LNG conversions for marine installations

WÄRTSILÄ TECHNICAL JOURNAL 01.2012 LNG conversions for marine installations AUTHORS: Sören Karlsson, General Manager, Ship Power Technology Mathias Jansson, LNGPac Product Manager, Ship Power Technology Jens Norrgård, General Manager, Project Proposals, Services Jens Häggblom, Project Proposal Manager, Services Fig. 1 The Bit Viking owned by Tarbit Shipping after becoming the world s first merchant ship to undergo a LNG conversion. New environmental regulations relating to operating within Emission Control Areas (ECAs) come into effect in 2015. The marine industry is actively seeking ways to comply. Converting to gas fuelled propulsion is an increasingly viable option. There are a number of reasons why a gas conversion makes sense, though customer needs naturally vary. Such needs can be everything from emphasizing the green image of the company, to purely economic reasons. However, in a majority of cases, the main drivers for converting to gas are the significant emission reductions, the consequentially reduced fees, and the reductions in fuel costs. The year 2015 is rapidly approaching, and with it the new emission reduction requirements within Emission Control Areas (ECAs). For shipowners and charterers operating in these areas, there are mainly three solutions available; low sulphur fuel (MDF), SOx scrubbers, or liquid natural gas (LNG). The price of LNG at major import terminals is today very cost competitive. Interest in expanding the existing infrastructure is vibrant, with investment proposals for small scale LNG facilities being reported almost daily. However, in order to build a solid business case, the price of the fuel is the most important parameter in the analysis. Having an agreed LNG price level at an early stage with a gas supplier, would remove this uncertainty and significantly increase the success probability of the project. In practice, all vessels can be converted where available space exists for the LNG tank. Nevertheless, the prime target vessel types can be listed as being; RoRo/RoPax, product/ chemical tankers, container vessels with LNG containers, and bulkers. in detail 55

[ MARINE / IN DETAIL ] [ MARINE / IN DETAIL ] LNG storage A key factor for the success of a gas conversion is finding sufficient space for storing the gas onboard the vessel. Wärtsilä has developed tools for calculating the required dimensions and weights in order to find an optimal solution. Conceptual, as well as in depth, studies can be made based on customer requests. For the Wärtsilä gas engine portfolio, gas storage in the form of LNG can be considered the most attractive alternative due to the high energy density of LNG and, therefore, the relative compactness of the storage required. Currently, LNG is also being developed for use in road vehicles, with considerable less installed power, and it can be anticipated that LNG will increasingly dominate the marine market. Daily gas consumption can easily be calculated based on the existing operating profile. In order not to incur unnecessarily high capital costs, the LNG storage tank should be kept as small as possible and instead more frequent bunkering intervals should be considered. The existing liquid fuel storage system would continue to work as a backup system if necessary. The LNG storage location can be freely selected onboard the vessel, and either vertical or horizontal tanks, on open deck or below deck, can be selected. When storage is above deck, the requirements set by the classification societies are slightly lower. Additionally, for the conversion, installation on an open deck is very straightforward, and some of the system ventilation requirements can be circumvented. The LNG storage tanks and any additional steel structures may have an impact on the vessel s stability. These vessel stability criteria, with new LNG tanks installed, can be analysed in-house by Wärtsilä as part of the initial feasibility study. For vessels with a very high stability, the rolling behaviour and crew comfort can even be improved. Converted or new engines? The second step in the process is to check whether or not the existing engines onboard can be converted, or if they should be exchanged for new Wärtsilä dual-fuel engines. Generally speaking, converting an existing engine is recommended and is economically more feasible than installing new ones - especially when keeping in mind that a conversion basically brings the same benefits as new engines. For example, the same warranty is granted as for a brand new engine, in addition to which there are also savings to be made on maintenance costs since the running hours are reset. However, with smaller generating sets, say below 2 MW, it might be more cost effective to install new engines. At present a conversion can be offered for basically all Wärtsilä 32, Vasa 32 and Wärtsilä 46 engines. Wärtsilä is actively considering expanding its portfolio of conversions, and in the future it may even be possible to convert two-stroke engines. If the existing engines aren t suitable for conversion, the only option is to replace them with new ones. When doing this one may need to replace the gearbox and some of the auxiliary equipment as well, should it prove that the capacity of the existing equipment isn t sufficient. Unless it s a question of replacing old engines with new ones, a DF-conversion will usually mean a lowering of the total output onboard. If the utilisation of the available power onboard is normally in the lower range, this is in most cases acceptable. In other cases it may prove to be quite critical and has to be compensated for in some way, like for instance, omitting the use of shaft generators. Another important consideration is, of course, the age of the installation. A DF-conversion is a fairly large investment, and if the vessel is near the end of its service life, there is a big risk that a conversion would never pay itself back. From vision to offer Developing a LNG conversion solution, from a vision to a completed project, will involve a number of progressive steps. We have, therefore, made a model of how to handle the Proposal Management (see Figure 2). Fig. 2 Typical lead times for the major tasks in the sales process. MARINE LNG SALES PROJECT DEVELOPMENT Structure of offering (sales) process RFP (Request for Proposal) RFP from client Leads / Opportunities developed with the client Pre-study Concept study from GA drawings and data provided by client Budgetary proposal for equipment delivery. Go / No Go decision Pre-study follow up Possible ship check Possible update of budgetary proposal Preliminary time schedule Go / No Go decision Agreement on feasibility and basic design Feasibility Broad engineering, design work and report for determining feasibility Engineering package for submittal to the flag authorities and class society for concept approval Go / No Go decision Basic design Build plan and schedule in cooperation with client Engineering deliverables needed to secure a shipyard contract Turn key proposal preparation Obtaining firm offer from selected shipyard and other sub suppliers Preparation of turn key proposal Preparation of contract draft Presentation of proposal Submittal and presentation of detailed proposal and contract draft 56 in detail

