International Gas October 2020
Industry expected to rebound in 2021
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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
Meeting the world’s energy demands Qatargas provides quality LNG and other hydrocarbon products to the global market safely and reliably. We operate 14 mega LNG trains with a total production capacity of 77 million tonnes per annum, two of the world’s largest condensate refineries, two sales gas facilities, two helium plants, and a chartered fleet of 70 LNG vessels. Through efficient and reliable operations, commitment to our customers and the environment, we supply cleaner energy to the world.
The World’s Premier LNG Company www.qatargas.com
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 efcient 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 liqueed 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 Liqueed 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 liqueed 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 benets 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; reecting 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
495000
81°
510000
Z-1
4°
| n
Z-64
Z-38
XX
9555000
4°
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9555000
81°15'
465000
XXIII . !
MANCORA
4°15'
X
9525000
4°15'
LOS ORGANOS
EL ALTO
9525000
. !
9540000
9540000
V
. !
II 9510000
Z-2B A
LOBITOS
|!. n
4°30'
IV
TALARA
I
9480000
VII
LEGEND
4°45'
. !
9465000
III
2.5
0
MAIN HIGHWAY BIDDING ROUND BLOCKS
CRS: UTM 17S WGS84 5
MAIN PORT SECONDARY HIGHWAY
Z-6
5
| n
CITIES
10
15
Z-2B B 20 Km
465000
81°15'
480000
9480000
NEGRITOS
4°45'
. !
IX
9495000
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VI
XIII-A BLOCKS UNDER CONTRACT REFINERY 495000
81°
510000
9465000
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
NEWS
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
Accelerating the transition to a low carbon society Through innovative technologies and integrated expertise, our offering unlocks new possibilities for our clients in developing their energy resources and meeting the energy transition challenge. In LNG, we deliver first-class projects while offering solutions to reduce CO2 emissions from liquefaction and export terminals through: ` Energy efficient designs built on decades of R&D ` Carbon Capture and Storage for existing facilities - wellhead CO2 removed in pretreatment and combustion related CO2 ` Electrification of new facilities using power generated from high efficiency combined cycle power plants and renewable sources associated with energy storage. With our depth of LNG experience and breadth of energy industry coverage, we are uniquely positioned to deliver greater efficiency across project lifecycles from concept to delivery and beyond. Discover more. TechnipFMC.com
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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