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International Gas October 2020

Industry expected to rebound in 2021


Passionate about Progr is making dreams come


ess alive


International Gas October 2020 Published by International Systems and Communications Limited (ISC) in conjunction with the International Gas Union (IGU). Copyright © 2020. The entire content of this publication is protected by copyright, full details of which are available from the publisher. All rights reserved. No part of this publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior permission of the copyright owner.

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Vision and Mission The International Gas Union (IGU) is a worldwide, non-

 IGU works to improve the competitiveness

profit organisation promoting the progress of the gas

of gas in the world energy markets by pro­moting

industry. Through its many member countries and

transparency, public acceptance efforts and the

corporations representing over 95% of the global gas

removal of supply and market access barriers.

market, IGU covers all aspects of the gas industry.

 IGU seeks to collaborate with governmental agencies and multilateral organisations to

Vision

demonstrate the economic, social and

As the global voice of gas, IGU seeks to improve the

environmental benefits of gas in the global

quality of life by advancing gas as a key contributor

energy mix.

to a sustainable energy future.

 IGU supports and facilitates the development of new technologies and best practices, while

Mission

emphasising sound environmental performance,

 IGU is the key and credible advocate of political,

safety, reliability and efficiency across the entire

technical and economic progress of the global gas industry, directly and through its members and in collaboration with other multilateral organisations.

4  Visi o n a n d M i s s i o n

value chain.  IGU maximises the value of its services to members and other stakeholders.


HOW CAN WE PROVIDE ACCESS TO ENERGY WHILE MINIMISING NEGATIVE IMPACTS ON THE ENVIRONMENT?

Natural gas – providing more and cleaner energy www.shell.com/roleofnaturalgas


ENGIE : SA AU CAPITAL DE 2 435 285 011 € - RCS NANTERRE 542 107 651. © Getty Images.

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Contents

OCTOBER 2020 Introduction Vision and Mission

4

Message from the President and the Secretary General

8

Update on IGU’s current work programme By Jeongwook Khang

Features The mixed impacts of coronavirus on the Latin American gas markets By Mauro Chavez and Rodrigo Rosas Cost-effective and clean ways of producing hydrogen from natural gas By Alexander Ishkov, Konstantin Romanov, Roman Teterevlev and Maximilian Kuhn

12

17 20

Why LNG is the best deep-sea marine fuel option today By Peter Keller News

44

53

IGU awards at WGC 2021

56

Reports from the Regional Coordinators

60

Members’ corner

64

Presenting IGU’s new members

68

Activities of IGU

72

Global Gas Report predicts growth will resume 76 IGU publishes latest wholesale gas price survey 78

26

The roll-out of hydrogen in Korea By Yoon Namgoong

32

Smart gas metering: A Portuguese project By Nuno Nascimento and Mariana Paiva

38

Gas technology and innovation for a sustainable future

80

IGU Organisation

84

Members of IGU

86

Events and Acknowledgements

88

The opinions and views expressed by the authors in this magazine are not necessarily those of IGU, its members or the publisher. While every care has been taken in the preparation of this magazine, they are not responsible for the authors’ opinions or for any inaccuracies in the articles.

7


I NTRODUCT I ON

MESSAGE FROM THE PRESIDENT AND THE SECRETARY GENERAL Dear Colleagues,

ful webinars, since we launched the

Welcome to the final edition of the

service this summer, and plan to

IGU print magazine.

continue with this new feature. While some of the webinars will be com­

It is hard to believe, but we are now well into year three of the Korean

pletely open to the public, others will

Presidency, and this year has been

be restricted to IGU members only. On April 27, we released the 2020

one to put us all to a test.

World LNG Report, our flagship annual

We are so proud to represent an industry that showed commitment

publication, providing key insights into

and compassion in navigating this

LNG industry developments during

challenging time. We are proud of

2019 and a glimpse into the future of

the people that continued to not

key developments and trends in the

only reliably deliver essential energy

world of LNG. In June, we released the first IGU

to markets, but also support their communities and frontline workers.

digital magazine, Global Voice of Gas

Our hats are off to all of you!

(GVG). GVG will replace the physical magazine, and it will set a new

While much progress has been made in coming out of the Covid-19

standard in communication for the

pandemic health crisis, and the signs

natural gas community worldwide.

of economic recovery may be emerg­ ing, there is still some uncertainty

Joo-Myung (Joe) Kang (right) and Luis Bertrán Rafecas.

Here at IGU, the team has also been

Natural Gas World, GVG will be a quarterly digital magazine bringing

ahead, and we continue to operate in an adaptive environment.

Produced in collaboration with

in the key global energy discussions.

new insights and analysis to the global

We have been learning and adapting

gas community. On July 2, 2020, we released the

working hard to actively respond to

to the new environment to make sure

this new environment and focus on

that we are there for the industry

Wholesale Gas Price Survey – 2020

delivering value to our members.

effectively and timely.

Edition, another valued flagship report. The survey is the 12th in a series that

We have redoubled our digital efforts, and despite the travel restrictions,

Key developments

see great engagement from the IGU

These are some of the highlights from

membership taking advantage of the

IGU activities, since our last update.

began in 2005. Also in July, we published, in collaboration with the Boston Consulting Group, and funding

digital connectivity and participating in our new webinar service. We have

Reports and publications

support from BP and Snam, a new

successfully launched our flagship

IGU has launched a new webinar series.

key report Gas Technology and

reports and continued participating

We have already delivered five success­

Innovation for a Sustainable Future

8  Message from the President and the Secretary General


I NTRODUCT I ON

that quantifies the contribution that

The election will take place

Research, development and

gas technologies can make to the

during the virtual Council meeting

innovation (RD&I) play a key role for

success of the global energy transition,

on November 18-19, 2020. For more

the gas industry and the challenges

help-ing to build sustainable cities

information about the election and

and the opportunities that RD&I

and communities and to provide

voting procedures, please contact

can address are critical to future

access to affordable and clean energy.

the IGU Secretariat.

growth and development. More

It features robust analysis demon­

broadly, the industry must demon­

strating economic deployment

Pandemic Advisory Group

strate that gas is the fastest, most

potential across 12 gas technology

The Pandemic Advisory Group was

economical way to a sustainable

categories, which cumulatively can

established to provide advice and

energy future through innovations

help avoid 12 Gigatons of CO2

guidance to the IGU leadership on

in gas technology.

emissions, or a third of all global

how to best cope and navigate

energy sector emissions.

through the challenges brought

serves to facilitate the discussion and

about by the global pandemic.

debate around these issues as well as

research company BloombergNEF

The first greatest near-term challenge

to display the technological develop­

(BNEF) and Snam, we released the

was to review the manner in which

ments becoming available to support

annual Global Gas Report 2020. This

the fall Executive Committee and

the industry's future.

year’s edition traditionally reviews

Council meetings were to be held

You will be able to learn more

key global industry developments

virtually, including conducting the

details of these events and much

and major trends, as well as assessing

important 2024-2027 Presidential

more as you read through this

the impact of Covid-19 on the industry

election. The group has also been

magazine edition.

and recovery projections. It also

working on the process and actions

features a special focus chapter on the

needed in case WGC2021 would be

working very hard on a smooth

prospects for global hydrogen markets

postponed to 2022.

transition to our Permanent Head­

In early August, together with

develop­ment and what needs to

The IGU Research Conference

Last but not least, we continue

quarters in London by July 2021.

happen on the policy side for these

Future event news

prospects to materialise.

We are pleased to announce

comments and feedback. It is our

together with our co-organisers, the

utmost priority to listen to our mem­

your copies of these reports at:

Gas Technology Institute (GTI) and the

bers’ needs. Please get in touch by

www.igu.org.

International Institute of Refriger­ation

writing to us at info@igu.org.

If you haven’t already, grab

(IIR) that the world’s most important

As always, we encourage your

Thank you for your continued

Election for the Presidency

liquefied natural gas conference,

support and active engagement as

of IGU 2024-2027

LNG2025, will be held in Doha, Qatar.

we work to advance the natural gas

On June 3, 2020, the Executive

We congratulate Qatar and wish them

industry and enhance IGU’s relevance

Committee endorsed Orlando

success in the preparations!

in this changing global climate.

Cabrales Segovia from Colombia

We would also like to share that

and Andrea Stegher from Italy, as the

all IGU Charter Members have been

Joo-Myung (Joe) Kang

candidates for the post of IGU

invited to submit an Expression of

IGU President

President 2024-2027 and host of the

Interest (EOI) to host the IGU Research

Luis Bertrán Rafecas

30th World Gas Conference.

Conference (IGRC) in 2023.

IGU Secretary General

Message from the President and the Secretary General  9


We see possibilities in the sun and wind.

And in natural gas, the smart partner to renewables.


That keeps the lights shining bright.

We see possibilities everywhere. From renewable energy and cleaner-burning natural gas to advanced fuels and new low carbon businesses, BP is working to make energy cleaner and better.

Natural gas burns 50% cleaner than coal in power generation.


I NTRODUCT I ON

Update on IGU’s current work programme IGU’s committees and task forces are continuing their work under the Korean Presidency.  By Jeongwook Khang IGU’s 2018-2021 work programme is

issues across the global gas industry

at: Future gas demand in the world

being carried out under the theme

and cover the full gas value chain.

energy mix; Future gas exploration

“A Sustainable Future – Powered by

The call for papers was launched on

and development to satisfy demand;

Gas” and the Union’s 11 committees

May 29 and the response has been

and Digitisation in the E&P of natural

and two of the three task forces are

excellent. There is still time for sub­

gas. It is also organising two T&I

now focusing on preparations for

missions via www.wgc2021.org as

sessions on: Frontier E&P tech­

the 28th World Gas Conference,

the closing date is the end of 2020.

nologies for natural gas; and Gas

which will be held in Daegu, Korea, June 21-25, 2021. The committees and task forces

Abstracts submitted for each topic will be assessed on a range of criteria including originality, objectivity and

production stimulation and recovery improvement. The R&D and Innovation

(with the exception of Task Force 1)

quality of exposition, while geo­

Committee is responsible for three

are responsible for organising WGC

graphi­cal diversity will be sought for

II sessions looking at: Decarbon­

2021’s technical programme. There

each session.

isation: The role of gas technologies

will be 39 Industry Insight (II) sessions

To give some examples of

in moving towards a low-carbon

and 26 Technology and Innovation

the topics, the Exploration and

society; Decentralisation: The role of

(T&I) sessions, which will look at

Production (E&P) Committee is

gas technologies to realise a resilient,

commercial, strategic and technical

organising three II sessions looking

robust and smart society; and Game-

Members of the Strategy Committee during their last physical meeting in Tel Aviv in February.

12  Update on IGU’s current work programme


I NTRODUCT I ON

IGU committees and task forces chairs and technical sessions at WGC 2021

Industry Insight

Technology & Innovation

Exploration and Production

Ekaterina Litvinova, Russian Federation

3

2

Storage

John Heer, USA

4

2

Transmission

Patrick Pelle, France

3

3

Distribution

José Carlos Broisler Oliver, Brazil

2

2

Utilisation

Roger Serrat, Spain

3

3

Sustainability

M. Azhar A. Satar, Malaysia

4

3

Strategy

Dr Gerald Linke, Germany

4

3

Gas Markets

Christina Zhaoyan Liu, China

3

2

LNG

Farid Berrahou, Algeria

3

2

Marketing and Communications

Pierre Bartholomeus, The Netherlands

3

2

R&D and Innovation

Dr Hisataka Yakabe, Japan

3

2

Task Force 1: Strategic Communications and Outreach

Mark McCrory, United Kingdom

*

*

Task Force 2: Energy for All

Barbara Jinks, Australia

2

-

Task Force 3: Energy Policy

Hedayat Omidvar, Iran

2

-

39

26

Totals

*Task Force 1’s role is to provide support, guidance and strategic direction for the Public Affairs Director and his team and it does not normally contribute to the WGC 2021 roster of papers.

changing LNG technologies. It is also

emissions and for ensuring the

countries normally meet twice a

collaborating with the Transmission

intro­duction of renewable gases;

year with members taking turns to

Committee on two T&I sessions

Innovations in gas transmission

host the gatherings, but the global

looking at the implementation of

networks: a booster for the flexibility

pandemic has put a temporary

cutting-edge technologies for:

of energy markets; and IoT and AI:

stop to this. The last physical

Digitisation; and Mixing gases.

The two allies to optimise risks and

meetings were of Task Force 2 in

For its part, the Transmission

costs in gas transmission networks.

Bonn, Germany, February 10-12,

Committee is responsible for three

Task Force 2 – Energy for All is

and of the Strategy Committee in

II sessions looking at: Advances in

responsible for two II sessions asking

Tel Aviv, Israel, February 26-28.

the reduction of greenhouse gas

the questions: Who will facilitate and

Since then there have been several

(GHG) emissions and in transporting

fund energy access? Energy access –

online meetings.

renew­able gases in transmission

Where can gas be the solution?

systems; Gas transmission networks

For any further information please

For the Plenaries, Current Debate

contact the Deputy Manager of the

to enhance the vitality of energy

sessions and Luncheon Addresses, the

Korea Presidency Team, Ms Seyoung

markets; and Social value creation for

Coordination Committee working with

Ha (syha@wgc2021.kr) or me directly

trans­mission system operators and

the Presidency has selected the topics

(jwkhang@wgc2021.kr).

stakeholders. It is also responsible for

and is inviting high-level speakers.

three T&I sessions: The development

The committees and task forces

of technologies for minimising GHG

with a membership of 897 from 49

Jeongwook Khang is the Chair of IGU’s Coordination Committee.

Update on IGU’s current work programme  13


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Features This issue’s features section starts with a report on the impact of Coronavirus on gas markets in Latin America and the Caribbean. Next up are two hydrogen articles, the first looking at ways of producing hydrogen from natural gas and the second at the roll-out of hydrogen in Korea. Then we have a report from Portugal on a smart gas metering pilot project and an article looking at LNG as a marine fuel.

17


A better world With natural gas as the world’s cleanest and most efcient fossil fuel, Oman LNG’s operations near the Omani city of Sur, is helping to make for a better world. Since starting production in 2000, we have delivered over 2,300 cargoes to customers, remaining a reliable supplier of liqueed natural gas that is helping to reduce carbon emissions and preserve the earth’s natural environment for future generations to enjoy. For centuries, this beautiful coastbound nation of Oman was a trade centre connecting different parts of the world through vibrant and ourishing commerce relations. Trade that supported lives in far lands. At Oman LNG, we continue that tradition of seafarers and commerce through bringing energy to many corners of the world. Oman Liqueed Natural Gas LLC (Oman LNG) is a joint venture company established by a Royal Decree in 1994 operating under the laws of the Sultanate of Oman. The company engages in the business of producing and selling liqueed natural gas (LNG), and its by-product, natural gas liquids (NGLs) and operates three liquefaction trains at its plant in Qalhat, serve in Ras al Jinz in the eastern region South Sharqiyah Governorate. of the country boasting one of the world’s largest breeding beaches for Hand-in-hand with our operations Greenback Turtles. comes a strong health, safety and environment performance. Our recent As a company our responsibility to our achievement of over 30 million man- staff, contractors and the community is hours without a Lost-Time Injury (LTI) is to provide a safe environment so that testament to our HSE excellence, and they can come to work and return an exemplary diligence and commit- home to their families, safely every day. ment to the safety of our people, environment, and communities where we Through our empowerment philooperate. Our processes meet the sophy, we continue to develop talent highest of ISO standards, which we are and help remove barriers to reach sucproud to maintain every year and our cess. Our aim is to develop all staff to ceaseless efforts to support the envir- their fullest potential. We support inonment through the sponsoring of country value through focused efforts various initiatives such as the Turtle Re- towards developing local talent and

stimulating local business ventures by enabling Small Medium Enterprises (SMEs), a major cornerstone of Oman’s economy, to ourish and providing equal opportunities to compete for all service contracts. The company is a corporate and social responsible organisation by maximising benets to the employees, stakeholders and community and has a well-designed alignment between sustainable social development and the business. From powering large industries, to keeping homes warm and the lights on, Oman LNG is your reliable energy partner.


Perpetual sustainable investments in the society of Oman Corporate Social Responsibility (CSR) has been an integral part of Oman LNG with a focused objective: to deliver tangible value to Oman and its people through social investment by capitalising on the country’s natural gas resource. The company allocates annually 1.5% net income after tax (NIAT) to various social investment and sustainable programmes; a commitment set when the company was founded. In addition, before the rst cargoes left the LNG plant, the company invested in sustainable development projects for the community which speaks volumes about the company’s business principles; that Oman LNG’s initial investment in social development began even before the production line was fully functional. Today, Oman LNG’s CSR programmes, delivered through Oman LNG Development Foundation, span the entire nation and contribute to the socioeconomic development of the country. Over the past nineteen years, the com-

pany’s social investment programmes have spanned the length and breadth of the country with thousands of projects ranging from healthcare and education to preserving the environment and road safety; reecting its sincere interest to embed the principles of social responsibility as part of its core existence. Through strengthening the cooperation between the public and private sector, the projects and programmes aim to supplement the national economy and ambitious

omanlng.com

oman-lng-l-l-c-

development plans implemented in the Sultanate. Oman LNG Development Foundation supports Oman LNG’s ambitious vision and dedication towards CSR. The Foundation champions private sector contribution to the development of Oman and its people, through CSR and citizenship, as an active contributor to social and societal welfare, and through proactively addressing community needs.

@OmanLNG

Oman LNG

omanlngllc


F EATURES

The mixed impacts of coronavirus on the Latin American gas markets In the run-up to the virtual Latin America and Caribbean Gas Conference in February 2021, and a pre-event on November 26, organised by EnergyNet in partnership with IGU and supported by OLADE and ARPEL, this Wood Mackenzie report looks at recent developments.  By Mauro Chavez and Rodrigo Rosas Latin America and the Caribbean is

closely to industry development, and

measures tightened to contain the

one of the regions that have been hit

so, industrial gas demand. With con­

spread of the coronavirus, the severity

harder by the coronavirus disease (see

tinuous GDP growth since 2005, indus­

of economic impacts deepened while

Figure 1). The pandemic affected Latin

trial gas demand had always moved in

also eroding energy needs.

America at a time of economic weak­

the same direction – including the

ness and macroeconomic vulnerability.

period between 2007-2009 when both

visible. The coronavirus pandemic has

The mix of external and domestic

declined due to the global financial

taken its toll over industrial activity

factors could pose challenges for the

crisis and the swine flu pandemic.

and the whole market, reducing

development of the gas and power industries in the region.

Once again, history repeats itself.

Demand-side impacts are already

energy needs significantly. In April,

Since 2019, GDP growth has slowed

we observed a 6.1% decline in elec­

due to political and regulatory

tricity demand year-over-year, while

Mexico

uncertainties causing turmoil in the

gas decreased by 10% compared to

Gas markets have suffered as industrial

Mexican economy. Before the corona­

the previous month.

activity has stalled in the last months.

virus crisis, we estimated Mexico’s eco­

For Mexico, Covid-19 impacts are evi­

nomic activity would regain momen­

analysis, a 5% decline year-over-year

dent. Mexico’s GDP expansion is tied

tum in 2020. But, as social distancing

in domestic gas demand can be

According to Wood Mackenzie’s

expected, affecting the two engines of growth; the industrial and power

GDP growth (%)

GDP growth in Latin America 1990-2020

sectors (see Figure 2). However, a glimmer of hope remains on the

15% 10%

horizon. While the country is facing

5%

new regulatory changes impacting renewable energy investments, gas-

0

based capacity remains the base-

-5%

load technology.

-10%

Just in 2020, close to 3 GW of

-15% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Latin America & Caribbean

Mexico

Brazil

Argentina

flexible and highly efficient combinedcycle plants are scheduled to start operations, which follows several new

Figure 1.

20  The mixed impacts of coronavirus on the Latin American gas markets


F EATURES

supply below our previous forecast

bcf/d

Mexico gas demand forecast

until the 2040s, featuring a material price premium for Henry Hub. These

8

effects quickly cascade down to

7 6 5

Mexico, pressuring prices upward.

4

We anticipate a national average of

3

US$3.8/mmbtu in 2021-2025, an

2

increase of 53% from current levels.

