinventing the wheelJan-Olaf Probst, DNV GL, Germany, looks at the groundbreaking conversion of the Sajir containership to LNG propulsion.
12 A reason to celebrateGordon Cope, contributing editor, asks if the good times will last for European LNG importers.
Copyright © Palladian Publications Ltd 2019. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmittedin any form or by any means, electronic, mechanical phoor otherwise, without the i
ON THIS MONTH’S C
ulations (ABC). sales department.
Aspen Aerogels®’s Cryoginsulation blanket is revocryc ogenic insulation for tindi ustry. Cryogel’s uniqueavoids the need for costlyexpansion joints, simplifyinstallation methods andlabour productivity, up to 4than rigid insulations on lapipes and vessels. Restore process conditions and de-insulation phase of major Lprojects with Cryogel.
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outlines how big trends in o prominence in the global power
NG set to power
gy Solutions SE, Germany, nmental case for wer solutions in remote st Asia.
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WIDENING THE HORIZONSOF LNG SUSTAINABILITY
Cryogenic pumps, systems and technologies for LNG Marine, Automotive and Industrial applications
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COMMENTDAVID ROWLANDS
EDITOR
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This year, the world is celebrating the 50th anniversary of humanity’s greatest achievement.
I am talking, of course, about the moon landing. On a practical level, the Apollo 11 mission lasted
eight days, three hours, 18 minutes and 35 seconds, and saw three men collect 21.5 kg of lunar material to bring back to Earth for investigation. More significantly, Armstrong and Aldrin led humanity’s first exploration onto another celestial body (with Collins waiting in the command module) and, in the process, cemented their own names in the annals of history (which would not have been possible were it not for the thousands of others involved in the operation).
Of course, these space-age pioneers were not the first to leave the cradle of Earth, nor were they the last to venture onto the lunar surface. Ten others have stepped onto the moon since the Apollo 11 mission, the last of which did so in 1972. Whilst some may question why we haven’t gone back to the moon since (price, politics and lack of requirement all being the major reasons), we Earthlings have not simply abandoned space exploration. Our priorities, however, have changed.
Mars is currently the focus of space exploration organisations. Indeed, scientists have already confirmed that the surface of the planet was once covered in liquid water, and there is a slim possibility that some liquid water could remain below the surface. With that knowledge, the search for life remains underway. Interestingly, a little further afield lies Titan – a moon of Saturn that has proven to have liquid methane on its surface.
As fascinating as the search for life both inside and outside of our solar system is, it is perhaps equally important to value what we have on our own planet. As the world’s
population becomes increasingly wise to the harm we are causing, green technologies, fuels and materials are all seeing rapid growth, especially in Europe.
Fortunately, there is economic incentive to move towards these technologies. As Gordon Cope, contributing editor, discusses in his article starting on page 12, the future looks bright for European gas buyers. Growth in the global gas market is providing European buyers with access to cheap, clean gas, as the US battles it out with Qatar and Russia to meet demand. The US is particularly interesting given its relatively young LNG export industry.
In addition to this, new regulations coming into force next year mean that the use of LNG as a marine fuel is becoming increasingly popular. Cope writes in his article: “Carnival Corp., the largest cruise ship operator in the world, announced that it is gradually switching its fleet over to LNG. The company’s first ship, AIDAnova, arrived in 2018, with plans to have seven fully LNG-powered ships by 2022.”
Of course, these efforts are not limited to Europe alone, and Asia is ramping up its own LNG imports. In fact, a recent Wood Mackenzie report claims that China could overtake Japan as the world’s top LNG importer as early as 2022.1 With the move towards cleaner energy well and truly underway, LNG stands to benefit.
Although switching from traditional fuels to LNG may seem like a small step, it could in fact be a giant leap for mankind. We hope you enjoy this latest issue of LNG Industry magazine.
1. Wood Mackenzie, ‘Japan to lose top LNG importer position to China by 2022’, https://www.woodmac.com/press-releases/japan-to-lose-top-lng-importer-position-to-china-by-2022/
4 August 2019
LNGNEWSJamaicaJamaica
PM commissions FSRT to supply LNG to Jamaica
Jamaica’s Prime Minister, Andrew Holness, has officially commissioned a floating storage regasification terminal
(FSRT) into service to supply Jamaica with LNG.This FSRT is the first terminal of its kind in the region,
and will help diversify Jamaica’s energy mix, as well as provide greater energy security.
