The current year was always going to be an upbeat period for the LNG industry, what with exports from recently commissioned liquefaction trains continuing to ramp up and new projects scheduled to come onstream.
However the pace of new developments – the tabling of potential export plants, LNG carrier construction, the emergence of new markets and more receiving terminal projects, the tightening of the marine environment protection regulatory regime, and the use of LNG as marine fuel – has caught even the optimists by surprise.
As of 1 May, 23 LNG carriers had been completed in the year to date and 18 new LNG carriers had been ordered. All the newly contracted ships were conventional-size LNG carriers in the 174,000 to 180,000 m3 range, with the exception of an LNG bunker vessel (LNGBV), at 18,600 m3, the largest such vessel ever ordered.
All the conventional-size LNG carriers ordered so far this year will be powered by dual-fuel, two-stroke engines. High-pressure ME-GI engines and low-pressure X-DF units are roughly equal in popularity as a propulsion system for the newbuildings.
This issue features LNG World Shipping’s annual review of ships using LNG as fuel. Among other things, it highlights that the world fleet of in-service and on-order LNG-powered ships has increased by 26.5% over the past 12 months, reaching 253 vessels. The 132 ships on order represent a 36% jump in the size of the orderbook.
So far this year, the Cove Point terminal on the US East Coast, with capacity to produce 5.5 million tonnes per annum (mta) of LNG, has entered service, while three further export projects – the 8.9 mta Ichthys, the 1.2 mta Cameroon LNG and the 3.7 mta Prelude facilities – have recently received cooldown cargoes. These shipments signal that the start of commercial operations is imminent.
Cameroon LNG and Prelude are set to follow the pioneering Malaysian PFLNG Satu venture, becoming the second and third floating LNG production (FLNG) vessel projects to come to fruition. Floating production vessels have also been ordered for the 3.4 mta Coral FLNG and 1.5 mta PFLNG2 projects, both at Samsung Heavy Industries; these schemes are set to start in 2020 and 2021, respectively.
Final investment decisions (FIDs) could well be forthcoming for three more FLNG projects in 2018. These are the 2.2 mta Fortuna FLNG scheme planned for offshore Equatorial Guinea; the first of four 3.7 mta FLNG vessels proposed by Delfin LNG for the US Gulf; and the Greater Tortue project which calls for the development of an offshore field that straddles the territorial waters of Senegal and Mauritania.
Another FID possible for 2018 is by Shell and partners for the LNG Canada initiative in the Canadian province of British Columbia. Most of the LNG export projects planned for Canada’s west coast have fallen by the wayside in recent years, but following its takeover of the BG Group, Shell now intends to consolidate the separate projects that the two companies were developing.
In 2017 Petronas abandoned its own Pacific NorthWest scheme, scheduled for the same province; it is now rumoured to be a potential additional LNG Canada partner. Its presence would increase the already-strong likelihood of a FID this year.
On the gas buyer side, Bangladesh is poised to become the world’s 41st LNG import nation. Gas processed by the 138,000 m3 floating storage and regasification unit (FSRU) Excellence, moored off Moheshkhali Island, was expected to reach Chittagong via connecting pipeline by late May 2018. Summit LNG, a second FSRU-based Bangladeshi import project, is scheduled to start operations later in the year.
In neighbouring India, two new import terminals are set to boost the country’s portfolio of such facilities to six. H-Energy has positioned the 145,000 m3 FSRU GDF Suez Cape Ann at Jaigarh in preparation for the start of operations later this year, while India Oil Corp plans to bring its 5 mta Ennore shore-based facility in Kamarajar port onstream this October.
As you can see, it has been a busy year so far, and we are only a third of the way into it.