FSRU maintenance, inspection and survey cycles must be considered when planning an onshore power project, says ABS Europe, global gas solutions director of FSRU and FLNG Tor-Ivar Guttulsrød
Floating storage and regasification units (FSRUs) have been instrumental in opening new markets to LNG, but careful planning regarding vessel maintenance, inspection and safety has to be taken in the development of any project.
During an interview with Riviera’s executive editor Edwin Lampert at the LNG Ship/Shore Interface, Europe conference, Tor-Ivar Guttulsrød, director of FSRU and FLNG, global gas solutions, ABS Europe, noted that most FSRUs are connected to onshore power plant projects, sending gas to power plants to generate electricity.
While this might seem straightforward, Mr Guttulsrød cautioned that there are a number of factors that should be considered when planning a power project which depends on a steady supply of gas from a floating asset.
Considerations such as planned maintenance, class inspections and safety checks on the vessel must be taken into the account. “You need to allocate the proper amount of spare capacity, so you can take parts of the plants down for maintenance when other parts are still running,” he said. Maintenance can be conducted during lesser times of energy demand, he suggested. “Can you perform your five-year inspection underwater, instead of taking the unit to drydock and how do you manage that?” asked Mr Guttulsrød.
These issues are representative of the concerns power plant managers “don’t think about down the road” as they are not used to working with floating assets, he said. Mr Guttulsrød cautioned that upstream operators, shipowners and regas companies must ensure that “you are talking the same language” to the power plant management as it can be a “different culture”. He added: “You need to try to make sure these (discussions) are aligned.”
“Maintenance can be conducted during lesser times of energy demand”
Careful advanced planning and risk analysis will avoid potential headaches, ensuring that the end users of the electricity have energy reliability.
Mr Guttulsrød believes LNG has an important role to play in the clean energy transition. “With the ‘blue skies’ policy in China, we have already seen a lot of coal switching to natural gas, with pipeline gas, LNG and renewables being used to combat air pollution and reduce greenhouse gas (GHG) emissions and improve air quality,” he said.
Competing regional and international regulatory policies could pose a significant challenge to shipping, he said, noting recent developments in the EU. The European Parliament has approved draft legislation to include shipping emissions in the EU Emissions Trading System (ETS) – a ‘cap and trade’ scheme that applies to GHG and CO2 emissions – starting 1 January 2022. The ETS would cap overall GHG emissions of all participants in the system. Shipping companies would be lumped in with power plants, industry and airlines which would compete for a set number of ‘allowances’. These allowances permit the participants to emit GHG emissions equivalent to the global warming potential of 1 tonne of CO2 equivalent (CO2e). The cap determines the number of available allowances, which can be traded by participants in the ETS. Participants that do not use all of their emissions allowances can trade them to others. Those participants that exceed their allowances can be hit with heavy fines, set at €100 (US$121) per kg of excess CO2e emitted.
Mr Guttulsrød said some regions with high shipping traffic and high population densities could see tighter GHG emissions regulations.
Uncertainty over regulations and commercial changes to the market are the biggest challenges to investment decisions being made in LNG shipping, he said. “It’s not so many years ago that the standard for LNG shipping was a 20-year contract, Now, you have to live with more flexible terms and more uncertainty in the market,” he concluded.