LNG World Shipping November/December 2016

November/December 2016 www.lngworldshipping.com

EMERGING MARKETS Where next for LNG demand?

Small-scale: Bomin Linde’s groundbreaking LNG bunker-supply ship Offshore LNG: We go one-to-one with Excelerate, BW and GasLog

“The next two to three years will see a significant increase in LNG production.

Much of this new LNG is homeless” Yngvil Åsheim, managing director BW LNG, Offshore LNG supplement page 8

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November/December 2016

contents

10 14

Comment 7 A global 0.5 per cent sulphur cap should boost take-up of LNG as marine fuel.

Infographic 8D espite growing interest in small and midsize carriers, these still make up a tiny fraction of the global LNG shipping fleet. VesselsValue lists the ships on the water and on order and names the owners with the largest and most valuable fleets.

Special report: emerging markets 10 Cheaper LNG and tougher environmental regulations are opening new gas-

18

buyer markets around the world. Karen Thomas examines which countries will be next to join the LNG-importers’ club 13 Kuwait National Petroleum Co (KNPC) plans to replace its floating storage and regasification unit (FSRU) with land-based imports.

14 The Philippines faces severe power shortages; can LNG solve its problems?

Atlantic Gulf & Pacific (AG&P) boss Albert Altura makes his case

Innovation 18 As orders for new LNG carriers have slowed, containment specialist GTT is turning to LNG fuel-tank designs. Chairman and chief executive Philippe Berterottière explains how GTT is promoting LNG as the fuel of the next decade

20

Interview 20 Bomin Linde LNG has just ordered the world’s largest LNG bunkersupply ship. Chief executive Mahinde Abeynaike explains why scale and size are critical 22 Spanish terminal operator Enagás is to repurpose its LNG-import terminals as European logistics hubs. Assets general manager Claudio Rodrigo outlines the plan

Training 26 LNG World Shipping asks Kongsberg Digital, BSM and its maritime training centre in India, class society RINA and the Transas Academy how the latest simulator packages are improving LNG crew know-how

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LNG World Shipping | November/December 2016

contents Best of the web 30 The ten most popular web-only stories and most downloaded white paper, published on LNGworldshipping.com this autumn

Statistics 32 Your exclusive LNG World Shipping guide to the global LNG fleet, orders and deliveries

Viewpoint 42 Lloyd’s Register gas technology strategic marketing manager Leo Karistios talks opportunities in floating storage and regasification units (FSRUs)

Offshore LNG supplement

November/December 2016 Editor: Karen Thomas t: +44 20 8370 1717 e: karen.thomas@rivieramm.com Consultant Editor: Mike Corkhill t: +44 1825 764 817 e: mike.corkhill@rivieramm.com Commercial Portfolio Manager: Bill Cochrane t: +44 20 8370 1719 e: bill.cochrane@rivieramm.com Sales Manager: Ian Pow t: +44 20 8370 7011 e: ian.pow@rivieramm.com

47 Supplement contents list

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Follow LNG World Shipping on Twitter, @LNGkaren Keep up with the latest international LNG shipping news at www.lngworldshipping.com Front cover image: AG&P

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LNG World Shipping | November/December 2016

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COMMENT | 7

LNG MUST TAP 2020 SULPHUR CAP BOOST T Karen Thomas, Editor

www.lngworldshipping.com

he LNG shipping industry has welcomed the decision that the IMO’s marine environment protection committee (MEPC70) announced in late October, to adopt the global 0.5 per cent sulphur cap from 2020, rather than from 2025.

The MEPC70 decision means that from 2020, shipowners must adopt one of three options: burn more expensive distillates, install scrubbers or switch to alternative fuels. Some estimate that this will cost global shipping some US$50 billion a year.

Retrofitting gas propulsion systems remains prohibitively expensive. Meanwhile, orders for new tonnage slowed to a trickle last year, leaving shipbuilders strapped for fresh orders.

Nevertheless, there is an opportunity in the coming months to press for LNG to become the obvious choice for all new ships ordered from this point.

According to class society DNV GL, LNG is already first choice for new tonnage. According to its LNGi database, there are now 86 LNGfuelled ships in operation and 93 on order.

By 2020, DNV GL expects that number to have risen to 400-600 vessels. It also expects the price of sulphur cap-compliant fuel to rest somewhere between that for heavy fuel oil (HFO) and marine gasoil (MGO), strengthening the business case for shipowners to switch to LNG – notably among deepsea operators, rather than the coastal players that have dominated take-up thus far.

Already this year, the cruise industry has thrown its weight behind LNG-fuelled newbuildings. And containership giants such as United Arab Shipping Co (UASC) and CMA CGM are getting LNG-ready.

There is also an application to the IMO to impose a NOx emissions-control area (NECA) across the Baltic and North Sea regions from 2021. If that application succeeds, it will only

strengthen the case for LNG against the two rival solutions, DNV GL says.

What happens next is therefore crucial. LNG bunker supply is still in its infancy. The IMOcommissioned fuel-availability study concluded that fuel shortages are unlikely in 2020.

Clearly, there is no shortage of LNG supply – the issue now is one of delivery.

LNG supply chains need to grow sooner, rather than later, to maximise the opportunities that come with the MEPC vote in favour of an earlier push. The pace at which LNG bunkersupply infrastructure develops will be critical to take-up rates for new tonnage.

This will be one of the deciding factors for the success of LNG as ship fuel, DNV GL concludes.

LNG is already the first-choice fuel for new ships This year has seen some groundbreaking ventures that bring more joined-up thinking to LNG bunker supply. Industry sources are at last working together to develop practical supply solutions, notably cross-industry lobby SEA\ LNG, the LNG-supply partnership in Europe between Shell and Carnival, and the Gas4Sea, new global partnership that Engie, Mitsubishi and NYK have announced.

Although the last 12 months have been tough for everyone involved in the LNG value chain, the regulatory push is now gathering momentum. We may well look back at 2016 as a turning point in take-up of gas as marine fuel.

With that thought in mind, the LNG World Shipping team would like to wish all our readers a happy, peaceful and prosperous new year. LNG

LNG World Shipping | November/December 2016

GLOBAL FLEET, SMALL & MIDSIZE LNG CARRIERS Top three Owners ($ million) Anthony Veder

94

MISC

55

Dalian Inteh

54

Hyproc Shipping

151

Teekay LNG Partners

73

ENI

72

Bermuda

Small-scale carriers 29,000m3 Midsize LNG carriers 30,000m3 - 90,000m3

Source: VesselsValue Graphic: Richard Neighbour/Karen Thomas

73

Vessel number total fleet

small

midsize

LIVE

14

10

ORDERBOOK

07

02

Total fleet value

US$591 million

US$548 million

TOP FIVE OWNER COUNTRIES BY FLEET VALUE

(US$ million)

94 The Netherlands 57 France

Japan China

72 Italy

China

151

177

201

86

Algeria Malaysia

55 46

Indonesia

5 4 3 2 1 0

1972

1975

1993

1996

1997

1998

2000

2003

2004

Number of ships by year of delivery 1972-2017

2005

2007

2008

2011

2013

2015

2016

2017

10 | SPECIAL REPORT

Supply glut opens As new US and Australian LNG production creates more supply than traditional buyers can absorb, new markets are emerging all over the world. But which ones present the strongest opportunities for shipowners? Karen Thomas reports

South Africa is likely to join the LNG-importers’ club by 2020. Paul Saad

C

heap gas has prompted many countries to look seriously at LNG imports, in some cases as a move towards cleaner-burning fuels and in many others to fuel remote electricity-producing plants for communities beyond the national power grid.

Just five states have joined the LNG-importers’ club so far this year. Poland opened its long-awaited deepsea import terminal at Swijnouscie in June as part of a move to cut its dependence on piped gas from Russia. The other four nations have launched small-scale import projects.

Jamaica and Indonesia have

chartered floating storage units (FSUs), off Montego Bay and Bali, respectively, to support gasto-power projects. Barbados has started to import small quantities of LNG by barge from Florida in the US, and this autumn Finland opened a small-scale import terminal at Pori.

The next round of new importers will almost certainly include Puerto Rico, Ghana, Bahrain and Bangladesh, which all plan to employ either floating storage and regasification units (FSRUs) or FSUs. This is becoming a common strategy in many new LNG markets.

“In these markets, investors

LNG World Shipping | November/December 2016

are often cautious,” says Douglas Westwood analyst Mark Adeosun. “What we are seeing is that many of these new markets are being built around FSRUs. For investors, they ensure that if things don’t go well, they can move the vessel elsewhere. The technology is available and is well-known.”

When LNG World Shipping mapped the world’s new and planned FSRU projects this summer, there was a notable concentration in Latin America and the Indian subcontinent.

India, alone, is looking at up to 10 FSRU-based projects but Southeast Asia, sub-Saharan Africa and the Middle East will

also drive new LNG demand.

Wood Mackenzie’s recent study of proposed LNG-topower projects found more than 30, again clustered in the Caribbean, southeast Asia and west and southern Africa, as well as southern Europe and the eastern Mediterranean.

Meanwhile, BMI notes that sub-Saharan Africa will have the world’s fastest GDP growth to 2025. It predicts that this will drive new LNG demand as economic growth puts powergeneration there under pressure.

Many African nations – particularly those that use hydropower, with its seasonal output – will turn to gas-fired

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SPECIAL REPORT | 11

new LNG markets New exporters

Africa may attract a third of global investment in offshore LNG in 2016-2022, says Douglas Westwood

power generation, BMI predicts.

Describing sub-Saharan Africa as “a niche LNG destination”, the company sees Cote d’Ivoire, Ghana and Tanzania as the markets with the strongest import potential.

Other states with gas-topower plans are South Africa, Cameroon – which also plans floating LNG projects – Namibia, Kenya and Ethiopia.

However, BMI warns of significant risks or obstacles in these countries to growing LNG demand.

Ghana is pushing ahead with FSRU-based imports, although there are questions about where it will put the

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two floating vessels it plans.

Golar LNG has chartered its 170,000m³ FSRU Golar Tundra, to West African Gas (WAGL), due to have entered service this summer. However, at the time of going to press Golar Tundra was at anchor outside Tema in Ghana and the project had been delayed.

Plans for a second FSRU at Tema are now in doubt, however. Quantum Power and Ghana National Petroleum (GNPC) may instead move the project to Takoradi, to support power projects in the west of the country. It is now unclear whether either project will meet its early 2017 start target.

Import projects are not the only new LNG-shipping opportunity. Several developing countries are also well placed to become producers. That development has been even less straightforward as low oil and gas prices have made energy companies nervous about backing ventures in untried markets.

Of the 20 additional LNG trains and new production projects that had reached final investment decisions by August for a 2015-2020 start, eight are in the US, five in Australia, three – including two offshore ventures – are in Malaysia and two are in Indonesia.

Russia’s Yamal LNG is the 19th new venture. The 20th – and the only newcomer to exports – is Golar LNG’s floater in Cameroon, whose LNGexport ambitions have faced major challenges.

Sub-saharan Africa, the eastern Mediterranean, the Middle East and southeast Asia have sizeable reserves of gas that can be tapped and exported as LNG. But here, projects are progressing at a glacial pace.

Low oil and gas prices have cut returns on any new investment, and regulatory barriers and shortages of infrastructure present additional hurdles. All this can make bringing these new reserves to market a fraught exercise, particularly for floating LNG (FLNG) projects, a segment that is still largely untried.

However, work is progressing on Cameroon’s proposed floating project.

Golar LNG is converting the LNG carrier Hilli into a 1.2 mta FLNG vessel. Singapore-

based Keppel will deliver the converted ship in the new year. The project should begin production by 2019.

However, France-based Engie has halted its plan to develop a second Cameroon LNG project, an onshore 3.5 mta export plant at Kribi. Engie worked with state-owned oil company Société Nationale des Hydrocarbures for eight years but pulled out this summer, citing “unfavourable” market conditions.

Latin America’s lone LNG-production start-up – a barge-based FLNG project off Colombia – is also on hold.

Exmar needs a taker for the 500,000 tonne a year barge Caribbean FLNG, built in China to produce gas off Colombia. Pacific Exploration & Production (PEP) had agreed a 15-year contract for the vessel, which is now unfixed.

Exmar has not kept faith with emerging-market LNG production. It is concentrating its search off West Africa and in the Middle East, where postsanctions Iran is eager to get its gas to market.