1 0 2015 Power

2016 RCA*

2017 Industrial

2018

2019

Oil & Gas**

2020

Brazil and Bolivia

Pre-coronavirus forecast

Brazil is one of the countries that

* RCA = Residential, commercial and agriculture **Oil & Gas excludes Pemex E&P demand

suffered the most in terms of gas Figure 2.

demand reduction (see Figure 3).

large combined-cycle plants in 2019

per day on average by year-end,

Due to this gas demand reduction,

as well. Although no material growth

despite the fact that Permian gas

Petrobras had to force thermal power

in gas demand for 2020 awaits, over

production is 13% lower from March

operation to maintain the minimum

the long term, we remain confident

peak levels after a series of shut-in

feed gas volumes required to ensure

the market will continue to grow at

wells. Looking ahead, US piped imports

the integrity of its upstream produc­

2% (compound annual growth rate)

remain as the primary supply source,

tion. This came along with a set of

throughout 2040.

increasing by 42% in 2030, reaching

force-majeure claims, including the

the 7.3 bcf (204 mcm) per day mark.

sole longstanding import agreement

Pipeline imports from the United States saw a significant decrease in

Following an unprecedented oil

between state-owned companies

April, following the pandemic effects.

market collapse, North American

Our pre-coronavirus forecast consi­

associated gas supply has been sharply

dered 5.4 bcf (151 mcm) per day from

hit. Even as oil prices recover, we

for Bolivia’s gas market, as Brazil’s

pipeline imports, but as mentioned

expect a lower rig-to-price relationship,

offtake hit a record low of 10 mcm/d,

before, the economy took a heavy

meaning a North American associated

and Argentina was importing just 10.5

Petrobras and Bolivia’s YPFB. April 2020 was extremely difficult

blow. Economic activity decreased (4.6 bcf or 129 mcm per day) monthover-month. However, recovery in gas flows is already visible, as the lockdown measures began to be eased in early

Demand gas reduction in Brazil due to coronavirus crisis Mcm/d

by 17.3%, while imports fell by 14%

80

76.0

70

0.2

-3.2

66.0

-7.0

60

Difference in demand Feb-Mar

50

-7.5

30

Wahalajara corridor – a pipeline linking

20

the Waha play in the USA’s Permian

10

basin with Guadalajara in Mexico –

0 February 2020

in mid-2020, we estimate pipeline

-0.8

Difference in demand Mar-Apr

40

June. With the completion of the

54.4 -3.3

Power sector

March 2020 Fertiliser

Refinery

April 2020

Local distribution companies (LDCs)

imports to recover to 5.2 bcf (146 mcm) Figure 3.

The mixed impacts of coronavirus on the Latin American gas markets  21


F EATURES

mcm/d. And on top of that, domestic

reform in Brazil, as Petrobras currently

economy was struggling. The govern­

demand fell to to 7 mcm/d, and on

controls 100% of transport capacity,

ment at the time capped prices to end-

some weekends 4 mcm/d. This created

which avoids commercialisation bet­

users in an attempt to support the

an issue to manage reservoir integrity

ween independent pre-salt producers

economy. However, price regulation

for non-associated gas fields.

and local distribution companies,

proved uneconomical for producers,

thermal power plants and industries.

and upstream investment stalled,

sector will be the most affected in

At the writing of this report, the

causing supply to go into decline.

the long-term. In recent years, Latin

Congress has approved the vote of the

America held a set of auctions for

New Gas Law, which will provide legal

created supply shortfalls, and ulti­

renewable projects that resulted in

background for new gas transport

mately the government introduced gas

a capacity expansion for electricity

agreements using the entry-exit tariff

price subsidy regimes from 2013 to

using demand forecasts based on

system. This was not encompassed by

resuscitate the country’s exploration

high GDP performance. Therefore, the

the 2009 Gas Law.

and production sector.

Gas consumption in the power

oversupply of renewables has become

Coronavirus and the oil price crash

The drop in production eventually

Argentina appears to be reviving

more critical with electricity demand

have also resulted in major capex

this approach. The new administration

destruction in the medium-term, and

investment cuts in the region. Wood

is introducing intervention to cap gas

this will result in low utilisation factors

Mackenzie’s upstream team estimates a

prices to support the country’s strugg­

of thermal power plants and limited

capital spend down by 39% in 2020 in

ling economy. As history has shown us,

opportunities for thermal power

Latin America compared to pre-crash

there will be a supply decline response.

auctions in South America.

levels; and the countries most affected

Unlike before, these days 40% of

are Venezuela, Brazil and Argentina.

production is from steep-declining

Brazil continues to attract M&A investments, as Petrobras is executing

unconventional fields. This indicates

according to schedule its commitments

Argentina

that supply shortfalls will be steep and

to divest gas transport and distribution

In the case of Argentina, on top of the

swift. Having ended the contract for

assets in Brazil. Over this year, Petrobras

macroeconomic and coronavirus crisis,

one of its two floating storage and

is selling its 51% participation in

the new administration started gas

regasification units (FSRUs) in 2018,

Gasbol, 10% participation in NTS, the

price control measures. To maintain

the country is now likely to need to

transport company of the southeast

low gas prices for end-users, the new

bring back an FSRU as soon as next

of Brazil, and 51% in Gaspetro, the

administration has imposed a tariff

year, and LNG imports are likely to rise

holding that owns 19 local distribution

freeze until the end of 2020.

over US$0.7 billion by 2022 from

companies across Brazil. In July, it

Enargas, the national gas regu-

US$0.4 billion in 2019. As LNG imports

concluded the sale of its remaining

latory agency, uses an exchange rate

are paid by the Argentinian state

10% of the gas pipeline company TAG

of ARS$42/US$1 for gas prices to regu­

energy company, IEASA, with transfers

to the consortium Engie and CDPQ,

lated users when nowadays the

from the national treasury, this could

a Canadian institutional investor.

exchange rate is over ARS$70/US$1.

add more stress to Argentina’s capacity

In addition to this, Enargas has not

to pay external debt.

In 2020, it was expected that there would be a public call to tender trans­

revised its transportation and

port capacity for NTS and TAG, but this

distribution tariffs since April last year.

is likely to be postponed to 2021. This is pivotal for the desired gas market

Argentina has been in a similar situation before. In 2002, the country’s

22  The mixed impacts of coronavirus on the Latin American gas markets

Chile For Chile’s gas market, the sharp decline in Argentina’s domestic


480000

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9555000

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81°15'

465000

XXIII . !

MANCORA

4°15'

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9525000

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LOS ORGANOS

EL ALTO

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LOBITOS

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4°30'

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9480000

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LEGEND

4°45'

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2.5

0

MAIN HIGHWAY BIDDING ROUND BLOCKS

CRS: UTM 17S WGS84 5

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| n

CITIES

10

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465000

81°15'

480000

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XIII-A BLOCKS UNDER CONTRACT REFINERY 495000

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9510000

XV . !


F EATURES

c  El Salvador’s gasto-power project will see the start of LNG imports by the end of 2021. Work has started on a regasi­ fication module that will be installed onboard the BW Tatiana (formerly the Shell tanker Gallina) which is being converted into an FSRU by BW LNG.

production will compromise gas

and the Dominican Republic report

from oil-fired generation to decrease

piped imports. Fortunately for the

an increase in LNG imports. However,

its exposure to price volatility, reduce

Chilean buyers, this is happening

we expect LNG imports to decrease

generation costs and comply with

in a record low LNG price environ-

by 4% from our pre-coronavirus

environmental policies.

ment, so importing LNG is at rela-

forecast for both islands.

tively little incremental cost to

Mauro Chavez is a Principal Analyst and

The pandemic effects leave our

Argentinian pipeline imports. And

view in the Caribbean relatively

Rodrigo Rosas is a Senior Analyst both

Chile could increase its LNG imports

unchanged over the next years, given

covering Latin America gas and LNG at

to support its coal decommission-

the signifi­cant efforts to shift away

Wood Mackenzie (www.woodmac.com).

ing programme.

In the Caribbean, there are mixed stories. In Puerto Rico, the biggest LNG market in the region shows a notable decrease in LNG imports due to the combined impact of the earthquake in early January and

LNG imports in Latin America and the Caribbean 2013-2020 mmtpa

Caribbean

18 16

Puerto Rico

14

Panama

12

Mexico Jamaica

10

Dominican Republic

8

Colombia

6

Chile

coronavirus. Accord­ing to the US

4

Brazil

Department of Energy, between

2

January and April, the island received

0

8.274 bcf (232 mcm), a 60% decline year-over-year. In contrast, Jamaica

Argentina

2013

2014

2015

2016

2017

2018

2019

2020

Note: El Salvador and Nicaragua are expected to start LNG imports by the end of 2021.

Figure 4.

24  The mixed impacts of coronavirus on the Latin American gas markets


F EATURES

Cost-effective and clean ways of producing hydrogen from natural gas Hydrogen has an important role to play in meeting climate targets and can be produced from natural gas with zero greenhouse gas emissions. Here we look at developments that can be applied in the EU. By Alexander Ishkov, Konstantin Romanov, Roman Teterevlev and Maximilian Kuhn The step-by-step decarbonisation

as studies consistently indicate that

of natural gas, which produces in the

of the EU’s energy system based on

hydrogen produced from water by

order of 9 kg of CO2e per kg of hydro­

expanding the use of natural gas, using

electrolysis using renewable energy

gen. However, the proposed carbon

methane-hydrogen blends and pro­

will be significantly more expensive

intensity target is half this which

ducing hydrogen from natural gas can

than low- and zero-carbon hydrogen

means that the continued use of con­

reduce greenhouse gas emissions

produced from natural gas, certainly

ventional steam methane reforming

(GHG) by up to three-quarters.

up to 2050 and probably beyond. This

(SMR) would require a substantial

is because water electrolysis is highly

scaling up of carbon capture, use

natural gas lies in the possibility of

energy intensive, requiring between

and storage technologies (CCUS).

producing CO2 emissions-free hydro­

48 and 77.5 kWhel per kg of hydrogen

gen from methane. This will be vital

produced (based on published data).

Indeed, the long-term potential of

for the EU to achieve its objective of a cost-effective decarbonisation policy,

Currently, hydrogen is most com­ monly produced via steam reforming

Methane pyrolysis An alternative and highly promising hydrogen production method is methane pyrolysis which decomposes methane into hydrogen and solid car­

Methane pyrolysis has significant potential to create new market opportunities METHANE PYROLYSIS 4 GAS

1

THERMAL PYROLYSIS CATALYTIC PYROLYSIS PLASMA PYROLYSIS

Grid / RES

MOLTEN MEDIA PYROLYSIS

Н 1.008

6

C 12.011

without direct CO2 emissions. A high temperature above 1,000ºC is neces­

Low carbon Cost effective

sary for the thermal decompo­sition. The use of a catalyst helps to increase the reaction rate and thus reduces the

hydrogen

carbon

bon in the absence of oxygen and, thus,

The EU market

reaction temperature. Different tech­ nology routes are based on methane pyrolysis including thermal, catalytic

Environmentally friendly

(as well as thermo-catalytic), plasma and molten-media processes. Major EU companies and institutes

Note: Hydrogen atomic number 1 and atomic mass 1.008; Carbon atomic number 6 and atomic mass 12.011.

such as BASF, the Institute for Advanced Sustainability Studies (IASS), the

26  Cost-effective and clean ways of producing hydrogen from natural gas


F EATURES

readiness levels are based on a scale from 1 to 9 with 9 being the most mature technology.) The energy required for the pyrolysis reaction can be provided by grid or renewable electricity, natural gas feedstock or hydrogen produced as part of the process. The electricity consumption for methane pyrolysis is estimated at up to 20 kWh per kg of hydrogen. Uses of solid carbon Solid carbon is a valuable material for the industrial and building sectors as Karlsruhe Institute of Technology (KIT),

catalytic methane pyrolysis. Russian

well as in electrical engineering and

Linde and Thyssenkrupp have focused

companies such as Gazprom are inv­

electronics, which allows for an overall

on a thermal decomposition process

estigating plasma methane pyrolysis.

optimisation of production costs.

and molten metal systems. Monolith in

The technological maturity of methane

the USA is pursuing plasma technology

pyrolysis pro­cesses is estimated to be

filler in the manufacture of car tyres

and the Australian Hazer Process uses

in the range of TRL 4-8. (Technological

and also as a pigment in plastics,

Carbon black is used as a reinforcing

z  As well as hydrogen, methane pyrolysis produces high-purity, granular carbon. v  BASF is one of the companies experi­ menting with methane pyrolysis in special laboratories and it is working to implement the process on a pilot scale

Cost-effective and clean ways of producing hydrogen from natural gas  27


F EATURES

c  Carbon nanotube filaments, called yarn, can be com­ bined with carbon fibre to make toughened braided textiles. The strong, lightweight material is cured with a polymer matrix to strengthen compo­ sites for aircraft applications like fan blades and fuselage components.

printing inks and paints. Other uses of

carbon. Carbon fibres are used as part

technologies is that these technologies

carbon black include as an ultraviolet

of composite materials. Graphene is a

can potentially use methane from any

(UV) stabiliser in plastic pipes and in

relatively new material known for its

source, including biomass, industrial

electronics. To facilitate handling, car­

high strength and conductivity with

and animal waste as well as sewage,

bon can be formed into pellets. Carbon

applications in the aerospace and

and can be an important part of the

is non-toxic should components leach

automotive sectors, for wind turbines

EU’s future circular economy. In

out or release into groundwater when

and in construction. Possible appli­

addition, they can be used in the

stored underground.

cations include semiconductors,

regions where CCUS is unavailable thus

Another solid carbon product,

batteries and electronics. Nanotube

expanding the opportunities for low-

synthetic graphite, can be used as an

carbon is used in polymers, plastics

and zero-carbon hydrogen production

anode in lithium-ion batteries, which

and batteries.

in the EU. Unlike gaseous CO2, solid

are used in portable electronic devices

The utilisation for soil improvement

carbon is easy to store and is non-toxic.

such as smart phones, cordless devices

with positive environmental effects

or power tools and electric vehicles.

(long-term carbon soil sequestration)

Economic and emissions benefits

Synthetic graphite can also be used

is another market for solid carbon.

Perhaps most importantly, hydrogen

as an electrode in steel production in

The production of solid carbon as

produced from natural gas via methane

electric arc furnaces or as a refractory

a part of the hydrogen production

pyrolysis can have truly zero and even

(heat-resistant material) in furnaces

process will therefore not only reduce

negative emissions. These hydrogen

and crucibles.

GHG emissions but will also create new

technologies produce no direct СО2

market opportunities. Another compe­

emissions, and their indirect emissions

titive advantage of methane pyrolysis

depend on the carbon footprint of

Other carbon products include graphene, carbon fibres and nanotube

28  Cost-effective and clean ways of producing hydrogen from natural gas


F EATURES

natural gas and electricity used to

of hydrogen) and steam reforming

developing hydrogen energy in the

power the process.

($1.03-$2.16 per kg of hydrogen).

EU. A step-by-step decarbonisation

Technologically driven minimal

of the EU economy based on the use

fugitive methane emissions from

Technology neutrality

of methane-hydrogen fuel and later

properly sourced and transported

In the light of these facts, when realis­

hydrogen could ensure the cost-

natural gas, objectively verified, could

ing the EU’s Hydrogen Strategy, it is

effective achievement of the EU’s

be potentially offset through

important that the technology neutral­

climate goals for 2030 and 2050 while

compensatory measures (for example,

ity principle is upheld. Life cycles

using existing gas infrastructure for

[re-]forestation). And where renewable

embracing all sustainable development

natural gas supplies as a feedstock for

electricity is used, the carbon intensity

criteria and externalities – including

hydrogen production.

of the process is substantially reduced.

but not limited to GHG emissions –

The carbon intensity of hydrogen

need to be fully taken into account.

produced by plasma methane pyrolysis

Implementing discriminatory

Professor Alexander Ishkov is Deputy Head of Gazprom’s Strategy Department

is estimated at 1.2-1.6 kg of CO2e per

mechanisms aimed against hydrogen

– Head of Directorate and a Doctor in

kg of hydrogen (taking into account

produced from natural gas in compli­

Chemistry. Dr Konstantin Romanov is

the transportation of gas via Nord

ance with carbon intensity require­

Head of Division at Gazprom’s Strategy

Stream and the use of renewable

ments could result in a cost-inefficient

Department and a member of IGU’s

power – wind, solar). Thus, the

decarbonisation policy in the EU and

Distribution Committee. Roman

hydrogen produced by methane

even might lead to an increase in

Teterevlev is Deputy Head of Division at

pyrolysis corresponds to “low-carbon

GHG emissions.

Gazprom’s Strategy Department and a member of IGU’s Strategy Committee.

hydrogen” in accordance with the

It therefore makes sense to exploit

published EU Hydrogen Strategy.

the ecological, economic and techno­

Dr Maximilian Kuhn works in Group

By way of comparison, the figures

logical advantages of natural gas while

Relations (GR/PR) at Gazprom Germania.

for electrolysis (wind, solar) stand at 0.6-3.7 kg of CO2e per kg of hydrogen (the assessment takes into account the following stages: the construction of units, supplies of feedstock, direct emissions). Furthermore, and pending further research into using sea water, scaling up water electrolysis technology in the EU would require significant quantities of pure water. Methane pyrolysis also offers advan­ tages from an economic point of view. With hydrogen production costs of $1.36-$1.79 per kg currently forecast in the literature, pyrolysis is compe­titive with electrolysis ($4.61-$14.87 per kg

A researcher examines a wafer with carbon nanotubes.

Cost-effective and clean ways of producing hydrogen from natural gas  29


Green gas deployment Naturgy promotes the generation of renewable natural gas in Spain, a booming green fuel that is part of decarbonisation, contributing to the fight against climate change and is also part of the future Circular Economy. The gas industry, like the rest of the

the system and, specifically, in France

pursue an important number of initiatives

productive sectors in Spain, is placing

it is expected that by 2050 all gas will

related to the various forms of RNG,

increased emphasis on their environ-

be renewable”, points out the Spanish

investigating: the upgrading of biogas,

mental performance and strategy. In this

Gas Association (Sedigas).

generated from waste products or crops to

respect, it is striking to see how the gas

Sedigas believes that half of the

produce biomethane; and the gasification

sector has been promoting numerous

domestic demand for gas in Spain

of biomass, crops and or residuals to

renewable natural gas generation activities

could be covered by 2030 with renew-

produce renewable synthetic gas that is

and projects over recent years, a new

able gas given the volume of existing

then treated to produce Bio-SNG.

green fuel that is expected to displace

waste products.

a considerable part of natural gas consumption in the future. The increase in the use of renewable

This potential volume of renewable

In 2019 Nedgia (the gas distribution subsidiary of the Naturgy group) injected

gas production could be equivalent to

renewable natural gas (biomethane) for

a quarter of the current demand for

the first time in its distribution network.

natural gas can lead to a significant

gas in Spain in the most conservative

It was RNG produced from the upgrading

reduction in greenhouse gas emissions

case, and even “up to 65% of the current

of biogas that is generated in the treat­

when it is injected into the natural gas

demand for natural gas provided that its

ment of waste water sludges in the Waste

distribution network or used as fuel in

development is promoted decisively and

Water Treatment Plant (WWTP) in

the transport sector. According to many

without longer delay”, as explained by

Butarque, Madrid. The facility, operated

experts it is expected that this energy

the experts Xavier Flotats and Álvaro

by Nedgia, is part of the activities of the

will contribute significantly to the

Feliu, authors of the report “Los gases

European ECO-GATE consortium project

decarbonisation of the gas sector in

renovables. An emerging energy vector”,

to promote sustainable mobility that is

coming years.

published by the Naturgy Foundation in

cofinanced by the European Union

June 2019.

through the CEF-Transport programme.

Sweden are leading the way in the

Naturgy, in the lead

carried out by the company is called

development of this new energy vector

Naturgy has been working for several

Unidad Mixta de Gas Natural Renovable

with a large number of biomethane

years on promoting RNG in Spain.

in Spanish. This project is a joint initiative

production plants already in operation,

The company’s activities have focused

being carried out by Naturgy and the

while in countries such as France, Italy,

on the realisation of pilot projects to

technology centre Energylab located

and the Netherlands there are already

investigate RNG production with the

in Vigo, Spain with the Bens WWTP

measures in place promoting the develop­

final ambition to maximise yields while

located in A Coruña, north-west Spain.

ment of these plants. “In Europe there are

reducing production costs. The company

The principal aim of the project is to

700 plants injecting renewable gas into

has participated in and continues to

investigate various new technologies

European countries such as Germany, the United Kingdom, Denmark or

Another representative projets being

to obtain improvements in the production of biogas, biomethane and in the development of a novel bio-methanisation concept. The project is financed by the European Union within the framework of Programa Operativo FEDER Galicia 20142020. The biomethane produced so far has served to fuel an interurban bus in the A Coruña area and three operating vehicles from the plant, together making journeys of 135,000 km. In total, this small research project led to a reduction in emissions of around 6,000 tonnes of CO2 A bus in Galicia (Spain) fuelled by RNG.

in 2019.


Helping the planet means investing in the environment. That’s why we’ve invested over 1.4 billion euros in renewables over the last 3 years, thereby supplying 3 million homes with energy from the wind, water and sun.

naturgy.com


F EATURES

The roll-out of hydrogen in Korea Hydrogen has a major role to play in decarbonisation around the world but Korea is so far the only country to have enacted a hydrogen law.  By Yoon Namgoong With the drive to combat climate

the Hydrogen Law on January 9, 2020

of the by-product hydrogen was used

change, moves to transition from the

provided a legal basis and a much-

outside the complexes being supplied

carbon economy to a hydrogen eco­

needed driving force to usher in the

via pipelines totalling 200 km in length

nomy are picking up pace around the

hydrogen economy.

(280,000 tons) and 540 tube trailers

world. Many countries are developing

At present, major advanced coun­

policies to grow the hydrogen energy

tries such as Japan, the US and mem­

In terms of utilisation, Hyundai

market and Korea is no exception,

bers of the EU are pushing ahead with

Motor has emerged as a world leader

seeing hydrogen as a new engine for

various policies to foster the use of

in hydrogen fuel cell technology by

economic growth with a key role to

hydrogen, but Korea is the only coun­

launching the world’s first mass-

play in the country’s shift to a low-

try that has enacted a law to under­pin

production fuel cell electric vehicle

carbon economy over the long term.

the systematic and effective develop­

(FCEV), Tucson ix, in 2013. The total

ment of the hydrogen economy.

number of FCEVs jumped to 5,083 in

The Korean government released a roadmap for ramping up the hydrogen

(20,000 tons).

