LNG World Shipping March/April 2018

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Panama Canal ready for growing LNG carrier traffic

Exclusive: Chinese LNG terminals hit record utilisation rates LNG carrier builders off to a flying start in 2018 “Compared to the 2017 fiscal year, we expect LNG traffic through the waterway to grow by 50% this fiscal year�

Executive manager of the Economic Analysis and Market Research Division at the Panama Canal Authority, Silvia de Marucci, page 40

contents

March/April 2018

13 20

Comment 5 Mike Corkhill examines the impact of today’s more flexible and buoyant market on shipowner confidence

Infographic 6 China’s northern, eastern and southern LNG receiving terminals, their capacities and astounding road tanker loading achievements

Shipowner Interview 8 Nakilat provides the stable platform for Qatar to deliver LNG cargoes around the world. Craig Jallal reviews the current state of the fleet

26

Opinion 13 Mike Corkhill highlights the popularity of small and mid-scale liquefaction trains amongst developers of a number of US LNG export projects

Projects 17 China’s demand for gas has driven up utilisation rates in the country’s growing network of LNG receiving terminals. Mike Corkhill reports

Ship Equipment 20 Three new sets of equipment and operations guidelines from SIGTTO are aimed at enhancing safety levels at the ship/shore interface during cargo transfers

34

Innovation 1 – Containment Systems 24 The first LNGC with KC-1 membrane tanks is now in service, while the delivery of the first conventional-size LNGC with an IHI-SPB Type B system is fast approaching

Innovation 2 – Propulsion Systems 26 The list of LNGCs ordered over the past 12 months shows that the newly arrived WinGD’s low-speed dual-fuel X-DF engines are increasingly popular.

Mike Corkhill reports

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LNG World Shipping | March/April 2018

contents Ship/Shore Interface 28 Mike Corkhill looks at the providers of escort tug services for floating LNG terminals in open seas and the unique challenges that they face

Operations 31 Bernhard Schulte Shipmanagement’s acquisition of Pronav has helped bolster the company’s presence in the specialist LNGC sector

Area Report – Middle East 32 The Middle East is a lynchpin of global LNG supply. Qatar, the region’s own lynchpin, is considering a 33% boost in exports. Mike Corkhill reports

Statistics – Fleet Developments 34 The busy start to 2018 for LNGC shipyards included 10 ship completions in January, the highest ever monthly total for such vessels

Viewpoint 40 Silvia de Marucci of the Panama Canal Authority describes the steps her agency is taking to accommodate growing levels of LNG carrier traffic

Next issue May-June 2018 issue of LNG World Shipping: Area report: Adriatic and eastern Mediterranean Technical: propulsion Data: Things we have learned from this year’s GIIGNL report Special report: small-scale LNG and the world’s LNG-fuelled fleet, including

March/April 2018 Editor: Mike Corkhill mike.corkhill@rivieramm.com t: +44 1825 764 817 Contributing Editor: Craig Jallal craig.jallal@rivieramm.com t: +44 7974 935 477 Brand Manager: Ian Pow t: +44 20 8370 7011 e: ian.pow@rivieramm.com Production Manager: Richard Neighbour t: +44 20 8370 7013 e: richard.neighbour@rivieramm.com Subscriptions: Sally Church t: +44 20 8370 7018 e: sally.church@rivieramm.com Chairman: John Labdon Managing Director: Steve Labdon Finance Director: Cathy Labdon Operations Director: Graham Harman Head of Content: Edwin Lampert Executive Editor: Paul Gunton Head of Production: Hamish Dickie Published by: Riviera Maritime Media Ltd Mitre House 66 Abbey Road Enfield EN1 2QN UK

service and supply ships, container and dry bulk ships, passenger ships and ferries, tankers and liquid bulk ships

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COMMENT | 5

LNG shipowner confidence grows in a more flexible marketplace

S Mike Corkhill, Editor

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uch has been the pace of new developments in the LNG industry over the first two months of 2018 that it has been hard to keep up. The 10 newbuildings commissioned during January 2018 constitute the highest monthly total of LNGC completions on record, while shipowners have been placing orders for new vessels at a tempo unmatched in years.

Two new export terminals – Cove Point LNG and Cameroon LNG – are coming onstream while Yamal marked the loading of its first million tonnes of LNG in early March 2018, only three months after opening for business.

Cove Point despatched its inaugural export cargo on the 40th anniversary of the terminal opening as an import facility. Cameroon LNG is making use of the first LNG carrier to be converted to a floating LNG production (FLNG) vessel and is only the second FLNG project to enter service.

The commencement of operations at Sinopec’s shore-based facility in Tianjin has boosted to 18 the number of LNG receiving terminals in operation in China. The new addition will help accommodate the continued rise in Chinese LNG imports.

The newly crowned world No 2 LNG importer, China purchased 5.18M tonnes in January 2018, a 51% year-on-year (YOY) leap.

The monthly total was equal to 63% of the volume handled by Japan, the world’s leading LNG buyer.

As part of the brisk start to 2018, the handling of two LNGC transits per day in one direction has now become a routine operation at the Panama Canal. The waterway’s overall LNGC traffic is set to show a 50 per cent yearon-year growth for the 12 months ending in September 2018.

The current high level of shipyard enquiries for newbuilding berth slots is driven by the need for the remaining 50 or so LNGCs that will

be required by 2020 and 2021 to lift cargoes from the new US liquefaction trains currently under construction. The competitive prices being quoted for new tonnage are attracting owners anxious not to miss an opportunity and willing to order speculatively.

Beyond that, however, there is a looming need for a new wave of investments in LNG projects and ships worldwide. In recent in-house publications both Shell and Chevron have warned of an impending shortage of LNG by the mid-2020s as the global appetite for clean-burning gas grows.

The challenge for gas sellers and buyers will be to find common ground in a rapidly changing LNG market. Gone, or going, are the traditional 20-year-plus sale and purchase agreements, with gas prices indexed to those of crude oil and shipments to nominated discharge ports.

Many buyers now prefer more flexible contracts that not only commit them to buying fewer supplies over a shorter period of time but also enable them to take greater advantage of price fluctuations. Such buyers are also not averse to spot deliveries of LNG to meet lastminute needs. Shell reports that the LNG spot market increased by 17% in 2017 to reach an alltime high of 1,100 cargoes.

As part of the drive towards more flexible trading conditions, several countries are seeking to establish LNG trading hubs. The emergence of hubs is expected to increase marketplace liquidity and transparency in pricing, similar to the development of benchmark crude oil futures years ago.

After a quiet 2017, when only Eni made a commitment to adding more liquefaction capacity, pressure is growing for more LNG export project final investment decisions in the months ahead. Growing confidence in market prospects indicates that upcoming events will prove that the brisk start to 2018 was no fluke. LNG

LNG World Shipping | March/April 2018

CHINA LNG RECEIVING TERMINALS Terminal (operator)

Capacity (mta)*

Road tanker loadings per month**

Dalian (PetroChina)

3.0

< 1,500

Tangshan (PetroChina)

3.5

3,000-4,500

Qingdao (Sinopec)

3.0

3,000-4,500

Tianjin FSRU (CNOOC)

2.2

> 4,500

Tianjin (Sinopec)

3.0

–

6.5

< 1,500

Qidong (Ganghui Energy)

0.6

3,000-4,500

Shanghai (CNOOC)

3.0

–

Wuhaogou (Shenergy)

1.0

–

Ningbo (CNOOC)

3.0

> 4,500

Zhoushan (ENN)

3.0

–

Wenzhou (SInopec)

3.0

–

Northern

Eastern Rudong (PetroChina)

Southern Fujian (CNOOC)

5.2

> 4,500

Yuedong (CNOOC)

2.0

1,500-3,000

Dapeng (CNOOC)

6.7

< 1,500

Dongguan (Jovo)

1.5

1,500-3,000

Zhuhai (CNOOC)

3.5

> 4,500

Beihai (Sinopec)

3.0

3,000-4,500

Hainan (CNOOC)

3.0

–

Haikou (Shenergy)

0.6

–

Fangchenggang (CNOOC)

0.6

–

Shenzhen Diefu (CNOOC)

4.0

–

* LNG regasification/handling capacity, in million tonnes per annum (mta) ** Number of LNG road tankers loaded per month during the winter of 2017/18 Source: LNG World Shipping; JCL Research: Mike Corkhill Asia with Countries by FreeVectorMaps.com

in service as at 1 March 2018 under construction as at 1 March 2018

Tangshan (PetroChina)

Dalian (PetroChina)

Mongolia Tianjin FSRU (CNOOC)

Beijing

North Korea

Tianjin (SInopec)

Japan

Qingdao (Sinopec)

CHINA

South Korea

Rudong (PetroChina)

Qidong (Ganghui Energy)

Shanghai (CNOOC)

Wuhaogou (Shenergy)

Zhoushan (ENN)

Ningbo (CNOOC)

Wenzhou (SInopec) Zhuhai

Fujian

Dapeng Taiwan

Fangchenggang (CNOOC)

Yuedong

Shenzhen Diefu (CNOOC) Dongguan

Laos

Haikou Thailand

Beihai (Sinopec) Hainan

Cambodia

Vietnam Phillipines

Malaysia

Brunei

Indonesia

LEFT: Nakilat’s CEO Eng Abdullah Al Sulaiti signs a new charter agreement with chairman of Maran Gas, Mr John Angelicoussis.

NAKILAT’S ROLE AS A KEY SUPPORTER OF QATAR’S AMBITION Qatar is on the brink of an expansion that could increase LNG exports by 30%. LNG World Shipping reviews the Qatar Gas Transport Company Limited (Nakilat), a company whose main purpose is to support Qatar’s ambition to dominate global LNG supply.

Aiming to be the largest supplier of LNG in the world

Nakilat’s main role is to support Qatar’s often stated ambition of being the world’s largest supplier of LNG. Established in 2004 (see milestones), Nakilat manages the shipping requirements of Qatar’s LNG and associated products (eg LPG) to global markets. Nakilat has a strategic long-term charter agreement with the world’s largest LNG producer Qatargas. Qatar remains the world’s top LNG exporter. Around 78M tonnes was loaded in 2017, which accounted for 26.6% of the global trade

LNG World Shipping | March/April 2018

in the product. In this respect, Nakilat is responsible for the transportation of LNG produced in Qatar to global markets.

Nakilat’s LNG and LPG vessels are trading worldwide, either managed inhouse through the subsidiary Nakilat Shipping Qatar Ltd (NSQL) or by Shell International Trading and Shipping Company Limited (STASCO), as well as joint venture partners such as MOL, NYK, K Line, Maran Gas, Teekay, International Seaways, Pronav and SCI. This role is expanding and in March 2018, Maran Nakilat Company Ltd, a joint venture between Nakilat and Maran Gas,

announced a new agreement which increases the number of vessels jointly-owned by Nakilat and Maran Gas from 13 to 15. The two newly added vessels, Woodside Rogers and Woodside Goode are equipped with dual-fuel diesel-electric propulsion and have a capacity of 159,800 m3 each.

Ownership structure

Nakilat has a somewhat more complicated ownership structure than often realised.

The company is 51%-owned by a range of Qatar state-owned entities, with the

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Shipowner INTERVIEW | 9

2004 Nakilat established as shipping arm of Qatar’s LNG sector.

2005 Nakilat’s shares are listed on the Qatar Stock Exchange.

2005 Nakilat takes delivery of its first LNG carrier.

2005 Nakilat Agency Company is established.

2006 Nakilat formed strategic alliance with STASCO for management of its 25 wholly owned LNG carriers.

2006 Nakilat awarded a 25-year time charter contract by Qatargas for 24 LNG carriers.

2008-2009 42 LNG carriers and 4 LPG carriers are delivered to Nakilat.

2008 Nakilat takes delivery of Mozah, the first Q-Max LNG carrier.

6% Qatar Investment Authority 10% Qatar Civil Pension Fund

2% Qatar Military Pension Fund 2% Qatar Fuel 1% Qatar Petroleum

2008 Nakilat-Keppel Offshore & Marine is established.

2010 Nakilat Damen Shipyard Qatar is established.

2011 Erhama Bin Jaber Al Jalahma Shipyard started operations.

OWNERSHIP

30% Milaha (the new identity of the merger of Qatar Navigation and Qatar Shipping)

2012 wholly owned subsidiary Nakilat Shipping Qatar Ltd (NSQL) formed and assumes management of four LPG carriers.

49% Qatari citizens (via the Qatar Stock Exchange)

2014 NSQL assumes management for first the four LNG carriers.

2015 Nakilat completes the world’s first ME-GI conversion for a Q-Max LNG carrier.

remainder of the shares quoted on the Qatar Stock Exchange.

Subsidiary roles

Nakilat Shipping Qatar Limited (NSQL) is a wholly owned subsidiary of Nakilat, responsible for the inhouse ship management of a number of the fleet’s vessels. At present, NSQL manages 18 vessels, comprising of 14 LNG (eight Q-Flex, six Q-Max) and four very large gas carriers (VLGGs). The VLGCs were ordered in 2005 and delivered in 2008 and 2009.