Holness commissioned the terminal in a formal ceremony onboard the Golar Freeze barge, which, at the time of writing, was docked in Old Harbour, St Catherine. His speech included the following comments:
“Today we celebrate a significant milestone in the partnership between the people of Jamaica and New Fortress Energy. We are on track to achieve an ambitious goal which is to have at least 50% of our electricity generation from renewables or cleaner fuels. We are almost there at 44% when we complete Old Harbour and that is a major significant achievement. The completion of the terminal will firmly establish the island as a premier LNG hub. It is the first of its kind in the Caribbean and will supply the 190 MW to the Old Harbour power plant through natural gas pipelines.
“We are demonstrating that we can put in place the necessary investments, build infrastructure that both reduces the cost to the consumer, but most importantly, reduces the cost to the environment, and I think this is a good example of that. It’s a win-win for all.”
As the project operator, New Fortress Energy has reportedly invested close to US$1 billion so far.
USAUSA
DoE authorises LNG exports from Gulf LNG
The US Department of Energy’s (DoE) Office of Fossil Energy has issued an order to Gulf LNG Liquefaction
Co., LLC (GLLC), approving exports of domestically produced LNG from the Gulf LNG project.
The project will be located in Jackson County, Mississippi, near Pascagoula and will be built at the site of the Gulf LNG terminal – an existing import terminal owned by Gulf LNG Energy, LLC. The project is 50% owned by Kinder Morgan’s Southern Gulf LNG Co., LLC.
Secretary Rick Perry said: “Increased amounts of US LNG on the world market benefit the American economy, American workers, and consumers and help make the air cleaner around the globe.”
Under the order signed, GLLC is authorised to export up to 1.53 billion ft³/d of natural gas in the form of LNG from the proposed Gulf LNG liquefaction project. According to the statement, GLLC is authorised to export this LNG by vessel to any country with which the US does not have a free trade agreement (FTA) requiring national treatment for trade in natural gas, and with which trade is not prohibited by US law or policy. The Federal Energy Regulatory Commission (FERC) authorised the company to site, construct and operate the project on 16 July this year.
Steven Winberg, Assistant Secretary for Fossil Energy, said: “The US is in another year of record-setting natural gas production."
RussiaRussia
Jereh to construct 10 LNG fuelling stations in Russia
Jereh has announced that it has won a contract to construct 10 new LNG fuelling stations in Russia.According to the statement, the Chinese company
will provide integrated services covering modular design, procurement, manufacture and commissioning. The total fuelling capacity of the project is expected to reach 500 million litres per year.
Jereh claims that the whole project will be delivered this September, and will commence operations the following month.
The project will see the fuelling station and control room integrated into two 20 ft containers, respectively, leaving it more compact and convenient for transportation.
Wang Fei, manager of the project said: “We own a self-developed process that targets integrated design and are able to provide shorter delivery period, lower financial input with less space occupation. Equipped with leading modular manufacturing capability, global sourcing platform and international project management system, Jereh guarantees our client a truly turnkey engineering project.”
6 August 2019
News Highlights
Visit our website for more news: www.lngindustry.com
South Africa plans LNG import terminal
FERC authorises Cameron LNG Train 1 to begin commercial service
EU approves Croatian aid for Krk LNG
LNGNEWSCyprusCyprus
Klaipedos nafta submits tender bid for Cyprus LNG
AB Klaipedos nafta has announced that it has submitted a tender bid to design, build and operate the Cyprus LNG
import terminal.The Lithuanian LNG gas operator submitted the bid
alongside consortium partners Samsung C&T, Posco E&C, Mitsui O.S.K. Lines (MOL) and Osaka Gas.
Klaipedos nafta claims that the Cypriot natural gas public company DEFA issued an international public call for tenders in October last year. According to the published specifications, the project will consist of a floating storage and regasification unit (FSRU), a jetty for mooring the FSRU, and a jetty borne gas pipeline to secure supply of natural gas to the largest Vasilikos power plant in Cyprus. The project has reportedly been granted EU support in the form of over €100 million. The overall project budget is estimated at approximately €500 million.
If Klaipedos nafta wins the tender, the company will work alongside MOL and Osaka Gas to provide terminal operator services for a 20-year period.
