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January/February 2019
Ice operations: LNG how the latest carriers penetrate the LNG carriers are penetrating Russian HighHigh Arctic the Russian Arctic
REGASIFICATION New terminals showcase regas technology
ESCORT TUGS Bespoke tugs are finding favour with LNG operators
FLOATING LNG Why are floating storage and regas vessels so popular?
MIDDLE EAST How Qatar intends to keep its number one spot as LNG exporter
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Contents January/February 2019 volume 41 issue 1
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11
Comment
5 LNG is gaining traction the world over; new editor John Snyder considers the ramifications for availability and infrastructure
Area report – Middle East
6 Qatar has increased its LNG output, but developments in Abu Dhabi and Oman will also boost the Middle East as an LNG export region
Regasification
11 A wave of new import terminals will provide an ideal environment to showcase the latest regasification technologies
16
Import terminals
14 A host of new terminal projects are vying to quench the thirst for LNG on the east coast of Australia 16 How Grain LNG plans to meet breakbulk demand
Equipment: Cargo monitoring
19 Why traditional training methods overlook unusual scenarios 20 How simulators are improving competence in and around cargo monitoring
Interview
22 Maritime Strategies’ David Bull considers the rapid increase in rates and record numbers of LNG carrier deliveries
30
Export terminals
24 LNG Canada is the largest of 13 LNG export terminals proposed for British Columbia
Latest delivery: Significant vessel
28 A look at the PaxOcean-built floating storage and regasification unit Karunia Dewata
Special report – Floating LNG
30 With 17 countries employing FSRUs and additional regas vessel projects under development, the floating LNG option has never been so popular
33
Technical: Escort tugs and emergency response
33 Tug owners are starting to use LNG for tug fuel, especially when the vessels are dedicated to escorting LNG carriers 35 Tugs adapted for the specific requirements of LNG carrier manoeuvring in export and import terminals are now finding favour among owners
Operations: Ice class and Polar
36 LNG carrier operations in the Russian High Arctic and the Baltic Sea have extended the operational envelope of ice class gas shipping
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LNG World Shipping | January/February 2019
Contents January/February 2019 volume 41 issue 1
36
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Editor: John Snyder t: +1 917 886 5192 e: john.snyder@rivieramm.com Production Editor: Kevin Turner t: +44 20 8370 1737 e: kevin.turner@rivieramm.com Brand Manager: Ian Pow t: +44 20 8370 7011 e: ian.pow@rivieramm.com Sales: Kaara Barbour Southeast Asia & Australasia Representative t: +61 414 436 808 e: kaara.barbour@rivieramm.com
Pumps/compressors/expanders/turbines 41 Using thermal oxidation to handle boil-off gas; a deepwell cargo pump designed specifically for LNG-fuelled engines
Statistics
44 The LNGC orderbook as of 1 January 2019
Viewpoint
48 Final investment decisions are looming in the LNG shipping sector
Next issue
Main features include: Area Report: China; Special Report: LNG bunkering
Head of Sales – Asia: Kym Tan t: +65 6809 1278 e: kym.tan@rivieramm.com Production Manager: Richard Neighbour t: +44 20 8370 7013 e: richard.neighbour@rivieramm.com Chairman: John Labdon Managing Director: Steve Labdon Finance Director: Cathy Labdon Head of Content: Edwin Lampert Published by: Riviera Maritime Media Ltd Mitre House 66 Abbey Road Enfield EN1 2QN UK
in Asia; Operations: Shipmanagement; Technical: Ship-to-ship & ship-to-shore transfer technology; Equipment: Containment systems www.rivieramm.com ISSN 1746-0603 (Print) ISSN 2051-0616 (Online) ©2019 Riviera Maritime Media Ltd
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LNG World Shipping | January/February 2019
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COMMENT | 5
Exciting times to cover the LNG shipping market
A John Snyder, Editor
THERE HAS BEEN TALK OF CONSTRUCTING SMALL LNG CARRIERS IN THE US. THAT HAS NOT HAPPENED SINCE 1980”
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s I settle into the editor’s chair for LNG World Shipping, the mood surrounding LNG is buoyant. The demand for LNG continues to grow and 2019 is expected to be a record year for supply in terms of both production growth and new project FIDs, according to analysts. As an American marine journalist with some 30 years’ experience covering the marine market, it is an exciting time to cover the LNG market. That’s because the US is poised to triple its exports by the end of this year and become the world’s largest exporter of LNG in less than five years. It is an astounding turn of events considering that Cheniere Energy shipped its first LNG from its Sabine Pass export terminal in 2016. Mexico, South Korea and China are some of the biggest importers of US LNG. There has even been some talk of constructing small LNG carriers in the US. That has not happened since 1980. While there will be plenty to report on in the US, it will not be the sole focus of our coverage at LNG World Shipping. Through our print and digital magazines, online media channels and in person at events, we will provide a much broader view. One topic we will certainly be covering in detail is the IMO 2020 sulphur cap. As it approaches its implementation date, demand for LNG as a marine fuel will continue to grow. As Peter Keller, SEA/LNG chairman pointed out in a commentary on 17 January, the LNG-powered fleet has grown globally from 118 vessels in operation in 2017, to 143 in operation as of last year – with a further 135 on order and 135 LNG-ready ships either in operation or on order. The vessel types are wide ranging, and include tankers, container ships, car carriers, cruise ships and bulkers. Mr Keller’s company, TOTE, was a pioneer in the LNG-fuelled vessel market and now has more than three years of service with its container
ships operating between Jacksonville, Florida, and San Juan, Puerto Rico. A study performed by simulation and analytics specialist Opsiana and commissioned by SEA/LNG makes the economic case for LNG as a marine fuel, compared to burning HFO with exhaust gas scrubbers or compliant low sulphur fuel. The study, released 23 January, examines a newbuild 14,000-teu container ship operating between Asia-US West Coast in liner trade. “The study,” said Mr Keller, “unequivocally shows that for this vessel type, on this trade route, LNG as a marine fuel delivers the best return on investment on a net present value basis over a conservative 10-year horizon, with fast payback periods ranging from one to two years.” Of course, a key element for the increased use of LNG as a marine fuel is its availability, either in port or via a bunkering vessel. In the coming months, LNG World Shipping will be reporting on investments in the latest LNG bunkering infrastructure developments at ports and terminals, the construction and delivery of the newest bunkering vessels and the development of specialised bunkering and cargo handling technologies. LNG bunkering has grown to encompass 24 out of the world’s top 25 - and all but one of the top 10 - bunker ports globally. From a lone operational LNG bunker vessel in 2017, SEA/LNG estimates that as many as 30 will be in operation within the next four to five years at key bunkering nodes in Asia, Europe, the Middle East, and North America. And last but certainly not least, we will also cover a ship’s greatest safety mechanism – the crew – diving into training and simulation among other pertinent issues. And we have a few more surprises to expand our coverage for the coming year. Please feel free to contact me at john.snyder@rivieramm. com with any areas that you would like to see covered in the months ahead. I look forward to hearing from you. LNG
LNG World Shipping | January/February 2019
6 | AREA REPORT Middle East
It remains to be seen how the construction of four new Super Trains will impact the LNG carrier loading arrangements at Ras Laffan
Gulf prepares for major increase in LNG exports While a groundbreaking new Qatar expansion phase is set to grab the headlines, more modest developments in Abu Dhabi and Oman will also boost the Middle East as an LNG export region
T
he Middle East produced 91.3M tonnes of LNG in 2017, or 31.5% of the global total of 289.8M tonnes. Qatar, with 77.5M tonnes, was by far the biggest contributor to the region’s output, while Oman exported 8.2M tonnes and the United Arab Emirate of Abu Dhabi 5.6M tonnes. Qatar has been the world’s leading LNG exporter for over 12 years, having overtaken Indonesia in 2006. Ever since the 14th and final liquefaction train at the vast Ras Laffan industrial complex came onstream in February 2011, Qatar has been
LNG World Shipping | January/February 2019
producing LNG at or slightly above the facility’s nameplate capacity of 77 million tonnes per annum (mta) and filling, on average, three LNG carriers per day. This sustained level of Qatari output has ensured the Middle East’s status as the world’s leading LNG-producing region for most of the past decade. However, the commissioning of seven new LNG export projects in Australia in recent years pushed Asia into the top spot among LNG-producing regions in 2017, while Australia itself is set to pass Qatar to become the premier LNG export nation in 2019.
Qatar Super Train quartet
However, the time in the limelight for Australia, which now has an aggregate nameplate capacity of 85M tonnes, is set to be limited. Qatar is poised to launch an ambitious project that calls for the construction of four additional ‘Super Trains’ at Ras Laffan, of 7.8 mta capacity each. Six of the 14 existing trains at Ras Laffan are of this size. The four new liquefaction units will boost Ras Laffan’s nameplate capacity to around the 110 mta mark by the time the planned construction work is complete in 2024. The 40% increase in LNG production volumes will push Qatar back to the top spot in the LNG exporters league table and increase the number of annual LNG carrier loadings at Ras Laffan from around the 1,000 mark to over 1,400. Qatar introduced a self-imposed moratorium on any further development of its immense offshore North Field gas deposit in 2005, to give it time to assess
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Middle East AREA REPORT | 7
MIDDLE EAST LNG EXPORTERS Terminal/country Ras Laffan/Qatar Qalhat/Oman Das Island/Abu Dhabi Balhaf/Yemen
Start of Terminal Operations
Capacity (mta)
Output in 2017 (mta)
1996
77
77.5
2000
10.4
8.2
1981
5.8
5.6
2009
6.7
*
* Note: Yemen LNG halted operations in April 2015 due to civil war in the country
Export flexibility
the potential future life of the field in the aftermath of constructing the initial 14 Ras Laffan liquefaction trains. Appraisal work in recent years has increased the country’s proven gas reserves to around the 880 trillion cubic feet (tcf) level, or 13% of the global total, and indicates that the North Field is more than capable of not only supporting output from four new LNG Super Trains, but also meeting rising domestic demand over an extended period. The moratorium was lifted in 2017 and Qatar expects to make a final investment decision (FID) on the construction of the four new Ras Laffan liquefaction units before the end of 2019. In late 2018 Qatar decided to become the first Middle East member country to leave the Organization of Petroleum Exporting Countries (OPEC) cartel, as of 1 January 2019. Although it was a member of the oil exporter group for 57 years, Qatar produces only 600,000 barrels/day of oil, or 2% of OPEC’s output, and is now focusing primarily on further developing its LNG and gas supplier credentials. Qatar supplied LNG to around 90 terminals in 24 countries worldwide in 2017. Traditionally, these volumes were marketed by RasGas and Qatargas, the two Qatar Petroleum (QP) subsidiaries which, between them, operated the 14 liquefaction trains at Ras Laffan.
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At the start of 2018, QP merged the two ventures into a single entity under the Qatargas name. The new Qatargas marketing system enables the Ras Laffan output to flow more freely between the Atlantic and Pacific Basins, providing QP with an edge against growing LNG supply competition from, not least, Australia and the US. Qatar has worked in other ways to make its LNG export strategy more flexible in recent years. The LNG purchase prices in several established long-term sales and purchase agreements (SPAs) have been renegotiated downwards and cargo destination clauses have been amended to make them less terminal-specific. Around 60% of the contracts in the country’s current LNG sales portfolio have flexible destinations. The flexible arrangements enable QP to react to changes in the global market. In the first half of 2018 some 71% of the cargoes loaded at Ras Laffan were shipped to Asia, reflecting the strength of demand in the region. A few years earlier, European customers were taking 50% of the country’s output. Qatargas was party to the largest SPA to be concluded in 2018, a September deal with PetroChina under which it is providing 3.4 mta of LNG for 22 years, with immediate effect and until 2040. The SPA, which allows flexibility in the delivery of LNG to various terminals across China, also provides the Asian nation with an important new and competitive source of supply at a time when it is engaged in a trade war with the US and is currently imposing a 10%
tariff on US LNG imports. Around two-thirds of Qatari LNG export cargoes are loaded on ships operated by Qatar Gas Transport Co Ltd, or Nakilat. The Nakilat LNG carrier fleet of 66 fully and part-owned vessels is comprised of 31 Q-Flex ships of 216,000 m3, 14 Q-Max ships of 266,000 m3, 22 conventional-size carriers and a floating storage and regasification unit (FSRU). If Nakilat’s aim is to maintain a fleet capable of lifting a similar share of the output of the four planned Super Trains, an additional 40 LNG carriers will be required. The industry will be watching closely to see what size ships are specified. While the Q-Flex and Q-Max ships offer benefits in terms of economies of scale, they are too big to transit the expanded Panama locks. If ships of the Q-Flex and Q-Max size are specified, it is certain they will be provided with dual-fuel propulsion systems, unlike the existing oil-fueled Q-Flexes and Q-Maxes. Nakilat has already converted one of its Q-Max ships to enable it to run on gas and is reportedly considering similar transformations for its other 44 large ships, to facilitate compliance with the January 2020 global sulphur cap of 0.5%.
Abu Dhabi gas rebirth
April 2019 marks a watershed date for Abu Dhabi LNG. The United Arab Emirate has been shipping LNG from its 5.8 mta, three-train Das Island export terminal since 1981, longer than any of the region’s other LNG suppliers. Over the years the sole long-term SPA customer of the Abu Dhabi National Oil Company (Adnoc) has been Tokyo
LNG World Shipping | January/February 2019
8 | AREA REPORT Middle East
Electric Power Company (Tepco). In recent years, Tepco and Chubu Electric in Japan have amalgamated their LNG marketing operations under the Jera banner. In March 2019, Jera’s current 4.7 mta, 25-year sales deal with Adnoc expires and, in line with the drive by Japanese LNG importers to diversify their supply base and conclude more flexible terms, the new deal finalised by the two parties bears no relationship to the legacy contract. From April 2019 Jera will purchase eight cargoes annually from Adnoc for a period of three years on an open destination basis. The volume, which is equal to about 0.5 mta, is approximately 90% down on the previous arrangement, and then only for a limited duration. Adnoc LNG, an affiliate of Adnoc in which Mitsui, BP and Total hold minority stakes, is stepping up its marketing efforts to line up a range of new LNG customers to fill the vacuum created by Jera’s reduced requirements. To date the company has succeeded in signing seven short- and medium-term sales agreements, including the new Jera arrangement, aggregating 4.2 mta. At the same time, the entire Abu Dhabi gas industry is in a state of flux. Although in possession of substantial reserves, the emirate has a natural gas demand that is currently in excess of production capabilities, and growing at a rate of 10% per annum. Abu Dhabi became a net gas importer in 2008, primarily as a result of the Dolphin pipeline deliveries, from Ras Laffan in Qatar to the Taweelah receiving facilities in the UAE, which commenced in 2007. The Dolphin line currently meets 30% of Abu Dhabi’s gas needs and supplies have continued uninterrupted despite the strained diplomatic and economic relations that have persisted between Abu Dhabi and Doha over the last 18 months. The Qatar/Abu Dhabi Dolphin supply contract does not expire until 2032. In November 2018 Abu Dhabi’s Supreme Petroleum Council (SPC) approved a five-year, US$132Bn Adnocbacked investment plan aimed at
LNG World Shipping | January/February 2019
After shuttling between Abu Dhabi and Tokyo Bay for over 22 years, Mubaraz will soon be sailing on different routes
increasing oil and gas output and making the emirate once again self-sufficient in gas production. To facilitate this goal, Abu Dhabi has launched its firstever upstream licensing round and is welcoming international players in field development initiatives. Recent new gas field discoveries have added 15 tcf to the emirate’s 210 tcf of proven reserves. Although much of the developing gas output will be utilised locally, including in petrochemical manufacture, power generation and oil field reinjection, LNG exports will continue to have a key role to play for Abu Dhabi. The intention is to spend the next few years refurbishing the Das Island liquefaction trains and to continue developing its portfolio of new LNG customers. These drives, in turn, will enable the terminal to export LNG at its full 5.8 mta nameplate capacity by 2024 and thereafter to maintain this output level until at least 2040. Meanwhile, the emirate’s National Gas Shipping Company is seeking charter opportunities for its fleet of eight 137,000 m3 LNG carriers. These are the vessels that have been utilised over the past two decades in shuttling Jera cargoes from Das Island to Japan on behalf of Adnoc LNG. One notable LNG cargo that Adnoc will soon be delivering is the inaugural shipment for the Bahrain LNG project, having been appointed as the chosen supplier. Near-neighbour Bahrain, which is poised to become the Gulf’s newest LNG importer in the coming months, is making use of a floating storage unit and an adjacent jetty-
mounted regasification unit as its receiving terminal arrangement.