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They are jointly owned by Nakilat and Milaha and have a capacity of 84,000 m3 each. Nakilat acts as the commercial and technical manager for these vessels, which are currently chartered by Shell, Glencore and Gunvor. According to Nakilat, while its main business focus is in LNG shipping, it also monitors the LPG sector closely to take advantage of any associated business opportunities that may arise.

All 65 Nakilat LNG carriers are fixed on long-term charters and the company does not charter in any vessels. If a vessel was to come off charter, based on

2017 Nakilat completed the first phase of the fleet management transition for 10 LNG carriers from STASCO. 2017 Nakilat recognised as one of the top performing companies in Qatar by Forbes Middle East.

2017 Nakilat signed an alliance agreement with Höegh LNG to explore FSRU collaboration opportunities.

2017 Nakilat named as one of the winners of the British Safety Council’s International Safety Award.

LNG World Shipping | March/April 2018

10 | INTERVIEW Shipowner

market conditions, commercial drivers and industry relationships, Nakilat may charter the ship out directly to charterers or use a shipbroker.

Nakilat driving Qatarisation

In line with Qatar’s National Vision 2030, the development of a sustainable Qatari workforce is one of the key priorities at Nakilat. The aim is to ensure Qatari nationals are provided with ample opportunity to develop their careers to enable them to eventually take on positions of higher responsibility. As at December 2017, the company had achieved a Qatarisation level of 41.7%.

Dual-fuel trial

Nakilat was the first company to undertake the conversion of conventional MAN diesel engines to a dual-fuel, M-type, electronically controlled gas injection (ME-GI) set-up. The retrofit

was carried out on the pair of engines driving the 266,000 m3 Rasheeda, one of its Q-Max LNGCs. However, according to Nakilat, any decision to retrofit the remaining fleet is one that must be driven by the charterers in co-operation with Nakilat.

Significant milestones in the development of Nakilat

In addition to its core shipping activities, Nakilat operates the ship repair and construction facilities at Erhama Bin Jaber Al Jalahma Shipyard in Ras Laffan Industrial City via two strategic joint ventures: Nakilat-Keppel Offshore & Marine and Nakilat Damen Shipyards Qatar. It also provides shipping agency services through Nakilat Agency Company at all Qatari ports and terminals, and towage and other marine support services through its joint venture Nakilat SvitzerWijsmuller for vessels at the Port of Ras Laffan and around

Qatar’s Halul Island.

Nakilat’s business portfolio extends beyond shipping to include a comprehensive range of maritime services, complementing Nakilat’s vision to be a global leader and provider of choice for energy transportation and maritime services.

There is no question that Nakilat has become, size-wise, a world leader in LNG shipping. The current LNG and LPG fleet represents a total investment of approximately US$11Bn and it has a combined carrying capacity of over 9M m3 or approximately 12% of the world’s LNGC capacity.

Nakilat has 69 vessels in its fleet, which is made up of 65 LNG and 4 very large LPG carriers. Of the 65 LNG carriers, 25 are wholly owned by Nakilat while the remaining 40 vessels are jointly owned. With regards to the jointly owned vessels, Nakilat’s ownership ranges from 20-60%, with an aggregate average of 45%. LNG

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LNG World Shipping | March/April 2018

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OPINION | 13

Small and mid-scale liquefaction streamlines LNG export projects E

lba Island, one of the new US LNG export terminals due to commence loading cargoes in 2018, is notable for its choice of gas-processing technology.

Rather than the large-scale liquefaction trains commonly chosen for export projects, the terminal operators have opted for a series of modular units, each capable of producing 0.25 million tonnes per annum (mta) of LNG. Elba Island is one of six US LNG export terminals for which small and midscale liquefaction solutions have been chosen in order to streamline project realisation.

One other has been approved and, although the remaining four are yet to receive the green light, the projects’ developers are confident of the technical and commercial merits of their offerings and expect to make financial investment decisions (FIDs) shortly.

Elba Island rebirth Situated near Savannah in Georgia, Elba Island entered service almost 40 years ago, in September 1978, as an LNG import terminal to receive the large volumes of gas expected to arrive from Algeria under long-term contract. The project faltered due to a pricing dispute, and Elba Island was mothballed in 1982.

The Georgia terminal was reopened as an expanded

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Elbe Island is being made ready for its new role as an LNG loading facility, commencing later in 2018

Adopting a ‘keep it simple’ approach, several developers of US export projects are advocating multiple, smallerscale liquefaction trains of modular construction in the drive for flexible, reliable and low-cost LNG

receiving facility in October 2001, as dwindling US gas reserves led to a renewed need for LNG imports. However, within a decade, drillers had discovered how to exploit the country’s vast shale gas resources and cargo discharges at Elba Island have been sporadic in recent years.

Now operated by a 51/49 Kinder Morgan/EIG Global Energy Partners joint venture, Elba Island is one of several US LNG import terminals being given a new lease of life as an export facility through

the provision of a bi-directional capability. With storage tanks and marine jetties in place, all these installations need for their new role is a liquefaction plant.

The gas processing technology chosen for Elba Island is Shell’s Moveable Modular Liquefaction System (MMLS). The masterplan for the site involves installing six MMLS units in the first phase of the project, followed by another four in the second phase to provide an overall LNG export potential of 2.5 mta. Peak output rates could be

LNG World Shipping | March/April 2018

14 | OPINION

expanded up to 4 mta.

Shell has a contract in pace to take the full output of the Elba Island terminal for 20 years. The first six MMLS units are scheduled to be operational by mid-2018 while the facility will reach full capacity by mid-2019.

The MMLS units are produced at a dedicated manufacturing plant and moved to Elba Island for easy assembly. The various units that make up each small MMLS train can be disassembled and moved to a new site if required.

Shell pointed out that the technology enables the start of LNG production much more quickly than is possible with a conventional large liquefaction train of, say, 5 mta capacity.

The 2.5 mta Elba Island liquefaction project entails an overall capital expenditure of US$2.2Bn, making the unit production costs associated with an MMLS unit roughly comparable with those of a large train.

Elba Island has been permitted for LNG sales to customers worldwide, but in addition to exports the facility is well positioned to supply LNG bunkers to domestic locations. Savannah and the Florida home ports of the big cruise liners serving the Caribbean region will be a particular target.

fourth and fifth trains will be replaced with seven 1.4 mta liquefaction units of modular design totalling 9.5 mta in capacity. Cheniere believes it is more cost-effective to build the smaller trains as this would eliminate the need for costly excavation and foundation work and provide the requisite export capacity more quickly than would be possible with larger processing units. Also, the smaller output per train is expected to make it easier to line up prospective LNG buyers and enable construction to proceed on a train by train basis.

Initial estimates by Cheniere show that the unit production costs of the midscale trains are similar to those of a 4.5 mta unit. While the energy company still supports the efficacy of traditional, large-scale liquefaction trains, it is keen to explore the small-tomid-scale option to ensure the buildup of in-house expertise across the range of options.

Supporters of modular trains are also hoping to avoid the delays and cost overruns that have dogged certain custom-built megaprojects. The spiralling costs and extended time delays that Chevron experienced with its Wheatstone and Gorgon schemes in Australia are a case in point.

consists of a gas turbine-driven compressor with a singlesuction scrubber, after cooler, cold box and MR separator.

The company points out that the selection of a centrifugal compressor that does not require a gear box, helper motor or interstage components for the mixed refrigerant highlights its twin philosophies of ‘keep it simple and reliable,’ and ‘stick to wellproven equipment’ when it comes to liquefaction plant design.

Established by Cherif Souki, formerly of Cheniere Energy, and Martin Houston, ex-BG Group, Tellurian is planning to bring the 27.6 mta Driftwood LNG project onstream in four stages.

Targeted for an early 2023 start, the first phase would comprise two storage tanks, one marine jetty and eight mid-scale trains capable of producing 11 mta of LNG. The Driftwood liquefaction process will use integrated precooled single mixed refrigerant technology. When fully operational as a 20-train facility, the terminal will be equipped with 20 GE refrigeration compressors driven

by GE aero-derivative turbines.

Tellurian stated that the US$15.2Bn overall cost of the project means that Driftwood will set a new standard for lowcost LNG production.

Although each individual Driftwood liquefaction train will be a mid-scale unit, by replicating such trains many times over, the project’s overall output will be larger than the volumes produced by most LNG export terminals.

Certainly, the facility’s storage tanks, GE turbines and marine jetty arrangements will match the size of any available.

Commonwealth and Eagle LNG The final two US project developers opting for small-tomid-scale liquefaction solutions are Commonwealth LNG and Eagle LNG. Commonwealth LNG is a scheme proposed for a site near Cameron, Louisiana and the plan calls for eight single mixed refrigerant LNG liquefaction trains with a total output of 9 mta. Target dates are 2019 for a decision to proceed and 2022 for the start of operations.

Eagle LNG is poised to commence construction on the first phase of a three-train, 1 mta LNG plant near the Florida port of Jacksonville’s Blount Island Marine Terminal.

The company has received federal approval for small-scale exports and is aiming for initial LNG production commencing in Q3 2019. LNG

LNG Ltd and Tellurian Corpus Christi joins in Another US export terminal operator swayed by the potential advantages of small to mid-scale liquefaction is Cheniere Energy.

All five trains at the company’s Sabine Pass facility and the first two trains at its new greenfield Corpus Christi installation are units with a liquefaction capacity of 4.5 mta. Subject to an FID on its construction, a third Corpus Christi train would also be of 4.5 mta.

However, for the Stage 3 expansion phase at Corpus Christi, the planned 4.5 mta

LNG Ltd and Tellurian are both developing schemes for LNG export plants in Louisiana near Lake Charles and the Calcasieu River. LNG Ltd is proposing four 2 mta trains for its Magnolia project, while Tellurian Inc is planning for up to 20 trains of 1.38 mta each to underpin operations at its Driftwood LNG terminal.

LNG Ltd is advocating its own optimised single mixed refrigerant liquefaction technology for Magnolia. The mixed refrigerant (MR) cycle at the heart of the process

LNG World Shipping | March/April 2018

The Magnolia LNG facility is proposed for a site just across from the existing Lake Charles terminal

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PROJECTS | 17

Chinese LNG terminals hit record utilisation rates China’s 18 LNG terminals have not only been receiving shipments at an unprecedented rate but also sending out record numbers of laden road tankers

C

hina achieved a remarkable 48% growth in LNG imports in 2017, with cargo discharges up from 25.5M tonnes in 2016 to 37.9M tonnes. The performance pushed China past South Korea to become the world’s second-largest LNG importer.

Several of China’s 17 facilities in service last year were operating well above nameplate capacity as the winter chill set in, while the

behalf of Sinopec in January 2018 – China’s 18th terminal.

Sinopec’s facility is a shorebased installation, unlike the first terminal in the northern port, a floating storage and regasification unit (FSRU)-based project operated by CNOOC.

Northern powerhouse average utilisation rate for the countrywide complement of terminals was 66%, marking their busiest ever year.

This stands in stark contrast to the situation in 2015 when, in the face of the high gas prices, Chinese LNG imports, at 19.6M tonnes, fell by 1% year-on-year.

Many of China’s new LNG terminals coming onstream in 2015 remained virtually idle throughout the year.

A second terminal in Tianjin commenced operations on

The current strong Chinese demand for LNG imports, and natural gas in general, is being driven by the government’s clean environment programme of substituting gas for coal as a heating fuel in homes and commercial premises.

So far, 18 provinces have implemented coal-to-gas conversion schemes, including the energy-intensive northern provinces of Beijing, Tianjin, Shanxi and Hebei.

The four LNG import terminals serving the northern

part of the country – Dalian, Caofeidian Tangshan, Qingdao and the Tianjin FSRU – have been particularly busy over the past year.

The Qingdao terminal, also operated by Sinopec, received 4.6M tonnes of LNG in 2017, 75% up on the previous year and well above the facility’s nameplate regasification capacity of 3 million tonnes per annum (mta).

PetroChina has reported that its 3.5 mta Tangshan terminal has received 121 shipments totalling 10.1M tonnes since the facility opened in November 2013, and that the annual throughput in 2017 was by far the greatest.

CNOOC’s Tianjin FSRU terminal is a hybrid installation that makes use of either an FSRU or a floating storage unit (FSU) to handle LNG flows.

The vessel is backed up by

The Dapeng terminal team are proud of their LNG receiving facility, the largest in China

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LNG World Shipping | March/April 2018

18 | PROJECTS

two 30,000 m3 shore storage tanks and eight road tanker loading bays.

The FSRU utilised at Tianjin, GDF Suez Cape Ann, has the capacity to regasify up to 2.2 mta of LNG but only small volumes have ever been processed in this way. CNOOC replaced the FSRU with an FSU at Tianjin for most of 2017 and this vessel received 1.8M tonnes during the year, an 88% jump on 2016 levels.