According to the statement, DEFA should select the winner of the tender later this year. The terminal in Cyprus is scheduled to commence operations in 2021.
RussiaRussia
TechnipFMC awarded Arctic LNG 2 contract
TechnipFMC has been awarded a major engineering, procurement and construction (EPC) contract by Novatek
and its partners for the Arctic LNG 2 project, located on the Gydan peninsula in West Siberia, Russia.
This development will consist of three LNG trains, each with a capacity of 6.6 million tpy, which will be installed on three gravity-based structure platforms.
TechnipFMC will execute this project under a lump sum and reimbursable basis. It will cover the EPC of the three LNG trains and associated topsides, which will be manufactured on a modular basis in Asian and Russian yards.
Nello Uccelletti, President Onshore/Offshore at TechnipFMC, commented: “We are extremely honoured to be entrusted with this new contract by Novatek and its partners. We are leveraging our successful track record on the Yamal LNG project and notably the modular fabrication scheme. This project recognises the experience and expertise of our teams as well as their capacity to deliver the most ambitious and innovative projects. It also confirms the leadership of TechnipFMC both in the LNG market and in the transition journey of the global energy industry.”
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8 August 2019
LNGNEWS
03 - 06 September 2019
SPE Offshore EuropeAberdeen, UKhttps://www.offshore-europe.co.uk/
10 - 12 September 2019
Turbomachinery & Pump SymposiaHouston, Texashttps://tps.tamu.edu/
05 - 07 November 2019
European Annual Gas ConferenceParis, Francehttps://www.theeagc.com/
21 January 2020
LNG Fuel 2020Web Conferencehttps://www.lngindustry.com/lngfuel/?utm_source=events&utm_medium=list&utm_campaign=reg#
SpainSpain
Brittany Ferries and Repsol extend LNG delivery agreement
B rittany Ferries and Repsol have extended their agreement for the delivery of LNG for long-haul
Spanish routesUnder the agreement, Repsol will supply LNG to
Brittany Ferries’ operations in Spain. Furthermore, the energy company has agreed to build two LNG bunker terminals at the ports of Bilbao and Santander, where Brittany Ferries conducts its Spanish operations. Each terminal will include an intermediate storage tank of 1000 m³ to guarantee an uninterrupted supply.
Repsol will supply LNG bunker fuel to Brittany Ferries’ Salamanca and Santoña during the ships’ regular visits on routes linking Portsmouth, UK and northern Spain, beginning in 2022.
“LNG offers significant environmental advantages over traditional marine fuels, and we’re extremely pleased to work with Repsol on LNG fuelling operations for our future ferries in Spain. Salamanca and Santoña will be our second and third LNG-powered vessels, and the first to operate to and from northern Spain. Repsol’s expertise in the field of LNG refuelling and environmentally friendly fuels, as well as its ability to deliver to us makes them a trusted partner. These new terminals will allow regular, flexible and reliable deliveries during the calls of Salamanca and Santoña in our Spanish ports,” said Frédéric Pouget, Fleet and Operations Manager Brittany Ferries.
BeninBenin
Total to develop LNG market in Benin
Total has announced that it has signed agreements with the Republic of Benin and the Société Béninoise
d’Energie Electrique (SBEE) to develop the LNG market in Benin.
Specifically, the parties have signed a gas supply agreement and a host government agreement for the development of a floating LNG import terminal and the supply of up to 0.5 million tpy of regasified LNG from Total’s global portfolio to Benin for a period of 15 years, starting in 2021. The agreements are subject to conditions precedent.
According to the statement, Total will develop and operate the regasification infrastructure that will consist of a floating storage and regasification unit (FSRU) located offshore Benin, as well as an offshore pipeline connection to the existing and planned power plants in Maria Gléta.
Laurent Vivier, Senior Vice President Gas at Total, said: “This project is in line with Total’s strategy to develop new gas markets by unlocking access to LNG for fast-growing economies. We are very pleased to have been entrusted by the Benin authorities to develop LNG imports and support a broad adoption of natural gas in the country.
“Access to LNG will help Benin to meet growing domestic energy demand and add more natural gas to the country’s current energy mix, hence reducing its carbon intensity.”