Oman gets Khazzan boost
Oman is the Middle East’s second largest LNG exporter. The 8.2M tonnes shipped to overseas customers in 2017 meant that the three Oman LNG trains at the Qalhat terminal near Sur were operating at around 80% capacity on average. Oman consumes about 70% of the gas it produces and domestic use more than doubled between 2007 and 2017, reducing the amount of gas available for export as LNG. However, production from the large new onshore Khazzan field came onstream in September 2017 and immediately began to buoy the Qalhat terminal’s LNG output. Although the figures for 2018 are not yet in, LNG loadings for the first nine months of last year were running 15% ahead of those for the equivalent period in 2017. If this pace was maintained, Oman LNG exports in 2018 will have topped 9.5M tonnes. Oman LNG is currently weighing up a 1.5 mta debottlenecking project for the Qalhat facility’s three trains, an initiative that would boost the terminal’s nameplate capacity from10.4 to 11.9 mta. The first 0.5 mta of the expansion project could be available by early 2020. Oman has a core fleet of eight LNG carriers engaged in lifting a substantial part of the Qalhat output. Oman Shipping Company holds a controlling stake in seven of the vessels and a 40% share in the eighth. Mitsui OSK Lines part-owns all but two of the ships. LNG
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REGASIFICATION | 11
Regasification: innovation on land and sea The high number of planned new import terminals makes for an ideal environment to showcase the latest regasification technologies
A
s demand for LNG grows, so too does the need for regasification technology that allows floating storage and regasification units (FSRUs) and other terminals to meet requirements and ensure national infrastructure remains supplied with gas. On 8 January, the Kremlin announced that Vladimir Putin had formally activated Gazprom’s first FSRU, Marshal Vasilevsky, a converted tanker named for Aleksandr Mikhaylovich Vasilevsky, a former Marshal of the Soviet Union and Soviet Defence Minister. Marshal Vasilevsky is moored off Kaliningrad on the Baltic Sea and provides an alternative energy supply for the Kaliningrad Oblast enclave,
which is separated from the rest of Russia on land by Latvia, Lithuania and Belarus. The terminal is located 5 km offshore in water depths of 19 m and is protected by a breakwater. The vessel itself is 300 m long by 46.5 metres wide. The temperature in its reservoirs, which can carry 174,000 m3 of LNG, is maintained at -163°C. It has a speed of 19.5 knots and is the first vessel of the Arc4 ice class. It is Russian-flagged and registered with the Russian Maritime Register of Shipping. Mr Putin said: “We are all certainly well aware that delivering a primary energy resource such as natural gas over such a distance by pipeline makes better economic sense and is a cheaper option. “But for us, for [the] Kaliningrad Region, the project will most likely be a backup, and will substantially minimise, or more precisely, mitigate all transit risks.” He noted that the FSRU’s capacity of 2.7Bn m3 of gas per year means it is capable of entirely covering the energy requirements of the Kaliningrad Oblast, without the need for gas to be delivered via pipeline. “It is hard to overestimate the importance of this terminal for the region’s energy security and consolidation of the local energy base, given the geographical location of
Dreifa’s regasification concept targets smaller and medium-scale regasification requirements (credit: Dreifa)
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LNG World Shipping | January/February 2019
12 | REGASIFICATION
Kaliningrad Region,” Mr Putin added. On 11 January, Sovcomflot (SCF) announced it would be providing technical management for the FSRU. SCF’s executive vice president and chief technical and operating officer Igor Tonkovidov said: “It is a great honour for Sovcomflot to provide technical management for the Marshal Vasilevskiy FSRU, an offshore facility that is so important for the stable operation of Kaliningrad Region’s gas supply system. The implementation of [this] project became possible, among other things, thanks to the extensive experience accumulated by SCF’s crews in operating our gas tanker fleet. From a technical standpoint, Marshal Vasilevskiy is one of the best vessels in her class and complies with the highest environmental and energy efficiency standards. The vessel’s high Arc4 ice class allows her to operate safely in the Baltic Sea basin all year-round.” Further west in Europe, Germany may soon get its first LNG import terminal. On 18 December 2018, Uniper SE and Mitsui O.S.K. Lines released a joint announcement confirming they would seek to develop an FSRU LNG import terminal at Uniper’s site in Wilhelmshaven, Germany’s only deepwater port. The planned terminal would have a send-out capacity of 10Bn m3 per year (bcm/yr), a storage capacity of 263,000 m³ and could be in operation by the second half of 2022. It is planned that Mitsui O.S.K Lines will own, operate and finance the facility, while Uniper SE will act as project developer, liaising with relevant authorities to procure the necessary permits for the operation of the facility and gathering interest for regasification capacity from additional market participants. Uniper SE’s chief commercial officer Keith Martin said: “We are glad that we were able to get such an experienced partner as Mitsui O.S.K. Lines on board for the development of Germany’s first LNG terminal … Our partnership with MOL, combined with the FSRU technology as well as Wilhelmshaven’s
LNG World Shipping | January/February 2019
uniqueness in Germany, provide the fastest and most economical way to realise LNG imports directly into Germany.” Meanwhile in Latin America, on 14 January Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP) submitted a plan to the country’s antitrust regulator CADE that would see semi-public oil major Petrobras’ LNG regasification terminals designated as “essential national infrastructure.” If ANP’s proposal is approved by CADE, third-party private companies would be able to access unused capacity at the regasification plants.
FOR [THE] KALININGRAD REGION, THE PROJECT WILL MOST LIKELY BE A BACKUP AND WILL SUBSTANTIALLY MINIMISE, OR MORE PRECISELY, MITIGATE ALL TRANSIT RISKS”
Developments in APAC
Shipbuilding expertise in the AsiaPacific region came to the fore in November 2018 when Singaporeheadquartered PaxOcean, a shipbuilder focused on rigs and specialist offshore vessels with yards in Singapore, Indonesia and China, announced the delivery of the largest Chinese-built FSRU to date, Karunia Dewata. Owned by Jakarta-based Jaya Samudra Karunia (JSK), Karunia Dewata has a storage capacity of 26,000 m3 and a maximum regasification throughput of about 50M standard cubic feet per day. It is the first FSRU to be built with Type-C cargo tanks. PaxOcean’s engineering director Bian Lixin said: “The design is focused on simple and reliable operation for
Indonesian water. “By working closely with Lloyd’s Register (LR) on classification requirements, and international maritime legislations for vessels carrying liquefied gases in bulk, we have successfully delivered Karunia Dewata to JSK. “Our achievement in delivering it on schedule is a result of our execution excellence and good teamwork with JSK, LR and Korean Register” As more projects launch, technology is now becoming available that makes small- and medium-scale regasification projects more feasible. Announced at Gastech 2018 in Barcelona, Philippines-based infrastructure engineering firm AG&P has brought two such technologies to market. The first is based around a standardised water-bath vaporisation (WBV) technology. This utilises fire tubes to transfer heat to a bath of water by convective and conductive heat transfer. The design can include low NOx burner technology and a waste heat recovery economiser, to boost efficiency and reduce emissions. The second is based around fast ambient-air vaporisation (FAV) technology. This is especially well-suited for subtropical and tropical locations, with ambient air temperatures greater than 15°C and with adequate available space. The two new technologies mean that AG&P can offer three different regasification options, each with their own benefits. Writing for GasTech in November 2019, AG&P’s vice president of process engineering and operations Nancy Ballout outlined the company’s ethos. “AG&P is not focused on any particular size of LNG infrastructure, but rather, its designs offer scalability and flexibility,” she said. “This approach allows solutions to be configured from the customer’s perspective, using the right combination of onshore and offshore assets, with the flexibility to expand over time.” Ms Ballout added that AG&P’s configurations, combining scalable, standardised regasification modules
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REGASIFICATION | 13
with floating storage, can improve scheduling at terminals while reducing bottlenecks. This has three benefits she explained: capital cost is reduced and efficiently utilised during development; infrastructure is the right size for current demand, which means efficiency is boosted and surplus is eliminated, while key components to support future demand are pre-invested; and modular assets can be built quickly, resulting in projects starting up faster and investors receiving earlier returns. The Manila-based company looks set for growth, announcing in November 2018 it would be boosting its workforce by 5,000 to support heavy manufacturing and infrastructure projects in the Philippines.
A combined approach
Further developments in regasification technology aimed at the smaller-scale market were showcased at the LNG World Shipping Ship/Shore Interface Conference that took place in London on 22-23 November 2018. Dreifa Energy’s co-founder Jostein Ueland gave an update on his company’s innovative solution, which is based around splitting the FSRU concept in two, with large floating
storage units (FSUs) and a smaller floating regasification unit (FRU), based around a converted platform supply vessel. Started in 2016, Dreifa identified and secured a candidate vessel for the FRU, the PSV Blue Betria. The project received a NKr600,000 grant from Innovation Norway in June 2017 and so far agreements have been signed with Citec to conduct basic engineering work on the FRU and with Wärtsilä Oil and Gas Systems to provide the regasification module. An agreement was signed with Bernhard Schulte Shipmanagement in November 2016 to develop the project. DNV GL granted Approval in Principle for the project in November 2017 and has given the FRU the notation 1A OSV REGAS GAS FUELED. It has regasification capacity for between 50M-300M square cubic feet per day of gas at delivery pressures between 50 and 100 bar. Mr Jostein suggested that rather than constructing new cryogenic LNG storage, chartering in an existing steam LNG carrier to act as the FSU can result in significant capex reductions. He noted that existing LNG carriers are available and inexpensive, and that using them as FSUs has limited conversion risk compared with FSRUs.
Gazprom’s first FSRU Marshal Vasilevsky was activated by Vladmir Putin on 8 January (credit: Russian government)
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THIRD-PARTY PRIVATE COMPANIES COULD ACCESS UNUSED CAPACITY AT THE REGASIFICATION PLANTS”
They are also compatible with the existing conventional LNG supply chain, and avoid the need for expensive small-scale LNG carriers. Dreifa estimates the FSU and FRU offers a 40% reduction in total terminal costs, covering regasification and storage including fuel, as compared to a newbuild FSRU. The company also estimates a total 80% reduction in balance sheet exposure, comprising accumulated capex lease rates and an owner’s residual value, compared to newbuild FSRUs. Mr Jostein outlined several potential applications for the Dreifa concept. In a deepwater phased development, the FSU and FSRU combo could be used in the first, medium-demand phase; when demand outstrips the capacity of the FSU, it can be replaced with a highercapacity FSRU. In a shallow-draft port, while a conventional LNG carrier would not be suitable for use as the FSU, the FRU would still be suitable and a shallow-draft LNG carrier can be moored alongside it. A combination of an FSU and FRU is ideal for medium-scale or phased developments, or developments where an interim solution is required. This is because the floating elements allow for maximum flexibility and offer a costefficient storage solution compared to land-based storage or FSRUs, according to Mr Jostein. With 70% of identified floating regasification projects worldwide having demand of less than 1.5M tonnes per annum, this represents a lucrative market. LNG
LNG World Shipping | January/February 2019
14 | LNG TERMINALS
AGL has identified Höegh Giant as an FSRU candidate for the Crib Point project (credit: Höegh LNG)
FSRU projects race to meet Australia's domestic gas demand Import terminal projects are vying to quench the thirst for LNG on the east coast of Australia
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s one of the world’s largest exporters of gas, Australia might seem an odd location to place a growing number of LNG import terminals, but rising gas demand is placing a premium on such projects. “A combination of volatile gas demand, declining mature gas fields and LNG exports will lead to impending gas shortages on the east coast of Australia,” explained Wood Mackenzie’s director of Asian Gas & LNG Research Nicholas Browne. Consequently, several interesting import
LNG World Shipping | January/February 2019
terminal projects are now being mooted for construction on the country’s East Coast. A new floating storage and regasification unit (FSRU)-based import terminal is to be developed in the Port of Newcastle in New South Wales, Australia, by Seoul-based EPIK, an FSRU project development company. It announced on December 4 it had signed a Project Development Option Agreement with the Port to commence preliminary work on a proposed import terminal. The project has a potential investment of between US$400M-US$430M, including a
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LNG TERMINALS | 15
170,000 m3 newbuild FSRU and associated on-shore infrastructure. The order for the FSRU is expected to be placed by EPIK, subject to receiving regulatory approvals for the project. EPIK’s founder and managing director Jee Yoon said: “Based on our assessment of the New South Wales gas market, particularly along coastal demand regions such as Newcastle and Sydney, we are confident that by importing LNG via a new, low-cost FSRU terminal, we will be able to provide an infrastructure solution that is capable of delivering a cost-efficient source of alternative gas supplies to the region on a long-term basis.” “We are very excited to be working with Port of Newcastle and hope to expand our relationship by discussing other potential projects, such as a gasfired power plant and an LNG bunkering facility,” he added. The Port of Newcastle’s executive manager of customer and strategic development, Ian Doherty, noted that the deepwater port’s significant land and channel capacity make it an attractive location for the project; he added that the development opportunity is consistent with the port’s diversification plans. Elsewhere on the East Coast, AGL announced on 21 December the signing of a contract with Höegh LNG for long-term charter of an FSRU for the proposed Gas Import Jetty project at Crib Point, Victoria. The likely vessel, Höegh Giant, was constructed by Hyundai Heavy Industries in 2017. The 294 m-long FSRU uses a Mark III membrane containment system and has a cargo capacity of 170,032 m3 and a regasification capacity of 750 million standard cubic feet per day (mmscf/d). A final investment decision and regulatory approvals are required before the agreement is confirmed and the vessel’s impact will be assessed as part of the project’s Environmental Effects Statement, which is currently under way. Describing the contract as an important milestone, AGL’s general manager for energy supply and origination Phaedra Deckart said: “This is a big step for the project and we are pleased to enter into this agreement with Höegh LNG, an industry leader in the operation of modern, floating
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VOLATILE GAS DEMAND, DECLINING MATURE GAS FIELDS AND LNG EXPORTS WILL LEAD TO GAS SHORTAGES ON THE EAST COAST OF AUSTRALIA”
NEWCASTLE LNG Investment size: C. US$400M-US$430M FSRU details: 170,000 m3 capacity newbuild, other details not disclosed
AGL GAS IMPORT JETTY Investment size: Not disclosed FSRU details: Charter signed with Höegh LNG; 170,000 m3 capacity Höegh Giant identified by AGL as likely vessel
PORT KEMBLA LNG Investment size: C. A$200M-A$250M FSRU details: Supply contract signed with Höegh LNG, other details not disclosed
LNG import terminals. “These FSRUs are highly sophisticated in nature, with a range of monitoring functions and protections in place for safe and reliable operations, making them ideal for the project. Australian Industrial Energy (AIE), a consortium comprising Squadron Energy, Marubeni Corporation and JERA, has also thrown its hat into the ring with its proposed Port Kembla terminal near Wollongong in New South Wales. The project has a forecast capital cost of AUD$200M-AUD$250M and AIE is aiming to have first gas available on the market by early 2020. Planning for the project appears to be progressing well through the NSW government’s assessment process and AIE lodged an Environmental Impact Statement in November 2018. In August 2018 AIE also contracted Höegh LNG to supply an FSRU for the project and in September the project director carried out an inspection of a candidate vessel, Höegh Galleon, which is nearing completion at Samsung’s Busan, South Korea, shipyard. The 297.5 m vessel uses the Mark III membrane containment system and has a storage capacity of 170,000 m3 and a regasification capacity of 750 mmscf/d. It is scheduled for delivery in the second quarter of 2019. The chosen vessel will be moored at Berth 101 in Port Kembla’s inner harbour. AOE estimates that the project will have an initial capacity to meet more than 75% of New South Wales’ annual gas needs. AIE’s chief executive James Baulderstone said: “Höegh LNG is uniquely positioned to provide NSW with this critical piece of energy infrastructure. “They have the world’s most modern and technologically advanced fleet and a strong commitment to operational excellence. “These were crucial determinants in AIE’s final selection decision.” He added: “AIE’s NSW gas import facilities will be nothing short of bestin-class. We have Höegh LNG’s global leadership in the supply and operation of FSRU technology, combined with the world’s largest LNG buyer, JERA, which also has decades of LNG import terminal operating experience.” LNG
LNG World Shipping | January/February 2019
16 | LNG TERMINALS
Grain LNG to capitalise on breakbulk LNG demand The UK’s main LNG import terminal intends to meet breakbulk demand with an innovative solution
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peaking at Riviera Maritime Media’s LNG Ship/Shore Interface Conference in London, which ran from 22-23 November 2018, Grain LNG’s commercial advisor Paul Ocholla outlined the terminal’s approach to logistics, trends in end-use applications and future plans. The UK has been a net importer of gas since 2004 and the Isle of Grain LNG terminal plays a key role in this process. Comprising two jetties on the river Medway, Grain LNG is the largest LNG import terminal in Europe and the eighth-largest in the world. It offers a 644 GWh per-day regasification capacity, more than 200 berthing slots per annum and has 1,000,000 m3 of storage capacity; a truck-loading facility was launched in 2015 and a rail route in 2017. Mr Ocholla looked over trends in truck loadings for various markets, covering road fuel, off-grid power and marine bunkering. While road-fuel loadings were subdued in 2018, Mr Ocholla noted that the UK government’s decision to extend the tax duty differential in October 2018 out to 2032, “[gives] a clear signal that it supports gas trucks and the gas market”; hence, growth in this area is anticipated as confidence returns. The off-grid market has remained fairly stable, he said, explaining that competition with other fuels, such as LPG, coupled with the relatively far off adoption date (2025) for regulation forcing the use of cleaner fuels, means this stability is expected to continue into the 2020s. Looking at marine bunkering
LNG World Shipping | January/February 2019
demand, Mr Ocholla noted that while there are orders coming through, uncertainty over the 2020 sulphur cap and confusion over which emissions reduction method will eventually win out, is exerting downward pressure. With vessels potentially having working lives of 20 or more years, investment decisions must be made carefully and high initial capex requirement for LNG, uncertainty about security of supply and competition from other low-sulphur options must all be factored in. Still, Mr Ocholla is confident about the future of LNG: “We believe there is a future for this and this is one reason why we are now looking into the breakbulk marine side.” The market for LNG-fuelled vessels is growing and set to continue doing so, and Grain LNG aims to meet this demand with a breakbulk facility expected to be introduced in 2020 or 2021, to coincide with IMO’s 2020 sulphur cap coming into force. Bringing this facility to fruition requires balancing Grain LNG’s commercial requirements with the needs of potential customers. A low-capex solution that utilises existing jetties is required, while the activities of current primary capacity holders must be minimally impacted, and the UK’s stringent Health and Safety requirements must be met. Breakbulk customers demand a flexible service: “They don’t want to be pushed aside when a big ship is there,” Mr Ocholla said. Any solution would also need to be compatible with a wide range of vessel sizes, from 1,000 m3 to 30,000 m3.
