A huge rise in demand for ethane is driving vessel size increases and prompting innovative cargo arrangements, says ABS director for global gas development Aditya Aggarwal
Until four years ago the largest vessels capable of carrying ethane offered cargo capacities of 22,100 m³. Following recent deliveries, this size has more than quadrupled, and present projects look set to double unit capacities once again.
This evolution in technology promotes the use of boil-off cargo in a dual-fuel engine arrangement and as ethane vessels become larger, they begin to offer greater cargo flexibility, with owners now able to specify a degree of readiness for future conversion to LNG.
A flurry of activity from shipowners, yards and class societies is being driven by the prospect of cheap ethane from US shale deposits, as energy companies position themselves to benefit from an expansion of the ethane trade in key manufacturing centres across Asia and South America.
In many respects, it was the success of Reliance Industries’ pioneering use of Very Large Ethane Carriers (VLECs) to transport US ethane exports to India that transformed the gas sector and made clear the potential to further expand the market by exporting US ethane to new crackers in China.
Ethane Crystal was the first of its kind in a series of six VLECs built for Reliance Industries by Samsung Heavy Industries (SHI). Capable of carrying ethane and liquefied petroleum gas (LPG), Ethane Crystal has a GTT Mark III membrane cargo containment system (CCS), which integrates a cryogenic liner covering the inner hull. The liner includes a primary metallic membrane made of corrugated stainless steel, a secondary membrane made of Triplex, and a load-bearing system made of prefabricated insulation panels.
Global exports of ethane have risen from zero to 8M tonnes annually in the past six years. With a number of US projects expected to come online in the next couple of years, export capacity could double relatively quickly. In all, there are as many as 40 prospective VLECs in the newbuilding pipeline, provided the bilateral trade agreements and subsequent import licencing underpinning their construction are approved. Most will transport US ethane to new processing plants in China.
In a recent major project, the American Ethane Company (AEC), shipowner China Merchants Group and ABS are collaborating to develop the ‘next generation’ fleet of Ultra-Large Ethane Carriers (ULEC).
AEC’s plans for a dedicated ethane carrier fleet could comprise up to 17 ships to be built at shipyards in China, with the project partners hoping to have the first unit delivered in 2021.
Designed to carry about 150,000m3 of ethane using GTT’s Mark III membrane tank containment system, the ships will expand the unit capacity of existing ships of this type by more than 70%, with the goal of building a fleet capable of delivering 7.2M tons of ethane a year.
In addition to its core class activities, ABS has been supporting AEC to understand the market, technical and regulatory requirements of building and operating the VLECs, which will also use ethane for dual-fuel propulsion.
The GTT Mark III cargo containment system – which allows a ship to maintain a relatively shallow draft while maximising cargo capacity within the vessel’s dimensions – is the same as that previously selected for a fleet of 87,000-m3 VLECs built in South Korea for Reliance Industries.
The class of choice for the VLEC newbuild market, with six more 98,000 m³ VLECs currently on order to ABS class in Korea, ABS has been busy supporting the pioneering work of yards looking to tap into the ethane carrier sector.
The organisation announced in November approval in principle (AIP) of a new VLEC design from China’s Jiangnan Shipyard Group. The 99,000-m3 ‘Bluebonnet’ design ethane carrier will offer the shipyard’s ‘BrilliancE’ Type-B cargo containment system, which ABS previously approved to the requirements of the US Coast Guard.
Like many of the VLEC and ULEC blueprints currently on industry drawing boards, the Jiangnan ship is designed to be more environmentally friendly than its predecessors that were built as little as five years ago. It is dual-fuelled, designed to use a quantity of the cargo for propulsion.
The AEC ships will be powered by a single MAN slow-speed diesel engine with high pressure gas-injection, in its ethane-capable ME-GIE version with propulsive power close to 20,000 kW. The ships will also feature four auxiliary engines and a selective catalyst-reduction system for compliance with NOx Tier III emission limits.
AEC expects the boil-off during regular operations to consume about 2.5% of the ships’ cargo on a roundtrip between the US Gulf Coast and eastern China.
The development of fleets by AEC and others marks the quickening of the ethane revolution, which promises an exciting era of innovation and technology development for these ships.
Until recently, ships used to carry ethane were smaller 20,000 to 30,000-m3 carriers, built to haul LPG and petrochemicals. The VLECs ordered by Reliance Industries in 2014 were also designed to carry LPG, in case of interruptions to the ethane trade.
For VLECs built with cargo capacities of up to about 100,000 m³, cargo-flexibility is relatively easily provided by enabling them to carry LPG. Significantly larger vessels, however, will prove too big to trade to conventional LPG terminals. However, this is not the case with most modern LNG terminals, which have been designed to accommodate ships of at least 174,000 to 180,000 m3.
Designing and building ships with the potential to carry ethane and LNG will greatly reduce financial risks for shipowners and give charterers more flexibility to sign long-term contracts. It is also likely to lower the financial risks for lenders and financing costs for owners.
To support the greater interoperability of VLECs, ABS became the first classification society to officially offer an ‘LNG Cargo Ready’ notation for ethane carriers.
The notation confirms that an ethane carrier is capable of future modification to trade with LNG as cargo, identifying potential barriers and assessing the capability of equipment and systems to carry LNG.
The ABS notation will offer prospective VLEC/ULEC owners a cost-effective way to include only the LNG-capable equipment and systems that are necessary, precluding the need to spend tens of millions of dollars during the newbuild stage in order to hedge future market risks.
With the additional investment in the tanks during construction, any retrofits would largely be focused on vendor-supplied components such as pipes, compressors, and pumps. The LNG Cargo Ready notation also has the potential to lower the risk associated with the initial investment by providing operational flexibility.
From the ABS perspective, there will be a host of opportunities to provide independent technical support, as a substantially expanded ethane trade accelerates the construction and maturity of supporting transport infrastructure. For the era of ethane, this is just the beginning.