LNG World Shipping May/June 2019 by rivieramaritimemedia

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A gateway to small-scale LNG LNG BUNKERING All but one of worldâ&#x20AC;&#x2122;s top ports now offer LNG

INSULATION AND STORAGE Pressurised bullet tanks boost smaller LNG terminals

EXPORT TERMINALS Golden Pass has the brownfield advantage

BWTS Overcoming time and spacing constraints

Contents May/June 2019 volume 41 issue 3

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Comment

5 How LNG is transforming the US maritime sector

Area report â&#x20AC;&#x201C; Scandinavia & Baltic

6 Scandinavia is investing heavily in new LNG import terminals, small-scale tankers and bunker vessels to meet the growing demand for LNG

Operator Profile

12 Norwegian ship owner Knutsen is adding to its fleet with its largest LNG carriers and a small-scale vessel

Interview: Jan Valkier

14 Why the Anthony Veder Group has turned to LNG as its fuel of choice

Export terminals

18 Once operational in 2024, the new LNG export terminal Golden Pass will leverage existing infrastructure to lower development costs

Significant vessel

23 GasLog Warsaw is one of eight LNG carriers being built by GasLog in

anticipation of a capacity shortfall

Insulation and storage tanks

26 The increased use of LNG as a marine fuel in Scandinavia and the Baltic is driving the development of innovative LNG storage solutions

Statistics

30 A look at the LNG Global Orderbook 2019-2023

LNG as marine fuel

32 Container ships are the big winners as gas engine designers reduce their costs

LNG bunkering and bunker vessels 36 The growing LNG bunker vessel orderbook is driving new concepts and research into cryogenic technologies

Propulsion and bunkering systems

40 Better integration of fuel and cargo systems, coupled with hybrid propulsion, could save gas carrier operators time and money

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LNG World Shipping | May/June 2019

Contents May/June 2019 volume 41 issue 3

Ballast water treatment systems

44 When choosing a BWTS for an LNG carrier, operators must prioritise engineering requirements

LNG terminal operations

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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

increasingly popular fuel source

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48 Small- and mid-scale LNG terminals are supporting the growth of this

52 SIGTTO will celebrate its 40th anniversary this year, but despite its many achievements the topics it initially considered continue to impact mariners

Head of Sales – Asia: Kym Tan t: +65 6809 1278 e: kym.tan@rivieramm.com

Next issue

Creative Manager: Richard Neighbour t: +44 20 8370 7013 e: richard.neighbour@rivieramm.com

Main features include: Area Report: Indian subcontinent; Special Report: LNG bunkering in Europe; Operations: Floating FLNG; Technical: Class societies; Equipment: Cargo transfer equipment & systems

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

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COMMENT | 5

US LNG transforming American maritime industry

F John Snyder, Editor

LNG carried on US-flagged LNG carriers would have higher operating costs, making US LNG less competitive on the world market”

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ebruary marked the 60th anniversary of the maiden voyage of the world’s first LNG carrier Methane Pioneer. Originally built as a cargo ship in 1945 by the US Maritime Commission and sold to private owners as World War II was coming to an end, Methane Pioneer was converted to an LNG carrier at Alabama Drydock and Shipbuilding Co in Mobile, Alabama. The ship carried 32,000 barrels of LNG from Calcasieu River in Louisiana to Canvey Island in the UK on its historic voyage. Now, 60 years later, there are some 500 LNG carriers in the world fleet and another 100 on order or under construction – none of which fly the US flag. And US Representative John Garamendi, a California Democrat, has an issue with that. With exports of LNG flowing freely from the US Gulf and more export terminals proposed, Representative Garamendi would like to see a portion of those cargoes shipped on US-flagged LNG carriers manned by American crews and built at American shipyards. The Congressman is urging that any trade deal with China regarding increased purchases of American energy should also require LNG and crude to be carried on US-flagged ships. Working with Senator Roger Wicker, a Republican from Mississippi, Representative Garamendi has filed the 'Energizing American Shipbuilding Act,' which would require a certain percentage of LNG exported from the US to be carried on US-flagged, US-manned and US-built LNG carriers by 2025. In a joint letter to US trade representative Robert Lighthizer, Secretary of the Treasury Robert Mnuchin and Secretary of Commerce Wilbur Ross, the Congressmen wrote that their bill “would grow the US-flagged fleet and create thousands of new, well-paying jobs for American mariners, shipyards and

our domestic maritime industry.” However, the US maritime industry is already being transformed by the growing supply of US LNG. Here are just a few things I think the two Congressmen should keep in mind: • LNG carried on US-flagged LNG carriers would have higher operating costs, making US LNG less competitive on the world market. • LNG is already creating thousands of jobs in US; a study by the American Petroleum Institute estimates that increased US LNG exports and new export terminals will add between 220,000 to 452,000 jobs by 2040. • LNG is already creating opportunities for US shipyards; the first LNG bunker barge has been constructed and is now in operation with more LNG bunker ATBs being built in Mississippi. • LNG is already creating opportunities for US mariners; there are increasing opportunities for escort tugs at LNG terminals and mariners will also be needed for new small-scale LNG bunker and transport vessels, both self-propelled and articulated tug barge units that will serve both the coastal and feeder markets. To avoid interruption of operations when it opens, Golden Pass Products, which is developing an LNG export terminal in Sabine, Texas, is developing and building in the infrastructure to serve small-scale LNG carriers and LNG bunker vessels, with capacities of 3,000 to 12,000 m 3. LNG and renewables are growing as part of the world’s energy mix in an effort to reduce greenhouse gas emissions and provide affordable clean energy. US LNG will remain a growing part of that supply for decades to come and will continue to create American maritime and shipbuilding jobs – no legislation necessary. LNG

LNG World Shipping | May/June 2019

6 | AREA REPORT Scandinavia & Baltic

Wave of investment drives Baltic LNG infrastructure Manga LNG terminal in Tornio, Finland is supplied by small-scale LNG carrier Coral EnergICE

Driven by growing demand for LNG as fuel and power generation, Scandinavia is investing heavily in new LNG import terminals, smallscale tankers and bunker vessels

he construction of a new LNG import terminal at the Port of Hamina, Finland, is part of a wave of investment in the Baltic Sea region in LNG infrastructure that will support growing demand in the area for clean energy and LNG bunkering. Having been awarded an engineering, procurement and construction (EPC) contract, Wärtsilä broke ground on the US$118M Hamina LNG import terminal in September 2018. When operational in 2020, the 30,000 m3 capacity terminal will provide storage of LNG and regasification capability for distributing natural gas to an existing pipeline network serving both regional and national markets. Additionally, the terminal will be able to load trucks and supply bunkering vessels and small-scale carriers with LNG. A subsequent expansion could increase the terminal’s capacity by 20,000 m3 of LNG storage. The major stakeholders in Hamina LNG Oy are Hamina Energy Ltd and Estoniabased energy company Alexela, with Wärtsilä

LNG World Shipping | May/June 2019

holding a minority stake through Wärtsilä Financial and Development Services. At the time of the ground breaking, Wärtsilä vice president, LNG solutions Alexandre Eykerman, said: “This project is very much in line with Wärtsilä’s emphasis on utilising LNG fuel to reduce the environmental impact of power generation. It also supports our vision of a future where 100% of energy will be sourced from renewables, such as solar and wind. For this, fast-starting, flexible, powerplants fuelled by clean-burning LNG will be needed.” The start of construction of the Hamina LNG import terminal follows on the heels of Wärtsilä’s completion last year of the Manga LNG terminal in Tornio, Finland. A joint venture between industrial companies Outokumpu and SSAB Europe and energy companies EPV Energy and Gasum, the terminal's LNG storage capacity is the largest in the Baltic at 50,000 m3. The terminal supplies natural gas to industrial customers

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Scandinavia & Baltic AREA REPORT | 7

in Röyttä via a connection pipeline. LNG is also supplied to regional refuelling stations by road using tanker trucks. LNG-fuelled ships are bunkered by truck-to-ship transfer or tank-to-ship at the terminal. LNG is supplied to the terminal by the Anthony Veder Group’s 18,000 m3 ice class small-scale LNG carrier Coral EnergICE from Risavika LNG production plant in Norway. In 2016, Gasum opened commercial operations at Finland’s first LNG import terminal, Pori LNG terminal. With a storage capacity of 28,500 m3, the terminal serves industrial customers through a local connecting pipeline, by LNG carrier or tanker truck. Ships

Completion of the Nord Stream 2 pipeline would have an impact on LNG imports into the EU, with less demand lowering the price”

can also bunker LNG by bunker vessel at the terminal or by ship-to-ship transfer. With the European Union (EU) and Nordic countries imposing stricter CO2 emissions goals, Gasum expects regional LNG demand to increase from new gas-powered vehicles. It is opening additional LNG refuelling stations for heavy-duty vehicles in Finland and expanding to Sweden and Norway in 2019 and 2020. Gasum will add a total of 50 new filling stations in the three Nordic countries, about half of which will be in Sweden. Truck manufacturers are rolling out new LNG-powered heavy-duty vehicles that promise to reduce CO2 emissions by 20% as compared

LNG BUNKERING INFRASTRUCTURE IN SCANDINAVIA AND BALTIC Location

Country

Type of bunkering

Hirstshals

Denmark

LNG bunkering terminal

500 m³

Hirtshals

Finland

LNG terminal

30,000 m³

Hamina Energy, Alexela Gasum

Hamina*

Storage capacity

Owner

Manga

Finland

Truck loading, Tank-to-ship

50,000 m³

Pori

Finland

Tank-to-ship, BV, Truck loading

28,500 m³

Gasum

Kairos

Lithuania

LNGBV

7,500 m³

Babcock Schulte

Klaipeda

Klaipedos nafta

Lithuania

Truck loading, Tank-to-ship

5,000 m³

Bjun

Norway

Tank-to-ship

750 m³

Marine Harvest

Bodø

Norway

Tank-to-ship

130 m³

Barents Naturgass

Coast Centre Base

Norway

Truck loading, Tank-to-ship

500 m³

Gasnor

Coralius

Norway

LNGBV

5,600 m³

Sirius Veder Gas

Fjordbase

Norway

Truck loading, Tank-to-ship

500 m³

Sagafjordbase

Halhjem fergekai

Norway

Truck loading, Tank-to-ship

1,000 m³

Gasnor

Kollsnes 2

Norway

Truck loading

4,000 m³

Gasnor

Lødingen

Norway

Tank-to-ship

250 m³

Barents Naturgass

Mosskenese

Norway

Tank-to-ship

150 m³

Barents Naturgass

Melkøya

Norway

Truck loading

Øra

Norway

Truck loading

6,500 m³

Skangas

Risavika

Norway

Truck loading, BV, Tank-to-ship

30,000 m³

Skangas

Snurrevarden

Norway

Truck loading

500 m³

Gasnor

Tjeldbergodden

Norway

Truck loading

Vestbase

Norway

Truck loading, Tank-to-ship

500 m³

Norsea Group

Swinoujscie

Poland

Truck loading

Kingisepp

Russia

SSLNG plant, Truck loading

Pskov

Statoil

AGA Polskie LNG 100 m³

Cryogas

Russia

SSLNG bunker facility

Cryogas Pskov

Gothenburg

Sweden

LNG Terminal, truck loading

Swedegas/Vopak

Hou Harbour

Sweden

LNG bunkering unit, Tank-to-ship

Lysekil

Sweden

Nynashamn

Sweden

Seagas

Sweden

LNGBV

50 m³

Port of Hirtshals

LNG Terminal, truck loading

30,000 m³

Skangas/Preem

LNG terminal, Truck loading

20,000 m³

AGA

187 m³

AGA

Note: *Opening 2020 Source: DNV GL, LNG World Shipping

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LNG World Shipping | May/June 2019

8 | AREA REPORT Scandinavia & Baltic

with diesel-powered vehicles. By 2025, the EU expects CO2 emissions from new vehicles to be 15% lower than in 2019. By 2030, CO2 emissions are expected to be at least 30% lower.

Expanding Poland’s LNG import terminal

Poland is also set to increase the capacity of the Świnoujście LNG import terminal by 50%, following an agreement in April between Polskie LNG and the EU on US$143M in financing. Regasification capacity at the terminal will grow from 5Bn m3 of gas to 7.5Bn m3 once the project is completed. Future terminal expansion plans will add a second jetty for loading/unloading LNG carriers, LNG transshipment and LNG bunkering services. The move by Polski LNG (PLNG), a subsidiary of Gaz-System, is part of an effort by Poland and Central European states to lessen their dependence on Russian gas. Polish government advisor for strategic energy infrastructure Piotr Naimski points out that the expansion of the Świnoujście LNG import terminal fits with the EU’s ‘North Gate’ concept, which involves the construction of the Baltic Pipe that would connect gas fields on the Norwegian continental shelf to Poland by October 2022. The European Commission (EC) signed an agreement with Poland to provide funding of US$239M for the construction of the Baltic Pipe through Denmark. Poland would serve as a hub for the transport of gas to the Czech Republic, Slovakia, Lithuania, Hungary and Ukraine. The pipe would supply about 10Bn ft3 of natural gas per year to Poland. Poland purchases about two-thirds of the 17Bn ft3 of gas it annually consumes from Russia’s Gazprom. “It is crucial for the EC to mark the strategic role of our gas port as a tool to ensure the security of gas supplies not only to Poland but also to the Baltic States, through diversification and promotion of new transport routes in the region,” says Poland Minister of Energy Krzysztof Tchórzewski. Meeting about 40% of Poland’s current natural gas demand, the expansion, says PLNG president Paweł Jakubowski, “will enable us to launch a more competitive offer of services related to regasification and unloading of LNG, for which we have an increasing demand in Poland.”

LNG World Shipping | May/June 2019

ABOVE: Linde supplies the Baltic Sea region with LNG from its Nynäshamn terminal in southern Sweden

Fast-starting, flexible, power plants fuelled by clean-burning LNG will be needed”

Polish gas demand is expected to increase to 21Bn m3 in 2023. To meet its increasing demand, Poland plans to purchase Norwegian gas through the Baltic Pipe, produce 4Bn m3 per year domestically and import 7.5Bn m3 per year of LNG through the Swinoujscie LNG terminal. Meanwhile, another pipeline being laid in the Baltic Sea is one of the most controversial energy projects in Europe. Nord Stream 2 is a 1,200-km pipeline being constructed across the Baltic to bring more Russian natural gas to the EU via Germany. The pipeline has come under intense political pressure from the US, with President Trump calling it “horrific,” saying that it is not in the best interests of energy security in Europe. About 1,000 km of the pipeline has been laid in the Baltic Sea by Switzerland-based Allseas Group. To support the Nord Stream 2 project, Allseas deployed the world’s largest construction vessel Pioneering Spirit, pipelay vessels Solitaire and Audacia, specialised supply vessel Calamity Jane and offshore construction vessels Fortitude and Oceanic. Nord Stream 2 AG has been frustrated by delays in the permitting process. It said in a statement that it was “incomprehensible why there has still been no decision” from the Danish Energy Agency on its two previous applications and that asking for a third “can only be seen as a deliberate attempt to delay the project’s completion.” The pipeline is scheduled for completion before the end of the year. If completed, the Nord Stream 2 pipeline would handle gas currently being piped from Russia through Ukraine under a contract between Gazprom and Ukraine’s Naftogas, which is due to expire at the end of the year. Completion of the pipeline would have an impact on LNG imports into the EU. If the pipeline is completed, there would be less demand for importing LNG, lowering the price paid. As a result, there would be less

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Scandinavia & Baltic AREA REPORT | 11

demand for LNG shipped from the US. Besides Russia’s Gazprom, the Nord Stream 2 pipeline is being backed by France’s Engie, Anglo-Dutch energy giant Shell, Austria’s OMV and Germany’s Uniper and Wintershall.