Paul Ocholla (Grain LNG): “We believe there is a future for marine LNG; it’s one reason why we are now looking into the breakbulk marine side”
The FLU is a floating adapter barge that mimics a jetty on a smaller scale. The unit is not self-propelled and will be moved from one jetty to another using a tug. Two fenders on each side allow for ship-to-ship transfers between vessels. The FLU barge attaches to the jetties using clamps that mean existing pilings on either of Grain’s jetties can be used; the unit will be stable laterally and able to rise up and down with the tide. Hard loading arms were chosen over hoses as a more “fit-for-purpose” solution: “That will give us a more stable and enduring design that we can take [into] the next 20 years,” said Mr Ocholla. “It’s going to be a fairly simple design to make sure we minimise capex and we are still able to load the smaller ships, which currently can’t load on our main jetties because they are too small,” he said. National Grid hopes to take a Final Investment Decision in April 2019, subject to market interest, with a view to project completion and launch by the first-half of 2021. LNG
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CARGO MONITORING | 19
‘Unusual’ scenarios overlooked by traditional training methods BSM corporate expert liquified gas Chris Clucas and director Maritime Training Centre (India) Brijendra Srivastava extol the virtues of simulator-based training
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SM, which manages 25 LNG carriers, is a leader in using simulators for training. Its global Maritime Training Centres (MTCs) have full-mission bridge and engine simulators and LICOS cargo simulators. As the airline industry knows, computer simulation offers a riskfree environment to test students’ capabilities and to reinforce classroom learning. However, in shipping, most training regimes rely on time served, in which the cadet learns from senior personnel the situations that may occur on board. On a modern vessel, where everything works well, the trainee may experience few practical problems, making the training somewhat ineffective. Hence, the increased use of simulators is part of the training approach expected from quality operators and managers. But unless the wider industry recognises the benefits of simulation training, it is difficult to justify this investment. The simulator at BSM’s Mumbai MTC allows up to six participants to train simultaneously on independent stations monitored from the instructor’s terminal. The Mumbai centre conducts three-day Operational Level and five-day Management Level courses using LNG simulators,
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approved by DNV GL and that meet Society of International Gas Tanker and Terminal Operators (SIGTTO) standards. It has conducted more than 60 courses for over 300 BSM onboard personnel, as well as for companies including Shell, BW Maritime, Chevron, K Line and Honeywell. The LNG industry has a high-level performance and safety record, but faces rapid growth in ship numbers. How do we avoid diluting experience on board ships and reducing operational standards? You can put on board numerous extra trainees to
Chris Clucas (BSM): Instructors can adjust simulation exercises to suit a candidate’s experience
learn the business, but this is the least appropriate way to learn, especially if everything is running like clockwork. The cargo officers can practise setting up and operating the gas flows to shore during loading and to the engineroom at sea, or deal with unusual situations that arise if valves fail to open or close, causing back-flow and potential cargo tank overflow during discharge. Instructors can adjust exercises to suit the candidate’s experience and tailor them to unusual scenarios, such as failure of shore vapour return and the need to use the ship-board vaporiser to maintain tank pressures and discharge rates. SIGTTO courses, such as remote valve indicator failure leading to unexpected cargo flows during discharge, can also be simulated. The shipping industry is looking to improve standards. If we recognise the value of simulation training and use it to the full, we will learn vital lessons that our aviation colleagues already appreciate. LNG has always been the most forward-thinking sector in shipping. SIGTTO’s recent creation of a Human Elements Committee shows our willingness to explore new avenues to improve standards. This, surely, is the greatest opportunity to demonstrate the benefits of simulation training. LNG
LNG World Shipping | January/February 2019
20 | CARGO MONITORING
K-Sim’s dedicated simulation floor features interconnected cargo handling, engine and bridge simulations (credit: Kongsberg Digital)
Cargo monitoring and control: simulators improve competence The global LNG carrier fleet is set for significant growth and given the combustible nature of LNG, the control and monitoring of cargo has never been so important
LNG World Shipping | January/February 2019
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he importance of shipping to the LNG supply chain has never been more apparent, so it is hardly surprising that suppliers of monitoring and control equipment for LNG carriers are reporting healthy order books. By way of example, French gas technology supplier CRYOSTAR reported in August 2018 a total of €108M of LNG-related orders, comprising 70 pumps, 90 compressors and more than 300 heat exchangers and vaporisers, for 25 LNG carriers from Korean shipyards owned by Daewoo, Hyundai and Samsung. In this environment, ensuring seafarers are well trained in cargo monitoring and in handling equipment on board LNG carriers is vital. To this end, simulators can be an invaluable training tool. Examples of their use include Kongsberg Digital (KDI)’s range of K-Sim simulators that enable safe, realistic and
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CARGO MONITORING | 21
efficient training on procedures for engineering students and crew. These are specifically designed to support IMO’s IGF code, as well as International Convention on Standards of training, Certification and Watchkeeping forSeafarers (STCW) requirements for both basic and advanced training. All of these simulators incorporate an Instructor, Monitoring and Assessment system. This has been developed in collaboration with the Norwegian Maritime Directorate, class society DNV GL and instructors worldwide. It is designed to be user-friendly and efficient in order to enable instructors to impart knowledge to students efficiently and effectively during exercises. Using this system, instructors can configure Student Stations to specify what information students are able to access and view, including what sub-systems relate to each station and which indicators can be viewed. Instructors are also able to access a tool that allows them to asses students at all levels, from support to management. This means that instructors can shape their assessment of students around not just alarms, but also any of the available variables in the simulation model. A new feature in this solution is the capability for the engineroom simulator and the cargo-handling simulator to be connected together, allowing for combined training between the LNG cargo operator and LNG engineer. Each engineroom simulator can also be connected up to a corresponding ship model on the bridge simulator while it is in this configuration, opening up further opportunities for team training. In the K-Sim Cargo line, all models are based on actual ship specifications and performance data in order to make simulation as realistic as possible. The simulators are scalable and can be configured from PC desktop levels up to operational full mission simulators that use custom panels and ship equipment. It is also possible for clients to customise solutions to meet their specific training needs, allowing for individually laid out control room simulation setups. Users can also integrate a CCTV camera
function into the simulation, giving operators the ability to see, for example, what is happening at the manifold, if loading arms are connected, or if there are oil or gas leaks.
Building competence
In the LNG carrier market, K-Sim can be used to build competence in the planning of cargo loading and discharge, the use of loading computers, lining up for loading and ballasting, lining up for discharge, stripping of tanks via vacuum and ejector systems, topping up and finalising loading, aeration, inerting and nitrogen supply, compressor systems and boil off, flow control in relation to stability and mechanical forces, and communications with terminal, deck and cargo control rooms, among others. The library of DNV SeaSkill-approved LNG exercises for cargo control and monitoring includes cargo tank drying, nitrogen purging, inerting, gassing up, cooling down of cargo and systems, loading and deballasting, boil-off gas and forced vaporisation, tank warm up, gas freeing, air purge, and emergency operations such as emergency cargo pump use and discharge. In September 2018, KDI announced the delivery of a simulator package to Athens-based LNG carrier operator GasLog. Through its subsidiary GasLog LNG Services, GasLog operates 27 LNG carriers, a mixture of wholly-owned vessels, vessels owned by GasLog Partners and vessels owned or leased by Royal Dutch Shell. The company puts a premium on technology, especially relating to communications and marine safety. The scope of the contract covers an integrated turnkey training solution that combines K-Sim Cargo LNG Liquefied Natural Gas Carrier-M cargo handling simulation with K-Sim Engine Desktop simulators, including Kongsberg’s Steam Plant Dual Fuel LNG Carrier and Diesel Electric Dual Fuel DE21 models with a bridge simulator. The systems will be installed on a dedicated floor of GasLog’s Piraeus, Greece, technical management HQ. LNG
Emerson introduces new pressure relief valves St Louis, Missouri-based engineering products and services specialist Emerson has announced a new range of pressure relief valves. The Anderson Greenwood 9300H low-pressure pilotoperated pressure relief valve (POPRV) is a patented design that provides leak-free operation up to set pressure, with an additional 10.5% flow capacity over valves currently on the market, according to Emerson. The valves are designed specifically for marine LNG tanks on ships and floating production and storage units (FPSOs). The additional capacity the valves provide allows for a smaller size, which results in initial purchase savings as well as subsequent savings on associated piping, fittings and expansion elbows, says the company. The design uses Emerson’s Anderson Greenwood 93 Series pilot-mounted flush to the valve, which provides a low profile that makes it well-suited for rough seas.
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It is field-adjustable either for modulating action to reduce product loss during relief events, or to open completely at set pressure via snap action. The valves are easy to fit with monitoring technology and are certified for LNG carrier operation by major class societies including Lloyd’s Register, ABS, Bureau Veritas and DNV GL. Emerson Automation Solutions’ product manager for pressure relief valves Brett Bockeloh said: “As the world pushes to keep pace with growing LNG demand, the need for innovative, reliable overpressure protection solutions has never been greater. “The Anderson Greenwood 9300H’s combination of performance and reliability puts our customers in the best position to achieve their goals without the need to compromise on safety or their budget.”
LNG World Shipping | January/February 2019
22 | INTERVIEW
Can the surge in spot and time charter rates continue? Maritime Strategies’ David Bull reports on a rapid increase in rates, while record numbers of LNG carriers have been delivered
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he US shale gas revolution has changed the dynamics of the LNG shipping market. “The main impact, apart from adding substantial volumes of LNG to the global market, arises from the unusual structure of sales contracts that bring a large degree of flexibility to the trading of LNG,” Maritime Strategies International senior gas analyst David Bull told LNG World Shipping. “We have seen this from Sabine Pass and this will continue at Cove Point and Corpus Christi as they ramp-up. Most of the contracts have no destination clauses – meaning that vessels can trade wherever there is demand. This has added greatly to the diversity of trading patterns, adding to tonne-miles and ship demand.” Mr Bull said the expanded Panama Canal has enabled LNG carriers from the US to trade with Asia. “Such has been the demand for the new NeoPanamax locks that the Canal Authority has increased the number of slots to eight per day – for any type of vessel, not just LNG,” he said. “They have also lifted the daylight only restrictions on LNG carriers through the new locks and lifted the restrictions prohibiting LNG vessels passing each other in different directions.” One likely spot in Asia for US LNG exports is China, but that has been slowed by the trade spate between the two nations. “Trade hasn’t stopped,” said Mr Bull, “but the ramp-up we saw during 2017 and early 2018 has reversed, falling to just single cargoes per month in the latter part of 2018.” The US Energy Information Administration reported 7,269M ft3 of natural gas exported to
LNG World Shipping | January/February 2019
China in October 2018, down from 24,588M ft3 in October 2017. “The cargoes that could have gone to China from the US were able to find alternative destinations in other Asian and European markets,” he said. “Conversely, China increased its imports from the Middle East and southeast Asia, while also being able to tap in to the surge in exports from Australia. Currently, we see the net impact on vessel demand from the trade war to have been largely neutral.” Mr Bull questioned how long the trade dispute would last. “We have assumed that China will be a major source of demand for US cargoes in the medium term and if this does not materialise then a redrawing of the current pattern of trade will be necessary.”