Several other FLNG projects have been delayed or cancelled this year. Partners Inpex and Shell suffered a major setback when the government of Indonesia overruled their plans to build the 7.5 mta Abadi LNG venture offshore. Moving the project ashore will cost more and push it over its 2020 start target.

Spending high After a tough year, FLNG and FSRU prospects may brighten in 2017, however.

Douglas Westwood expects spending on offshore LNG – in which it includes both imports and exports – to peak

LNG World Shipping | November/December 2016

12 | SPECIAL REPORT

at a total of US$42 billion in 2017. Douglas Westwood also expects a shift in FLNG capital spending to Africa and Australasia in 2016-2022. It predicts that Africa will attract US$14.3 billion of investment in offshore LNG, or 34 per cent of the global total.

Mr Adeosun says Mozambique and Equatorial Guinea are the exporters to watch and Ghana and Ain Sokhna in Egypt the import hot spots.

New exploration has slowed as oil and gas companies scale back their ambitions.

However, Kosmos Energy plans to develop a nearshore LNG production project off Mauritania and Senegal.

Kosmos Energy plans to produce 8 trillion ft³ from the Tortue gas field, and is working with the two governments on a plan to produce and export LNG 8km offshore. The company admits, though, that first gas production “is several years away”.

Improved confidence in

Latin America’s lone LNGproduction start-up – a barge-based floating LNG (FLNG) project off Colombia – was put on hold this spring

offshore production bodes well for players such as Golar LNG, as it presses ahead with its FLNG plans. It needs a final investment decision to place Gandria, its second converted FLNG vessel, with the 2.2 mta Fortuna LNG export project off Equatorial Guinea.

Golar is also converting a third FLNG vessel, Gimi, for a 2018 start date. This vessel, designed to produce up to 2.2mta, is not yet fixed.

Undaunted, Golar believes it can place “five or more” FLNG vessels in the Middle East and West Africa by the end of the decade.

So, despite higher hopes for FLNG next year, new LNG markets will emerge more for imports, for the next couple of years at least. Douglas Westwood expects global investment in liquefaction terminals to reach US$160 billion in 2016-2020. It concludes that the other new LNG-import markets include Colombia, Malta, Vietnam and the Philippines. LNG

Tomorrow’s LNG importers: Columbia

Puerto Rico

Ghana

South Africa

Malta

Croatia

Russia

Bahrain

Bangladesh

Vietnam

The Philippines Exmar is targeting emerging LNG-export markets with its 500,000 mta barge Source: Douglas Westwood, August 2016

LNG World Shipping | November/December 2016

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SPECIAL REPORT | 13

KUWAIT RAMPS UP ITS LNG IMPORTS T

Mohammed Ghazi al-Mutairi

Kuwait LNG imports

Total imports 3.04 mta Annual increase 13.3 per cent Spot cargoes 190,900m³ Import sources Equatorial Guinea, Nigeria, Trinidad & Tobago, Oman, Qatar, Australia, Brunei, Malaysia Source: GIIGNL report, 2015

www.lngworldshipping.com

he Middle East is a promising import market for LNG. Half-year figures from Paris-based KPLER show the region took in nearly 8 million tonnes (mt) in the first half of this year, a near fourfold increase on its intake in first-half 2015.

Notable among the region’s countries is Egypt, which has switched from exporting to importing gas, using the floating storage and regasification units (FSRUs) BW Singapore and Höegh Gallant. Jordan also started to import LNG last year, using the FSRU Golar Eskimo, moored in Aqaba, and in August, Abu Dhabi became the newest member of the LNG-importers club, taking delivery of the 138,000m³ FSRU Excelerate.

Also in the Middle East Gulf, Dubai imports LNG using the Excelerate FSRU Explorer, which has a record send-out capacity of 1 bcf/day.

Next off the blocks may be Bahrain, which has contracted a floating storage unit (FSU) from Teekay LNG. But compared with most of its neighbours, Kuwait is an old LNG hand. It took delivery of its first LNG imports seven years ago and today, Kuwait National Petroleum Co (KNPC) has chartered the Golar LNG-owned FSRU Golar Igloo to bring in up to 4 million tonnes a year (mta) to 2019.

However, KNPC is now building a landbased terminal. In March, it signed a US$3 billion EPC contract with South Korea’s Kogas, Hyundai Engineering Co and Hyundai Engineering & Construction Co to build on reclaimed land on the south coast, near the al-Zour refinery.

Al-Zour terminal will have a maximum send-out capacity of 3,000 bbtu/day of gas, KNPC chief executive Mohammed Ghazi al-Mutairi told LNG World Shipping.

A new company, Kuwait Integrated Petrochemical Industry (KIPI), will manage the LNG imports, he says, and Kuwait Petroleum Co (KPC) Marketing will buy the cargoes.

“The LNG plant will be on stream within the next five years,” says Mr al-Mutairi. “Future

LNG activities will then depend on the energy demand and indigenous gas production.”

KNPC estimates the project costs at some KD998 million (US$3.3 billion). It comprises a new LNG pier, vaporisers for regasification, eight storage tanks, a flare system, utilities and hook-up to the national gas grid.

It has set up a team to secure finance for the venture and hopes to build the first four tanks in the first quarter of 2020 and the remaining four by early 2021. Now, it needs to secure land and approvals for the project.

Kuwait is to study whether it will still need FSRU capacity once the terminal is built, but it also plans to diversify its supply sources.

This spring, Kuwait Petroleum (KPC) agreed a 500,000-tonne, four-year supply deal with Qatargas 2, for summer delivery to Golar Igloo at Mina al-Ahmadi. And in May, Teekay-owned Creole Spirit delivered the first US LNG cargo to Kuwait, unloading a cargo from Cheniere’s Sabine Pass export terminal.

Future LNG activities depend on energy demand and indigenous gas production Meanwhile, Gazprom is courting Kuwait too. The Russian energy giant needs to contract volumes to reach a final investment decision on its proposed 10 mta export venture, Baltic LNG. A year ago, it signed a memorandum of understanding with Kuwait Petroleum Corp (KPC) to co-operate in LNG trade, investment and technical matters.

Mr al-Mutairi concludes: “KPC will source approximately 90 per cent of the LNG from aggregators, portfolio players and producers on a long-term basis and will leave some volume for shorter-term and spot purchases.” LNG

LNG World Shipping | November/December 2016

14 | SPECIAL REPORT

EMERGING LNG MARKETS – THE PHILIPPINES L

Albert Altura: pioneering LNG for power, bunkering, cold storage and transport in the Philippines

The Philippines does not yet import LNG but will have to satisfy a projected power-demand growth of 60 per cent by 2030. Karen Thomas looks at the opportunities and challenges ahead for this nation of islands and asks Manila-based Atlantic Gulf & Pacific (AG&P) about its LNG ambitions

LNG World Shipping | November/December 2016

ike many emerging economies in Asia, the Philippines faces an ever greater challenge to supply power to support its economic growth. This country of 100 million people has the added challenge of delivering electricity to remote communities spread across more than 7,000 islands.

Demand for power in the Philippines is set to grow by 60 per cent by 2030, to 29,330MW, with an expected shortfall in power generation and transmission of 10,00013,000MW that will require private sector investment of some US$25 billion.

Meanwhile, the country’s new president Rodrigo Duterte plans to increase capital spending on power, transport, shipping, petrochemicals, refineries and fuel supply and to invest 6-7 per cent of GDP in infrastructure. He also aims to repeal restrictions on foreign investment.

That will be crucial, as the country’s LNG-import plans have made slow progress.

Several import projects have been proposed. One of the most detailed featured a 4 million tonnes a year (mta) floating storage and regasification unit (FSRU) moored at Batangas. That Shell-led project has now been put on hold.

Several developments this year may strengthen the country’s plans to join the LNG-import club, however.

In January, Sevan subsidiary HiLoad LNG signed a deal

with Vires Energy to develop a floating regas dock (FRD) as a cheaper alternative to FSRUbased imports.

And this spring Manilabased conglomerate Atlantic Gulf & Pacific Co (AG&P) announced it will introduce small-scale solutions to the Philippines and other powerhungry nations in Southeast Asia. Its so-called virtual LNG pipeline proposes a network of breakbulk LNG terminals to transfer cargoes into smaller packages to support regional industry clusters, in the Philippines and beyond.

Also this spring, AG&P secured a technical assistance and licence agreement with French containment giant Gaztransport & Technigaz (GTT) to build its membrane containment systems – one of just three such licences worldwide.

Finally, this summer, AG&P announced it has taken a stake in South Korean

"We have built hundreds of highly complex process modules spanning the LNG value chain, from gas compression to liquefaction and transport"

www.lngworldshipping.com

SPECIAL REPORT | 15

AG&P IN FIGURES Name: Atlantic, Gulf & Pacific (AG&P) Major products: Small-scale and midscale floating LNG and on-shore products, specialised platform and mooring infrastructure for LNG operations and LNG transfer, LNG equipment, E-houses, mobile ports, petrochemical process modules, heavy-lift logistics and modular field teams Areas of operation: Energy distribution, petrochemicals, floating power, storage tanks, cold storage, civil works, and transport and bridges Headquarters: Manila, the Philippines Workforce: 300-plus in Manila and Batangas.

Contract workforce for major projects at home and abroad Financial data: A private company, AG&P declined to divulge its results

engineering and design firm Gas Entec, a specialist in small and mid-scale LNG applications that designed and built the floating regasification unit (FRU) that came into service off Bali in Indonesia this summer.

AG&P now claims to offer “a complete engineering, procurement, construction

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and even operating solution for all aspects of LNG supply and use”.

And so, after a year in which the company has positioned itself to lead the Philippines’ drive to import chilled gas, LNG World Shipping invited its president Albert Altura to discuss the company’s plans.

LNG World Shipping: can you outline AG&P’s LNG interests?

Albert Altura: AG&P works globally for oil and gas, power and mining majors and for the world’s largest EPC companies and shipyards that have been awarded major contracts that require large-scale subcontracting. All our clients are blue-chip organisations.

We count some of the world’s most complex infrastructure projects as our case studies: the largest gas project in the world, Ichthys LNG, and Gladstone LNG, both in Australia. In the past decade, we have built hundreds of highly complex process modules spanning the LNG value chain, from gas compression to liquefaction and transport.

Our new product suite offers a range of LNG infrastructure solutions including small-scale and mid-scale LNG floating and onshore products, platform and mooring infrastructure for LNG operations, and LNG equipment.

What is your LNGbusiness growth strategy?

Which markets and niches are you targeting, and what opportunities and challenges do you see ahead?

Although LNG is abundantly available in Qatar and the Northwest Shelf, the infrastructure to distribute it efficiently to smaller markets has been unavailable.

There is substantial regional

AG&P made its name building modular solutions

demand for distributed energy, especially in our own home market of the Philippines and in Indonesia.

The downturn in oil and gas prices has made LNG more affordable to users. Lower prices have resulted in an environment conducive to small and midscale LNG and are driving new technologies for LNG infrastructure development.

There is immediate demand for these solutions in archipelagic Indonesia and soon in the Philippines – and within widely distributed population centres, as well as in North America, Europe and India.

AG&P has become a pioneer in using LNG for power, bunkering, cold storage and transportation, and become a licensee or partial/whole owner of unique, standard products for downstream and LNG-related energy sectors, as holder of one of only three global licences from GTT to build specialised LNG membrane tanks.

We are leveraging decades of experience delivering to the modular and smart plant requirements of giant shore-based LNG projects, combining this with our new compact and mid-scale LNG solutions, principally in the form of gas-fired power in the 5-250 MW range.

Please tell us about some of your most important LNG projects and the challenges these presented.

One example is the E-houses delivered to the US$35 billion Ichthys LNG Project, one of the world’s largest infrastructure projects, off Darwin, Australia. The Japan Gas, KBR & Chiyoda ( JKC) consortium commissioned AG&P to design, construct and deliver 29 E-houses to support power for the project.

The E-houses are value-dense as they contain sophisticated electrical control and monitoring systems that govern power distribution to Ichthys LNG, providing its central intelligence and control structure. They were constructed entirely in AG&P’s advanced manufacturing base at Batangas.

We created a utilities hook-up network there to keep the machinery inside the E-houses environmentally controlled and explosionproof throughout construction and while on site and to test their operating ability before delivery to Darwin.