The LNG was pumped to the shore tanks as space became available and then loaded into cryogenic road tankers for distribution to final customers. During the 2017/18 winter CNOOC has been using both GDF Suez Cape Ann and an FSU to maximise cargo throughputs.

Because the Tianjin FSRU terminal was hooked up to the PetroChina pipeline serving the Beijing-Tianjin-Hebei region in December 2017, the FSRU’s cargo regasification capabilities are likely to be called upon more than previously required during the current charter period.

Eastern promise

China’s eastern provinces are served by five LNG import terminals – Rudong, Qidong, Shanghai, Wuhaogou and Ningbo.

PetroChina’s Rudong installation received 57 shipments and 4.4M tonnes of LNG in 2017. The volume was within nameplate capacity as the commissioning of a new 200,000 m3 storage tank in November 2016 helped boost LNG-handling capability at the terminal from 3.5 to 6.5 mta.

CNOOC’s Ningbo terminal received 3.6M tonnes in 2017, up 66% on the previous year and 20% above its nameplate capacity.

Commissioned in June 2017, Guanghui Energy’s 0.6 mta Qidong terminal was one of two new Chinese terminals opened

last year. Nine cargoes were discharged at the facility during the second half of the year.

In recent weeks CNOOC has embarked on an expansion project at its Shanghai terminal which will double capacity, from 3 to 6 mta, by 2020. Two new 200,000 m3 storage tanks and road tanker loading bays are being added.

Southern provinces

China’s greatest concentration of LNG receiving facilities is in the southern provinces, including in the Pearl River Delta region. The eightterminal complement is comprised of Fujian, Yuedong, Dapeng, Dongguan, Zhuhai, Beihai, Hainan and Haikou.

Dongguan and Haikou, like Qidong and Wuhaogou, are small-scale facilities.

The second new Chinese terminal to commence operations in 2017, CNOOC’s Yuedong installation received 550,000 tonnes of cargo since its April commissioning. Yuedong became the seventh of China’s 18 terminals to be inaugurated by a Qatargas cargo when the 210,000 m3 Q-flex vessel Al Kharaitiyat discharged the facility’s first shipment.

CNOOC’s Zhuhai terminal also received more LNG than its nameplate capacity in 2017, the 4M tonnes discharged being 14% above its rated throughput. Australia, the leading supplier of LNG to China over the past two years, provided 50% of the installation’s cargoes.

Keep on trucking

China has followed the example of Everett in the US port of Boston, the first LNG import terminal with road tanker loading bays, and has set new records in tank truck sendouts.

China is making up for its comparative lack of natural gas pipeline

LNG World Shipping | March/April 2018

The FSRU-based Tianjin terminal is one of the busiest in China for road tanker loadings

and storage infrastructure through a fleet of 10,000 LNG road tankers and 40-foot ISO tank containers.

While many of these units distribute shipments from China’s small-scale domestic liquefaction plants, the majority load at the country’s LNG import terminals.

The eight truck loading bays at CNOOC’s Tianjin FSRU terminal are among the country’s busiest. This winter more than 4,500 laden road tankers per month have been dispatched from the terminal.

Ningbo, Fujian and Zhuhai are also members of the top tier terminals for LNG road tanker loadings. Qingdao, Beihai, Tangshan and Qidong comprise a second tier; Yuedong and Dongguan a third; and Dalian, Rudong and Dapeng a fourth.

Even Dapeng has been dispatching road tankers at a rate of over 600 per month.

While the majority of road tanker deliveries are to customers within 500 km of the liquefaction plant or import terminal, this winter the LNG terminals in the southern part of the country have been dispatching tank trucks and ISO

tanks on long-distance journeys to consumers in the north.

CNOOC has leased 100 road tankers for loading at its southern terminals and one of the more notable operations was a December 2017 Zhuhai consignment to Weifang, 2,000 km away. Early this year Sinopec dispatched a truckload of LNG from its Beihai terminal to the city of Zibo in Shandong province, a drive of three days.

Following the commissioning of Sinopec’s Tianjin facility in January, China is set to bring two further new LNG import terminals into service in 2018, followed by two more in 2019.

The newcomers will increase the country’s complement of LNG receiving terminals to 22.

Not only are nationwide LNG imports expected to continue to climb strongly over the next few years, but also the fleet of LNG road tankers and ISO tanks required for domestic distribution services.

Vehicle manufacturers predict that the annual production of such units could hover around the 2,500 mark through to at least 2020. LNG

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20 | SMALL-SCALE LNG

Coral Energy delivers a commissioning cargo to the Manga LNG terminal in Tornio in November 2017

TORNIO BOOSTS BALTIC LNG MOMENTUM

he delivery of the 18,000 m3 coastal LNG carrier Coral EnergICE by Neptun Werft’s Rostock yard to Anthony Veder on 25 January 2018 has opened up a new phase in Baltic LNG shipping.

The first such vessel to be built to the ice-class 1A Super standard, the newbuilding is the largest of the growing fleet of coastal LNGCs active in the region and is able to serve all the Baltic Sea LNG terminals, including those in ports that are ice-bound throughout the winter months.

with its 50,000 m3 tank, is currently going through the commissioning process. The largest LNG receiving facility in the Nordic region and due to be fully operational by mid-2018, Manga LNG is a joint venture with Gasum, Outokumpu, SSAB and EPV Energy.

The Manga LNG terminal is able to supply LNG bunkers in addition to regasifying LNG and loading LNG road tankers. One of the ships it is fuelling is Arctia Icebreaking Oy’s Polaris, a dualfuel icebreaker whose two LNG bunker tanks provide 800 m3 of capacity and 10 days of autonomous operation on gas in typical winter conditions.

Coral EnergICE represents a strengthening of the Baltic shipping links between Skangas and Anthony Veder. The gas company already has two of Veder’s coastal LNG carriers – the 6,500 m3 Coral Anthelia and the 15,600 m3 Coral Energy – on charter, as well as the 5,800 m3 LNG bunker vessel Coralius that Veder owns jointly with Sirius Shipping.

These ships are frequent visitors to the other Skangas LNG terminals in the Nordic region, namely the Risavika and Øra facilities in Norway and Lysekil in Sweden. Whereas Øra and Lysekil, like Pori and Manga, are receiving terminals, the Risavika plant near Stavanger is a production facility, able to liquefy up to 300,000 tonnes per annum of LNG.

Adding Finland to the mix

Baseload receivers

A key seedbed of LNG bunkering activity, the Baltic Sea is welcoming a new wave of investment in the infrastructure needed to fuel gas-powered ships

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Coral EnergICE has been taken on long-term charter by Skangas, the LNG terminal-operating affiliate of Finland’s Gasum. Skangas will use the vessel to deliver LNG to its two Finnish receiving terminals – Pori on the south coast and the Manga facility in Tornio, the northernmost port in the Bay of Bothnia.

Pori, which features a 30,000 m3 storage tank, commenced commercial operations in September 2016 while the Manga facility,

LNG World Shipping | March/April 2018

There are also two Baltic Sea baseload LNG import terminals in operation, Polskie LNG’s shore terminal in the Polish port of Świnoujście and the 170,000 m3 floating storage and regasification unit (FSRU) Independence operated by Höegh LNG in the Lithuanian port of Klaipeda. By means of these facilities, Lithuania and Poland became LNG import nations in December 2014 and June 2016, respectively.

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SMALL-SCALE LNG | 21

Commencing in 2018, the FSRU Independence in Klaipeda will become part of an important new LNG bunkering supply chain

Świnoujście received, on average, one cargo a month last year but that delivery rate is set to double in 2018. The terminal operator has also embarked on a project to increase the LNG regasification capacity of the facility by 50%, to 5.6 million tonnes per annum (mta) by 2021.

The expansion programme includes the development of LNG bunkering infrastructure; facilities to enable loading, discharge and transhipment operations involving small and medium-scale LNG tankers; and rail loading points to facilitate the dispatch of cryogenic ISO tank containers.

Klaipedos Nafta (KN) has chartered the regas vessel Independence until 2024, at which point it has an option to buy the FSRU. The 2.2 mta unit is not only assisting Lithuania reduce its dependence on Russian pipeline gas but also, like the Polskie LNG terminal, providing a springboard for the development of small-scale LNG infrastructure in the region.

In September 2017 KN began commissioning its new shoreside terminal, which features five 1,000 m3 cylindrical pressure vessel storage tanks, in another part of Klaipeda harbour. Like most Baltic Sea LNG receiving facilities, the KN installation is capable of reloading cargoes.

Start-up operations at the site kicked off with the ship-to-ship (STS) transfer of 1,000 m3 of LNG from Independence to Shell’s new 6,500 m3 LNG bunker vessel Cardissa. Cardissa then moved to KN’s reloading station to discharge her cargo to the first two tanks at the installation ready to receive LNG. The liquefied gas was then pumped into road tankers at the facility’s loading bays for onward distribution.

Hive of bunkering activity

The designation of the Baltic and North Seas as IMO sulphur emission control areas in 2006 and 2007, respectively, supported the emergence of northern Europe and Scandinavia as the birthplace of LNG bunkering.

Although the concept is now spreading globally, the Baltic and North Seas still play host to over 80% of the world’s LNG bunkering activity and remain the focus for most new investments in fuelling infrastructure for LNG-powered ships.

Nynäshamn, operated by AGA and the second of Sweden’s two LNG receiving terminals, has been one of the world’s leading providers of LNG bunkers since Viking Line’s dual-fuel passenger/ car ferry Viking Grace entered service in 2013. A delivery system

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based on using road tankers and a 180 m3 cross-harbour bunker vessel ensures that the 57,000 gt Viking Grace is fuelled with Nynäshamn LNG at its Stockholm berth virtually every day.

Viking Grace provides a daily service between Stockholm and the Finnish port of Turku and burns around 23,000 tonnes of LNG per annum. In October 2017 Viking Line contracted a second LNGfuelled ferry for the Stockholm-Turku link, a vessel of 63,000 gt that will commence operations in early 2021.

The AGA terminal is also set to provide the LNG fuel for a pair of dual-fuel ferry newbuildings that Rederi AB Gotland will put into domestic service on the route between Nynäshamn and the island of Gotland. Nauticor, like AGA part of the Linde Group, has won the contract to supply the bunkers and both 32,000 gt ferries, Visborg and Thjelvar, are set to enter service in 2018.

To support its nascent Baltic LNG bunkering service, Nauticor, in co-operation with KN in a venture called Blue LNG, will charter a 7,500 m3 LNG bunker vessel that Bernhard Schulte Shipmanagement (BSM) and Babcock International are having built at the Hyundai Mipo yard in Korea. The vessel, which is due for completion in September 2018, will use the KN reloading terminal in Klaipeda as its home base.

Only the start

The Baltic Sea projects outlined above mark the start of the blossoming relationship that the region’s gas and electric utilities, shipping companies and industrial enterprises are developing with LNG. Plans for the construction of further LNG bunkering and distribution terminals in LÜbeck, Rostock, Riga, Paldiski, Hamina, Helsinki, Turku, Gävle, Liepaja and Muuga are being progressed.

Two additional baseload receiving terminal schemes are also under review – an FSRU for the Russian enclave of Kaliningrad and a new shore terminal in Brunsbüttel to serve northern Germany.

Gazprom is due to take delivery of its 170,000 m3 FSRU Marshal Vasilevskiy from Hyundai Heavy Industries in June 2018 and inaugural employment in Kaliningrad is an option under review.

Market demand for the Brunsbüttel facility, which would be Germany’s first LNG import terminal, is currently being assessed.

If the response is positive, it aims to begin receiving cargoes in late 2022. Brunsbüttel is connected to the Baltic via the Kiel Canal, a handy link for bunker vessels and gas-powered ships wishing to make use of this new LNG source. LNG

LNG World Shipping | March/April 2018

CARGO HANDLING | 23

SIGTTO cargo-handling guidance for the ship/shore interface The Society of International Gas Tanker and Terminal Operators (SIGTTO) is publishing three sets of guidelines early in 2018 that focus on equipment and operations that come into play when a gas carrier is berthed at a terminal and cargo is being pumped between ship and shore

T

he first deals with ship manifolds; the second provides guidance on how to avoid the generation of excessive surge pressures when emergency shutdown (ESD) systems are activated; while the third features safe working practice guidelines for ships and terminals handling LPG and chemical gases.

The Second Edition of Recommendations for Liquefied Gas Carrier Manifolds is a joint SIGTTO/Oil Companies International Marine Forum (OCIMF) publication. The document, which updates the 2011 edition, provides recommendations on the layout, strength and fittings for gas carrier manifolds.

With the new edition, SIGTTO and OCIMF have sought to bring together in one document the manifold arrangements and cargo strainer guidelines for LPG and LNG carriers in order to promote improved standards of safety and efficiency in ship operations. Shore compatibility is an essential element of safe operations and the new guidance will also assist

SIGTTO’s new manifold document covers LNG bunkering for the first time

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in planning the position of loading and discharging facilities on new jetties.