2019, which is 5.7 times higher com­

economy on January 17, 2019. Subse­

Current status of Korea’s hydrogen

pared to 2018, served by 34 hydrogen

quently, it announced follow-up plans

industry

refuelling stations (see Table 1). Keeping

to build hydrogen infrastructure and

In 2019, Korea’s hydrogen production

up the pace, the Korean government

refuelling stations (October 22, 2019)

reached about 2 million tons, out of

plans to have 10,280 FCEVs including

along with a hydrogen technology

which 70% was by-product hydrogen

buses in operation by the end of 2020.

development roadmap (October 31,

generated from the petroleum refining

As of 2019, there were 3,208 fuel

2019) and comprehensive measures for

process, mainly from three large-scale

cells installed in Korea for power gen­

safety management (December 16,

petrochemical complexes in Ulsan,

eration and residential use. Of these,

2019). Most notably, the enactment of

Yeosu and Daesan. About 300,000 tons

41 fuel cells for power gener­ation have a total capacity of 308 MW and 3,167

Fuel cell electric vehicles and refuelling stations in Korea

Actual

Projection

Year

2017

2022

2018

2019

81,000 6,200,000 (67,000 for domestic use (2,900,000 domestic and 14,000 for export) and 3,300,000 export)

Hydrogen refuelling stations

310

14

34

capacity of 7 MW. Fuel cells for power generation are more advanced in

2040

Production 177 891 5,083 of FCEVs 12

fuel cells for residential use have a total

1,200

terms of capacity and technology than fuel cells for residential use. In terms of hydrogen production, Korea obtains abundant by-product hydrogen, but the country is still in its infancy when it comes to hydrogen

Table 1.

32  The roll-out of hydrogen in Korea


F EATURES

production technology, especially related to natural gas reforming and water electrolysis on a large scale. Currently, hydrogen is transported by tube trailers and low pressure pipelines, which means that there is a need to develop high pressure pipe­ lines and liquefaction facilities. An evaluation of the competiveness of Korea’s hydrogen industry is shown in Table 2. Korea’s hydrogen economy

Korea’s hydrogen supply Year

2018

2022

2030

2040

Supply (=demand)

130,000 tons/ year

470,000 tons/year

1.94 million tons/year

5.26 million tons/year

Means of ① By-production ① By-production supply hydrogen hydrogen ② Hydrogen ② Hydrogen from SMR from SMR ③ Water electrolysis

① By-production hydrogen ② Hydrogen from SMR ③ Water electrolysis ④ Production abroad * ①+③+④=50%, ②=50%

① By-production hydrogen ② Hydrogen from SMR ③ Water electrolysis ④ Production abroad * ①+③+④=70%, ②=30%

Price

4,000 KRW/kg

3,000 KRW/kg

6,000 KRW/kg

Note: SMR = Steam methane reforming. Source: Ministry of Trade, Industry and Energy, Hydrogen Economy Roadmap of Korea, January 2019.

roadmap In January 2019, the Korean govern­

Table 3.

ment announced an ambitious fuel

becoming a leading hydrogen

of hydrogen and 6.2 million FCEVs

cell initiative entitled “Hydrogen

economy by 2040.

(3.3 million for export and 2.9 million for

Economy Roadmap of Korea”. The

The government’s aim is to reach an

roadmap sets out Korea’s vision of

annual production of 5.26 million tons

domestic use, the latter served by 1,200 hydrogen refuelling stations) by 2040. The government also aims to increase the combined capacity of fuel cells for

Competitiveness evaluation of Korea’s hydrogen industry

power generation to 15 GW (domestic,

Classification

Competitiveness

Supply Hydrogen side production

By-production hydrogen Natural gas reforming with carbon capture and storage Electrolysis on a large scale

High Low

Hydrogen storage and transportation

Low pressure piping Tube trailers High pressure piping and composite container Liquefaction and transportation

Moderate Moderate Low Low

natural gas will account for the remain­

Installation cost The number of installed stations

Moderate Moderate

ing 30% (see Table 3). According to the

The number of distributed products The competitiveness of companies and related technology

Low Moderate

Hydrogen charging

Demand Residential use side (fuel cells)

Low

Power generation The number of distributed products (fuel cells) and capacity The competitiveness of companies and related technology

High

Transport use (fuel cells)

The number of distributed FCEVs The competitiveness of Hyundai Motor and related technology

High High

The competitiveness of companies and related technology

Low

Hydrogen-fired gas turbines

High

8 GW and export, 7 GW) by 2040. In 2040, 70% of the total hydrogen production is forecast to come from by-product hydrogen together with water electrolysis and overseas pro­ duction, and hydrogen reformed from

roadmap, Korea will focus on improv­ ing the scalability of hydrogen produc­ tion and enable hydrogen mass pro­ duction by developing water electrolysis technology in conjunction with solar and wind power generation by 2022. The Korean government also plans to establish overseas hydrogen production bases and import hydrogen for domestic uses.

Table 2.

The roll-out of hydrogen in Korea  33


F EATURES

Under this roadmap, KOGAS plans to build 25 hydrogen-producing facilities and operate 500 tube trailers and pipelines totalling 700 km in length to deliver hydrogen produced c  Hyundai Motor’s second-generation fuel cell electric vehicle, the NEXO introduced in 2018, offers more power and has a lighter powertrain.

at the facilities by 2030. KOGAS aims to build 100 hydrogen refuelling stations by 2022 through HyNet, a publicprivate special purpose company. To implement the roadmap up to 2030, KOGAS has set aside a budget of 4.7 trillion KRW ($4.01 billion).

For hydrogen transportation, in

an attempt to facilitate the govern­

addition to the existing tube trailers,

ment’s strong drive towards the

CO2 reduction by ushering in the

Korea will lay out a nation-wide hydro­

hydrogen economy. KOGAS plans to

hydrogen economy

gen pipeline network in the long term.

supply hydrogen to refuelling stations

In compliance with the 2015 Paris

The target price for hydrogen by 2040 is

to the tune of 100% of the demand for

Climate Agreement, the Korean

3,000 KRW/kg ($2.42/kg), and hydro­gen

FCEVs, and just under 60% of the

government decided in December

will be supplied at the same price across

demand for fuel cells and mixed power

2016 to cut greenhouse gas emissions

the country, regardless of distance.

generation. Specifically, out of the

by 37% from its business-as-usual level

Korean government’s 2040 supply

(BAU: 851 million tons CO2-equivalent)

Hydrogen industry promotion

target of 5.26 million tons, KOGAS

by 2030 (domestic 25.7%, overseas

roadmap of KOGAS

plans to supply 3.45 million tons or

reduction 11.3%). However, in July

KOGAS released its “Hydrogen Industry

66% of the national hydrogen demand

2018, the government announced a

Promotion Roadmap” in April 2019 in

(see Table 4).

revised plan that lowered its overseas c  Table 4.

Hydrogen industry promotion roadmap of KOGAS

2022

2030

2040

Mobility

Government FCEVs

81,000 (67,000 domestic)

2,284,000 (108,000 domestic)

6,200,000 (2,900,000 domestic)

29,150

469,500

1,014,500

100

100

100

Domestic demand (tons)

KOGAS Proportion (%)

Supply (tons)

29,150

469,500

1,014,500

Fuel cells

Power generation (GW)

1.5 (1 domestic)

5 (2.5 domestic)

15 (8 domestic)

Residential use (MW)

50

1,000

2,100

Domestic demand (tons)

441,000

1,470,000

4,242,000

Power generation (tons)

420,000

1,050,000

2,000,460

Residential use (tons)

21,000

210,000

441,000

Proportion (%)

100

85.71

57.55

Supply (tons)

441,000

1,260,000

2,441,460

Government

KOGAS

Source: KOGAS, Hydrogen Industry Promotion Roadmap, April 2019.

34  The roll-out of hydrogen in Korea


F EATURES

reduction target while increasing its domestic reduction target to 32.5% (276 million tons). Accordingly, the government plans to reduce 10.3 million tons through CO2 capture, utilisation and storage technology (CCUS). The existing industrial natural gas-based hydrogen production requires application of CO2 capture and utilisation technology (CCU). CO2 emissions generated from producing 1 kg of hydrogen from steam methane reforming (SMR) are estimated to be 9.8kg CO2-equivalent without carbon capture and storage (CCS) or 1.2 kg CO2-equivalent with CCS. The average CO2 emissions generated from producing 1 kg of

Hyundai Motor showcased its hydrogen and mobility solutions at Korea’s H2 Mobility + Energy Show 2020 in July. Exhibits included the HDC-6 Neptune Concept, a hydrogen-powered Class 8 heavy-duty truck.

intertwined with cutting greenhouse

elopment of hydrogen storage

gas emissions.

technology, Korea will also focus on

hydrogen amount to 7.2 kg as of 2020.

CCUS technology over the long term.

However, according to Korea’s hydro­

Priorities for Korea’s hydrogen

gen economy roadmap, the emissions

market

hydrogen society beyond the

are estimated to decrease to 2.4 kg by

This year, the Korean hydrogen

hydrogen economy, the top priorities

2040 owing to a ramp-up of green

market is expected to expand with

are a ramp-up of hydrogen production,

hydrogen supply (renewable hydrogen

wider hydrogen use and active

reduction of hydrogen production

from electrolysis, imported green

hydrogen technology development

cost, expansion of hydrogen

hydrogen, etc.) that does not emit

as the government has allocated a

distribution infrastructure and

CO2 in the production process.

hydrogen policy budget, which is

optimisation of the prices of FCEVs.

In addition, each FCEV replacing

three times higher than that for 2019.

To that end, Korea will also closely

a diesel vehicle will be able to reduce

While hydrogen utilisation continues

cooperate with global entities to set

CO2 emissions by 1.8 tons/year in 2020 and 3.6 tons/year by 2040. If hydrogen

to grow, further technology develop­

international hydrogen standards,

ment is required to nurture the

and engage in a global network of

electric vehicles are put on the street

fields of hydrogen production

technical cooperation with major

instead of their diesel counterparts as

and transport.

energy companies around the world.

planned in the roadmap (forecast

In order for Korea to evolve into a

Under the technology development

domestic demand of 2.9 million FCEVs

roadmap, the government plans to

Dr Yoon Namgoong is Principal

by 2040), Korea will be able to reduce

develop natural gas reforming techn­

Researcher in the Centre for Gas

emissions by about 10 million tons of

ology and electrolysis technology by

Economics and Management at

CO2 every year. As such, achieving the

establishing a joint industry-university

KOGAS and a member of IGU’s

hydrogen roadmap target is

R&D system. In addition to the dev­

Strategy Committee.

The roll-out of hydrogen in Korea  35


F EATURES

Smart gas metering: A Portuguese project A successful pilot project in Portugal has proved the feasibility of operating smart gas meters using Narrowband IoT technology.  By Nuno Nascimento and Mariana Paiva Galp Gás Natural Distribuição (GGND)

collect data on the application of smart

is the leading gas distribution system

gas meters (SM) in a Portuguese con­

operator (DSO) in Portugal, with

text. Given that the chosen communi­

around a 70% market share.

cation technology was Narrowband-

The gas distribution sector is

Internet of Things (NB-IoT), this PoC

currently in a transition phase, given

has had a disruptive and pioneering

the new EU Directives regarding sus­

nature at the national level, by being

tainability, energy efficiency and the

the first smart gas metering project

progressive introduction of renewable

with this type of wireless IoT solution.

fuels in the different energy fields.

The details, goals and key performance

In 2018, as part of the “Clean Energy for All Europeans Package”, a new

indicators (KPIs) of the pilot project are presented below.

amending Directive on Energy Effici­

The smart meters used in the pilot project were manufactured by Pietro Fiorentini.

ency was agreed which establishes a

Pilot project

package of energy efficiency measures.

The pilot project was deployed in

As regards natural gas meters, it calls

Lisbon by GGND, as the gas DSO, and

ing five back-ups) were installed in the

for a metering system that enables the

by NOS Comunicações, as the

premises of non-household consumers.

provision of consumption information

communications operator. The chosen

The pilot started in April 2019 and

in real-time when this “is technically

SM manufacturer was Pietro Fiorentini,

lasted 12 months. All meters were

feasible and financially reasonable”.

and the meter data management

configured for the periodicity of

(MDM) software system was provided

communication and the possibility of

by Terranova Software (see Figure 1).

entering a PIN to reopen the shut-off

To this end, GGND developed a proof of concept (PoC) in order to

During the project, 100 SM (includ­

Main companies involved in the pilot project NB-IoT module

Hardware and firmware adaptation

Connectivity

Figure 1.

38  Smart gas metering: A Portuguese project

Technological tests

Application layer

Project management


F EATURES

valve after closure following an intru­

 Low cost: given that the smart

each periodic check. In Portugal,

sion or emergency. The communi­ca­

metering solution is likely to be

current analogue gas meters are

tion periodicity of the SM was divided

deployed on a large scale, it is

periodically checked after 20 years and

into 10 groups of 10, ranging between

extremely important that the

from 2031 the period will be 12 years.

once a week (minimum communi­

chosen communication techn-

cation frequency) to 16 times a

ology entails low costs.

analysed during two distinct periods:

day (maximum).

Given these necessities, it was

 Between April and the second

The configuration of the chosen SM

concluded that low power wide area

week of December (average

model can occur locally (using the ZVEI

technologies were the best fit for the

number of days between collected

port) or remotely, always by means of

pilot project and of these technologies

data: 232 days). This was the initial

the device language message specifi­

NB-IoT was chosen.

phase of the pilot project, which

cation protocol. In case of release of a

NB-IoT technology is distinguished

The wear level of both batteries was

included the installation phase.

new firmware version, the update can

by deep indoor penetration, a large

During this period, many com­

also be performed remotely. It is also

number of connected devices, low

mands were sent to the SM aggra­

possible to replace the SIM card

data rates, low energy consumption,

vating the battery wear level;

present in each smart meter.

bidirectional communication and

 Between the third week of

optimised network architecture. As it

December and May (average

test in a real pilot environment the

operates with licensed frequency

number of days between collected

performance of the chosen solutions,

bands, it can guarantee service level

data: 154 days) during which the

assessing their technical and economic

agreements providing excellent sec­

number of commands sent to the

viability to sustain a cost-benefit

urity and quality of service. In addition,

devices was reduced (i.e., similar

analysis which, depending on its

it is very flexible and can operate in 2G,

conditions to a real environment).

conclusion, may be submitted to the

3G and 4G bands (and will evolve over

Figure 2 (overleaf) illustrates the

regulatory authority for cost recog­

the next few years to 5G), eliminating

significant difference in NB-IoT

nition, enabling a national roll-out.

the need for a gateway, which saves

transmission battery consumption

cost in the long run.

between the pilot’s initial phase with

The main goal of this project was to

The IoT solution

many com­mands and the second

A smart metering project presents

KPIs

phase in which these commands were

several requirements that must be met

Battery consumption

reduced (com­parable with utilisation

by the wireless communication tech­

Each meter in Pietro Fiorentini’s RSE

under real conditions). As a result, and

nology, namely:

series has two independent batteries:

especially for the first five groups, there

 Strong coverage and long-range:

the metrological one, which cannot be

is a con­siderable difference in the

some SM might be located within

replaced, and the NB-IoT transmission

estimated battery life.

building basements. As such, the

battery, which can be replaced.

It should be noted that the results

The evaluation of battery consump­

represent the average obtained for

tion is a critical KPI for this project due

each group and directly depend on

 Long battery life (low power usage/

to its direct link with the associated

the communication success rate,

high energy efficiency): batteries

costs. This is especially important for

which could explain why the group

must last for the lifetime of the

the metrological battery, as it deter­

that communicates three times a

device; and

mines the time gap required between

week has a higher estimated battery

network connection must deliver strong penetration and reach;

Smart gas metering: A Portuguese project  39


F EATURES

2000

39 35

1600 25

27 25

20

1200

17

22 800

10

15 10

5

1x week

2x week

3x week

5

9

400 0

15 8

4x week

7x week

4

5

3

14x week

21x week

35x week

2

2

2

2

70x week

112x week

Battery consumption (days) (April - December)

Battery consumption (days) (December -May)

Estimated battery life (years) (April - December)

Estimated battery life (years) (December - May)

Estimated battery life (years)

Battery consumption (days)

NB-IoT transmission battery consumption according to communication frequency of the SM

5

-5

c  Figure 2.

life than the group that communicates

(activity of the motherboard, shut-off

SM and the analysis of this is divided

twice a week.

valve cycles, for example) but to

into three periods:

varying degrees. Nevertheless, the

I April and May 2019: during this

between the battery consumption in the

number of communications has an

time 53 SM were installed in an

two phases of the pilot is less evident

impact on the metrological battery’s

area with controlled coverage,

than that presented in the transmission

consumption, since it is used to

provided by Huawei cells;

battery analysis, which is also reflected

connect the transmission module.

As shown in Figure 3, the difference

II June to September 2019: during

in the estimated battery life. This is

these months the remaining SM

because the number of commands

Communication success rate

were installed, completing the 95

doesn’t strongly affect the autonomy

If a high success rate is guaranteed,

units. Due to the lack of locations

of the metrological battery. Unlike the

on-site meter readings will be greatly

where the SM could be installed,

NB-IoT battery that only runs the

minimised or even dismissed, increas­

the pilot area was extended to

remote communication interface, the

ing the efficiency of the entire system.

other municipalities, which forced

metrological battery’s autonomy is

Figure 4 shows the overall successful

the connection of new Nokia sites

influenced by most peripherals

communication rate for installed

(yet to be tested). At this point, c  Figure 3.

25

300 21

20

20

20

20

21

250 200

20 20

20 19

19 18

19 17

20

17 16

150

13 14

12 12

15 10

100 5

50 0

1x week

2x week

3x week

4x week

7x week

14x week

21x week

35x week

70x week

Battery consumption (days) (April - December)

Battery consumption (days) (December -May)

Estimated battery life (years) (April - December)

Estimated battery life (years) (December - May)

40  Smart gas metering: A Portuguese project

112x week

0

Estimated battery life (years)

Battery consumption (days)

Metrological battery consumption according to communication frequency of the SM


F EATURES

4

60

other municipalities/areas to consider. The “guard band” function was also activated, which reduced

39

67

72

Communication success < 90%

9 4

9

ar M

ua r

y

ch

6

br

Ja

nu ar

m be

y

r

r

13

90% ≤ Communication success < 98%

14

Fe

9 4

15

ce

16

m be

23

De

15

r

ril Ap

17

27

8

ve

6 2

5 2

8

3

to be

4

Se

during this time there were no

36

33

0

III October 2019 to March 2020:

42

63

72

47 44

30 20

53

46

40

10

b  Need for software updates.

98%

97%

No

50

r

nearby cells;

97%

97%

95%

27

Oc

to suffering interference from

98%

96%

92%

em be

thousands of devices, in addition

70

87%

gu st

result, shared the network with

91%

87%

pt

was operating over 4G and, as a

80

Au

in “in band” mode, meaning that it

94%

90

Ju ly

the fact that NB-IoT was being used

100

Ju ne

a  Existence of interference, due to

ay

was stabilised:

Overall successful communication rate for installed SM (excluding outliers*)

M

the coverage of the new meters

Number of installed SM

several challenges were posed until

Communication success ≥ 98%

*Outliers = SM with a communication success rate ≤ 33%

Figure 4.

the inter­ference caused by the

some limitations, such as

nicating, thereby notifying the

surrounding cells. Updates were

connectivity interferences or

tampering action.

also made to the cells to optimise

decommissioned cells. Shut-off valve tests

the success of the communications. However, there were still cx  The intrusion tests included the removal of the NB-IoT transmission battery (lef t ), coverage with aluminium foil (below ) and inter­ ference with metal barriers (bottom ).

Intrusion tests

The SM used in this PoC have an inte­

In order to assess the resilience of

grated on/off motorised full-bore valve.

the hardware and communication

To understand how the remote valve

technology used in this PoC, several

management system works in a real

intrusion tests were performed.

test environment, a series of shut-off

These included the removal of the

valve tests were performed, includ­ing

NB-IoT transmission battery, coverage

both in singular and in group actions.

with aluminium foil, direct contact

Although this type of management

with water, interference with mag-

feature is not available on analogue

nets and interference with metal and

gas meters, it can be highly beneficial

water barriers.

for commercial purposes, such as:

Of these intrusion tests, the

when the battery change is not author­

aluminium foil cover test did not

ised or it takes too long, due to a break-

show the desired results since the

in attempted; when there is no com­

foil blocks the communication flow.

mu­nication for a configurable time;

However, it is possible to configure

when the residual battery power is

the SM to trigger the closing of the

below the critical level. Thus, the results

shut-off valve if it exceeds a certain

of these tests will play an important

number of days without commu­

role in the cost-benefit analysis.