We delivered the 29 modules via 13 staggered shipments over 14 months from March 2015 to May 2016. At our peak, more than 4,500 employees – including

LNG World Shipping | November/December 2016

16 | SPECIAL REPORT

welders, fitters, painters, insulators and electricians – worked day and night, across three shifts, to meet the delivery schedule.

These intelligent modules demonstrate AG&P’s transition from steel and pipe to innovative engineering, design and construction.

When AG&P’s E-houses arrived, they were fully tested and plug-and-play ready, expediting the start of production at Ichthys LNG. Another example is the FRU designed by our new equity partner, GAS Entec, to deliver LNG to Bali. It is Indonesia’s first mini LNG terminal and a flexible solution that drives down the cost of production, has a shorter delivery time and reduces environmental impact.

The FRU offers a solution for other archipelago nations.

It supplies 40 mmscfd of gas to Bali’s Pesanggaran power plant, which previously used diesel, and should save Rupiah 1-2 trillion (US$76-152 million) a year.

More than 4,500 employees – welders, fitters, painters, insulators and electricians – worked day and night, across three shifts to meet the delivery schedule

What opportunities do you see in offshore LNG? There are islands in the Mediterranean, the Caribbean and Southeast Asia that will never be connected to pipelines because of their vast geographical spread, because they are too small to justify traditional large-scale LNG infrastructure or both. These factors render conventional power generation, pipeline resupply and transmission approaches prohibitively expensive or technically unfeasible.

As a provider of integrated floating and terrestrial small and mid-scale LNG storage, transport, regasification and power-generation assets, we can add value to the distributed baseload and peaking powergeneration strategies of power generators and distributors, regardless of location.

We anticipate increased demand for our customised and modularised solutions for vessels, projects and plants across the infrastructure lifecycle, including FSRUs and floating and onshore storage.

What opportunities are you targeting in small to mid-size LNG carriers?

AG&P and its strategic partnerships, licences and investments deliver full design, engineering, construction and assembly for various small-scale and mid-scale LNG vessels, including design, assembly and integration of sub-components, such as cargo handling and control systems for bunker vessels, small LNG carriers, onshore and offshore storage solutions and LNG-fuelled commercial vessels.

Small-scale LNG carriers of 2,000-10,000m³ carry LNG to independent power producers and smaller-scale power stations.

We are building a 4,000m³ LNG vessel to serve Southeast Asian markets at our manufacturing facilities 80km south of Manila and have several substantial projects in the pipeline.

We can also design, engineer and construct LNG-fuelled commercial vessels, including conversion to dual-fuel, newbuildings and cold storage.

So what opportunities do you see in gas as marine fuel and what projects are you working on in LNG bunker supply?

AG&P delivered 29 E-house modules in 13 staggered shipments to Ichthys LNG

LNG World Shipping | November/December 2016

Used as a marine fuel, gas can reduce SOx emissions to zero, reduce NOx by 80-90 per cent and CO2 by 20-25 per cent. Our virtual LNG pipeline can meet the needs of the shipping industry as it transitions from diesel to LNG as its primary fuel source in line with COP21 and other environmental commitments.

One example of how we can serve these customers is with our new equity partner, GAS Entec, which designed and engineered the 2,200m³ LNG bunkering barge that will be the first LNG Jones Act-compliant bunker barge for the marine market in North America. LNG

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18 | INNOVATION

GTT boss Berterottière discusses costs, scaled-down designs and why it's good to be ‘disruptive’ LNG World Shipping: 2016 has been a slow year for new orders. What are your expectations, in terms of when shipowners will start ordering LNG carriers again, reviving demand for GTT containment systems?

Philippe Berterottière: Based on new liquefaction projects agreed in the last two years, we believe that the market will need an additional 50 LNG carriers – and very soon. This LNG will become available in 2018-2019, which means that these ships will need to be ordered quickly.

In the meantime, we are also looking at opportunities for GTT in LNG as bunker fuel.

We are very focused on developing LNG fuel tanks for non-LNG oceangoing vessels – and for cruiseships and containerships in particular.

Here, we may not rely on the shipyards and are looking instead at partnerships with the outfitting companies that will build our systems.

This year’s dearth of orders for large LNG carriers is pushing containment specialist GTT to pursue new niches. Chairman and chief executive Philippe Berterottière spoke to LNG World Shipping at SMM in Hamburg about the company’s priorities

our three current partners and with the emphasis on quality. We listen to recommendations and are committed to the highest quality.

When the recovery comes, what markets do you see as your most important targets?

The main markets of interest, with our existing partners, are in southeast Asia. We also believe that LNG as marine fuel will develop in Europe, where two of GTT’s partners are based. We are also thinking of developing this kind of partnership in the US and are looking at ways to do this.

Can you tell us about those partnerships, and your criteria for choosing these companies?

So far, we have three such partnerships: with Endel in France, with Gabadie in Spain and with AG&P in the Philippines. We have built trust with these partners, and they have brought GTT a network able to build our LNG-fuel tanks.

All three offer multiple capabilities, have experience in the oil and gas industries and are skilled at welding techniques, particularly in stainless steel.

They also have the ability to move their workforce to third-party yards. Above all, they have the management capability to handle very complex projects.

How aggressively are you pursuing additional new partnerships?

We are not looking to expand our partnerships in the market, for the time being. We have made a slow start in this market, reflecting today’s low energy prices and the price gap between LNG and marine gasoil (MGO).

If and when we see the market skyrocketing, we may well seek new partners – while still insisting on the kind of trust-filled relationship we have with

LNG World Shipping | November/December 2016

Philippe Berterottière: “We have to question and revisit that technology for small-scale applications”

This year has brought some exciting initiatives to promote LNG as marine fuel; GTT has joined some of the biggest players in shipping to launch SEA\LNG, and Engie, Mitsubishi and NYK have just launched Gas4Sea at SMM. Is the tide turning to favour LNG as an alternative fuel?

So, the chicken-and-egg situation! People are working hard to break that old logic, taking initiatives that prove that we are not locked any more into that same old thinking.

As far as GTT is concerned, we are taking the initiative – and at SMM we signed an agreement with CMA CGM, DNV GL, ABB, Solar Turbines and OMT to develop designs for a large, LNG-fuelled containership. We are developing and refining our technology for this application to break the impasse.

Once the market grows and develops, we will need many partnerships of the kinds that you mention. It shows that the technology is ready and that the right networks are starting to exist.

www.lngworldshipping.com

INNOVATION | 19

GTT IN FIGURES

Onshore storage tanks

Containment systems orderbook

LNG/ethane carriers

96

Floating storage and regasification units (FSRUs)

6

2

107

US$129 million 2016 revenue (forecast)

Floating LNG (FLNG) vessels

2

Revenues (half-year 2016)

LNG bunker barge

US$240 million

1

Source: GTT half-year results, 2016

The critical factor is the price gap between LNG and MGO, which needs to be large enough to amortise the cost of the equipment. We don’t have that at the moment, but we should still take the opportunity to be better prepared for when things start to happen.

What prospects do you see for growth in small-scale and coastal LNG shipping?

For GTT, the main issue we need to address is what happens when we reduce the size of the LNG-carrier structure, because when you reduce the size, you don’t necessarily reduce the cost.

That makes our business plan unbalanced – scaling-down weighs heavy on that plan.

We have to be imaginative enough, to be disruptive enough to come up with solutions for these applications that are more cost-effective.

Right now, we are working on designs for barges that are significantly more cost effective than small LNG carriers and may address the requirement to deliver smaller quantities of LNG in the vicinity of the largest terminals.

We are building a barge designed as a feeder to large containerships in the US, a barge that can also deliver small quantities of LNG. We are looking to reduce the cost of the structure to make this solution possible – otherwise, the figures will not match.

Construction is under way at Conrad Shipyard on the 2,200m³ barge to deliver LNG to TOTE’s container ships, and we are already drawing lessons from this project. This is very different to the work we do for large LNG carriers.

www.lngworldshipping.com

We have to question and revisit our technology for small-scale applications, making it a lot simpler, adapting to very different constraints

When I spoke earlier about developing partners, it’s also about working with the small yards that can build these smaller structures. We have other designs, of 4,000m³, 5,000m³ and 6,000m³, going all the way up to 30,000m³.

You also used the word ‘disruptive’ earlier.

It’s a term gaining common usage in many industries; what does being disruptive mean to GTT?

It’s about being disruptive with regard to technology – our technology has traditionally been used for very large LNG carriers. We have to question and revisit that technology for small-scale applications, making it a lot simpler, adapting to very different constraints.

Simplicity, cost – these things become very important. Because the ships will not necessarily sail on the high seas, you have to look at the constraints of the technology and adapt them to very particular new requirements.

The second point about being disruptive is that we think of ways to make LNG available in very different ways. And the third is about working with smaller yards that have strong management, able to deliver high quality. It’s about being disruptive in terms of technology and in terms of doing business.

What are your concluding thoughts?

We believe that LNG is the fuel of the next decade, the way to clean up the atmosphere. The LNG industry has the expertise to make that opportunity possible – and the responsibility for making that possible. That is our commitment at GTT. LNG

LNG World Shipping | November/December 2016

20 | INTERVIEW

Mahinde Abeynaike: as demand increases, more bunker vessels will be introduced to the Baltic Sea

H

SIZE AND SCALE ARE CRITICAL TO LNG BUNKER-SUPPLY SHIPS, SAYS BOMIN LINDE LNG BOSS MAHINDE ABEYNAIKE

amburg-based Bomin Linde LNG has ordered a 7,500m³ LNG bunker-supply ship to be based at the Port of Klaipeda in Lithuania, serving a hinterland that spans the Baltic Sea. It signed a long-term time charter contract in September for the vessel with German shipowner Bernhard Schulte.

The 7,500m³ newbuilding is the world’s largest – and the first ice-class – LNG bunker-supply vessel ordered so far. The vessel is due for delivery towards the end of 2018. The vessel is only the sixth purpose-built LNG bunker-supply ship ordered to date.

Klaipeda is home to the Höegh LNG-owned, 170,000m³ floating storage and regasification unit (FSRU) Independence.

Its Lithuania-based charterer Klaipedos Nafta will hold a 10 per cent stake in the bunker-supply ship, cementing the Blue LNG partnership the energy company formed with Bomin Linde LNG late last year.

The partners decided early on to invest in a dedicated supply vessel to position Klaipeda as a regional bunkering hub. They see opportunity in the Baltic due to tighter regional emissions regulations that are driving regional ferry operators and cruiseship operators to consider the switch to LNG as marine fuel.

Bomin Linde LNG also plans to expand its regional truck-toship LNG bunkering supply operations.

This autumn’s announcement ends a busy year of preparation for Bomin Linde. LNG World Shipping sat down with Bomin Linde LNG chief executive Mahinde Abeynaike and asked him to outline the company’s ambitions for LNG as marine fuel and its plans for Klaipeda.

Tell us about the design spec for your LNG bunker-supply ship.

The vessel will have a capacity of 7,500m³. You have to be somewhat flexible – in terms of the size of vessel you plan to supply and in terms of where you will deliver. So in economic terms, we believe that size matters and scale matters.

But from an operational point of view, you also need all the operability that bunkersupply operations demand. Our 7,500m³ bunker-supply vessel with dynamic positioning (DP2) and ice-class features and a high degree of manoeuvrability provides excellent bunkering capabilities at an economically favourable size. It also offers a great degree of mobility that ensures availability of our bunkering services in many ports in the Baltic sea.

It will also have a very fast flow rate of up to 1,250m³/ hr, making it possible to serve customers that only have a short layover.

You formed the Blue LNG joint venture in Lithuania with Klaipedos Nafta in late 2015; how are you working together to progress this project?

LNG World Shipping | November/December 2016

We hold 90 per cent of the recently ordered LNG bunker vessel for the Baltic Sea; Klaipedos Nafta is participating with a ten per cent stake. We will use the vessel mainly for bunkering of LNG and for services linked to our terminal in Nynashamn in Sweden.

Klaipedos Nafta will use the bunker-supply ship to supply their truck-loading station with LNG from the floating storage and regasification unit (FSRU) Independence.

This FSRU will serve as our main hub to supply loads for our LNG bunker vessel.

How have Bomin Linde’s LNG priorities evolved?