Investing in LNG bunker vessels

The Baltic Sea is also home to some of the first LNG bunker and small-scale LNG vessels in the world. Besides investing in refuelling stations for LNG-powered road vehicles and terminals, Gasum is also well experienced in LNG bunker vessel (LNGBV) operations. Operating in the North Sea and Baltic, Gasum’s LNGBV Coralius, with a capacity of 5,800 m3 of LNG, completed its 100th bunkering in 18 months in February. The first European-built LNG bunker and transport vessel, Coralius, delivers LNG through ship-to-ship bunkering at sea or in port, which broadens the availability of LNG refuelling coverage to vessels that are unable to visit a terminal or a port. Gasum says shipto-ship bunkering also boosts efficiency. “Coralius has definitely increased Gasum’s flexibility as an LNG supplier,” says Gasum vice president, natural gas and LNG Kimmo Rahkamo. In Sweden, the first ship-to-ship LNG bunkering operation was completed in March at the Port of Visby. Under a contract signed between Hamburg-based LNG fuel supplier Nauticor GmbH and Sweden’s Destination Gotland, the ferry Visborg was refuelled by the 7,500 m3 LNGBV Kairos. Nauticor chief executive Mahinde Abeynaike, says Kairos assures “the availability of LNG as fuel for shipping on a large-scale basis is secured in Northwest Europe, with shipping companies having access to a fuel that not only is financially attractive, but also environmentally sustainable.” Owned by Babcock Schulte Energy, Kairos is chartered by Blue LNG, a joint venture owned 90% by Nauticor and 10% by Lithuanian energy infrastructure provider Klaipedos Nafta, which also operates the Klaipeda LNG Terminal in Lithuania. Kairos made its first reload operation of LNG in January at the Klaipeda LNG Terminal, which uses the floating storage and regasification unit (FSRU) Independence. The terminal has been focused on the export of LNG, transporting gas on small-scale LNG carriers to terminals in Sweden, Finland and Norway. Starting in April, however, Klaipeda

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LNG terminal began accepting LNG cargoes from conventional and small-scale LNG carriers, bringing a total of 158,000 m3 of LNG. In May and June, it is expected that four more small-scale LNG gas carriers, each of which will carry 10,000 m3 of LNG, and two conventional LNG carriers with 138,000 m3 of LNG each, will enter the terminal. The move allows the supply of LNG at lower prices to consumers based on seasonal fluctuations in pricing, which can vary US$6/ MWh between summer and winter seasons depending on supply and demand.

The availability of LNG as fuel for shipping on a large-scale basis is secured in Northwest Europe”

Two new LNGBVs for the Baltic

Two new LNGBVs are under construction for operation in the Baltic. Steel was cut in March for the first of a planned series of coastal LNGBVs for Estonia energy company Eesti Gaas. Under construction at Damen Yichang Shipyard in China, the 100-m, LGC 6000 LNG class vessel will have a capacity of 6,000 m3 of LNG with delivery set for H2 2020. The LGC 6000 LNG is designed to meet the requirements of ice-class 1A certification, allowing it to operate all year in the Gulf of Finland and northern Baltic. Eesti Gaas will operate the LNGBV under a long-term charter contract from its parent company Infortar AS. As the adoption of LNG as a marine fuel gains momentum, Eesti Gaas expects that additional LNGBVs will be ordered. Tallink’s LNG-powered ferry Megastar, which operates between Tallinn and Helsinki, will be one of the vessels that is served by the new LNGBV. Over a two-year period, Eesti Gaas has delivered a total of 28,300 tonnes of LNG and company board member Kalev Reiljan expects to see sales increase this year, now that it is the sole LNG bunker supplier for Megastar in the Port of Tallin. Eesti Gaas bunkers Megastar using eight trailer trucks in an operation that takes approximately four hours. Eesti Gaas purchases LNG in Russia, Finland, Poland and Lithuania. Under construction at Singapore’s Keppel Offshore & Marine, Russia’s LNGBV Shturman Koshelev will have an ice-class 4 notation and a cargo capacity of 5,800 m3. Set for delivery in Q4 2020, the LNGBV will be chartered to Gazprom Neft for operation in the Baltic Sea. No homeport has yet been named for the LNGBV, but one possible location might be the FSRU Marshal Vasilevskiy at the Kaliningrad gas terminal. LNG

LNG World Shipping | May/June 2019

12 | OPERATOR PROFILE

Knutsen expands its LNG fleet Pioneer Knutsen is one of the smallest LNG carriers in the world, with a capacity of 1,100 m³ (image: Wärtsilä)

orway’s Knutsen Shipping Group has roots that stretch back more than 120 years. Today, it is one of the world’s largest shuttle tanker owners and a major player in the LNG shipping business. Led by Trygve Seglem and headquartered in Hagesund, Norway, the group encompasses the shuttle tanker and floating production storage and offloading (FPSO) business through Knutsen NYK Offshore Tankers and the publicly listed KNOT Offshore Partners. The LNG carrier ownership and ship management business is conducted through Knutsen LNG and Knutsen OAS Shipping and marine technology development through Knutsen Technology. Knutsen Technology has developed volatile organic compound (VOC) emissions reduction systems for use during tanker loading operations and is now seeking US Coast Guard approval for its KBAL ballast water

LNG World Shipping | May/June 2019

Under its newbuilding programme, the Norwegian shipowner is adding its largest LNG carriers and a small-scale vessel for Mediterranean operations

treatment system. Mr Seglem serves as chairman of KNOT Offshore Partners, president and chief executive officer of Knutsen NYK Offshore Tankers and is the owner and managing director of Knutsen OAS Shipping. Knutsen OAS shipping entered the LNG market after delivery of the company’s first steam propulsion 138,400 m3 LNG carrier, built in Spain in 2004. During 2010, Knutsen added four LNG carriers from South Korea’s Daewoo Shipbuilding & Marine

Engineering (DSME), all with dual fuel engines. All of Knutsen’s LNG carriers are fitted with GTT NO 96 membrane cargo containment systems, with maximum operational speeds of 19.5 knots. The current fleet stands at 10 largescale LNG carriers ranging in capacity from 138,000 to 174,300 m3, and one small-scale LNG carrier, Pioneer Knutsen, with a capacity of 1,100 m3. Pioneer Knutsen is the smallest LNG carrier in the world, delivering LNG along the Norwegian coast. It has been used in ship-to-ship transfers and delivers LNG to bunkering terminals and other industry along Norway’s west coast. A newbuild programme is being managed by Knutsen OAS Shipping, with four LNG carriers on order, three of which have a capacity of 180,000 m3 and are under construction at Hyundai Heavy Industries (HHI), with one small-scale 30,000 m3 capacity vessel at Hyundai Mipo Dockyard (HMD).

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OPERATOR PROFILE | 13

Small-scale LNG in Italy

Of particular interest is the smallscale, dual-fuel newbuild that will be one of the first LNG carriers of its size to be fitted with Type C bi-lobe cargo tanks. The vessel will go on a 12-year charter with energy company Edison SpA of Milan, Italy, when it is delivered in 2021. The smallscale LNG carrier will operate in the Mediterranean, supplying LNG to a new small-scale LNG terminal under construction at the Port of Ravenna in Italy to serve heavy-duty on-road vehicles and vessels that use LNG as a fuel. Edison and logistics and cargo handling company PIR are investing US$112M in the terminal, which will have a storage capacity of 20,000 m3. It is expected to open in 2021. “Our development plan in smallscale LNG involves the construction of a system of coastal depots, of which the Ravenna plant is only the first,” says Edison executive vice president of gas midstream energy management Pierre Vergerio. “Our goal is to reach 25% of the Italian market by 2030 and Ravenna is just the first step.” In 2017, Edison signed an agreement with Venture Global LNG to purchase 1.4Bn m3 of LNG from the Calcasieu Pass LNG. Because it is dual-fuel, the smallscale tanker’s main and auxiliary engines will also be consumers of boiloff gas (BOG). Wärtsilä is supplying the vessel’s cargo-handling system, incorporating the fuel supply, cargo control system, BOG re-liquefaction and safety management. For propulsion, the small-scale LNG carrier will have a five-cylinder WinGD X52DF dual-fuel main engine. Its main and auxiliary dual-fuel engines are essential consumers for the BOG management system, which monitors and controls the cryogenic cargo, to ensure, in combination with a mixed refrigerant re-liquefaction unit, all time control over the cargo tank pressure and temperature. “The latest development of LNG infrastructure provides clear evidence of the increasing importance of LNG

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ADRIANO KNUTSEN AT A GLANCE Overall length: 299 m Beam: 48 m Draught: 26.4 m Capacity: 180,000 m³ Maximum speed: 19.5 knots Main engines: (2) MAN B&W 5G70ME-GI Cargo Containment: GTT Mark III Flex

fuel to the marine industry. Wärtsilä has a lot of experience and know-how throughout the LNG value chain, and we are confident that their solutions are what we need for this latest expansion to our fleet,” says Knutsen OAS Group newbuilding director Jarle Østenstad. The scope of supply includes three Wärtsilä 20DF dual-fuel auxiliary engines that power the board net, thrusters, cargo control system, and re-liquefaction module. The main engine and single Wärtsilä controllable pitch propeller system allow the vessel to operate at its highest fuel efficiency design point, in a combinator mode controlling the shaft power, pitch and speed. The small-scale vessel is owned 41% by Norwegian investment group Klaveness Marine Holdings.

First of four chartered to Spain

On the other end of the LNG carrier newbuild scale, Knutsen OAS Shipping will take delivery of Adriano Knutsen in July. With a capacity of 180,000 m3, Adriano Knutsen will operate under a seven-year charter agreement with Spanish energy company Endesa, transporting LNG from the US Gulf Coast to Spain. The charter contract, which contains two options of six years each, will cover part of the maritime transport needs under the LNG purchase agreements held by both Endesa and its parent Enel Group over the next 20 years. The value of the contract is US$25M per year, and the construction cost of the LNG carrier, which amounts to around US$185M, according to Endesa. Flying the Spanish flag, Adriano Knutsen will have an overall length of 300 m and beam of 48 m – allowing it to transit the expanded Panama Canal – with a draught of 26.4 m. The total onboard re-liquefaction system reduces the carrier’s gas consumption and offers options for its propulsion fuel, which can be 100% natural gas or low-sulphur fuel oil Additionally, the vessel has systems to reduce NOx emissions. Traiano Knutsen, a sister vessel to the Adriano Knutsen under construction at HHI in Ulsan, will also be chartered by Enel, with delivery set for mid-2020. LNG

At a capacity of 180,000 m³, Adriano Knutsen will be one of Knutsen's largest LNG carriers (image: HHI)

LNG World Shipping | May/June 2019

14 | INTERVIEW Jan Valkier

Refit as an LNG bunker vessel, Coral Methane refuelled the cruise ship AidaNova (image: Anthony Veder)

LNG is the fuel of choice for Anthony Veder Group Anthony Veder Group is betting on the future growth of small-scale LNG, where it has established itself as a key player

hen it comes to transporting liquefied gases and petrochemicals, there are few shipowners that can claim their ships carry ammonia, ethylene, propylene, butadiene, LPG, LNG, and even food-grade CO2 for carbonated soft drinks. One of a handful of owners able to transport such variety is Netherlands-based Anthony Veder Group, which owns, operates and manages a versatile fleet of small- and midsize gas carriers around the world on contracts of affreightment, time charters and in spot markets. “We have been in the gas business for 50 years, so we know a thing or two about what’s happening in the market,” Anthony Veder chief executive Jan Valkier says. “If the opportunity is there, we are able to grasp it quickly. It’s a strategy of knowing

LNG World Shipping | May/June 2019

our customers and building ships for their needs.” In many respects, it was Mr Valkier’s father who first steered Anthony Veder into the gas tanker business. Back in the late 1960s, Mr Valkier Sr was a director of a fertiliser manufacturer that required large amounts of ammonia to be transported by gas tanker. At that time, the Anthony Veder Group was still owned by the Veder family. Mr Valkier Sr contacted a board member at the Anthony Veder Group, which resulted in the Dutch shipowner’s decision to build a gas tanker, Coral Maeandra, in exchange for a long-term contract for ammonia transportation. As a result, it established Anthony Veder Group’s gas tanker operations in 1969 and cemented a long business relationship between the Valkier and Veder families. When the Veder family decided to sell its business interests in 1991, the Valkier family and HAL Investments acquired the Anthony Veder Group. After the change of ownership, Anthony Veder Group shed a diverse portfolio of non-core holdings to focus on liquefied gas transportation. While petrochemicals transportation comprises the lion’s share of Anthony Veder’s business by volume, about 10 years ago the company envisioned small-scale LNG as an emerging

www.lngworldshipping.com

Jan Valkier INTERVIEW | 15

business segment, expanding its fleet in 2009 with the 7,500 m3 LNG carrier Coral Methane. “While it’s a relatively small market, small-scale LNG has a great deal more potential in the future,” says Mr Valkier. “It’s being driven by LNG as a fuel and power generation. It has been slow growth, but I think it will gain momentum in the years ahead.” Anthony Veder’s small-scale LNG operations are in the Baltic region, including Northern Europe and Scandinavian countries, and in the Caribbean. In the Caribbean, Anthony Veder supplies LNG from various sources, including the US, to Jamaica, which is transitioning its power plants to burn natural gas. “We see that the Caribbean has potential, but the reality is that it is developing very slowly,” says Mr Valkier. However, Mr Valkier believes the IMO 2020 sulphur cap could be a pivotal moment for LNG as a fuel. He thinks the sulphur cap will lead to higher bunker prices because oil refineries will have to retool their production to meet demand for compliant fuel: “You can make a strong environmental and business case for LNG. It emits less CO2, 90% fewer NOx, no SOx and no particulates. It’s a much cleaner fuel than any gasoil or heavy fuel. We think LNG in the long run could be an economical alternative to 0.5% sulphur fuel.” Concludes, Mr Valkier, “LNG as a bunker fuel and for power generation makes sense. If you talk about sustainable electricity, next to solar and wind, gas-fired power stations

The sulphur cap will lead to higher bunker prices because oil refineries will have to retool their production to meet demand for compliant fuel” represent the best opportunity.” As the IMO 2020 sulphur cap draws closer, Mr Valkier also notes that larger marine consumers. such as container shipping lines and cruise companies. are committing to LNG as a marine fuel. He thinks consumers will also play a role in the shift to LNG: “I think most people that live in Europe or the US that buy products from China want to see those goods transported in an environmentally sound way. I think that’s what is going to drive the market.” In January, a newly refit Coral Methane carried out its first LNG bunkering operation on the LNG-powered cruise ship AidaNova at Santa Cruz de Tenerife in the Canary Islands. Coral Methane was modified from an ethylene/LNG carrier to an LNG bunker vessel for Shell, which is supplying the LNG. Coral Methane was refit with a hose transfer system for bunkering operations and a boil-off gas (BOG) management system for efficient use of natural gas and carbon emission reductions. While part of the fleet operates on low sulphur gasoil, Mr Valkier vows that all future fleet additions will operate on LNG. When it comes to addressing CO2 and climate change concerns, he believes that LNG will be the energy of choice for the next 20 to 30 years, “until there is a better alternative”. Discussions regarding carbon capture storage (CCS) are also beginning to heat up. “CCS is part of the solution to solve CO2 emissions,” he says. While nothing as yet has materialised, says Mr Valkier, ships can play an important role in the process: “In the North Sea, there are quite a few empty gas fields, which could be used for CCS. Ships could transport the CO2 to the gas fields for injection.”