Among the key changes in the latest version of the manifold publication are: • New sections covering small-scale LNG. • The bunkering manifold provisions have been extended to include LNG bunkering as an option.

• A new approach to laying down the recommendations on manifold design is introduced through the specification of the pipe schedule (denoting the wall thickness of the pipework); allowable loads on manifold support arrangements; minimum mechanical properties of material used; and the pressure rating of flange reducers and spool pieces.

• Clarified presentation flange dimensions and face finish to conform to the ASME B 16.5 standard.

The new Guidelines for the Alleviation of Excessive Surge Pressures on ESD for Liquefied Gas Transfer Systems publication has been prepared

by SIGTTO to assist relevant ship and

shore staff in avoiding the generation of excessive surge pressures and momentum change in cargo transfer systems on activation of ESD devices or other events. The document’s description of the generation of surge pressures features both a high-level overview and a more detailed technical explanation so that it is applicable to surge experts and novices alike.

The publication’s practical guidance and recommendations are aimed specifically at personnel with responsibilities for gas carrier and terminal loading and unloading systems. They have been developed to assist in achieving the following goals: • Recognise the potential hazards of surge pressure.

• Understand the factors that affect or create surge pressures.

• Review the engineering and operating procedures of the cargo transfer system.

• Understand aspects of surge pressure control on the other side of the ship/shore interface to enable mutual understanding of safe transfer procedures.

• Understand the potential benefits of a linked ship/shore ESD system in mitigating surge pressures.

The first edition of the Ship/Shore Interface for LPG/Chemical Gas Carriers and Terminals guidance document recognises the technological advances that have been made over the past two decades and supersedes a 1997 SIGTTO publication entitled Ship/Shore Safe Working Practice for LPG and Chemical Gas Cargoes, which is now withdrawn.

SIGTTO has prepared this document to identify the potential hazards that can arise at the LPG/chemical gas ship/ shore interface; to provide safe working practice guidelines through reference to industry publications; to minimise the risk of incidents occurring; and to help raise overall safety awareness at the interface.

The publication describes risk assessment and hazard identification techniques that can be used by gas carrier staff and terminal operators. LNG

LNG World Shipping | March/April 2018

24 | INNOVATION

CONTAINMENT SYSTEM BREAKTHROUGHS

I

t is not every day that the LNG shipping industry welcomes a ‘new’ cargo containment system.

However, in 2018 two systems – KC-1 in Korea and IHI-SPB in Japan – are featuring in conventional-size LNG carriers for the first time.

The KC-1 membrane tank system is a truly new technology and has not been utilised in an LNG carrier of any size before. However, IHI’s self-supporting, prismatic-shape, IMO Type B (IHI-SPB) design is not new, as such, having been introduced as a liquefied gas carrier containment system by the Japanese shipbuilder 30 years ago. It has only been incorporated on commercial LNG carriers on one occasion: a pair of 89,900 m3 vessels built in 1993.

Two cargo containment systems are being applied to conventional-size LNG carriers for the first time

KC-1 is a new membrane LNG containment system designed, developed and built in Korea

in February 2016 by Kogas in tandem with Korea’s three leading shipyards – SHI, Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering.

KC-1 has been introduced by the KC LNG Tech partners to provide Korean shipbuilders with a domestic alternative to the two established membrane technologies offered by Gaztransport & Technigaz (GTT). Like most LNG carrier builders, the Korean yards are licensees of the GTT technologies and pay a handsome royalty fee for each ship constructed with GTT tanks.

The KC-1 containment

system technology received design approval from various leading classification societies over the 2007-2014 period.

The latest agency to award a certification is the US Coast Guard, having granted concept approval in December 2017 for KC-1 LNG ships of up to 174,000 m3 in size.

KC-1 in detail

Both the primary and secondary barriers in the KC-1 system are of 1.5 mm thick stainless steel plate, and both barriers have corrugations to accommodate thermal expansion and contraction. The barriers are positioned close to each other and are backed by

Enter KC-1

The first two LNG carriers fitted with KC-1 membrane tanks entered into service early in 2018. They are the 174,000 m3 sister ships SK Serenity and SK Spica, built for SK Shipping by Samsung Heavy Industries. Both vessels have been fixed on 20-year charters to Korea Gas Corp (Kogas) to carry LNG cargoes from Cheniere Energy’s export terminal at Sabine Pass in Louisiana. Each ship is expected to lift about 500,000 tonnes of LNG per annum.

The KC-1 membrane tank containment system has been developed by KC LNG Tech, an engineering firm established

LNG World Shipping | March/April 2018

www.lngworldshipping.com

INNOVATION | 25

a single layer of polyurethane foam (PUF) insulation, supplied as panel pieces.

Inter-barrier spacers (IBSs) are placed between the primary and secondary membranes to maintain equidistant spacing between the two, thus ensuring that any damage to the primary barrier does not impact on the secondary barrier.

SK Serenity and SK Spica are fitted with MAN’s mechanically operated, electronically controlled, gas-injection (ME-GI) diesel engines and a Samsung partial reliquefaction plant.

KC LNG Tech reports that the KC-1 system provides a cargo boil-off gas (BOG) rate of 0.12% of the cargo volume per day.

The SK Shipping pair were delivered approximately six months later than originally envisaged. KC LNG Tech states that most of the delay is down to insufficient preparations for the mass production of the membrane panels and that, considering the challenges involved in introducing a major new technology in the LNG shipping sector, the principals are not overly disappointed with the progress that has been made.

SHI is also constructing a second pair of LNG carriers to be equipped with KC-1 containment systems. Due for completion in 2019, these are 7,500 m3 coastal ships for the Jaeju Aewol project and one of the pair will serve as an LNG bunkering vessel.

The two vessels will transport cargo to a new LNG terminal being built on the Korean island of Jaeju. KC-1 membranes will also be utilised as the containment system for a pair of 45,000 m3 storage tanks under construction at the new Jaeju terminal.

IHI-SPB comeback

The two 89,900 m3 LNGCs built in 1993 and delivered as

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SK Spica and sistership SK Serenity are the first KC-1 LNG carriers

Arctic Sun and Polar Eagle are not the only gas vessels with IHI-SPB tanks currently in service. Two offshore LPG vessels – the 1997-built, 54,000 m3 Escravos floating storage and offloading unit and the 135,000 m3 Sanha floating production storage and offloading vessel commissioned in 2005 – also incorporate this containment system.

IHI-SPB tanks were also specified for a 25,000 m3 floating storage and regasification unit barge built for Exmar by the Wison Offshore Marine shipyard at Nantong in China. Delivered in December 2017, the LNG regas vessel has two 12,500 m3 cargo tanks which were built at the Aichi yard in Japan and barged to China.

The next IHI-SPB ships about to make the news are a series of four 165,000 m3 LNG carriers that the Japan Marine United Corp ( JMU) shipyard in Japan is constructing for Tokyo Gas. The orders were placed in 2014, a year after JMU was established through the merger of the ship construction activities of IHI Marine United and Universal Shipbuilding. The hulls of the quartet are being built at JMU’s Tsu facility and are then towed to Aichi for tank installation.

Tokyo Gas will employ the ships, which are due for delivery in 2018 and 2019, in lifting cargoes from the new Cove Point LNG export project on the US East Coast. They will be the first conventional-size LNGCs to be fitted with IHI-SPB tanks.

IHI-SPB tanks are subdivided into four spaces by a centreline, liquid-tight bulkhead and a transverse swash bulkhead. This subdivision, in tandem with the stiffened plate structure of both the shell and the internal supporting elements, provides the IHI-SPB system with a high degree of strength, to the extent that the risk of cargo sloshing damage is obviated at all fill levels.

In addition, like all liquefied gas tanks designed to the IMO Type B standard, IHI-SPB units require only a partial secondary barrier.

Robust Type B tanks comply with the ‘leak before failure’ principle which means that if a fatigue crack occurs, it will propagate very slowly, allowing time for remedial measures to be taken.

Another advantage is the prismatic shape; IHI-SPB tanks are the most space-efficient of the containment systems currently in use. The units can

be constructed to accommodate specific hull lines so that the final shape optimises use of the space available. The main deck is flat across the width of the ship and there is no need for a trunk deck.

IHI-SPB tanks can be constructed of either aluminium, stainless steel or 9% nickel steel. Aluminium tanks are the lightest of the three options and have been chosen for all the liquefied gas vessel applications to date.

The cargo tank insulation consists of PUF panels, fixed by central studs to the tank.

Cushion joints are inserted between panels to absorb relative movements between the tank and the insulation and eliminate thermal stresses in the insulation.

The first ship in the series was named Energy Liberty at an October 2017 yard ceremony and the vessel is due for a March 2018 delivery. Completion of the four Tokyo Gas ships is running several months late and IHI has attributed the delays to problems encountered in fitting the insulation system. However, the shipbuilder is confident that all four ships will be in service by April 2019, as per the latest schedule. LNG

LNG World Shipping | March/April 2018

26 | INNOVATION

Wärtsilä remains closely involved with WinGD’s X-DF technology through a 10-year service partnership agreement

MORE LNG OWNERS CHOOSE LOW-PRESSURE, TWO-STROKE ENGINES

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f the 13 conventional LNG carriers contracted in 2017, four were specified with low-pressure, dual-fuel, twostroke engines developed by Winterthur Gas & Diesel (WinGD). The current LNGC orderbook now features 16 vessels which will be powered by these units, which WinGD terms its Generation X dual-fuel (X-DF) engines.

The newbuildings will join the two LNG carriers with low-pressure, twostroke propulsion systems currently in service. These are the 14,000 m³ Hua Xiang 8, which is powered by a Wärtsilä 5RT-flex50DF unit, a precursor of the WinGD dual-fuel X-DF technology, and the 180,000 m3 SK Audace which is propelled by a pair of WinGD 6X62DF engines. Both ships were completed in 2017.

LNG World Shipping | March/April 2018

Two-stroke breakthrough

The propulsion system of choice for the majority of LNGC newbuildings was the dual-fuel diesel-electric (DFDE) option, with a set of four-stroke, medium-speed diesel generators, from around 2002 until December 2012. The order that month, however, for the first vessel with MAN’s high-pressure diesel engines marked the start of the two-stroke, dual-fuel power train era.

Two-stroke, low-speed engines of the MAN high-pressure and WinGD low-pressure types offer major propulsive efficiency advantages over both the DFDE technology and steam turbines, the most popular propulsion system choice during the early days of LNG transport.

Initial LNG shipowner interest in twostroke, dual-fuel propulsion was focused

primarily on the MAN high-pressure unit, otherwise known as its mechanically operated, electronically controlled, gasinjection (ME-GI) diesel engine. Daewoo Shipbuilding & Marine Engineering (DSME) was particularly successful in gaining newbuilding orders by marketing an ME-GI propulsion package which also included its inhouse designs for a high-pressure fuel gas supply system (FGSS) and a partial reliquefaction plant.

While MAN’s ME-GI option remains a popular LNGC propulsion system choice, the WinGD X-DF technology has been gaining ground recently, as highlighted by the current 16-ship orderbook. Both propulsion systems are now also being specified to power larger LNG-powered vessels that are not LNG carriers, including container ships and tankers.

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INNOVATION | 27

Low-pressure advantages

WinGD was established as a 70/30 joint venture company by China State Shipbuilding Corp (CSSC) and Wärtsilä in January 2015 to take over Wärtsilä’s lowspeed, two-stroke engine business, and is now fully owned by CSSC. The origins of the two-stroke technology can be traced back to Sulzer, the Switzerland-based engine manufacturer acquired by Wärtsilä in 1997.

WinGD’s new Generation X engines employ lower rated speeds to reduce both fuel consumption and wear while maintaining power outputs comparable to their predecessors. The X-DF dual-fuel version uses LNG delivered to the engine as low-pressure gas.

The X-DF technology is based on the lean-burn Otto cycle, in which a compressed lean air-gas mixture is ignited through the injection of a small amount of liquid pilot fuel. Under the micro-pilot ignition concept, which is the global standard for the four-stroke engines that drive DFDE propulsion systems, the pilot fuel accounts for only 1% of the overall volume of fuel used.

WinGD states that the concept results in significant reductions in nitrogen oxide (NOx) emissions compared with alternative engine types and enables compliance with IMO Tier III NOx limits in emission control areas (ECAs) without the need for the vessel to be fitted with exhaust after-treatment equipment. The first demonstration run of a large-bore X-DF engine, in April 2015 in co-operation with Diesel United of Japan, verified the performance capabilities.

ME-GI engines, which run on the diesel cycle, offer important advantages such as the abilities to deliver the same output as conventional diesel engines; to burn gas from any source, irrespective of the

methane number; and to provide high levels of efficiency at partial loads.