The Linde Group has recently taken over 100 percent of our shares. With the change in our shareholder structure we strengthen our position, better realising synergies with the existing Linde LNG operations and securing more direct access to our parent company’s unique cryogenic engineering knowhow.

Every participant in this very young market has been on a learning curve. Initially, our focus was on landside storage solutions but it became clear that providing mobility

www.lngworldshipping.com

INTERVIEW | 21

of supply has priority, in particular in the early phase of the market.

It’s also been about having direct access to a hub – a terminal capable of receiving large LNG carriers, and having from that hub the distance or proximity to the delivery point. That distance needs to be as short as possible to offer commercially attractive prices.

What happens next?

We must focus on getting everything prepared to operate the world’s largest LNG bunker vessel. Our priority is securing all the approvals we need in the ports and ensuring we have technology and procedures that are compatible with the LNG-fuelled vessels that are on order.

The new emissions regulations mean that more and more ferry operators are looking at LNG and there is increasing interest from the cruise ship industry in this area too.

Our existing infrastructure includes our LNG terminal in Nynashamn, Sweden and we have the small LNG bunker barge Seagas. Both complement the new bunker vessel, giving Bomin Linde LNG a unique position to secure LNG supply in the Baltic Sea. Of course we will also continue to supply our customers with LNG from trucks.

Will your ship compete against the Shell and Engie bunkersupply ships based out of Rotterdam and Zeebrugge – or against rumoured operators based in Russia?

We will see separate supply zones emerge in the northwest Europe market rather than one joint market; terminals such as Gate and Zeebrugge will serve the North Sea. On the other, we will serve the Baltic Sea using the terminal in Klaipeda and our mid-scale terminal close to Stockholm.

We will serve Baltic Sea ports in Denmark, Sweden, Finland, the Baltic States, Poland and Germany. We cannot rule out the fact that in the future more LNGsupply sources will become available. That will increase our operational flexibility.

As demand increases, more bunker vessels will be introduced to the Baltic Sea. This will help the market to develop. However, shipto-ship bunkering requires experienced and credible suppliers. Being the first mover in the Baltic Sea, backed by a shareholder [that is] a globally leading industrial gases supplier bears a strong advantage.

Bomin Linde will charter the world’s first ice-class LNG bunker-supply ship

www.lngworldshipping.com

Everyone in the industry is trying to predict when demand will take off for LNG as marine fuel; what are your thoughts?

First, we have seen the ferries move. Thanks to their fixed schedules and the fact that they operate point to point they are the ideal first movers on customer side. No one was expecting cruise ships to switch so quickly, but now they are coming up fast, too.

A number of tankers and also some container vessels have taken final investment decisions for dual-fuel vessels.

From 2020 all vessels in European Union waters must comply with 0.5 per cent sulphur regulations and potentially that will also become effective at the same time on a global level.

This could massively drive the demand for LNG as a bunker fuel. Shipowners investing in new vessels will have to choose whether to invest in a dual-fuel engine, ie being in a position to use LNG or to bet on fuel oil/ gas oil only.

The latter alternative may lead to lower residual value for the vessels after 2020.

However, in current market environment, the investment level in new tonnage in particular in container business remains low, no matter if for LNG fuelled or traditionally propelled vessels.

Investing in LNG-fuelled cargo vessels could become a way to differentiate successful shipowners from others.

Certain large customers have started to prefer transportation suppliers that ensure environmentally friendly shipping solutions.

As gas is becoming much cheaper than oil again, the payback for the additional investment in a dual-fuel vessel is improving. For both, passenger traffic and cargo shipping, there is a viable business case supporting the ordering of LNG fuelled vessels rather than betting on the old oil-based technology.

What challenges come with taking LNG shipping out of an LNGonly environment – and finding and retaining crew that have the skills and experience to uphold the industry’s impressive safety record?

The level of professionalism in the supply chain is very high. On the regulatory side, things are handled strictly and we are confident, particularly in northwest Europe, that there will hardly be any gaps.

LNG has been out there for what, 50 years and the accident rate when handling LNG is low.

As a member of the Society for Gas as a Marine Fuel (SGMF), Bomin Linde LNG is involved in developing international guidelines to ensure safety during LNG bunkering operations.

On the customer side, the requirements for the crew are manageable. The crew will have all the gas-handling and safety training they need. On our side – the supplier side – we will have a highly specialised and trained crew. The customer will not need their crew to become cryogenic experts.

Final question; what are you most excited about – and what keeps you awake at night, worrying?

I’m excited about LNG as marine fuel – it is becoming a great market. And this is happening now. LNG is the bridge between the world of fossil fuels and the world of renewables.

And there is hardly any doubt that the trend to this renewable fuels’ world is unstoppable.

I am positive enough about our business that I manage to sleep well at night. However, no one would have minded if this market had ramped up at a higher pace over the last years. This is changing now.

The recent new orders of LNG fuelled cruise ships are good indicators that this speed will increase. LNG

LNG World Shipping | November/December 2016

22 | INTERVIEW

ENAGÁS REINVENTS ITS LNG-IMPORT TERMINALS AS LOGISTICS HUBS Enagás sees its native Spain as a crossroads that can supply LNG as marine fuel to global deepsea shipping. Gas assets general manager Claudio Rodriguez tells Karen Thomas how the energy giant is expanding along the LNG supply chain – at home and abroad How large is the Enagás LNG portfolio, and what are your growth targets and expectations to 2020 and beyond?

In October, Spain implemented the European Network Code on gas balancing of Transmission Networks. This will transform the Spanish system – which also launched an organised gas market in December – and will provide standard products and services.

We will adapt Spanish LNG and natural gas products and services to our customers’ needs and consolidate the Spanish system.

Enagás is present in eight LNG terminals – six in Spain, one in Mexico and one in Chile – and we are analysing a largescale regasification terminal in the Canary Islands, and a smallscale terminal in Gothenburg, known as the GO4LNG project. Altogether last year, we handled 5.6 million tonnes of LNG, down 18.8 per cent from 6.9 million tonnes in 2014.

In Spain, we manage LNG vessels from 2,000m³-266,000m³ and our terminals offer the full range of traditional LNG services. However, we are also developing small-scale LNG in the Iberian Peninsula, through innovative projects in the

LNG World Shipping | November/December 2016

maritime, railroad and airport sector and the LNGas hive project, a five-year initiative co-financed by the European Union to develop an integrated logistics supply chain for LNG. Internationally, Enagás is using its operations and maintenance (O&M) knowhow in emerging markets. Having operated natural gas infrastructure since the late sixties, starting at Barcelona LNG terminal, we can develop new gas infrastructure worldwide.

Where will you concentrate new investment in the next 12 months?

In Spain, our 2015-2020 efficiency plan aims to improve our role as a midstream player.

We have improved our energy intensity to above pre-crisis levels.

Boil-off gas (BOG) compressors eliminate losses during reloading and we use residual energy to generate electricity. We will continue to increase efficiency and flexibility, and expect to multiply by 18 our investments in 2015-2020 to obtain 8.5 times more energy savings – to reduce our carbon footprint and to increase the competiveness of LNG. During

www.lngworldshipping.com

INTERVIEW | 23

this period we will also invest in improving flexibility in the smallscale LNG logistics chain. Enagás is adapting its terminals to provide small-scale and bunkering services and will test LNG multimodal transport via ISO containers next year. We are also analysing the feasibility of LNG rail tank cars and how we would need to adapt our terminals to load such trains.

Internationally, we will consolidate our position as a midstream player, looking for opportunities in growing markets that offer a good balance between risk and profitability.

What do you expect for LNG demand growth in the short and longer term?

Although we expect a slight increase in LNG traffic looking for long-term purpose in Europe, we do not expect strong demand growth in largescale LNG. In small-scale, the latest data suggests significant demand will arrive around 2018.

Future demand will depend on infrastructure availability, regulation, prices and the final environmental impact of LNG. We must address doubts about the environmental impact of LNG. Enagás is participating in several

www.lngworldshipping.com

Our presence in six of the eight Iberian Peninsula LNG terminals makes us best-positioned in LNG in Europe.

Moreover, new LNG products and services are expected soon and we are improving the gas value chain by reducing midstream costs

studies to clarify how LNG cuts transport-sector emissions and recently compared the emissions of different fuels to conclude that LNG is one of the most environmentally friendly in the well-to-tank cycle, benefiting from being widely available, from spare infrastructure capacity and having experienced LNG operators.

We have two main objectives: energy efficiency – to reinforce natural gas’ short-term competitiveness as transitional energy and LNG as fuel for a decarbonised future – and adapting infrastructure to consolidate Spain as a hub.

What opportunities and challenges do you see in the shift to buy more destinationfree or shorter-term cargoes?

The shift to destination-free or shorter-term cargoes is not a possibility, it is a fact. A new natural gas market framework is in place. The number of LNG providers has increased, the US has started to export and many liquefaction projects are under development.

Global LNG prices have converged and decreased, and we expect some oversupply.

Shippers need the storage and flexibility to take advantage of business opportunities such as new small-scale LNG demand,

new gas demand or unexpected spot operations.

One of the key words these days is adaptability as medium and short-term operations increase in scale and as the gas sector becomes more and more varied and demanding.

How will Enagás make the most of this shift?

We are transforming our LNG regasification plants into multimodal terminals to offer large and small-scale services with the flexibility and reliability our clients demand. We are also improving the gas value chain by reducing midstream costs.

By February, Cartagena LNG terminal will reload at a rate of 7,000m³/h, making it one of the fastest terminals in Europe, which offers our shippers a significant economic benefit.

When do you expect balance to return to LNG supply and demand, and for shipowners to place new orders again?

The evolution of LNG is accelerating – it depends on infrastructure availability, regulation, prices and final environmental impact. It is difficult to predict when supply

LNG World Shipping | November/December 2016

24 | INTERVIEW

and demand will return to balance or when new orders will come. Whenever it happens, Enagás will be ready.

ENAGÁS IN FIGURES

What is Enagás’ LNG growth strategy in Spain?

8 8

We aim to strengthen our position in large-scale LNG. We are present in six of Spain’s seven LNG terminals and recently increased our stake in Sagunto from 30 per cent to 72.5 per cent.

In small-scale, Enagás is developing solutions in Spain and beyond, through the LNGas hive project.

Directive 2014/94/EU on deployment of alternative fuels infrastructure (Clean Power for Transport) aims to decarbonise the Mediterranean and Atlantic corridors. Enagás infrastructure will comply with the directive in 2017; Spain will be ready by 2020. That is an enormous achievement, given Europe’s 2025 deadline.

We are also working to develop efficient, competitive infrastructure in Tenerife to complete an LNG value chain to support energy sustainability in the Canary Islands. Here, small-scale LNG could bring excellent opportunities in gasto-power and marine fuel.

We always have in mind the ambitious challenge of transforming Spain into an NG/ LNG hub. The Iberian gas hub MIBGAS is already in place, although it remains to be seen how it will evolve and how competitive the new LNG products, services and tariffs will be.

What is Enagás’ LNG growth strategy in Europe?

As the market is less local and more and more global, leveraging our positioning in Spain means leveraging our position in Europe. Our capacity and flexibility will play a significant role in European LNG strategy, particularly in gas security and resilience.

COUNTRIES

LNG TERMINALS

5.6mta TOTAL LNG PORTFOLIO

US$1.4

BILLION REVENUES

US$466 MILLION PROFIT US$600 MILLION INVESTED

61%

In March last year, Enagás and Fluxys acquired Swedegas, which owns and operates Sweden’s high-pressure gas pipeline network. Fluxys and Enagás are also working together to develop the GO4LNG terminal.

What is Enagás’ LNG growth strategy in Latin America and other emerging markets?

In Chile and Mexico, our strategy is to extend our expertise and business model to our terminals’ zone of influence.

We feel very comfortable with our partners and with the management of TLA Altamira in Mexico and Quintero LNG in Chile.

In Chile, we recently increased our stake from 20.4 per cent to 60.4 per cent. These two terminals are benchmarks for both countries and we plan new improvements and expansion here.

We continue to look for new opportunities in emerging markets within our core business, based on our extensive operations and maintenance (O&M) knowhow.

What are your plans to promote smallscale LNG? Our presence in six of the eight Iberian Peninsula LNG terminals makes us bestpositioned in LNG in Europe.

The main LNG infrastructure is already built in Spain, so developing the LNG logistics chain only requires marginal investments. Barcelona and Cartagena enjoy dedicated LNG jetties for small-scale services.