Expanding the fleet

Jan Valkier (Anthony Veder): “LNG will be the energy of choice for the next 20 to 30 years”

www.lngworldshipping.com

Anthony Veder has a long history in building and delivering ships in China, such as the LNG-fuelled LEG vessels Coral Star and Coral Sticho. Both ships were built in 2014, each with a capacity of 4,768 m3; they are two of eight vessels in the Rotterdam-based shipping company’s fleet that burn LNG as a fuel. Earlier this year, the Dutch gas tanker owner acquired a 30,000 m3 LNG carrier under construction in China at Zhejiang Xinle Shipbuilding in Ningbo. It is expected to be available for worldwide trading in the H2 2019. Continuing its growth in the small-scale LNG sector,

LNG World Shipping | May/June 2019

16 | INTERVIEW Jan Valkier

Anthony Veder also acquired two 10,000 m3 combined gas carriers – formerly owned by bankrupt IM Skaugen – from a Nordea Bank-led consortium. The two ships, Norgas Creation and Norgas Invention, can transport both LNG and petrochemical gases, including ethylene (LEG). Both combined gas carriers were built by China’s Taizhou Wuzhou Shipbuilding, with Norgas Creation delivered in 2010, followed by Norgas Invention in 2011. With the acquisitions, Anthony Veder expands its fleet to 33 vessels, including eight small-scale LNG vessels, to support the growing demand for LNG as a marine fuel and its distribution for use in the power generation market. The two gas carriers acquired from Nordea Bank were part of the fleet of Norgas Carriers, an IM Skaugen company, and will be renamed Coral Favia and Coral Fungia. Prior to the addition of the new vessels, Anthony Veder had 30 gas carriers in its fleet with a total value of US$426M, according to UK-based ship evaluator VesselsValue. The smallest in the fleet is the 3,800 m3 semi-pressurised, fully refrigerated LPG carrier Coral Obelia, while the largest is the fully refrigerated 35,130 m3 Prins Alexander, currently chartered to Swiss-based LPG trader Geogas Trading SA.

First LNG carrier with 'ice-class 1A Super'

Last year, Anthony Veder took delivery of Coral EnergICE, the first LNG carrier holding the ice-class 1A Super, from Germany’s Neptun Werft. Managed by Skangas, Coral EnergICE is specially designed and constructed to operate in the Baltic Sea, carrying LNG to Skangas LNG terminal in Pori and the Manga LNG terminal in Tornio, Finland.

The vessel’s hull is reinforced to break one-metre-thick ice and it uses BOG as a fuel for its main and auxiliary engines, making the vessel fully compliant with future emission regulations. Special innovations on deck are geared for improving crew safety; one such example is the cap on deck, which protects the equipment and prevents icing outside. The tanker also has additional shelters on deck, with warmer platforms for the crew’s feet. Heat tracing on the doors ensures they will always open, no matter how harsh the conditions might be. Mr Valkier says: “Coral EnergICE is the third LNG carrier we have delivered to our long-term customer Skangas in the past five years. The high-tech vessel is capable of serving the northern Finnish harbour of Tornio all year around, even when temperatures reach -25ºC.” Coral EnergICE’s construction was funded with the first sustainable shipping loan, fully certified in accordance with the Clean Shipping Index Guidelines by Bureau Veritas, which also verified the sustainable credentials of the transaction. ABN AMRO arranged a €66M (US$74M) private placement for Anthony Veder with investor Delta Lloyd Asset Management in Q1 2015 to finance the construction of the vessel. Digitalisation is also playing a role in the transformation of the company’s fuel trading procedures. Late last year, Anthony Veder struck a deal with Rotterdam-based Bunker Connect covering bunker procurement and management for the Amsterdam-Rotterdam-Antwerp (ARA) set of ports. The Bunker Connect online platform enables real-time fuel trading and fuel quality monitoring by analysis of results and historical data. LNG

Designed for harsh environments, Coral EnergICE can break ice up to one metre thick (image: Anthony Veder)

LNG World Shipping | May/June 2019

www.lngworldshipping.com

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18 | EXPORT TERMINALS

Golden Pass LNG has the brownfield advantage A joint venture between Qatar Petroleum and ExxonMobil, the new LNG export terminal Golden Pass will leverage existing infrastructure to lower development costs

erhaps there is no other LNG export terminal project that better illustrates the radical transformation of the US energy picture than Golden Pass Products, LLC. Riding the US LNG boom, Golden Pass Product’s LNG export terminal will be developed in Sabine, Texas next to a facility that was built as one of the world’s largest LNG import terminals, with regasification capacity of 2Bn ft3 per day.

In 2006, prior to the shale gas revolution, the US imported 583,537M ft3 of LNG. For 2018, total US imports were 76,451M ft3, according to the US Energy Information Administration. The agency now estimates that US LNG export capacity will reach 8.9Bn ft3 per day by the end of 2019, making it the third largest LNG exporter behind Australia and Qatar. To protect its LNG market share, Qatar is a major investor in Golden Pass

Products, LLC, through state-run Qatar Petroleum (QP), holding a 70% stake, and ExxonMobil with the remaining 30% interest. In February, joint venture partners QP and ExxonMobil announced their intention to proceed with the Golden Pass Products LNG export terminal, after it received all necessary federal regulatory approvals. The US$10Bn facility will have a nameplate capacity of 15.6 mta of LNG when operations begin in 2024.

Brownfield advantage

Sean Ryan (Golden Pass Products): “Our team has worked diligently on the design, development and permitting for this world-class LNG export facility”

LNG World Shipping | May/June 2019

The Golden Pass LNG import terminal encompasses about 1.2 km2 on the Port Arthur Ship Channel, about 16 km south of Port Arthur, Texas. Golden Pass constructed the existing terminal to import LNG for regasification and the subsequent transport of natural gas to the US domestic markets. It opened in two phases in 2011 and is authorised to handle about 200 LNG carriers per year. At the time of the FID, Wood Mackenzie principal analyst Americas LNG Alex Munton, said the development of the export terminal by Golden Pass Products enjoyed several advantages over other US LNG projects. “The repurposing of the existing facility has commercial logic,” said Mr Munton. “The Golden Pass regas terminal, with its five storage tanks, two ship-loading berths and header pipeline, already includes much of the infrastructure needed for an export project.” While a significant number of LNG projects have suffered from cost overruns, Mr Munton said that even

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EXPORT TERMINALS | 19

if it came in slightly overbudget, “on a dollars-per-tonne basis, it is still one of the lowest-cost opportunities for new large-scale liquefaction capacity anywhere in the world.” He also praised the timing of the FID: “Proceeding with construction now will enable the project to lock in costs and minimise exposure to inflationary pressures before the next cycle of global LNG investment heats up. By moving ahead now, the partners ensure that Golden Pass will be at the forefront of the second wave of US LNG.” Mr Munton said the Golden Pass project offers QP the opportunity to optimise shipping costs, particularly into Europe and Latin America. The timing of the FID presses home the brownfield advantages it has over planned US greenfield projects in terms of cost and schedule, he added. Golden Pass awarded the engineering, procurement and construction (EPC) contracts for the project to a joint venture of Japan’s Chiyoda International Corporation, McDermott International Inc and Zachry Group. It also executed a 20-year firm transportation agreement with Enable Midstream Partners. Golden Pass Products chief executive Sean Ryan said: “Our team has worked diligently on the design, development and permitting for this world-class LNG export facility.” Golden Pass will have three liquefaction trains, each with a capacity of approximately 5.2 mta, as well as other associated utility systems, interconnections to the existing facility and the expansion of the facility’s storm protection levee system. It will utilise the existing infrastructure, including five 155,000 m3 LNG storage tanks, two marine berths to accommodate Q-Flex and Q-Max size LNG carriers, with capacities up to 266,000 m3, and the existing 111 km Golden Pass Pipeline system with access to US natural gas markets. Additionally, the project contemplates the addition of compressor stations to the existing pipeline to facilitate receipt and redelivery of 2.6Bn ft3 per day of

www.lngworldshipping.com

GOLDEN PASS LNG AT A GLANCE Owners: Qatar Petroleum (70%) And ExxonMobil (30%) Investment: US$10Bn Trains: 3 x 5.2 mta Total capacity: 15.6 mta Opening: 2024

15.6 mta

Golden Pass nameplate capacity of LNG when operations commence

3 Golden Pass liquefaction trains, each with a capacity of 5.2 mta

natural gas supply to the facility. Houston-based Baker Hughes, a GE company, was awarded the contract to supply turbomachinery equipment for three of the facility’s LNG trains, including six gas turbines and 12 centrifugal compressors. BHGE’s technology will consist of six MS7001 EA heavy-duty gas turbines driving 12 centrifugal compressors. Two gas-fired turbines, each equipped with a heat recovery steam generator, would power each liquefaction train. BHGE is also supporting the expansion of another US LNG export project. Last year, BHGE won a contract to supply the turbomachinery for the third liquefaction train of the Cheniere LNG facility in Corpus Christi, Texas. BHGE was selected by Bechtel, which is the EPC partner for Cheniere. BHGE will provide turbomachinery equipment for the third train consisting of six PGT25+G4 DLE gas turbines driving various compressors. BHGE has provided the same equipment for two other trains already under construction at Corpus Christi, and similar technology for five trains at Cheniere’s Sabine Pass plant. The Corpus Christi site is located on the La Quinta Channel on the northeast side of Corpus Christi Bay in San Patricio County, Texas. When all three trains are completed, the Corpus Christi LNG will have a nameplate capacity of approximately 13.5 mta of LNG. Ocean LNG will offtake and market all LNG volumes produced and exported from the Golden Pass LNG export terminal in Sabine Pass, Texas, according to QP. Owned by affiliates of QP and ExxonMobil, Ocean LNG will focus its efforts on marketing its US LNG volumes in the Asia Pacific region. It will also expand its relations and networks with both established customers, emerging and prospective LNG buyers, while maintaining a strong footprint across South America and Europe. Qatar Minister of State for Energy Affairs, and QP president and chief executive Saad Sherida Al-Kaabi, said the agreement “is a further testament of

LNG World Shipping | May/June 2019

20 | EXPORT TERMINALS

Operations are expected to commence at the Golden Pass Product’s LNG export terminal in 2024

Qatar Petroleum’s position as a global LNG leader with a large portfolio capable of offering tailored LNG supply structures and commercial terms in an evolving global LNG environment.” In preparation for the opening of the Golden Pass LNG export terminal in 2024, QP is already moving to renew its LNG carrier fleet. In April, it issued an “invitation to tender” for shipyard capacity to build initially 60 LNG carriers to support its North Field expansion project in Qatar and the opening of the Golden Pass LNG export terminal. The order could grow to more than 100 ships, the largest ever LNG carrier newbuilding programme. Three South Korean shipbuilders – Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering –

have previously built 45 LNG carriers (31 Q-Flex and 14 Q-Max designs) under charter to Qatargas to transport LNG to global markets. Qatargas also charters a fleet of 25 purpose-built conventional vessels, each with a capacity of between 135,000 and 152,000 m3 currently on long-term charter to transport LNG from Qatar to customers in Asia, the Indian sub-continent, Europe, and the Mediterranean Sea. As the world's largest cargocarrying capacity LNG vessels, Q-Flex and Q-Max vessels are capable of transporting 210,000 m3 and 266,000 m3 of LNG respectively.

Flexibility built in

While some of the largest LNG carriers will call at the Golden Pass LNG export terminal when it opens, some of the

smallest might, too. Golden Pass said that if a market develops, it would be ready to serve LNG bunkering barges with capacities of 3,000 to 12,000 m3 of LNG and marine vessels that use LNG for fuel. The facilities required to serve smaller LNG carriers or LNG bunkering barges, such as modified LNG transfer arms and additional permanent marine dolphins, are being built into the project. Consequently, if all permits and authorisations are obtained for those potential future uses, the facilities required for their use would be in place and no additional construction would be required. Golden Pass determined that constructing those facilities as a part of the original project would avoid interruptions of ongoing LNG loading operations in the future. LNG

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SIGNIFICANT VESSEL | 23

GasLog Warsaw helps meet rising demand for LNG shipping GasLogâ&#x20AC;˛s newbuilding programme includes four 174,000 m3 capacity LNG carriers similar to the GasLog Glasgow (image: GasLog)

GasLog Warsaw is one of eight LNG carriers being built by GasLog to meet an anticipated shortfall in shipping capacity

www.lngworldshipping.com

ith LNG demand booming, Greek shipowners have been on a spending spree, ordering LNG carriers at South Korean shipyards at a rapid-fire pace. None have been more aggressive than Peter Livanos-led GasLog Ltd, which has seen the value of its fleet climb by almost 19% in a 12-month period, from US$2.7Bn to US$3.2Bn, according to UK-based VesselsValue. The fleet investments are being driven by increasing LNG demand, which rose globally from 288M tonnes to 313M tonnes last year, a 9% growth. Among the top 10 LNG importing countries, demand grew by 30 mta year-on-year (YoY) from 2017 to 2018. NYSE-listed GasLog pointed out in a presentation to investors earlier this year that growth in LNG demand continues to require incremental shipping capacity. A big driver for LNG carrier capacity will

be US exports of LNG, which support a shipping multiplier in excess of historical levels. GasLog says that since the Sabine Pass start-up, approximately 1.8 ships have been needed for each 1 mta of US LNG supply, as compared to an historical global average shipping multiplier of 1.3. US LNG exports have driven tonne mile demand higher. This is particularly important since 60% of the 73 mta of new liquefaction capacity is expected to come online by 2023 is in the US. Based on these fundamentals, there is going to be a tightening of the LNG shipping market.

