A floating lifeline for cleaner power

Mehmet Katmer, Karpowership, Turkey, explains how floating LNG assets can help alleviate energy poverty by providing countries with access to this transitional fuel. A floating lifeline for cleaner power

It has been extremely encouraging to witness calls to action and fresh pledges aimed at advancing climate targets coming at a rapid pace, despite the ongoing global health crisis. Amidst the human tragedy and economic hardship, there has been an increasing alertness to climate change – an issue that is as important to collective long-term safety as anything else could be. Now, the world is looking at COP26 to sustain that momentum as nations and advocates work to ensure goals can be met within achievable timeframes and critically, given the current context, within budget. This is where LNG delivered via floating LNG (FLNG) assets and infrastructure can play a vital role.

LNG is key to advancing universal access to electricity and securing a more sustainable and inclusive energy transition, but many markets lack the infrastructure or supply to readily access and benefit from natural gas. Countries without indigenous natural gas supply need to be given the opportunity to harness the benefits of LNG as a transitional fuel – and at the forefront of this will be mobility and flexibility. Floating assets can solve this problem. Powerships (floating mobile power plants) utilising

LNG as a fuel source have the ability to provide countries with a reliable, practical, and affordable means to bridging the energy transition. They are ready to deploy and can generate electricity within tight timeframes – but enhancing this already speedy access to energy will be the combination of powerships and

FSRUs. The use of FSRUs and powerships together is a pioneering solution in the mission to bring LNG-utilised power generation to countries with no natural gas infrastructure, and at the same time offer a reliable, cost-effective solution to alleviating energy poverty.

Figure 1. One of Karpowership’s LNG-to-power sites in Amurang, Indonesia.

Floating assets deliver success

FSRUs are FLNG import terminals capable of both storing and regasifying large volumes of LNG. Since the world’s first FSRU hit the seas in 2005, the vessels have proved ground-breaking in the transportation, storage, and supply of LNG, fuelling growth in the market and opening up access.

The growth has been significant. According to the US Energy Information Administration, between 2015 and 2019, global LNG trade has expanded by 45%, driven by record growth in both 2018 and 2019. While the global pandemic produced a dip in demand in 2020, consultancy Wood Mackenzie estimates global LNG demand is still expected to grow by another 53% to 560 million tpy by 2030.

A critical component to meet this demand will be FSRUs as governments and energy companies see the benefits of using the vessels to import LNG. The market is already ensuring that to service this demand, more FSRUs are being built and utilised around the world.

An LNG-to-power solution

Figure 2. KARMOL FSRU, LNGT Powership Africa, moored in Dakar, Senegal.

Figure 3. KARMOL FSRU, LNGT Powership Africa, docked at Sembcorp Marine’s Singapore shipyard. Karpowership strongly supports the use of these gamechanging vessels and is working proactively to support this shift. FSRUs are at the heart of Karpowership’s ongoing LNG-to-power mission to ensure access to electricity is universal.

Using FSRUs to supply powerships with natural gas is vital to realising LNG’s vast potential as a transitional fuel in new markets. FSRUs can store up to 260 000 m3 of LNG and enable an immediate yet durable connection to the LNG supply chain. The combination is the simplest, quickest, and most effective way of bringing the benefits of LNG to countries with no domestic supply or infrastructure.

The solution is simple: two vessels connect via gas pipelines allowing the FSRU to feed regasified LNG to the powership, which then creates gas-fuelled power that can be delivered directly into a country’s grid from the onboard high voltage substation. The combination of floating assets involves little on-land infrastructure and importantly helps to ease reliance on dirtier fuels. This is good for the environment, significantly cutting

demand for development on land, largely eliminating the costs and challenge of decommissioning assets, and cutting emissions compared to other fuels.

This reduction in the environmental impact of power is vital to those who operate in the energy sector. The sector is always looking forward, committed to finding new ways of providing cleaner fuel options. This is a responsibility that needs to be taken seriously. LNG is a pragmatic solution while the world continues to develop renewables to a point where they are both an economical and practical solution for baseload power.

An LNG-to-power solution means markets with small, medium, and large scale power demand can get fast access to reliable electricity, and no longer need to rely on expensive and environmentally damaging methods such as diesel generators or coal-burning power plants.