Smart gas metering: A Portuguese project  41


F EATURES

Data security approach

meter and the central node that

occurred during the pilot were due to

GGND believes that it is extremely

crosses the communication

network adjustments and interferences

important to be aware of hacking

provider’s borders; and

capable of being optimised.

attacks that could compromise the

 Network radio frequency (RF): this

From an operational point of view,

system and privacy of its customers.

category aims to certify security on

GGND has not detected any sufficiently

The PoC was designed with the prem­

the operator’s network to ensure

serious barrier to make us discredit a

ise that each SM will share a common

secure access and transmission.

possible roll-out of this type of

APN (Access Point Name) with many

The results of documentary and

technology.

other unknown devices. As it is a group

practical analysis allowed us to identify

of devices that use wireless communi­

vulnerabilities in the physical and

still don’t have enough data to allow us

cations and that aggregate data

logical layers that were classified acc­

to draw conclusions. We believe that as

storage, it is necessary to evaluate

ord­ing to the level of impact. As the

use of NB-IoT technology increases,

from the perspective of information

PoC is implemented in a shared

more sensors, equipment and solutions

security in order to guaran­tee the basic

environ­ment with many other devices,

will be available, and the associated

pillars of this data (confidentiality,

a spectrum analysis was also per­

costs will be lower.

integrity, authenticity, auditability,

formed to ensure a minimum inter­

non-repudiation) and mitigate risks

ference caused by unknown RF sources

the world will be increasingly digital

of fraud and loss of information.

on the ISP network. This effort allowed

and companies/utilities will have to

us to define a set of technical measures

provide a service aligned with this

performed by Galp Energia SGPS S.A.

and security policies in order to miti­

path and with the consequent

(GGND’s main shareholder), was

gate the risks added by each vulner­

demands of their customers. The

divided into two phases: a complete

ability detected, ensuring a totally

costs of a digital transformation, for

review of privacy legislation for SM

secure platform.

which we are very attentive, will

The security analysis methodology,

data and a document analysis of safety

From an economic point of view, we

One thing seems relatively obvious:

necessarily be considered in a final

standards adopted by the manufac­

Conclusions

go/no go decision, but we will not

turer; and a practical assessment that

NB-IoT communications have shown

disregard the safety and quality of

was segmented in four categories:

good performance. GGND believes,

service that can be obtained using

 Architecture review: this category

however, that the communication

these new technologies.

aims to compare the literature

system may provide an even more

review on meter technology to

satisfactory response, as more tests are

Nuno Nascimento is Head of Energy

identify undocumented issues and

done, and more problems are solved.

Transition, New Technologies and

specific scenarios where the data

For example, the analysis of the

Communication and a member of IGU’s

can be compromised;

batteries showed that, in case of roll-

R&D and Innovation Committee and

out, we must take into account the

Mariana Paiva is a project engineer in

these tasks make an extensive

periodicity of the communications of

the Energy Transition and New Techn­

analysis of the central unit that

the SM, as these significantly affect the

ologies Department, both with GGND

should receive each of the meter

duration of the batteries.

(www.galpgasnaturaldistribuicao.pt).

 Server operating system testing:

records;

In the case of a potential roll-out,

This is an edited version of a paper that

 Network protocol analysis: covers

NOS Comunicações estimates success

has been submitted for presentation

communication between the

levels above 99% since the failures that

during WGC 2021.

42  Smart gas metering: A Portuguese project


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F EATURES

Why LNG is the best deep-sea marine fuel option today LNG is gaining popularity as a marine fuel as the International Maritime Organisation’s 2030 and 2050 target looms large on the horizon. SEA-LNG’s chairman offers his insight into why LNG as a marine fuel has grown and what its prospects look like in a low-carbon future.  By Peter Keller In recent decades,

sible for the flow of 80%1 of the vol­

technological shift that makes this

LNG as a marine

ume of global trade, while operating

possible, is another.

fuel has been on

out of sight and out of mind. As a

the march. Ever

sector, shipping is often accused of

obstacles to a sector that has already

since the IMO

using its status as the most efficient

had to contend with the recent sulphur

announced plans

way to transport cargo to avoid taking

cap forcing a change of marine fuel use

to commit ship­

urgent action to tackle climate change.

on all deep-sea vessels using heavy

ping to a 40% reduction in CO2

Peter Keller, Chairman of SEA-LNG.

Yet, in the last couple of decades,

Decarbonisation presents numerous

fuel oil (HFO) and a host of other new

global institutions and

regulatory pressures including scrapp­

emissions intensity by 2030, pursuing

environmentalists have sought to bring

age and ballast water management.

efforts towards 70% by 2050, decar­

shipping into global emission

On decarbonisation, the lack of clarity

bon­isation while remaining profitable

reduction targets. Setting targets is

regarding which future fuel to adopt is

has been the biggest challenge the

one thing, however, achieving them,

having a damaging impact on the

international shipping sector has faced.

and facilitating the unprecedented

industry’s ability to make meaningful

Shipping has for decades enjoyed its indispensable role of being respon­

progress. For example, while batteries 1  UNCTAD (2018), Review of Maritime Transport.

may work well for inland ferries, their

LNG is gaining popularity as a marine fuel. Bulk carrier Ilshin Green Iris transports limestone cargoes in the Korean coastal trade for steelmaker POSCO.

44  Why LNG is the best deep-sea marine fuel option today


F EATURES

energy density cannot sustain large vessels on long-distance voyages. Furthermore, the incredible sums of capital required are posing a sub­stan­tial challenge to the sector with esti­mates from University Maritime Advisory Services (UMAS) putting the total cost of decarbonisation at $1.65 trillion by 2050 based upon using hydrogen and ammonia as zero-carbon fuels. These obstacles, while numerous, have not prevented the sector from being in clear agreement regarding the need to take action to decarbonise. But this needs to be done now, using methods that are financially viable, and

LNG bunkering’s growth is supporting the rise in demand for LNG-fuelled vessels. This 7,500 m3 LNG bunkering vessel is due to enter service with FueLNG in Singapore later this year.

which do not require vast amounts of new infrastructure to be built. Through­­

bonisation target of a 40% decrease in

contamination or off-spec issues as we

out shipping’s vast ecosystem, ranging

emissions intensity by 2030 for ship­

see with conventional fuel oils.3

from ship operators, governments and

ping. As an executive at a global bulk

Furthermore, LNG competitive­ness

leading energy majors, many have long

shipowner and operator commented in

remains robust historically against very

realised that there is currently only one

Shell’s Decarbonising Shipping report;

low sulphur fuel oil (VLSFO) according

viable alternative: LNG as a marine fuel.

“It took many years for LNG to become

to research from various future price

viable, it is the only alternative we have

scenarios conducted by McKinsey &

Why LNG as a marine fuel?

today, and it will get us under the 2030

Company. Finally, the abundant future

LNG is the only competitive and widely

IMO target2.”

supply of LNG, which is less susceptible

available marine fuel option today that

Crucially, it also virtually eliminates

than oil to price swings and geopoli­

can act as a strong foundation for

dangerous local emissions of sulphur

tical tensions, puts it in pole position to

future emissions reductions. An inde­

oxides (SOx) and particulate matter

replace conventional marine fuels for

pendent study conducted in collab­

(PM) and cuts nitrogen oxide (NOx) by

deep-sea vessels.

oration with life-cycle analysis experts

around 85%, which far reduces the

thinkstep (now Sphera) showed that

impact of shipping on human health.

LNG can reduce greenhouse gas (GHG)

But how does LNG stack up oper­

The rise and rise of LNG bunkering LNG bunkering’s growth is supporting

emissions by up to 21% compared

ationally against conventional marine

the rise in demand for LNG-fuelled

with current oil-based marine fuels

fuels used for shipping? In comparison,

vessels. For example, in early 2019

over the entire life-cycle from Well-to-

LNG is a purer form of energy and, as

there were just six LNG bunkering

Wake. This reduction is for all GHG

highlighted by the shipping asso­

vessels around the world. As of January

emissions, including methane.

ciation BIMCO, shouldn’t face the

Today, LNG is the only way for deepsea vessels to meet the IMO’s decar­

2  https://www.shell.com/energy-and-innovation/ the-energy-future/decarbonising-shipping.html

3  https://www.rivieramm.com/news-content-hub/ news-content-hub/standardised-tampcs---key-tolng-bunker-pricing-58768

Why LNG is the best deep-sea marine fuel option today  45


F EATURES

Shipping is a conservative industry based upon the fact any investment is long-term with modern vessels’ design life being 25 years or more. Therefore, any decision requires considerable management consideration and a need to make the right decision now on how to reach IMO 2030 and 2050. But wait­ ing for “zero-emissions” fuels such as hydrogen and ammonia, which are still in their infancy being nothing more than conceptual solutions or earlystage pilots, is not a sensible plan. The 23,000 TEU CMA CGM Jacques Saadé is the world’s largest LNG-fuelled container vessel and is part of the fleet of the CMA CGM Group, a global shipping and logistics company.

Since 2010, the number of vessels fuelled by LNG has grown strongly by between 20% and 40% per annum.

2020, there were 12 in operation with a

enters service this year. Early adopter

LNG vessels increased nearly 10% in

further 27 on order and/or undergoing

ports have prospered. For example, the

the year to January 2020 with a nearly

commissioning, the majority of which

Port of Rotterdam exceeded previous

20% growth in overall tonnage ordered.

are due to come into service within the

yearly LNG bunker sales figures by the

Leading energy majors, including

next two years. This underpins future

end of H1 2020, making 2020 its best

Shell and Total, continue their long­

growth and addresses the chicken and

ever year for LNG bunker sales.

standing investment in developing

egg question over the building of LNG-

By investing now in LNG infra­struc­

bunkering infrastructure and backing

powered ships and the rest of the

ture and bunkering facilities, the ship­

LNG’s cause. Elsewhere, Qatar Petro­

infrastructure to support it.

ping industry can save significant sums

leum recently announced their inten­

down the road through the net-zero car­

tion to invest in over 100 LNG carriers

LNG bunkering illustrate the confi­

bon pathway offered by liquefied bio­

to increase their capacity while Gaz­

dence that shipping is having in LNG.

methane (LBM), produced from bio­mass

promneft Marine Bunker, a sub­sidiary of

In particular, recent announcements by

or liquefied synthetic methane (LSM),

Gazprom, noted that the future looks

South Korea, Japan, and the US demon­

produced from renewable electricity.

promising for LNG rather than HFO.

Headline after headline of firsts for

strate their commitment to the expan­

Meanwhile, private sector com­ Popularity among maritime leaders

panies, looking to decarbonise their

“We don’t have much time to study

supply chain are encouraging the

strategic investments to ensure they

things or wait for someone to find the

adoption of LNG with its immediate

have LNG infrastructure to attract LNG-

solution for us”, noted one engine manu­

GHG benefits. Top-two global vehicle

fuelled vessels to their ports. These

fac­turer in Shell’s Decarbonising Ship­

manufacturer VW Group, which

include the 23,000 TEU CMA CGM

ping report. LNG, which is plentiful and

transports half of its vehicle volume

Jacques Saadé, the world’s largest LNG-

available, can enable the sector to take

by sea, has adopted LNG-fuelled car

powered vessel of the global shipping

action now, rather than wait for an alter­

carriers which says the company “not

and logistics CMA CGM Group, which

native solution which may not be viable.

only makes shipping of this type more

sion of LNG bunkering infrastructure. Ports across the world are making

46  Why LNG is the best deep-sea marine fuel option today


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F EATURES

environmentally friendly, but also

last 20 years to stop transporting

in Raahe, Finland, Gasum bunkered

much more efficient.”

ammonia by ships as it is toxic and

ESL Shipping’s dry bulk carrier, m/s

difficult to handle.” Furthermore,

Viikki, with 100% renew­able LBM to

Tackling the methane slip

ammonia slip remains an issue to

transport iron ore for the Swedish

Methane slip is a common argument

be quantified and addressed.

steel company SSAB.

against LNG as a marine fuel. Yet this

In addition, LNG dual-fuel engines

only affects certain types of marine

A foundation for a zero-carbon

can accelerate decarbonisation of the

LNG dual-fuel engines – primarily low-

future

shipping sector. Not only do they

pressure systems. It is often mislead­

Many organisations are focused on

enable significant GHG reductions to

ingly characterised as an incurable

developing commercially viable zero-

be achieved now, but they also offer

design flaw but the original intro­

emissions vessels to operate along

the industry a realistic decarbonisation

duction of dual-fuel LNG engines was

deep-sea trade routes by 2030. By utili­

pathway. LBM and LSM can be trans­

designed to cut local emissions of SOx

sing LBM and LSM as fuels in existing

ported, stored and bunkered in ports

and NOx which they do highly success­

LNG vessels, the industry is getting

utilising existing LNG infrastructure.

fully. Modern technologies continue to

very close to reaching that goal today

Dual-fuel internal combustion engines

reduce GHG emissions with the levels of

as witnessed in recent small-scale tests.

are incredibly flexible and offer ship

methane slip in affected low-pressure engines being reduced fourfold.

LNG-fuelled ships, with little or no modifications, can use LBM and LSM

owners optionality and future fuel choice beyond LBM and LSM.

Significant advances have been

initially as drop-in fuels, allowing the

made by OEMs. WinGD’s new Intelli­

industry to begin to realise significant

CE Delft shows both LBM and LSM to

gent Control by Exhaust Recycling

GHG savings now. Unlike many future

be scalable solutions for the maritime

(iCER) system cuts methane emissions

fuels which are based on theory, LNG

sector, with estimated sustainable

by 50% from its X-DF slow-speed dual-

and the pathway to a decarbonised

global supplies potentially exceeding

fuel engines, a technological break­

deep-sea shipping industry has

the demands of shipping in the future.

through. Elsewhere, MAN Energy

already been successfully demon­

The CE Delft study also confirms that

Solutions is improving its data trans­

strated. For example, in June this year

LBM and LSM will also likely be

SEA-LNG’s commissioned study with

parency for its customers regarding methane emissions among its highpressure ME-GI engines, supporting customers to make environmentally responsible decisions. Other future fuels face similar obstacles. In our Alternative Fuels study, authored by DNV GL, the toxicity of ammonia requires additional safety measures and associated additional operational and safety costs. This is echoed by a comment in Shell’s Decarbonising Shipping report dec­ laring: “we have been trying for the

SIEM’s car carrying division has invested in two LNG-fuelled vessels which can each carry up to 7,500 cars. Pictured is SIEM Confucius being bunkered by Engie Zeebrugge, which will be joined by SIEM Aristotle later this year.

48  Why LNG is the best deep-sea marine fuel option today


LNG is an environmentally friendly green fuel. Petronet LNG Ltd. is supplying 55 MMSCM/D of gas which is approximately 40% of the gas consumption in India.


F EATURES

support from governments and global institutions is a testament to an overall appreciation of its qualities. We cannot wait for a silver bullet to rescue shipping from its decarbon­ isation dilemma. The industry must act now; we do not have the time to wait for untried and theoretical solutions that may or may not be realised in future decades. We’re approaching a complex, multi-fuel future rather than one solution which will magically remedy the situation. What we need is ESL Shipping’s Viikki carried out a voyage in June using 100% renewable LBM.

urgent action based on realistic, affordable and deployable solutions.

commercially competitive relative to

full-scale LNG bunkering infrastructure

LNG, which is safe and scalable while

other low- and zero-carbon fuels.

system by 2025, with a focus on river­

outperforming conventional marine

ine vessels, where local air quality is par­

fuels on a local and GHG emissions

Support in high places

ticularly important for human health.

basis, guarantees this.

While LNG has received considerable

Meanwhile, Japan’s Ministry of Land,

support among the ship-owning

Infrastructure, Transport and Tourism

on the horizon, LNG has a critical role

community, flag states and global

(MLIT) has listed LSM as a future marine

to play in shipping’s decarbonised

institutions are beginning to recognise

fuel that can help shipping achieve the

future. It is encouraging to see its

the importance of LNG with financial

IMO’s 2050 decarbonisation target.

growth as a marine fuel and there’s no

assistance for these projects. The European Union’s Connecting

With the IMO targets looming large

doubt that LNG will put us on a path Waiting is not an option

for decarbonisation.

Europe Facility has already poured

Shipping faces a decarbonisation

considerable investment into LNG

challenge which will require an

Peter Keller is the Chairman of SEA-LNG

projects. For example, Titan LNG

unprecedented overhaul of its entire

(www.sea-lng.org).

recently secured €11 million in funding

operations. Time is not on shipping’s

to add three new bunker barges to

side. As one participant in Shell’s

support future bio-LNG services and

Decarbonising Shipping report

Spanish energy company Enagás has

surmised: “2030 is tomorrow, 2050 is

won over €20 million in funding to

one ship lifetime away”.

build and supply two LNG bunker vessel newbuildings. Beyond Europe, Asian governments

The perceived barriers to the widespread uptake of LNG are being dismantled. The steady increase in

are seeing the potential for LNG. In

global inter-linked bunkering infra­

August 2018, China’s Ministry of Trans­

structure, the significant reduction in

port released a timetable for creating a

the methane slippage, and policy

50  Why LNG is the best deep-sea marine fuel option today

SEA-LNG is a UK-registered not for profit collaborative industry foundation serving the needs of its member organisations committed to furthering the use of LNG as an important, environmentally superior maritime fuel.


UNLOCKING NORTH AMERICA’S ENERGY POTENTIAL

Sempra LNG’s unique portfolio of LNG export facilities strategically located on the Gulf Coast and Pacific Coast of North America can provide global markets with sustainable, safe and reliable access to abundant U.S. natural gas. Our mission is to be North America’s premier LNG infrastructure company.

Sempra LNG, LLC is not the same companies as the California utilities, San Diego Gas & Electric company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra LNG, LLC is not regulated by the California Public Utilities Commission. ©2020 Sempra LNG, LLC. All copyright and trademark rights reserved.


NEWS We start this issue’s news section with an article on IGU’s awards, which will be presented during WGC 2021 in Daegu, Korea. Then we have a report from the Regional Coordinator for Europe while the Members’ corner focus is on the National Gas Company of Trinidad and Tobago. Next up are profiles of IGU’s new members followed by news from the Secretariat and summaries of IGU’s Global Gas Report 2020, Wholesale Gas Price Survey 2020 and a new report entitled Gas Technology and Innovation for a Sustainable Future. After the news section, we round off with an overview of IGU’s organisation, members and the events calendar.

  53


A forward-thinking solution that combines compressor and expander technologies Today’s LNG plants face more pressures than ever. Fast-changing market situations and increased

competition are challenging both small- and large-

scale LNG to decrease costs and increase efficiencies

wherever possible. Overall plant efficiency, seal leakage

rates, operational flexibility and space limitations are among the

biggest challenges facing plants, and subsequently are areas with the most opportunity for improvement. Looking to solve these challenges, Atlas Copco Gas and Process turned to their decades of experience engineering compressors and expanders for LNG applications. The team had already developed a forward-thinking solution that bridges these two technologies for offshore LNG applications, and now saw an opportunity to advance the technology for onshore LNG applications in both the nitrogen and methane cycles. The resulting Compander combines compressor and expander technologies into one unit, living together on one skid. The Compander design has one gearbox that houses both the compressor and expander stages, one oil system, one control system and one seal gas panel. By comparison, SSLNG plants, for example (using either nitrogen Brayton cycle or methane cycle), usually have compressors and warm and cold turboexpanders on separate skids, each with its own set of components. By combining compressor and expander technologies, the Compander is able to solve modern challenges that traditional equipment cannot.

SMALLER FOOTPRINT AND SIZE

Because the Compander combines the compressor and expander, it has a much smaller footprint. Unlike a traditional compressor / expander combination, in which the compressor and one or two turboexpanders each live on their own skid, the Compander is a much more efficient use of space.

In plants where floorspace is at a premium, the space savings of the Compander result in significant cost savings for plant operators. The Compander’s smaller footprint greatly reduces complexities of installation, since installing one skid requires less crane time, labor, utility, and process pipe connections. The cost savings that result from installing one Compander skid versus two separate skids is about 25% for most LNG plants.

EFFICIENCY GAINS

The coefficient of performance (COP) — the amount of energy required to liquify feed gas — is one of the biggest operating costs in LNG. Combining the warm- and cold-end Compander stages on one common gearbox with the compressor allows for more equal load distribution between all compressor stages, resulting in better COPs. In fact, customers have seen average COP efficiency gains of about 2%, providing a significant cost savings to LNG plants.

LESS MAINTENANCE

The reduction in the number of components the Compander requires means less parts that require service, lowering overall maintenance costs. Atlas Copco Gas and Process also provides remote monitoring options, allowing operations specialists and Atlas Copco Gas and Process engineers to check maintenance parameters from anywhere in the world. This gives plant operators real-time feedback on their equipment and allows them to

see data trends and identify potential problem areas before they arise.

LOWER SEAL LEAKAGE

High seal leakage in compressors is one of the costliest issues facing remotely operated LNG plants. Typical compressors use labyrinth or carbon ring seals, which have a high leakage rate and cost plants both time and money in lost process gas and nitrogen and the manpower required to refill it. By comparison, the Compander uses single dry gas seals (SDGSs), which reduce seal gap size by 10–100x. With seal gaps that are exponentially smaller, the Compander’s SDGSs are able to reduce leaks by as much as 6000%. The result of this reduction in leakage can save more than half a million USD annually, huge savings for LNG plants that are looking to cut costs wherever they can.

