Elengy chief commercial officer Guiseppe Spotti discusses the group’s plans to develop LNG ship bunkering infrastructure in the South of France
As one of the biggest operators of LNG terminals in Europe, Elengy is a bellwether for the developing trends in the region. Hence its plans to develop small-scale LNG and bunkering operations in the South of France to meet anticipated demand for the fuel from shipping in the Mediterranean have generated much interest.
Elengy intends to develop services around the port of Marseille, France, for reloading smaller LNG cargoes and bunkering ships, by expending its experience of small-scale LNG operations (truck loadings) provided at two of its terminals since 2013-14.
The group operates the Montoir-de-Bretagne terminal, in Brittany, on the Atlantic coast and two terminals in the Mediterranean – Fos Tonkin and Fos Cavaou. These terminals are being re-engineered for loading LNG on bunkering ships and on to bunker vessels, explains Elengy chief commercial officer Giuseppe Spotti.
Mr Spotti describes the potential market for LNG bunkering in the Mediterranean as “promising” as there is increasing interest in France and Italy for fuelling ships with natural gas, instead of marine gasoil or heavy fuel oil.
“We are developing our services in the South of France for loading LNG onto barges or small-scale LNG tankers, which could then be used to supply coastal sites or for ship bunkering operations,” he says. “We are conducting developments for open bunkering and looking to start bunkering services in Q4 2019.” This will be from the Fos Cavaou terminal.
The berth at Fos Cavaou is being redeveloped for ship reloading and bunkering
Elengy has set its sights on becoming a reference player, contributing to the development of small-scale LNG in the Mediterranean. It already has experience of these operations at its terminal at Montoir-de-Bretagne, where it loads lorries with LNG and conducts transhipments and LNG reloadings.
“We are modifying the berth [at Fos Cavaou] to load bunker vessels of around 5,000 m3 or more”
Mr Spotti says there are also LNG truck loading facilities in the Fos Tonkin terminal and work is underway to introduce LNG truck loading at Fos Cavaou. “In Fos Cavaou we are developing LNG loading services with two bays for loading 40 trucks per day from September 2019,” he says.
There is also investment on the marine section of the terminal. “We are modifying the berth [at Fos Cavaou] to load bunker vessels of around 5,000 m3 or more to run from September 2019,” Mr Spotti says.
Elengy also plans to extend the life of the 47-year-old Fos Tonkin terminal through incremental investments. “We are conducting open season to test market appetite for extending the life of the terminal,” says Mr Spotti. “Our vision is to have this as a small-scale terminal. We are testing the market for players who want to bring LNG to Fos Tonkin and have small-scale activities.”
Elengy’s investments means it will have facilities for cargo unloading, cargo reloading, LNG transshipment, truck loading and ship bunkering in two markets in areas of major shipping activity.
“Our motivation for our developments is we believe terminals of the future will have to provide a variety of services for clients with multiple solutions,” says Mr Spotti.
“Terminals need the ability to reload LNG carriers and load smaller carriers. We believe in the future operators will be developing new business that are linked to alternative fuels for transportation, industry use and shipping activities.”
Increased regasification capacity
There are also plans to expand the regasification capacity of the Elengy terminals. “These projects could be designed to meet potential customer demand beyond 2020 and would thus help secure natural gas supplies for France and its European neighbours,” says Mr Spotti.
He anticipates this capacity increase would meet the expectations of businesses and major LNG players and traders that will want to use LNG terminals.
“In our outlook for LNG imports we see a lot of activity in 2019 and we should be busy into 2020,” says Mr Spotti.
“We see potential for bunkering ships in the Mediterranean, with potential around Marseille and other ports in the South of France, which is why we are developing LNG for shipping. Plus, there is potential LNG fuel for Italian ports and for Sardinia and potentially Corsica.”
There could also be spot cargoes and LNG reloading from Fos Cavaou. “It has been a busy beginning of the year for us, and expectations are high,” says Mr Spotti. But activity levels are influenced by price changes in LNG that can affect the final destination of LNG cargo.
“Unloadings will remain high, but then things can turn quickly,” Mr Spotti explains. “The market can change rapidly and reloading operations can restart very quickly” As an example, he cited that in Q3 2018 Elengy performed reloading operations to meet demand from customers for sending European cargoes to eastern markets. But then market LNG pricing changed and there were very few reloadings, but more cargo unloadings as vessels returned to Europe.
Elengy is suited to react to these market changes because of its geographic positioning in Europe.
“We can provide access to French gas markets in two different geographic areas – in the south and north west of France,” says Mr Spotti. LNG can come from East of Suez (via the Suez Canal and Mediterranean), North Africa and the Atlantic markets, including US cargoes.
“We are competitive and have range of services, including experience in using Montoir-de-Bretagne for transhipments.”
Elengy wants to be ahead of other terminal operators by using its diverse facilities and its 54-year history of LNG regasification. Since beginning LNG operations in 1965, Elengy has completed more than 9,600 LNG carrier unloading operations. Mr Spotti says more than 220 different LNG carriers have berthed at its terminals since it started operations. “That is around a third of the world LNG carrier fleet,” he exclaims.