THE BIGGEST CHALLENGE FOR SHIPOWNERS WILL BE RISING DEMAND FOR SHORTER CONTRACTS”
US-China trade aside, Mr Bull is very upbeat on the LNG shipping market as a whole. He pointed out that 2018 saw the most rapid appreciation in spot LNG carrier rates since 2011. Spot rates hit a seasonal trough in April at approximately US$40,000/day, rising to an unseasonable US$90,000/day
mid-year, before accelerating during September and more than doubling by November. During December 2018, rates fell slightly, but were still reminiscent of the level seen at the last peak in 2012 at close to US$180,000 to US$200,000/day. As a result of the increased spot charter rates, MSI DFDE one-year timecharter rates averaged $108,000/ day during Q4 2018 – an increase of 33% compared to Q3 2018, and a 90% increase compared to the same period in Q4 2017. Mr Bull said the rapid increase in rates has developed while record numbers of LNG carriers have been delivered, which has shown that despite the growth in fleet capacity, this has been barely sufficient to match the expansion of current global LNG production output. Indeed, MSI’s calculated annual employment rate for the LNG sector – though rising sharply in 2018 – does not fully capture the scale of the rise in spot rates last year. To attempt to understand this process better MSI has developed a quarterly measure of market balances based on cargo flows and fleet growth by quarter, using the same methodology it uses in its annual analysis. The surge in trade and employment clearly drove the rates up in the second half of 2017, but the latest surge is not fully captured in the demand trends. “This may, of course, be due to a lack of timeliness of trade data,” Mr Bull pointed out, “but it also suggests that the spot market has been driven by other temporary demand factors, that have depleted the spot available tonnage during the latter months of the year, resulting in a shortage of prompt
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INTERVIEW | 23
A newbuild 174,000-m3 LNG carrier, managed by NYK, will go on long-term charter in 2020 transporting LNG from the Cameron LNG project in Louisiana
and correctly positioned vessels in both the Pacific and Atlantic basins.” One explanation, according to Mr Bull, is that anticipation of the usual rise in winter demand within the northern hemisphere led charterers to secure vessel capacity forward of this period, adding to the current shortage of vessels and rising freight rates. LNG shipping companies have also leveraged new technologies, new vessel designs and economies of scale to dramatically lower transportation costs to about 20% less than two decades ago. “Transportation costs for LNG have been reduced by a number of technological developments,” said Mr Bull, “including containment system design, with lower boil-off rates, increased efficiency in propulsion systems with the arrival of ME-GI and X-DF dual-fuel engines, continued developments within hull design, and the gradual impact of vessels getting larger. Carrying capacity has grown from 155,000 m3 a decade ago to 177,000 m3 currently. All these improvements have helped reduce transportation costs.” Mr Bull also pointed out that newbuilding prices “remain on a par with those of 20 years ago: the average price for a DFDE vessel in 1999 was $180M. The development of the shipbuilding industry led some Chinese yards to join
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the exclusive club of LNG carrier builders, bringing additional competition to the established South Korea and Japanese yards, but the impact has been limited and ultimately prices are driven by trends in the broader shipbuilding industry.” Looking ahead, Mr Bull said nearterm pressure on rates is likely to be maintained. Substantial new volumes of LNG continue to enter the market. Estimates suggest that around 22M tonnes of new production capacity has been added to the market this year, with 8.5M tonnes originating from the US, 6.8M tonnes from Russia and 5.9M tonnes from Australia. During 2019, an additional 28.8M tonnes is scheduled to come on-stream, followed by a further 18.6M tonnes in 2020. In total, approximately 70.0M tonnes of new liquefaction capacity is forecast to come to market through to 2020 – representing a 25% increase in overall global exports of LNG compared to recent volumes. All these projects will require additional tonnage and provide valuable tonne-miles for the LNGC fleet. The LNGC fleet currently comprises 80.7M m3 (527 vessels) and the orderbook currently stands at 22.2M m3 (132 vessels) with delivery dates up until 2022. This will grow fleet capacity by about 28%, and this will be added to by additional newbuilding orders over
the period. Therefore, the fundamentals would suggest that the fleet will ultimately increase at a faster rate compared to the liquefaction capacity. However, Mr Bull said this will emphatically not be the case in the near term, where the net result is increasing vessel earnings. Utilisation rates for the fleet are forecast to increase to approximately 87% by 2022, resulting in annual average one-year time charter rates for DFDE vessels forecast to peak at over US$102,000/day during 2020. While it is understood that the spotmarket can fluctuate quickly and support rapid rate hikes, the impact on longerterm charters – and in this instance the one-year timecharter rate – is more subdued as owners and charterers take a longer view on the market. However, it is believed there will be a knock-on effect from the spot market to the longer-term charter market over the next two years, raising rates as new tonnage enters the fleet and is utilised for new LNG production facilities. After this time frame, there is a distinct drop in the number of new liquefaction projects scheduled for construction, resulting in lower demand for large-scale vessel additions and falling charter-rates. “LNG remains a complex business and volatility in the supply demand balance and spot and short-term charter rates will remain a feature,” said Mr Bull. “In this context, arguably the biggest challenge for shipowners will be rising demand for shorter contracts. The traditional 20- to 25-year contracts are still there, but the question is when they come up for renewal, what will be the duration; will they be 5, 7, or 10 years, or even shorter than this? The past decade has seen the LNG sector constantly develop and adapt to new conditions, but this is one of the most important as long-term charters were considered the back-bone of the sector. The shift to shorter contracts particularly impacts the financing of vessels – this will require new and innovative solutions from owners and financiers and an increased willingness to assess market risk,” he concluded. LNG
LNG World Shipping | January/February 2019
24 | EXPORT TERMINALS
Artist’s impression of the LNG Canada export terminal being built in British Columbia (credit: LNG Canada)
Developing Canada’s first LNG export terminal LNG Canada is the largest of 13 LNG export terminals proposed for British Columbia and one of the country’s biggest ever infrastructure projects
LNG World Shipping | January/February 2019
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he emergence of abundant, cheap US shale gas over the last decade has dramatically changed the North American gas market and, by extension, the world energy picture. One result of the US shale gas revolution has been to lessen its reliance on natural gas piped in from Canada. Data from the US Energy Information Administration bears that out. In 2007, natural gas pipeline imports from Canada to the US were 3,782,708M ft3. In 2017, natural gas imports fell 22% to 2,962,689M ft3. With natural gas pipeline exports to the US falling, Canadian gas producers shifted their gaze beyond North America to the more lucrative markets of Asia and Europe. The result is that since 2011, 24 LNG projects have been issued long-term
export licences by Canada. Since Canada only has one operational LNG terminal – Canaport LNG’s regasification import terminal located in Saint John, New Brunswick – it also set in motion proposals for developing 18 LNG export facilities. Those proposals include five in eastern Canada – two in Quebec, three in Nova Scotia – and 13 others on its west coast, all in British Columbia. The largest of the LNG export terminals proposed is in British Columbia (BC). LNG Canada export terminal is one of the largest ever infrastructure projects in Canada. Construction on the Can$40Bn terminal has already begun. In January, it awarded contracts worth Can$937M after the facility’s first three months of construction. LNG Canada will be located
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EXPORT TERMINALS | 25
on a site near Kitimat, BC, on the Douglas River. In phase one, LNG Canada will have two LNG trains, with storage tanks and processing equipment, a rail yard and wharf that can berth two LNG carriers. A second phase will add two more trains. Annual LNG exports are estimated to be equivalent to 1,357.8Bn ft 3 of natural gas per year, or 3.72Bn ft3 per day (Bcfd) inclusive of a tolerance allowance. If all goes according to plan, LNG Canada should be operational by 2021. LNG Canada will be the first LNG export facility to bring Canadian natural gas to Asia, with China, South Korea and Japan eager consumers. China, in particular, would benefit from a steady supply of clean natural gas to replace its dirty coal-fired plant habit. Coalfired plants generate about twothirds of China’s electricity. Forbes reported that domestic gas supply shortages in recent years have led China to soften its policy on displacing coal heating with natural gas. China approved nearly US$6.7Bn worth of new coal mining projects last year, and it produced3.55Bn tonnes – a 5.2% increase. Coal imports also jumped 9% last year. One of the five joint venture (JV) partners in LNG Canada is PetroChina Company Limited. It owns a 15% stake in the JV through its subsidiary PetroChina Canada Limited; along with Royal Dutch Shellplc, through its affiliate Shell Canada Energy (40%); Petronas, through its whollyowned entity North Montney LNG Limited Partnership (25%); Mitsubishi Corporation, through its subsidiary Diamond LNG Canada Ltd (15%); and Korea Gas Corporation, through its wholly-owned subsidiary Kogas Canada LNG (5%).
Stimulating the local economy
While consumers in Asia will benefit from shale gas and conventional natural gas liquefied and shipped from LNG Canada, the jobs created by the project will be a welcome
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sight for the town of Kitimat, which saw a methanol supplier shutter operations in 2006 and Eurocan pulp and paper mill close its doors in 2010 after 40 years. “For First Nations communities,” said LNG Canada’s director external relations Susannah Pierce, “it is delivering on the opportunities we have committed to that will help the Nations address issues of poverty, unemployment and skills development. For local communities, it is the opportunity for young people to find employment that allows them to remain living in the North.”
THE JOBS CREATED BY THE PROJECT WILL BE A WELCOME SIGHT FOR THE TOWN OF KITIMAT”
While the project has faced opposition from some local indigenous groups, it has won support of other First Nations groups because of the employment opportunities the project is expected to create. It is estimated that 10,000 Canadian workers will be employed during the years of construction of the LNG Canada and the Coastal GasLink pipeline that will transport natural gas from north-eastern BC to the LNG export facility for processing. TransCanada Pipeline will build the 670-km Coastal Gas Link pipeline. “One of the most significant early decisions was to site our project in Kitimat, BC, on the wharf of the former Eurocan Pulp and Paper mill and the Methanex jetty,” Ms Pierce told an audience during a presentation at The Walrus Talks discussing the project in 2017. “This decision not only enabled us to use an existing industrial
port, but also provided access to infrastructure to support construction and operations, road and railways, in addition to the deepwater, beautiful Douglas Channel.” Ms Pierce noted that the site also offered the opportunity to build a relationship with a First Nation that had experience with industry. “Kitimat was a city planned and built in the 1950s by the Aluminum Company of Canada – now known as Rio Tinto.” Rio Tinto spent some US$4.8Bn to modernise an aluminium smelter near town and remains a large local employer. LNG Canada has also forged a strong relationship with the Haisla First Nation on whose traditional territory the facility would be built. She said the company recognised early on that collaboration with local stakeholders and the Haisla would be crucial for the future success of the project.
Aiming for a smaller carbon footprint
LNG Canada has committed to making the export terminal one of the most environmentally friendly LNG facilities in the world. During a keynote address at the British Columbia Natural Resource Forum on 22 January 2019, LNG Canada chief executive officer Andy Calitz said, “We designed our facility to have the lowest CO 2 emissions of any large-scale LNG export facility operating in the world today. We recognised the concern about climate change, and we wanted to be part of the solution.” The BC Government has exempted LNG Canada from a Can$15-a-tonne increase to the carbon tax until 2021 if it can keep its promise. The move is in line with the BC Government’s goal to cut CO2 emissions in the province by 40% based on 2007 levels. To minimise its carbon footprint, LNG Canada will use the BC hydrosupplied grid with hydroelectric power. It will also: • Employ highly efficient General Electric LMS 100 gas turbines to liquefy
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26 | EXPORT TERMINALS
LNG World Shipping | January/February 2019
Northwest Territories
Yukon Territory
Cordova Basin
Horn River Basin
Liard Basin
Fort Nelson
British Columbia has over 3,300 TRILLION CUBIC FEET of natural gas TransCanada North Montney Mainline
Montney Basin
Proposed Projects*
Partner(s)
Tilbury LNG
Fortis BC/ WesPac Midstream-Vancouver
Woodfibre LNG
Pacific Oil and Gas
Kwispaa LNG
Steelhead / Huu-ay-aht First Nation
LNG Canada
Shell / PetroChina / KOGAS/ Mitsubishi
Kitimat LNG
Chevron / Woodside
WCC LNG
EXXONMOBIL / Imperial Oil
* Proposed projects include projects that have an approved NEB export license and have either entered into an Environmental Assessment process or are actively engaged in front-end engineering and design (FEED) work.
Fort St. John
Existing Pipeline Proposed Pipeline
Alaska, USA
nector Ga W e stcoas t Co n s
Pr i nc e
Rupert
T ransmissio
Dawson Creek
n
G
Tumbler Ridge
T as
the natural gas. • Use Shell’s dual-mixed refrigerant technology process in combination with the gas turbines. • Use an existing industrial development area for the LNG plant site and refurbish existing harbour infrastructure where feasible during marine construction. Adopt best-in-class LNG plant simplicity, utilising the lowest equipment count per LNG capacity. • Implement mitigations and associated sampling programmes that prescribe to the most up-to-date standards and methods recognised by government and industry. Implement an integrated engineering environment for plant design to minimise process safety risks throughout the life of the project. • Adopt state-of-the-art design and engineering practices that exceed requirements laid out in legislation. The expectation is that the end result positions LNG Canada as the lowest carbon intensive LNG export facility of its scale in the world – at about 0.15 tonnes of carbon per tonne of LNG produced. “What does that mean? It means that LNG from LNG Canada shipped to China and used for power would backout approximately 40 coal power plants and reduce CO2 emissions by 60 to 90M tonnes on an annualised basis,” Ms Pierce told her audience at The Walrus Talks. “As a reference point, BC’s emissions in 2014 were 60M tonnes.” LNG Canada’s development also appears well timed. In the LNG Canada project study it prepared for LNG Canada Development, Inc, Navigant Consulting forecast sustained long-term growth of BC natural gas production as a result of the Montney and Horn River development. Navigant projected Canadian dry gas production will increase 57% between 2015 and 2062 (from 15.2 to 23.9Bcfd), “driven by the significant increases in British Columbia shale gas production to build on the roughly level Alberta conventional gas production.” Further, Navigant expected that natural gas production in Alberta will likely improve in the future as new plays and additional markets are developed. “Similar to Canada, total North American shale gas production will add a significant
Prince Rupert Kitimat
Pa c
ra ns m
i fic N
i s s i on
orth ern Pacific Trails P ipelin e G as Loo ping
Coastal GasLi nk Pip e line
Prince George Alberta
Quesnel
Williams Lake
Cache Creek
Campbell River Courtenay Pacific Ocean
Powell River Sechelt
Port Alberni Nanaimo
Whistler
Kamloops
Salmon Arm
Merritt Kelowna
Squamish
Kimberley Nelson
Castlegar
Fortis Eagle Mtn Woodfibre Looping Project
Elkford
Fernie
Cranbrook
Vancouver
amount of incremental gas supply on top of stagnant conventional production, with a 160% increase in shale gas production from 37.9 Bcfd in 2015 to 98.9 Bcfd in 2062 leading to an overall 70% increase in total North American production from 91.6 Bcfd in 2015 to 156.0 Bcfd in 2062,” said Navigant. At that time, shale gas will account for 63% of North American gas production. Victoria
Idaho, USA
Montana, USA
ABOVE: Map of proposed LNG export terminals in British Columbia (credit: BC Government)
Washington, USA
Keeping costs down
LNG Canada is using a module strategy designed to cut valuable time from the construction schedule to keep the costs manageable. As Canada does not have the physical and technical capability to produce large complex LNG modules domestically, it will rely on overseas yards with the size, scale and experience to build these large modules off site, then transport them via water to the site. In addition, it selected JGC and Fluor as its engineering, procurement and construction contractor to construct the LNG Canada project on a lump sum basis. The approach reduces the risk for the JV partners’ investors, because it offers greater certainty as to the final costs. LNG
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28 | LATEST DELIVERY
A feather in the LNG cap: new FSRU bolsters expertise in China and Indonesia The PaxOcean-built floating storage and regasification unit Karunia Dewata elevated China’s shipbuilding expertise and Indonesia’s LNG supply chain knowledge when delivered in midNovember 2018
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he 26,000 m3 capacity floating storage and regasification (FSRU) Karunia Dewata is the first mini-FSRU to be built in PaxOcean’s Zhoushan shipyard and is is the largest ship of its type to be built in China. For good measure, Karunia Dewata is also the first FSRU constructed in China to be fitted with type C cargo tanks. Owned by Indonesia’s JSK group, Karunia Dewata will regasify around 50M standard cubic feet a day (scf/d), bringing energy to otherwise neglected regions in this vast country of nearly 270M people. Now specialising in LNG, Djakarta-headquartered JSK says it is focusing on long-term contracts with credible counterparties. It is understood that the FSRU is initially destined for an LNG terminal in Bali. “The design is focused on simple
and reliable operations in Indonesian waters,” said PaxOcean engineering director Lixin Bian at the launch. The vessel will be put to service in the small-scale supply of LNG within Indonesia’s network of archipelagos, with their often shallow depths.
