Handling and Transportation of LNG

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1 Handling and Transportation of LNG

2 History and Examples of LNG use Whereas Liquid Petroleum Gas (LPG) is carried under pressure, Liquid Natural Gas (LNG) is carried at atmospheric pressure and has been safely carried by sea for the past 50 years. Today the carriage of LNG employs a fleet of almost 400 purpose-built highly specialized vessels dedicated to meeting this growing sector of world energy demand. Approximately 75,000 voyages have now been successfully completed. In addition to being a traded commodity, LNG is also becoming a preferred fuel for the world s merchant fleet as the International Maritime Organization seeks to regulate progressive reductions in vessel emissions. After being initially adopted for coastal trading in Europe, BC Ferries, Seaspan and Washington State Ferries have all placed orders Image credit: Photographic Services, Shell International Limited Liquid Natural Gas has been safely carried by sea for the past 50 years. Approximately 75,000 voyages have now been successfully completed. for gas fuelled new-buildings in addition to vessel conversions. We are also seeing the first orders placed for gas propulsion in the world international fleet in response to investments by a number of leading global ports in LNG bunkering infrastructure. In North America, natural gas provides a substantial portion of energy needs in the domestic and commercial sectors, the energy for most new power generating stations and is also used as an essential raw material for many common products such as paints, fertilizers, plastics, antifreeze, dyes, photographic film and medicines. Handling and Transportation of LNG 1

3 Alaska Canada Graphic 1: NA Emissions Control Area United States of America Hawaii North American Emissions Control Area North American Emissions Control Area Emissions of CO 2 from natural gas are 45% less than other conventional fuels and 30% less than oil. hybrid ferry under construction An application by Canada and the United States to establish an Emissions Control Area (ECA) extending approximately 200 nautical miles offshore was filed with the International Maritime Organization in The application was approved in 2010 and the ECA implemented in Simply put, vessels are now required to switch to fuel having a maximum sulphur content of 0.1% within the ECA or achieve compliance by other approved means. One option is the use of LNG for main propulsion and many observers are predicting that this will become the fuel of choice for the world s merchant fleet in the years ahead. Emissions of CO 2 from natural gas are 45% less than other conventional fuels and 30% less than oil. It is also relatively more abundant than other fossil fuels, burns more cleanly and is easy to distribute. LNG will harmlessly evaporate in the unlikely event of a leakage. Emissions Profile of Natural Gas Compared to Oil 100% Residual fuel oil (Bunker C) Low sulphur fuel oil Distillate oil Natural Gas The Chamber of Shipping of British Columbia 2 80% 60% 40% 20% 0% PM2.5 particulate matter SO2 sulphur dioxide NO2 nitrogen dioxide CO2 carbon dioxide

4 LNG Transportation Cycle Natural gas is liquefied for ocean transportation by cooling in the case of purpose built Liquid Natural Gas (LNG) carriers. Gas is liquefied by cooling prior to loading and carried at atmospheric pressure at close to -162 degrees centigrade. At this temperature 600 cubic meters of gas occupies only 1 cubic meter in its liquefied form which in turn translates to the efficient marine transportation of large volumes of LNG to the major consumers around world. On a typical voyage, LNG cargo compartments are loaded to approximately 98.5% of their capacity in order to allow for expansion. The boil off is nearly always used as a fuel in the ship s boilers and/or engines. Gas is liquefied by cooling prior to loading and carried at atmospheric pressure at close to -162 degrees centigrade. Automated monitoring of cargo temperature and pressure is constant throughout the voyage. Following discharge at the receiving port, the liquefied gas is returned to its gaseous state for delivery to the distribution system and ultimately the consumer. Natural gas is colourless, non-toxic, noncorrosive and odourless, but for safety reasons, and prior to distribution, a trace of chemical is added to give it a distinctive smell of rotten eggs. LNG Transport Cycle The Chamber of Shipping of British Columbia Field Development Liquefaction Shipping Receiving Terminal Power Generation 3

5 Moss Type LNG Carrier Bridge LNG Tanks Fuel Tank Engine Room Double Hull Types of LNG Carriers There are two main designs of LNG carriers: Moss Design The Moss Design is where the LNG cargo containment system consists of insulated independent spherical tanks approximately 40m in diameter constructed from aluminum alloy and designed to carry LNG at cryogenic temperatures and close to atmospheric pressure. The tanks are encased within a cargo hold and situated in-line from forward to aft within the hull. The spaces between the inner hull and outer hull may be used for ballast but also importantly provide protection to the cargo tanks. Membrane Design The more common design today is the membrane design of which there are several versions whereby arrangement for containment of cargo includes, for safety reasons, a primary and secondary barrier with insulation between and also a protective outer structure. The materials used for the containment system are required to reduce heat transfer from the hull structure and thereby minimize boil-off gas from the cargo, as well as to protect the hull structure from the effects of cryogenic temperatures. The cargo tanks are separated from other compartments, and from each other, by transverse cofferdams which are dry compartments. The tank construction thus consists of two layers of membrane and insulation, so that in the unlikely event of a leak in the primary barrier, the cargo will be contained by the secondary barrier. Membrane Type LNG Carrier Inner Deck Hull Mastic Ropes Secondary Insulation 300mm Secondary Barrier INVAR 0.7mm Primary Insulation 230mm Primary Barrier INVAR 0.7mm LNG Discharge Line Ballast Tanks

6 World Fleet Image credit: Photographic Services, Shell International Limited The current world fleet of LNG carriers is almost 400 vessels in active operation with approximately 140 vessels on order. Such is the growth in demand for LNG as more and more countries transition from other energy sources, it is estimated that orders for a further 100 vessels will need to be placed by The current world fleet of LNG carriers is almost 400 vessels in active operation The new build price of a standard LNG carrier of about 170,000 cbm capacity is in excess of US$200 million with most being built in South Korea. In addition, some projects will incorporate Floating LNG (FLNG) production plants as an alternative to construction of very expensive on-shore infrastructure. These vessels can be permanently moored on-site and provide storage and conversion capacity prior to transfer of LNG to or from an ocean-going vessel. Forecast LNG Trade Through 2030 (bcm) Asian LNG Importers Canada South Korea Japan United States China

7 Ship and Terminal Safety In Canada, the majority of energy related projects are subject to a so called TERMPOL Review (Technical Review of Marine Terminal Systems and Transshipment Sites) which is a voluntary review conducted by Transport Canada aided by subject matter expertise. This involves a highly detailed technical study and assessment of vessel routing to and from intended Canadian port(s) of call, aids to navigation, traffic management, emergency response capabilities en-route and risk mitigation including the utilization of high powered tug escorts during coastal The review ensures some of the most detailed safety and security standards of any sector in the marine industry. voyages. The outcome of the TERMPOL Review will feed into the overall regulatory consideration of project approval or otherwise. The review also extends to terminals which in the case of LNG routinely implement and ensure some of the most detailed safety and security standards of any sector in the marine industry. This includes auto-shutdown of operations in the event that terminal monitoring systems detect any abnormal operating conditions. Handling and Transportation of LNG 6

8 For further information on Safe Shipping in British Columbia, please visit safeshippingbc.ca or contact us at: Chamber of Shipping of British Columbia Suite West Hastings Street Vancouver, BC V6E 2J3 T F