However, as WinGD points out, some of the X-DF technology’s shortcomings in those areas where ME-GI offers advantages need to be offset by considering the overall propulsion system performance rather than just that of the main engine as a stand-alone unit.

For example, ME-GI engines require a sophisticated FGSS to inject gas into the cylinders at 300 bar. The piston compressor set needed for a highpressure FGSS can result in a compressor skid that weighs six times that of the unit utilised in the WinGD’s 16-bar system.

The piston pumps that feature in the high-pressure FGSS are also more sophisticated and require more maintenance than the simple centrifugal LNG pumps used in the WinGD FGSS. WinGD estimates the capital cost of a propulsion system for an ME-GI LNG carrier could be up to 40% greater than that for a similar-sized vessel with a lowpressure, two-stroke power train, due to the need for exhaust gas treatment facilities, a more elaborate, energy-intensive FGSS and more robust engineroom feed gas pipework. For LNG-fuelled merchant ships the price disparity would fall to 15% but the advantage still lies with the X-DF option.

X-DF rollout

Eight of the 16 LNGC newbuildings specified with WinGD engines will be completed in 2018. One of the first to be delivered will be SK Resolute, a sister ship of SK Audace. Both were built by Samsung Heavy Industries for a SK Shipping/Marubeni joint venture and chartered to Total.

In August 2016 South Korea’s SK

Terntank’s 15,000 dwt chemical/product tanker Ternsund is the first LNG-powered vessel with a low-pressure, two-stroke engine

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Shipping ordered a second pair of 180,000 m3 LNGCs with WinGD propulsion systems, this time at Hyundai Heavy industries (HHI). In contrast to SK Audace and SK Resolute, each equipped with a pair of 6X62DF engines, the HHI duo will each be fitted with two five-cylinder, 72cm-bore (5X72DF) units.

Other shipowners besides SK Shipping that have opted for WinGD engines for several of their recent LNGC newbuilding orders are GasLog, Mitsui OSK Lines and TMS Cardiff Gas. These companies believe that their engine choice will not only ensure compliance with all existing and likely future emissions regulations but also bring long-term savings through reduced fuel and maintenance costs.

The French liner service operator CMA CGM achieved a major breakthrough in the use of LNG as marine fuel in November 2017 when it specified WinGD dual-fuel engines for nine new 22,000 TEU container ships. They are not only the largest vessels of this type ever ordered but also the largest ships that are not LNG carriers to be powered by LNG. Each ship in the series will be propelled by a 12X92DF unit. Their rating – 63,840kW at 80 rpm – makes them the largest gasburning engines ever contracted.

Terntank placed the first ever order for a low-pressure, two-stroke, gas-burning engine to propel a ship in December 2013. The tanker operator specified an RT-flex50DF engine for each of a pair of 15,000 dwt coastal product/chemical tankers it had contracted at the Avic Dingheng yard in China. The deal was subsequently boosted to four ships, all of which are destined for operations in North and Baltic Sea ECAs. X-DF engines were also chosen for the first-ever gas-fuelled Aframax crude oil tankers to be contracted. Each of the four 114,000 dwt ice-class 1A tankers that Sovcomflot odered at HHI in March 2017 will be powered by 7X62DF engines.

Since the Sovcomflot order, nine more Aframax tankers and two twin-screw Suezmax shuttle tankers have been specified with similar propulsion systems.

WinGD reports that 83 X-DF engines have been ordered to date, eight of which are in operation. The orderbook is just about evenly split between the LNG carrier and LNG-powered ship sectors.

As more owners become aware of the benefits of the low-pressure, two-stroke technology, not only will the number of engine orders grow but also the X-DF share of the gas-powered vessel market. LNG

LNG World Shipping | March/April 2018

28 | SHIP/SHORE

Escort tugs in the service of offshore LNG Providers of escort tug services for floating LNG terminals in open seas face unique challenges but also play a role in facilitating project realisation

A

growing network of LNG export and import terminals worldwide means an expanding fleet of escort tugs needed to safely shepherd visiting LNGCs to and from their berths and mooring positions, and to serve as emergency responders should the need arise during cargo transfer operations.

The LNG terminal community is now being joined by the inaugural floating LNG production (FLNG) vessels and an increasing number of floating storage and regasification units (FSRUs) in varied locations.

These floating LNG facilities provide challenges for escort tug service providers in addition to those encountered servicing traditional, shore-based terminals.

Offshore Cameroon

Among the notable new deployments of escort tugs at offshore LNG facilities is that for the Cameroon export project. The scheme is using Hilli Episeyo, the world’s first conversion of an LNG carrier into an FLNG vessel, and is currently poised to commence commercial operations.

Hilli Episeyo has a storage capacity of 125,000 m3 and will produce 1.2 million tonnes per annum (mta) of LNG under an eight-year charter contract with Société Nationale des Hydrocarbures (SNH)

LNG World Shipping | March/April 2018

and Perenco Cameroon. Smit Lamnalco is supplying the escort tugs for the operation and is using three 32 m vessels from its existing pool.

Hilli Episeyo, developing the Kribi field off the country’s southern coast, is moored in relatively shallow water 14 km offshore by means of an external frame turret arrangement which allows it to weathervane. Cargo transfers to loading LNGCs are to be carried out with the two vessels positioned side-by-side (SBS).

Smit Lamnalco expects the tugs’ escort and operationsmonitoring duties to settle into a routine fairly quickly.

The relatively benign sea and weather conditions in the area have provided the project with a 90% operability window, while the tugs’ class certificates highlight that their stationkeeping, towage and emergency response capabilities measure up to what is required.

Support Craft at Liquefied Gas Facilities: Principles of Emergency Response and Protection - Offshore, a document published by the Society of Gas Tanker and Terminal Operators (SIGTTO) in 2016, provides guidance for tug operators on appropriate responses in the event of an emergency at an offshore gas terminal. Implementation of the recommended actions to be taken by such craft will help to prevent and mitigate accidents.

Each gas terminal has traditionally specified the performance standards that the specialist assist vessels it uses must comply with as part of its emergency response plan.

The variable nature of these requirements had increased over the years as the global network of gas terminals has spread, prompting SIGTTO to develop harmonised guidelines.

Notwithstanding the support offered by generic guidelines, each offshore gas terminal has its own unique set of operational challenges. These

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SHIP/SHORE | 29

FSRU action

include providing the required level of redundancy; arranging for the necessary logistics support; catering for local content requirements; tailoring an appropriate training regime; and organising regular exercises to test response plans.

If requested, escort tug operators can get involved with a new offshore gas terminal project at an early stage to provide valuable consultancy advice on the optimum scheme layout, operating procedures and tug fleet. Such support can not only assist the floating vessel operator, the gas seller, the LNG buyer and the port authority achieve commercial acceptability for their offering but also help determine the nature of the tug operator service package that is contracted.

Prelude coming up

Another FLNG project due to commence operations in 2018 is Shell’s Prelude initiative 230 km off the coast of Western Australia. The energy major has contracted Perth-based KT Maritime Services Australia, a joint venture between Kotug International and Teekay Shipping Australia, to provide three 42 m, 100-tonne bollard pull tugs to serve as escort tugs for the 488 m floating unit.

Termed infield support vessels (ISVs) by Shell, the tugs have been built by ASL Marine Holdings in Singapore to Robert

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Allan’s advanced rotor tug ART 100-42 design. The vessels embrace the rotor tug power system technology pioneered by Kotug through a combination of Robert Allan’s RAstar hullform and three separate azimuth propulsion units – two astern and one amidships.

Poisitioned in open seas where the water depth is 250 m, Prelude will remain on station for its entire working life. Offloading operations, to LNG and LPG carriers and condensate tankers moored alongside in an SBS configuration, are subject to the vagaries of the wind and the waves.

Variables also include the possibilities of beam and quartering seas, side-to-side rotation of the LNG carrier, wave motions and different liquid filling levels in the cargo tanks.

To deal with what can be challenging conditions, Shell and KT Maritime have introduced an amended push-pull method for bringing loading vessels alongside the FLNG unit. With this procedure two of the ISVs, sailing stern first, establish a towline connection, one at the bow and one at the stern of the approaching offloading vessel.

After they bring the vessel alongside the FLNG, the tugs move to its side and push it against the FLNG, at which time mooring lines are fixed in place.

Whereas a conventional azimuthing stern drive (ASD) escort tug would be unable to execute such a manoeuvre in anything but good weather conditions, the ISVs are able to handle the side-on push movement in waves likely to be encountered in exposed locations without the risk of damage to either themselves or the offloading vessel.

Kotug has also proposed an alternative procedure for work in seas of increased wave heights known as ‘rotoring’ or indirect towing. During rotoring the ISVs assist the LNG carrier on a short wire length, staying connected centre forward and centre aft. They are then able to push against the short tow line and do not need to be repositioned to transfer forces onto the LNGC. Kotug points out that rotoring mitigates the risk of damage to the hull of the LNG carrier and is only possible with the unique rotor tug configuration.

The Prelude project promises the LNG industry a steep learning curve. From the outset of commercial operations the performance of the ISVs, the FLNG vessel and offloading gas carriers and tankers will be carefully monitored and measured, to enable experience and expertise to be fed back into the playbook in the drive for continuous improvement.

Bangladesh stands ready to make an entrance onto the world LNG stage as an importer of considerable potential. Five major receiving terminal projects are currently taking shape, comprising three FSRU-based and two shorebased facilities, while two smaller schemes involving the use of FSRU barges to provide gas to fertiliser producers in the Chittagong area could materialise quickly.

The first two major FSRU projects are both due onstream within the next 12 months; both are 3.75 mta schemes; and in both cases the regas vessels will be stationed near Moheshkhali Island in the Bay of Bengal.

The first Bangladesh FSRU, to be provided by Excelerate Energy, is due to commence operations by mid-2018.

Svitzer will provide marine support to the terminal using a fleet of five vessels, including three RAstar 3200 escort tugs designed by Robert Allan and built by Cheoy Lee Shipyard in Hong Kong.

Excelerate will use one of its FSRUs with a bow ‘moonpool’ able to accommodate the terminal’s submerged turret loading buoy. The regas vessel operator has been involved in many FSRU projects worldwide over the past 13 years but reports that the Moheshkhali scheme represents an industry landmark, being the first floating LNG terminal to be fully permitted, constructed, implemented and operated through a single contract and company.

The second Moheshkhali project, mounted by Summit LNG, is due onstream early in 2019 and PSA Marine of Singapore has been awarded a 15-year contract to provide the required towage services. In its first involvement with the LNG sector, PSA will supply three escort tugs, a crew boat and a supply vessel. LNG

LNG World Shipping | March/April 2018

. g u t r o t o R By

OPERATIONS | 31

Bernard Schulte Management: a strategy for growth

I

n early 2018, Bernhard Schulte Shipmanagement (BSM) purchased PRONAV and its fleet of six managed LNG carriers (LNGCs), taking BSM fleet activity to full management for nine LNGCs and crew management for 21 LNGCs. Five 174,000 m³ LNGCs and one 7,500 m3 LNG bunker vessel (LNGBV) are currently under construction and set to join the BSM-managed fleet in 2018 and 2019.

These newbuildings and the PRONAV ships will lift the number of BSM’s fully managed LNGCs to 15. LNG World Shipping asked Angus Campbell, corporate director of energy projects, to explain the rationale behind this expansion and BSM’s growing role in the nascent LNG bunkering industry.

Could you describe your company’s involvement in the LNG ship management sector?

With 45 years of experience in managing gas carriers, we regard LNG shipmanagement as a key strength and growth area. The fundamental supply and demand balance is good, with LNG production increasing significantly.

Services provided span newbuilding supervision, technical management, crew management and inhouse LNG training. BSM manages over 80 gas carriers in the LPG, ethylene and LNG sectors.

This involvement will continue to grow as new 174,000 m³ LNGCs are delivered into the owned and managed fleet.

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Bernhard Schulte Shipmanagement is expanding rapidly through acquisition, and new business development. LNG World Shipping catches up with this ambitious group

What have been the most important developments within your company over the last 12 months in the LNG sector?

The acquisition of the specialist LNG shipmanager PRONAV was certainly a significant development for the Schulte Group. We reached agreement in January 2018 and received clearance for the merger from the German authorities in February 2018. This increases the number of LNG carriers under full management by six vessels. We also continue to work with Babcock International, under the name Babcock Schulte Energy, on opportunities that we have identified in the small-scale LNG sector.

Do you see further consolidation and mergers taking place among shipmanagers, specifically to meet the requirements of the LNG sector?

The shipping industry is consolidating in many areas, with shipmanagement representing one aspect.

We are confident that the strength we have in the LNG sector, backed by decades of experience, will add value to our organisation. The expertise of our seafarers on board and our fleet teams ashore provide

the ability to work successfully with new technology, meeting the requirements of the LNG sector as it expands. This aligns with BSM’s mission to enable our business partners to achieve their objectives through applied knowledge, experience and innovation.

BSM is at the forefront of managing LNG bunkering.