Is eight enough?

In light of the increased LNG shipping demand, GasLog Ltd has undertaken a newbuild programme that includes eight LNG carriers at Samsung Heavy Industries (SHI), ranging in capacity from 174,000 m3 to 180,000 m3. Among the largest capacity

LNG World Shipping | May/June 2019

24 | SIGNIFICANT VESSEL

vessels on order is the GasLog Warsaw, due for delivery in July. Previously uncommitted, GasLog Warsaw will commence an eightyear fixed-term charter with Spanish utility company Endesa SA starting in May 2021. The charter can be extended with two six-year options. Commenting on the GasLog Warsaw charter, GasLog chief executive Paul Wogan says the vessel would be available to other customers during a period of expected strong LNG carrier demand prior to the commencement of the term charter to Endesa. He says the combination of initial spot exposure and a fixed-term charter to Endesa is “expected to generate attractive returns for GasLog shareholders”. He points out that GasLog Warsaw will be available during a period when the spot market is expected to be strong, during winter seasons in the northern hemisphere in 2019/2020 and 2020/2021.

GASLOG WARSAW AT A GLANCE Length, overall: 297 m Beam: 47 m Depth: 26.2 m Capacity: 180,000 m3 Propulsion: Low-speed, tri-fuel (LSTS) Builder: Samsung Heavy Industries Delivery: Q3 2019

Endesa chief executive José Bogas says: “Contracting the GasLog Warsaw on long-term charter represents another important step in delivering a flexible and competitive LNG carrier solution to service our contracted LNG volumes over the next 20 years.” Once it comes under charter to Endesa, GasLog Warsaw will transport LNG from the US Gulf Coast to Spain. In 2014, Endesa signed an agreement to purchase 2Bn m3 per year of LNG from the US company Cheniere Energy from Corpus Christi, Texas over the next 20 years. Endesa has also chartered Adriano Knutsen, an LNG carrier with a capacity of 180,000 m3 owned by Norway’s Knutsen OAS and under construction at South Korea’s Hyundai Heavy Industries (HHI). It will transport LNG from Corpus Christi under a seven-year charter agreement, once it is delivered in Q3 2019.

SIGNIFICANT VESSEL | 25

Keeping transportation costs down

Once completed, GasLog Warsaw will have an overall length of 297 m, a beam of 47 m and a depth of 26.2 m. Among its key transportation technologies are its four Mark III Flex Plus cargo containment tanks that are expected to have a boil-off rate (BOR) of 0.07%, providing sufficient capacity to hold LNG volumes equivalent to Spain's total daily demand in one voyage. An efficient propulsion system will also be critical to keeping LNG transportation costs down. The ship will have an on-board, partial re-liquefaction system that can reduce its gas consumption, allowing it to select the type of fuel it will use, either burning 100% natural gas or low-sulphur fuel oil. Back in 2014, GasLog was one of the first shipowners to order lowspeed, two-stroke WinGD X-DF dual-fuel engines for its LNG carriers. WinGD’s X-DF engines employ lower-rated speeds to reduce both fuel consumption and wear, while maintaining power outputs comparable to their predecessors. The X-DF dualfuel version uses LNG delivered to the engine as low-pressure gas. The X-DF technology is based on the lean-burn Otto cycle, in which a compressed lean air-gas mixture is ignited through the injection of a small amount of liquid pilot fuel. Burning LNG as compared to more carbon-intensive fossil fuels can reduce CO2 emissions by 30%. GasLog feels that the combination of its LNG carriers’ low-speed, two-stroke (LSTS) WinGD X-DF engine technology and low BOR will “produce an extremely competitive transportation cost that should make it particularly attractive to potential charterers.” All eight of GasLog’s newbuilds under construction at SHI will have LSTS propulsion. Following the commencement of GasLog Warsaw’s eight-year charter to Endesa, GasLog Partners LP will have the right to acquire the LNG carrier under an agreement between GasLog

and GasLog Partners. GasLog also secured a 12-year, fixed-term charter with Japan’s LNG Marine Transport Limited, the principal LNG shipping entity of Japan’s JERA Co, Inc, for an as yet-unnamed sister vessel to the GasLog Warsaw that will be delivered in April 2020 by SHI. SHI recently delivered another new GasLog LNG carrier, the GasLog

Gladstone, arriving on its maiden voyage at the Port of Gladstone in Australia. The 174,000 m3 GasLog Gladstone is operating under a 10-year charter to a wholly owned subsidiary of Royal Dutch Shell Plc. It loaded its first cargo of LNG from Shell Australia’s Curtis Island twotrain LNG facility in Queensland in April. LNG

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26 | INSULATION & STORAGE TANKS

Baltic LNG infrastructure growth spurs new storage solutions Innovative LNG storage solutions are supporting the increased use of LNG as a marine fuel in Scandinavia and the Baltic

rowth in the import of LNG into Scandinavia and the Baltic Sea region has created a seedbed for the development of new small-, mid- and worldscale LNG plants, terminals and bunkering stations, including some flexible and creative LNG storage solutions. Munich-based Linde AG has had a hand in engineering, designing and building LNG infrastructure across the entire LNG value chain in the Scandinavian and Baltic Sea region for decades. Back in 1996, it began working with Statoil ASA (now Equinor) on the development of the world-scale Snøhvit LNG export plant on the industrial island of Melkøya near Hammerfest, Norway. The plant is designed to operate in arctic conditions and is the only LNG facility in the world to capture and store CO2 from the well stream, reducing its carbon footprint and making it energy efficient.

LNG World Shipping | May/June 2019

Situated above the arctic circle, Melkøya receives and processes natural gas from the Snøhvit field in the Barents Sea. The gas is transported via a 168 km gas pipeline to the facility. At the onshore facility at Melkøya, condensate, water and CO2 are separated from the well stream before the natural gas is cooled down to LNG and stored in two dedicated tanks. The two flat-bottomed LNG storage tanks each have a capacity of 125,000 m3, a diameter of 74 m and a height of 48.7 m. The gas processing complex also has a condensate tank, with a capacity of 75,000 m3, diameter of 60 m and height of 42.3 m, and one liquefied petroleum gas (LPG) tank with a capacity of 45,000 m3, diameter of 50 m and height of 37.9 m. DSI Norway, part of German engineering

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INSULATION & STORAGE TANKS | 27

company Dywidag-Systems International (DSI), was responsible for the supply and installation of the tanks, stressing and grouting a total of 1,650-tonne horizontal and vertical post-tensioning tendons with accessories. The tank walls were constructed by means of a slip formwork. DSI supervised the installation and position of system components during the concrete works. DSI says a key challenge was the installation of the vertical tendons with 12 strands in the tanks. The vertical tendons of tanks are typical U-shaped or loop tendons. A loop tendon consists of two vertical tendons, which are connected at their bottom ends in the foundation by an 180° arc. The Melkøya LNG export facility, with a capacity of 4.3 mta, has been operating since 2007. It produces and exports approximately 70 shiploads of LNG every year.

Small-scale storage under pressure

ABOVE: Norway’s Snøhvit LNG terminal has two 125,000 m³ LNG storage tanks (image: Bratland/ Equinor)

70 shiploads of LNG per year produced and exported by the Melkøya LNG facility

www.lngworldshipping.com

Linde says that unlike the large-scale LNG business, with its downstream LNG distribution chain at atmospheric pressure using LNG carriers, small-scale LNG may require pressurised storage facilities for a number of reasons. One is that economical pressurised storage tanks can be designed for low-storage capacity needs and downstream LNG distribution by either vessel or truck to end consumers. Linde engineers LNG storage options that include flat-bottom tanks, such as in the case of the Melkøya LNG export facility, spherical tanks – with capacities ranging from 1,000 to 8,000 m³ – and bullet tanks, with capacities of between 100 and 1,000 m³. For small- to midscale LNG plants, the storage tank is typically designed to hold a three- to 10-day production volume to have an adequate buffer and flexibility for the downstream supply chain. A typical application of a bullet tank is the small-scale LNG import terminal at Agotnes, Norway, which has one 450 m3 pressurised bullet storage tank. Pressurised bullet tanks also offer flexibility, allowing for a modular approach to terminal expansion. Pori LNG import terminal in Finland, for example, was built with five 1,000 m3 pressurised bullet LNG storage tanks, but could potentially add four more 1,000 m3 LNG storage tanks to its footprint. At the Halhjem ferry terminal in Norway, Chart Industries supplied two 500 m3 storage

tanks to allow ferry operator Fjord1 to bunker its vessels every night. The horizontal storage tanks have the capability to connect to semitrailers for either bunkering or filling up the storage tanks. The storage tanks connect via a 100-m vacuum insulated piping (VIP) interconnecting pipe underneath the roadway.

Flexibility for expansion

The port of Klaipeda in Lithuania is an LNG hub for the Baltic states. Its infrastructure includes the construction of a single value chain from LNG delivered from the floating storage and regasification unit (FSRU) Independence. While it does not have the economies of scale of a large LNG terminal, Klaipeda LNG terminal was built in a significantly shorter timeframe and provides operational flexibility. This creates an attractive business model for terminal operators and owners to quickly address the growing demand for LNG as a fuel for transportation and energy and take advantage of new supply. LNG offloaded and stored at Klaipeda can be loaded onto tanker trucks for virtual pipeline distribution to off-grid users. It is used for truck refuelling, bunkering, as well as vaporised as a source of power generation for local consumers. The cryogenic section of the terminal comprises five identical horizontal vacuuminsulated storage tanks, each with a capacity of 1,000 m3, pre-fabricated by Chart Industries, 10 ambient air vaporisers for gas delivery, loading bays that can simultaneously fill two tanker trucks, four cryogenic submerged pumps for truck filling and bunkering, interconnecting pipework, emergency flare and all associated control and safety systems. The modularised design of the Klaipeda LNG terminal will allow it to double its storage capacity from the current 5,000 m3 to 10,000 m3 if market conditions justify such expansion. Chart’s horizontal LNG storage tanks can handle storage applications requiring a maximum allowable working pressure of more than 50 psig (3.45 barg). Because pre-fabricated storage tanks are manufactured in a controlled environment, the vacuum technology achieves a higher level of performance as compared with tanks built on site, says Chart.

Development of LNG fuel tanks

With the increasing popularity of LNG as a marine fuel, the most successful design for LNG-fuelled vessels has been vacuum-

LNG World Shipping | May/June 2019

28 | INSULATION & STORAGE TANKS

While it does not have the economies of scale of a large LNG terminal, Klaipeda LNG terminal was built in a significantly shorter timeframe and provides operational flexibility”

insulated Type C tanks. A vacuum is maintained in the space between the storage system’s inner and outer tanks to reduce convective heat transfer. Additionally, the space is filled with an absorptive insulating material to reduce the heat transfer. Cryogenic storage and distribution system manufacturer Inoxcva India supplied two 6.5 m3 fuel tanks to the Dutch firm Cryonorm Systems BV for installation in Europe’s first LNG-powered split hopper dredge, built by Shipyard Constructions Hoogezand Nieuwbouw (SCHN) shipyard in the Netherlands for the Port of Bremen. One of the largest Type C tanks Inoxcva India has produced was fabricated at its Kandla facility in India. Inoxcva constructed two sets of three 765 m3 LNG marine fuel tanks for TGE Marine Gas Engineering, Bonn, Germany, for installation in Crowley Maritime Corporation’s two 2,400 TEU Container roro (ConRo) ships. The tanks were installed by VT Halter Marine in Pascagoula, Mississippi. The 34-m long tanks have a 6.3 m diameter and weigh 225 metric tonnes. The doublewalled, vacuum-insulated Type C tanks have an estimated hold time in excess of 58 days – more than ample for the two LNG-powered ConRo ships that operate in Jones Act service between Jacksonville, Florida, and San Juan, Puerto Rico. For bunkering storage at the Port of Jacksonville, two 260-metric tonne tanks, each 52 m long were manufactured by Chart Ferox in the Czech Republic. With an outer diameter of about 6 metres, each tank features an inner shell to hold the product and an outer shell that is insulated and kept under vacuum, to keep the LNG cold. The tanks are fitted with two internal LNG pumps, each of which can deliver a flow rate of 3,400 litres per minute, with the ability to run multiple pumps for a maximum of 9,100 litres per minutes at peak load rate. Each tank holds enough LNG to fuel the vessels within an eight-hour period. China’s Gloryholder Liquefied Gas Machinery Co will design and supply the LNG cargo handling and fuel gas supply system for the new 6,000 m3 LNG bunkering vessel being built by Damen Shipyard for Eesti Gaas, Estonia’s leading energy company. The 100 m LNGBV is being built at Damen Yichang Shipyard in China and will have two IMO Type C stainless steel tanks, each with a capacity of 3,000 m3. LNG

LNG World Shipping | May/June 2019

LNG storage for fish food plant Norwegian seafood company Mowi ASA has embraced sustainability as part of its corporate culture. Aquaculture is expected to become an increasingly important source of food to meet the needs of a growing world population. The European Commission’s Joint Research Centre estimates that global average seafood consumption is 22.3 kg per capita, an increase of about 50% since 1980. It comes at a time when wild catch seafood for human consumption is expected to stagnate. Mowi AS, formerly known as Marine Harvest, wanted to minmise its carbon footprint at its fish food processing plant. An LNG bunkering station at Oksvoll, Norway, was commissioned to support the refuelling of LNG-powered fish farm feeder vessels, serving 40 offshore farms operated by Mowi AS. An integral evaporation plant regasifies LNG to provide a source of natural gas for the nearby fish feed processing facility’s boiler system. The three perlite, vacuum-insulated horizontal LNG storage tanks, each with a capacity of 257 m³, are supplied with LNG by smallscale LNG carrier, but can also unload LNG by truck tankers. Three tanks have approximately 750 m³ of LNG storage, about two-thirds of which is for LNG bunkering with the remaining capacity supporting the fish feed processing facility’s boiler system. Both the bunkering and boiler feed sections were designed for low and high operational modes. Chart engineered and supplied 290 m of VIP of 6-inch inner diameter and 8-inch outer diameter in 12 m sections for optimal transport. The bunkering station bunkers vessels for a 55-hour roundtrip around the fish farms. Chart says its VIP decreases heat leakage by 90%.