17 - 19 September 2019
GastechHouston, Texashttps://www.gastechevent.com/
21 - 23 October 2019
North American Gas ForumWashington, D.C.https://energy-dialogues.com/nagf/
10 August 2019
LNGNEWSBelgiumBelgium
Qatargas delivers first Q-Max LNG cargo to Belgium
Qatargas Operating Co. Ltd has announced that it has successfully delivered the first LNG cargo on a Q-Max
vessel to the Zeebrugge LNG Terminal in Belgium, marking the first unloading of a Q-Max LNG vessel at this terminal.
The cargo was loaded at the Ras Laffan terminal in Qatar on 22 June 2019, and arrived on board the Q-Max vessel Al Dafna on 22 July 2019.
According to the statement, the delivery also celebrates another multi-terminal delivery for Qatargas, bringing the total number of multi-port deliveries undertaken by the company this year to eight deliveries. This operation saw the first LNG parcel discharged in Zeebrugge and a second parcel at the South Hook LNG terminal in the UK.
Khalid bin Khalifa Al Thani, Qatargas Chief Executive Officer, said: “At Qatargas, we are very much focused on further developing the concept of multi-port deliveries of our LNG cargoes and offer it to our global portfolio of customers. This will provide our customers with flexibility and reliability to help them meet their demand for clean burning natural gas while enhancing flexibility of supply.”
Pascal De Buck, Chief Executive Officer and Managing Director of gas infrastructure group Fluxys, owner and operator of the Zeebrugge LNG terminal, added: “We are particularly pleased at Fluxys with this new milestone in our long-standing cooperation with Qatargas at the Zeebrugge LNG terminal. The Q-Max delivery demonstrates the versatility we offer our customers, with LNG carriers of all types and sizes able to dock at the facility, ample pipe gas take away capacity for delivery throughout Northwestern Europe and a range of options for downstream small scale LNG distribution.”
RomaniaRomania
SCHOTTEL to supply thrusters for Seaspan LNG ferries
SCHOTTEL has been chosen as the propulsion supplier for two newbuild Ro-Ro ferries under construction at
Damen Shipyards Mangalia, Romania.Each of the vessels ordered by Canadian Seaspan Ferries
Corp. will be propelled by two SCHOTTEL combi drives and two SCHOTTEL transverse thrusters. The new ferries will join the company’s first two hybrid vessels, Seaspan Swift and Seaspan Reliant, which were commissioned just over
two years ago. Seaspan Ferries currently operates a fleet of seven ferries out of four terminals in British Columbia, Canada.
“Thanks to the positive experiences we’ve had with SCHOTTEL thrusters in our first two LNG ferries, we once again opted for the German manufacturer", stated Harly Penner, Director of Fleet Engineering & Vessel Development at Seaspan Ferries.
PolandPoland
PGNiG receives first LNG cargo under new contract with Cheniere
Polish Oil and Gas Co. (PGNiG SA) has announced that it has taken delivery of the first LNG cargo under the long-term
contract it has in place with Cheniere Energy.The cargo was received at the President Lech Kaczynski LNG
Terminal in Swinoujscie, Poland. According to the statement, the long-term contract was signed in November last year, and will total approximately 39 billion m³ of gas over the contract’s 24-year period.
Piotr Wozniak, President of PGNiG Management Board, said: “Two years ago, in this place, together with our partners from Cheniere we greeted the first ever delivery of American LNG to Poland and to this part of Europe. The cargo, purchased as part of a spot transaction, came from Cheniere. Today we are also meeting with our American partners and with today's delivery we are launching the first long-term contract for the purchase of LNG from the US.
“Our portfolio of contracts with US suppliers covers over 9 billion m³ of natural gas after regasification annually – that is more than we import from Russia. Such a volume strengthens Poland’s energy security, but also gives us the opportunity to actively participate in LNG trading on the global market.”
PGNiG claims that the 165 000 m³ LNG cargo was transported by the Oak Spirit LNG carrier. Once regasified, this equals approximately 95 million m³ of gas. The delivery was the 65th delivery of LNG to Poland since the terminal first started operations.
Anatol Feygin, Executive Vice President and Chief Commercial Officer for Cheniere, said: “This first cargo under our long-term agreement is the start of more than two decades of partnership that will bring reliable, clean, and secure energy to Poland... We are honoured to stand with our partners today to welcome this inaugural cargo, which will be followed by many more for years to come.”