We are adapting our LNG terminals to offer the safest, most efficient small-scale services, revamping Barcelona LNG terminal’s small-scale jetty and planning to do so in Cartagena, Huelva, Sagunto and Bilbao.

Our LNG terminals are to be logistics terminals, where we complement traditional unloading, storage and

INVESTED ABROAD Source: Enagás 2015

LNG World Shipping | November/December 2016

regasification services with new ones, big and small scale.

This new concept requires the infrastructure and the regulatory framework to support demand.

Enagás co-ordinates the LNGas hive that is developing the software and the hardware to supply LNG for use as a marine fuel and for small-scale services, identifying standards to develop LNG as a fuel, defining the training and accreditation processes and proposing a National Policy Framework.

Other studies will test LNG bunker-supply logistics.

This includes adapting LNG terminals to offer bunkering and small-scale services, developing bunker barges or multimodal transport, and studying how LNG is used within the port environment.

As for associations, Enagás holds the maritime vicepresidency of the Iberian Association for the promotion of natural gas and liquefied natural gas as fuels for road, railway and maritime transport, or GASNAM. We are also in contact with NGVA, which promotes the use of natural gas for sustainable mobility.

Finally, what are your plans to make LNG available as marine fuel?

We are focusing on smallscale and view bunkering of LNG as one of the main markets. The CORE LNGas hive project will contribute by developing the supply chain for LNG-bunker demand. The Iberian Peninsula is very well positioned, as a crossroads in global shipping and the Strait of Gibraltar is one of the world’s main bunkering areas.

Enagás LNG Terminals are hubs that will support this demand, so we are very aware of our role in developing LNG as a marine fuel. We are participating in studies to clarify how LNG can cut transport-sector emissions. LNG

www.lngworldshipping.com

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26 | TRAINING

OPINION: HOW DO YOUR LATEST SIMULATORS IMPROVE LNG CREW KNOW-HOW? Kongsberg digital product manager Leif Pentti Halvorsen

LNG World Shipping asks the experts how improved software packages are training LNG crew to work more safely and efficiently

Kongsberg Digital product manager engineroom and cargo-handling simulators Leif Pentti Halvorsen Simulator training provides important feedback on theoretical knowledge and practical application. A key learning element of Kongsberg’s LNG-carrier simulator is understanding the use of boil-off gas (BOG) in dual-fuel engines and in a diesel-electric combination.

However, the simulators are also used to deliver training scenarios for saving energy. Considering the cost of fuel and the efficiency gains of a diesel-electric dual-fuel (DEDF) plant over traditional steam plants, this is an important aspect of LNG simulators.

Five years ago, Kongsberg released its engineroom simulator (ERS) model based on a DEDF configuration for a modern LNG carrier. Today, it is used to train LNG engineers at more than 20 sites.

The ERS has been developed to allow shipowners to meet Marpol Annex VI regulations for preventing air pollution from ships. These include the new chapter four regulations on energy efficiency for ships, which make mandatory for new ships the Energy Efficiency Design Index and for all ships the Ship Energy Efficiency Management Plan.

Last year, IMO added to the Standards of Training, Certification and Watchkeeping (STCW)

LNG World Shipping | November/December 2016

Convention aspects of the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code), including LNG fuelhandling and bunkering.

Handling LNG and other low-flashpoint fuels for ships enters maritime training standards next year.

These regulations and the realisation that DEDF power can provide operational efficiencies have caused a boom in ships built to operate on LNG. There has been massive growth in LNG-powered ships with dual-fuel engines, including ferries, cruiseships, cargo vessels, and oil and chemical carriers.

In July Kongsberg Digital signed contracts with Chalmers University of Technology and Kalmar Maritime Academy at Linnaeus University for the development and delivery of a new K-Sim Engine model for an LNG cruise ferry.

This fulfils engine plant demands for energy efficiency and low environmental impact. It contains training for the bunkering and operation of a cruise ferry

that employs a multiple installation of the Wärtsilä medium speed, four-stroke, LNG and diesel oil 8L50DF engine to generate power for a high-voltage switchboard.

The simulator covers the operation and system understanding of a DEDF configuration with the engineroom systems on board such a cruise ferry and the procedures related to bunkering of LNG. It includes sufficient controls relevant to the ship type to realistically simulate the ship/truck/shoreto-ship interface and checks and operations.

Chalmers, which uses the LNG-carrier model, is providing theoretical, advanced and basic courses that comply with the coming IGF/STCW requirements. It plans to integrate the new LNG cruise ferry simulator.

Chalmers believes that handling and managing lowenvironmental-impact fuels like LNG is best practice.

The simulator, which includes LNG bunkering, will be fundamental for better understanding the thermodynamics of LNG.

www.lngworldshipping.com

TRAINING | 27

BSM corporate expert liquified gas Chris Clucas

Maritime Training Centre director Brijendra Srivastava

RINA services sector manager maritime crew training Alessandro Mura

Transas Academy vice-president Ralf Lehnert

BSM corporate expert liquified gas Chris Clucas and director Maritime Training Centre (India) Brijendra Srivastava BSM, which manages 25 LNG carriers, is a leader in using simulators for training.

Our global Maritime Training Centres (MTCs) have full-mission bridge and engine simulators and LICOS cargo simulators.

As the airline industry knows, computer simulation offers a risk-free environment to test students’ capabilities and to reinforce classroom learning. However, in shipping, most training regimes rely on time served, in which the cadet learns from senior personnel the situations that may occur on board.

This is not really effective.

On a modern vessel, where everything works well, the trainee may experience few practical problems. Increased use of simulators is part of the pro-active training approach expected from quality operators and managers.

But unless the wider industry recognises the benefits of simulation

training, it is difficult to justify this investment.

The simulator at BSM’s Mumbai MTC allows up to six participants to train simultaneously on independent stations monitored from the instructor’s terminal. The Mumbai centre conducts threeday Operational Level and five-day Management Level courses using LNG simulators, approved by DNV and that meet Society of International Gas Tanker and Terminal Operators (SIGTTO) standards. It has conducted more than 60 courses for over 300 BSM onboard personnel as well as for companies including Shell, BW Maritime, Chevron, K Line and Honeywell.

The LNG industry has a high-level performance and safety record, but faces rapid growth in ship numbers.

How do we avoid diluting experience on board ships and reducing operational standards? You can put on board numerous extra trainees to learn the business, but this is the least appropriate way to learn, especially if everything is running like clockwork.

Our industry is well-

suited to simulation – for navigation simulation, where the characteristics of the large vessels can become familiar to experienced gas-ship personnel, and for engineers, facing the novel situation of using cargo as fuel.

Simulator-based training exposes participants to all aspects required during the complete drydock-todrydock cycle of an LNG carrier: gassing up, loading, discharging, stripping, warming up and ballast voyage spray cooling.

On deck, the cargo officers can practise setting up and operating the gas flows to shore during loading and to the engineroom at sea, or deal with unusual situations that arise if valves fail to open or close, causing back-flow and potential cargo tank overflow during discharge.

Instructors can adjust exercises to suit the candidate’s experience and tailor them to unusual scenarios, such as failure of shore vapour return and the need to use the ship-board vaporiser to maintain tank pressures and discharge rates.

SIGTTO courses, such as remote valve indicator failur leading to unexpected cargo flows during discharge, can also be simulated.

The shipping industry is looking to improve standards.

If we recognise the value of simulation training and use it to the full, we will learn vital lessons that our aviation colleagues already appreciate.

LNG has always been the most forward-thinking sector in shipping. SIGTTO’s recent creation of a Human Elements Committee shows our willingness to explore new avenues to improve standards. This, surely, is the greatest opportunity to demonstrate the benefits of simulation training.

www.lngworldshipping.com

RINA Services sector manager maritime crew training Alessandro Mura Growth in LNG as shipping fuel reflects new legislation to reduce carbon emissions. To ensure the highest standards of safety, international regulations require extensive training for all personnel on board gasfuelled ships.

RINA has begun to

LNG World Shipping | November/December 2016

28 | TRAINING

class the new generation of LNG-fuelled cruise vessels.

Some 400-500 LNGfuelled ships will come into operation by 2020, presenting a huge challenge.

Technology can meet that challenge and RINA has introduced a course using a simulator to reproduce onboard operations and onshore operations and bunkering.

IMO has defined competence levels for training seafarers operating in LNG shipping to ensure the highest standards of operational excellence.

RINA’s training methodology is based on continuous crew improvement through practical assessment. This identifies any weakness in a seafarer’s competence and therefore creates bespoke training programmes, to be delivered through simulators.

Training using simulators enhances the seafarer’s active participation and learning motivation. As he or she becomes more familiar with the system, the learning process accelerates.

Seafarers can repeat each exercise until they reach an adequate level of competence.

The safe environment of a simulator encourages

problem-solving without risk and builds confidence.

RINA’s simulator-exercises menu is based on shipping standards and offers statutory training courses covering normal operations, unusual situations and emergencies.

Possibly the greatest value comes from exercises that cover unusual situations and emergencies, simulating vessel traffic, adverse weather, onboard system malfunctions, equipment breakdowns and blackouts.

Modern high-resolution simulators can be programmed to simulate the most complex operations, creating a user experience that is highly realistic. A programme can be customised to simulate the ship that will employ the crew, matching the vessel’s size, manoeuvring capabilities, cargo containment system, propulsion system and cargo composition.

Bridge, engineroom and cargo-handling simulators can be interconnected to emulate a full ship system, training and assessing seafarers as individuals, and as a team. The immersive nature of modern simulators can improve crew leadership, situational awareness, decision-making, communication and

LNG World Shipping | November/December 2016

resource management.

Coupling simulators in different locations through a virtual network is particularly effective in operations that require interaction with external stakeholders. For example, if the operation of LNG escort tugs is being simulated, tugs can be manoeuvred by the tug masters operating in that port.

RINA simulators include an e-tutor and an automated evaluation system to reduce the instructor’s workload. This gives instructors more time with the student to maximise the learning experience with the simulator.

Simulator training will help the industry to embrace the benefits of LNG as a clean fuel for shipping.

Transas Academy vicepresident Ralf Lehnert Training of maritime personnel is vital for safety at sea. As a global leader in advanced simulation solutions, Transas constantly keeps track of all the aspects of development in marine technologies, allowing us to meet modern training standards.

Training and operation skills of the crews of ships that use low-flashpoint fuel

should improve because of the innovative technologies developed through our R&D capabilities in IT, mathematical modelling and system integration, all implemented in the latest LNG tanker and terminal simulator solutions.

Preparing crew means minimising the risk to the ship, personnel and the environment, having regard to the nature of the fuels involved. The main problem is a lack of infrastructure and of qualified seafarers. Our task is to provide LNG seafarers and LNG terminal personnel with advanced simulator training.

The recently launched Transas Academy takes a holistic approach to training delivery. New training requirements for seafarers will depend on simulator training more than before, and Transas has contributed to maritime simulator training, especially in dynamic positioning, LNG-fuelled bunkering and ice navigation.

With the amendment of the STCW Convention to include the IGF Code, adopted in June 2015, and coming into force on 1 January, ice simulator training will become important.

Transas has redeveloped the ice functionality in its simulator to train and assess ice-navigator proficiencies in polar waters according to the Polar Code.

This includes identification of ice types, ice avoidance, risk identification, A-to-B transit in various ice concentrations, the use of polynyas, finding leads, iceberg drift track and CPAs from bergs, ridges/hummocks, growlers mixed in the ice edge, icebreaking support for structures, and ice management.

The new ice functionality features meet the requirements of classic ice navigation training and ice management and icebreaking training to support energy production and cruise ship activities in the polar regions. LNG

www.lngworldshipping.com

8,000 people working as one, for you

At Lloyd’s Register, we work with shipyards, owners and operators, OEMs and regulatory authorities to ensure their floating storage and regasification units (FSRU) are safe, reliable, efficient and comply with all necessary statutory regulations. We offer technical support and advice at every stage from concept to repurposing and end-of-life, helping you to reduce technical, commercial and safety risks. We can give you the support you need, when you need it.

www.lr.org/gas

Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates.

Copyright © Lloyd’s Register Group Limited. 2016. A member of the Lloyd’s Register group.