Elengy has completed 25 direct transshipments in the Montoir-de-Bretagne terminal, 21 of these were in 2018. To date, the group has performed 85 LNG cargo loading operations.
“We can provide access to French gas markets in two different geographic areas – in the south and north west of France”
“In 2018, we completed 151 ship unloading operations and 19 ship reloadings,” says Mr Spotti. Elengy’s regulated income from third-party access to LNG terminal agreements was €288M (US$322M) in 2017.
In total, Elengy can store 770,000m3 of LNG and has 21.25Bn m3 per annum of natural gas regasification capacity at its three terminals combined.
The Montoir-de-Bretagne terminal was opened in 1980 and can store 360,000 m3 of LNG. It has the capacity to import 10Bn m3/yr as it has two berths for docking carriers of between 65.000 m3 to 267,000 m3.
The Fos Tonkin terminal was opened in 1972 for small trans-Mediterranean LNG trade from North Africa. It can store 80,000 m3 of LNG, process 3Bn m3/yr of LNG and berth 7,500-75,000 m3 (MedMax) ships.
Fos Cavaou is owned by Elengy subsidiary Fosmax LNG. The terminal started in 2010 and has storage for 330,000 m3 of LNG and imports up to 8.25Bn m3/yr. It has one berth that can handle 15,000-267,000 m3 (Q-Max). Elengy can reload LNG tankers at a rate of 4,000 m3/hr at Montoir-de-Bretagne and at Fos Cavaou, which means a standard LNG carrier can be reloaded in two days, and 1,000 m3/hr at Fos Tonkin.
Ship docking & unloading
“We can deal with Q-Max at Montoir-de-Bretagne and Fos Cavaou, and MedMax at Fos Tonkin,” says Mr Spotti. “At Montoir-de-Bretagne, for transhipments we can do ship-to-berth-to-ship, as we can use both berths simultaneously [at the same slack of tide, in order to optimise the laytime duration for the two ships]”.
A gas carrier berthing at the Fos Cavaou terminal with LNG for South France customers
Transshipments can be performed for break-bulking, to divide a large cargo into smaller ones, or for transferring from one carrier to another to optimise utilisation of a tanker fleet or to meet trading requirements between the sellers and buyers.
LNG carriers are escorted to these terminals and then docked by harbour tugs operated by Boluda France. Mr Spotti says the type and number of tugs required for these operations is determined by the port authorities, LNG carrier owners, the weather and sea conditions at the time of berthing.
“Usually two tugs are required for escorting, one fore and one aft of the ship,” he says. “Then one tug can assist in stronger weather,” he explains. “The number of tugs assisting in operations will depend on the size of the ship, weather and type of operations to be conducted. We can see up to five tugs.”
The regasification activities at Elengy's three terminals are regulated by the French energy regulator, Commission de Regulation de l’Energie. Under these regulations, for every new project to change subscription capacity, Elengy is required to conduct broad consultation with market players to ascertain demand for investment. The resulting capacity allocations will then meet predetermined objective criteria, such as reserved unloading volume.
Energy companies can lease their own dedicated storage at the Montoir-de-Bretagne terminal to save LNG for future use, or to modify its send-out profile.
Shippers can adapt their send-out profile on a weekly and daily basis. Shippers using the Montoir-de-Bretagne terminal benefit from its compression devices and the ability to directly inject boil-off gas into the downstream network when the LNG send-out of the terminal is insufficient to recondensate these vapours. This gives traders and shippers more freedom in their LNG inventory management.
Energy traders can select to send out a uniform quantity of gas on a daily basis over 20-40 days, or can book additional dedicated LNG storage space on a monthly basis.
Elengy fast facts
Group capabilities - 770,000m3 of LNG storage capacity
11,000 LNG truck loadings per year capacity
21.25Bn m3 per annum of natural gas regasification capacity
>9,600 ship unloading operations
25 direct transshipments in Montoir-de-Bretagne terminal
85 ship loading operations
220 different LNG carriers have berthed in one of Elengy's terminals (one-third of world fleet)
151 ship unloading operations
19 ship reloading operations
21 direct transshipments in Montoir-de-Bretagne terminal
5,843 LNG trucks loaded
€288M (US$325.8M) regulated income from third-party access to LNG terminal agreements in 2017
Capacity - 10Bn m3/yr (BCM/yr)
Storage capacity - 360,000 m3
Berths - 2 for 65.000 m3 to 267,000 m3 (Q-Max)
Tanker LNG reloading 4,000 m3/hr
Capacity 3Bn m3/yr
Storage 80,000 m3
Berth (1) 7,500-75,000 m3 (MedMAX)
Tanker LNG reloading 1,000 m3/hr
Capacity 8.25Bn m3/yr
Storage 330,000 m3
Berth (1) 15,000-267,000 m3 (Q-Max)
Owned by Fosmax LNG and operated by Elengy
Tanker LNG reloading 4,000 m3/hr
Snapshot CV: Giuseppe Spotti
2018 - Elengy chief commercial officer
2012 - director of gas supplies for Southern Europe
2006 - senior vice president in charge of LNG supply contracts
2001 - joined Gaz de France’s E&P business
1997 - joined the group IFP as a project manager
Career started in 1987 in the field of exploration and production with the ENI group