LOOKING FORWARD

The Compander is a prime example of how Atlas Copco Gas and Process is using technology to improve operations for LNG plants around the world. Atlas Copco Gas and Process has been an industry leader for over 50 years, providing LNG process equipment that has both the reliability and availability modern plants need. With a highly experienced team, flexible and customizable solutions, and innovative equipment like the Compander, Atlas Copco Gas and Process can help your facility become more productive, more efficient and more profitable.


The Compander. Small footprint, big results.

In LNG operations, youâ&#x20AC;&#x2122;re always looking to increase efficiency and decrease operating costs. The Atlas Copco Gas and Process Compander is here to help, with a compact-footprint design that combines compressor and expander functions in one unit. Streamlined system design and prefabrication mean lower CAPEX and OPEX. Single dry gas seals ensure low seal leakage. And a 2% increase in operational efficiency allows you to meet ROI targets faster. Altogether, the Compander helps your plant meet the demands of tomorrow.

Learn more about the Compander at atlascopco-gap.com


NEWS

IGU Awards at WGC 2021 Preparations are well underway for IGU’s 28th World Gas Conference which will bring together thought leaders and industry experts from across the gas industry in Daegu, Korea, June 21-25, 2021. Here we look at the awards IGU will be presenting. Global Gas Award

gas in powering more sustainable

Director Advisor in the IGU Secretariat;

The IGU Global Gas Award was

energy futures”.

Jeongwook Khang, Chair of IGU’s

established in 2008. Its objective is

There will be a cash prize of $5,000

Coordination Committee; Gerald Linke,

to contribute towards the progress of

and the winner will be invited to

Chair of IGU’s Strategy Committee;

the gas industry through promoting

attend WGC 2021 in Daegu with free

Christina Zhaoyan Liu, Chair of IGU’s

innovation and sustainability. It is

registration for the conference, travel

Gas Markets Committee; and M. Azhar

presented at the end of each triennium

(in economy class) and

A. Satar, Chair of IGU’s Sustainability

during the World Gas Conference.

accommodation. The prize will be

Committee. They will select between

presented during WGC 2021.

three and five finalists and pass them

The winning project demonstrates an understanding of the in-depth chall­

Applications are now open as part

to a Judging Panel in February 2021.

enges faced in the energy sector. It

of the Call for Papers for WGC 2021.

The Judging Panel will comprise:

provides insight, innovation and prag­

Authors submitting an abstract can

Joo-Myung (Joe) Kang, IGU President;

matic approaches that demon­strate

nominate themselves for the Global

Luis Bertrán Rafecas, IGU Secretary

how the greater adoption of natural gas

Gas Award until the Call for Papers

General; Jeongwook Khang; and Luis

can deliver positive societal benefits by

closes on October 19.

Calvo. They will select the winner who

overcoming these challenges. The theme of the IGU Global Gas Award for 2021 is “The role of natural

The initial selection process will

will be invited to present their project

be carried out by an Evaluation

at IGU’s Executive Committee meeting

Committee comprising: Luis Calvo,

in Prague in April 2021. The judging criteria will be:

c  The winner of the 2018 Global Gas Award was Qiao Jia, Senior Engineer at the Beijing Gas Group Research Institute, for a review of the lessons learnt from Beijing’s switch from coal to natural gas. She is pictured receiving the award from IGU’s then President, David Carroll (left) and IGU Secretary General, Luis Bertrán Rafecas (right).

 The relevance of the project to the sustainable development of the gas industry;  How the project contributes and supports advocacy of natural gas;  How the project relates to the UN Sustainable Development Goals;  To what extent the project improves the quality of life;  To what extent the project contributes to the climate change challenge;  To what extent the project improves energy efficiency;

56  IGU awards at WGC 2021


NEWS

v  WGC 2021 will take place in the EXCO Exhibition & Convention Center in Daegu.

 To what extent might the project

 Upstream technologies – in the

IGU’s R&D and Innovation Committee

improve the gas industry’s

exploration and production and

will select a winner for each of the five

competitiveness?

LNG sectors;

categories and announce them in

 Does the project demonstrate

 Downstream technologies – for

in-depth knowledge of the gas

gas transmission, processing,

industry?

storage and distribution;

 To what extent does the project

 Environment and sustainability –

position gas in the long-term?

covering emissions detection

 Has there been a similar project in the past?  The project’s feasibility, implementation and financing.

and mitigation and gas and renewables;  Emerging technologies –

February 2021. The winner of each category will then be put forward for the WGC 2021 Industry Choice Award, voted for by industry professionals online. There will be a dedicated Awards Ceremony during WGC 2021 to show­case all of the award winners and their

digital technologies (AI, IoT, etc.),

innovations. This will take place in the

smart energy solutions and

Technology and Innovation Centre on

Innovation Awards

connected and/or integrated

the exhibition floor. Each award winner

Launched in 2018, IGU’s Innovation

solutions.

will prepare a five-to-seven minute

Awards celebrate the next major

Applications are now open as part

presentation or live demon­stration for this

innovations in gas industry technology.

of the Call for Papers for WGC 2021.

session and the winner of the WGC 2021

There are five categories:

Authors submitting an abstract can

Industry Choice Award will be announced.

 Utilisation – in the commercial,

nominate themselves for the Inno­

industrial and domestic sectors

vation Awards until the Call for Papers

For the latest WGC 2021 updates and

and as a transportation fuel;

closes on October 19.

news, visit: www.wgc2021.org.

IGU awards at WGC 2021  57


Building the clean energy future Since being accepted as an associate member of IGU Chart has enjoyed working alongside other members promoting our shared goal of a lower carbon, sustainable energy future. Primarily this is through providing opportunities for natural gas power and fuelling through LNG, but Chart is also increasingly active in the development of the hydrogen economy. At the cornerstone of our business is a

Our cryogenic tanks range from the

broad portfolio of complementary products,

smallest standard packaged gas vessels to the

including specialty heat exchangers and

world’s largest, with multiple mobile solutions

cryogenic storage tanks. What makes Chart

also available. With the acquisition of VRV,

unique is our ability to deliver a complete

Chart has world-class manufacturing facilities in

solution, from feasibility study to plant start-

the US, Czech Republic, China, Italy and India.

up, and provide the necessary after-sales

Chart’s LNG-to-power solutions are

support to ensure our equipment continues

configured according to any storage and

to operate at peak performance throughout

demand requirement and incorporate LNG

the product lifecycle.

storage, vaporisation, pressure regulation and

Chart brazed aluminium heat exchangers

control systems to deliver natural gas power

fuel from 3.5% to 0.5%, Chart has

(BAHX) are used in global liquefaction

at the point of use in areas not connected to

continued to help the maritime sector adopt

projects driving the next energy wave.

the grid, for peak shaving and as temporary,

LNG to meet the new standards through the

The recently completed multi-million dollar

back-up or emergency power applications.

design and manufacture of on-board LNG

expansion at our La Crosse, Wisconsin facility

Chart has many LNG-to-power projects in

tanks for a range of ships and the bunkering

extended our capability to build the world’s

operation, from large megawatt power

terminals to fuel them. We are also members

largest BAHX, more than 50% larger than its

stations to skid mounted composite solutions

of all notable marine institutions promoting

predecessor, and expands the capacity of a

for medium-sized manufacturing facilities.

the clean and sustainable developments in

single liquefaction module beyond 3MMTPA. As the industry pioneer for small-scale

Chart supplies on-board LNG fuel tanks to major truck OEMs. We also offer a com­

the marine industry. The decision taken in the US permitting

and modular liquefaction, we have applied

plete range of fuelling stations, from private,

the bulk transportation of LNG by rail is

our know-how to develop a technically and

relocatable outlets to ones with multiple

also providing exciting new opportunities

commercially viable solution for the

dispensers open to the public and fleet

for Chart.

liquefaction of smaller gas volumes typically

operators. Public stations can also be fitted

Chart is a responsible global citizen and

associated with biogas. The C15MR Micro

with a CNG module, which equips them to

we place Diversity and Inclusion at the centre

LNG plant has a nameplate liquefaction

service all natural gas-fuelled vehicles.

of our company culture.

capacity of 15,000 gallons per day (25 tonnes per day).

With IMO2020 regulations mandating a reduction in the sulphur content of marine

To learn more visit www.ChartLNG.com z  A Chart system is on-board the Xiang Shui Yun, China’s first river-to-sea LNG fuelled vessel. c  Chart has been engaged in a multiyear project to bring natural gas to industries and homes in Peruvian cities through the LNG virtual pipeline.


BRIGHTER

FUTURE CO O L E R BY DESIGN™ Chart’s LNG power generation solutions provide natural gas to hundreds of thousands of homes. This is one way Chart facilitates LNG as a safe, clean-burning fuel for energy, transportation and industry.

Learn more at www.ChartLNG.com LNG@ChartIndustries.com


NEWS

Reports from the Regional Coordinators Here we bring you a report from IGU’s Regional Coordinator for Europe. Challenges and

as the most relevant elements – at least

dynamics, but we have to acknowledge

opportunities

in terms of direction and attention.

that, among other factors, the recent

for gas in the

The EU Strategy for Energy System

IEA initiatives such as its Sustainable

European market

Integration will provide the framework

Recovery Plan, point in that direction

By Andrea Stegher

for the green energy transition, replac­

as well, with broad international

Just a little more

ing the previous model of looking at

recognition and support, so it’s not

than a year has

energy consumption in different

just a European matter.

passed since the April 2019 issue of Inter­

sectors separately.

national Gas when I used the following

The EU Hydrogen Strategy will look

That’s why our industry at large needs to focus on and, I would add,

expression: “Europe can be considered

how to transform into reality the

positively embrace this crucial evolu­

an important ‘laboratory’ to test the

potential of hydrogen to support

tion and take the lead: with a major

future resilience of the gas industry”.

decarbonisation, through investments,

and profound attention to the whole

regulation, market creation and

spectrum of initiatives that could well

research and innovation.

bring benefits to both the economy

Indeed, this has proved to be the case but with two additional, impor­ tant factors which open new perspec­

and the environment, relying on the

tives: the first is the speed of change,

Challenges and opportunities

strength of the existing assets and

while the second relates to how these

The Covid-19 emergency has created a

promoting a credible way forward.

developments on the European scene

paradigm shift for most countries

can influence not just the region but

which need to rethink how to combine

tant steps in this direction – notably

the whole industry.

economic growth and environmental

with a new report, Gas Technology and

targets. But this can be also seen as a

Innovation for a Sustainable Future,

powerful opportunity to align them.

published in July – in which initial

In the April 2020 issue of International Gas, Barbara Jinks, the Chair of IGU’s Energy for All Task Force, reviewed many of the ongoing

Expanding the perspective, Europe is certainly at the centre of these

IGU has been leading recent impor­

reflections and ideas have been developed (see the summary on pages

activities in the legislative sphere which are having an influence on our industry in Europe and I will not go over the same ground, even though – allow me to repeat it – the speed of change is increasing. Let me just refer to the European Union strategies for energy system inte­ gration and hydrogen, adopted in July,

60  Reports from the Regional Coordinators

c  New bunkering vessels such as Gas Agility with a capacity of 18,600m3 support the use of LNG as a marine fuel in Europe. Based in Rotterdam, it is the world’s largest LNG bunkering vessel and is chartered by Total from Mitsui OSK Lines


NEWS

80-81). We have to build on these first steps to accelerate our actions in the field, considering the “positioning” that more and more members are taking as regards their carbon footprint targets and also how financial lenders (both public and private) are more actively considering the matter. We should do more and more rapidly, to regain the positive role of natural gas. So, challenges are there but they always also come with opportunities. In this respect, and again Europe can be a region to promote a new approach for

Throughout the EU and its neighbours there is growing investment in hydrogen. BIG HIT is a project in Orkney, Scotland to demonstrate an integrated model of hydrogen production, storage, transportation and utilisation. Hydrogen is produced by wind- and tide-powered electrolysis and transported in special lightweight high pressure cylinders.

our industry, we can surely build on

inclusive-of-all-clean-hydrogen-

organisation can serve its members

bringing together the deep technical

pathways-1.pdf).

and promote value to the regions

expertise in the existing gas businesses

This is also an important piece of evi­

for which different approaches should

together with new partners and stake­

dence that many gas players in Europe

holders to enhance the traditional invest­

are becoming active investors in both

igation of “new gases” and technological

renewable gases and in different hydro­

up of IGU’s European Working Group set

solutions which should prove their

gen options, both “blue” (where the car­

up under the Strategic Communications

“do-ability” as part of the future energy

bon emissions from producing hydro­

and Outreach Task Force can serve as a

portfolio for consumers and industries.

gen are captured and stored or reused)

possible role model.

In this respect, IGU has been an

and “green” (where hydrogen is pro­

active contributor to the recent

duced from renewable energy sources).

position­ing being developed at

Additional works and positioning

be tailored. In this respect, the progressive build-

In a broader perspective, Europe has moved from being a laboratory to a work­shop where things are being

European level working together with

are ongoing to further promote the

crafted. Other regions and countries

other relevant associations under the

utilisation of gas, such as in transport,

are also considering similar trajectories

umbrella of GasNaturally. There are two

where both road and maritime sectors

and options.

important initiatives: the first being

will require a stronger contribution

So it’s time to act and step up with

Clean Hydrogen and CCS for Europe

from more environmentally friendly

more concrete action plans, consider­

(https://gasnaturally.eu/clean-

fuels. To this end, IGU supported the

ing how to best interact and involve

hydrogen-and-ccs-for-europe/); the

recent LNG Protocol declaration

additional stakeholders and build

second – together with more than

(https://www.ngva.eu/wp-content/

new alliances.

30 other companies and associations –

uploads/2019/10/20191016-LNG-

on the Hydrogen Strategy (https://

Protocol-declaration.pdf)

gasnaturally.eu/wp-content/

Andrea Stegher is Senior Vice President,

So, the window of opportunity is

Commercial & Stakeholder Engagement

uploads/2020/06/Wide-industry-

here: to benefit we need more active

at Snam and the IGU Regional

coalition-call-for-a-Hydrogen-Strategy-

and dynamic thinking into how our

Coordinator for Europe.

Reports from the Regional Coordinators  61


Minimise Methane Emissions Utilising Integrated, Data-driven Solutions By Demos Pafitis Methane is the main component of natural

to reduce environmental impact. Historically,

operator to make intervention and repair

gas and also a powerful greenhouse gas

fugitive emission detection was considered

decisions based on actual valve condition,

(GHG). Over a 100 year period, methane

to be expensive and time-consuming. Today,

which in turn helps reduce unscheduled

warms the planet at a rate that is 28 times

however, a more sophisticated, data-driven

downtime, plan efficient maintenance and

higher than carbon dioxide. As part of

approach can reduce costs and provide an

maintain compliance.

normal upstream, midstream and down­

effective means to significantly and

stream oil and gas operations, some methane

consistently detect, monitor and reduce

ecosystem for the benefit of edge devices

invariably escapes into the atmosphere.

methane emissions.

provides operators with domain and

While the amount of methane emitted is a

A cloud-based data and applications

equipment intelligence. The advantage of

small fraction of total production, because of

Data-driven asset integrity

leveraging edge and cloud computing is the

its potency as a GHG, the warming effects of

solutions

ability to deploy solutions, such as domain-

even small emissions can have a significant

A focus on asset (equipment) integrity can

specific workflows along with algorithms for

environmental impact.

prove to be essential in curbing fugitive

real-time monitoring, detection, alerts and

emissions associated with oil and gas

remediation. The intelligent insights, com­

in comparison to the aviation industry, the

According to a study by McKinsey & Co,

operations. Methane emissions can be

bined with field intervention and expertise,

oil and gas industry is responsible for nearly

targeted, and significantly reduced, through

are key elements in reducing downtime and

twice as much greenhouse gas emissions

an integrated, data-driven approach that

increasing operational efficiency.

(5% vs. 2.5% of total anthropogenic GHG

leverages intelligent Internet of Things (IoT)

emissions). A significant reduction in

hardware, edge computing and cloud-based

part of a digital ecosystem can deliver plant-

methane emissions associated with oil

applications. Reducing product loss due to

wide emission modelling and comprehensive

and gas operations would prove beneficial,

unintentional gas release, abnormal

analysis via process simulation, augmenting

not only for the companies within the

operations and managing emissions equates

direct measurements and detection. Access

industry but, more importantly, for the

to increased profitability through enhanced

to live domain expertise and equipment data

benefit of all.

efficiency and performance.

– via a secure, cloud-based environment –

Many operators are already taking

Implementation of this integrated digital

A digital twin and IoT devices used as a

is central to ensuring overall asset integrity

measures to reduce methane emissions,

solution provides access to real-time data for

and ultimately minimising methane

often in adherence to government and

asset integrity, inspection, diagnostics and

emissions. This integrated digital solution

environ­mental regulations. In doing so,

remediation – as the equipment or field-level

provides a comprehensive, knowledgeable,

these operators are also securing their

data streams into a secure cloud data eco­

data-driven approach to asset integrity and

license to operate in communities around

system for real-time monitoring and control.

process optimisation.

the world. The benefit, however, is twofold –

Once ingested, actionable insight is extracted

reducing methane emissions translates to

from the data using advanced machine

grated, data-driven approach to optimising

optimised performance and profitability,

learning and artificial intelligence methods

asset integrity provides a roadmap towards

while also enabling our industry to meet

(ML/AI). Modern data science, combined

minimising methane emissions associated

the expectations of today’s environmentally-

with original equipment manu­facturer (OEM)

with oil and gas operations. The ability to

conscious investment community.

domain expertise, enables rapid creation of

identify and prioritise tasks immediately

valuable operational insights.

based on intelligent insights enables

There are two methods by which methane, associated with oil and gas

As an example, the selection, installation,

Real-time intelligence through an inte­

operators to cost effectively plan and

operations, is released into the atmosphere:

maintenance and repair of fugitive emissions-

execute field services and remedial work,

intentional gas release as part of regular

compliant valves can ensure that the equip­

thus reducing fugitive emissions while also

operations, known as vented emissions,

ment is able to meet evolving emissions

improving asset efficiency, product delivery

and unintentional gas release due to mal­

standards. The addition of intelligent instru­

and profitability – in a sustainable manner.

functioning equipment, known as fugitive

mentation provides real-time access to critical

emissions. Targeting the fugitive emissions

performance data, health monitoring and

Demos Pafitis is Chief Technology Officer at

presents a low-risk, high-yield opportunity

condition-based alerts. This allows the

Schlumberger.


Protecting People, Assets, and

the Environment Cameron, a Schlumberger company, offers the industry’s most comprehensive fugitive emission-qualified valve portfolio, covering the entire gas value chain. Industry leaders have trusted our technology for more than 100 years. We stand ready to help you manage your environmental footprint and uphold your values and commitment to the global community today—and beyond. Count on Cameron, your trusted partner. Our lowemission valve portfolio for gas production, processing, transmission, and storage applications includes industryleading brands such as CAMERON T-30 Series, GROVE, ORBIT, and WKM.

slb.com/valves

CAMERON T-30 Series , GROVE, ORBIT, and WKM are marks of Schlumberger. Copyright © 2020 Schlumberger. All rights reserved. 20-VL-792487


NEWS

Members’ corner This section of International Gas gives IGU members an opportunity to profile themselves and their relationship with the Union. In this issue we have a Q&A with Mark Loquan, President of Charter Member the National Gas Company of Trinidad and Tobago, which joined IGU in 2001. International Gas (IG)

sale, transmission and distribution

Could you introduce

of natural gas. Today, NGC leads a

the National Gas

diversified group of companies, and

Company of

through subsidiaries and investments,

IG Trinidad and Tobago is the

Trinidad and

is also involved in: upstream

second largest gas producer in

Tobago briefly

exploration and production (non-

Latin America and the Caribbean

to readers?

operated basis); natural gas liquid

and a well-established LNG

Mark Loquan (ML)  The National Gas

(NGL) fractionation and export; port,

player; how do you see the

Company of Trinidad and Tobago

estate and industrial site develop-

country’s gas market developing

Limited (NGC) is a state energy

ment; compressed natural gas

in the next decade?

company whose core business

(CNG) merchandising; and energy

ML  Energy forecasts project that

activities across the gas value chain

commodity trading including crude

natural gas will continue to play

include the purchase, aggregation,

oil and LNG.

a major role in the global energy zc  Mark Loquan, President of the National Gas Company of Trinidad and Tobago. c  The Phoenix Park Valve Station (PPVS) is a critical facility in NGC’s pipeline system as it serves to remove liquids from the gas flow before it is transported to Phoenix Park Gas Processors where the heavier gases are removed. The dry (residue) gas is then returned to the PPVS for distribution to NGC’s customers in Point Lisas and across the country.