WÄRTSILÄ TECHNICAL JOURNAL 01.2012 Since almost all vessels are in some way unique, it is very difficult to have readymade concepts for all types of LNG conversion projects. Therefore, one always has to start with a desktop study, which later leads in turn to a pre-study. A pre-study can include everything from a ship check to a lot of engineering hours, just to determine if the concept can be applied or not, is feasible or not, or even possible or not. By carrying out these pre-studies, Wärtsilä can support the customer with consulting services, and already at an early stage give recommendations as to the feasibility of the project. This includes sometimes recommending that for a specific vessel, it is not economically feasible. The pre-studies/conceptual plans are made internally by Wärtsilä naval architects and system experts, or in co-operation with external engineering partners, to arrive at the most applicable solution. Developing the optimal LNG conversion solution together with the customer involves more than just Wärtsiläs' own propulsion machinery systems. The engine conversion work itself is a very straightforward activity for Wärtsilä, and is today seen internally as daily business. Neither is the time needed for the engine conversion a bottleneck in the LNG conversion schedule, nor is it the most expensive part of the project. In addition to the engine technology, engineering/naval architecture, and the equipment, there are a number of other aspects to be considered when developing the LNG conversion solution. These include: minimizing the yard time in order to reduce losses in charter revenues site location for the conversion work pre-selection of shipyards that are suitable to both parties external stakeholder requirements (autonomy of tanks, shore-based fuel bunkering systems, safety, classifications and flag states, etc). In practice, the entire conversion schedule/ project is developed and planned during the sales phase. As can be seen from Figure 3, the cost of the engines and auxiliaries is just 1/5 of the total price. The biggest price impacts come from the autonomy of the tanks, the complexity of the project (design & engineering), and of course, the installation work. The latter needs to be considered very thoroughly since not all shipyards have the capacity to undertake these conversions. As pointed out earlier in this article, the year 2015 is rapidly approaching, and with it the new emission reduction requirements within Emission Control Areas (ECAs). This means that owners and operators need to quickly start considering which technology to use. There is only one year remaining before action must be taken if one wants to comply with the new legislations. A time schedule for developing such a project can be seen in Figure 4. Project execution and risk management A conversion project is managed by certified Project Managers with the aid of a dedicated project team. A project process utilizing the gate/milestone principle is used. It involves the project team early enough in the sales stage and this, together with a work breakdown structure, planning and follow up routines, ensures full control of all phases of the project execution. Sufficient resourcing in the planning and design phase minimizes the risks of costly mistakes, and schedules should contain buffers for the unexpected. The dedicated project team normally consists of a Project Manager, Project Engineer, Site Execution Manager and Team Leaders in the following disciplines; Naval architecture, Process design, Electrical and Automation, Classification, Engine conversion, LNG storage and feed system, and Steel outfitting. Team leaders would manage the engineering tasks assigned to the internal and external trusted and carefully selected suppliers. A frame agreement with selected shipyards enables the development of long-term co-operation and the best use of previous experience. Fig. 3 Cost split for the major tasks in a LNG conversion. Surveys, engineering, project management, Naval architecture & system engineering integration Engine conversion & auxiliary system components 12% 20% Installation work & material (Shipyard) 31% 31% 6% Fuel gas system (LNG storage, bunkering, process equipment) Automation & control lsystem in detail 57

[ MARINE / IN DETAIL ] [ MARINE / IN DETAIL ] Vision 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 RFP Desktop study Pre-study Concept development Contract negotiations Signing of contract Project lead time Deadline Q1/2015 Engineering, design, planning LNG conversion time schedule (Typical for a single main engine merchant vessel, starting from date of order) Weeks 0 5 10 15 20 25 30 35 40 45 50 55 60 65 Manufacturing Piping, cabling, equipment installation, hull modifications Engine conversion Commissioning test run & sea trial Duration Fig. 4 A typical project schedule, including a zoom of the actual conversion schedule. 58 in detail