Could you describe the progress so far, and any plans to expand further into this sector?

Babcock Schulte Energy was formed to develop safe, sustainable, high-value business in the energy sector.

We recognise the potential of the LNG bunkering and small-scale opportunities that we have identified. They are perfectly suited to the skills that both companies bring to BSE, enabling the Schulte Group’s gas shipping expertise to be blended with the gas process, equipment and design expertise of Babcock.

Our first purpose-built gas supply vessel will be delivered in September by Hyundai Mipo Dockyard. This is the first of what we anticipate will be several such specialised ships to work within the evolving small-scale sector.

Angus Campbell (BSM): “We recognise the potential of the LNG bunkering and small-scale opportunities that we have identified”

Based on your experiences, how do you view the challenges that lie ahead?

Our industry is experiencing dramatic change on a grand scale, with new global regulations governing emissions, fuel choice, efficiency and ballast water treatment. Improvements in technology and connectivity, with increasing digitalisation and streamlining of business processes offer commercial opportunities. We are well prepared to meet these challenges and provide our customers with guidance as they navigate this change successfully. The solutions will differ. For example, the choices that make financial sense for the existing fleet will be different to the choices available for newbuildings. LNG

LNG World Shipping | March/April 2018

32 | AREA REPORT Middle East

GULF LNG PRODUCERS POISED FOR NEW GROWTH SPURT T

hanks to Qatar’s commitment to monetising its rich gas resources through LNG production, the Arabian Peninsula and Gulf region is a major powerhouse in the global LNG marketplace.

The Gulf states produce around 94 million tonnes per annum (mta) of LNG, or about 32% of the global total, and just under the volume turned out by the Asian export terminals.

While the Middle East share of world LNG output is set to decline further in the face of growing Australian production over the next two years, Qatar is planning a major expansion project that would boost its exports by 30% and redress the Gulf/Asia supply balance.

In terms of output volumes Qatar has no rivals in the

Qatar has been in the vanguard of Middle East LNG production for two decades and is ready to lead the region in a new expansion phase

Gulf. Although long-serving, the LNG export terminals in Oman and Abu Dhabi produce only a fraction of what their near neighbor turns out.

The region has lost the contribution made by Yemen LNG in recent years, following the closure of the plant due to the threat of terrorist attacks in that war-torn country.

However, Iran could soon become a new member of the LNG exporters club, after many years of trying.

Qatar at the forefront

Ras Laffan is averaging three LNG carrier loadings per day

LNG World Shipping | March/April 2018

Qatar remains the leading force in LNG not only in the Middle East but also globally.

Although Australia is catching up fast, Qatar remains the world’s top LNG exporter.

Loadings in 2017, at around 78M tonnes, accounted for

26.6% of the global trade in the product. Qatar has also been exporting gas via the Dolphin pipeline to its neighbours Oman and the United Arab Emirates for the past 10 years.

Qatar’s LNG production is concentrated at the massive Ras Laffan port and industrial complex in the north of the country. The 14 trains at the site have been operating at or slightly above their nameplate capacity of 77 mta since coming onstream at various stages over the past two decades and now fill, on average, three LNG carriers per day.

Core to Qatar export shipments is the fleet of Qatar Gas Transport Co (Nakilat), a company established in 2004 to deliver cargoes produced

by Qatargas and RasGas, the operators of the Ras Laffan trains, to customers worldwide under 25-year charters.

Nakilat’s fleet of 65 wholly or part-owned LNG carriers includes 31 Q-flex ships of 216,000 m³ and 14 Q-max vessels of 266,000 m³. Designed to optimise the transport economics of Qatari exports, the Q-flex and Q-max ships are the largest LNGCs ever built.

While new Australian projects are set to increase that country’s export capacity to 85 mta by 2020, Qatar is already taking steps to ensure its return to the top spot in LNG exports by early in the next decade. In June 2017 Qatar Petroleum (QP) contracted Chiyoda

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Following the recent discovery of additional gas reserves, the Oman LNG terminal at Qalhat is once again operating at nameplate capacity

Corp to study the feasibility of expanding the Ras Laffan export capacity by 30%, to 100 mta, primarily through the debottlenecking of existing liquefaction facilities.

Qatar has several factors in its favour in the drive to expand LNG production capacity.

These include having the existing terminal infrastructure in place; access to cheap gas through the reserves of the country’s vast North field; its geographical location halfway between the main markets of Asia and the Atlantic Basin; and a high level of foreign investor interest in the scheme.

In January 2018 QP completed the integration of Qatargas and RasGas into a new, single Qatargas operation.

Aside from the cost savings to be achieved by the amalgamation, Nakilat will now only have one charterer to deal with.

Oman and Abu Dhabi

Oman is the Middle East’s second-largest LNG exporter.

The 8.12M tonnes shipped to overseas customers in 2016 meant Oman LNG’s three trains at its Qalhat terminal near Sur were operating at around 80% capacity.

The reserves in some of the gas fields feeding the plant have been in decline in recent years and Oman has been seeking to reverse the trend.

Production from the large new onshore Khazzan field

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came onstream in September 2017 and immediately began to buoy the Qalhat terminal’s LNG output. Oman LNG reports that cargo loadings are now back up to the facility’s nameplate capacity of 10.4 mta.

Oman has a core fleet of eight LNGCs. Oman Shipping Company holds a controlling stake in seven of the vessels and a 40% share in the eighth.

Mitsui OSK Lines part-owns all but two of the ships.

Oman LNG added to its long-term customer base in January 2018 when it signed a deal with BP covering the sale of 1.1 mta of LNG for seven years. Cargoes will be loaded at Qalhat on a free-on-board basis.

Abu Dhabi is the thirdlargest LNG exporter in the Middle East, since Yemen LNG’s 7.2 mta plant at Balhaf has been shut down due to the political turmoil in that country. Abu Dhabi has been loading LNG at its Das Island terminal for 41 years.

The United Arab Emirate loaded 5.86M tonnes in 2016, marginally up on the previous year. Approximately 75% of the volume goes to the Japanese terminals of Jera, it sole long-term customer.

Abu Dhabi’s National Gas Shipping Co Ltd employs a fleet of eight 136,000 m³ spherical tank LNGCs built in the mid-1990s to transport the Jera cargoes.

In August 2016 Abu Dhabi added the ability to import

LNG to its energy mix when the 138,000 m³ floating storage and regasification unit Excelerate was positioned in Ruwais, the country’s main port. Imports help meet the emirate’s growing domestic gas needs and enable a continuation of revenue-earning exports of oil and gas. Ruwais cargoes to date have been locally sourced from Das Island.

Jera, Abu Dhabi’s main LNG customer, is a joint venture established in 2015

by Chubu Electric Power and Tokyo Electric Power to procure fuel supplies. The new group’s combined purchases of 35 mta make Jera the world’s biggest buyer of LNG and give it significant sway in the market.

Jera’s existing 25-year contract with Abu Dhabi’s Adnoc LNG covers the delivery of 4.3 mta on a delivered ex-ship basis.

However, this purchase agreement expires in March 2019, and Jera, in its current contract negotiations with Abu Dhabi, is pushing for much more flexible terms.

Jera would like to renew the sale and purchase agreement but at reduced volumes, under a shorter time-scale and with more relaxed provisions regarding cargo discharge ports than previously negotiated.

Jera is targeting a renewal of its Abu Dhabi arrangement on the basis of a volume of 0.5-1.0 mta of Das Island LNG for three years, with a buyer’s option to extend for another two years.

Iran pursues club membership

Iran, possessor of the world’s second-largest reserves of natural gas after Russia, has aspired to mount an LNG export project for five decades.

However, geopolitical tensions, lack of investment and a burgeoning domestic demand for gas have combined to stymie the country’s plans at every turn.

There are signs, however, that a breakthrough is about to be made, albeit on a modest scale. In October 2017 National Iranian Oil Co signed a preliminary contract with IFLNG covering the liquefaction of gas currently flared during crude oil extraction operations near Kharg Island.

IFLNG is a joint venture between Helma Vantage, a Norwegian oil and gas company, and Iran’s Kharg Gas Refining Co. The deal covers the production of 0.5 mta of LNG for 20 years and talks have been underway with Exmar about the possible charter of the Belgian gas carrier operator’s floating LNG production vessel, Caribbean FLNG, for the work.

Conditional on a successful conclusion to the final negotiations, the current availability of Caribbean FLNG means that Iran could finally achieve its goal of joining the LNG exporters club by the end of 2018. LNG

LNG World Shipping | March/April 2018

34 | STATISTICS

Vladimir Rusanov has joined lead vessel Christophe de Margerie as one of the first five icebreaking LNG carriers in the Yamal fleet

LNG carrier builders off

to a flying start in 2018

I

t has been a brisk start to 2018 for the builders of LNG carriers, with 13 LNG carriers delivered and 10 ordered during the first two months of the year. The 10 ships commissioned in January 2018 made it the busiest-ever month for LNGC completions.

An underlying cause of the busy round of ship completions is the delayed delivery dates agreed by shipowners and yards for vessels last year. Only 37 LNG vessels were completed in 2017, well down on the 57 originally timetabled.

The pushback in the completion dates for some vessels means that shipbuilders are due to hand over 62 LNG carriers in 2018.

If achieved, this number will be a new annual output record.

The 10 LNGC deliveries in January 2018 was a new monthly record, while February has been a busy month for contract signings, with seven newbuilds ordered

LNG World Shipping | March/April 2018

Deliveries galore

With six of the 13 early 2018 deliveries to its name, Daewoo Shipbuilding & Marine Engineering (DSME) hosted an LNGC handover ceremony on average once every 10 days during January and February.

Five of the DSME newbuildings are powered by a pair of MANâ&#x20AC;&#x2122;s mechanically operated, electronically controlled, gas-injection (MEGI) engines which require a fuel gas supply system to introduce cargo boil-off gas at high pressure.

The sixth DSME ship is the 172,000 m3 Vladimir Rusanov, one of a series of 15 icebreaking, dual-fuel diesel-electric (DFDE) LNGCs the South Korean yard is building to carry the Yamal LNG export cargoes. Five have now been handed over.

One of the early 2018 DSME completions is the 173,400 m3 BW Tulip, the BW Groupâ&#x20AC;&#x2122;s first ME-GI LNG carrier and one of a series of three. BW now has 16 LNGCs in operation and five on order; three of the total are floating storage and regasification units (FSRUs).

Two of the other DSME completions are noteworthy in that they welcome Flex LNG into the select ranks of LNGC owners and operators. The 174,000 m3 Flex Endeavour and Flex Enterprise mark the realisation of an initiative launched in 2007 when the original Flex LNG proprietors ordered a pair of 90,000 m3 M-Flex carriers at Samsung Heavy Industries (SHI).

The idea behind these novel ships was that either regasification or liquefaction

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STATISTICS | 35

facilities could be added to the flat deck to give them a multipurpose role. The flush main deck was made possible by the choice of IHI’s selfsupporting, prismatic-shape, IMO Type B (SPB) containment system for the cargo tanks.

In the event, the M-Flex ships were never built but the Flex LNG order at SHI went through various ship designs and number incarnations, in line with waxing and waning charterer interest in the offering.

Flex LNG was acquired by John Fredriksen in 2014 and he subsequently augmented the SHI order, amended to two conventional 174,000 m3 LNGCs, with orders for four similar ships at DSME. Flex Endeavour and Flex Enterprise are the first of the six; all the vessels will be in service by mid-2019, all will be propelled

by ME-GI engines and all will have Gaztransport & Technigaz (GTT) membrane cargo tanks.

Enter KC-1 tanks

Perhaps the most notable of the 13 ships delivered so far in 2018 is SK Shipping’s 174,000 m3 SK Serenity. The vessel is the first of a pair of SHIbuilt LNG carriers to be fitted with KC-1 tanks, a membrane containment system developed

by KC LNG Tech, a joint venture involving Korea Gas Corp (Kogas), DSME, SHI and Hyundai Heavy Industries (HHI), to provide Korean shipbuilders with a domestic alternative to the two established GTT membrane technologies.

SHI completed the sister ship, SK Spica, in March 2018 and both vessels have been fixed on 20-year charters to Kogas to carry LNG cargoes from Cheniere Energy’s export terminal at Sabine Pass in Louisiana. Each ship is expected to lift about 500,000 tonnes of LNG per annum.

The deliveries of the two KC-1 ships are approximately six months later than originally

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envisaged. However, considering the challenges involved in introducing a major new technology in the LNG shipping sector, the principals are not overly disappointed with the delay.

New order momentum

The high level of newbuild contracting in the first two months of 2018 owes much to the LNG industry’s growing awareness that talk of an extended oversupply of ships and cargoes is overblown.

Shell, in its second annual LNG Outlook published in February 2018, warns the market could face a shortage of LNG by the mid-2020s due to underinvestment in new projects. Pressure is growing for final investment decisions (FIDs) in 2018 for several of the proposed LNG export schemes currently on the table. Agreement between LNG buyers and sellers on the type of purchase contract that brings optimum mutual benefits will facilitate approvals for new projects.

