LNG storage: a growth story? StocExpo Rotterdam 17-03-2015 stefaan.adriaens@gateterminal.com, commercial manager
Do I have your attention? Goldman Sees LNG as Biggest Commodity After Crude This Year (Bloomberg)
What do you see?
LNG storage in Europe Source GLE
Topics 11.45 Growth of LNG as a transportation fuel and infrastructure developments across Europe - Demand for LNG storage - Developing break bulk LNG services - Overcoming the technical and regulatory challenges Stefaan Adriaens Commercial Manager, Gate Terminal 12.15 Integrating LNG into existing storage terminals - Quantitative risk assessments for an LNG intermediate terminal (with 5-7 bullets) integrated into an existing petrochemical energy port - Feasibility study on integrating an LNG bunkering infrastructure (including FC LNG storage tank) into a new oil tank terminal Dennis van der Meulen, Consultant, DNV GL - Oil & Gas
LNG is a great product, also when burning it Liquid Gas (main component is methane CH4) Temperature around -162 degrees Celsius The volume of LNG is around one six-hundredth of it volume in gas LNG is a non-toxic, non-carcinogenic, non-corrosive, odorless, and colourless liquid Density around 450 kg/m3 1 m³ of LNG contains approx. 7 MWh of energy In large volumes stored and transported at atmospheric pressure as a boiling liquid (small volumes might be pressurized) LNG is not LPG, very different Over 50 years experience with excellent safety and environmental performance Flammable 5-15% concentration Exhaust emissions compare favorable versus other HC LNG Copyright 2013 Gate terminal
Despite reduced pollution, lives are still at risk Air pollution is the number one environmental cause of premature death in the EU 430 000 premature deaths from particulate air pollution (PM2.5) in EU-28 in 2011 Air pollution causes cancer, cardiovascular diseases, respiratory diseases such as infections, asthma (WHO 2014) Map: Loss in average statistical life expectancy (months) due to identified anthropogenic PM2.5 (2000). Source EU Copyright 2013 Gate terminal
Why is there so little LNG storage in NWE if this great product is the 2nd biggest commodity? Growth with buyers/sellers markets More trade flows In opposite directions Also shorter term Global Events (drought, Fukushima, shale, For SoS, a long earthquakes) time characterised as long term tramway LNG as between a fuel a few countries exporting and Diversion a few countries importing where the LNG was Reloads regasified. Niche Mainstream (around 10% of worldwide gas market which itself represents 25% of worldwide energy consumption) Simularities with bulk liquid?
Are LNG terminals rare? OPERATIONAL 23 LNG Terminals (201 bcm/a) UNDER CONSTRUCTION 5 LNG Terminals (28 bcm/a) Source: GLE, March 2015 LEGEND OPERATIONAL UNDER CONSTRUCTION / COMMITTED PLANNED / UNDER STUDY GASPORT FOR FSRUs PLANNED 24 LNG Terminals (> 146 bcm/a) CANARY ISLANDS Detailed information on LNG terminals available at www.gie.eu, Maps & Data
Topics around LNG storage hindering roll out Expensive and time consuming A typical tank costs around 100 million EUR Full integrity No seals/floating roofs. No smell. No losses. Unit prices are around 130 /m3 (LNG)/y or around 20 /MWh/y (without injection or withdrawal) Lower energy content 3-5 years lead time Alternatives for gas storage depleted gas fields, aquifers, salt caverns which have lower gas storage volume costs e.g 2 /MWh/y (moreorless triple if injection and withdrawal costs are included) BOG After 1 year around 33-50% is evaporated into gas grid What remains becomes heavier and could become offspec New technological developments (such as reliquefaction, vacuum insulated pipes) might mitigate this So, in NWE, only for operational reasons (golden rule: twice size of biggest ship)
Low send out utilisation until recently Copyright 2013 Gate terminal