Hungry for LNG
The country is hungry for energy of any form, but especially LNG. Stateowned oil and gas company Pertamina only made its first LNG shipment to the east of the country in 2017 and has been busy forming alliances with independent suppliers to plug the LNG gap under a mandate from the government. Two liquefaction plants are under construction that will require the services of LNG carriers: Senkang LNG, with a contracted capacity of 0.5M tonnes a year (tpa) that is due
PaxOcean-built Karunia Dewata is the largest FSRU built by a Chinese yard to date (credit: PaxOcean)
LNG World Shipping | January/February 2019
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LATEST DELIVERY | 29
to start production in early 2020; and Tangguh phase two (3.8M tpa) slated to start up in early 2020. For relatively new LNG importing countries such as Indonesia, FSRUs are seen as a game-changer. As GTT, the France-based LNG tank and fuel specialist pointed out in its mid-2018 financial statement, this kind of vessel offers major competitive advantages over land-based terminals, citing speed of construction and mobility, affordability, adaptability in the event of volatile LNG prices, and the availability of a wide range of shipyards that have gained experience in the complexities of regasification. As the year closed, there were more than 30 of these floating terminals in service or under construction around the world. In Indonesia, there are two sizeable existing FSRUs, with three more planned or possible, and no less than nine small-scale versions under discussion, according to GasLog, the LNG carrier specialist. Owned by parent company, Singapore-based holding company Kuok group, the Zhoushan shipyard served its apprenticeship before tackling the FSRU project. As well as undertaking a variety of work for the offshore support industry, such as rig building and refurbishment and the conversion of floating platform and storage vessels, PaxOcean’s six shipyards have built up a reputation for handling one-off projects. For instance, the group is in the middle of building a 61 m gold carrier for Australia’s Newcrest Mining. Technically known as a self-propelled split hopper barge, the vessel will be deployed in early 2019 to a remote group of islands 900 km north-east of Port Moresby, New Guinea. PaxOcean is also a specialist in repair work. Since 2009, the company says it has repaired over 1,600 vessels, including LPG and chemical/product tankers, dredgers, ro-ro and car carriers and a mix of tugs and offshore support vessels. But before Karunia Dewata the nearest PaxOcean came to an FSRU was the design of LNG vessels and
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platforms, picking up classification approvals along the way. As easily PaxOcean’s biggest gascarrying vessel to date, the group pulled out all the stops for Karunia Dewata. Although PaxOcean has a shipyard in Batam, Indonesia, the Zhoushan facility was selected for this milestone project because of its all-round skills. The shipyard started work in early 2017 for the then unnamed client. Originally, the commission was for a simple floating storage unit (FSU), but JSK reserved the right to include a regasification function; it was only during the course of construction that JSK opted for a full FSRU.
KARUNIA DEWATA WILL REGASIFY AROUND 50M STANDARD CUBIC FEET A DAY, BRINGING ENERGY TO OTHERWISE NEGLECTED REGIONS IN THIS VAST COUNTRY″ The non-propelled vessel was designed for the installation of four independent type C tanks, each with a capacity of 6,500 m3 and a minimum operating temperature of minus 163C. The choice of type C technology was not a difficult one; with the capacity of some LNG tanks running up to several thousands of cubic metres, type C tanks have become the preferred option in large ships, including container ships, ferries and bulkers. But smaller vessels, such as tugs, ferries and platform supply vessels have recently started adopting lower-volume tanks with a capacity of several hundreds of cubic metres. Although PaxOcean did not confirm that Karunia Dewata is fitted with GTTmanufactured tanks, the company
dominates type C technologies. At mid2018, GTT had booked orders for nine FSRUs that will eventually require up to 40 units.
LR support
Lloyd’s Register (LR) played an important role in the construction of Karunia Dewata. Built to the society’s rules for LNG ships and regasification barges, LR made available its experts in four countries – Singapore, Korea, Indonesia and China – to help ensure the success of the project in a shipyard unfamiliar with the complexities of FSRUs. “[We worked] closely with LR on classification requirements,” said PaxOcean engineering director Lixin Bian. LR’s main contribution was its long-term knowledge of the gas supply chain and the manufacturers that have developed robust technology over a period of years. The society itself has provided technical services in large gas projects, maritime and otherwise, for more than half a century and, as the vessel took shape, LR worked with a small army of equipment manufacturers whose products had stood the test of time in previous projects. “As this was the first gas project in PaxOcean’s Zhoushan shipyard, LR put together the best team for the project with the right mix of skills, knowledge and experience,” said the society’s managing for the east China area, G.Z.Wang. Korea Register also contributed to the project, according to PaxOcean, but the society has not issued any statement on its role. With its first FSRU now under its belt, PaxOcean is ready to take on other LNG floating platforms. “We are proud to construct a 26,000 m3 project [that was] based mainly on our own design,” said the chief executive of PaxOcean Holdings, Tan Thai Yong. Building on its new-found expertise, PaxOcean is planning to expand into a variety of floating LNG platforms and ships, including bunker ships, FLNGs, power plants, regasification ships and carriers. LNG
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30 | FLOATING LNG
BW Courage, seen here on float-out from its Daewoo building dock in 2018, is BW LNG’s third FSRU, highlighting the popularity of such vessels
Floating LNG regas and production vessels in the limelight FSRUs are now in use across 17 countries and further regas vessel projects are under development on six continents; the floating approach is proving popular
LNG World Shipping | January/February 2019
T
he flexibility inherent in the contractual arrangements and services offered by providers of floating storage and regasification units (FSRUs) means that FSRU project start-ups and expiries are in a constant state of flux. This flexibility enables those gas importers not requiring a longterm charter to take on an FSRU for short periods, until a shore-based LNG receiving terminal has been constructed, say, or the need for LNG imports is eventually obviated due to the provision of either a new pipeline gas supply, sufficient domestic gas production facilities, or some other new source of energy. FSRU operators, in turn, are able to manage charter periods of varying durations with relative ease because
their vessels, on coming off-hire, can trade as conventional LNG carriers until such time that a new regasification project has been lined up. The fact that an FSRU jetty or buoy, with pipeline connections to the gas grid, can usually be provided at the receiving port quickly and at modest cost, facilitates the accommodation of short-term charters. The other two key attributes of FSRUs – their ability to enable gas companies to commence LNG imports relatively cheaply and quickly – ensure that the overall global portfolio of FSRU projects continues to grow strongly.
Global market
To date, 14 countries have joined the LNG importers club as a result of FSRU projects, while another three nations have added FSRU-based terminals to
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FLOATING LNG | 31
their existing complement of shorebased facilities. Looking to the future, four countries are moving ahead with plans to implement their first FSRU scheme, while a further 12 are evaluating proposals prior to a final investment decision (FID). The first FSRU project was inaugurated in 2008, and there are now 30 FSRUs in service and 12 on order. Just short of 35M tonnes of LNG was regasified by FSRUs in 2017, approximately 8% ahead of the previous year and equal to 12% of that year’s global trade in LNG. Bangladesh became the world’s 42nd LNG import nation in August 2018, when the 138,000 m3, 2005-built FSRU Excellence began pumping regasified cargo ashore via a submerged turret loading (STL) buoy arrangement and subsea line. The vessel is stationed off Moheshkhali Island and is on charter to Petrobangla. In December 2018 the 125,000 m3 Golar Freeze, a converted FSRU, was moored at its new home in southern Jamaica’s Old Harbour to take on regasification and distribution duties under a 15-year charter with New Fortress Energy. In recent weeks Gazprom’s 170,000 m3 Arc4 ice class FSRU, Marshal Vasilevskiy, freshly delivered by Hyundai Heavy Industries, took up station at the Russian Baltic Sea enclave of Kaliningrad. Although Russia has been exporting LNG since 2009, Marshal Vasilevskiy provides Russia with the ability to import LNG for the first time.
Early closure
Despite these three recent success stories, several FSRU projects were brought to a premature closure last year, due to extenuating circumstances. Egypt Natural Gas Holdings (EGAS), for example, decided to dispense with the services of Hoegh Gallant and BW Singapore, the two FSRUs it had moored at the Red Sea port of Ain Sokhna since 2015, because substantial new domestic gas finds not only brought an end to Egypt’s need to import LNG but also supported a rebound in LNG export shipments by the country’s two idled
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liquefaction plants. The solution to the cessation of regas services provided by Hoegh Gallant illustrates the flexibility inherent in the FSRU approach to LNG imports. Although the ship had been chartered to EGAS until April 2020, the availability of the vessel from October 2018 has meant that Höegh LNG has been able to redeploy Hoegh Gallant in the conventional LNG trades on a shortterm basis. EGAS has agreed to pay Höegh the difference between its FSRU charter rate and what Hoegh Gallant will earn in global LNG trading between October 2018 and April 2020.
THE KEY ATTRIBUTES OF FSRUS – AN ABILITY TO ENABLE GAS COMPANIES TO COMMENCE LNG IMPORTS RELATIVELY CHEAPLY AND QUICKLY – ENSURES THAT THE GLOBAL PORTFOLIO OF FSRU PROJECTS CONTINUES TO GROW STRONGLY" Excelerate, a regas vessel which came off charter to Abu Dhabi National Oil Co (ADNOC) in 2018, is earmarked for a new FSRU project, commencing in 2019. It will be utilised by Summit LNG to provide Bangladesh with its second FSRU-based LNG import facility. The bow moonpool arrangement on Excelerate, similar to that on Excellence, will also enable the use of an STL buoy to discharge regasified cargoes ashore via a subsea line. In addition to early FSRU project expiries, some proposed regas vessel schemes never get off the drawing board. This is hardly surprising, given the large number of initiatives under development at any one time. Often, it is not possible to finalise LNG sales contracts of sufficient volume to justify the necessary investments in an FSRU project. Schemes planned
for Chile, Ghana, Ivory Coast, Croatia, Puerto Rico and the UK have been delayed, to the extent that several of the proposals now look stillborn. For example, in recent weeks Excelerate Energy announced it is backing out of the proposed Aguirre Offshore Gas Port in Puerto Rico, citing changed circumstances and the current unfavourable financial situation on the island. Excelerate and Puerto Rico Electric Power Authority (PREPA) initiated talks on this proposed scheme as long ago as 2011.
New projects galore
However, for each FSRU setback there are at least two new regas vessel projects being tabled. The advantages of the FSRU solution continue to attract the attention of gas importers anxious to fast-track new supplies on the international market. In El Salvador, the utility company Energia del Pacifico (EDP) has commenced construction work on a new gas-fired power station at Acajutla on the country’s Pacific Coast. The masterplan calls for the facility to be supplied by an FSRU moored offshore and BW LNG has been selected to operate the required regas vessel. The conversion of an existing conventional LNG carrier to an FSRU is envisioned for the Acajutla LNG project, and EDP is said to favour a Moss spherical tank vessel for offshore mooring, as this containment system is not susceptible to cargo sloshing damage, irrespective of the tank fill level. Shell will supply the LNG volumes for the scheme and the company’s 137,000 m3, 2002-built Gallina has been mooted as a possible conversion candidate. An FID on the FSRU conversion is expected in spring 2019, to enable the project to commence operations in tandem with the power plant in May 2021. Australia is on the cusp of moving ahead of Qatar to become the world’s top LNG exporter, thanks to the output of 10 liquefaction projects distributed between Western Australia, Northern Territory and Queensland. At the same time, three
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32 | FLOATING LNG
of the country’s southern states – New South Wales (NSW), Victoria and South Australia – are pushing ahead with plans to commence LNG imports based on the use of FSRUs. Four such proposals have been tabled. Two of the most advanced of these schemes are the Australian Industrial Energy (AIE) initiative to place an FSRU at Port Kembla in NSW by 2020 and the regas vessel that AGL Energy proposes to have in position at Crib Point in Victoria a year later. Both AIE and AGL have reached agreements with Höegh LNG, under which the shipowner will provide one of its 170,000 m3 FSRUs for each project. Several proposals have also been tabled recently that will place Germany in the ranks of LNG importers for the first time, the most ambitious of which is the Uniper plan to charter a large FSRU newbuilding of 263,000 m3 from Mitsui OSK Lines and place it in service at Wilhelmshaven in the second half of 2022. Uniper has signed up for the purchase of 900,000 tonnes per annum of LNG from the Freeport export terminal in the US for 20 years; much of this volume would be used to supply Wihelmshaven.
Floating LNG exports
Although the capital cost of an FLNG vessel is likely to be at least 10 times that of an FSRU, floating LNG production offers advantages over shore-based
liquefaction in certain scenarios. In recent years, the LNG industry has moved with alacrity to realise these FLNG benefits, not least in exploiting remote and inaccessible offshore gas reserves. The first FLNG vessel to enter service was the 180,000 m3 Petronas-operated PFLNG Satu, a newbuilding unit which loaded its first LNG cargo from the Kanowit field off the coast of Malaysia in March 2017. The second floater to produce LNG was Hilli Episeyo, a converted Moss spherical tank 125,000 m3 LNG carrier which began commercial operations in Cameroon coastal waters in June 2018. Hilli Episeyo had dispatched 11 cargoes by the end of the year. As 2019 kicks off, four new FLNG projects are moving ahead, while another has hit the buffers. Shell’s 488m Prelude FLNG vessel, which has the capacity to produce 3.7 million tonnes per annum (mta) of LNG at its location off Western Australia, will be the next FLNG project to come onstream. At the turn of the year the vessel began producing LNG from its offshore gas fields and commercial operations will commence within the first half of 2019. Another FLNG vessel set to be producing LNG in 2019, within the second quarter, is Tango FLNG. The project will make use of a barge-based unit, owned by Exmar and formerly known as Caribbean FLNG, which was earmarked for a project in Colombia
that fell through. Tango FLNG, which has the capacity to process 0.5 mta of LNG, will be positioned in the Argentine port of Bahia Blanca and utilised in the processing of shale gas piped across country from the Vaca Muerte source. In December 2018 BP and its project partners gave the green light to the 2.5 mta Tortue scheme, which will utilise an FLNG vessel to develop the gas resources of the Greater Tortue Ahmeyim field, which straddles the offshore waters of Mauretania and Senegal. Golar LNG will provide the required FLNG vessel and will convert one of its older Moss spherical tank LNG carriers for the task, as it had done for the Hilli Episeyo project. BP is targeting a 2022 start for Tortue LNG. Another African FLNG project targeted for a 2022 start-up is Eni’s Coral FLNG initiative in Mozambique. Samsung Heavy Industries (SHI) is building the 3.4 mta floating production vessel, which will go on station off the country’s northern coast for 25 years. BP has agreed to purchase the entire output of the Coral FLNG vessel. SHI also has the other FLNG vessel currently under construction on its books. The 177,000 m3 PFLNG2 vessel will be the second FLNG for Petronas and service off the Malaysian coast, after PFLNG Satu. The 1.5 mta PFLNG2 project is set to commence operations in 2020. LNG
Höegh LNG’s Neptune is one of two FSRUs that Turkey has in service, complementing the country’s original pair of shore-based LNG receiving terminals
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LNG finds favour among tug owners Tug owners are starting to use LNG for tug fuel, especially when the vessels are dedicated to escorting LNG carriers
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NG-fuelled tugs are being built at shipyards in Singapore and China for Asian operations. Two tugs were delivered in 2018 in Singapore after they were constructed by Keppel Singmarine: Maju Loyalty entered service in July as an azimuth stern drive (ASD) tug, built for Maju Maritime, which is a joint venture between Keppel and Royal Boskalis Westminster. It was designed by Keppel O&M for terminal and harbour operations, with an overall length of 32 m, breadth of 12.5 m and bollard pull, ahead and static, of 73 tonnes. Maju Loyalty’s propulsion and power comes from a pair of Niigata dual-fuel engines of 6L28AHZ-DF type, which drive two steerable and azimuthing, fixed-pitch propellers.
