A new crop of small-scale LNG terminals will grow LNG as a bunker, heavy truck and power generation fuel in the country
Already an import link in Italy’s natural gas supply chain, the OLT Offshore LNG Toscana receiving terminal will expand its versatility by converting its floating storage and regasification unit (FSRU) to load small-scale (ssLNG) carriers.
Permanently moored 22 km off of Italy’s coast between Pisa and Livorno, FSRU Toscana is used as a receiving terminal for large LNG carriers, storing and regasifying LNG into the country’s national gas grid via a subsea pipeline. Following authorisation by Italy’s Ministry of the Economic Development in October 2020, OLT can now provide a new LNG reloading service for ssLNG carriers which will underpin wider distribution of LNG for bunkering, power generation and heavy truck refuelling.
Following the introduction of the ssLNG service within the OLT Regasification Code, OLT Offshore LNG Toscana gathered feedback from stakeholders through an expression of interest. In their responses, stakeholders outlined their proposals regarding their interest in annual capacity, expressed in the number of ssLNG carriers they expect to book, their small-scale service tariff expectations, and detailed the ssLNG carriers they expected to use.
OLT plans to start offering the ssLNG service 1 January 2022.
Before that can happen, however, the terminal will need to undergo modifications. These will cover the mooring system to allow the safe approach of smaller LNG carriers on the port side and changes to the existing LNG transfer systems. Based on a feasibility study, the ssLNG carriers must have a length between 90 and 120 m. Maximum loading capacity will be about 900 m3/hr. These modifications are expected to be conducted without interrupting LNG loading operations at the terminal.
OLT will be the first regasification terminal in Italy to provide the discharge of LNG into ssLNG carriers.
Growing ssLNG sector
The ssLNG market has developed due to the European Community’s efforts to promote the availability of lower carbon-intensive fuels in the transport sector to support the clean-energy transition. The European Green Deal has further strengthened this path, setting the rules for an energy transition in all sectors – industrial, civil and transport – which will have to achieve total greenhouse gas (GHG) emissions neutrality by 2050. LNG is seen as an essential fuel in that clean energy transition.
LNG will allow the transition to carbon-neutral fuels, such as hydrogen by 2050, says OLT Offshore LNG Toscana. In Europe, LNG propulsion has been rapidly growing in roros, passenger ferries, tugs, dredgers and cruise ships – with 12 new orders and two vessels already operating in the North Sea and the Mediterranean.
“We are ready to make our contribution to promote the use of LNG, which plays a key role in the energy transition process”
The fleet of LNG bunkering vessels is growing, too, with 31 in operation and 20 under construction, according to DNV.
Moreover, LNG is playing a central role in heavy road transport. In Italy, for example, the number of LNG distributors for vehicle use had grown from six in 2016 to 94 by the end of 2020.
The OLT Offshore LNG Toscana regasification terminal is seen as a key component in underpinning the ssLNG market, serving as an LNG hub in the Mediterranean. This is particularly relevant if a Sulphur Emissions Control Area (SECA), similar to those in the North Sea and Baltic Sea, is established in the Mediterranean.
Further south on the island of Sardinia, a new ssLNG import, storage and distribution terminal is being developed by Avenir LNG and local Italian partners Gas & Heat and CPL Concordia.
Being built at the port of Oristano, the Higas terminal will have a jetty capable of receiving LNG vessels up to 20,000 m3, an unloading arm, six horizontal cryogenic holding tanks (1,500 m3 each), two LNG truck loading bays, and a natural gas captive power generation system. When it opens in H1 2021, the terminal will be able to load in excess of 8,000 LNG trucks each year (some 180,000 tonnes), for subsequent distribution to smaller satellite stations across the island.
Sardinia currently lacks a system of access to natural gas and only a small number of industrial customers receive LNG by truck, which is brought to the island by ferry.
Developer Avenir LNG is backed by some LNG industry heavyweights – Stolt Nieslen, with a 45% stake, Höegh LNG and Golar LNG, each with 22.5% interest and NOTC, 10%. In turn, Avenir LNG holds 80% of the equity in the terminal, with the remaining 20% stake split equally between Gas & Heat and CPL Concordia.
In March, Higas awarded a contract to Spain’s Reganosa to operate and maintain the terminal.
Green light for Venice terminal
In January, Italian regulators gave the green light to start the construction and operation of an LNG import terminal in Porto Marghera in Venice.
Venice LNG, a subsidiary of the Decal Spa Group, reported it received authorisation from the Italian Ministry of Economic Development in agreement with the Ministry of Infrastructures and Transport.
With a storage capacity of 32,000 m3, the Venice LNG import terminal will be a brownfield development in the South Industrial Canal of Porto Marghera.
Venice LNG called the regulatory green light a “step forward in the fuel infrastructure for road and marine transport.”
Financing for the project comes from a private investment of over €100M (US$121M) by Decal Spa Group, with an additional €18.5M (US$22.3M) through the North Adriatic Sea Port Authority and co-financed by the European Commission under the Connecting Europe Facility (CEF) initiative through the “Gainn4SEA” and “Venice LNG Facility” projects.
LNG will be transported to the Venice LNG import terminal via small- and medium-sized LNG carriers, with a maximum capacity of 30,000 m3, and will be distributed on tank trucks, ISO-tanks and LNG bunker barges. Venice LNG anticipates no more than 50 LNG carriers – about one per week – calling at the facility.
Venice LNG president and chief executive Gian Luigi Triboldi noted the project went through a long technical-administrative path, involving many national and local authorities and stakeholders. “Now, we are ready to make our contribution to promote the use of LNG, which plays a key role in the energy transition process,” said Mr Triboldi.
Venice LNG expects to handle 150,000 m3 of LNG per year in its first phase, with a maximum output of 900,000 m3. Construction is expected to take two years.
About 150 km south of Venice, a new small-scale LNG facility is being constructed by Depositi Italiani GNL, 51% owned by Pir and 49% by Edison SpA, at the port of Ravenna; it will support the distribution of LNG for heavy vehicle and vessel refuelling.
With expected commissioning in Q4 2021, the facility will have two 10,000-m3 storage tanks and the ability to load LNG onto LNG bunkering barges and tanker trucks. Initial estimates are that 520,000 m3 of LNG would be distributed, 496,000 m3 of which would be by tanker truck and 24,000 m3 by barge.