64  Members’ corner


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mix, displacing demand from more polluting fuels such as coal and oil. The LNG industry, like all global commodities, was not immune to the adverse impact of the Covid-19 pandemic, and long-term LNG demand is linked to GDP growth. Notwithstanding this, NGC’s LNG subsidiary company, TTLNG will continue to focus on growing its regional LNG presence including infra­ structure projects as well as growth in other regions, and will seek to capitalise on all market opportunities. IG Could you tell us more about Trinidad and Tobago’s plans to develop small-scale LNG and LNG bunkering? ML  In the Caribbean, many islands are moving towards cleaner energy, integrating renewables and natural gas into power generation. That gas must be imported as LNG. At present, only a few countries have the requisite demand and infra­ structure to make importation of LNG commercially feasible. NGC is therefore working with stakeholders to arrive at solutions that could make LNG more accessible to smaller Caribbean markets. One such solution would be outfitting Atlantic LNG to load small-scale LNG ships that could successfully dock on smaller islands. As it is, standard-sized LNG tankers cannot be accommodated in small

NGC owns, maintains and operates a transmission and distribution gas pipeline network of approximately 1,000 km. Beachfield is NGC’s centralised natural gas and condensate processing facility.

Members’ corner  65


NEWS

Trinidad and Tobago started LNG exports in 1999 from the first train of the Atlantic LNG plant in Port Fortin. The plant has four trains with a total capacity of 14.8 mtpa and NGC is a shareholder in trains 1 and 4.

island ports, which makes LNG

where available to position the

provides our leadership team and

importation a challenge.

Company as a thought leader in

employees with macro insights on

the energy business and where

emerging trends in the gas industry

IG What are your plans for

possible, the NGC Group will seek

including clean energy, global carbon

participating in the 2020 Latin

to have employees participate as

reduction targets and technologies

America and Caribbean Gas

delegates to better understand

and gas pricing trends.

Conference supported by

international trends and leading

IGU, ARPEL and OLADE, which

changes within the energy

platform for NGC to build its inter­

this year is expected to be a

industry.

national brand presence, which is

virtual event?

Additionally, IGU provides a

one of the Company’s main stra­tegic

ML  NGC is aiming to use this year’s

IG Finally, how do you benefit

goals. Participation in IGU publica­

virtual conference as a platform to

from IGU membership?

tions and events helps build NGC’s

share the Company’s latest initiatives

ML  IGU’s some 160 members are

visibility within the international

with the expansive IGU community as

associations and corporations of the

gas sector, and offers unrivalled

well as to learn from other esteemed

gas industry representing over 95%

opportunities for networking.

speakers. Presentation and speaking

of the global gas market. The global

opportunities will be leveraged

gas insights provided by the IGU

66  Members’ corner

IG Thank you


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Presenting IGU’s new members IGU welcomed two new Associate Members during the electronic Council session which ended on July 13. Here are brief overviews of their activities and their reasons for joining the Union. Egoli Gas

At the heart of Egoli Gas is a group

Johannesburg in 1892, supplying coal

By Vishal Pooran

of passionate and competent people,

gas to the city to power its street lights.

Egoli Gas is immensely proud to have

managing a dynamic business. The

Johannesburg at the time was known

been accepted as an Associate

core business is the reticulation of

for its gold mining activities.

Member of IGU. We are looking

natural gas through a network of

forward to playing an active role

pipelines under the City of

years until coal gas processing started

through our membership and

Johannesburg. More recently, the

to be supplemented in the 1960s in

contributing where we can to the

company has started trading natural

favour of supplying the city with

benefit of the natural gas industry.

gas through third party networks, and

hydrogen-rich gas produced by Sasol.

Our vision and shared values are

this is seen as key to our growth

Coal gas processing was steadily

closely aligned to those of IGU, which

strategy. The motto of our parent

reduced and eventually suspended

is what attracted us to becoming a

company, Reatile is “we are growing/

with the Gasworks shutting down

member. It is with this in mind that

we have grown”.

in 1992.

we look to a long and mutually beneficial relationship with IGU.

The company started out as the President Street Gasworks in

The company grew steadily over the

The switch to natural gas from Mozambique took place in 2004 with a major conversion project undertaken. The vision of Egoli Gas is: “To be a leading, world-class natural gas business, providing sustainable gas solutions to our customers”. The company has a network of approximately 1,200 km of pipelines and very close to 8,000 customers. Egoli Gas has also grown steadily to become the second largest trader of natural gas in the Province of Gauteng, which is South Africa’s economic hub. It continues to grow into other provinces in the country. It is also the only gas reticulation company in Johannesburg and its activities are regulated by city by-laws. In recent years the company has

An Egoli Gas worker inspecting one of the company’s meter chambers.

68  Presenting IGU’s new members

invested heavily in increasing the


NEWS

Hanwha Energy

Tongyeong project and has since

Corporation

entered the gas-to-power generation

Hanwha Energy

and LNG direct import business. It is

Corporation was established in 2007

now looking to expand its gas business

as a co-generation project supplying

on a global scale focusing on the liquid

reliable and high-quality steam and

natural gas supply chain.

electricity to the Yeosu and Gunsan

To this end, Hanwha Energy has

industrial complexes in Korea. It has

signed an MoU with KOGAS and Korea

since succeeded in diversifying by

Southern Power (KOSPO) to develop

moving into domestic fuel cell power

gas-to-power businesses in Asia.

generation, overseas solar, operations

The company’s goal is to expand its

and maintenance (O&M) and energy

business beyond the Asian market and

storage system (ESS) projects.

sees IGU membership as a means both

More recently, Hanwha Energy

Egoli Gas has invested in increasing the length of its network and in renewing its assets to improve pipeline integrity

length of its network and in renewing

of developing its knowledge of the

entered the power retail business

global gas market and sharing its

in Texas, USA and the natural gas

knowledge and insights of the Korean

business through its participation

and Asian markets. The company

in a power generation project in

intends to be an active participant in

Tongyeong, Korea. In November 2019,

IGU meetings and events.

the company signed an agreement with Hyundai Development Company

For more information, visit:

(HDC) to jointly develop the

www.hec.hanwha.co.kr.

its assets to improve pipeline integrity. This trend is set to continue into the future with significant Capex set to be invested in asset renewals. Egoli Gas has recently introduced an Operations Excellence strategy aimed at bringing world-class practices in terms of pipeline integrity, asset management and process safety management. As a responsible business we contribute significantly to our parent company the charitable Reatile Foundation. Vishal Pooran is the Managing Director of Egoli Gas. For more information, visit: www.egoligas.co.za.

An artist’s impression of the Tongyeong gas-to-power project due to start up in 2024.

Presenting IGU’s new members  69


Strengthening partnership in the framework of the new Algerian hydrocarbons law…

Boosting foreign investments and

complex taxation system, as well

Being less restrictive, this system

partnership in the hydrocarbons

as several unstable, rigid legal and

contributes to enhance profitability of

industry, particularly in the exploration,

contractual frameworks which were

upstream investments and take charge

research and production operations,

unadapted to international standards

of projects undergoing geological and

is at the core of the law 19-13 dated

were deterring incentives for investors.

financial difficulties.

December 11, 2019 regulating the

Add to this the involvement of several

hydrocarbons activities in Algeria.

parties, the exchange policy and

equitable and attractive distribution

customs systems highly contributed

of profits, foreign partners are now

to the inefficiency of this law.

allowed to select at their convenience,

The promulgation of this law is the outcome of a long and hard analysis made by experts from the hydrocarbons

To address this situation, the law

To achieve the goal of a more

one of the three internationally-

sector, taking into account feedback

19-13 was issued to set the required

recognised contract formats:

from the parties involved within the

adjustments in order to make the

Participation contract;

scope of the hydrocarbons law. They

hydrocarbons sector more appealing

Production sharing contract;

aimed at diagnosing the reasons and

to capital and new technology owner

Risk services contract.

causes behind the foreign investors lack

foreign investors.

of interest in the Algerian mining sector

While preserving the 49%-51% rule,

These contracts can be concluded either through international bids

which, though potentially rich, is still

this law enshrines the role of Sonatrach

launched by the National Agency for

under-explored.

as the key player and clarifies the roles

the Development of Hydrocarbon

of regulatory authorities and the energy

Resources (ALNAFT), or through direct

August 19, 1986 gave a great boost to

ministry. In this manner, the position of

negotiations between Sonatrach and

partnership through the adoption of a

Sonatrach is thereby reinforced as it will

foreign partners.

legal and taxation regime allowing the

be directly associated with contract

enhancement and intensification of

negotiations. Sonatrach can also solely

ment for the well being of people and

exploration efforts. This yielded

conduct research and production

for assets becomes more meaningful

satisfying results in terms of reserves

operations as it can be granted

through this law by streamlining

replacement. The natural depletion of

authorisation. In addition, Sonatrach

procedures and by optimising the

the oil and gas fields, the growing

keeps the monopoly over the pipeline

deadlines for the review of author­isa­

domestic demand as well as the

transportation activity and the supply of

tions granting required by HSE, without

restricted number of discoveries had a

the domestic hydrocarbons market.

neglecting the facilities and infra­

The Law number 86-14 dated

negative impact on the efforts to

To demonstrate its good will to

The importance of risk manage-

structure monitoring, and their reliability during the life cycle of the project.

maintain the right level of reserves. In

attract foreign investors, the taxation

order to remedy this situation, the law

system was lightened and simplified to

05-07 dated April 28, 2005 was

ensure a balance between the respective

new law will relaunch exploration and

adopted. However, a less attractive and

State revenues and its investors.

production activities through partnership.

Along the lines of the law 86-14, the


NEWS

Activities of IGU A round-up of news from the Secretariat. Pandemic Advisory Group A Pandemic Advisory Group (PAG) has been set up to provide advice and guidance to the IGU leadership on how best to cope and navigate through the challenges brought about by the global pandemic. Its mandate includes: 1 Short term: Provide guidance on conducting the H2 meetings of the Executive Committee and Council in a total virtual mode including the election for the Presidency,

The LNG event series is held every three years, most recently in Shanghai in 2019.

the first time this election is being held virtually; 2 Medium term: Provide mitigation

Caribbean. The Charter Member for

Kind reminder for members: contact

Italy is Comitato Italiano Gas and the

the IGU Secretariat to ensure your

actions on risk assessment of WGC

candidate for IGU President is Andrea

voting right for the election.

2021, which includes the option of

Stegher, Senior Vice President

postponing the event to 2022 and

Commercial & Stakeholder Engage­

Qatar to host LNG2025

the consequences of such a decision;

ment at Snam and IGU Regional

IGU President and Chair of the LNG

3 Long term: Provide guidance for

Coordinator for Europe. The election

Event Series Steering Committee, Prof.

the post-Covid 19 scenario to

will take place during the electronic

Joo-Myung (Joe) Kang has announced

enhance IGU’s role in events, advo­

IGU Council meeting, November 18-19.

that Qatar has been selected as the

cacy and member engagement. IGU Presidency 2024-2027 Colombia and Italy are the candidates for the 2024-2027 Presidency of IGU and to host the 30th World Gas Conference in 2027 in either Bogotá or Milan. The Charter Member for Colombia is Naturgas and the candidate for IGU President is Orlando Cabrales Segovia, President of Naturgas and IGU Regional Coordinator for Latin America and the

72  Activities of IGU

IGRC2020 was hosted by Oman in Muscat, February 24-26.


NEWS

host country for LNG2025, the 21st

IGRC2020 was hosted by Oman in

throughout Australia. He is a former

International Conference and

Muscat, February 24-26, and the April

journalist and served as press secretary

Exhibition on Liquefied Natural Gas.

issue of the IGU magazine carried a

to former Australian Government

review. Papers presented during the

Ministers for Finance and Trade.

Prof. Kang, representing the three owners of the event IGU, Gas Tech­

conference can be downloaded from:

nology Institute (GTI) and International

www.igrc2020.com.

Institute of Refrigeration (IIR) said:

Matt holds a Bachelor of Economics from Flinders University of South Australia and lives in Adelaide, South

“Qatar’s key role in the future of the

New Public

Australia, with his wife and two

global LNG industry and the inno­

Affairs Director

teenage daughters.

vations it has proposed for LNG2025

President Kang

made it an ideal host for the world’s

has announced

Message from

premiere LNG industry event.”

that Mr Menelaos

new editor of

Ydreos, while leav­

IGU magazine

has been awarded to Qatar with Doha

ing the post of

The first issue of

previously the host city for LNG 14

Public Affairs

in 2004.

Director, requested to serve as a non-

zine, Global Voice

standing unpaid advisor to the

of Gas (GVG), was

every three years, most recently in

President in the area of advocacy. This

published in June.

Shanghai in 2019, and the forthcoming

request has been approved and

It is produced in collaboration with

LNG2022 is scheduled to be held in

became effective as of August 31. Mel

Natural Gas World (NGW).

St Petersburg, Russia, April 4-8. For more

has made tremendous contributions to

information, visit: www.lng2022.ru.

our advocacy efforts and in

editorial board, I would like to intro­

transforming IGU into the global voice

duce myself and share a few plans

IGRC2023

of gas, particularly recently in this era

about the magazine’s direction.

The deadline for submissions of

of virtual reality induced by Covid-19.

This is the second time the event

The LNG event series is held

expressions of interest to host the next

Matthew Doman.

Matthew Doman, formerly Director

IGU’s new maga­

Joseph Murphy.

As editor of GVG, working with IGU’s

Prior to joining the NGW team back in June 2019, I spent eight years as a

edition of the triennial IGU Research

External Affairs of IGU Associate

gas market reporter, focused on the

Conference in 2023 was September 30.

Member the Australian Petroleum

former Soviet Union and Europe.

IGU Charter Members nominating

Production & Exploration Association,

During that time, I also served as editor

themselves will now go forward to

has been appointed as IGU’s Interim

of two regional publications covering

the evaluation and selection process.

Director, Public Affairs.

oil and gas, coal and electricity in the

Particular attention will be paid to each

Matt is a public affairs professional

CIS and Central and Eastern Europe.

nominee’s vision for the conference

with long experience in government,

When I came to NGW, I was interested

with a review of proposed innovations

media, industry advocacy and

in the big global energy picture and

and enhancements. Other factors to

communications in Australia, Latin

began looking at investment, market

be evaluated include the infrastructure

America and the United States. He has

trends and policy developments that

of each suggested host city. IGU’s

held senior corporate affairs roles in

impacted the international gas market

Executive Committee will select

the Australian oil and gas industry and

and shaped its future.

the IGRC2023 host at the end of

has worked closely with industry,

January 2021.

government and regional communities

I was thrilled about taking on the new challenge with driving the

Activities of IGU  73


NEWS

development and growth of GVG, because it provides an excellent new platform for looking into this future through an informed and relevant lens of the world’s most prominent energy

Wholesale G a Price Survey s

leaders. With GVG, I set the goal for achieving a new standard in commu­

2020 Edition

nication for the gas and energy communities worldwide. We will do

A Global Rev iew of Price Formation Me chanisms 2005 to 2019

that by addressing the most critically

June 2020

timely and impactful energy issues, and we will look to answer tough questions that are critical to a successful energy transition. The magazine will complement IGU’s efforts promoting the economic and environmental role of gas in a sustainable energy future. One of the most pressing current issues on the global energy discourse

key topics, the magazine will high­light

the current host with the Secretariat

agenda is of course the post-pandemic

these emerging gas technologies and

based in the Naturgy offices in

crisis economic recovery. Governments

innovations.

Barcelona. The implementation team

around the world are developing major

Joseph Murphy

infrastructure investment plans and

is now working towards completing the necessary plans that will enable

making decisions that will impact the

Latest IGU reports

the change with the formal handover

way energy systems look over the

IGU has published the latest editions of

expected in July 2021.

coming two decades. This time is a

the Global Gas Report and Wholesale Gas

critical one for the sector as well, and

Price Survey and a new report entitled

Ministerial Gas Forum goes virtual

the potential contributions of gas to a

Gas Technology and Inno­vation for a

Originally planned to be held in Kuala

sustainable energy future need to be

Sustain­able Future, which all are avail­

Lumpur, Malaysia, the 7th IEF-IGU Mini­

heard. There is a vast array of gas

able for download from www.igu.org.

sterial Gas Forum will now be a vir­tual

technologies, both mature and dev­

There are summaries of their key

event supported by Malaysia. It will take

eloping, that offer an immense value to

findings in the following pages.

place on December 3. The biennial

the economy and the environment –

event was last held in Barcelona in

deploying them in a prudent way can

IGU on course for permanent

November 2018 and is an important

make a huge dent in the global carbon

Secretariat

forum bringing policy­makers and

and air pollutant emissions and get us

As reported in the last issue, IGU will

industry leaders together to discuss

closer to meeting the goals of the Paris

move from the model of a rotational

the actions that need to be taken in

Agreement and the Sustainable

hosted Secretariat to a permanent

order to support gas as a key contri­

Development Goals. Amongst other

headquarters in London, UK. Spain is

butor to a sustainable energy mix.

74  Activities of IGU


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NEWS

Global Gas Report predicts growth will resume The 2020 edition of the Global Gas Report comes in the midst of an unprecedented global pandemic, whose short- and long-term impacts on the global economy and the energy sector are still unfolding. The fourth edition of the Global Gas

missioned in 2019, and new takeaway

other countries, like India, are following

Report is a collaborative effort bet­

capacity has been built in the critical

suit. Policies focused on clean air will

ween IGU, Snam and research company

supply region of the Permian Basin in

provide growth oppor­tunities for the

BloombergNEF. It assesses the key

the US. A record number of LNG export

gas industry in this decade. The recent

drivers currently shaping the natural

projects were approved last year. Once

regulations from the International

gas industry, explores the potential

commissioned, these will deliver close

Maritime Organi­sation will also open up

impact of Covid-19 in the next two-

to 97 bcm per year of new LNG supply

avenues of growth for LNG to be used

three years and looks at the long-term

to the market. Future supply growth is

as a major fuel in the shipping industry.

role of gas in the energy sector from

expected to be led by the Middle East,

And the role of gas-fired power gen­

the lenses of sustainability, compe­

but the US, Russia and Iran are expec­

eration as a flexible resource to com­

titive­ness and supply security. Here

ted to remain the top-producing

plement growing renewable gener­

is a summary of the conclusions.

countries in the medium and long

ation is becoming more established.

term. China has seen domestic supply Cost-competitiveness is enabling

rise by a third in the last five years, and

Gas technologies can play a major

new demand

could double its production by 2040.

role in the low-carbon transition

Recent low gas prices around key

Propelled by growth on the supply

As countries and regions pursue a low-

global hubs, in part due to the pan­

side, new LNG import terminals are

carbon transition, technologies such as

demic, have garnered much attention.

being built in markets like Southeast

biomethane, hydrogen and gas with

However, rising supply and affordable

Asia to ensure gas delivery to the

car­bon capture could play an impor­

prices were already enabling record gas

power and industrial sectors, as

tant role, serving to decarbonise

demand in 2019 in key growth markets

domestic supply wanes.

sectors of the economy that are

like China. LNG imports also hit record

currently seen as hard to abate, and

highs in Europe, supported by inc­

Sustainability and enabling

providing opportu­nities for long-term

reasing carbon prices. A signifi­cant part

policy will define the future

growth for the gas industry. However,

of the growth came from coal-to-gas

of the gas industry

investment and policy support are

switching in major markets like the US

Clean air policies have provided an

needed to scale up these solutions.

and China. Overall, global gas demand

impetus for gas consumption in major

grew by more than 2% in 2019.

markets like China, where gas can dis­

The current level of excitement

place coal. Similarly, in Europe and the

around hydrogen presents an

Security of supply is increasing

US, coal displacement by gas is leading

opportunity

Important new pipeline routes from

to better outcomes for air quality and

Hydrogen is starting to garner policy

Russia to China and Europe were com­

carbon emissions. Slowly and steadily,

support and, with enough investment,

76  Global Gas Report predicts growth will resume


NEWS

could abate up to 37% of energy-

in balancing the market and

related greenhouse gas emissions,

reducing volatility. Storage

according to BloombergNEF estimates.

facilities in Europe, including

While clean hydrogen is not yet cost-

Ukraine have already

competitive in many applications,

proved critical in balancing

delivered costs could reach around

the global LNG market in

$2/kg in 2030, and $1/kg in 2050,

the first half of 2020. China

opening up possibilities in a variety

is also aiming to raise

of appli­cations. These include steel

storage capacity to 10%

and cement making, chemicals,

of its demand.

aviation, shipping and heavy-duty

Global Gas Re

As the energy tran­

transport. For hydrogen to achieve

sition proceeds, gas

its potential, not only will strong

transport and storage

policy action be needed to drive scale,

infrastructure can be

but there will also be a significant need

readied for hydrogen

for infra­structure investment. Large-

blending, and indeed

scale hydrogen networks will be

for pure hydro­gen

necessary to connect high-quality

transport, at much

production and storage resources to

lower cost than con­

users, which can help lower supply

struc­ting new

costs, increase security, enable

purpose-built hydrogen networks.

competitive markets and facilitate international trade.

port 2020

commoditisation of gas and LNG, and New market mechanisms are

help manage risk.

fuelling trade growth Infrastructure investment can

Global gas trade is being facilitated by

Covid-19 impact

propel demand growth for gas, and

a combination of market deregulation,

It remains difficult to assess the future

prepare the ground for hydrogen

establishment of trading hubs and

impact of Covid-19 on the global

Both LNG and pipeline infrastructure

growth in financial derivatives. Many

economy, the energy sector and the

will be critical to deliver continuous

markets, including China, are pushing

gas industry. Initial assessments

supply to end-users. Between 2019 and

for third-party access to LNG import

suggest that gas demand may decline

Q1 2020, 11 new LNG import terminals

and gas transmission infrastructure.