KST Liberty is a dual-fuel tug, operated by Keppel Smit Towage in Singapore, for terminal and harbour operations
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Maju Loyalty was the second dual-fuel tug that Keppel Singmarine delivered for Singapore operations, as in May 2018 it handed over the LNG-fuelled tug, KST Liberty to Keppel Smit Towage, which is a sister company to Maju Maritime. This is also an ASD tug for terminal and harbour operations, with 65 tonnes of bollard pull. More LNG-fuelled tugs are being built for Singapore operations. In China, PaxOcean Engineering is constructing dual-fuel terminal tugs for PSA Marine. It laid the keel for the first of these LNG-powered harbour tugs, known by its hull number PX1098, at its facility in Zhuhai, China, on 23 November 2018. Both tugs are expected to be delivered by the end of 2019. To meet PSA Marine’s performance, stability and environmental leadership expectations, PaxOcean, selected Canadian naval architect Robert Allan in January 2018 to design these dual-fuel vessels. PaxOcean has built other diesel-powered harbour tugs in China for PSA Marine. In September 2018, it delivered two escort and berthing support tugs for the owner’s operations in Singapore. These azimuthing stern drive (ASD) tugs, PSA Thor and PSA Hulk, were built to the same Robert Allan design and classed by Lloyd’s Register. Robert Allan designed an LNG-fuelled tug, of RAstar 3800DF design, for Ningbo Zhoushan Port, China. This dual-fuel tug is under construction at Jiangsu Zhenjiang Shipyard for completion by Q3 2019. It will be an ASD tug with a pair of Niigata 8L28AHX dual-fuel engines that will power two Rolls-Royce US 255 controllable pitch Z-drives. When this tug is delivered, it will have a bollard pull of around 80 tonnes and LNG storage capacity of 55 m3. In Japan, Mitsui OSK Lines has two dual-fuel tugs under construction at Japan’s Kanagawa Dockyard Co. The first of these is scheduled for completion in February 2019 and the second tugboat is expected to commence operations in April 2019. These will be operated by Nihon Tug-Boat Co, with the LNG fuel supplied by Osaka Gas. They will each have a pair of Yanmar 6EY26DF main engines. Yanmar is also supplying the LNG fuel tanks, buffer tanks and gas combustion devices that will be part of the gas fuel feed systems for the engines. Robert Allan designs were used for three LNG-fuelled terminal tugs that entered service in the Arctic in 2017. Spanish shipyard Astilleros Gondán built three escort tugs – Dux, Pax and Audax – for Østensjø Rederi for operations at an LNG production centre and export terminal in Hammerfest, Norway. These tugs were built to Bureau Veritas class and for operations in Arctic conditions all year round. They escort LNG carriers into and out of the terminal in temperatures down to -20˚C. They are RAstar 4000-DF design tugs with Wärtsilä dual-fuel engines. They can achieve a maximum free-running speed of 15 knots and can produce up to 107 tonnes of bollard pull. LNG
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34 | ESCORT TUGS
Technical: Escort tugs and emergency response New escort tugs, designed specifically to support LNG operations, are proving capable and valuable assets
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ew tugs, adapted for the specific requirements of LNG carrier manoeuvring in export and import terminals, are starting to find favour among owners SAAM Smit Towage (SST) is expecting to take delivery of a new LNG terminal tug from Turkish shipyard Uzmar Shipbuilding in Q1 2019; the tug having been launched from the shipyard on 15 November 2018. This escort tug has been built to a Robert Allan RAstar 3200-W design and has IMO Tier III propulsion. The 32-m tug will be employed from Q2 2019 for escorting and berthing LNG carriers at an export facility in British Columbia, Canada. Uzmar assistant general manager Mutlu Altuğ said that this tug was designed with the specific requirements of escorting LNG carriers in mind. “It is an LNG-proof tug for a Canadian LNG terminal [and] will have around 80 tonnes of bollard pull and Cleanship and Green Passport notations from Bureau Veritas,” he explained. Robert Allan optimised the RAstar hull and deep skeg of this tug to generate high indirect escort forces, while also ensuring it can provide towing operations from the stern. For safety at the LNG export terminal, this tug incorporates a gas detection system, explosion-proof deck equipment, off-ship FiFi1 fire-fighting capabilities and a winch for emergency towage. Elsewhere, Smit Lamnalco will order new tugs to support operations in Bahrain, after securing a contract
LNG World Shipping | January/February 2019
Svitzer Meridian is an ATD tug, escorting LNG carriers to the Grain terminal, UK
in the middle of 2018 covering marine services on the nation’s LNG import terminal. It will be providing escort and towage services at a floating LNG import terminal for 20 years. The centrepiece of this contract involves four 70-tonne bollard pull tugs that will assist with the escorting, berthing and departure of LNG carriers at this facility. Commercial operations are scheduled to begin in 2019 at the Bahrain LNG import terminal, which will use a floating storage unit and a jetty-mounted regasification facility located offshore 5 km east of Khalifa Bin Salman port. As part of its overall package, Smit Lamnalco will initially employ four
escort tugs from its existing LNG terminal support fleet. However, in the fifth year of the contract these vessels will be replaced by four new purposebuilt tugs for the remaining 15 years. Smit Lamnalco has further employment opportunities for its tugs in Australia, having secured a towage licence renewal at a growing LNG export port. Gladstone Ports Corp awarded the licence to Smit Lamnalco in December 2018, following a competitive tender process. This should keep a fleet of 11 tugs in employment at the Queensland, Australia, port for at least another five years. Their employment could be continued
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ESCORT TUGS | 35
to the end of 2026 as there is an option to extend this licence for a further three years. Port of Gladstone is a large, multi-commodity port with a significant LNG plant and export terminal. Smit Lamnalco has provided harbour towage services at this port since 2011. New tugs have also been ordered by Svitzer to support operations around European LNG terminals in 2018. The most recent to join the Svitzer Europe fleet, Svitzer Meridian, has been deployed in southeast England to support ships using the Thames and Medway rivers. Part of this deployment involves escorting LNG carriers into the Grain LNG terminal on the river Medway. Svitzer Meridian became one of the most powerful tugs operating at the terminal when it joined Svitzer’s fleet in November 2018. It is a UK-flagged, azimuth tractor drive (ATD) tug with 71.5 tonnes of bollard pull and combined engine power of 4,200 kW. This gives this tug a maximum speed of 12.5 knots ahead and 12 knots astern, as
proven during sea trials. Svitzer Meridian was constructed at Sanmar’s shipyard in Turkey as part of a two-vessel Delicay series. It was built to an adapted Robert Allan TRAktor 2500-SX design and to ABS class requirements for towing and FiFi1 operations. This design has a raised half foc’sle above the waterline for seakeeping in exposed waters and a hullform optimised for manoeuvrability, fuel efficiency and roll dampening. Svitzer Meridian also has StRAke stabilisers on the stern of the hull. These were developed by Voith and Robert Allan to improve tractor tug directional stability. Inside the engineroom, Svitzer Meridian has two Caterpillar 3516C HD main engines that drive two Rolls-Royce US 255 FP Z-drive units. On the aft working deck there is a DMT type TW-021-E electric, doubledrum towing winch that has a force of 250 kN at a low speed of 9 m/min, or 80 kN at a high speed of 28 m/min. It also has a brake-holding load of 190 tonnes. LNG
SVITZER MERIDIAN PARTICULARS Owner: Shipbuilder: Designer: Design:
Svitzer Europe Sanmar Robert Allan TRAktor 2500-SX
Operating port:
London, UK
Bollard pull:
71.5 tonnes
Length, oa: Beam, moulded:
25.3 m 12 m
Hull depth, moulded:
4.55 m
Draught:
5.74 m
Gross:
339 gt
Classification:
ABS
Main Engines:
2 x CAT 3516C
Propulsion: Winch:
2 x US255 FP Z-drives DMT type TW-021-E
SafeTug enhances safety among LNG carrier tugs Trelleborg Marine Systems has launched SafeTug, a program designed to enhance piloting and navigation safety Trelleborg Marine Systems’ new software enables real-time sharing of operational data and information on the movement of assisted LNG carriers. This enhances collaboration between the tug master, ship bridge teams, pilots and port operators. SafeTug uses dynamic data including the ship’s speed and direction, rate of turn, trajectory, heading and course over the ground. The software also displays the position of other tugboats using the system. “SafeTug improves the range and accuracy of navigational measurements, offering true 360° visibility and enhancing situational awareness in real time,” said Trelleborg’s president of marine systems Richard Hepworth. “This helps the pilot to know exactly where the tugs are located and for the tug master to know exactly what the movement of an assisted vessel is, creating a safer and more effective pilotage experience,” he added. SafeTug connects with SmartPort Cloud for data storage and exchange to provide an overview of port and piloting operations. It enables onshore teams to monitor whole operations for decision support and planning future manoeuvres.
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SafeTug features: • Over-the-air (OTA) differential corrections • Real-time traffic overview • Live positioning data with predicted paths • Data recording • Data storage • Operations playback for investigations Mr Hepworth said this software will help reduce pilotage and tug incidents during challenging operations: “Piloting requires the safest, most efficient and reliable technology,” he said. “It demands exceptional performance, ease of operation and high position accuracy to facilitate optimum approach, berthing and departure.” SafeTug sits within Trelleborg’s growing SmartPort portfolio, which addresses the critical interfaces between LNG carriers and terminals. SmartPort integrates assets, such as fenders and mooring equipment, while improving ship performance monitoring and navigation systems. Trelleborg won the LNG Technology Award for its ship-to-shore communications link at the debut LNG World Shipping Awards, which were sponsored by tug operator Smit Lamnalco and recognised achievements in safety and terminal operations during 2018. These awards were handed out during Riviera Maritime Media’s LNG Ship/ Shore Interface Conference in London, on 22-23 November 2018.
LNG World Shipping | January/February 2019
36 | ICE OPERATIONS
Winter season tests the mettle of Yamal and Baltic LNG carriers LNG carrier operations in the Russian High Arctic and the Baltic Sea have extended the operational envelope of ice class gas shipping
O
ver the past 15 months Novatek has rewritten the record book covering ice class LNG carrier operations. The company is bringing LNG from the Russian High Arctic by means of a fleet of 15 icebreaking LNG carriers (LNGC) built by Daewoo Shipbuilding & Marine Engineering in Korea. Constructed to the Arc7 standard set down in the Russian Maritime Register of Shipping (RMRS) ice class rules of 2007, the ships are being utilised by Novatek to transport LNG from the Yamal LNG export terminal at Sabetta on Ob Bay to customers worldwide. The Arc7 rating is the highest ice class yet awarded to a merchant ship. When operating in the stern-first, icebreaking mode, the ‘double-acting’ Yamal LNGCs are able to proceed through ice up to 1.8 m thick on a continuous basis.
ice conditions, such as westbound runs from Sabetta to Europe. They are also utilised for the onward transport of cargoes that are transhipped from the Arc7 ships, by means of ship-toship (STS) transfers, at the earliest possible opportunity. Such operations enable the Arc7 ships to optimise their time in the ice – the working environment for which they were designed. Novatek’s fleet utilisation strategy for the Arc7 ships is to send cargoes westbound to Europe during the winter heavy ice cover season. Westbound shipments in Arc7 ships, even in the Arctic winter months of November to June, do not require costly
Long Yamal winter
Sabetta lies approximately 525 km north of the Arctic Circle and endures a 65-day polar night, from late November to late January, when the sun does not appear above the horizon. First-year ice begins to form and thicken in the vicinity of the Yamal terminal around mid-October and remains in place through the following June. Sabetta’s fleet of dedicated port icebreakers are kept busy for over seven months of the year, keeping the channel to the terminal’s two LNG jetties clear. In December 2018 Train No 3 at Yamal exported its first cargo, 12 months earlier than scheduled. Train 3 has commenced producing LNG well ahead of the delivery of the final tranche of five ships planned for this, the third of project’s three original 5.5 million tonnes per annum (mta) liquefaction units. Novatek also has a secondary charter fleet of 11 LNGCs to work on the Yamal scheme. The majority of the vessels in this additional fleet are built to the lesser Arc4 ice class, while a handful are conventional, non-ice class LNG carriers. Ships in the secondary fleet are employed in less onerous
LNG World Shipping | January/February 2019
The Manga LNG receiving terminal was commissioned at Tornio in Finland, the northernmost Bay of Bothnia port
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ICE OPERATIONS | 37
Sabetta’s fleet of dedicated port icebreakers are kept busy for over seven months of the year, keeping the channel to the terminal’s two LNG jetties clear” icebreaker escorts, whereas such escorts are stipulated for Arc7 ships travelling east from Sabetta to Asia during this period. In the summer months, when the ice cover thins, the Arc7 LNGCs are able to travel eastbound along the Northern Sea Route (NSR) in the Russian Arctic without the need for a dedicated icebreaker escort. Asia is the principal market for LNG and the ability of these specialised ships to make direct eastbound deliveries during the summer months, including to transhipment points, is set to be well utilised. Novatek is also planning to build its own fleet of up to four LNG-powered Arctic icebreakers. The availability of these in-house vessels to escort LNGCs sailing to Asia would enable the eastern NSR sailing season to be extended.
Logistics challenges
Because the start-up of the three Yamal liquefaction trains is running ahead of the delivery schedule of Arc7 ships required to lift the cargoes, Novatek is placing great store this winter in the earliest possible transhipment of westbound cargoes from the Arc7 LNGCs to the secondary fleet, to maximise the time that the available icebreaking vessels spend in the ice. Novatek has secured the Tschudi Group to manage a busy schedule of STS transhipment operations at four open-sea locations in two fjords near Honningsvåg in northern Norway. The first transfer, from the 172,600 m3 Arc7 Vladimir Rusanov to the 170,200 m3 Arc4 Pskov, was carried out in November 2018.
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Novatek and Tschudi are expecting to handle up to 160 STS transfers at Honningsvåg by the end of June 2019, enabling the early transhipment of 11.7M tonnes of Yamal LNG. STS operations at Honningsvåg enable the Arc7 ships to reduce their Sabetta-Europe roundtrip voyage distances by 2,000 km. Another initiative is underway that holds the potential to improve Yamal LNG delivery logistics. In November 2018 the Russian Transport Ministry, which is responsible for setting the NSR navigation rules, proposed some amendments to the regime that would give Arc4 and Arc5 vessels more scope for work in ice. Arc4 and Arc5 vessels are currently prohibited from operating on the NSR between 30 November and the end of the ice season each year. Under the proposed change, such ships would be able to travel on the route with the assistance of an icebreaker escort, even during the winter months. If approved, the new provisions could enter into force by May 2019.
Baltic rules set the pace
The Finnish-Swedish Ice Class Rules (FSICR), governing shipping operations in the Baltic Sea, began evolving in the 1890s and were the maritime industry’s first set of standards governing the construction of ships operating in ice-bound waters. The ice class of ships sailing in the Baltic is based on a vessel’s classification notation, and all the major class societies have implemented FSICR in their own rules. Large parts of the Baltic Sea east of the Kattegat are icebound during the winter months and the thickest winter ice cover to be found in the region is that in the northern reaches of the Bay of Bothnia. Compliance with FSICR ensures that, among other things, ships engaged in trade to Finnish and Swedish ports in the Northern Baltic Sea are able to navigate safely and efficiently in these waters on a year-round basis, irrespective of the prevailing ice cover. In 2018 the Manga LNG receiving terminal was commissioned at Tornio in Finland, the northernmost Bay of Bothnia port. Boasting a 50,000 m3 storage tank, Manga is the largest LNG import terminal in the Nordic countries. LNG is delivered to the Tornio terminal by the 18,000 m3 Coral EnergICE. Delivered in January 2018, Coral EnergICE is the first LNGC to be built to the FSICR ice class 1A Super standard, roughly equivalent to Arc5 in the Russian rules. The icebreaking capabilities of the Anthony Veder-owned LNGC enable it break through ice up to 1 m thick on a continuous basis and to service the northern Baltic, including the Manga terminal, throughout the year. Coral EnergICE is serving on a long-term charter to Gasum, a stakeholder in the terminal along with Outokumpu, SSAB Europe and EPV Energy. The ship is the largest of a growing fleet of coastal LNGCs and LNG bunker vessels (LNGBVs) active in the Baltic Sea region. All the other vessels in this
LNG World Shipping | January/February 2019
38 | ICE OPERATIONS
The inaugural Vladimir Rusanov-to-Pskov LNG transhipment in November 2018 is set to be the first of up to 160 such STS transfers
fleet are built to the FSICR Ice Class 1A standard. As of mid-January 2019, an ice cover of 20-40 cm was reported in the Tornio area. Sweden and Finland make three icebreakers available to assist vessels sailing in the Bay of Bothnia during the winter season, one of which is the LNGpowered Polaris, owned by Arctia Icebreaking Oy. The dualfuel icebreaker bunkers at the Manga terminal and its two LNG fuel tanks provide 800 m3 of capacity and 10 days of autonomous operation on gas in typical winter conditions.