Send out peaks in Feb 2012 and March 2013 (cold periods). Optionality versus baseload Value returning given SoS and decreasing domestic production Copyright 2013 Gate terminal
due to high demand in Asia
Leverage our location: Gate 2.0
Emisson values (%) Also in the middle of SECA 0,1% S Also NOx ever stricter 100% 75% 50% 25% 0% NOx SOx CO² Particles Diesel LNG Diesel vs LNG Copyright 2013 Gate terminal
LNG fuel emissions for a coaster SOx Emissions (Tonnes/year) NOx Emissions (Tonnes/year) 50 40 30 20 10 0 LNG fuel Low Sulphur fuel* Convential fuel** + scrubber Convential fuel** 200 150 100 50 0 LNG fuel Low Sulphur fuel* Convential fuel** + scrubber Convential fuel** CO² Emissions (Tonnes/year) Particles Emissions (Tonnes/year) 8,000 6,000 4,000 2,000 0 LNG fuel Low Sulphur fuel* Convential fuel** + scrubber Convential fuel** 10 8 6 4 2 0 LNG fuel Low Sulphur fuel* Convential fuel** + scrubber Convential fuel** Also less noise: trucks Copyright 2013 Gate terminal
LNG/gas as a product making its inroads into transportation 3500.0 Transportation fuels 250.0 5 year changes 3000.0 2500.0 Renewables 200.0 2000.0 MToe Coal 150.0 MToe 1500.0 1000.0 Gas 100.0 50.0 500.0 0.0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Oil 0.0 2015 2020 2025 2030 2035 Source BP 2035 Outlook, 2015
Modifying jetties Installations of smaller fenders in place of dummy fenders to accomodate for vessels between +/-5000 m 3-65000 m 3 Review ESD logic (surge, QRA) Example of new type fender Location of new fenders No interference on larger vessels during construction nor operation
Fill in small scale distribution needs in a cost effective way Coral Energy berthing at Gate Coral Methane berthing at Gate Copyright 2013 Gate terminal
Short sea transport of LNG: available Example of reach of shortsea with figures in/out of Rotterdam in 2013/14. Stars indicate large scale import terminals. Stars indicate large scale import terminals. Triangles indicate small scale import terminals. The colors indicate whether small scale reload is operational, under construction or not available yet. Norway not indicated. Adapted from GLE
Offering conventional re-loading to global markets January 2014 Artic Discoverer and Wilpride Copyright 2013 Gate terminal
All european terminals looking for a new roles IGU
Truck loading 7 trucking customers From UK to Poland, from Norway to Italy Used for marine, trucks, industry 174 trucks in 2014 Truck at loading station LNG Truck at Gate
LNG by truck over Europe: available Reach of truckloadings out of Rotterdam and Zeebrugge. Stars indicate large scale import terminals. Triangles indicate small scale import terminals. The colors indicate whether truckloading is operational, under construction or not available yet. Norway not indicated. Adapted from GLE.
And the reality check LNG trucks in China (240000) and US (25000) and NGV all over the world (1 % or 15 million) Also LNG carriers on LNG and a limited numbers of barges
Dedicated small scale jetty: under construction Impression of the LNG break bulk terminal Copyright 2013 Gate terminal
Impact on storage use Copyright 2013 Gate terminal
Some LNG storage events worldwide Storage in US as, awaiting export, import terminals are even less used then in Europe Korea storage for Japan at underutilised terminal Floating storage Singapore pure storage play Kochi (0,5 USD/Mmbtu per month) Zeebrugge: FID for a transshipment storage (very short storage between unloading and reloading for Yamal LNG towards Asia
Copyright 2013 Gate terminal
Some conclusions LNG is available @ any place @ any quantity in NWE, especially with FIDs taken on 3 bunker ships. All European terminals (and worldwide) improving services and offering more choice. LNG for transport: well beyond chicken and egg but also beyond the hype. Step by step. One would expect more storage requirements resulting from the new trading patterns and new applications of LNG (but on the other hand some EU 2050 forecasts show lower gas use)