30 | BEST OF THE WEB

BEST OF THE WEB The LNG World Shipping website is updated daily, tracking the latest developments in shipping, projects, products and services. Our news coverage is now online-only. Our analytics reveal that the following are the ten most popular web-only stories and online comment pieces that we published this autumn

LNG shipping newcomer ‘eyes 20-vessel order’ Reports from Asia say a little known investment firm plans to order up to 20 LNG carriers, in a deal worth up to US$3.8 billion – boosting South Korea’s beleaguered shipbuilding sector.

CBI Energy and Chemical (CB&I) reportedly wants to develop a supply network in Asia and Africa, comprising

lngworldshipping.com

conventional carriers, floating production and import infrastructure. It seeks 10 firm orders plus 10 options for LNG carriers in the 120,000m³-175,000m³ range, taking one new vessel every two to three months from 2019, Reuters says.

project is aiming for a 2019 start date and will produce up to 2.6 million tonnes a year.

http://bit.ly/LNGnewbie

The future for LNG is bright

Samsung Heavy Industries closes in on FLNG order South Korean shipyard Samsung Heavy Industries (SHI) is close to landing a US$2.5 billion order to build a floating LNG (FLNG) vessel abroad for Italian energy company ENI. SHI has formed a consortium with France-based Technip and Japan-based JGC to lead the project, which is said to have a total value of US$5.4 billion. Sources in South Korea expect a deal to be signed in October, according to the reports.

ENI aims to reach a final investment decision (FID) this year on the Mozambique-based Coral FLNG project.

The company aims to export its first LNG from Mozambique by the end of the decade. The US$7 billion Coral FLNG

http://bit.ly/shiFLNG

Despite low rates and excess capacity, the future for LNG shipping is bright – that’s the message delivered to the Capital Link Shipping, Marine Services & Offshore Forum in London in October.

Speakers on the LNG shipping panel talked up the prospects for LNG shipping, noting that although today’s vessel oversupply reflects tonnage being delivered before new LNG projects come on stream, by 2018-2019 new US and Australian exports could create a deficit of up to 50 LNG carriers. http://bit.ly/LNGbright

Anatomy of the LNG carrier fleet This year, the total trading LNG carrier fleet has expanded to 452 vessels, with a total capacity of 65.7 million m³, as of 1

To view more whitepapers visit the Knowledge Bank on www.lngworldshipping.com To upload a whitepaper to the Knowledge Bank, please email Steve Edwards at steve.edwards@rivieramm.com www.lngworldshipping.com/s/knowledgebank

Editor’s selection: Marine Fuel Stability and Compatibility – Issues, Tests and Management by ExxonMobil

for fuels in the world’s emission-control areas (ECAs), and reviews ECA-compliant products of differing formulations.

The most downloaded white paper this autumn looks at how the marine-fuel market is changing, due to ever tougher environmental legislation. This paper examines fuel stability and compatibility in light of the sulphur cap

http://www.lngworldshipping.com/s/knowledgebank/ download,view_46.htm

LNG World Shipping | November/December 2016

www.lngworldshipping.com

BEST OF THE WEB | 31

September, after 17 newbuildings with a combined capacity of 2.8 million m³ were delivered in the first eight months of this year, according to Banchero Costa.

Banchero Costa expects the fleet to grow by 9 per cent this year, with 6.1 million m³ hitting the water, “creating further pressure on the market”. http://bit.ly/bancheroLNG

Bomin Linde orders the largest and first ice-class LNG bunker-supply ship Bomin Linde LNG has booked a 7,500m³ LNG bunker-supply vessel in a timecharter contract with shipowner Bernhard Schulte. The vessel is chartered by the joint venture between Bomin Linde and Klaipeda LNG import terminal operator Klaipedos Nafta. http://bit.ly/BLbunkership

year. The shipyard is tipped to land a US$2.7 billion order from ENI for a floating LNG (FLNG) newbuilding to liquefy gas for the Coral FLNG project off Mozambique. http://bit.ly/LNGtide

Wärtsilä signs small-scale LNG deal with Indonesia Wärtsilä has signed a memorandum of understanding with Indonesian state-owned power company PT Perusahan Listrik Negara (PLN) to develop 500MW power generation solutions and small-scale LNG storage and infrastructure across the vast and populous southeast Asian island state.

Indonesia produced 16.5 million tonnes (mt) of LNG and exported 14 mt last year, when its energy consumption grew 3.9 per cent and Oxford Institute of Energy Studies predicts that it will import between 6.7-15.1 million tonnes a year of LNG by 2030.

Stolt-Nielsen poised to order ships as Italy says yes to Sardinia LNG storage

http://bit.ly/wartsIND

Higas has won approval to build and operate a 9,000m³ LNG-storage plant at Santa Giusta in Sardinia’s Oristano province. Gas & Heat and CPL Concordia will build and operate an LNG terminal and distribution hub in Sardinia.

Last year, Stolt-Nielsen subsidiary Stolt-Nielsen Gas bought a 10 per cent stake in Higas, with the option to acquire up to 80 per cent. Stolt-Nielsen will soon confirm its order for two small-scale LNG carriers shortly, to support the Sardinia project.

ENI finance search positions Mozambique for LNG go-ahead

http://bit.ly/SNsmallLNG

Has the tide turned for LNG carrier orders?

Samsung Heavy Industries (SHI) is to build two LNG carriers for an unnamed Europe-based shipowner brings this year’s total newbuilding orders, as of October, to six. The order has been linked to GasLog. SHI has had no new bookings in a

www.lngworldshipping.com

Italian energy firm ENI has been meeting bankers to raise funds for Coral FLNG, its floating LNG production project off Mozambique in its push to reach a final investment decision (FID) by year-end.

ENI had hoped to start production on the 3.4 million tonne a year (mta), US$7 billion offshore project by 2019. The project is now likely to overrun. Prospective lenders are said to be asking for government credit guarantees for the project, including from the UK and China.

Nevertheless, with the Petronas-led Pacific NorthWest LNG project newly bound in red tape, Coral FLNG is widely tipped to become the next wholly new project to reach FID.

to step up their security after Teekay LNGowned Galicia Spirit came under what the company describes as “a suspected piracy attack” on Tuesday.

Security sources say a smaller vessel approached the 2004-built, 137,814m³ LNG carrier as it sailed off the coast of Yemen. The unknown assailants fired a rocket-propelled grenade (RPG) and small arms at the vessel, which is chartered to Union Fenosa Gas. Vessel and crew escaped unscathed but were escorted from the Bab al-Mandab Strait by a warship from Djibouti. http://bit.ly/rocketraid

Follow the news your business needs by signing up to our free weekly newsletter: http://bit.ly/LNGmust-read

EVENTS UPDATE European Dynamic Positioning Conference 07 Feb 2017 London dynamicpositioningeurope.com OSJ Subsea Conference 07 Feb 2017 London osjsubsea.com Offshore Wind Conference 07 Feb 2017 London offshorewindjournalconference.com

http://bit.ly/ENIcash

LNG carrier Galicia Spirit escapes RPG attack off Yemen Security sources are urging ships sailing between the Gulf of Aden and the Red Sea

European Marine Engineering Conference and Awards 25–26 Apr 2017 Amsterdam marinepropulsionconference.com

LNG World Shipping | November/December 2016

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

32 | STATISTICS

LNG CARRIER ORDERS AND DELIVERIES Statistics as at 1 November 2016 showing the latest developments in the world fleet of LNG carriers

IN-SERVICE AND ON-ORDER LNGC FLEET BY PROPULSION SYSTEM No of vessels

Orderbook = 133

Exisiting LNG fleet = 476

300 250

in service on order

Two-stroke diesel 60 vessels

Steam 16 vessels

Dual-fuel diesel-electric 70 vessels

200

Two-stroke dual fuel Dual-fuel diesel-electric 5 vessels 139 vessels

150 100 50

Two-stroke dual-fuel 47 vessels

0

Dieselelectric

Steam

Low-speed diesel

Steam 272 vessels

Low speed dual-fuel

IN-SERVICE AND ON-ORDER LNGC FLEET BY CONTAINMENT SYSTEM No of vessels

Orderbook = 133

Existing LNG fleet = 476

200 Type C 14 vessels KC-1 2 vessels IHI SPB 4 vessels

existing

150

LNT A-Box 1 vessel

newbuild

GTT CS1 3 vessels

Type C 20 vessels

GTT Mk III 177 vessels

Moss 114 vessels

GTT Mk III 37 vessels

100 IHI SPB 2 vessels

Moss 21 vessels

50

0

GTT No 96 54 vessels GTT Mk III

GTT No 96

GTT CS1

Moss

IHI SPB

KC-1

Type C

GTT No 96 160 vessels

LNT A-Box

YEAR OF BUILD OF THE LNG FLEET BY NUMBER OF VESSELS No of vessels

6060 5050

Q-max

40

50–180,000m3

Q-flex

40

Up to 50,000m3

3030 2020 1010 2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

LNG World Shipping | November/December 2016

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

1971

1970

1969

00

www.lngworldshipping.com

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

STATISTICS | 33

LNG NEWBUILDING COST, BY SHIP TYPE (average annual prices, US$ million) 350 small-scale, 30,000m3 LNGC

300 170,000m3 floating storage & regasification unit

250

steam-propelled LNGC, 145,000-177,000m3

200

Icebreaking LNGC, Yamal, 172,000m3

150

DFDE LNGC, 155,000-174,000m3

100

ME-GI propulsion, 174,000m3

diesel-propelled LNGC, 210,000m3

50

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

LNG NEWBUILDING ORDERBOOK BY YARD OF BUILD Total number of vessels on order = 133 vessels

Hyundai

Hudong

- Keppel - Yangzijiang - Sinopacific

Imabari

1 2 45

Daewoo

20

17

10

Samsung

8

6

- Mitsubishi - Kawasaki

4

- China Merchants - Qidong Fengshun - Cosco Dalian - Bodewes - STX - Neptun - Ningbo

- Wison - JMU

LNG CARRIER ORDERS AND DELIVERIES PER YEAR No of vessels

8080 7070 6060 5050 4040 3030 2020 1010 00

orders per year deliveries per year

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

www.lngworldshipping.com

LNG World Shipping | November/December 2016

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

34 | STATISTICS

LNG CARRIERS DELIVERED (1 JANUARY 2015 - 1 NOVEMBER 2016) vessel name 2015 deliveries Papua SCF Melampus BW Pavilion Vanda Golar Kelvin Asia Excellence Cool Explorer Golar Snow Golar Ice SCF Mitre Maran Gas Sparta Hai Yang Shi You 301 Gaslog Salem Asia Endeavour Maran Gas Lindos Southern Cross Amadi Maran Gas Mystras Clean Horizon JS Ineos Insight JS Ineos Ingenuity BW Singapore Maran Gas Troy Maran Gas Alexandria BW Pavilion Leeara Energy Atlantic JS Ineos Intrepid LNG Jurojin LNG Finima II Golar Tundra Beidou Star LNG Bonny II LNG Port Harcourt II 2016 deliveries LNG Lagos II Maran Gas Achilles Clean Vision LNG Saturn JS Ineos Inspiration Creole Spirit LNG Abuja II Woodside Chaney Gaslog Greece Hoegh Grace Kumul Maran Gas Agamemnon LNG Fukurokuju LNG Abalamabie Gaslog Glasgow Oak Spirit Maran Gas Amphipolis Maran Gas Pericles La Mancha Knutsen Gaslog Geneva Seri Camellia Maria Energy LNG Mars

delivery

capacity m3

owner

builder

charterer

cont system

details

1.2015 1.2015 1.2015 1.2015 1.2015 1.2015 1.2015 2.2015 4.2015 4.2015 4.2015 4.2015 6.2015 6.2015 6.2015 7.2015 7.2015 7.2015 7.2015 7.2015 8.2015 9.2015 9.2015 9.2015 9.2015 10.2015 11.2015 11.2015 11.2015 11.2015 12.2015 12.2015

172,000 170,000 155,000 162,000 155,000 160,000 155,000 160,000 170,000 163,700 30,000 155,000 160,000 155,900 172,000 155,000 155,900 162,000 27,500 27,500 170,000 155,900 163,700 162,000 160,000 27,500 155,000 174,000 170,000 172,000 170,000 170,000