Baltic bunker vessels
The Baltic LNG bunker vessel fleet, comprising the 180 m3 Stockholm cross-harbour bunker vessel Seagas and the 5,800 m3 Coralius, jointly owned by Veder and Sirius Shipping, has recently been augmented by the entry into service of the 7,500 m3 Kairos. Built for Babcock Schulte Energy, a 50/50 Bernhard Schulte Shipmanagement (BSM)/Babcock International joint venture, the distinctive, superstructure-forward LNGBV, has been taken on long-term charter by Blue LNG. Hamburg-based Nauticor holds a 90% stake in Blue LNG, while Klaipedos Nafta (KN), the Lithuanian energy firm, controls the remaining 10%. Built to ice class 1A, equivalent to Arc4 in the Russian rules, Kairos utilises the LNG reloading terminal developed by KN in the Lithuanian port of Klaipeda as its home base. Commissioned in early 2018, KN’s shoreside reloading terminal features five 1,000 m3 cylindrical pressure vessel storage tanks, road loading bays and a marine jetty. KN also has on charter the ice class 1A 170,000 m3 floating storage and regasification unit (FSRU) Independence, moored across the harbour in Klaipeda. LNG for the KN shoreside terminal is sourced from this regas vessel, and Kairos is also able to load LNG from the FSRU by means of STS transfers for direct delivery to Blue LNG customers. In recent years, Nauticor has been successful in winning a number of long-term LNG bunkering contracts for gas-fuelled ships operating in the Baltic. To meet its obligations, the company can provide not only an STS fuelling service utilising Kairos, but also truck-to-ship (TTS) bunkering at a number of ports. A notable recent STS agreement involves Finland’s ESL Shipping. Kairos will bunker ESL’s new handy-size, dual-
LNG World Shipping | January/February 2019
fuel bulk carriers Haaga and Viikki in the Swedish port of Oxelösund. Each of the two 25,600 dwt, ice class 1A bulkers is fitted with a 400 m3 LNG bunker tank positioned on the main deck aft of the accommodation superstructure. The bulkers will service the ports of Luleå and Oxelösund in Sweden and Raahe in Finland, ensuring that the steelmaker SSAB is kept topped up with the raw materials it requires. Nauticor is set to utilise the Swedish coastal LNG receiving terminal at Nynäshamn, 55 km to the north of Oxelösund, as a source of LNG for the ESL bunkering operation. Nynäshamn, with a 20,000 m3 storage tank, is operated by AGA, a sister company of Nauticor within the Linde Group. AGA also owns Seagas, the small LNGBV that bunkers the 57,000 gt, LNG-powered passenger ferry Viking Grace in Stockholm harbour virtually every day. Over the course of a year, Seagas supplies approximately 23,000 tonnes of LNG fuel to Viking Grace. Nauticor is also contracted to supply LNG bunkers for a pair of dual-fuel passenger ferry newbuildings that Rederi AB Gotland is putting into domestic service on routes linking the Swedish mainland with Visby on the island of Gotland. Once again, Kairos will be able to load LNG at the Nynäshamn terminal for STS fuel transfers to the 32,000 gt ferry pair. Each of the ice class 1A vessels has been provided with a pair of Type C bunker tanks, offering a total capacity of 570 m3. The first of the two ferries, Visborg, is scheduled to enter service in February 2019, while Thjelvar will commence operations a few months later. In January 2019, Gazprom’s new 170,000 m3 LNG vessel Marshal Vasilevskiy was put into position as the Baltic Sea’s second FSRU, after Independence. Stationed at a fixed marine berth with its own breakwater 5 km offshore in the Russian enclave of Kaliningrad, the regas vessel is built to the Arc4 Russian ice class standard. This rating enables the ship, when navigating in open water, to proceed through ice up to 0.8 m thick on a continuous basis. Gazprom is also behind a recent newbuilding contract for an Arc4 LNGBV newbuilding placed with the Keppel Singmarine yard in China. Gazprom will take the 5,800 m3 vessel on charter on completion in Q4 2020 and put it into service fuelling gaspowered ships in the Baltic Sea. LNG
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CARGO PUMPS | 41
GCU makes light work of boil-off gas Newbuild LNG carriers are looking to thermal oxidation as a means of handling boil-off gas, while a new deepwell cargo pump designed specifically for LNGfuelled engines will help reduce maintenance costs
B
oil-off gas is an inevitability on board LNG vessels and must be dealt with effectively to avoid adverse effects on gas pressure in the LNG tanks. Reliquefaction, whereby LNG is cooled and reverted to a liquid state, is one option; another is feeding the boil-off gas to the vessel’s engines, either at tank pressure in the case of four-stroke engines, or in compressed form for two-strokes. But increasingly, straightforward thermal oxidation, in the form of burning off the gas, is being employed as either a supplemental or standalone solution. More than half of the LNG carriers built during 2018 utilised Alfa Laval’s Gas Combustion Unit (GCU) for boil-off gas management, according to the company itself. Over the past decade the trend in newbuild LNG carrier propulsion has shifted from steam turbines to dual-fuel diesel electric propulsion, both of which are economically and environmentally sound compared to traditional systems. However, such engines require additional means to regulate LNG cargo tank pressure. The GCU provides this by burning excess boil-off gas that the ship’s propulsion system does not use. Available in four standard sizes, to accommodate flow rates of 1.5-3 tonnes per hour (t/h), 3-4.5 t/h, 4.5-6 t/h and 6-9 t/h of methane, the GCU can safely dispose of excess boil-off gas without the need for pilot oil burners. Monaco-based GasLog LNG, manager
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The GCU contains few components and moving parts, making for easy integration and maintenance (credit: Alfa Laval)
of one of the world’s largest fleets of LNG carriers, acquired the 100th GCU from Alfa Laval and its innovation and technology manager noted, “Between its compactness and simplicity, the GCU is easily integrated into our LNG carriers and provides the high reliability we demand.” Elsewhere, the Yamal LNG project’s 15 Arctic ice-class tankers will each carry specially engineered Alfa Laval machinery, including GCUs, to cope with the extreme cold conditions in which they will operate. As well as a GCU, each vessel will also carry a thermal-fluid-based secondary heating system, six Aalborg XS-TC7A economisers and two 35-tonne Aalborg OL boilers with dual-fuel burners from Alfa Laval. All this equipment must be able to handle temperatures of minus 50°C or lower. The GCU comprises three levels: a fan deck, which contains combined dilution and combustion fans and an air chamber; a combustion chamber and utility deck, which along with the combustion chamber and burner arrangement contains other equipment such as the gas valve train, power cabinets and the control cabinet; and the top casing deck/stack, which contains the exhaust gas outlet and temperature sensors. The GCU is available in either single or dual combustion chamber configurations, depending on the required methane flow capacity. The relatively small size and lack of components, interfaces and moving parts makes the system simple, reliable, and easy to integrate, according to Alfa Laval. The technology behind the GCU was acquired in 2013 by Alfa Laval from Snecma, now known as Safran Aircraft Engines, a Courcouronnes, France-based aerospace engine manufacturer. Since then, the company has continued to develop the technology in partnership with customers
LNG World Shipping | January/February 2019
42 | CARGO PUMPS
and at the Aalborg, Denmark-based Alfa Laval Test & Training Centre., which was expanded to cover gas applications in 2017. Since the expansion, a full-size GCU has been at the centre of Alfa Laval’s 1,350 m2 testing space. Alfa Laval’s exhaust and combustion systems manager Pieter Borg said: “Numerous GCU advances have been made at the Alfa Laval Test & Training Centre, such as a full free-flow application that enables full-capacity burning at low inlet pressure without the need for gascompressors. “We have also implemented Alfa Laval Touch Control, which is the same control system used on other Alfa Laval products, such as Aalborg boilers and Smit inert gas generators.” This year, a smaller version of the GCU is expected to be released. Unlike the current system, which is most suited to large vessels, the new unit will be optimised for 100–1000 kg/h of boil-off gas. Mr Borg said: “The smaller GCU will be an excellent fit for small LNG carriers, floating storage and regasification units, LNG bunker vessels and vessels using LNG as fuel, which also need an option for burning boil-off gas.”
THE DEEPWELL DESIGN SETS THE EFP APART FROM MOST OTHER LNG FUEL PUMPS, WHICH ARE OF THE SUBMERGEDTYPE”
BELOW: As the EFP’s service parts are outside of the tank it is easier to monitor and boil-off gas generation is reduced
customers for the EFP, according to Mr Lund, who noted that the design underwent a year and a half of assessment at Svanehøj’s former parent’s testing facility in Finland. The EFP is a cryogenic multi-stage centrifugal pump and is designed for continuous variable frequency operation. The deepwell design sets the EFP apart from most other LNG fuel pumps, which are of the submerged-type, said Mr Lund. This design makes it easier to monitor the pump, as all electrical service parts sit outside of the fuel tank itself, there is no heat transfer from the motor to liquid gas and the motor does not increase pressure and boil-off gas. Another advantage over competing designs is the EFP’s long maintenance interval of five years. The pump also features a hermetically sealed MagDrive coupling, which separates gas in the tank system from its surroundings, systematically removing the risk of gas leakages through shaft sealings. The EFP’s foot valve can be activated from outside of the fuel tank, and when closed, allows the caisson pipe to be purged with nitrogen and the pump to be
Growing demand for pump innovation
Aalborg, Denmark-based pump manufacturer Svanehøj Group is optimistic about going it alone following its divestment from Wärtsilä, which was announced in October 2018. Svanehøj was acquired by Copenhagenbased investment house Solix, which has committed to support the deepwell and in-line pump specialist by strengthening its sales and service arm and investing in new production development. “Even though we have been very pleased being a part of the Wärtsilä Family, we are confident that we will also benefit positively from the transfer to Solix,” Svanehøj’s sales director Jens Peter Lund said. One of the company’s most recent developments is the ECA Fuel Pump (EFP), a deepwell cargo pump developed in cooperation with LNG fuel-gas system designers specifically for LNG-fuelled engines. The EFP first came to market in 2017 and the first vessels fitted with the pump, which include a DEME dredger, have recently entered operation. Wärtsilä is one of the main
LNG World Shipping | January/February 2019
Service Area 1
Service Area 2
Static Seal
Service Area 3
Foot Valve
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CARGO PUMPS | 43
Burckhardt upgrades compressor on FSRU Golar Freeze Golar Management in Norway has contracted Burckhardt Compression to upgrade the Laby-GI compressor fitted on board the 126,000 m³, 1977-built floating storage and regasification unit (FSRU) Golar Freeze.
Golar Freeze will serve as a regasification vessel in Jamaica under a 15-year charter to New Fortress Energy (credit: Golar LNG)
The revamp is part of a project to prepare the ship for new employment as a regasification vessel in Jamaica under a 15-year charter to New Fortress Energy (NFE). Golar Freeze started life as a conventional LNG carrier, spending three decades shuttling cargoes worldwide. In 2010 Golar LNG had the vessel converted by Singapore’s Keppel Shipyard into an FSRU to serve as an LNG receiving terminal in the port of Jebel Ali, under charter to the Dubai Supply Authority (Dusup). Burckhardt Compression supplied one of its Laby-GI compressors for Golar Freeze as part of the Dusup conversion work. It was the first compressor of its kind installed on an FSRU and during the vessel’s time in Jebel Ali the Laby-GI unit was used as a minimum send-out (MSO) compressor. The Jamaica contract will require use of the compressor for a different purpose, necessitating the current revamp. The new employment calls for an increase in discharge pressure from 45 to 65 barge; that requires an additional compression stage, along with extra auxiliaries, piping and other modifications. An engineering study was first performed to verify the feasibility of the plan. The analysis provided a clear picture of the necessary changes, allowing the scope of the contract work to be defined and a suitable offer to be drawn up.
retracted for repair, even when there is still liquid gas in the fuel tank. There are six EFP models available, split between three nominal flow sizes of 5, 11 and 24 m3 per hour and two pressure versions, 8 and 18 bar, designed for standard four- and two-stroke engines. As well as LNG, the pump is also suitable for LPG and ethane. “We see that [the EFP pump] has high levels of attention from major shipyards both in Japan and Korea,” said Mr Lund. “It is one of the pumps that we are expecting a lot from, but it is still very early days – and it is very early days for LNG as a fuel.” Svanehøj has seen a lot of interest in its cargo and offloading pumps for LNG bunker barges, but investment in these vessels seems to be lagging other vessels. “It’s been a little bit like the chicken and the egg,” said Mr Lund, with development behind both in terms of bunkering infrastructure and dualfuel vessels. While there are some bunker barges coming to market, it is often the case that potential clients looking for modern vessels with high-tech equipment opt instead for floating platforms and trucks. Mr Lund is also dismayed by the
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slow uptake of LNG as a marine fuel. He attributes this to the availability of alternatives, such as scrubbers, that allow owners to comply with IMO’s 2020 sulphur cap requirements, and the relative scarcity of LNG bunkering. But Svanehøj expects this to change in the near future: “We do expect that both small LNG vessels, bunkering and the LNG fuel market will grow enormously over the next years,” said Mr Lund. Another area of growth he foresees involves ultra-large LNG carriers. While Svanehøj’s current range does not see use on these vessels – the target market is LNG carriers with less than 100,000 m3 capacity – an increase in such vessels is likely to precede growth in the rest of the LNG sector, with smaller vessels such as coastal LNG carriers and bunker vessels following on. “I think that we can also tell from the Clarkson numbers that everybody expects that the gas market will become quite lucrative over the next years,” added Mr Lund, noting that with China keen to take ethane, LNG and LPG, and the potential for growth from by-products of shale gas in the US, there is cause for optimism. LNG
THERMAL OXIDATION IS BEING EMPLOYED AS EITHER A SUPPLEMENTAL OR STANDALONE SOLUTION TO BOIL-OFF GAS”
LNG World Shipping | January/February 2019
44 | STATISTICS
YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no
LNG ORDERBOOK LNGC ORDERBOOK AS OF 1 January 2019 HULL
OWNER
CAPACITY
YEAR
CHARTER
CONTAINMENT
CLASS
PROPULSION
DETAILS
Saga LNG Shipping
CHINA China Merchants H.I. 188
Landmark Capital
45000
2019
LNT A-Box
ABS
DFDE
China coast
Saga LNG Shipping
45000
2021
LNT A-Box
ABS
DFDE
China coast
Saga LNG Shipping
45000
2021
LNT A-Box
ABS
27500
2019
CNPC Kunlun
Type C
CCS
DFDE
China coast
Xinao Marine
8500
2020
ENN Energy
Type C
CCS
DFDE
Zhoushan LNGBV
Eesti Gas
6500
2020
Eesti Gas
Type C
BV
DFDE
Baltic LNG BV
1786A
Dynagas
174300
2021
GTT No96
DFDE
FSRU open
1787A
Dynagas
174300
2021
GTT No96
DFDE
FSRU open
1817A
Total/MOL
18600
2020
H1666A
CNOOC/CLNG/TK/BW
174000
H1810A
Mitsui O.S.K.
174000
H1811A
Mitsui O.S.K.
H1812A H1813A
China coast
COSCO Dalian Shipyard N588
Dalian Inteh Group
Dalian Shipbuilding Industry
Damen Yichang 559014 Hudong-Zhonghua
Total
GTT MkIII
BV
Rotterdam bunkering
2019
Shell
GTT No96
ABS/CCS
DFDE
QCLNG exports
2019
Yamal LNG
GTT No96
DFDE
Yamal cargoes
174000
2020
Yamal LNG
GTT No96
DFDE
Yamal cargoes
Mitsui O.S.K.
174000
2020
Yamal LNG
GTT No96
DFDE
Yamal cargoes
Mitsui O.S.K.
174000
2020
Yamal LNG
GTT No96
DFDE
Yamal cargoes
Gasfin Development
28000
2020
Jovo Group
79800
2021
Jovo Group
79800
2021
CIMC Enric SJZ Gas
2200
2019
H400/ H55
Stolt-Nielsen/Avenir Gas
7500
2019
H401/H56
Stolt-Nielsen/Avenir Gas
7500
H402/ H57
Stolt-Nielsen/Avenir Gas
H403/
Jiangnan Shipyard H2621
BV
LNG FSRU
Jovo Group
CCS
Jovo imports
Jovo Group
CCS
Jovo imports
Jiangsu Hantong CNG1
ABS
DFDE
Type C
DNVGL
DFDE
Coastal Europe
2019
Type C
DNVGL
DFDE
Coastal Europe
7500
2020
Type C
DNVGL
DFDE
Coastal Europe
Stolt-Nielsen/Avenir Gas
7500
2021
Type C
DNVGL
DFDE
Coastal Europe
Keppel/Shell
7500
2020
Shell
Type C
DFDE
Singapore Bunkering
8200
Kawasaki Kisen
178000
2021
Mitsui & Co.