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LNG Global Orderbook 2019-2023

Statistically the LNG newbuilding boom continues with little sign of abatement. The major talking point is a plan by Qatargas to order up to 80 very large gas carriers. Initially up to 40 units will be ordered at a delivery rate of ten each year over a four year period. Against this a further 40 vessels have been earmarked on an optional basis. With a record orderbook already Qatargas may find it difficult to secure building slots. The 174,000 cu.m. capacity vessels will be of the highest technical standard and higher pricing levels will probably apply. Previously in 2004 Qatar ordered a series of 45 very large gas carriers with the latest newbuildings intended as replacements. Such is the frantic pace of ordering that a further 16 LNG vessels were

contracted in just a two month period lifting the current orderbook to 158 units. Orders now stretch into 2023. With so many orders offering high CGT production totals South Korean yards in particular are being lifted out of the trough of depression. The lionâ&#x20AC;&#x2122;s share will go to South Koreaâ&#x20AC;&#x2122;s big three builders of Samsung and the merged giants of Hyundai and Daewoo. Depending on licensing of tank containment systems some orders will fall to Japan and China with bids from Imabari and Hudong-Zhonghua likely. With the security of full orderbooks prices are gradually rising and have now exceeded US$ 200 million for the biggest ships in some cases.

RUSSIA

Vessel JAPAN

170,253

(cu.m.)

Vessels

2,064,000 (cu.m.)

CHINA

Total Vessels

158

SOUTH KOREA

Vessels

SINGAPORE

1,863,440

Vessels

(cu.m.)

19,500 (cu.m.)

115

Vessels

19,369,783 (cu.m.)

Total Capacity

23,486,976

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

Order forecast to date by number of ships 2019

2020

2021

2022 2023

16 2

Top 5 shipyards by capacity (cu.m) Daewoo 5,885,183

Hyundai 3,853,600 Samsung 6,644,200

Hyundai Samho 2,956,800

Hudong-Zhonghua 1,419,200

Propulsion Manufacturers Confirmed

StaGE

104

LSDF

For a full list of orderbook data inclusive of hull number, owner, capacity, charter, year, containment, class, propulsion and owner country please visit: www.brldata.com

DFDE

32 | SPECIAL REPORT LNG as marine fuel

Container ships benefit as gas engine designers cut costs Some of the world’s biggest container ships are now being built, and in one breakthrough case retrofitted, with dual-fuel engines, as two-stroke technology providers seek alternative ways to add value

he barriers to the uptake of LNG as a marine fuel are more commercial than technical. But those barriers are being eroded, partly as the cost of gasfuelled technology falls compared to other environmental compliance options, but also as a difficult market forces shipyards to reduce the premium they charge for such vessels. These are the findings from a study launched early this year, which projected rapid returns on investment for a large newbuild container ship fitted with dual-fuel technology. The study was conducted by simulation and analytics expert Opsiana for the SEA\LNG consortium, which aims to persuade shipowners of the commercial case for gas fuel in shipping. The researchers analysed the case of a newbuild, 14,000-TEU container vessel operating on an Asia-US West Coast liner route. The report compares six fuel pricing scenarios and, according to SEA\ LNG chairman Peter Keller, challenges commonly-held assumptions about the economic performance of LNG bunkers. He says: “The study 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

LNG World Shipping | May/June 2019

The X92DF destined for CMA CGM's ultra-large container ships features cost-cutting new technologies

present value basis over a conservative 10-year horizon, with fast payback periods ranging from one to two years.” The cost of LNG-burning two-stroke engine technology has fallen both relatively and absolutely in recent years. In relative terms, the cost premium for LNG compared to conventionally-fuelled vessels has become more tolerable given the expense of complying with IMO’s global sulphur cap. Conventional ships will comply by using very low-sulphur fuel oil or marine diesel oil, raising operational costs. For ships using exhaust

gas cleaning systems and continuing to burn heavy oil, fuel may be cheaper, but LNG is cheaper still. The absolute cost of dual-fuel technology is also falling. The Opsiana report attributes this to the lower premium that shipbuilders put on gasfuelled vessels due to the slowdown in shipbuilding. But it is also a result of efforts by engine designers to simplify their systems. One of the biggest gas-fuelled ship orders in recent years is a case in point. CMA CGM’s nine 22,000-TEU vessels to

www.lngworldshipping.com

LNG as marine fuel SPECIAL REPORT | 33

be delivered in 2020 and 2021 will each be powered by the biggest dual-fuel marine two-stroke engine ever built – WinGD’s 12-cylinder, 920-mm bore X92DF, delivering 63,840 kW at 80 rpm. The engines include several design features that reduce size, weight, complexity and maintenance demands. These engines will be the first to incorporate a new engine control system, MK-E cylinder lube pumps, as well as being the first of their size to deploy an integrated gas pressure regulation system. All the design features offer significant benefits in terms of reduced footprint, complexity and maintenance. Among the innovations is a new system that brings the function of the gas valve unit (GVU) within the engines, easing installation and improving integration. The role of the GVU is to regulate the pressure of gas from the fuel gas supply system to the engine and to shut down supply quickly and safely. GVUs usually sit in the engineroom, although they can also be housed in a dedicated room. The new integrated gas pressure regulator (iGPR) incorporates that functionality within the X-DF engine. The new concept results in a space saving in the engineroom as well as a weight saving (of around 1,100 kg compared to the GVU-equipped alternative design in the debut case), easing installation. But according to WinGD manager, marketing and application, Daniel Strödecke, the impact on control and communication is more significant than the weight and space savings. “Rather than communicating

SULPHUR COMPLIANCE OPTIONS, CAPEX COMPARISON (US$) Dual-fuel (high-pressure two-stroke)

Dual-fuel (low-pressure two-stroke)

Open-loop scrubber

LNG yard work

4,230,000

n/a

Selective catalytic reduction

2,495,700

n/a

3,260,340

Scrubber (incl. yard work)

n/a

8,620,560

n/a

High-pressure gas supply

1,190,621

n/a

Low-pressure gas supply

708,654

n/a

6,382,837

n/a

n/a 2,662,080

Fuel chiller

LNG tanks Auxiliaries

Conventional

118,000

3,327,600

2,662,080

Main engine

15,396,552

12,317,241

TOTAL

33,731,964

30,045,643

26,860,221

18,357,661

Premium vs conventional

15,374,303

11,687,982

8,502,560

Source: SEA\LNG

between the GVU and engine via an external system, now there is just internal communication within the engine,” he says.

Increased control

Integration is improved in other areas too. Interfaces with other equipment are simplified and more of the engine set-up can be completed by the engine builder rather than the shipyards. Mr Strödecke notes that the iGPR design enables the installation of significantly smaller ventilation air fans, for example, and gives WinGD more control over the design and construction in general. “If we want to optimise the pressure control valve it can be done without liaising with a third party,” he says.

The system has been introduced on the first X52DF engines, destined for two 125,000-DWT shuttle tankers being built for AET by Samsung Heavy Industries. It will also be introduced on the X92DF engines and will eventually be rolled out across WinGD’s X-DF portfolio. WinGD will also debut its Mk-E cylinder lubrication pumps on the X92DF engines. The pumps inject precise amounts of oil onto the cylinder liners at tightly controlled times to lubricate the main pistons and cylinders. The new pump has improved priming, both internally and with a buttonoperated venting valve. It has 45% fewer parts than its predecessor, making it quicker to assemble and install on the engine. As a result, the pump’s weight is

Hapag-Lloyd's Sajir represents an important test case for retrofits on big vessels

www.lngworldshipping.com

LNG World Shipping | May/June 2019

34 | SPECIAL REPORT LNG as marine fuel

reduced by 40% and production costs fall by around 35%. The new pump design has also allowed WinGD to improve the configuration of the outlets, simplifying installation and service on the engine. The CMA CGM vessels are among the first, but they are not the only container ships to take advantage of cost-saving dual-fuel designs. In March, Singaporebased Eastern Pacific Shipping ordered 11 15,000-TEU ships to be built at Hyundai Samho Heavy Industries. Six of the units will feature LNG-burning engines from MAN Energy Solutions. The MAN B&W 11G90ME-GI dual-fuel engines are scheduled for delivery between 2020-2022. The engines will feature MAN’s new pump vaporiser unit (PVU) – a lowcost pump unit for pressurising and supplying LNG to the engines. The PVU is designed to pressurise and vaporise the required fuel to the pressure and temperature required by the ME-GI engine. The gas pressure is controlled

by the hydraulic flow to the pump. The separate control of the three pump heads provides full redundancy and is secured by a control system with safety functions and a high degree of integration with the ME-GI engine. MAN Energy Solutions senior vice president, head of two-stroke business Bjarne Foldager says: “Apart from the reduced cost and weight, ordering both PVU and engine from the same designer provides many other advantages, including easier integration and straightforward installation.” The PVU is an ingenious simplification of the dual-fuel auxiliary machinery, using pumps driven by the engine’s exhaust valve actuator to compress fuel before vaporising it for injection. Although the Eastern Pacific Shipping order is the biggest order to include the PVU, the system will make its debut on a more noteworthy vessel. Hamburg-based liner company Hapag-Lloyd’s 15,000-TEU vessel

Sajir will become the biggest container ship so far to retrofit dual-fuel LNG engines, with the PVU included in the order. The company has signed a contract with Hudong Zhonghua Shipbuilding (Group) Co to carry out the conversion at Huarun Dadong Dockyard in Shanghai. The vessel’s 54.9 MW MAN B&W 9S90MEC10 engine will be converted to MAN Energy Solutions’ dual-fuelled ME-GI engine concept. Hapag-Lloyd plans to primarily use LNG, with low-sulphur fuel oil as a back-up option. “By carrying out this unprecedented pilot, we hope to learn for the future and to pave the way for large ships to be retrofitted to use this alternative fuel,” says Hapag-Lloyd managing director fleet management Richard von Berlepsch. Sajir is one of 17 container ships built as ‘LNG ready’ by United Arab Shipping Co before it was acquired by HapagLloyd. Hapag-Lloyd first revealed its plan

LNG as marine fuel SPECIAL REPORT | 35

to convert one of the LNG-ready vessels when it detailed its compliance strategy for the 2020 sulphur cap last year.

Highly efficient

Hapag-Lloyd's first LNG retrofit candidate will feature a 6,700 m3 gas fuel tank, bunkering twice per round trip. The smaller tank size compared to the 18,600 m3 tanks on CMA CGM's large container ships points to greater certainty about bunkering in Asia, as well as space constraints on Sajir, which was designed LNG-ready six years ago. The ship is already highly efficient, running at -60% to the EEDI reference line thanks to modern efficiency features, including waste heat recovery. Another feature likely to remain is the power take-off (PTO). A recent case study by MAN Energy Solutions highlights how a PTO can optimise energy efficiency by generating electricity from the main engine. Auxiliaries will also be dual-fuel, the line has confirmed. After conversion, the 54.9 MW MAN B&W 9S90MEC10 will earn the -GI suffix that denotes MAN Energy Solutions' high-pressure, diesel cycle, dual-fuelled engines. A successful retrofit for a vessel of Sajir’s size would represent a significant milestone for the advancement of LNG as a marine fuel. The high cost of retrofitting has been seen as a barrier to uptake; following the Sajir contract, MAN believes conversions are becoming viable for more vessels and container ships built within the past five years are now seen as good candidates. MAN head of sales, retrofit projects Klaus Rasmussen notes that the company has been able to refine its conversion strategies as the number of projects has grown. The age range for suitable candidates is not limited by the need for payback time, he explains, but by the fact that vessels must have modern ME-C engines. These feature the electronic controls needed to govern fuel injection and exhaust valve timings on gas engines. Mr Rasmussen acknowledges that Hapag-Lloyd has paid a higher cost for works on Sajir due to it being the first of its kind. Any further retrofits would be cheaper as a result of this work, he says.

Hapag-Lloyd has put the cost of LNG conversions at US$25M-30M. Further conversions would also offer economies of scale on LNG fuel. The membrane tank, enough for one voyage between Europe and Asia, is the most significant element of the 90-day retrofit. The engine conversion could be completed in around five weeks; the remaining two months will be devoted to installing the tank and the complicated

steelwork supporting it. At 368 m in length and 149,400 DWT, Sajir is the biggest ship ever to be converted for dual-fuel operation. Along with the big new container ships ordered by CMA CGM and Eastern Pacific Shipping, they showcase how improving dual-fuel technology – and particularly the prospect of dramatic fuel cost savings – is helping to bring LNG fuel to the attention of owners of ever bigger vessels. LNG

THE FUTURE IS GREEN, THE FUTURE IS LNG Visit us at Nor-Shipping GTT will exhibit in Booth B03-33

SWITCHING TO LNG AS FUEL? ASK GTT. LNG IS IN OUR BLOOD.

Learn more on www.gtt.fr

LNG as fuel allows to meet 2020 Global Sulphur Cap. GTT has developed for over 55 years LNG tank technologies. This considerable expertise, combined with this experience, is available for owners looking at switching to LNG. Today, GTT solutions allow to save some space compared to other LNG tank solutions.

