LNG as (Marine) Fuel Greener Shipping Summit 2015 Athens November 10, 2015 George Alexandris, Associate Strategy & Corporate Development
International LNG market outlook The global LNG market was dominated by the acceleration of the market loosening in Asia in 2015, leaving more volumes to find markets in Northwest Europe, but also in North America and the Middle East. Europe remains heavily dependent on Russian gas, but LNG imports into Europe will start to pick up substantially from 2016 and Russia will struggle to maintain market share Lower LNG prices unlock demand based on different demand drivers, such as coal displacement in power, indigenous supply, diversification from pipeline imports
Source: IHS Energy International LNG market outlook
International LNG market outlook Change in LNG net trade: 2014-20 (bcm) Source: IEA
The increasing role of small scale LNG Gas exploration Liquifaction Large scale shipping Hub Evaporat ion Pipeline End user (NG) Small scale shipping Mid scale storage Evaporation End user (NG) Small scale storage Truck transport Evaporation End user (NG) Ship bunkering Source: Wartsila
Key markets for small scale LNG Marine Fuel Road Transport Fuel Off-grid customers The historically high price differential between natural gas/lng and low emissions oil products necessary to meet the growing restrictions on ship emissions, are key drivers for using LNG as Marine fuel. LNG is increasingly becoming the most economical, costeffective, and environmentally friendly alternative to conventional transportation fuels for heavy-duty trucks and fleets. LNG can compete favorably in the heating, commercial, and industrial sectors with conventional fuels such as diesel and propane in areas not currently served by regional pipeline gas infrastructure.
Need for Clean Marine Fuel IMO has designated three Emissions Control Areas (ECAs), with several more proposed To comply with ECA emission limits, ship owners have three main options: 1. Secure costly, low-sulphur Marine Gasoil 2. Install costly emissions abatement controls (e.g. scrubbers) 3. Adopt LNG as ship fuel
.as emission limits are lowered Using LNG as marine fuel offers: ship emissions that meet new limits (without requiring scrubbers or SCRs 1 ) fuel cost advantage and lower operating costs vs. traditional clean bunker fuels Ship, engine and tank technology for LNGfuelled ships are available and proven 1. Selective Catalytic Reduction
LNG for marine transport is picking up 139 confirmed LNG fuelled ship projects Updated: 27/5/2015 Source: DNV GL
Studies in SE Europe for Introduction of LNG as Marine Fuel The evolution of Actions related to marine LNG in Greece and SE Europe area
The Archipelago LNG Action DEPA is currently a partner in the Archipelago-LNG, an Action co-financed by the EU, with an aim to promote the use of LNG as marine fuel in the passenger and shipping sectors of the Greek islands in South Aegean region, which accommodates heavy marine traffic especially in summer season. The objective is to motivate and provide the necessary tools for Greek Authorities in order to adopt a regulatory framework for the bunkering of gas-fuelled (LNG) ships by first: identifying the key technical and economic framework of the small scale LNG as marine fuel value chain in the region, by analyzing current situation and proposing sustainable marine LNG supply chain and business plans and then by: making recommendations of a legislative and regulatory nature with regard to both the technical and financial aspects of the proposed LNG supply chain
Poseidon Med II II In order to exploit to full extend the results of the concluding projects: COSTA II East and Archipelago LNG a new global (in SEE) multi annual Action: Poseidon MED II is proposed. A proposal for co-financing has been submitted to the EU (CEF Transport), received a positive response and is subject to proceed with a Grant Agreement. Poseidon Med II Action aims in implementing LNG Marine Bunkering in SE Europe through Simultaneous Development of Critical Supply and Demand Side installations. This will be done by designing: the upgrade of Revithoussa to an export terminal (up to tendering documents) LNG bunkering infrastructure for Piraeus and another 5 ports (up to tendering documents) the LNG retrofit of specific ships (up to construction drawings) an LNG newbuilt (up to construction drawings) LNG Bunkering barge and LNG Feeder vessel and constructing an innovative LNG vessel (for Venice Port)
Poseidon Med II II Coordinator DEPA 5 years duration 3 EU Member States Involved: Greece, Italy and Cyprus 26 companies and organizations 5 Main Ports to be studied Estimated cost 53 M, financed 50% by the companies and organizations participating and 50% by the EU (CEF Transport).
Partners II Energy Ports Shipping Technical/Financial DEPA DESFA Piraeus Heraklion Patras Igoumenitsa Cyprus Limassol Venice Minoan Lines Blue Star Attica Ferries ANEK Neptune Hellenic Seaways Arista Lavar HSSA -EENMA SEEN Hellenic Lloyd's OceanFinance EPE NAP Rogan R.R. Panfido Bunkernet CERTH- EKETA
Objectives II The specific objectives are to: Further promote the use of LNG as marine fuel and increase public awareness facilitate the adoption of the regulatory framework for the LNG bunkering; design the extension of Revithoussa LNG terminal; design LNG fuelled specific feeder vessels; implement technical designs and plan approvals for the retrofit/new building of LNG fuelled vessels and for additional ports infrastructure for bunkering operations; examine potential synergies with other uses of LNG; develop a sustainable LNG trading and pricing scheme; develop financial instruments to support the port and vessel installations.
Poseidon Med II Building the Future II