The extent to which the market has absorbed LNG over the past 18 months reinforces the need for new ships and projects. Shell points out that the world trade in LNG grew by 29M tonnes in 2017, 30% more than expected, to reach 293M tonnes.

The fastest growing LNG producer over the next three years will be the US, where exports are set to increase fivefold, from 13M tonnes in 2017 to 65M tonnes in 2020. This volume of cargo will require a fleet of approximately 115 LNGCs due to the long distances involved in reaching the main Asian customer base. Most, but by no means all, of the ships needed for these US exports have already been ordered.

Newbuilding orders over the past two months have been supported by the competitive

yard prices still on offer. DSME, for example, secured orders for four ships during the period, each costing around US$183M, or 10% less than prices pertaining in 2015.

The cost of FSRUs has also come down markedly in recent years, with an FSRU ordered in early 2018 at a cost of around US$225M.

Notable newbuilds

One of the early 2018 newbuild orders stands out from the crowd and that is the contract for an 18,600 m3 LNG bunker vessel (LNGBV) at the HudongZhonghua yard in Shanghai.

Total and Mitsui OSK Lines (MOL) ordered the ship to fuel the fleet of nine new 22,000 TEU dual-fuel container ships that the French liner operator CMA CGM currently has under construction.

On delivery in 2020, the Total/MOL newbuild will be three times the size of any

other LNGBV afloat. The owners’ choice of GTT’s Mark III membrane containment system for the bunker vessel’s cargo tanks is an interesting one.

All the LNGCs built by Hudong to date incorporate tanks built to the No 96 design, GTT’s other membrane technology. China is yet to build an LNG vessel to the GTT Mark III system and Hudong’s LNGBV order will necessitate the establishment of a new production line, including for the waffled stainless steel plate that forms the Mark III system’s primary barrier.

It is no coincidence that the LNG bunker tank on each of the new CMA CGM container ships will also be built to the GTT Mark III design and have a capacity of 18,600 m3.

In addition, Hudong will be building five of the big box ships and the neighbouring yard of Shanghai Waigaoqiao the other four. LNG

Hudong has only built LNGCs to GTT No 96 membrane system to date but its new involvement with LNG bunkering is introducing the yard to the GTT Mark III membrane

LNG World Shipping | March/April 2018

36 | STATISTICS

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

LNG CARRIERS ON ORDER LNGC ORDERBOOK AS OF 28 FEBRUARY 2018

SOUTH KOREA Hull no

Shipowner

Capacity, m3

Delivery

Charterer

Containment

Class

Propulsion

Details

Shell business

Daewoo Shipbuilding & Marine Engineering (DSME), Okpo 2456

Maran Gas

173,400

2019

Shell

GTT No96

DNV GL

LSDF (HP)

2457

Maran Gas

173,400

2019

–

GTT No96

LR

LSDF (HP)

open

2458

Maran Gas

173,400

2018

Shell

GTT No96

ABS/CCS

LSDF (HP)

Shell business

2459

Maran Gas

173,400

2019

Shell

GTT No96

LR/CCS

LSDF (HP)

Shell business

2466

Maran Gas

174,000

2019

–

GTT No96

ABS

LSDF (HP)

open

2467

Maran Gas

174,000

2019

–

GTT No96

LR

LSDF(HP)

open

2468

Maran Gas

173,400

2020

–

GTT No96

DNV GL

DFDE

FSRU; open

2416

Teekay

173,400

2017

Shell

GTT No96

DNV GL

LSDF (HP)

Shell business

2417

Teekay

173,400

2018

Shell

GTT No96

DNV GL

LSDF (HP)

Shell business

2454

Teekay

173,400

2018

Shell

GTT No96

DNV GL

LSDF (HP)

Shell business

2455

Teekay

173,400

2019

Yamal LNG

GTT No96

DNV GL

LSDF (HP)

Yamal cargoes

2461

Teekay

173,400

2018

Bahrain LNG

GTT No96

DNV GL

LSDF (HP)

Bahrain FSU

2421

Dynagas

172,000

2018

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2422

Dynagas

172,000

2017

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2427

Dynagas

172,000

2019

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2428

Dynagas

172,000

2019

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2429

Dynagas

172,000

2019

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2426

CSDC/MOL

172,000

2019

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2432

CSDC/MOL

172,000

2020

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2423

Teekay/CLNG

172,000

2018

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2425

Teekay/CLNG

172,000

2018

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2430

Teekay/CLNG

172,000

2019

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2431

Teekay/CLNG

172,000

2020

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2433

Teekay/CLNG

172,000

2020

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2434

Teekay/CLNG

172,000

2020

Yamal LNG

GTT No96

BV/RS

DFDE

icebreaking LNGC

2436

BW Group

174,000

2018

–

GTT No96

DNV GL

LSDF (HP)

open

2488

BW Group

174,000

2019

–

GTT No96

DNV GL

LSDF (HP)

FSRU; open

2489

BW Group

174,000

2019

–

GTT No96

DNV GL

LSDF (HP)

open

2464

Chandris/K Line

173,400

2018

BP

GTT No96

LR

LSDF (HP)

BP business

2441

BP Shipping

173,400

2018

BP

GTT No96

LR

LSDF (HP)

BP business

2442

BP Shipping

173,400

2018

BP

GTT No96

LR

LSDF (HP)

BP business

2443

BP Shipping

173,400

2018

BP

GTT No96

LR

LSDF (HP)

BP business

2444

BP Shipping

173,400

2019

BP

GTT No96

LR

LSDF (HP)

BP business

2445

BP Shipping

173,400

2019

BP

GTT No96

LR

LSDF (HP)

BP business

2446

BP Shipping

173,400

2019

BP

GTT No96

LR

LSDF (HP)

BP business

2462

MOL/Itochu

180,000

2018

Uniper

GTT No96

–

LSDF (LP)

Uniper business

2470

Flex LNG

173,400

2019

–

GTT No96

ABS

LSDF(HP)

open

2471

Flex LNG

173,400

2019

–

GTT No96

ABS

LSDF(HP)

open

2490

BW Group

174,000

2020

–

GTT No96

–

LSDF (HP)

open

2491

BW Group

174,000

2020

–

GTT No96

–

LSDF (HP)

open

–

Alpha Shipping

173,400

2020

–

GTT No96

–

LSDF (HP)

open

–

Alpha Shipping

173,400

2020

–

GTT No96

–

LSDF (HP)

open

170,000

2018

Golar Power

GTT MkIII

DNV GL

DFDE

Sergipe FSRU

Samsung Heavy Industries (SHI), Geoje 2189

Golar Power

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2130

GasLog

174,000

2018

Shell

GTT MkIII

ABS

LSDF (LP)

2131

GasLog

174,000

2017

Shell

GTT MkIII

ABS

LSDF (LP)

Shell business Shell business

2212

GasLog

180,000

2019

Centrica

GTT MkV

–

LSDF (LP)

Sabine Pass exports

2213

GasLog

180,000

2019

–

GTT MkV

–

LSDF (LP)

open

2107

Flex LNG

174,000

2018

–

GTT MkIII

ABS

LSDF (HP)

open

2108

Flex LNG

174,000

2018

–

GTT MkIII

ABS

LSDF (HP)

open

–

Petronas

180,000

2020

Petronas

GTT MkIII

–

N/A

LNG FPSO

2148

MOL/NYK Line

174,000

2018

Mitsui & Co

GTT MkIII

–

LSDF (LP)

Cameron exports

2149

MOL/Mitsui & Co

174,000

2018

Mitsui & Co

GTT MkIII

–

LSDF (LP)

Cameron exports

2150

MOL/Mitsui & Co

174,000

2018

Mitsui & Co

GTT MkIII

–

LSDF (LP)

Cameron exports

2154

SK Shipping

174,000

2018

Kogas

KC-1

–

DFDE

Sabine Pass exports

2220

Höegh LNG

170,000

2019

–

GTT MkIII

–

DFDE

FSRU; open

2233

Korea Line

7,500

2019

Kogas

KC-1

KRS

DFDE

South Korea coast

2234

Korea Line

7,500

2019

Kogas

KC-1

KRS

DFDE

South Korea coast/

Pertamina consortium

170,000

2019

Pertamina

GTT MkIII

–

DFDE

Indonesia FSRU

2212

GasLog

180,000

2019

–

GTT MkIII

–

LSDF (LP)

open

2213

GasLog

180,000

2020

Centrica

GTT MkIII

–

LSDF (LP)

Centrica business

bunkering –

Hyundai Heavy Industries (HHI), Ulsan 2865

Höegh LNG

170,000

2018

Penco LNG

GTT MkIII

DNV GL

DFDE

Chile FSRU

2909

Höegh LNG

170,000

2018

Global Energy

GTT MkIII

DNV GL

DFDE

Pakistan FSRU

2735

MISC

150,000

2018

Petronas

Moss

LR

UST

Petronas projects

2801

GasLog

174,000

2018

Total

GTT MkIII

DNV GL

LSDF (LP)

Total business

2854

Gazprom

174,000

2017

Gazprom

GTT MkIII

RS

DFDE

Kaliningrad FSRU

2937

SK Shipping

180,000

2019

SK E&S

GTT MkIII

–

LSDF (LP)

Freeport exports

2938

SK Shipping

180,000

2019

SK E&S

GTT MkIII

–

LSDF (LP)

Freeport exports

2945

Kolin/Kalyon

170,000

2019

Kolin/Kalyon

GTT MkIII

–

DFDE

Turkey FSRU

2963

Knutsen OAS

180,000

2020

Iberdrola

GTT MkIII

–

LSDF (HP)

Corpus Christi exports

2964

Knutsen OAS

180,000

2020

Endesa

GTT MkIII

–

LSDF (HP)

Corpus Christi exports

Triumph Offshore

180,000

2019

Swan Energy

GTT MkIII

–

DFDE

Jafrabad FSRU

3020

TMS Cardiff Gas

174,000

2020

Total

GTT MkIII

–

LSDF (LP)

Total business

3021

TMS Cardiff Gas

174,000

2020

Cheniere

GTT MkIII

–

LSDF (LP)

Cheniere business

3022

TMS Cardiff Gas

174,000

2020

–

GTT MkIII

–

LSDF (LP)

open

Sovcomflot

174,000

2020

–

GTT MkIII

–

LSDF (LP)

open

BP business

–

–

Hyundai Samho Heavy Industries (HSHI), Samho-Myun S856

Teekay

164,000

2019

BP

GTT MkIII

–

DFDE

S857

Teekay

164,000

2019

BP

GTT MkIII

–

DFDE

BP business

8006

NYK

174,000

2020

EDF

GTT MkIII

–

LSDF (LP)

EDF business

Bernhard Schulte

7,500

2018

Nauticor/SGD

Type C

LR

DFDE

Baltic bunker vessel

Hyundai Mipo Dockyard, Ulsan –

JAPAN Mitsubishi Heavy Industries (MHI), Nagasaki 2310

K Line

155,000

2018

Inpex Corp

Moss

ClassNK

UST

Ichthys exports

2316

NYK

155,000

2018

Tokyo Electric

Moss

ClassNK

UST

Wheatstone exports

2321

MOL

177,000

2018

Mitsui & Co

Moss

ClassNK

StaGE

Cameron exports

2323

MOL

177,000

2018

Mitsui & Co

Moss

ClassNK

StaGE

Cameron exports

2322

NYK

177,000

2019

Mitsui & Co

Moss

ClassNK

StaGE

Cameron exports

2324

NYK

165,000

2018

Mitsui & Co

Moss

ClassNK

StaGE

Cameron exports

2325

NYK

165,000

2018

Mitsui & Co

Moss

ClassNK

StaGE

Cameron exports

2326

MOL/Chubu Electric

180,000

2018

Chubu Electric

Moss

ClassNK

StaGE

Freeport exports

2327

NYK/Chubu Electric

180,000

2018

Chubu Electric

Moss

ClassNK

StaGE

Freeport exports

2332

Mitsubishi Corp

165,000

2019

Mitsubishi

Moss

ClassNK

StaGE

Mitsubishi business

164,700

2017

Chubu Electric

Moss

ClassNK

UST

Chubu Electric use

Kawasaki Heavy Industries (KHI), Sakaide 1713

K Line

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38 | STATISTICS

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1720

MOL

164,700

2018

Chubu Electric

Moss

ClassNK

UST

1718

K Line

182,000

2018

Inpex Corp

Moss

BV

DFDE

Chubu Electric use Ichthys-Taiwan

1731

NYK/Kepco

177,000

2018

Kansai Electric

Moss

ClassNK

DFDE

Cove Point exports

1728

MOL

155,000

2018

Mitsui & Co

Moss

ClassNK

DFDE

Cameron exports

1729

MOL

155,000

2019

Mitsui & Co

Moss

ClassNK

DFDE

Cameron exports

1734

MOL/Chubu Electric

177,000

2018

Chubu Electric

Moss

ClassNK

DFDE

Freeport exports

1735

NYK/Chubu Electric

177,000

2018

Chubu Electric

Moss

ClassNK

DFDE

Freeport exports

GNF business

Imabari Shipbuilding, Imabari 8177

Elcano

174,000

2018

GNF

GTT MkIII

LR

LSDF (HP)

