Europe’s northern LNG import terminals have moved beyond their original regasification duties to offer a broad range of supply chain services
What European LNG terminals lack in volume throughputs, they more than make up for in cargo-handling sophistication. As befits a region that gave birth to small-scale LNG and LNG bunkering, the terminals of northwest Europe are an integral part of an extended supply chain that reaches an ever-widening band of customers seeking coastal distribution and LNG-fuelling services.
The LNG receiving terminals dotted along Europe’s Atlantic coastline were originally conceived as regasification facilities, built to process the large parcels of cargo shipped from world-scale liquefaction plants. However, European LNG imports have always faced notable competition, in the form of domestic gas production and voluminous pipeline supplies from Algeria, Norway and Russia.
While output from some local sources, such as the UK North Sea and the Groningen field in the Netherlands, has gone into decline in recent years, Europe’s demand for gas is stagnating and competitively priced pipeline supplies are plentiful. With the power-hungry, gas-deficit economies of north Asia willing to pay a premium for available supplies of LNG, it is no wonder that Europe is known as “the LNG market of last resort”.
But, while LNG may not be required in Europe in large volumes as yet, it is sought after by a growing number of small-scale users, including residential and industrial customers not connected to national gas grids and operators of LNG-powered ships and heavy-duty vehicles. European clean air legislation, among the world’s most stringent, and the establishment of the North and Baltic Sea emission control areas by the maritime community underpin the spreading demand for LNG.
The region’s escalating small-scale LNG requirements are ensuring new roles for its import terminals. The majority have now been provided with the ability to reload cargoes for international customers willing to pay a better price and to load LNG road tankers and ISO tank containers at dedicated bays for onward distribution.
More recently, the ability to load LNG bunker vessels and provide cooldown services have become attractive options. And now, with the start-up of the Yamal project in the Russian Arctic, several European terminals have begun to carry out direct cargo transhipments across their jetties, from Yamal’s fleet of icebreaking LNG carriers to conventional ships for onward carriage to the final customer.
These new roles have placed the region’s receiving terminals as the central nodes of an increasingly complex matrix of European LNG activities.
Calculated after reloads, an aggregate total of 45.98M tonnes of LNG was discharged at the terminals of Europe’s 14 import nations in 2017, a 19.5% year-on-year jump. Despite the growth in European net imports in 2017, the region’s share of the global market has fallen by almost 50% since 2010, to 15.9%.
European growth last year was concentrated in the southern part of the region, in countries like Portugal, Spain, France, Italy, Greece and Turkey, where a combination of low hydropower, hot summer weather and low nuclear production in France pushed up imports by an aggregate 9.1M tonnes. In contrast, net imports by the northwest European countries of the UK, Belgium and the Netherlands declined by a combined 2.1M tonnes.
Low country small-scale focus
While the overall volumes handled by the LNG terminals of northwest Europe may have slumped, upgrade work at the facilities continues apace. Fluxys LNG, for example, is building a fifth storage tank at its Zeebrugge terminal. Scheduled for commissioning in mid-2019, the 180,000 m3 unit will support the transhipment of cargoes from Russia’s Yamal LNG project.
Engie, NYK, Mitsubishi and Fluxys jointly operate Engie Zeebrugge, a 5,000 m3 LNGBV based at the Zeebrugge terminal. Since loading LNG for the first time at the facility in April 2017, the vessel has been supplying LNG at the Belgian port by ship-to-ship (STS) transfers, including to UECC’s pure car and truck carriers.
Fluxys has also decided to construct a second road tanker loading station at its Zeebrugge terminal. Due to enter service mid-2018, the new facility will boost the road tanker/ISO tank loading capacity from 4,000 to 8,000 units per year.
In Rotterdam the Gate terminal opened its breakbulk centre in 2016, complete with a small-scale jetty for loading LNGBVs and coastal distribution tankers, road tanker loading bays, with Shell as the foundation customer. The volume of LNG bunkered in Rotterdam in 2017 rose to 1,500 tonnes, from 100 tonnes a year earlier, while Gate’s loading bays handled an average of 12 road tankers a day in 2017.
Shell’s new 6,500 m3 LNGBV Cardissa already calls the Gate breakbulk terminal home and the energy major is in the process of adding two additional LNG fuelling vessels to its northwest Europe fleet. Agreement has been reached with shipowner Anthony Veder for the conversion of the 7,500 m3 LNG coastal distribution tanker Coral Methane into a dedicated LNGBV.
Shell has also finalised a deal under which it will take on long-term charter a 3,000 m3 LNG bunker barge being built for a joint venture between Victrol and CFT. To be based in Rotterdam, the latter vessel will be used to bunker gas-powered inland waterway vessels visiting the port.
The bunker vessel fleet will support Shell’s blossoming portfolio of LNG bunkering clients in northern Europe. Among the company’s latest batch of customers is Sovcomflot, which has ordered a series of what will be the world’s first LNG-fuelled Aframax crude oil tankers, and Carnival Corp, two of whose gas-powered cruise liner newbuildings will sail in northern European and Mediterranean waters on completion.
Rotterdam is also set to fuel the largest gas-powered ships ever built. CMA CGM is constructing a fleet of dual-fuel 22,000 TEU container ships, the first of which is set for delivery in January 2020. Each will be propelled by the largest dual-fuel engine ever built.
The fleet will be serviced by an 18,600 m3 LNGBV that Total and Mitsui OSK Llnes have ordered in China. Three times larger than any LNG fueller yet built, the vessel will be based in Rotterdam.
The LNG bunker tank on each CMA CGM box ship, which is the same capacity as that of the Total/MOL LNGBV, will provide enough fuel for a Europe/Asia roundtrip voyage.
Going with the Grain
Across the North Sea in the UK, Grain LNG, which has storage space for 1M m3 of LNG, is seeking to provide a unique loading arrangement for coastal LNGCs and LNGBVs of up to 20,0000 m3 by Q3 2019. The solution would use a floating loading unit that takes on LNG from the marine loading arms on Grain’s existing berths and then transfers the product to the loading vessel utilising its own, smaller-scale cargo transhipment equipment.
In December 2017 Skangas concluded a letter of intent with Grain LNG covering the reloading and bunkering of small vessels.
Dunkirk LNG has increased the net volume of storage capacity at its terminal, from 570,000 to 600,000 m3, and investments continue to be made to boost cargo-handling capabilities at this French Channel port facility which commenced commercial operations in January 2017. The cargo reloading rate is currently being boosted to 8,800 m3/hour and a truck loading bay is being built. Both capabilities will be in place by the end of this year.
One of the customers of the truck loading bay will be Brittany Ferries and Honfleur, the cruise ferry it is building. In a fuelling partnership with Total, Dunkirk LNG and Groupe Charles André, Brittany Ferries will receive ISO tank containers loaded with LNG in Dunkirk at Ouistreham, Honfleur’s home port. The laden ISO tanks will travel with the dual-fuel ship for a single voyage, feeding into the main bunker tank, and then be replaced by a new set of filled tanks for the next trip.
In July 2017 Dunkirk LNG and the local port authority signed an agreement to provide an STS LNG bunkering service at the terminal.
Elengy has improved the facilities available at its Montoir LNG terminal at Nantes-St Nazaire by renovating its two berths installing boil-off gas compressors. The upgrades have enabled the facility to accommodate calls of Yamal’s icebreaking LNG carriers and to enhance the ability to tranship cargoes from these vessels to conventional LNGCs.