GTT MkIII
LSDF (HP)
open
8215
Undisclosed
178000
2022
GTT MkIII
LSDF (HP)
open
8216
Undisclosed
178000
2022
GTT MkIII
LSDF (HP)
open
8217
Undisclosed
178000
2022
GTT MkIII
LSDF (HP)
open
Keppel Nantong
JAPAN Imabari
LNG World Shipping | January/February 2019
LR
www.lngworldshipping.com
STATISTICS | 45
YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no
HULL
OWNER
CAPACITY
YEAR
CHARTER
CONTAINMENT
CLASS
PROPULSION
DETAILS
N.Y.K. Line
165000
2019
Tokyo Gas
SPB
NK
DFDE
Cove Point exports
5072
N.Y.K. Line
165000
2019
Tokyo Gas
SPB
NK
DFDE
Cove Point exports
5073
Mitsui O.S.K.
165000
2019
Tokyo Gas
SPB
NK
DFDE
Cove Point exports
Japan Marine United 5071
Kawasaki 1245
CLS Japan Corp
3500
2020
CLMF Japan Corp
1729
Mitsui O.S.K.
155000
2019
Mitsui & Co
Moss
NK NK
DFDE
Cameron exports
Japan LNGBV
1734
Mitsui O.S.K.
177000
2019
Chubu Electric
Moss
NK
DFDE
Freeport exports
1735
N.Y.K. Line
177000
2019
Chubu Electric
Moss
NK
DFDE
Freeport exports
2321
N.Y.K. Line
178000
2019
Mitsui & Co
Moss
NK
StaGE
Cameron exports
2322
Mitsui O.S.K.
177000
2019
Mitsui & Co
Moss
NK
StaGE
Cameron exports
2326
Mitsui O.S.K.
177000
2019
Chubu Electric
Moss
ABS
StaGE
Freeport exports
2327
Mitsui O.S.K.
177000
2019
Chubu Electric
Moss
ABS
StaGE
Freeport exports
2332
N.Y.K. Line
165000
2019
Mitsubishi
Moss
NK
StaGE
Cameron exports
2429
Dynagas
172000
2019
Yamal LNG
GTT No96
BVRM
DFDE
icebreaking LNGC
2430
Teekay/China LNG
172000
2019
Yamal LNG
GTT No96
BVRM
DFDE
icebreaking LNGC
2431
Teekay/China LNG
172000
2020
Yamal LNG
GTT No96
BVRM
DFDE
icebreaking LNGC
2433
Teekay/China LNG
172000
2020
Yamal LNG
GTT No96
BVRM
DFDE
icebreaking LNGC
2434
Teekay/China LNG
172000
2020
Yamal LNG
GTT No96
BVRM
DFDE
icebreaking LNGC
2444
BP Shipping
174000
2019
BP
GTT No96
LR
LSDF (HP)
BP business
2445
BP Shipping
174000
2019
BP
GTT No96
LR
LSDF (HP)
BP business
2446
BP Shipping
174000
2019
BP
GTT No96
LR
LSDF (HP)
BP business
2456
Maran Gas Maritime Inc.
173400
2019
Shell
GTT No96
DNVGL
LSDF (HP)
Shell business
2457
Maran Gas Maritime Inc.
173400
2019
GTT No96
DNVGL
LSDF (HP)
open
2459
Maran Gas Maritime Inc.
173400
2019
GTT No96
DNVGL
LSDF (HP)
Shell business
2466
Maran Gas Maritime Inc.
173400
2019
GTT No96
ABS
LSDF (HP)
open
2467
Maran Gas Maritime Inc.
173400
2019
GTT No96
ABS
LSDF (HP)
open
2469
Maran Gas Maritime Inc.
173400
2020
GTT No96
ABS
LSDF (HP)
open
2470
Flex LNG
173400
2019
GTT No96
ABS
LSDF (HP)
open
2471
Flex LNG
173400
2019
GTT No96
ABS
LSDF (HP)
open
2477
Maran Gas Maritime Inc.
173400
2020
GTT No96
ABS
LSDF (HP)
FSRU open
2478
Maran Gas Maritime Inc.
173400
2020
GTT No96
LSDF (HP)
open
2479
Flex LNG
173400
2020
GTT No96
LSDF (HP)
open
2480
Flex LNG
173400
2020
GTT No96
LSDF (HP)
open
2481
Minerva Marine Inc.
173400
2021
GTT No96
LSDF (HP)
open
2482
Minerva Marine Inc.
173400
2021
GTT No96
LSDF (HP)
open
2483
Alpha Gas
173400
2020
GTT No96
LSDF (HP)
?Gazprom
2484
Alpha Gas
173400
2020
GTT No96
LSDF (HP)
?Gazprom
2485
Alpha Gas
173400
2021
GTT No96
LSDF (HP)
open
2486
Maran Gas Maritime Inc.
173400
2020
GTT No96
LSDF (HP)
open
Mitsubishi
SOUTH KOREA Daewoo
www.lngworldshipping.com
Shell
LNG World Shipping | January/February 2019
46 | STATISTICS
HULL
YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no
OWNER
CAPACITY
YEAR
2487
Maran Gas Maritime Inc.
173400
2488
BW Gas
170799
2489
BW Gas
2490
BW Gas
2491
CONTAINMENT
CLASS
PROPULSION
DETAILS
2020
GTT No96
ABS
LSDF (HP)
open
2019
GTT No96
DNVGL
LSDF (HP)
FSRU open
170799
2019
GTT No96
DNVGL
LSDF (HP)
open
170799
2020
GTT No96
DNVGL
LSDF (HP)
open
BW Gas
170799
2020
GTT No96
DNVGL
LSDF (HP)
open
2492
Flex LNG
173400
2020
GTT No96
LSDF (HP)
open
2495
Maran Gas Maritime Inc.
173400
2021
GTT No96
LSDF (HP)
open
2496
BW Gas
174000
2021
DNVGL
LSDF (HP)
open
DNVGL
LSDF (HP)
open
LSDF (HP)
open
2497
BW Gas
174000
2021
Alpha Gas
173400
2021
2937
SK Shipping Ltd.
180000
2019
2938
SK Shipping Ltd.
180000
2945
Kolin/Kaylon
170000
2963
Knutsen OAS Shipping
2964 2993
CHARTER
GTT No96
Hyundai SK E&S
GTT MkIII
ABS
LSDF (HP)
Freeport exports
2019
SK E&S
GTT MkIII
ABS
LSDF (HP)
Freeport exports
2019
Kolin/Kaylon
GTT MkIII
ABS
DFDE
Turkey FSRU
180000
2019
Iberdrola
GTT MkIII
LR
LSDF (HP)
Corpus Christi exports
Knutsen OAS Shipping
180000
2019
Iberdrola
GTT MkIII
LR
LSDF (HP)
Corpus Christi exports
Triumph Offshore Pvt
180000
2019
Swan Energy
GTT MkIII
DFDE
Jafrabad FSRU
3037
TMS Cardiff Gas
174000
2020
GTT MkIII
ABS
LSDF (HP)
open
3038
TMS Cardiff Gas
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
3039
TMS Cardiff Gas
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
3086
Knutsen OAS Shipping
180000
2020
Endesa
GTT MkIII
LR
LSDF (HP)
Corpus Christi exports
3095
Turkish Petroleum Corp.
170000
2020
Botas
GTT MkIII
ABS
DFDE
Turkey FSRU
3096
Thenamaris
174000
2020
GTT MkIII
LSDF (HP)
open
3105
Capital Gas
173400
2020
GTT MkIII
LSDF (HP)
open
3106
Capital Gas
173400
2020
GTT MkIII
LSDF (HP)
open
3107
Capital Gas
173400
2021
GTT MkIII
LSDF (HP)
open
3108
Capital Gas
173400
2021
GTT MkIII
LSDF (HP)
open
3112
TMS Cardiff Gas
174000
2021
GTT MkIII
LSDF (HP)
open
3126
ABS
Thenamaris
174000
2021
LSDF (HP)
open
TMS Cardiff Gas
174000
2021
Shell
GTT MkIII GTT MkIII
ABS
LSDF (HP)
Shell business
TMS Cardiff Gas
174000
2021
Shell
GTT MkIII
ABS
LSDF (HP)
Shell business
Knutsen OAS Shipping
30000
2021
3020
TMS Cardiff Gas
174000
2020
Total
GTT MkIII
BV
LSDF (HP)
Total business
3021
TMS Cardiff Gas
174000
2020
Cheniere Energy
GTT MkIII
BV
LSDF (HP)
Cheniere exports
3022
TMS Cardiff Gas
174000
2020
GTT MkIII
BV
LSDF (HP)
open
8006
Sovcomflot
174000
2020
GTT MkIII
BV
LSDF (HP)
Total business
8007
Sovcomflot
174000
2020
GTT MkIII
BV
LSDF (HP)
open
8008
Sovcomflot
174000
2021
GTT MkIII
BV
LSDF (HP)
open
8010
Flex LNG
174000
2020
GTT MkIII
DNVGL
LSDF (HP)
open
8011
Flex LNG
174000
2020
GTT MkIII
DNVGL
LSDF (HP)
open
8012
Flex LNG
174000
2021
GTT MkIII
DNVGL
LSDF (HP)
open
Hyundai Mipo 8232
DNVGL
Hyundai Samho
LNG World Shipping | January/February 2019
Total
www.lngworldshipping.com
STATISTICS | 47
YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no
HULL
OWNER
CAPACITY
YEAR
CHARTER
8013
Flex LNG
174000
2021
8029
N.Y.K. Line
174000
2020
8039
Consolidated Marine
173400
2021
GTT MkIII
LSDF (HP)
open
8040
Consolidated Marine
173400
2021
GTT MkIII
LSDF (HP)
Open
S857
Teekay LNG Partners
174000
2019
BP
GTT MkIII
ABS
DFDE
BP business
S970
N.Y.K. Line
174000
2020
EDF
GTT MkIII
BV
LSDF (HP)
EDF business
EDF
CONTAINMENT
CLASS
PROPULSION
DETAILS
GTT MkIII
DNVGL
LSDF (HP)
open
GTT MkIII
ABS
LSDF (HP)
EDF business
Samsung 2126
Petronas
2131
2020
LNGFPSO
Gaslog LNG Services
170618
2019
Shell
GTT MkIII
ABS
2150
Mitsui & Co.
174000
2019
Mitsui & Co
GTT MkIII
ABS
2212
Gaslog LNG Services
176400
2020
Centrica
GTT MkV
ABS
LSDF (HP)
Sabine pass exports
2213
Gaslog LNG Services
176400
2019
GTT MkV
ABS
LSDF (HP)
open
2220
Hoegh, Leif
170000
2019
GTT MKIII
DNVGL
DFDE
FSRU open
2233
Korea Line Corp.
7500
2019
Kogas
KC-1
KR
DFDE
South Korea coast
2234
Korea Line Corp.
7500
2019
Kogas
KC-1
KR
DFDE
South Korea coast/ bunkering
2255
Pertamina
170000
2020
Pertamina
GTT MkIII
BV
DFDE
Indonesia FSRU
2262
TMS Cardiff Gas
174000
2020
GTT MkIII
ABS
LSDF (HP)
open
2271
TMS Cardiff Gas
174000
2020
GTT MkIII
ABS
LSDF (HP)
open
2274
Gaslog LNG Services
176400
2020
GTT MkIII
ABS
LSDF (HP)
open
2275
TMS Cardiff Gas
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
2276
TMS Cardiff Gas
174000
2022
GTT MkIII
ABS
LSDF (HP)
open
2297
Celsius Shipping
180000
2020
GTT MkIII
LSDF (HP)
open
2298
Celsius Shipping
180000
2020
GTT MkIII
LSDF (HP)
open
2300
Gaslog LNG Services
174000
2020
Cheniere Energy
GTT MkIII
ABS
LSDF (HP)
Cheniere exports
2301
Gaslog LNG Services
174000
2020
Cheniere Energy
GTT MkIII
ABS
LSDF (HP)
Cheniere exports
2302
N.Y.K. Line
180000
2021
Total
GTT MkIII
NK
LSDF (HP)
Total business
2304
Minerva Marine Inc.
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
2306
N.Y.K. Line
174000
2021
GTT MkIII
NK
LSDF (HP)
open
2307
N.Y.K. Line
174000
2021
GTT MkIII
NK
LSDF (HP)
open
2308
TMS Cardiff Gas
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
Gaslog LNG Services
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
2311 2312
LSDF (HP)
Shell business Cameron exports
Gaslog LNG Services
174000
2021
GTT MkIII
ABS
LSDF (HP)
open
Navigare Capital Partners
174000
2020
GTT MkIII
ABS
LSDF (HP)
open
Shell Gas and Power
170000
2023
LNGFPSO
Shell Gas and Power
170000
2022
LNGFPSO
Shell Gas and Power
170000
2021
LNGFPSO
TMS Cardiff Gas
174000
2021
Shell
GTT MkIII
ABS
LSDF (HP)
Shell business
TMS Cardiff Gas
174000
2021
Shell
GTT MkIII
ABS
LSDF (HP)
Shell business
Sinanju Tankers
7500
2019
SINGAPORE Keppel Singmarine
www.lngworldshipping.com
BV
Singapore/bunkering
LNG World Shipping | January/February 2019
48 | VIEWPOINT
LNG shipping in 2019: FIDs drawing in
I Susan L Sakmar (University of Houston Law Center): Might pipeline bottlenecks, not politics, limit Russian flows into Europe post 2020?
MOST ANALYSTS EXPECT AUSTRALIA’S TOP POSITION TO BE FAIRLY SHORT-LIVED”
n October 2018, Shell and other project sponsors took final investment decisions (FID) on LNG Canada, giving rise to optimism throughout the LNG industry that this was just the tip of the megaproject iceberg. Here are some of the key issues to watch for as the LNG industry kicks off another year. In 2018, the US-China trade war dominated the news cycle and is expected to continue do so in 2019. With China viewed as the 'emerging giant' of natural gas and LNG demand, there was hope after Cheniere and CNPC signed the first US LNG deal in February that more US LNG export projects would find Chinese backers. But discussions and US exports to China came to a halt after China slapped a 10% tariff on US LNG in August 2018. Regardless of how or when US-China trade tensions are resolved, the first wave of US LNG is still coming in 2019. US LNG exports have really only just begun, with export capacity expected to reach 4.9 Bcf/d by the end of 2018 as Cheniere brings online Corpus Christi Train 1 and Sabine Pass Train 5. In fact, the US EIA projects that US LNG export capacity will reach 8.9 Bcf/d by the end of 2019, which would make the US the third largest LNG exporter in the world behind Qatar and Australia. Three business models are emerging for US LNG export projects: SPA Model (Cheniere); Tolling Model (Cameron LNG, Dominion, Freeport LNG); and Equity Model (Tellurian). It remains to be seen in 2019 which model will prevail for the second wave of US LNG projects. Loosening Russia’s energy grip over Europe has been a goal of US administrations dating back decades, but tensions have ramped up of late as both the US and Russia attempt to capture
LNG World Shipping | January/February 2019
greater market share. As the secondlargest LNG supplier to Europe (after Qatar), Russia currently exports about 21 mta of LNG from two projects, Sakhalin II operated by Sakhalin Energy, a joint venture between Gazprom, Shell, Mitsui and Mitsubishi, and the Novatek-operated Yamal LNG, with Total as a partner. Some analysts predict that pipeline bottlenecks, not politics, will limit Russian flows into Europe post 2020, so several European LNG import projects are in the works. This could bode well for more US LNG in to Europe in 2019 and beyond, especially if price signals shift from Asia to Europe. In November, Australia just barely overtook Qatar as the world’s largest exporter of LNG, loading 6.5M tonnes of LNG for export while Qatar exported over 6.2M tonnes. Australia will add to its production capacity as the much-awaited Shell Prelude comes online sometime in 2019. Most analysts expect Australia’s top position to be fairly short-lived, with Qatar expected to rapidly regain the top spot and Australia only topping Qatar again in mid-2019, when Ichthys and Prelude ramp up. Wood Mackenzie predicts that 2019 could be a record year for LNG project sanctions with over 220 mmta of gas targeting FID. While not all of this is expected to happen in 2019, Woodmac expects over 60 mmta to take FID in 2019. Although the global economy has faced headwinds since the end of 2018, long-term demand for LNG is expected to grow, which will require the deployment of billions of dollars in the near term to build out the necessary export and import infrastructure. The mood is good and 2019 will no doubt be an interesting year for the global LNG industry. LNG
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Chinese National Energy Administration (NEA)
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Darren W. Woods
H.E. Saad Sherida Al-Kaabi
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