WÄRTSILÄ TECHNICAL JOURNAL 01.2012 Complete vessel conversion: Engine conversion LNG tank(s) and foundation LNG/NG double walled piping Gas detection and fire suppression Inert plant/n2 storage and control air Bunkering station(s) Automation and control system Exhaust pipe gas burst disc(s) Fig. 5 LNG tanks and components required for a LNG conversion. During the conversion, the most effective work division between the yard and Wärtsilä is that both parties focus on their own key competence areas, and together work towards finalising the conversion. Interface handling between the different parties is crucial for the success of a conversion, due to the short lead time involved. Therefore, detailed and defined specifications and areas of responsibility are the key to a successful engineering result. A document management system that is open and available for all involved engineering parties enables revision handling and better interface communications. Engineering review meetings with subcontractors, the yard and the customer, guarantees that no additional change requests to the design appear during the actual installation work at the yard. Laser scanning of the vital parts of the vessel can be recommended if the added values are seen as being crucial. Scanning of the structure is dependent on the available drawings and CAD models of the vessels. The classification and quality assurance of all engineering work and equipment installed in a conversion is the responsibility of the project team working closely with the classification societies. Classification requires a project specific Failure Mode and Effects Analysis (FMEA). The HAZOP or FMEA would be based on the already available FMEAs of the engine and gas fuel feed system. During the project execution, close co-operation with the classification society is crucial in order to ensure that all class requirements are met and fulfilled as a result of the conversion. The Wärtsilä project team carries total responsibility for ensuring that all equipment installed has the correct quality assurance, material certificates, and Non Destructive Testing (NDT). Any required SOLAS update would be the responsibility of the owner of the ship. Training of the crew and ship owners, as required by the classification society, can be carried out by the training experts at the Wärtsilä Land and Sea Academy. The conversion work at the yard is managed by the site manager, who is part of the project team. Further to the actual installing of all new equipment commissioning, the quay and sea trials of the vessel are the responsibility of the site manager. Tailoring a service agreement After conversion, the propulsion train can be operated as normal. However, Wärtsilä can also offer improved reliability and assistance based on the customer s needs and preferences. By teaming up as partners at an early stage, maintenance schedules can be jointly developed, which often results in: Improved reliability and availability - what we can measure we can manage. Extended maintenance schedules, but in a controllable way. Optimisation of the maintenance planning and execution - doing the maintenance at the right time and place to ensure economic benefits (lifecycle management). Reduced risk exposure for the customer. Long term savings in Operation & Maintenance costs due to improved lifecycle costs. Improved fuel consumption as an additional plus from assuring optimal running values. As a reference, it can be mentioned that the majority of the LNG carrier operators with dual-fuel engines onboard have service agreements with Wärtsilä to ensure improved and stable revenue flows from their investment. Case study and references Wärtsilä performed the first conversion of a marine vessel from heavy fuel oil (HFO) to liquefied natural gas (LNG) operation when the MT Bit Viking was converted in 2011. The total scope included the installation of two 500 m 3 LNG fuel storage tanks (LNGPac) on the ship s deck, converting the two existing Wärtsilä 46 engines to Wärtsilä 50DF engines, the installation of two LNG in detail 59

[ MARINE / IN DETAIL ] [ MARINE / IN DETAIL ] bunkering stations, all the LNG and gas piping onboard, updating the vessel s automation, and the gas detection system. Furthermore, the classification documents were updated as required. This included, among other things, updating the stability handbook and docking plane. The vessel was handed back to the owner after successful quay and sea trials. The project started in the summer of 2010 with the signing of the project contract. The engineering, procurement, and manufacturing started immediately thereafter and continued into the summer of 2011. The conversion work was finalised in autumn of 2011, and the project was completed in October 2011. The conversion of the engines to DF operation was carried out in just six weeks. Since 2005, Wärtsilä has converted 40 diesel engines to dual-fuel engines in land based power plants around the world. A Wärtsilä 50DF engine has already accumulated more than 40,000 operating hours following a conversion. The Bit Viking engine conversion was Wärtsilä's first marine engine to be converted to dual-fuel operation. CONCLUSIONS The key driver in the increasing interest in LNG as a marine fuel, on a global level, is the increased focus on reducing emissions. In whichever way the customer prefers to address future trends regarding fuel prices or emission abatement methods, Wärtsilä can meet such needs for both new buildings as well as gas conversions. A documented way of working, and means of handling the complex tasks and processes efficiently, have been developed and are continuously being improved. An already established track record of completed turnkey conversion projects is available, including the SOX scrubber conversion of the Containership VII vessel, and the LNG conversion of the Bit Viking. The long-term commitment to this strategy can be further exemplified by the acquisition of Hamworthy to add even greater strength to the company s environmental capabilities. The lead time from idea to completion may require up to one and a half years, and starting such discussions in good time is essential if the potential 2015 deadline is to be met. Fig. 6 Lifting of the LNG tanks aboard the Bit Viking during the conversion. 60 in detail