4% in 2020 and BloombergNEF

were commissioned, with India leading

India has recently launched a gas

estimates that global LNG demand will

the way. The country is planning to

trading exchange with three delivery

shrink by 4.2% this year, assuming the

almost double the length of its gas

locations, and Spain is aiming to start is

outbreak is contained by early 2021.

transmission pipelines and raise the

virtual trading hub this year. As new

The industry is expected to rebound

number of households connected to

hubs and pricing benchmarks are

quickly in 2021 and beyond, but it may

the gas grid six-fold. Similarly, China is

established, liquidity in financial

be too early to gauge the full impact.

aiming to grow its transmission

derivative contracts for gas-linked

pipeline network by 60% by 2025. Gas

prices is steadily increasing too. These

The full report can be downloaded from:

storage will also play an important role

efforts will support the

www.igu.org.

Global Gas Report predicts growth will resume  77


NEWS

IGU publishes latest Wholesale Gas Price Survey IGU has published the latest edition of the Wholesale Gas Price Survey covering price developments in 2019 and here we give its key findings. This is the 12th Wholesale Gas Price

imports to GOG and away from OPE.

Survey to be undertaken with the

The rise in GOG LNG imports in 2019

share of global gas consumption rose

series covering 2005, 2007, 2009 and

reflected both a sharp rise in spot LNG

from 31.4% to 48.4%, with the OPE

2010, and then each year from 2012.

cargoes and the rise in European LNG

share falling from 24.3% to 18.5%. Up

The 12 surveys show the changing

imports, as a result of the surge in LNG

until 2016, there was a switch away

trends in wholesale price formation

supply, focused on the trading markets

from regulated pricing mechanisms

mechanisms during a period of key

of Northwest Europe.

towards the more “market-based”

developments and upheaval in the

The rising trend in GOG in LNG

Between 2005 and 2019, the GOG

pricing mechanisms such as GOG and

global gas market. They consider

imports was a continuation of the

OPE. Since then that move has paused,

different types of price formation

trend over the last three years. The

with the key change in pricing mecha­

mechanism which are described

total GOG share of LNG imports in

nisms being in the LNG market. Within

in the box.

2016 was 25% and in 2019 that had

the regulated categories, the big

risen to 41%. The rise between 2016

changes occurred between 2005 and

Share of pricing mechanisms

and 2018 was all due to rising spot

2012, with a move away from sub­

Total consumption in 2019 was around

LNG imports, while in 2019 the

sidised pricing or RBC to higher prices

3,990 bcm. Gas-on-gas competition

increase was split equally between

but still regulated.

(GOG) has the largest share at 48.4%.

spot LNG imports and the rush of LNG

Oil price escalation (OPE) follows with

to Europe’s traded markets.

18.5%. The regulated categories –

Spot LNG cargoes are heavily

Most of the rise in GOG, and decline in OPE, between 2005 and 2017 was driven by changes in pipeline imports

cost of service (RCS), social and

concentrated in the Asian markets.

in Europe, with OPE almost

political (RSP) and below cost (RBC) –

China was the largest spot LNG market

disappearing in Northwest Europe and

account in total for 29.3%. The bilateral

in 2019, closely followed by Japan,

Central Europe. The remaining enclaves

monopoly (BIM) share is 3.3% and the

with India in third place, Spain fourth

of OPE in Europe are in Turkey,

shares of netback from final product

and Korea fifth. Italy, France and

Southeast Europe (including Greece)

(NET) and no price (NP) are each

Turkey also imported significant spot

and the Baltic countries, which are

less than 1%.

LNG cargoes, and these eight countries

heavily reliant on Russian pipeline gas,

The GOG share rose by 1 percentage

made up 83% of all spot LNG cargoes

plus Spain and Portugal, reliant on

point in 2019. This was almost all at the

in 2019, which by then had reached a

Algerian pipeline gas, and LNG. Italy is

expense of oil price escalation (OPE),

share of 31.3% of total LNG imports.

the only country in the southern part

the share of which fell by around 1

Some 60% of all the GOG traded

of Europe, where contract renego­

percentage point. This was largely

volumes were in the UK, Belgium and

tiations have resulted in a move

driven by a significant shift in LNG

the Netherlands.

towards GOG. Wholesale prices

78  IGU publishes latest Wholesale Gas Price Survey


NEWS

declined overall in 2019, largely due to

have a lot of regulated pricing –

gas price divergence in the years up to

the impact of rising global gas supply

Africa, the Middle East and the former

2015, but in line with developments

leading to sharp falls in spot prices

Soviet Union (FSU) – generally experi­

such as the growth of LNG trade and

around the world, to an average of

enced rising prices through 2015

increased market-related gas pricing.

$3.88 per mmbtu – only 2016 recorded

before a levelling off, as there was a

a lower global average.

move away from more subsidised

amongst countries with market-related

wholesale prices in many countries.

pricing, which are connected with the

2019 prices was the sharp decline

This was also the case in the FSU,

global gas market through gas imports,

in Europe on average, mostly spot

especially Russia, through 2013, but

with oil-indexed gas prices, and since

prices, contrasting with relative price

the decline in US dollar prices since

2014 with gas-indexed prices, and

stability in Asia and Asia-Pacific. These

then has largely reflected continued

within Europe. The trend of global gas

three regions had previously moved

currency weak­ness, with rouble prices

price convergence in the period 2005 –

together since 2015 and Europe and

being maintained.

2019 is more distinct when we exclude

A distinguishing feature of the

Asia-Pacific since 2005.

There is more gas price convergence

the data of the North American Price convergence

countries, which were effectively

between 2005 and 2014, apart from

Global gas prices have been con­

disconnected from other markets until

North America because of the shale

verging continuously since 2005,

very recently. In 2019, prices within

gas revolutions, before the supply –

indicating further globalisation of the

Europe diverged as compared to 2018.

demand balance and the oil price

gas markets, at least up until 2018. The

declines and increases, impacted

trend of price convergence is against

The full report can be downloaded from:

much of the market. Regions which

the conventional market wisdom of

www.igu.org.

Globally prices had generally risen

Price formation mechanisms Oil price escalation

The price is linked, usually through a base price and an escalation clause, to competing fuels, typically crude oil, gas oil and/or fuel oil. In some cases, coal prices can be used as can electricity prices.

Gas-on-gas competition

The price is determined by the interplay of supply and demand and is traded over a variety of different periods (daily, monthly, annually or other periods). Trading takes place at physical hubs (e.g. Henry Hub) or notional hubs (e.g. NBP in the UK). There are likely to be developed futures markets (NYMEX or ICE). Not all gas is bought and sold on a short-term fixed price basis and there will be longer-term contracts but these will use gas price indices to determine the monthly price, for example, rather than competing fuel indices. Also included in this category are spot LNG cargoes, any pricing which is linked to hub or spot prices and also bilateral agreements in markets where there are multiple buyers and sellers.

Bilateral monopoly

The price is determined by bilateral discussions and agreements between a large seller and a large buyer, with the price being fixed for a period of time – typically this would be one year. There may be a written contract in place but often the arrangement is at the govern­ment or state-owned company level. Usually there would be a single dominant buyer or seller on at least one side of the transaction, to distinguish this category from gas-on-gas competition, where there would be multiple buyers and sellers trading bilaterally.

Netback from final product

The price received by the gas supplier is a function of the price received by the buyer for the final product the buyer produces. This may occur where the gas is used as a feedstock in chemical plants, such as ammonia or methanol, and is the major variable cost in producing the product.

Regulation: cost of service

The price is determined, or approved, by a regulatory authority, or possibly a ministry, but the level is set to cover the “cost of service”, including the recovery of investment and a reasonable rate of return.

Regulation: social and political The price is set, on an irregular basis, probably by a ministry, on a political/social basis, in response to the need to cover increasing costs, or possibly as a revenue raising exercise – a hybrid between regulation: cost of service and regulation: below cost. Regulation: below cost

The price is knowingly set below the average cost of producing and transporting the gas often as a form of state subsidy to the population.

No price

The gas produced is provided free to the population and industry, possibly as a feedstock for chemical and fertiliser plants, or in refinery processes and enhanced oil recovery. The gas produced maybe associated with oil and/or liquids and treated as a by-product.

IGU publishes latest Wholesale Gas Price Survey  79


NEWS

Gas technology and innovation for a sustainable future

Gas Technolo gy and Innovation a Sustainable for Future

IGU working with Snam and BP has commissioned a new report from the Boston Consulting Group (BCG) demonstrating that technologies and innovation in the gas sector have a transformative potential impact on the global energy systems. The global economy is in distress, due

bounds, and that will only be possible

energy transition, and further

to the novel coronavirus global health

if energy innovation becomes society’s

innovation in the sector can

crisis. Measures to contain the infection

urgent priority.

significantly enhance benefits for

resulted in an unprecedented drop in

Technologies and innovation in

the global environment and human

energy demand and emissions. The IEA

the gas sector have a transformative

development in three ways:

assessed that global energy demand

potential impact on the global

 In the near-term, switching to

dropped by 3.8% in the first quarter

energy systems.

of 2020. Unfortunately, this was the result

In fact, there is a vast array of gas

natural gas from coal or oil products would immediately

technologies, ranging from highly

reduce emissions, both in the form

of a vast economic slowdown, and

mature to nascent, and their

of GHG emissions and localised air

came at great human cost. As the

deployment has the potential to

pollutants. At the same time, gas

world recovers from the health crisis,

economically reduce up to one third

technologies can improve global

the pressure to restore growth and

of emissions – nearly 12 GT – from

access to clean, modern energy,

prosperity will be great. At the same

the energy sector by 2040. This

including for the world’s poorest.

time, the urgent need to address the

report demonstrates that technology

For example, gas could provide

global climate and air quality

developments and innovation in

access to clean cooking for 1 billion

challenges will remain. That means

natural gas are of great importance.

additional people, reducing the

that the post-pandemic global energy

It does so by analysing the

number of people who currently

supply will grow, while the environ­

economic potential of a range of

lack this access by more than

mental impacts from its production

technology applications, across gas

a third. This would immensely

and use have to diminish. In order

networks and end-uses (see box).

improve human health around the world and reduce premature

to meet this double challenge, the

The results highlight that gas

energy system as we know it today

technologies are already playing a

mortality from lung and

will need to evolve in leaps and

key role in facilitating a sustainable

heart diseases.

80  Gas technology and innovation for a sustainable future


NEWS

 In the medium-term, gas

can also capitalise on the use of

3 Industry innovation is needed

technologies can promote

existing gas infrastructure to

from the sector, where incumbent

structural transitions in the way

minimise capital investment.

industry participants step up their

energy is delivered and used, by

support for innovation and the

enabling distributed energy

Key enablers

continued development and

systems and increasing efficiency

It is pivotal to recognise that these

deployment of new technologies,

of energy consumption. Through

benefits can be achieved by the

as well as develop new business

the continued development and

deployment of gas technologies in a

models to commercialise them.

deployment of low-cost and highly

market environment. But that doesn’t

As the world plans how to recover

efficient technologies, natural gas

mean that this will happen by itself,

from the Covid crisis, it has an oppor­

can facilitate renewable power

substantial private and public efforts

tunity to align to a path toward

integration, while further reducing

will be required to enable them.

achieving the needed reductions in air

both the emissions and costs.

Fostering sustainable development

 Progressively over the longer term,

pollutants and emissions, consistent

and achieving environmental benefits

with the Paris Agreement, and to

low- and zero-carbon gas

will require further research and

deliver on the Sustainable Develop­

technologies including renewable

development, as well as investment in

ment Goals. These two critical global

gas, hydrogen, and carbon capture,

testing and deployment, and removing

commitments will more than ever have

utilisation and storage (CCUS)

barriers to adoption, such as a lack of

to be united, because the poorest and

provide an efficient and cost-

infrastructure, access to upfront capital

the most vulnerable will suffer the

effective pathway to dramatically

requirements, or even cultural and

most from the current crisis, as well as

reduce GHG emissions. These

organisational obstacles to changing

from failure meet environmental

technologies are particularly

existing practices. These key actions

commitments. The gap on sustainable

relevant for sectors where emis­

can be summarised by the three

development is also likely to widen, as

sions are difficult or very costly to

enablers below, required to unlock

a result of the economic downturn

abate through other means. They

the full value of gas technologies.

from this crisis.

1 Government policy is critical to GHG reduction potential by 2040 (GT of CO2)

The findings presented in this

ensure that the value of reduced

report are urgent and relevant. They

emissions benefits enabled by gas

demon­strate that there is a huge

technologies is fairly reflected in

untapped potential offered by gas

Power switching

3.3

Industry switching

2.0

the market, through carbon and

technology and innovation, high­

Industrial efficiency

0.1

pollution pricing, or regulation.

lighting the contribution that a

Road transport

0.4

LNG bunkering

0.2

Renewable gas and hydrogen

0.9

CCUS

4.0

Building adoptions Distributed generation

2 Infrastructure investment is

selection of gas technologies can

required for enabling gas-fired

make to meeting the world’s most

power generation and access to

pressing challenge of restoring

0.5

gas in the near term, while also

growth, while reducing emis­sions,

0.2

scaling up low-carbon gas

cleaning up local environ­ments and

Small-scale LNG (enables fuel switching and emissions benefit accounted for in other categories)

technologies for the future.

supporting fair development.

Total

an important assurance of

The full report can be downloaded from:

energy security.

www.igu.org.

11.6

At the same time, it provides

Gas technology and innovation for a sustainable future  81


COVID-19

This is our fight, too. PETRONAS contributed polypropylene to produce 30,000 units of face shields for hospitals and clinics during the peak of COVID-19 pandemic in Malaysia.

2020 has been a year of unexpected turmoil and setbacks, with the greatest challenge being the COVID-19 health crisis. Within seven months since its first known case, COVID-19 has ravaged the world, with over 12 million recorded cases and more than half a million deaths. In the US alone, the number of COVID-19-related deaths surpassed 150,000 at the time of writing, exceeding the deaths for the country resulting from World War I and

By Chai Li Tiing Group Strategic Communications

doubling that of the Vietnam War. The relatively asymptomatic disease spread swiftly and silently, compelling governments to secure their borders, ordering national lockdowns or movement controls of varying degrees to contain the disease – thus bringing trade and industry to a grinding halt. And like that, the pandemic of our lifetime has precipitated the worst economic crisis of our generation. With supply lines cut, workers confined to their homes, and production of

nonessential products and services discontinued, countless businesses folded under pressure. The International Monetary Fund projected the global economy to contract by 4.9 per cent in 2020, the worst since the Great Depression. With no tried and tested vaccine as yet, containment is key. Governments are forced to walk a tightrope balancing the health and safety of its citizens with economic recovery – which will take months, if not years and the collaboration from all parties.

Going mainstream with our fight For this fight against COVID-19, PETRONAS came prepared. Having learned from the SARS outbreak 17 years prior, PETRONAS’ Business Continuity Plan was already in place and was pivotal in preparing the company for what to expect in the event of a pandemic. In one of its first moves in the fight, PETRONAS promptly set up its Pandemic Preparedness Response Team (PPRT) as early as January 2020, to deliberate and implement initiatives to curb the risk of transmission and safeguard the well-being of PETRONAS staff and their families, and its contractors. Swiftly responding to the impact on the industry, the Corporate Command Centre (C3) was assembled in March to strengthen PETRONAS’ oversight, orchestration and unified command across the company in addressing the impacts of the pandemic on an already fragile market.

To keep its frontliners safe, PETRONAS also implemented special working arrangements in close consultation with authorities on matters such as the movement of essential workers on site, with proper physical distancing, thermal scanning at its facilities and mandated health declaration forms and testing for those under investigation. The decision to err on the side of caution would prove to be the right call. PETRONAS’ swift and resolute strategy of rigorous testing, contact tracing and quarantine of identified high risk persons led to the successful closure of the Pengerang cluster in Malaysia at a total of just 15 cases, with a 100 per cent recovery rate. To further curb the risks of the pandemic spreading, PETRONAS tested some 630 individuals nationwide – nipping the spread in the bud.

The two multidisciplinary taskforces convened daily during the crisis to discuss proactive measures well above and beyond accepted best practices to ensure business sustainability with priority on health and safety.

The COVID-19 pandemic is not without its toll on mental health. PETRONAS created round-the-clock hotlines for its people to get the facts on COVID-19, mental and physical well-being, security advisory and human resources-related queries.

As an essential service provider and the national oil company, PETRONAS continued its reliable delivery of energy to support communities, businesses and governments while ensuring the country’s energy balance and needs in consultation with the Energy Commission of Malaysia.

It also launched its #WeWishYouWell campaign, aimed at alleviating anxiety and lending emotional support to its internal and external stakeholders. Initially an internal campaign to provide support through a daily supply of positive messaging for its frontliners

An attendant ensures that the PETRONAS fuelling station is properly sanitised. To keep its frontliners safe, PETRONAS implemented special working arrangements, social distancing, and sanitisation rules at its facilities, in close consultation with authorities.

working on-site and in the plant with minimal manpower and those reeling from the isolation of working from home, it grew quickly into a nationwide rally that pays tribute to medical frontliners, shares uplifting stories and provides advisory information on how to deal with the New Normal in a world afflicted by the pandemic. The campaign reached a worldwide audience and recorded some 207 million impressions.


Making it a global effort

At the same time, the oil and gas industry is faced with a double blow of a supply glut caused by the expiry of the OPEC alliance and the demand destruction brought upon by the COVID-19 lockdowns. These factors sent oil prices crashing further, with the WTI plunging into the negatives for the first time in history. Even as it is faced with crises on the business front, PETRONAS, made the decision to participate in the fight against COVID-19, joining hands with the Government of Malaysia as well as the authorities in the countries we operate in. As a crucial part of Malaysiaâ&#x20AC;&#x2122;s national growth journey since 1974, PETRONAS understands the symbiotic relationship between nation and industry, and that the very survival of its business hinges on the well-being of the people and countries in which it operates. It is with the support, trust and collaboration from its stakeholders that PETRONAS has grown into the energy multinational that it is today. And for any business to survive this pandemic, the nation and its people must survive, too.

With a presence in over 50 countries, PETRONAS is contributing to the fight from many fronts. Starting with efforts in its home country of Malaysia, it has also joined forces with governments of host countries, standing steadfast in helping communities survive this crisis and rebuild in its aftermath.

PETRONAS donated RM20 million (approximately USD4.7 million) worth of medical equipment and supplies to hospitals and frontliners through its foundation, Yayasan PETRONAS.

PETRONAS Upstream committed financial aids amounting to RM3.4 million to eight countries, including financial contributions to Azerbaijan and Brunei, personal protective equipment (PPE) for medical frontliners in Mexico, the Republic of South Sudan, Iraq and Canada, medical equipment to aid testing and recover support in Suriname and Myanmar. With a clear understanding that a global recovery is necessary to emerge from this pandemic and no group should be overlooked, PETRONASâ&#x20AC;&#x2122; global efforts amounted to RM37.8 million (approximately USD8.9 million) contributions to date.

Work-in-progress for the CPAP prototype by the researchers in PETRONAS Research Sdn Bhd.

Together we rise With such a gargantuan crisis, no single entity can make any significant impact by working on its own. PETRONAS thus coordinated its efforts with that of the governments to fulfil national needs and priorities in this challenging time, for so long as COVID-19 continues to ravage Malaysia and the world, business will never be as usual. From the onset, PETRONAS collaborated with the Malaysian National Security Council on its operations, while also working hand-in-hand with the Ministry of Health and the National Disaster Management Agency (NADMA) on health and safety matters, as well as crisis management. The Group, through its foundation, Yayasan PETRONAS, donated RM20 million (approximately USD4.7 million) worth of medical equipment and supplies to hospitals and frontliners. Additionally, PETRONAS staff, too, rallied behind the national efforts with a donation drive that saw 9,500 staff raising RM6.4 million for NADMA by contributing a portion of their salary. For the low-income households who are most affected by the pandemic and the movement control, PETRONAS, through its subsidiaries, contributed water, food, and supplies, as well as conducted donation drives at the local level. PETRONAS also put its integrated value chain and technological knowhow to good use, producing equipment and supplies that are in shortage during the crisis. For instance, PETRONAS Chemicals Group contributed polypropylene to produce 30,000 units of face shields for hospitals and clinics in Malaysia. Meanwhile, PETRONAS Lubricants International supplied fluids for trucks delivering essential supplies for the construction of hospitals in Wuhan and mobilised its plants to produce ethanol-based liquid and gel sanitisers for hospitals and local communities in Italy and Brazil. The Mercedes-AMG PETRONAS F1 team worked with mechanical engineers from University College London to develop a Continuous Positive Airway Pressure (CPAP) breathing aid device that is tailored for quick mass production and approved by the National Health Services in the UK. A similar prototype is being developed in Malaysia by the researchers at PETRONAS Research Sdn Bhd. At a time when the spread showed signs of being under control, PETRONAS contributed to the development of the standard operating procedures for the oil and gas sector to restart, supporting the plans by the Ministry of International Trade and Industry in rebuilding the Malaysian economy. PETRONAS also became a member of the newly formed Energy Core Group, alongside the Ministry of Energy and Natural Resources and the Energy Commission to sustain the security of power, gas and petroleum products in Malaysia.