MOL Sovcomflot BW/Pavilion Golar LNG Chevron Thenamaris Golar LNG Golar LNG Sovcomflot Nakilat/Maran Gas CNOOC GasLog Chevron Nakilat/Maran Gas MOL Brunei LNG Maran Gas Dynagas Evergas Evergas BW Group Maran Gas Nakilat/Maran Gas BW/Pavilion Alpha Tankers Evergas MOL Nigeria LNG Golar LNG MOL Nigeria LNG Nigeria LNG

Hudong STX Shipbuilding Hyundai Hyundai Samsung Samsung Samsung Samsung STX Shipbuilding Hyundai Samho Jiangnan Samsung Samsung Daewoo Hudong Hyundai Daewoo Hyundai Sinopacific Sinopacific Samsung Daewoo Hyundai Samho Hyundai STX Shipbuilding Sinopacific Mitsubishi Samsung Samsung Hudong Hyundai Samsung

ExxonMobil Shell Sinopec Voyage charters Chevron Voyage charters Voyage charters Voyage charters Shell Shell CNOOC Shell Chevron Shell ExxonMobil Brunei LNG Shell Voyage charters Ineos Ineos EGAS Voyage charters Nakilat Sinopec Cheniere Energy Ineos Kansai Electric Nigeria LNG West African Gas ExxonMobil Nigeria LNG Nigeria LNG

GTTNo96 GTTNo96 GTTMkIII GTTMkIII GTTMkIII GTTMkIII GTTMkIII GTTMkIII GTTNo96 GTTMkIII Type C GTTMkIII GTTMkIII GTTNo96 GTTNo96 GTTMkIII GTTNo96 GTTMkIII Type C Type C GTTMkIII GTTNo96 GTTMkIII GTTMkIII GTTNo96 Type C Moss GTTMkIII GTTMkIII GTTNo96 GTTMkIII GTTMkIII

PNG exports Shell business PNG exports Cool Pool vessel Gorgon exports Spot trading Cool Pool vessel Cool Pool vessel Shell business Shell business China coast Shell business Gorgon exports Shell business PNG exports Brunei exports Shell business Cool Pool vessel Ethane service Ethane service Egypt FSRU No 2 Spot trading Nakilat business Sinopec use Sabine Pass exports Ethane service Kansai Electric use Nigeria exports Ghana FSRU Gorgon exports Nigeria exports Nigeria exports

1.2016 1.2016 1.2016 1.2016 1.2016 2.2016 3.2016 3.2016 3.2016 3.2016 4.2016 5.2016 6.2016 6.2016 6.2016 7.2016 7.2016 8.2016 9.2016 9.2016 9.2016 10.2016 10.2016

176,700 174,000 162,000 155,000 27,500 173,400 170,000 174,000 174,000 170,000 172,000 174,000 164,700 170,000 174,000 173,400 173,400 174,000 176,200 174,000 150,000 174,000 155,000

Nigeria LNG Nakilat/Maran Gas Dynagas MOL Evergas Teekay Nigeria LNG Maran Gas GasLog Hoegh LNG MOL Maran Gas MOL Nigeria LNG GasLog Teekay Maran Gas Maran Gas Knutsen/NYK GasLog MISC Tsakos Energy MOL/Osaka Gas

Hyundai Hyundai Samho Hyundai Mitsubishi Sinopacific Daewoo Samsung Hyundai Samho Samsung Hyundai Hudong Hyundai Samho Kawasaki Samsung Samsung Daewoo Daewoo Hyundai Samho Hyundai Samsung Hyundai Hyundai Mitsubishi

Nigeria LNG Nakilat Voyage charters Osaka Gas/Kyushu Ineos Cheniere Nigeria LNG Woodside Shell SPEC ExxonMobil Voyage charters Kansai Electric Nigeria LNG Shell Cheniere Voyage charters Shell GNF Shell Petronas Voyage charters Osaka Gas

GTTMkIII GTTMkIII GTTMkIII Moss Type C GTTNo96 GTTMkIII GTTMkIII GTTMkIII GTTMkIII GTTNo96 GTTMkIII Moss GTTMkIII GTTMkIII GTTNo96 GTTNo96 GTTMkIII GTTMkIII GTTMkIII Moss GTTMkIII Moss

Nigeria exports Nakilat business Cool Pool vessel OG/Kyushu use Ethane service Sabine Pass exports Nigeria exports Woodside business Shell business SPEC FSRU Gorgon exports Spot trading Kansai Electric use Nigeria exports Shell business Sabine Pass exports Spot trading Shell business GNF business Shell business Petronas business open Osaka Gas use

LNG TANKER DELIVERIES BY COUNTRY OF BUILD (all sizes) not including FPSOs country Korea Japan China other total

2009 30 7 4 – 41

2010 22 3 1 – 26

2011 13 2 4 – 19

2012 1 – 1 1 3

2013 17 1 – – 18

2014 30 4 – – 34

2015 24 1 7 – 32

2016 30 7 10 – 47

2017 23 7 7 2 39

2018 34 11 2 2 49

2019 14 1 1 – 16

2020 2 – – – 2

2021 – 1 – – 1

2022 – 3 – – 3

LNGC NEWBUILDINGS BY YEAR OF DELIVERY vessel category No of vessels delivered/due for delivery of which above 125,000m3 of which Yamal icebreaking LNGCs of which Excelerate FSRU of which Hoegh FSRU of which Golar FSRU of which BW Gas FSRU of which MOL FSRU of which Gazprom FSRU of which Shell FLNG of which Petronas FLNG of which Exmar FLRSU/FLNG

2009 41 39 – 2 – –

2010 26 24 – 2 1 –

2011 19 12 – – 1 –

2012 3 2 – – – –

2013 18 16 – – – –

2014 34 34 – 1 3 2

2015 32 28 – – – 1

2016 47 40 1 – 1 –

2017 39 33 3 – 1 1

2018 49 47 7 – 1 –

2019 16 16 3 – – –

2020 2 2 1 – – –

2021 1 1 – – – –

2022 3 3 – – – –

– – – – – –

– – – – – –

– – – – – –

– – – – – –

– – – – – –

– – – – – –

1 – – – – –

1 1 – – 1 1

– – 1 1 – –

– – – – – 1

1 – – – – –

– – – – 1 –

– – – – – –

– – – – – –

LNG World Shipping | November/December 2016

www.lngworldshipping.com

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36 | STATISTICS

LNG CARRIERS ON ORDER LNG CARRIERS ON ORDER (AS AT 1 NOVEMBER 2016) hull no

shipowner

capacity m3

delivery

charterer

containment

class

propulsion

details

5,800

2017

Skangas

Type C

BV

DFDE

bunker vessel

18,000

2017

Skangas

Type C

BV

DFDE

Baltic trading

Royal Bodewes, Hoogezand, The Netherlands –

Sirius/Veder

Neptun Werft, Rostock, Germany S.575

Anthony Veder

United Shipbuilding Corp, St Petersburg, Russia –

LNG-Gorskaya

7,300

2017

LNG-Gorskaya

GTTMkIII

RS

–

Baltic bunkering

–

LNG-Gorskaya

7,300

2017

LNG-Gorskaya

GTTMkIII

RS

–

Baltic bunkering

–

LNG-Gorskaya

7,300

2017

LNG-Gorskaya

GTTMkIII

RS

–

Baltic bunkering

Keppel Offshore & Marine, Singapore –

Stolt-Nielsen

7,500

2018

Higas

Type C

–

–

Sardinia project

–

Stolt-Nielsen

7,500

2018

Higas

Type C

–

–

Sardinia project

Hudong-Zhonghua Shipbuilding, Shanghai, China 1715A

CESI/MOL

174,000

2016

Sinopec

GTTNo96

LR/CCS

DFDE

APLNG exports

1716A

CESI/MOL

174,000

2016

Sinopec

GTTNo96

LR/CCS

DFDE

APLNG exports

1717A

CESI/MOL

174,000

2016

Sinopec

GTTNo96

LR/CCS

DFDE

APLNG exports

1718A

CESI/MOL

174,000

2017

Sinopec

GTTNo96

LR/CCS

DFDE

APLNG exports

1719A

CESI/MOL

174,000

2017

Sinopec

GTTNo96

LR/CCS

DFDE

APLNG exports

1720A

CESI/MOL

174,000

2017

Sinopec

GTTNo96

LR/CCS

DFDE

APLNG exports

1663A

CNOOC/CLNG/TK

174,000

2017

Shell

GTTNo96

ABS/CCS

DFDE

QCLNG exports

1664A

CNOOC/CLNG/TK

174,000

2018

Shell

GTTNo96

ABS/CCS

DFDE

QCLNG exports

1665A

CNOOC/CLNG/TK/BW

174,000

2018

Shell

GTTNo96

ABS/CCS

DFDE

QCLNG exports

1666A

CNOOC/CLNG/TK/BW

174,000

2019

Shell

GTTNo96

ABS/CCS

DFDE

QCLNG exports

28,000

2016

CNPC Kunlun

Type C

CCS

DFDE

China coast

30,000

2016

CNPC Kunlun

Type C

CCS

DFDE

China coast

14,000

2016

–

Type C

CCS

LSDF (LP)

China coast

Cosco Dalian Shipyard, Dalian, China N588

Dalian Inteh

Ningbo Xinle Shipbuilding, Ningbo, China XL-157

PetroChina

Qidong Fengshun Ship HI, Qidong, China FS-007A

Zhejiang Huaxiang

Sinopacific Offshore & Engineering (SOE), Qidong, China 1019

Evergas

27,500

2016

Ineos

Type C

BV

DFDE

Ethane service

1020

Evergas

27,500

2016

Ineos

Type C

BV

DFDE

Ethane service LNG FLRSU

Wison Offshore & Marine, Nantong, China –

Exmar

16,100

2016

–

Type C

BV

N/A

S-188

Exmar

25,000

2016

Pacific Rubiales

SPB

BV

N/A

FSRU

–

VGS

N/A

2017

VGS

N/A

–

N/A

LNG FRU

–

Exmar

25,000

2018

–

Type C

BV

N/A

LNG FPSO

45,000

2017

–

LNT A-Box

–

DFDE

China coast

Xiamen Shipbuilding, Xiamen, China –

Landmark Capital

Yangzijiang Shipbuilding, Jingjiang, China –

Evergas

27,500

2017

Ineos

Type C

BV

DFDE

Ethane service

–

Evergas

27,500

2017

Ineos

Type C

BV

DFDE

Ethane service GNF business

Imabari Shipbuilding, Imabari, Japan 8177

Elcano

174,000

2017

GNF

GTTMkIII

LR

LSDF (HP)

8188

Elcano

174,000

2017

GNF

GTTMkIII

LR

LSDF (HP)

GNF business

8200

K Line

178,000

2021

Mitsui & Co

GTTMkIII

ClassNK

LSDF (HP)

Cameron exports

8215

Unknown

178,000

2022

–

GTTMkIII

–

LSDF (HP)

open

8216

Unknown

178,000

2022

–

GTTMkIII

–

LSDF (HP)

open

8217

Unknown

178,000

2022

–

GTTMkIII

–

LSDF (HP)

open

Japan Marine United, Kumamoto, Japan 5070

MOL/Tokyo LNG Tanker

165,000

2017

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

5071

NYK/Tokyo LNG Tanker

165,000

2017

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

5072

MOL/Tokyo LNG Tanker

165,000

2018

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

5073

MOL/Tokyo LNG Tanker

165,000

2018

Tokyo Gas

SPB

ClassNK

DFDE

Cove Point exports

Kawasaki Heavy Industries (KHI), Sakaide, Japan 1713

K Line

164,700

2016

Chubu Electric

Moss

ClassNK

UST

Chubu Electric use

1720

MOL

164,700

2016

Chubu Electric

Moss

ClassNK

UST

Chubu Electric use

1718

K Line

182,000

2016

Inpex Corp

Moss

BV

DFDE

Ichthys-Taiwan

1731

K Line

155,000

2017

–

Moss

ClassNK

UST

open

LNG World Shipping | November/December 2016

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STATISTICS | 39

LNG CARRIERS ON ORDER (AS AT 1 NOVEMBER 2016) hull no

shipowner

capacity m3

delivery

charterer

containment

class

propulsion

details

MOL

155,000

2017

Mitsui & Co

Moss

ClassNK

DFDE

Cameron exports

1729

MOL

155,000

2018

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

1728

Mitsubishi Heavy Industries (MHI), Nagasaki, Japan 2310

K Line

155,000

2016

Inpex Corp

Moss

ClassNK

UST

Ichthys exports

2316

NYK

155,000

2017

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

Daewoo Shipbuilding & Marine Engineering (DSME), Okpo, Korea 2413

Maran Gas

173,400

2016

–

GTTNo96

ABS

DFDE

open

2414

Maran Gas

173,400

2016

–

GTTNo96

ABS

DFDE

open

2415

Maran Gas

173,400

2016

–

GTTNo96

LR

DFDE

open

2456

Maran Gas

173,400

2017

–

GTTNo96

DNV GL

LSDF (HP)

open

2457

Maran Gas

173,400

2018

–

GTTNo96

LR

LSDF (HP)

open

2458

Maran Gas

173,400

2018

–

GTTNo96

–

LSDF (HP)

open

2459

Maran Gas

173,400

2018

–

GTTNo96

–

LSDF (HP)

open

2466

Maran Gas

174,000

2019

–

GTTNo96

–

LSDF (HP)

open

2467

Maran Gas

174,000

2019

–

GTTNo96

–

LSDF(HP)

open

6302

Petronas

180,000

2016

Petronas

GTTNo96

DNV GL

N/A

Kanowit FLNG

2411

Teekay

173,400

2016

Shell

GTTNo96

DNV GL

LSDF (HP)