36 | LNG BUNKERING AND BUNKER VESSELS

Bunker vessel boom brings innovation to the fore Shipbuilders are investing in new concepts and researching cryogenic technologies to support the continued growth of the LNG bunker vessel orderbook The 112-m, 12,000 m³ capacity LBV for MOL and Pavilion Gas will be the biggest in Asia

13 LNG bunker vessels currently in operation

fter a year of landmark developments the infamous ‘chicken and egg’ conundrum – which comes first, gas-fuelled ships or bunkering infrastructure? – has finally been solved, according to SEA/LNG chairman Peter Keller. “Bunkering infrastructure is expanding, encouraging operators to adopt LNG,” he says. “From limited availability at select ports, LNG bunkering has grown to encompass 24 out of the world’s top 25 ports and all but one of the top 10 bunker ports globally.” The trend has been mirrored by LNG bunker vessels (LBV), where the range and flexibility of refuelling options has been extended. The one bunker vessel in service at the beginning of 2017 was joined by a further eight by the end of 2018. It is a phenomenon that is set to continue, with SEA/LNG anticipating around 30 more such vessels being delivered over the next five years. According to DNV GL’s Alternative Fuel Insight platform there are 13 bunker vessels in operation today, a further 14 decided upon (including those already ordered from

LNG World Shipping | May/June 2019

shipyards or chartered out) and another four under discussion. As some of those projects enter the construction phase, Singapore’s rival shipyard groups Keppel Offshore & Marine and Sembcorp Marine are emerging as two of the big beneficiaries. At its Keppel Singmarine yard in Nantong, Keppel is already building the first LBV destined to serve Singapore – a 7,500 m3 vessel for the FueLNG joint venture (between Keppel and Shell) that has won a concession at the world’s biggest bunker port. That vessel will be completed in Q3 2020. More recently, in December, Russian oil tanker company Shturman Koshelev commissioned Keppel to build an LBV with ice-class 4 notation and a cargo capacity of 5,800 m3, due for delivery in Q4 2020. It will be chartered to Gazprom Neft for operation in the Baltic Sea. Buoyed by its early experience with bunkering vessels, Keppel is now looking to strengthen its expertise by co-operating on design and research with DNV GL. A framework agreement between the class society and Keppel Marine and Deepwater

www.lngworldshipping.com

LNG BUNKERING AND BUNKER VESSELS | 37

Technology covers potential newbuilding projects including LBVs, small-scale LNG carriers and floating storage regasification units (FSRUs), as well as LNG-related assets employing battery and hybrid technologies. “We have a strong track record in delivering LNG solutions that includes the first FLNG conversion as well as LNGfuelled vessels,” says Keppel managing director for gas and specialised vessels Abu Bakar Mohd Nor. He explains that the agreement will enable Keppel to develop a suite of LNG-related vessels to meet the needs of the market as the adoption of LNG as marine fuel increases. As the first delivery in the agreement, DNV GL will issue Approvals in Principle for two LBV designs from KMDTech. Both are designed to carry up to 7,500 m3 of LNG in Type C-tanks, with one featuring a hybrid propulsion configuration with batteries. An optimised deck arrangement for the modular LNG gas supply, filling and safety systems increases the cargo capacity and efficiency of the vessels. The vessels will have a class notation for bunkering which enables the provision of LNG bunkering services if required. They are equipped with engines that can run on both diesel and LNG. DNV GL projects that more than 10% of the world’s shipping fleet will be powered by LNG by 2030, compared to less than 0.3% in 2019. It anticipates that LNG powered vessels will make up 23% of the world’s fleet by 2050. “One of the objectives of our collaboration with Keppel is to facilitate the increased supply of LNG bunkering infrastructure,” says DNV GL business director gas carriers Johan Peter Tutturen.

LNG-FUELLED NEWBUILDS, 2019 DELIVERY Shipowner

Vessel type

LNG fuel capacity (m³)

Operating area

AET

Crude oil tanker

1700

Global

AET

Crude oil tanker

1700

Global

AET

Shuttle tanker

n/a

Global

AET

Shuttle tanker

n/a

Global

CMA CGM

Container ship

18600

Global

Containerships

Container ship

n/a

Europe

Containerships

Container ship

n/a

Europe

Containerships

Container ship

n/a

Europe

Groupe Desgagnés

Chemical tanker

620

America

Sovcomflot

Crude oil tanker

1700

Europe

Sovcomflot

Crude oil tanker

1700

Europe

Sovcomflot

Crude oil tanker

1700

Europe

Siem Car Carriers

Car carrier

3600

Global

Siem Car Carriers

Car carrier

3600

Global

Note: Two-stroke engine vessels only Source: DNV GL Alternative Fuels Insight; LNG World Shipping

Asia’s largest LBV

While Keppel takes the honour of building the first LBV for Singapore, Sembcorp Marine will build another to serve the port that will become Asia’s largest such vessel. Mitsui OSK Lines subsidiary Indah Singa Maritime contracted Sembcorp Marine to build the 12,000 m3 vessel in February. When completed in early 2021, the vessel will go on long-term charter to Singapore state-owned Pavilion Gas for deployment in Singapore. To be constructed at Sembcorp Marine Tuas Boulevard Yard, the vessel will be 112 m

www.lngworldshipping.com

23% amount of world fleet powered by LNG by 2050

long and 22 m wide with two GTT Mark III Flex membrane tanks. The vessel, which will have dual-fuel engines running on LNG or marine diesel oil, will be managed by Sinanju Tankers, a major bunker barge company. This will be the first LBV built by Sembcorp Marine, which will also fabricate the vessel’s membrane tanks under a licensing agreement with LNG containment specialist GTT. Mark III Flex membrane tanks have a lower internal pressure, temperature and boil-off rate than IMO Type-C tanks. This translates into greater tank durability, safer fuel transfer operations and reduced cargo loss through evaporation. The Mark III Flex membrane tanks also weigh less and occupy less ship space, allowing the vessel to carry more cargo and consume less fuel during transportation. “This project marries Sembcorp Marine’s ship design and construction expertise with GTT’s industry-leading membrane tank system,” says Sembcorp Marine president and chief executive Wong Weng Sun. “We are confident the outcome will be a sophisticated newbuilding that not only delivers optimal technical performance, but also helps MOL and Pavilion Energy contribute to the expected standard of LNG bunkering operations in Singapore.” While vessels under construction by

LNG World Shipping | May/June 2019

38 | LNG BUNKERING AND BUNKER VESSELS

LNG BUNKER VESSEL PROJECTS DECIDED AND UNDER DISCUSSION, 2019-2021 Year

Owner

Operator/charterer

2019

Korea Line

Kogas

2019

Titan LNG

2019

LNG Shipping (Victrol)

Shell

Home port

Country

LNG capacity (m³)

Status

Busan

South Korea

7,500

Decided

Antwerp

Belgium

1,680

Decided

Rotterdam

Netherlands

3,000

Decided

2019

Titan LNG

Amsterdam

Netherlands

1,480

Decided

2020

ENN Energy

Zhoushan

China

8,500

Decided

2020

CLS (Kawasaki Kisen Kaisha, Ltd., Chubu Electric Power Co., Inc., Toyota Tsusho Corporation, and Nippon Yusen Kabushiki Kaisha)

Chubu

Japan

3,500

Decided

2020

Ecobunker Shipping

Yokohama

Japan

2,500

Decided

2020

Q-LNG

Harvey Gulf/Shell

TBD

4,000

Decided

2020

MOL

Total

Amsterdam/ Rotterdam/Antwerp

Netherlands/ Belgium

18,600

Decided

2020

Shturman Koshelev

Gazpromneft

5,800

Decided

6,000

Decided

Central LNG Marine Fuel Japan Corporation

2020

Eesti Gaas

2020

NYK, Kyushu Electric Power Co, Saibu Gas Co and The Chugoku Electric Power Co

Setouchi/Kyushu

Japan

2020

Naturgy

Barcelona

Spain

6,000

Under discussion

2021

MOL

Total

Singapore

12,000

Decided

Woodside

Dampier

Australia

12,000

Under discussion

Oristano

Spain

7,500

Decided

Oristano

Spain

7,500

Decided

TBD

8,000

Under discussion

2021 2021

Avenir LNG

2021

Avenir LNG

TBD

Q-LNG

Harvey Gulf

Under discussion

Note: * Eesti Gaas and Shturman Kosheleve vessels will serve the Baltic Sea Source: DNV GL Alternative Fuels Insight; LNG World Shipping

Keppel and Sembcorp Marine will fulfil the LNG needs of the world’s busiest bunker port, plans are also progressing to develop bunkering infrastructure in one of the most mature markets for gas as marine fuel. On 18 March this year Damen Yichang Shipyard cut steel for what Estonian owner Eesti Gaas hopes will be the first of a series of short-sea bunker vessels. The 6,000 m³-capacity vessel and its future sister ships are intended to accelerate the adoption of LNG in the north-eastern Baltic Sea by providing a ship-to-ship bunkering service in that part of the region for the first time. “Eesti Gaas and our launch client, ferry operator Tallink, will become the companies with the most LNG competence in this region,” says Eesti Gaas board member Kalev Reiljan. “Eesti

LNG World Shipping | May/June 2019

LNG bunkering now encompasses 24 of the world’s top 25 ports and all but one of the top 10 bunker ports globally”

Gaas has performed over 1,500 port-based LNG truck-to-ship refuellings of Tallink’s LNG-powered Megastar ferry and now we are moving on toward offshore, more mobile solutions.” The LGC 6000 LNG vessels are designed to meet ice-class 1A certification, allowing them to operate all year in the Gulf of Finland and the northern Baltic. A dualfuel propulsion system will be used for the management of the boil-off gas in combination with a gas burner. The vessel will host two Type-C tanks of 3,000 m3 each, with Chinese supplier Gloryholder Liquefied Gas Machinery providing the cargo handling and fuel gas supply system. Following sea trials, the ship will arrive in Estonia in mid-2020 and will start serving LNG clients in the third quarter. The new vessel will be capable of carrying out bunker

www.lngworldshipping.com

LNG BUNKERING AND BUNKER VESSELS | 39

activities at designated locations both in and outside ports. Eesti Gaas will operate the vessel under a long-term charter from parent company Infortar.

Coastal bunkering

The addition of more bunkering vessels in the Baltic will supplement the already strong shoreside bunkering infrastructure there. In other markets, bunker vessels play a more central role: South Korea is likely to be one such example. Increasing demand for LNG bunkering has led the country to launch a development project for coastal ships with customised bunkering systems. The project aims to develop and validate bunkering facilities along the coast. South Korean LNG engineering, procurement and construction company Trans Gas Solution has received approval in principle from Korean Register for a 500 m3 bunker barge design that will be part of the new coastal bunkering system. The LNG bunkering barge concept, Kolt-05B, is a 48.5-m vessel with an IMO Type C pressurised fuel tank with a storage capacity of 500 m3, including a low-pressure LNG fuel gas supply system CryoPac-L. The barge will have a bunkering arm to assist in fuelling vessels at a flowrate of 200 m3/h, and the ability to handle return gases during bunkering operations. Funding for the LNG bunker barge concept is through a government-backed project supported by South Korea’s Minister of Maritime Affairs & Fisheries and organised by the Korea Research Institute of Ships & Ocean Engineering (KRISO). Following construction, testing and

commissioning in the first half of 2021, the LNG bunkering barge system is expected to operate from 2022. The wider coastal project brings together South Korean Government and industry. KRISO is joined in the project by steelmaker POSCO, shipbuilder, offshore and industrial construction company EK Heavy Industries, pressure vessel manufacturer Mytec and LNG fuelling station developer Valmax. Trans Gas Solution will oversee the development of the control system of the vessel, including the cargo handling system, which covers the basic and detail design of the vessel.

More than 10% of the world’s shipping fleet will be powered by LNG by 2030, compared to less than 0.3% in 2019”

Cryogenic research

The coastal project may be providing the impetus for the deployment of bunker ships in South Korea, but other projects are aiming to develop some of the technologies needed both for the country’s fledgling bunker vessel market and for its well-established gas carrier business. Shipbuilder Daewoo Shipbuilding & Marine Engineering has struck a partnership with Inha University to open a new marine and offshore research institute. There, Daewoo aims to study insulation systems and processing systems for cryogenic cargoes applied to LNG carriers. The collaboration with the university is expected to continue until 2023. “As the demand for environmentally friendly energy is increasing, so is the need for cryogenic technology development,” says Daewoo Shipbuilding & Marine Engineering director Lee Seong-keun. The LNG bunker vessel market shows little sign of slowing and competition for orders is likely to remain fierce. As shipyards continue to establish their expertise, evidence of investment in better technologies – including teaming up with class societies or academic institutions – is one tool for attracting buyers. If it also drives higher standards in building vessels, so much the better. LNG

LEFT: The Eesti Gaas LBV will supplement a busy shore-based bunkering schedule in Estonia

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LNG World Shipping | May/June 2019

40 | TECHNICAL Propulsion and bunkering systems

Switch to batteries to save precious cargo Hybrid propulsion, coupled with the improved integration of fuel and cargo systems, will save gas carrier operators time and money

Integrated cargo and fuel systems will bring savings on a new Knutsen OAS small-scale gas carrier

LNG World Shipping | May/June 2019

ual-fuelled LNG carriers have long dipped into their cargoes to power their engines. But even with easy access to cheap fuel, efficiency remains important. Any gas that can be re-liquified, instead of used in engines, means more cargo at the end of the journey and more profit for owners. New technologies, including hybrid propulsion and advanced system integration, offer the opportunity for operators to increase these savings. In April a partnership was formed that aims to drive the uptake of hybrid propulsion among gas carriers for the first time. Wärtsilä and Samsung Heavy Industries (SHI) are seeking to optimise the capital and operational costs associated with gas carriers. The project is based on a successful co-operation in the shuttle tanker segment. Batteries form part of the hybrid arrangement for a series of six shuttle tankers being built by SHI for Teekay Offshore. The package includes LNGburning engines that are also capable of using volatile organic compounds as well as a battery system. According to Wärtsilä sales director, merchant segment Stein Thorsager, the Teekay project encouraged SHI’s interest in the hybrid propulsion. “They see the advantage of using batteries as part of the energy demand on board and strongly believe this will be of value for other tankers and gas carriers,” he says. SHI is also interested in entering the marine market with its own batteries. It will be able to use Wärtsilä’s hybrid centre in Trieste – a facility that enables the full-scale testing of hybrid propulsion

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Propulsion and bunkering systems TECHNICAL | 41

arrangements – to explore the best battery properties and specifications for marine use. The agreement provides a “greater level of equality” than under a conventional shipyard-supplier relationship, allowing the companies to spread risks associated with research and development. It will also provide SHI with a knowledge of hybrid propulsion and power arrangements that it can apply when adapting ship designs and construction practices to accommodate these systems. The partners cited the strong LNG carrier newbuilding market as another driver for the deal, noting “potentially dozens of new vessels to be ordered for transporting increasing volumes of LNG from new and extended export terminals in Africa, Australia, Middle East and the US.” Gas carrier propulsion is usually provided by two-stroke engines, with medium-speed engines catering for on-board power demand including re-liquefaction and cargo loading. Batteries could replace an auxiliary engine and be used to tackle peaks in energy demand, allowing the remaining auxiliaries to be operated at a more optimal load. This would reduce fuel consumption as well as cutting maintenance on the remaining engines. Mr Thorsager notes that many LNG carriers – recently those being used for the Yamal LNG project in the Russian Arctic – already deployed electric propulsion. These arrangements make it easy to consider adding batteries to the set-up he said. “We believe in electric propulsion for smaller LNG carriers,” he says. “In the future you could see a row of generators on one deck with an electric propulsion motor down in the hull connected to the propeller shaft. We already see interest in such concepts from shipowners and charterers who are looking at all options to reduce their emissions to meet IMO targets.” The partnership could also extend to retrofit hybrid solutions. Wärtsilä has already developed containerised retrofit solutions comprising batteries,

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switchboards and controls, mainly deployed on offshore vessels. Solutions could be developed for larger vessels, says Mr Thorsager.

