Speakers at LNG Ship/Shore Interface, Europe discussed the design and operation of LNG terminals and the challenges posed by the growing market
Conference panelist Eagle LNG commercial development manager Matthew Fisher considered the competitiveness of small-scale LNG.
Eagle LNG focuses operations in two key markets: remote power generation and LNG as a marine fuel, supplying vessel manager Crowley Maritime in Jacksonville, Florida with LNG fuel. The company ships LNG in ISO containers to Puerto Rico for Crowley Maritime. Product is moved from Eagle’s small-scale Maxville facility to the port where the company bunkers the Crowley vessels weekly via the Talleyrand bunkering terminal.
Mr Fisher said the smaller terminal helps the company ease regulatory burdens. The facility is not covered under the jurisdiction of the US Federal Energy Regulatory Commission (FERC) jurisdiction as the Talleyrand terminal is not connected to a pipeline despite its location on the water.
The company is now building a medium-sized facility to be used for exports to the Caribbean power market. The new facility, however, does fall under FERC jurisdiction. Eagle LNG has now received a final environmental impact statement from FERC for the new facility.
“This is the same process you would experience on Sabine Pass (the US’ largest LNG terminal),” said Mr Fisher. “Even though our facility is only 1 million tonnes per annum (mta), it still had to go through the same permitting process as a 20 mta facility would have to go through. The size has less of an impact than the regulatory jurisdiction.”
US LNG suppliers also have to consider the US Coast Guard which monitors the waterway suitability of moving product. The US department of transport’s Pipeline and Hazardous Materials Safety Administration agency regulates facilities associated with pipelines, but Mr Fisher believes it “does not have the same scrutiny or environmental oversight” as FERC.
Further, in 2018, a ruling from the Department of Energy authorises a natural gas provider that provides a satisfactory environmental impact statement or an environmental assessment to export product to both FTA and non-FTA countries if they are under 1 mta.
With regard to logistics, companies can opt for a breakbulk model that breaks down conventional product for use in smaller markets or a direct shipment model, like Eagle LNG, using liquefaction trains. Mr Fisher said proximity to demand areas is “critical” for small-scale providers. “You need to increase the frequency of deliveries, frequency of utilisation. The higher the utilisation of those assets, the lower the price of those costs will be.”
Mr Fisher believes the growth of small-scale LNG is being driven by bunkering and commitments from operators of large vessels. With more LNG bunker vessels, which can also serve as shuttle tankers, being built, previously inaccessible regions can now be served and the improved infrastructure can begin to serve spot markets.
Representing Indian LNG operator Petronet LNG, Captain Nilendra Kumar, the company’s chief manager for port operations, stressed the importance of long-term planning and adding infrastructure to add value, and said issues such as wind caused by land reclamation works and tide swell are best considered at the stage of building a terminal rather than when expanding a terminal.
Kochi terminal was commissioned in 2013 with a regasification unit. The terminal now offers gassing up services, cooling down and heel loading for LNG ships and hopes to have barges supplying LNG for bunkering at anchorage.
Indian LNG is set to grow, with the country aiming to boost the share of gas in its energy mix to 15% by 2030 up from 6% per 2018 levels. “Every year we add a terminal or a pipeline. You will see continued growth over the next decade and a half” said Captain Kumar.
Regarding standards for vessel mooring at jetties, ABS director for FSRU and FLNG, Tor-Ivar Guttulsrød said, “For the jetty itself, it will be always be the local standard that guides it. For FSRUs, typically most of them are ships. So they are transient moorings being used for medium-longer duration. Class is involved with this but it comes back to interfaces. There are ISO standards coming out. How it is classed depends on if it is a ship or a permanent terminal. Then there are local building standards for the jetty. Like all projects you need to keep good control of your interfaces because that’s where most challenges lie.”
Mr Fisher said LNG’s biggest challenge in 2021 will be a number of pending final investment decisions and hopes to see more LNG-powered vessels in the near future. Despite the uncertainty over energy demands in the coming years, Mr Guttlsrød said he hoped there would be a switch to gas and more clarity on regulation of the energy transition.