8188

Elcano

174,000

2018

GNF

GTT MkIII

LR

LSDF (HP)

GNF business

8200

K Line

178,000

2021

Mitsui & Co

GTT MkIII

ClassNK

LSDF (HP)

Cameron exports

8215

Unknown

178,000

2022

–

GTT MkIII

–

LSDF (HP)

open

8216

Unknown

178,000

2022

–

GTT MkIII

–

LSDF (HP)

open

8217

Unknown

178,000

2022

–

GTT MkIII

–

LSDF (HP)

open

Japan Marine United, Kumamoto 5070

MOL/Tokyo LNG Tanker

165,000

2017

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

5071

NYK/Tokyo LNG Tanker

165,000

2018

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

5072

MOL/Tokyo LNG Tanker

165,000

2019

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

5073

MOL/Tokyo LNG Tanker

165,000

2019

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

CHINA Hudong-Zhonghua Shipbuilding, Shanghai 1720A

CESI/MOL

174,000

2018

Sinopec

GTT No96

LR/CCS

DFDE

APLNG exports

1665A

CNOOC/CLNG/TK/BW

174,000

2018

Shell

GTT No96

ABS/CCS

DFDE

QCLNG exports

1666A

CNOOC/CLNG/TK/BW

174,000

2019

Shell

GTT No96

ABS/CCS

DFDE

QCLNG exports

1810A

MOL

174,000

2019

Yamal LNG

GTT No96

–

DFDE

Yamal cargoes

1811A

MOL

174,000

2020

Yamal LNG

GTT No96

–

DFDE

Yamal cargoes

1812A

MOL

174,000

2020

Yamal LNG

GTT No96

–

DFDE

Yamal cargoes

1813A

MOL

174,000

2020

Yamal LNG

GTT No96

–

DFDE

Yamal cargoes

–

Dynagas

174,000

2020

TBC

GTT No96

–

DFDE

FSRU; open

–

Dynagas

174,000

2021

TBC

GTT No96

–

DFDE

FSRU; open

–

Total/MOL

18,600

2020

Total

GTT MkIII

–

TBC

Bunker vessel

30,000

2017

CNPC Kunlun

Type C

CCS

DFDE

China coast

28,000

2017

CNPC Kunlun

Type C

CCS

DFDE

China coast

N/A

2018

VGS

TBC

–

N/A

LNG FRU

45,000

2018

Saga LNG

LNT A-Box

ABS

DFDE

China coast

Ningbo Xinle Shipbuilding, Ningbo XL-157

PetroChina

Cosco Dalian Shipyard, Dalian N588

Dalian Inteh

Wison Offshore & Marine, Nantong –

VGS

China Merchant Heavy Industry, Nantong 188

Landmark Capital

Shipping Keppel Singmarine, Nantong –

Stolt-Nielsen

7,500

2018

TBC

Type C

–

DFDE

Coastal Europe

–

Stolt-Nielsen

7,500

2018

TBC

Type C

–

DFDE

Coastal Europe

Table includes newbuilding FSRUs, LNG FPSOs and LNG bunker vessels.

Propulsion key: DFDE = dual-fuel diesel-electric; ST = steam turbine; UST = ultra steam turbine; StaGE = steam turbine and gas engine; LSDF (HP) = low-speed dual-fuel (high-pressure); LSDF (LP) = low-speed dual-fuel (low-pressure) LNG World Shipping, data as of 28 February 2018

LNG World Shipping | March/April 2018

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STATISTICS | 39

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

LNG CARRIER NEWBUILDINGS DELIVERED 1 JANUARY 2017 – 28 FEBRUARY 2018 Vessel name

Delivery

Capacity, m3

Owner

Builder

Charterer

Containment

Details

Cesi Qingdao

1.2017

174,000

CESI/MOL

Hudong

Sinopec

GTTNo96

APLNG exports

Maran Gas Roxana

1.2017

173,400

Maran Gas

Daewoo

Shell

GTTNo96

Shell business

Maran Gas Ulysses

1.2017

174,000

Maran Gas

Hyundai Samho

Shell

GTTMkIII

Shell business

Seri Cenderawasih

1.2017

150,000

MISC

Hyundai

Petronas

Moss

Petronas projects

JS Ineos Innovation

1.2017

27,500

Evergas

Sinopacific

Ineos

Type C

Ethane service

Torben Spirit

2.2017

173,400

Teekay

Daewoo

Shell

GTTNo96

Shell business

Maran Gas Olympias

2.2017

173,400

Maran Gas

Daewoo

Shell

GTTNo96

Shell business

Asia Integrity

2.2017

160,000

Chevron

Samsung

Chevron

GTTMkIII

Gorgon exports

Ougarta

3.2017

170,000

Hyproc Shipping

Hyundai

Sonatrach

GTTMkIII

Algerian exports

BW Integrity

3.2017

170,000

BW Group

Samsung

Pakistan GasPort

GTTMkIII

Port Qasim FSRU

JS Ineos Intuition

3.2017

27,500

Evergas

Yangzijiang

Ineos

Type C

Ethane service

SM Eagle

4.2017

174,000

Korea Line

Daewoo

Kogas

GTTNo96

Sabine Pass exports

Hoegh Giant

4.2017

170,000

Höegh LNG

Hyundai

Quantum Power

GTTMkIII

Tema FSRU

JS Ineos Independence

4.2017

27,500

Evergas

Sinopacific

Ineos

Type C

Ethane service

Engie Zeebrugge

4.2017

5,100

Fluxys/Gas4Sea

Hanjin

Engie

Type C

Zeebrugge bunkering

Hyundai Princepia

5.2017

174,000

Hyundai LNG

Daewoo

Kogas

GTTNo96

Sabine Pass exports

SM Seahawk

5.2017

174,000

Korea Line

Daewoo

Kogas

GTTNo96

Sabine Pass exports

JS Ineos Invention

5.2017

27,500

Evergas

Yangzijiang

Ineos

Type C

Ethane service

Cesi Beihai

6.2017

174,000

CESI/MOL

Hudong

Sinopec

GTTNo96

APLNG exports

Cardissa

6.2017

6,500

Shell

STX

Shell

Type C

Rotterdam bunkering

Hyundai Peacepia

6.2017

174,000

Hyundai LNG

Daewoo

Kogas

GTTNo96

Sabine Pass exports

Prelude

6.2017

220,000

Shell

Samsung

Shell

GTTMkIII

Prelude FPSO

Seri Cempaka

7.2017

150,000

MISC

Huyundai

Petronas

Moss

Petronas projects

SK Audace

7.2017

180,000

SK Shipping/ Marubeni

Samsung

Total

GTTMkIII

Ichthys exports

Asia Venture

7.2017

160,000

Chevron

Samsung

Chevron

GTTMkIII

Gorgon exports

Caribbean FLNG

7.2017

16,100

Exmar

Wison

TBC

Type C

FLRSU; open

Coralius

7.2017

5,800

Sirius/Veder

Royal Bodewes

Skangas

Type C

N Europe bunkering

Cesi Tianjin

9.2017

174,000

CESI/MOL

Hudong

Sinopec

GTTNo96

APLNG exports QCLNG exports

Pan Asia

10.2017

174,000

CNOOC/CLNG/TK

Hudong

Shell

GTTNo96

MOL FSRU Challenger

10.2017

263,000

MOL

Daewoo

Botas

GTTNo96

Turkey FSRU

Boris Vilkitsky

10.2017

172,000

Dynagas

Daewoo

Yamal LNG

GTTNo96

Yamal exports

Macoma

10.2017

173,400

Teekay

Daewoo

Shell

GTTNo96

Shell business

Fedor Litke

11.2017

172,000

Dynagas

Daewoo

Yamal LNG

GTTNo96

Yamal exports

Murex

11.2017

173,400

Teekay

Daewoo

Shell

GTTNo96

Shell business

Eduard Toll

12.2017

172,000

Teekay/CLNG

Daewoo

Yamal LNG

GTTNo96

Yamal exports

Bishu Maru

12.2017

164,700

K Line

Kawasaki

Jera

Moss

Jera business

TBC

12.2017

25,000

Exmar

Wison

TBC

IHI SPB

FSRU; TBC

SK Resolute

1.2018

180,000

SK Shipping/

Samsung

Total

GTTMkIII

Sabine Pass exports

Patris

1.2018

174,000

Chandris/K Line

Daewoo

BP

GTTNo96

BP business

Cesi Wenzhou

1.2018

174,000

CESI/MOL

Hudong

Sinopec

GTTNo96

APLNG exports

Pan Americas

1.2018

174,000

CNOOC/CLNG/TK

Hudong

Shell

GTTNo96

QCLNG exports

Gaslog Houston

1.2018

174,000

GasLog

Hyundai

Shell

GTTMkIII

Shell business

Flex Endeavour

1.2018

173,400

Flex LNG

Daewoo

Uniper

GTTNo96

Uniper business open

Marubeni

Flex Enterprise

1.2018

173,400

Flex LNG

Daewoo

Voyage charters

GTTNo96

BW Tulip

1.2018

173,400

BW Group

Daewoo

Voyage charters

GTTNo96

open

Vladimir Rusanov

1.2018

172,000

CSDC/MOL

Daewoo

Yamal LNG

GTTNo96

Yamal exports

Coral EnergICE

1.2018

18,000

Anthony Veder

Neptun

Skangas

Type C

Baltic trading

SK Serenity

2.2018

174,000

SK Shipping

Samsung

Kogas

KC-1

Sabine Pass exports

Magdala

2.2018

173,400

Teekay

Daewoo

Shell

GTTNo96

Shell business

Seri Camar

2.2018

150,000

MISC

Hyundai

Petronas

Moss

Petronas projects

LNG World Shipping, data as of 28 February 2018

www.lngworldshipping.com

LNG World Shipping | March/April 2018

40 | VIEWPOINT

Panama Canal ready for growing LNG carrier traffic A Silvia de Marucci (ACP): “Our customers are looking for greater flexibility”

s the Panama Canal prepares to welcome its 300th LNG vessel transit in March 2018, there will be two things of which I am certain. First, we’ve enjoyed considerable progress since the first LNG vessel entered our waterway and, second, the future of this burgeoning segment couldn’t be brighter.

Indeed, when I consider that the Panama Canal began transiting LNG vessels just 20 months ago, in July 2016, I’m grateful for the approach our operations team took to realise this growth safely and reliably, and for our customers as we similarly continue to grow our partnership together.

Currently, of the seven booking slots offered daily to Neopanamax vessels, the Panama Canal allows one to be allocated to an LNG vessel each day. This decision was made after careful market analysis and operational consideration, and to allow our pilots to acquire enough experience to safely and confidently transit vessels from this market segment, new to the historic waterway.

This capacity has been more than commensurate to existing demand, as we have yet to average one LNG transit per day or have any LNG vessels experience extensive delays waiting to transit.

As the Panama Canal has gained experience in understanding the nature of the LNG trade, we realise our customers are looking for greater flexibility. In June 2017 we were able to successfully transit two LNG vessels in the same direction in one day.

We began to implement this initiative as a routine practice in December 2017, to handle the seasonal LNG demand and working in close co-ordination with our customers. To

LNG World Shipping | March/April 2018

date, we have been able to transit two LNG carriers in one day 13 times, and plan to continue to do so whenever the vessel mix allows it.

And, with the rising demand and plans for US exports to increase, we need to continue to do so. Compared to the 2017 fiscal year, we expect LNG traffic through the waterway to grow by 50% this fiscal year. This means LNG carrier transits will increase from 163 transits registered in the 2017 fiscal year to approximately 244 LNG carrier transits in the 2018 fiscal year, which ends 30 September.

Fortunately, we’ll be ready. Thanks to the data and experience we have gained thus far, we will soon be able to lift some of the transit restrictions on these vessels. This will keep us ahead of demand and allow us to accommodate demand surges as needed.

Panama’s operation of the Canal has always been defined by a commitment to planning, safe and reliable service, and continued innovation and growth. Our approach to the LNG segment remains no different.

As we balance the safety of our operations with a new and growing market, we look forward to working closely with our customers, who we realise are increasingly looking for certainty in an otherwise uncertain market.

Another thing I am sure of? That the Canal and its customers will continue to work together to ensure LNG flows smoothly through our waters, and that we’ll do so with one eye fixed towards the future. LNG

Silvia de Marucci is executive manager of the Economic Analysis and Market Research Division at the Panama Canal Authority (ACP).

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REGISTER TO HEAR FROM T H E S E I N S P I R AT I O N A L LEADERS AND GLOBAL S T R AT E G I S T S

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