Hybrid potential

Jonny Hult (Alfa Laval): Seeing greater demand for durable vaporiser technology

Heat exchanger advances deliver cool fuel savings New research on glycol freezing has driven developments in heat exchanger technology that are set to benefit users of LNG fuel. A fluid mix including glycol is often used as a medium for heat exchange, but the extreme temperatures at which gas is liquefied means that freezing of the mix is a risk. This has challenges for the use of plateand-shell heat exchangers used in the vaporisation of gas fuel. “With more and more ships relying on LNG as fuel, we are seeing greater demand for durable vaporiser technology that can dependably resist freezing and the fatigue caused by pressure and temperature,” says Alfa Laval head of marine heat transfer equipment Jonny Hult. “A glycol mix with a freezing point of around -50°C has the potential to freeze when it meets plate surfaces as cold as -90°C. Solving this problem with a higher glycol flow is a very expensive solution for our customers.” Alfa Laval has worked with SINTEF Energy Research to find the optimal correlation of flows on both sides and thereby avoid freezing of fluid on the hot side. This will allow shipbuilders use a more compact design with smaller pumps and pipes, reducing cost.

Wärtsilä and SHI are not the only companies to note the potential for hybrid propulsion in the gas carrier segment. Two small-scale LNG carrier design concepts from Keppel Offshore & Marine have just won approvals in principle from DNV GL, one of which features a hybrid power system with batteries. Bringing these concepts from the drawing board and into operation will revolutionise gas carrier propulsion and offer a step change in fuel efficiency. Hybrid propulsion is not the only way to improve efficiency on gas carriers; integration of onboard systems is an oftenoverlooked area for driving economies. A new 30,000 m3 LNG carrier being built at Hyundai Mipo Dockyard for Norwaybased Knutsen OAS Shipping is a good example of what can be achieved. An integrated propulsion and cargo handling solution will ensure effective interfacing between the vessel’s propulsion, onboard auxiliary power generation, and cargo control processes. The package from Wärtsilä includes fuel gas supply, cargo control system, boil-off gas re-liquefaction and safety management. The vessel’s five-cylinder WinGD X52DF dual-fuel main engine and the Wärtsilä auxiliary dual-fuel engines are essential consumers for the boil-off management system, which monitors and controls the cryogenic cargo. Used in combination with a mixed-refrigerant re-liquefaction unit, this will offer the operator control over cargo tank pressure and temperature at all times. The vessel will also be one of the first LNG carriers in its size to deploy space-saving Type-C bilobe cargo tanks. The scope of supply includes three Wärtsilä 20DF dual-fuel auxiliary engines that power the board net, thrusters, cargo control system, and re-liquefaction module. The main engine and controllable pitch propeller system allow the vessel to operate at its highest fuel efficiency design point through a single control for shaft

LNG World Shipping | May/June 2019

42 | TECHNICAL Propulsion and bunkering systems

Carbon-neutral biogas can be used in existing LNG infrastructure power, pitch and speed. The vessel will be operated by Knutsen and chartered to Italian energy services provider Edison. It will be used to supply coastal LNG depots in Italy. The Wärtsilä equipment is scheduled for delivery in 2020 and the vessel is expected to be delivered during the first half of 2021. The contract includes an option for an additional sister vessel.

trucks

ships

process design and related automation, while HB Hunte will provide mechanical gas engineering and gas tank design. The conversions will help Hurtigruten to meet the strict emissions

tanks

marine filling stations

reduction requirements imposed by the Norwegian government when it awarded coastal route concessions (starting in 2021) to Hurtigruten and Havila Kystruten last year. LNG

Benefits of bio-gas

Another emerging route to improving the environmental efficiency of LNG-fuelled ships is bio-gas. Gas fuels made from biomass avoid the significant greenhouse gas emissions associated with the production of natural gas. Because biogas (like LNG) consists mainly of methane gas, existing LNG supply infrastructure can be used without modifications. The same trucks, ships, tanks and marine filling stations can be used for both products. In June last year, Skangas performed what is understood to be the first liquefied biogas (LBG) bunkering of a ship, Furetank’s chemical/product tanker Fure Vinga. The fuelling took place at the Port of Gothenburg, transferring the fuel directly from a tanker truck to the ship. The Swedish LBG was delivered to Furetank’s ship from Skangas’ parent company Gasum’s biogas facility in Lidköping. Six ferries to be retrofitted by Norwegian shipowner Hurtigruten will become the first of their kind to operate on biogas. The vessels, which are due to be converted from diesel-electric to LNGbattery power and propulsion, will be fitted with fuel gas supply systems and tanks designed by system integration specialist Høglund Marine Solutions and naval architect HB Hunte Engineering. Høglund Gas Solutions will provide the fuel-gas supply system (FGSS), including

LNG World Shipping | May/June 2019

The technical and financial challenges of retrofitting ropax ferry Mecklenburg-Vorpommern proved too daunting for Stena Line

Stena abandons debut LNG retrofit plan Swedish shipowner Stena Line has highlighted the cost challenges associated with LNG retrofits after reporting that it has decided not to proceed with its first dual-fuel retrofit. The project to convert the 38,000 gt ropax ferry Mecklenburg-Vorpommern for LNG received a grant from the German Ministry of Transport and Digital Infrastructure in March. But Stena Line trade director Germany Ron Gerlach said that it was not going ahead, citing discussions around “budget, technical challenges and both operational and financial risk.” According to Mr Gerlach, the company is not ruling out gas as an alternative fuel for its vessels. Stena has ordered a series

“We will stay open with regard to technologies at hand in order to allow us full flexibility in our European route network,” says Mr Gerlach. “We will also continue to focus our efforts on other projects such as looking at expanding our battery project on Stena Jutlandica to further vessels and to extend our onshore power supply solutions to include more of our ports.” At 22 years’ old, the MecklenburgVorpommern would have been one of the oldest vessels to be retrofitted for LNG. The age of a vessel can affect the viability of a conversion by limiting payback time and because of the constraints of installed engine technology. Stena Line is familiar with challenging

of ropax vessels from Avic International shipyard in China that will be LNG-ready, with the final ship expected to operate on gas from its delivery in 2021.

retrofits, having converted four Wärtsilä four-stroke engines for methanol fuel on board the then 14-year-old cruise ferry Stena Germanica from 2015.

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44 | BALLAST WATER TREATMENT SYSTEMS

Ease of installation and maintenance must be based on individual vessel requirements (image shows DESMI Ocean Guard’s CompactClean system)

Choosing the right BWTS for an LNG carrier LNG operators have many options when it comes to ballast water treatment systems, but priority must be given to the engineering requirements of installation and maintenance

he owners and operators of large LNG carriers (LNGC) have certain advantages over other shipping sectors when it comes to the installation of ballast water treatment systems (BWTS). Smaller vessels have limited room among their machinery spaces and thus may need to use a modular BWTS; this is not necessarily a negative, but it does demand more planning. And while BWTS have various power requirements, some LNGCs have a source of relatively cheap energy from the boil-off gas. Another important consideration for none LNGCs is the training and safety

LNG World Shipping | May/June 2019

culture required for the crew. It is a step change for a bulk carrier crew to go from the culture required to operate a large but relatively benign vessel to the more complex chemical analysis required with some BWTS. On a sophisticated ship like a chemical carrier or LNGC, the training and operation demands required of a crew are already of a higher level, and the operation of a BWTS is less daunting. LNG carriers also tend to be younger and are less likely to have undergone refits and alterations in their short lives. The vessel will be closer to the original spec,

but even series-built sister ships will have significant differences in the machinery spaces, which is where the planning of the BWTS requires careful thought. Marine engineering firm 21 Knots has undertaken the planning, engineering and retrofit of several types of BWTS and founder and chief executive Nitesh Ranvah notes that the same issues occur. “What we are seeing is a bottleneck… the supply of engineering support is becoming tight and there is a shortage of experienced personnel in the yards,” he says. “The crucial point is that engineering has to come first and has to be combined with power requirements.” Mr Ranvah notes that owners tend to spend months visiting trade shows, talking to manufacturers and negotiating price. In his opinion, deciding the make and model should be a low priority compared to scanning the available space

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BALLAST WATER TREATMENT SYSTEMS | 45

UNITED STATES COAST GUARD MARINE SAFETY CENTER TYPE-APPROVED AND PENDING BALLAST WATER TREATMENT SYSTEMS No

Manufactuer

Model

Country

System Type

Capacity min (m³)

Capacity max (m³)

USCG Status

USCG Issued

USCG Amended

Optimarin

OBS / OBS ex

Norway

Filtration and UV

167

3,000

Approved

02 December 2016

03 November 2018

Alfa Laval

PureBallast 3

Sweden

Filtration and UV

150

3,000

Approved

23 December 2016

21 December 2017

TeamTec OceanSaver AS

OceanSaver MK II

Norway

Filtration and Electrodialysis

200

7,200

Approved

23 December 2016

18 October 2017

SunRui

BalClor

China

Filtration and Electrolysis

8,500

Approved

06 June 2017

05 January 2018

Ecochlor

Ecochlor BWTS

USA

Filtration and chemical injection

500

16,200

Approved

10 August 2017

26 April 2018

Erma First

Erma First Fit

Greece

Filtration and Electrolysis

100

3,740

Approved

18 October 2017

25 September 2018

Techcross

Electro-Cleen

South Korea

Electrolysis

150

12,000

Approved

05 June 2018

Pending

Samsung

Purimar

South Korea

Filtration and Electrolysis

250

10,000

Approved

15 June 2018

20 July 2018

BIO-UV Group

Bio-Sea B

France

Filtration and UV

1,400

Approved

20 June 2018

Wärtsilä Marine Solutions

Aquarius EC

Finland

Filtration and Electrolysis

250

4,000

Approved

30 August 2018

Hyundai

HiBallast

South Korea

Filtration and Electrolysis

10,000

Approved

26 October 2018

Headway Technology

OceanGuard

China

Filtration and Electrolysis

5,200

Approved

06 November 2018

JFE Engineering Corp

BallastAce

Japan

Filtration and chemical dosing

500

3,500

Approved

13 November 2018

Panasia

GloEn-Patrol

South Korea

Filtration and UV

6,000

Approved

14 December 2018

De Nora

Balpure

USA

Filtration and Electrolysis

400

7,500

Approved

19 December 2018

Envirocleanse

inTank

USA

Filtration and chemical injection

200,000

Approved

01 February 2019

Desmi Ocean Guard

CompactClean

Denmark

Filtration and UV

135

1,500

Approved

17 April 2019

Cathelco

Evolution

Filtration and UV

1,500

Pending

NK BMS

NK-O3 BlueBallast II

South Korea

Ozone (BWTT says chemical)

200

8,000

Pending

NK BMS

NK-O3 BlueBallast II Plus

South Korea

Ozone (BWTT says chemical)

200

8,000

Pending

Miura

HK-S€

Japan

Filtration & UV

200

900

Pending

Alfa Laval

PureBallast 4

Sweden

Filtration and UV

150

3,000

Pending

Optimarin

OBS / OBS ex

Norway

Filtration and UV

167

3,000

Pending

Semb-Eco Pte

LUV U1

Singapore

Filtration and UK

500

Pending

Techcross

ECS-Hychlor

South Korea

indirect electrolysis

150

12,000

Pending

Wärtsilä Marine Solutions

Aquarius EC

Finland

Filtration and Electrolysis

250

4,000

Pending

Wärtsilä Marine Solutions

Aquarius UV

Finland

Filtration and UV

1,000

Pending

Source: US Coast Guard Marine Safety Center, April 2019

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LNG World Shipping | May/June 2019

46 | BALLAST WATER TREATMENT SYSTEMS

and sourcing the engineering. Otherwise millions of dollars of income could be lost through time wasted fitting a compromised system.

UV-based BWTS was specified by Nakilat, the Qatari shipping and maritime company with the world’s largest LNG fleet. Two of Alfa Laval’s PureBallast 3.1 systems of 2,000 m3/h will be retrofitted. PureBallast 3.1 was selected, stated Alfa Laval head of PureBallast Anders Lindmark, for its small footprint, simple installation and ease of use.

USCG approval is key

A key concern for any choice of BWTS on a large LNGC is the potential to trade into US waters. Few predicted the rate at which US LNG exports would grow; at an output of 8.9Bn ft3 by the end of 2019, up from a predicted 4.9Bn ft3 in 2018 (according to the US Energy Information Administration), the export capacity of the US will soon be the third-largest in the world, behind only Australia and Qatar. As a consequence, four additional export terminals have received all necessary approvals from the Federal Regulatory Commission and the Department of Energy, amounting to a combined additional LNG export capacity of 7.6Bn ft3. Under current and future US LNG export scenarios, being able to de-ballast in US waters is a requirement, which means choosing a US Coast Guard (USCG) type-approved system. Similarly, the de-ballasting must be able to take place in a manner that does not interfere with the cargo loading procedure. US company, Ecochlor was one of the first companies to receive USCG typeapproval for its filtration and treatment with the ClO2 BWTS. Ecochlor’s newly appointed vice president of business development Andrew Marshall outlines the specific demands of the LNGCs when it came to ballast water treatment. “The challenges facing LNGCs are similar to those of any vessel with a high ballast pumping rate. Specifically, finding a ballast water management systems (BWMS) that has the ability to reliably meet those high rates over an extended ballasting period,” he says. “In some LNG vessel designs there are constraints on available space for the integration of piping and treatment units, but with proper planning and selection of the right BWMS, these issues can be overcome.” The design of a newbuilding would naturally take into consideration the

LNG World Shipping | May/June 2019

Innovative solutions

Andrew Marshall (Ecochlor): A ballast water treatment system needs to be able to consistently match the loading rate of an LNG carrier

space required for modern compliance equipment, from BWTS to exhaust gas scrubbers, but space can be a premium when retrofitting a BWTS. Mr Marshall notes that a modular system could have a smaller footprint. “A compact, modular system with minimal footprint provides several options for placement on the vessel,” he says. The Ecochlor system starts with precursor tanks that have a footprint of 12.7 m2 and treatment systems with a footprint from 0.3 m2 upward. The pumping rate is another factor when assessing a BWTS for a large LNGC: “The maximum flow rate capacity of an Ecochlor BWMS is up to 16,200 m3 per hour with an option for up to three ClO2 injection points,” says Mr Marshall. For a 150,000 m3 LNGC, Mr Marshall says only one BWMS system is needed for the entire vessel. Elsewhere, Erma First of Greece secured a fleet-wide agreement from Norway’s Golar LNG in December 2017 to supply its USCG type-approved BWTS Fit system. Erma First uses filtration, electrolysis and electrochlorination as its treatment method and the company said in a statement that its equipment would be installed “on up to 16 LNG vessels”, which potentially covers the whole Golar fleet. Alfa Laval’s USCG type-approved