A REASON TO CELEBRATE
12
These are happy days for European gas consumers. The Dutch front month gas price (TTF) hit an historical low in June 2019 at US$3.20/million Btu. One year ago, gas was
trading as high as US$9/million Btu. The price war has been instigated by too many sellers and
not enough buyers. Europe’s gas demand peaked in 2011 at 500 billion m³, but slumped to under 400 billion m³ by 2014 due to slower economic growth, enhanced competition from renewables, flat electricity consumption, and (until recently) high natural gas prices. Consumption has risen since then, and the continent uses approximately 475 billion m³/yr.
Russia has been the big conventional supplier of gas to the EU, mainly through Ukraine pipelines, the Yamal pipeline through Belarus, and Nord Stream under the Baltic Sea. Slightly over 200 billion m³/yr is delivered by Gazprom.
But LNG has introduced a host of new competition. Europe has 28 large scale LNG import facilities located throughout the continent that normally operate well below capacity of 163 million tpy; in 2018, the EU imported approximately 50 million t. Qatar traditionally supplies almost half; the rest is made up from supplies from Algeria, Trinidad & Tobago and Nigeria.
Thanks to an abundance of inexpensive shale gas, however, the US has been building LNG trains in Texas and Louisiana at a
blistering pace. Cheniere, a pioneer in the US LNG sector, has 3.5 billion ft³/d operating in its Sabine Pass terminal in Louisiana, and recently announced that it will build a sixth train. Thanks to Cheniere and other companies, the US exported 5.2 billion ft³/d of LNG at the end of 2018, and it is expected to rise to 10.3 billion ft³/d by the end of 2020.
Qatar, which has plans to increase its capacity from 77 million tpy to over 100 million t, has no desire to lose market share and is competing against the US upstarts. Russia, for its part, has also brought its Arctic-based Yamal LNG online, and wants to gain a bigger foothold in Europe.
And, if that does not make gas consumers happy enough, work is more than half complete on the Nord Stream 2 pipeline. The project aims to double the capacity of the line that runs under the Baltic Sea from Russia to Germany. When it is finished, the new 1200 km line will double the system’s total capacity to 110 billion m³/yr.
ComplicationsThe US worries that Nord Stream 2 will give Russia expanded leverage over energy supplies in Europe. Germany has remained firmly in support of the project, but has expressed an interest in diversifying sources, including building LNG import terminals and signing deals with US LNG suppliers.
Gordon Cope, contributing editor, asks if the good times will last for European LNG importers.
13
14 August 2019
In March 2019, the Danish Energy Agency placed a new obstacle in front of Nord Stream 2 when it requested that Gazprom examine a new route through the country’s waters, citing environmental and safety considerations. Gazprom has elected instead to change the route to avoid further significant delays.
The US is still upping the heat. In May 2019, a bipartisan bill was introduced in the US Senate that would place harsh economic sanctions against entities involved Nord Stream 2. Germany wants the pipeline so that it can reduce coal and nuclear power and distance itself from the squabbles between Russia and other countries regarding gas transit rights, however. Speculation among stakeholders is that the Trump administration will continue to threaten sanctions against the Nord Stream 2 pipeline, but not formalise them, due to the downside of alienating ally Germany and major investors. Rather, they will encourage delays to construction, as well as diversification of supply.
The futureRegardless of whether Nord Stream 2 goes ahead, LNG has a bright future in Europe. In an effort to reduce its reliance on Russian gas, Poland has inked several deals to import US LNG, including one to displace 10 billion m³ when a deal with Gazprom expires in 2022, and a long-term agreement with Cheniere Energy to deliver 40 billion m³/yr after 2023. In order to deal with the influx, it is expanding its Swinoujscie LNG terminal capacity to 5.4 million tpy.
In 2014, Lithuania built the 2.4 million tpy Klaipeda LNG import terminal in order to create an alternative to Gazprom’s monopoly gas supplies to Baltic States. Now it has plans to turn itself into a regional supply hub by doubling terminal import capacity and connecting to consumers in Poland and Finland via pipeline networks by 2021. The port is currently in discussions with US suppliers to formalise delivery contracts.
In the longer term, LNG, which currently supplies approximately 50 billion m³/yr, will become an even more important player in Europe’s gas needs. EU gas production now sits at 23 billon m³, and is dropping at 12% per year. As domestic production declines, a gap of approximately 100 billion m³ is expected to emerge over the coming decade. Gazprom is hoping that its twinning of the Nord Stream will add 50 billion m³ of new capacity, but there is also plenty of room for LNG to grow.