Recover, we will By June 2020, countries that saw a decrease in the number of cases were considering measures to ease lockdown in hopes of economic recovery. A McKinsey research found that governments worldwide have already allocated more than USD13 trillion to stabilise economies in freefall and restart growth. PETRONAS continues to throw its full weight behind the battle against COVID-19, while helping to rebuild the economy. In rebuilding itself from the aftermath of COVID-19 and the price crisis PETRONAS looks to expand its footprints in renewables to deliver the energy needs of the world for a sustainable future. As the world is healing from the indelible impacts on the way we live, it is of paramount importance to continue collaboration and cooperation to tide through this storm. This is our fight, and while the journey ahead is fraught with challenges, PETRONAS is unwavering in its belief that we can recover from crisis, even stronger and ever sturdier.


O R G A N I S AT I O N

IGU Organisation 2018–2021 IGU Council

IGU Executive Committee Mr Mazighi Ahmed, Algeria

IGU Management Team

President Executive Committee

Task Force 1: Strategic Communications and Outreach

Task Force 3: Energy Policy

Strategy

Exploration and Production

IGU Secretariat

Coordination Committee

Task Force 2: Energy for All

Sustainability

Vice President

Secretary General

Storage

Dr Graeme Bethune, Australia, Regional Coordinator North East Asia and Australasia

Mr Hazli Sham Kassim, Malaysia, Regional Coordinator South and South East Asia

Mr Jean-Pierre Hollevoet, Belgium

Mr Han Fennema, Netherlands, The

Mr José Carlos Broisler Oliver, Brazil

Mr Pål Rasmussen, Norway

Mr Khaled Abu Bakr, Regional Coordinator Africa and the Middle East

Mr Andrey Sapozhnikov, Russian Federation

Mr Andrea Stegher, Regional Coordinator Europe

Rosa María Sanz García, Spain

Mr Orlando Cabrales Segovia, Regional Coordinator Latin America and the Caribbean

Ms Che Lixin, China, People’s Republic of Marketing and Communications

LNG

Transmission

Dr Jeongwook Khang, Korea, Republic of

Ms Li Yalan, China, People’s Republic of,

Committees

Gas Markets

Mr Patricio da Ré, Argentina

Distribution

R&D and Innovation

Utilisation

Dr Chen Xavier, China, People’s Republic of Mr Andreas Rau, Czech Republic Mr Patrick Corbin, France Mr Gerald Linke, Germany Mr Mostafa Sepehrian, Iran Mr Satoshi Yoshida, Japan Mr Joo-Myung (Joe) Kang, Korea, Republic of

IGU Management Team

Mr Joo-Myung (Joe) Kang, President (Republic of Korea)

Dr Jeongwook Khang, Chair of the Coordination Committee (Republic of Korea)

IGU Secretariat Team v  The staff of the IGU Secretariat (from left to right): Marcela Martínez Serret, Advisor; Luisa Peris Meléndez, Executive Assistant; Håkon Olav Huglen, Senior Advisor; Emma Siobhan Paños Knowles, Administration Consultant; Luis Bertrán Rafecas, Secretary General; Flavia Malet de Hvidbo, Senior Advisor; Luis Calvo, Director Advisor; Hyunchang Kim, Senior Advisor. Not pictured: Rodney Cox, Events Director; Matthew Doman, Interim Director, Public Affairs; Tatiana Khanberg, Public Affairs Manager.

84  IGU organisation 2018–2021

Mr Luis Bertrán Rafecas, Secretary General

Ms Li Yalan, Vice President (People’s Republic of China)

Mr David Carroll, United States of America Ms Karen A. Harbert, United States of America Mr Liu He, Associate Member, CNPC Mr Francisco P. de la Flor, Premium Associate Member Enagás

Mr Peder Bjorland, Premium Associate Member, Equinor Mr Ajay Shah, Premium Associate Member, Royal Dutch Shell

Mr Timothy M. Egan, Regional Coordinator North America Mr Marcel Kramer, Regional Coordinator Russia-Black Sea-Caspian Sea Mr Luis Bertrán Rafecas, Secretary General

Mr Jean-Marc Leroy, Premium Associate Member, ENGIE

Dr Chen Xavier, Vice Chair of the Coordination Committee (People’s Republic of China)

Mr David Carroll, Immediate Past President (United States of America)


Innovating to meet the energy transition challenge With a 60-year track record of success,

worldwide and offer a number of advanced

Accelerating the journey to

the Technip Energies business segment

biofuel process technologies.

a low-carbon society

of TechnipFMC is best known in LNG

The rush to convert the energy used by

Through innovative technology and appli­ca­

as the EPC contractor that successfully

humanity from fossil based fuels to renew­

tion expertise built on strengths in engineer­

delivered Nigeria LNG, Yemen LNG,

ables while reducing CO2 emissions during

ing and project and construction manage­

Qatargas, Yamal LNG, as well as three

the energy transition will require significant,

ment, Technip Energies unlocks new possibili­

of the first four open-sea floating LNGs.

selective innovation and rapid investment in

ties for its clients by offering an array of

Technip Energies brings its clients the

process plant and infrastructure.

decarbonised solutions for a better environ­

skills, creativity and agility needed to

Lighting homes under clear evening skies

ment. We have structured our offering for

deliver top-rated liquefied natural gas

in Asia: Removing coal from the energy

the energy transition in a framework of four

projects. Among these are some of the

equation in Asia and replacing it with natural

pillars: LNG, sustainable chemistry, decarbon­

largest and most complex liquefaction

gas brought to market as LNG is the fastest

i­sation and carbon-free energy solutions to

and export terminals in operation.

single route to significant decarbonisation

accelerate the journey to a low-carbon society.

Working with our partners, we are proud

and improved urban air quality.

to have engineered and delivered more

Reducing municipal incinerator loads

By leveraging our extensive experience and expertise, we are redefining ourselves to

than 20% of the world’s LNG capacity

in Europe: the circular economy is a reality

meet the scale, complexity and breadth of

through mid-scale to large-scale plants

for Technip Energies as we are developing

technologies that are required for the energy

both onshore and offshore in remote

circular solutions and designing plants that

transition and found to a great extent in our

locations and harsh environments.

help clients reprocess plastic waste into

company’s existing portfolio.

feedstock capable of being reconverted into Leader in LNG, hydrogen and other key markets

the original product. Enabling developed countries to meet

In the meantime, when our clients cannot go 100% of the way in one step because of the impossibility of meeting profitability

What may be less well known for IGU

targets for greenhouse gas emissions: Turning

criteria in very new markets, we will continue

readers is that Technip Energies is also a

to carbon management, CO2 capture and

to build responsibly engineered plants

leader in the hydrogen, refining, petro­

sequestration, electrification and the

meeting all codes, standards and environ­

chemical and fertiliser markets among many

substitution of methane and hydrogen as

mental regulations, bringing safe industrial

others and a key player in sustainable

fuels where coal and oil have been used

facilities to the four corners of the world.

chemistry. Approximately one-third of all

up until today.

hydrogen produced today globally is done in

Developing offshore wind energy

At every juncture, energy saving and reduced CO2 emission solutions will be on

plants engineered around Technip Energies’

solutions for the management of electrical

the table for inclusion in all our projects,

process technology. We have also delivered

power: Building on early experience from

meaning we will accompany our clients to

a wide range of turnkey biofuel plants

pilot projects in the North Sea.

achieve their energy transition targets.


M E M BERS

Members of IGU Albania Algeria Argentina Armenia Australia Austria Azerbaijan

Bahrain Belarus Belgium Bolivia Bosnia and Herzegovina Brazil Brunei

Bulgaria Cambodia Cameroon Canada Chile China, People’s Republic of

Chinese Taipei Colombia Croatia Cyprus Czech Republic Denmark Egypt

Equatorial Guinea Finland France Germany Ghana Greece Hong Kong, China Hungary India Indonesia Iran Iraq Ireland Israel Italy Japan Korea, Republic of Kuwait Latvia Lebanon Libya Lithuania Macedonia Malaysia Mexico Monaco Mozambique Netherlands, The New Zealand Nigeria Norway Oman, Sultanate of

Albania Albanian Energy Regulator (ERE)

Bolivia Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) Bosnia and Herzegovina Gas Association of Bosnia and Herzegovina

Hungary Hungarian Electricity Plc (MVM) – Hungarian Gas Trade

Latvia JSC Latvijas Gāze

Algeria Association Algérienne de l’Industrie du Gaz – AIG

Cyprus Ministry of Energy, Commerce, Industry & Tourism Czech Republic Czech Gas Association

Argentina Instituto Argentino del Petróleo y del Gas

Brazil Associação Brasileira das Empresas Distribuidoras de Gás Canalizado (ABEGÁS)

India Gas Authority of India Ltd (GAIL)

Countries represented in IGU 85 Charter Members 14 Premium Associate Members 57 Associate Members

Peru Poland Portugal Qatar Romania Russian Federation Saudi Arabia Serbia Singapore Slovak Republic Slovenia South Africa Spain Sudan Switzerland Thailand Timor-Leste Trinidad and Tobago Tunisia Turkey Ukraine United Arab Emirates United Kingdom United States of America Uzbekistan Venezuela Vietnam Yemen

Charter Members

Armenia Union of Gas Companies of Armenia (UGCA) Australia Australian Gas Industry Trust Austria Österreichische Vereinigung für das Gasund Wasserfach (ÖVGW) Azerbaijan State Oil Company of the Azerbaijan Republic (SOCAR) Bahrain The National Oil and Gas Authority (NOGA) Belarus Gazprom Transgaz Belarus Belgium Association Royale des Gaziers Belges

Brunei Brunei Energy Association Bulgaria Overgas Inc. AD Cambodia Cambodian Natural Gas Corp. Ltd

Denmark Dansk Gas Forening – Danish Gas Association Egypt Egyptian Gas Association Equatorial Guinea Sociedad Nacional de Gas de Guinea Ecuatorial (SONAGAS G.E.) Finland Finnish Gas Association

Cameroon Société Nationale des Hydrocarbures

France Association Française du Gaz (AFG)

Canada Canadian Gas Association

Germany Deutscher Verein des Gasund Wasserfaches e.V. (DVGW

Chile Asociación de Empresas de Gas Natural (AGN) China, People’s Republic of China Gas Society

Ghana Ghana National Gas Company

Colombia Asociación Colombiana de Gas Natural – Naturgas

Greece Public Gas Corporation of Greece S.A. (DEPA)

Croatia Croatian Gas Association

86  Members of IGU

Indonesia Indonesian Gas Association (IGA) Iran National Iranian Gas Company (NIGC) Iraq State Oil Marketing Company/Ministry of Oil (SOMO) Ireland Gas Networks Ireland Israel The Israel Institute of Energy & Environment Italy Comitato Italiano Gas (CIG) Japan The Japan Gas Association Korea, Republic of The Korea Gas Union Kuwait Kuwait Petroleum Corporation (KPC)

Lebanon Ministry of Energy and Water Libya National Oil Corporation

New Zealand The Petroleum Exploration & Production Association of New Zealand Inc. Nigeria Nigerian Gas Association c/o Nigeria Gas Co. Ltd

Lithuania Nacionalinė Lietuvos Energetikos Asociacija (NLEA)

Norway Petoro AS

Macedonia Macedonian Gas Association

Peru Perúpetro S.A.

Malaysia Malaysian Gas Association Mexico Asociación Mexicana de Gas Natural, A.C. Monaco Société Monégasque de l’Électricité et du Gaz (SMEG) Mozambique Empresa Nacional de Hidrocarbonetos, E.P. (ENH) Netherlands, The Royal Dutch Gas Association – Koninklijke Vereniging van Gasfabrikanten in Nederland (KVGN)

Oman, Sultanate of Oman LNG L.L.C.

Poland Polskie Zrzeszenie Inżynierów i Techników Sanitarnych (PZITS) – Polish Gas Association Portugal Associação Portuguesa das Empresas de Gás Natural (AGN) Qatar Qatar Liquefied Gas Company Ltd (Qatargas) Romania S.N.G.N. Romgaz S.A. Russian Federation PJSC Gazprom Saudi Arabia Saudi Arabian Oil Company (Saudi Aramco)


M E M BERS

Charter Members – continued Serbia Gas Association of Serbia Singapore SP PowerGrid Ltd

Spain Spanish Gas Association – Asociación Española del Gas (Sedigas)

Timor-Leste TIMOR GAP, E.P.

Ukraine Naftogaz of Ukraine

Trinidad and Tobago The National Gas Company of Trinidad and Tobago Ltd

United Arab Emirates Abu Dhabi Gas Liquefaction Company Ltd (ADGAS)

Slovak Republic Slovak Gas and Oil Association

Sudan Ministry of Petroleum and Gas

Slovenia Geoplin

Switzerland Swissgas

Tunisia Association Tunisienne du Petrole et du Gaz (ATPG) c/o STIR

South Africa South African Gas Develop­ ment Company (Pty) Ltd

Thailand PTT Public Company Ltd

Turkey BOTAŞ

United Kingdom BP Gas Marketing Ltd

Venezuela Petróleos de Venezuela S.A. (PDVSA) Vietnam PetroVietnam Gas JSC Yemen Yemen LNG

United States of America American Gas Association Uzbekistan Uzbekneftegaz (UNG)

Premium Associate Members Beijing Gas Group (China)

Equinor ASA (Norway)

PT Pertamina – Persero (Indonesia)

Cheniere Energy Inc. (USA)

ExxonMobil Gas & Power Marketing (USA)

Royal Dutch Shell (The Netherlands/UK)

China National Petroleum Corporation – CNPC (China)

İGDAŞ – Istanbul Gas Distribution Co. (Turkey)

The Hong Kong & China Gas Co. Ltd (Hong Kong, China)

Enagás (Spain)

Korea Gas Corporation – KOGAS (Korea)

TOTAL S.A. (France)

ENGIE (France)

Naturgy (Spain)

Associate Members AGL Energy Ltd (Australia)

Indian Oil Corporation Ltd (India)

Santos Ltd (Australia)

Atlas Copco Gas & Process (USA)

Indonesian Gas Society (Indonesia)

Sempra LNG & Midstream (USA)

Australian Petroleum Production & Exploration Association – APPEA (Australia)

INPEX Corporation (Japan)

Société Suisse de l’Industrie du Gaz et des Eaux – SSIGE/SVGW (Switzerland)

Baker Hughes Company (USA)

Instituto Brasileiro de Petróleo, Gás e Biocombustíveis – IBP (Brazil)

Bureau Veritas (France)

Israel Natural Gas Lines Ltd (Israel)

TAQA Arabia (Egypt)

Chart Industries (USA)

Linde AG (Germany)

Chevron Gas & Midstream Company (USA)

Natural Gas Society (India)

TBG – Transportadora Brasileira Gasoduto Bolívia-Brasil S.A. (Brazil)

China LNG Association (China)

NextDecade Corporation (USA)

TgP – Transportadora de Gas del Perú (Peru)

China Petrochemical Corporation – Sinopec (China)

N.V. Nederlandse Gasunie (The Netherlands)

The Association of Oil & Gas Exploration Industries in Israel

COM-therm (Slovakia)

Oman Gas Company SAOC (Oman)

The Gas Association of Chinese Taipei (Chinese Taipei)

ConocoPhillips Company (USA)

ONC Energy (China)

Tubacex (Spain)

Edison S.p.A. (Italy)

Origin Energy Limited (Australia)

Turboden (Italy)

Egoli Gas Pty (South Africa)

Petróleo Brasileiro S.A. – Petrobras (Brazil)

Uniper SE (Germany)

Enerdata s.a.s. (France)

Petronet LNG Limited (India)

Vitol S.A. (Switzerland)

Energodiagnostika (Russia)

Posco Daewoo (Korea)

Westnetz GmbH (Germany)

Eni (Italy)

PwC (The Netherlands)

Woodside (Australia)

Ente Vasco de la Energía (Spain)

Regas (Italy)

GasTerra B.V. (The Netherlands)

Repsol S.A. (Spain)

GAZBIR – Association of Natural Gas Distributors of Turkey

Romet Ltd (Canada)

Hanwha Energy (Korea)

Russian Gas Society (Russia)

Hermann Sewerin GmbH (Germany)

Samsung Engineering Co. Ltd (Korea)

Sonorgás (Portugal)

Organisations Affiliated to IGU ARPEL – Regional Association of Oil, Gas and Biofuels Sector Companies in Latin America and the Caribbean

GIIGNL – Groupe International des Importateurs de Gaz Naturel Liquéfié/International Group of LNG Importers

MARCOGAZ – Technical Association of the European Natural Gas Industry

Energy Delta Institute (EDI)

NGV Global

Pipeline Research Council International, Inc. (PRCI)

Gas Infrastructure Europe (GIE)

Russian Natural Gas Vehicles Association (NGA)

Gas Technology Institute (GTI)

NGVA Europe – European Association for Bio/Natural Gas Vehicles

GERG – Groupe Européen de Recherches Gazières/ European Gas Research Group

International Pipe Line & Offshore Contractors Association (IPLOCA)

World LPG Association (WLPGA)

Members of IGU  87


E V ENTS AND AC K NOWLED G E M ENTS

IGU events and other major gas-related events 2020-2021 2020 October 12-13 Flame Virtual Conference November 2-6 WLPGA’s e-LPG Week November 4-5 IGU Executive Committee meeting November 18-19 IGU Council meeting November 24 GIIGNL 50th General Assembly

November 26 IGU-EnergyNet Latin America & Caribbean Gas Conference free pre-event digital discussion December 3 7th IEF-IGU Ministerial Gas Forum 2021 February (exact dates to be advised) IGU-EnergyNet Latin America & Caribbean Gas Conference (LGC 2021)

April 6-8 IGU Executive Committee and Coordination Committee meetings Prague, Czech Republic April 29-30 GIE Annual Conference Lucerne, Switzerland June 20-21 IGU Council and Coordination Committee meetings Daegu, Korea June 21-25 28th World Gas Conference Daegu, Korea

September 13-17 IPLOCA 54th Annual Convention Prague, Czech Republic November 1-12 26th Session of the Conference of the Parties to the UNFCCC (COP 26) Glasgow, UK December 5-9 23rd World Petroleum Congress Houston, USA Where no venue is listed the event is virtual. Readers are reminded to reconfirm all dates with the respective event organisers

Acknowledgements For IGU Secretary General: Luis Bertrán Rafecas Director Advisor: Luis Calvo Events Director: Rodney Cox Interim Director, Public Affairs: Matthew Doman Manager Public Affairs: Tatiana Khanberg Senior Advisors: Flavia Malet de Hvidbo, Hyunchang Kim, Håkon Olav Huglen Advisor: Marcela Martínez Serret Executive Assistant: Luisa Peris Meléndez Administrative Advisor: Emma Siobhan Paños Knowles

of Forest Certification (PEFC), all paper used being sustainably sourced.

For ISC Consulting Editor: Mark Blacklock Copy & Picture Editor: Adrian Giddings Publisher: Robert Miskin Finance Director: Yvonne O’Donnell Finance Assistant: Maria Picardo Senior Consultants: Michael Gaskell, Rafe McKenna and Jonathan Unsworth

Cover: ESL Shipping’s LNG-fuelled Viikki, ESL Shipping.

Art and Design Director: Michael Morey Printed by Buxton Press Ltd which is certified to Chain of Custody Standards for the Forest Stewardship Council (FSC) and Programme for the Endorsement

88 Events and Acknowledgements

IGU and ISC would like to express their thanks to all those who helped in the preparation of this publication. Thanks are also due to the following companies, people and organisations for providing pictures. The credits are listed by article. Where the pictures for an article came from a variety of sources, the appropriate page numbers are given in brackets after each source.

Introduction: IGU. The mixed impacts of coronavirus on the Latin American gas markets: Graphics Wood Mackenzie, BW LNG (24). Cost-effective and clean ways of producing hydrogen from natural gas: BASF SE (27), Jordan Salkin/NASA Glenn Research Center (28), IBM (29). The roll-out of hydrogen in Korea: Hyundai Motor. Smart gas metering: A Portuguese project: Nuno Nascimento and Mariana Paiva (38 authors’ pictures, 41), Pietro Fiorentini (38 meter).

Why LNG is the best deep-sea marine fuel option today: SEA-LNG (44 upper), Ulsan Internet Television (44 lower), FueLNG (45), CMA CGM Group (46), SIEM Ship Management (48), ESL Shipping (50). IGU awards at WGC 2021: WGC 2018/DChFOTO (56), EXCO Exhibition & Convention Center (57). Reports from the Regional Coordinators: Snam (106 upper), © Chris Schotanus via Total (60 lower), Colin Keldie for BIG HIT (61). Members’ corner: National Gas Company of Trinidad and Tobago (64 & 65), Atlantic LNG (66). Presenting IGU’s new members: Egoli Gas (69 & 69 upper), HDC (69 lower). Activities of IGU: LNG2019 (72 upper), Ubar Conferences & Events (72 lower), IGU (73 left & right, 74 upper), Natural Gas World (73 centre), Naturgy (74 lower). IGU Organisation: Korea Gas Union (Joo-Myung Kang & Jeongwook Khang, 84), Beijing Gas Group (Li Yalan & Chen Xavier, 84), IGU (Luis Bertrán Rafecas & Secretariat team, 84), GTI (David Carroll, 84).


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