Large vessels with high cargo loading rates, and therefore large volumes of ballast water being taken on-board, have another option: not to treat the ballast water as it enters the tanks. This is the approach offered by Coldharbour Marine and Environcleanse, among others. Environcleanse’s inTank model is an electrolysis and chemical injection BWTS. The Environcleanse treatment methodology is relatively simple: all port-based ballasting and de-ballasting activities are completed as normal. There is no filtration, no increase in power demand and no concern of ballast water quality. During the voyage, an electrochlorination cell uses clean seawater to create sodium hypochlorite. At the same time, ballast water is circulated and the newly-created disinfectant is injected into the circulation loop. The mixture is then returned to the ballast tank through the in-tank mixing nozzles which diffuse the biocide in the tank. The levels of biocide are monitored and confirm the lack of new growth during the voyage. It is not a requirement for BWTS to have USCG type-approval for global operation, but it has become a de facto standard by which many systems are judged. LNG World Shipping’s sister publication Ballast Water Treatment Technology maintains a database which contains 112 announced and/or fully developed BWTS. Of these, 17 have been type-approved by the USCG and a further 12 are under review pending type-approval. In some cases, BWTS have already been approved in original form, but variations, such as the fitment of a different filter system or a request to change the power setting of UV lamps, triggers another review. LNG

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48 | LNG TERMINAL OPERATIONS

Crew board the UTS platform to assist in hose and ship-shore link connection, but during transfer operations it is unmanned (image: ConnectLNG)

Flexible solutions increase the feasibility of small-scale LNG terminals The development of small- and midscale LNG terminals is supporting the growth of this increasingly popular fuel source

espite the rise of renewable energy sources, gas remains a solid backup option when there is not enough sunlight for solar or strong enough wind for turbines. But traditional terminal infrastructure for interfacing between ship and shore is illsuited to smaller-scale applications. Building fixed jetties requires tonnes of concrete and steel, with construction times and costs prone to exceeding estimates. The environmental impact of such work brings additional regulatory challenges to these projects. Anticipating the growing demand for small- and mid-scale projects in areas such as the Caribbean, Naturgy sought an alternative solution of help it meet the needs of these markets. Naturgy head of LNG projects

LNG World Shipping | May/June 2019

engineering & technology José Miguel Moreno Blanes, speaking at the LNG Ship/Shore Interface Conference Europe in London at the end of 2018, explained that the company eventually selected ConnectLNG’s DirectLink solution as the most viable option. DirectLink is a modular LNG transfer system that comprises a floating jetty, known as the Universal Transfer System (UTS), connected via floating, flexible pipes to modular onshore infrastructure. To connect with DirectLink, an LNG carrier moors at a multi-buoy mooring system and the UTS is placed alongside by a tug, with a floating umbilical transmitting signals and power to the platform from shore. The UTS’s vacuum attachment system is then used to secure a

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LNG TERMINAL OPERATIONS | 49

Its position at the entrance to the North Sea makes Dunkerque's LNG terminal wellsuited to meet Europe's growing demand for LNG bunkering”

BELOW: The Wilhelmshaven FSRU is targeted to enter operations in 2022 (image: Uniper)

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connection directly underneath the ship’s manifold. Using the ship’s crane, aerial hoses on the UTS are hooked up to the ship’s manifold and transfer can begin. Crew board the platform to assist with hose and ship-shore link connections, but during transfer operations the platform it is unmanned, as all systems can be remotely monitored and operated from shore. The timeframe for loading and discharge is roughly 10-20 hours. A fully redundant ballast system means the unit can follow the LNG carrier vertically during loading or discharge, and as the system is floating, tidal differences are essentially irrelevant. The current design can operate in maximum significant wave heights of 1.2 m, in currents of 7.4 m per second and winds of 14 m per second, according to Mr Blanes. The UTS is fitted with fire, smoke and gas detectors and CCTV cameras provide operators with a full overview of the platform during operations. If fire, smoke or gas leaks are detected, an emergency shutdown will be automatically triggered and the process flow stopped. The first UTS, La Santa Maria, was successfully trialled in October 2017. The trial involved La Santa Maria connecting to LNG carrier Coral Energy and transferring cargo to onshore facilities in Herøya, Norway. This was the first commercial LNG transfer to be carried out using floating cryogenic hoses and the first delivery of LNG to Herøya. ConnectLNG chief commercial officer Magnus Eikens noted that the permitting from Norwegian authorities for this operation took only three months, as compared to a fixed jetty project in the same area that took three years. Looking ahead, Mr Eikens noted a version of the UTS is being developed that will be able to handle full-scale offloading of large

LNG carriers with a typical required flow rate of 12,000 m3 per hour; ConnectLNG also anticipates a need for smaller units capable of operating in inland waterways.

Small-scale infrastructure

In Antwerp, LNG terminal operations are set to benefit from the construction of a new bunkering pontoon scheduled for completion by mid-2020. Titan LNG and Fluxys are co-operating on the project, with Titan LNG to be the longterm operator. Known as FlexFueler 002, the LNG bunkering pontoon will be based at Quay 526/528 in the port of Antwerp. Fluxys holds a concession for the provision of LNG bunkering services at the site and currently provides truckto-ship facilities. The pontoon will provide bunkering capacity for inland waterway vessels and small coasters throughout the port of Antwerp and the surrounding region. Titan LNG also developed the first pontoon of the type, Flexfueller 001, set to start service in Amsterdam in May 2019. The company’s chief executive Niels den Nijs said: “The use of LNG as a marine fuel is rapidly growing. We are convinced that the Titan LNG FlexFuelers are the missing link to safe, economical, and speedy LNG delivery in the ARA region. We feel strengthened by our Fluxys partnership and have identified ample opportunities to expand the cooperation in other geographies.” Fluxys chief executive officer Pascal de Buck added: “The pontoon is yet another link we are adding to the logistics chain in Belgium to make LNG more widely available as an alternative fuel for ships” Titan LNG is also involved in the development of downstream infrastructure at LNG terminals elsewhere and has signed a memorandum of understanding (MoU) with Uniper to develop small-scale downstream supply at Uniper’s planned FSRU at Wilhelmshaven, Germany’s only deepwater port. The terminal will enable loading of small LNG-fuelled seagoing vessels and barges and will also feature several truck loading bays to enable transport of LNG by road – a growing market in Germany, where the Federal Government subsidises logistics companies and provides toll-free use of roads for LNGfuelled trucks. Titan will work with Uniper on the development of the technical and

LNG World Shipping | May/June 2019

Maritime Cyber Risk Management Forum 25 June 2019, London

How prepared is the maritime industry for future cyber-attacks? Recognising and addressing the risk Cyber security will only get the organisational attention needed once attitudes align to acknowledge cyber threat as a business risk. Ship operators should be questioning how vulnerable their vessels are. The 4th Maritime Cyber Risk Management Forum provides answers and offers an unrivalled opportunity for key industry stakeholders to analyse the industry’s cyber security preparedness. Gain exclusive insights from an unparalleled line up of experts as they tackle the issues that matter to your business now and prepare you for what’s coming next: from cyber risk management regulations and compliance to how to prevent cyber-attacks from happening. Don’t miss this interactive programme for a chance to learn, collaborate and discuss the actions that need to be taken to counter cyber threats. Topics will include: • Understanding the magnitude of cyber risk • Identifying cyber security roles and responsibilities • Insurance cover for damage arising from a cyber incident • How to effectively get compliance right • Protecting your infrastructure from cyber crime • Staying one step ahead of cyber criminals • The threat to cyber security in ports • The importance of crew awareness to reduce cyber risk • How to test the cyber security of ships’ systems. Book your place online today at www.shipcybersecurity.com/book-now or for more information please contact Paul Dowling on +44 20 8370 7014 or at paul.dowling@rivieramm.com

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LNG TERMINAL OPERATIONS | 51

commercial interface for small-scale LNG at the Wilhelmshaven project. Japanese shipping company Mitsui O.S.K. Line (MOL) has signed an MoU with Uniper to develop the Wilhelmshaven FSRU; MOL will own, finance and operate the vessel. The facility is targeting the second half of 2022 to commence operations. It will have a natural gas sendout capacity of 10 billion cubic meters (bcm) per year and storage capacity of more than 263,000 m3. Wilhelmshaven is the only German site with a deepwater port and can be reached without tidal constraints. ExxonMobil Gas Marketing Europe has entered into a Heads of Agreement (HoA) with Uniper regarding a long-term booking of a substantial share of regasification capacity at the FSRU. The HoA was signed in January 2019, with a goal of entering into binding agreements “soon”. Uniper’s chief commercial officer Keith martin said: “The HoA is an important step towards the realisation of the Wilhelmshaven FSRU project. The FSRU will provide LNG companies from the US, but also other countries from around the world, with the opportunity to deliver LNG into the German and European market. This will increase security of supply for customers at competitive price levels.”

Cécile Grégoire-David (Dunkerque LNG): A dedicated small-scale jetty to accommodate vessels sized from 3,000 m3 is planned at the terminal

Dunkerque LNG expansion

Its position at the entrance to the North Sea makes Dunkerque's LNG terminal well-suited to meet Europe's growing demand for LNG bunkering, according to Dunkerque LNG director of business development Cécile Grégoire-David, speaking at the LNG Ship/ Shore Interface Conference in London in November last year. The bulk of LNG-powered vessels currently operating are Norwegian or European-flagged, and this trend is set to continue when vessels on order are added to the equation. Discussing ways in which the port intends to boost its bunkering capabilities, Ms GrégoireDavid explained a truck-loading bay is due to commence operations in the near future, while the development of the port's jetty will bolster the port's bunkering capabilities in response to anticipated demand. Currently capable of serving vessels between 65,000 m3 to Q-Max, the modified jetty will also be able to receive vessels sized between 5,000 m3-30,000 m3. The project will cost between €1.5M-2M (US$1.7M-2.3M) and will involve

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The Wilhelmshaven FSRU project will provide LNG companies from the US, but also other countries, with the opportunity to deliver LNG into the German and European market”

replacing the ancillary fenders and installing an additional gangway. A dedicated small-scale jetty to accommodate vessels sized from 3,000 m3 is also planned, said Ms Grégoire-David. Technical issues, such as whether to use hoses or piping and the viability of mobile or other lightweight structures, are currently being considered and it is hoped a firm investment decision for the dedicated jetty will be made by June 2019, explained Ms Grégoire-David. Dunkerque LNG has joined CMA CGM, Total and MOL in applying for funding from the European Union for the 'Green Loop' project, which the port works at Dunkerque will form a part of. Loading operations at the Dunkeque LNG facility have been considerably improved with the introduction of a rapid refuelling facility for tankers that significantly reduces stopover time. The maximum flow rate has been raised to 8,800 m3 per hour from 4,000 m3, halving the amount of time operations will take. Dunkerque LNG general manager Juan Vazquez said: “It is extremely costly to transport LNG from the production site to the point of consumption. Reloading a tanker faster means less down time for the ship and, therefore, major savings for our customers. With a flow-rate of 4,000 m3 per hour, it took 40 hours to reload a tanker. Now, at 8,800 m3 per hour, it only takes 20 hours.” Large-scale renovation work was required for the new service, with eight pumps replaced on Tank 1 and Tank 2. An additional compressor was also required, as the increased refuelling speed also raises the amount of gas vapour that must be recovered and treated before being sent into the gas transmission network. 2018 saw Fluxys acquire part of EDF and Total’s stakes in the Dunkerque terminal to become the majority shareholder. Fluxys’ managing director and chief executive Pascal De Buck explained the strategic rationale behind the acquisition, noting that the terminal is “a key asset” for the security of France and Northwest Europe’s gas supply, and that it could be a potential LNG gateway to Germany. Mr De Buck also saw potential for expanding the terminal’s small-scale offerings: “We fully back the Dunkerque terminal’s efforts to develop its services to load LNG onto trailers and ships, to accommodate the innovative logistic chain for supplying LNG to industry and LNG-fuelled ships and trucks.” LNG

LNG World Shipping | May/June 2019

52 | VIEWPOINT

After 40 years, safety is still the primary mission

I Andrew Clifton (SIGTTO): “Common issues of safety and reliability exist throughout the liquefied gas marine transportation sector”

It was quickly recognised that any such association would be the more valuable if it encompassed all forms of liquefied gas carrier and terminal operations”

n September SIGTTO will celebrate its 40th anniversary. The society has come a long way since its formation in 1979, but many of the topics it initially considered remain pertinent issues today Back in the late 1970s there was strong interest in establishing an international association where LNG carrier operators could share their experiences and assist each other with issues of safety and reliability and in the maintenance of high operational standards. A series of meetings was convened through December 1978 to March 1979 to explore the formation of such an association. The first meeting took place at the Princess hotel in Hamilton, Bermuda on the 11 and 12 December 1978. The meeting had been called at the request of El Paso LNG company upon suggestions made by Compagnie Nationale Algerienne de Navigation (CNAN) and others that such an organisation could prove valuable. At this time the intention was to call the new society ‘SIMTO’, the Society for International Methane Tanker Operators. While initial interest was centred around LNG carrier operations, it was quickly recognised that any such association would be the more valuable if it encompassed all forms of liquefied gas carrier operation (LPG and chemical gases as well as LNG) and if it also included the operation of the terminals loading or receiving these cargoes. In recognising this, it was realised that there were common issues of safety and reliability throughout the liquefied gas marine transportation sector and that there would be great value in providing a channel of direct liaison between ship and terminal operators to develop and maintain appropriate safety standards. In these formative discussions, the participants were supported by senior executives of ICS and OCIMF, both of whose bodies already included consideration of the liquefied gas industry within their activities and both of which already had consultative status with IMCO (now IMO). As a result of these formative meetings,

LNG World Shipping | May/June 2019

the Society of International Gas Tankers and Terminal Operators Ltd came into existence as a Bermuda-exempted company with limited liability and with availability of membership and shareholding in the company to those owning or operating a liquefied gas carrier or a liquefied gas marine terminal. The first board meeting was held in Bermuda on the 5 October 1979. The founding members were: • EL Paso LNG Company • Energy Transportation Corporation • Malaysian International Shipping Corp • BP Tanker company Ltd • Moore, McCormack Bulk Transport Ltd • P&O Bulk Shipping Ltd • Gotaas-Larsen Inc • Marine Transport Lines • Shell Tankers Ltd • Exxon A further board meeting with more members present was held in Houston on the 12 November 1979. At this board meeting, Maurice Holdsworth was appointed as the first general manager and Barry Hunsaker of El Paso Natural Gas was appointed founding president. Among the first technical issues the society dealt with were: • Contingency planning • Ship/shore linked emergency shut down • Safe havens • Cargo Strainers • Training When the society was formed there were 52 LNG vessels in service. Now, there are 10 times that amount in operation and another 100 vessels on order. This year, the society, which was formally established in October 1979, will commemorate its 40th anniversary with a special publication. The 100-page issue will focus on the development of SIGTTO and the gas shipping and terminal industry over the past four decades. LNG Andrew Clifton is general manager of the Society of International Gas Tanker and Terminal Operators (SIGTTO).

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