US companies are betting on the latter. Sempra now has five LNG projects under development in Louisiana, Texas and Mexico with a total projected capacity of 45 million tpy. While the US is primarily targeting Asia, Europe also beckons. Tellurian, which is proposing to build the Driftwood plant, a US$30 billion project to produce up to 27.6 million tpy of LNG in Louisiana, recently signed up France-based Total to buy 1 million tpy and to invest US$500 million.
Russia is not likely to give up without a fight, however. In July 2019, Wood Mackenzie released a report examining the future role that Russia will continue to play in the European gas market. By 2035, the consultancy reckons that EU imports will swell to 400 million m³, a 30% increase over current import levels. Russia currently supplies approximately one-third of imported gas, but political, regulatory and market constraints make any further new pipelines beyond Nord Stream 2 unlikely.
In order to keep its market share, Wood Mackenzie believes that Russia is far more likely to turn to LNG, as it holds a number of advantages over pipelines. It allows the immense, remote
supplies in Siberia to be economically tapped. It creates the flexibility of being able to deliver either to Europe or lucrative Asian markets.
Russia’s market share of the global LNG exports now stands at approximately 8%, or 25 million t. The government has plans to increase that to 120 million to 140 million tpy by 2035, making it one of three largest LNG suppliers in the world, with about 20% predicted market share.
Ships look to LNG Carnival Corp., the largest cruise ship operator in the world, announced that it is gradually switching its fleet over to LNG. The company’s first ship, AIDAnova, arrived in 2018, with plans to have seven fully LNG-powered ships by 2022.
In order to access fuel in its diverse ports-of-call, Carnival contracted with Shell to supply LNG via vessel. In February 2019, Shell fuelled the AIDAnova in Tenerife, Canary Islands, using the Cardissa LNG bunker vessel to conduct the first ship-to-ship fuelling of a cruise liner.
But it is not just cruise ships that are taking the LNG plunge. In October 2018, the Gagarin Prospect, Sovcomflot’s Aframax oil tanker, made the first delivery of crude by an LNG-powered tanker. The vessel had been fuelled by Shell’s bunker vessel Cardissa, and delivered 104 000 t of crude from Primorsk, Russia, to Rotterdam, the Netherlands. Sovcomflot has already taken delivery of a second LNG tanker and intends to switch its entire fleet to the latter. According to Korea Investment Programme Agency, by 2025, up to 60% of all newbuild orders could be LNG-fuelled.
The remarkable transformation began in 2016, when the International Maritime Organization (IMO) announced that, as of 1 January 2020, all ships must emit no more than 0.5% sulfur (SOx) from fuel usage.
Currently, most large maritime vessels use 3.5% sulfur bunker, commonly known as high sulfur fuel oil (HSFO). In order to meet the mandated IMO limit, shipowners have the option of installing scrubbers onboard, purchasing a variety of bunker and distillate fuels that meet 0.5% sulfur requirements, or shifting to LNG.
Most European seaport refineries are adding new modules in order to produce a line of IMO 2020 compliant fuels. Refiners are also offering LNG through mobile bunkers. In addition to the LNG bunker vessel Cardissa, Shell has also contracted with Victrol and Sogestran to deliver Europe’s first inland waterway LNG bunker vessel. The 110 m barge will be used for LNG bunkering in the ports of Amsterdam, Rotterdam and Antwerp.
The future of LNG as a vessel fuel bodes well. Well-to-Wake (WtW) studies undertaken by marine organisations show that LNG has a competitive advantage over other fuels when tasked with meeting IMO’s 2030 and 2050 de-carbonisation targets. In addition to reducing sulfur to negligible amounts, LNG reduces NOx and particulate matter emissions by up to 99%. While LNG lowers greenhouse gas (GHG) emissions by 20% over bunker fuel, a blend of 20% bioLNG as an additive can reduce GHG emissions by a further 13%.
ConclusionIn conclusion, the EU will be ground zero as pipelines from Russia and LNG suppliers from the US and Middle East battle it out for market share. Regardless of who prevails, however, Europe stands to benefit from abundant, inexpensive natural gas for several years into the future.
Coil Wound
Heat Exchanger
Photo credit: Petronas | ©2019 Air Products
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