Mobile LNG mission

Karpowership has moved quickly to deliver on this vision. In September 2020, the company initiated its first LNG-to-power operation in Amurang, Indonesia, after the conversion of dual-fuel engines in its powership. The transition from fuel oil to natural gas utilises Indonesia’s natural resources and reduces the carbon output of electricity generation.

Choosing to expand investment in the LNG value chain, Karpowership has also established a 50/50 joint venture with Mitsui O.S.K. Lines, Ltd under the brand name ‘KARMOL’. KARMOL is building three FSRUs, one of which is completed, designed specifically to be compatible with powerships. This makes them unique to other FRSUs on the market and will boost Karpowership’s LNG-to-power projects around the world.

The intention is to at least double the company’s LNG assets over the next five years. With the conversion of its Amurang operations to LNG, Karpowership has hit its 2021 target of ensuring 50% of operational supply is powered by natural gas and LNG. The ambition is to raise this to 80% by 2025 – and in time to 100%.

Currently, the company has 30 completed powerships exceeding 5000 MW installed capacity, across 11 international markets. These powerships are equipped with dual-fuel engines and the aim is to reach 8500 MW by 2026.

Fuel switchover success

As a continent in search of cleaner power generation and reliable electricity – natural gas offers increasing potential in Africa. Senegal’s national electricity company, SENELEC, has set an ambitious gas-to-power strategy to speed up the conversion of key energy facilities.

In August 2019, Karpowership signed an LNG-to-power contract with SENELEC, and within just 58 days delivered the powership to start supplying base-load power to the grid. The powership has a capacity of 235 MW and is supplying 15% of the country’s electricity.

The arrival of the first KARMOL FSRU earlier this year, with a capacity of 125 000 m3, and the switchover to natural gas, means Senegal is now Karpowership’s first LNG-to-power project in Africa. Senegalese authorities also plan to switch their existing 90 MW Bel-Air power plant to natural gas and procure the LNG that will be supplied by the FSRU. The project means Senegal will have access to over 300 MW of reliable power via natural gas.

South Africa: A case study

A strong case for where an FSRU and powership solution could rapidly alleviate a country’s energy challenges, is in South Africa. There is a mounting awareness of the challenge of balancing increasing demand for reliable power with the need to protect the environment. In addition, there is a critical focus on rebuilding the economy following the pandemic.

Currently, more than 90% of South Africa’s energy is generated from coal. In 2020, the South African government called for the reduction of greenhouse gas emissions to net zero by 2050. Karpowership strongly supports the government’s ambitions in this area. There is mounting recognition that LNG is an important part of the energy transition towards net zero because it emits less than the legacy plants currently powering South Africa and it is based on established, reliable technology. South Africa’s lengthy coastline also means it is an ideal location to host FLNG infrastructure.

Following a government tender for 2000 MW of new dispatchable electricity, in March 2021, Karpowership was named as one of the South African government’s preferred bidders to alleviate the energy crisis by mooring powerships at three sites – 450 MW at each of Coega and Richards Bay, and up to 320 MW at Saldanha Bay. Actual power output will be determined by the grid operator, Eskom, to best suit demands on the grid at any given time.

Karpowership’s projects were selected alongside a range of other technologies – most of which use a combination of renewables and thermal fuels, and three solar/battery projects. The selection is a hybrid: using LNG as a backbone to the power grid as renewables develop and expand. This is exactly what South Africa needs to proceed with the energy transition.

The introduction of FSRUs to supply the powerships is an opportunity to develop an entirely new gas industry for South Africa. Critically, the project will also help reduce load shedding during peak periods and boost supply when unplanned breakdowns occur at other power plants in the system.

Conclusion

As the world continues on the path towards a zero-carbon energy mix, natural gas will play an increasingly important role in bridging the gap from phasing out coal to the development of renewables. To deliver on the ambitions of the UN sustainable development goals and the Paris Agreement, a strong gas sector will ensure meaningful progress and create a viable commercial environment for the long-term development of renewables.

The ability to provide LNG to countries with no natural gas infrastructure will be critical in this mission. This can be achieved by making use of FLNG assets and boosting what has already been done for generations – using the world’s waterways to deliver fuel. In the case of LNG – floating assets, such as FSRUs and powerships, are delivering access to a vital fuel along with the promise of meeting the immediate power needs of countries around the world.