Shell use

2416

Teekay

173,400

2017

Shell

GTTNo96

DNV GL

LSDF (HP)

Shell use

2417

Teekay

173,400

2017

Shell

GTTNo96

DNV GL

LSDF (HP)

Shell use

2453

Teekay

173,400

2018

Shell

GTTNo96

DNV GL

LSDF (HP)

Shell use

2454

Teekay

173,400

2018

Shell

GTTNo96

DNV GL

LSDF (HP)

Shell use

2455

Teekay

173,400

2018

–

GTTNo96

DNV GL

LSDF (HP)

open

2461

Teekay

173,400

2018

Bahrain LNG

GTTNo96

DNV GL

LSDF (HP)

Bahrain FSU

2419

MOL

263,000

2018

Engie/Marubeni

GTTNo96

BV

DFDE

Gas Sayago FSRU

2418

Sovcomflot

172,000

2016

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2421

Dynagas

172,000

2017

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2422

Dynagas

172,000

2017

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2427

Dynagas

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2428

Dynagas

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2429

Dynagas

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2426

CSDC/MOL

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2432

CSDC/MOL

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2434

CSDC/MOL

172,000

2019

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2423

Teekay/CLNG

172,000

2017

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2424

Teekay/CLNG

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2425

Teekay/CLNG

172,000

2018

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2430

Teekay/CLNG

172,000

2019

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2431

Teekay/CLNG

172,000

2019

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2433

Teekay/CLNG

172,000

2020

Yamal LNG

GTTNo96

BV/RS

DFDE

icebreaking LNGC

2447

Frontline

174,000

2017

–

GTTNo96

–

LSDF (HP)

open

2448

Frontline

174,000

2017

–

GTTNo96

–

LSDF (HP)

open

2449

Korea Line

174,000

2017

Kogas

GTTNo96

–

DFDE

Sabine Pass exports

2450

Korea Line

174,000

2017

Kogas

GTTNo96

–

DFDE

Sabine Pass exports

2451

Hyundai LNG

174,000

2018

Kogas

GTTNo96

–

DFDE

Sabine Pass exports

2452

Hyundai LNG

174,000

2018

Kogas

GTTNo96

–

DFDE

Sabine Pass exports

2435

BW Group

173,400

2018

–

GTTNo96

DNV GL

LSDF (HP)

open

2436

BW Group

173,400

2018

–

GTTNo96

DNV GL

LSDF (HP)

open

2488

BW Group

174,000

2019

–

GTTNo96

DNV GL

LSDF (HP)

open

2489

BW Group

174,000

2019

–

GTTNo96

DNV GL

LSDF (HP)

FSRU

2460

Chandris/K Line

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2464

Chandris/K Line

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2441

BP Shipping

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2442

BP Shipping

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2443

BP Shipping

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

www.lngworldshipping.com

LNG World Shipping | November/December 2016

YOUR PARTNER IN SHIP PERFORMANCE MONITORING www.kyma.no

40 | STATISTICS

LNG CARRIERS ON ORDER (AS AT 1 NOVEMBER 2016) hull no

shipowner

capacity m3

delivery

charterer

containment

class

propulsion

details

2444

BP Shipping

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2445

BP Shipping

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2446

BP Shipping

173,400

2018

BP

GTTNo96

LR

LSDF (HP)

BP business

2462

MOL/Itochu

180,000

2018

E.ON

GTTNo96

–

LSDF (HP)

E.ON business

5,100

2016

Engie

Type C

BV

DFDE

bunker vessel FSRU

Hanjin Heavy Industries, Yeongdo, Korea –

NYK/Engie

Hyundai Heavy Industries (HHI), Ulsan, Korea 2552

Höegh LNG

170,000

2017

–

GTTMkIII

DNV GL

DFDE

2865

Höegh LNG

170,000

2018

–

GTTMkIII

DNV GL

DFDE

FSRU

2730

MISC

150,000

2016

Petronas

Moss

ABS

UST

Petronas projects

2731

MISC

150,000

2016

Petronas

Moss

LR

UST

Petronas projects

2732

MISC

150,000

2016

Petronas

Moss

LR

UST

Petronas projects

2735

MISC

150,000

2017

Petronas

Moss

LR

UST

Petronas projects

2734

Knutsen/NYK Line

176,300

2016

GNF

GTTMkIII

LR

LSDF (HP)

GNF business

2633

India LNG Transport

173,000

2016

Petronet

GTTMkIII

BV

DFDE

Gorgon-India

2800

GasLog

174,000

2017

Shell

GTTMkIII

DNV GL

LSDF (LP)

Shell business

2801

GasLog

174,000

2017

Total

GTTMkIII

DNV GL

LSDF (LP)

Total business

2813

Hyproc Shipping

170,000

2016

Sonatrach

GTTMkIII

LR

DFDE

Algerian exports

2814

Hyproc Shipping

170,000

2017

Sonatrach

GTTMkIII

LR

DFDE

Algerian exports

2854

Gazprom

174,000

2017

Gazprom

GTTMkIII

RS

DFDE

Kaliningrad FSRU

2937

SK Shipping

180,000

2019

SK E&S

GTTMkIII

–

LSDF(LP)

Freeport exports

2938

SK Shipping

180,000

2019

SK E&S

GTTMkIII

–

LSDF(LP)

Freeport exports

2854

Gazprom

174,000

2017

Gazprom

GTTMkIII

RS

DFDE

Kaliningrad FSRU

2937

SK Shipping

180,000

2019

SK E&S

GTTMkIII

–

LSDF(LP)

Freeport exports

2938

SK Shipping

180,000

2019

SK E&S

GTTMkIII

–

LSDF(LP)

Freeport exports

Hyundai Samho Heavy Industries (HSHI), Samho-Myun, Korea S691

Maran Gas

174,000

2016

–

GTTMkIII

LR

DFDE

open

S735

Maran Gas

174,000

2016

Shell

GTTMkIII

DNV GL

DFDE

Shell business

S856

Teekay

164,000

2019

BP

GTTMkIII

–

DFDE

BP business

S857

Teekay

164,000

2019

BP

GTTMkIII

–

DFDE

BP business

S857

Teekay

164,000

2019

BP

GTTMkIII

–

DFDE

BP business

Samsung Heavy Industries (SHI), Geoje, Korea 2189

Golar Power

170,000

2017

Golar Power

GTTMkIII

DNV GL

DFDE

Sergipe FSRU

2103

GasLog

174,000

2016

Shell

GTTMkIII

ABS

LSDF (HP)

Shell business

2130

GasLog

174,000

2017

Shell

GTTMkIII

ABS

LSDF (HP)

Shell business

2131

GasLog

174,000

2017

Shell

GTTMkIII

ABS

LSDF (HP)

Shell business

–

GasLog

180,000

2019

Centrica

GTTMkV

–

LSDF (LP)

Sabine Pass exports

–

GasLog

180,000

2019

–

GTTMkV

–

LSDF (LP)

open

Chevron

160,000

2016

Chevron

GTTMkIII

ABS

DFDE

Gorgon exports

2070

Chevron

160,000

2016

Chevron

GTTMkIII

ABS

DFDE

Gorgon exports

2076

Bonny Gas Transport

170,000

2016

Nigeria LNG

GTTMkIII

BV

DFDE

NLNG exports

2077

Bonny Gas Transport

170,000

2016

Nigeria LNG

GTTMkIII

BV

DFDE

NLNG exports

2118

BW Group

170,000

2016

–

GTTMkIII

–

DFDE

FSRU open

2080

SK Shipping/Marubeni

180,000

2017

Total

GTTMkIII

BV

LSDF (LP)

Ichthys exports

2081

SK Shipping/Marubeni

180,000

2017

Total

GTTMkIII

BV

LSDF (LP)

Sabine Pass exports

2107

Flex LNG

174,000

2018

–

GTTMkIII

ABS

LSDF (HP)

open

2108

Flex LNG

174,000

2018

–

GTTMkIII

ABS

LSDF (HP)

open

2030

Shell

220,000

2017

Shell Prelude

GTTMkIII

–

N/A

LNG FPSO

2069

–

Petronas

180,000

2020

Petronas

GTTMkIII

–

N/A

LNG FPSO

2148

MOL/NYK Line

174,000

2018

Mitsui & Co

GTTMkIII

–

DFDE

Cameron exports

2149

MOL/Mitsui & Co

174,000

2018

Mitsui & Co

GTTMkIII

–

DFDE

Cameron exports

2150

MOL/Mitsui & Co

174,000

2018

Mitsui & Co

GTTMkIII

–

DFDE

Cameron exports

2153

SK Shipping

174,000

2018

Kogas

KC-1

–

DFDE

Sabine Pass exports

2154

SK Shipping

174,000

2018

Kogas

KC-1

–

DFDE

Sabine Pass exports

6,500

2017

Shell

Type C

LR

DFDE

bunker vessel

STX Offshore & Shipbuilding, Jinhae, Korea –

Shell

Table includes 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) Source: LNG World Shipping

LNG World Shipping | November/December 2016

www.lngworldshipping.com

42 | VIEWPOINT

FSRUs have a buoyant future With the number of LNG-importing nations predicted to increase over the next decade, floating storage offers a costeffective alternative to conventional onshore installations and opens up opportunities for shipyards, owners and operators

Leo Karistios is gas technology strategic marketing manager at Lloyd’s Register

T

he list of countries importing LNG is getting longer every year – and there is a preference for floating storage and regasification over onshore import terminals.

Last year, new floating storage and regasification units (FSRUs) entered service in Egypt, Jordan and Pakistan. Chile and Ghana will shortly follow suit and we have also seen the launch this year of the biggest FSRU to date, off Uruguay.

The FSRU is a crucial link in the LNG supply chain. It has four key functions: receiving LNG, storing it, regasification, and delivery to a shore facility for distribution to the power and gas grid.

For importing countries, an FSRU offers a – relatively – quick, straightforward and inexpensive means of bringing LNG supplies on stream. As well as building from scratch, importers can convert existing LNG carriers into FSRUs. And the projected rapid growth in the global FSRU fleet presents significant opportunities for shipyards, owners and operators.

The first step in any FSRU project is to develop the design concept. Lloyd’s Register (LR), through the joint development project (JDP) programme, qualifies initial concepts to assure clients that the design can be safe, technically sound and fit for purpose.

We advise on all aspects of design, from power requirements and managing boil-off gas (BOG) to sloshing issues, cargo containment systems, regasification plants, equipment selection and mooring arrangements.

As the design progresses, Lloyd’s Register’s appraisal scheme allows qualification of the design from concept through all the design stages before project execution commences.

We ensure it complies with international regulations and local requirements as well as LR rules and regulations that incorporate industry best practice.

During construction, LR undertakes a full range of inspections, surveys and certification, and provides project management and

LNG World Shipping | November/December 2016

classification. We provide assurance and certainty to stakeholders, as we are talking about a multi-million-dollar asset with a lifespan of many years, perhaps decades.

This process has been designed to ensure the asset can operate reliably, efficiently and, above all, safely. Integration between the unit and the terminal is key. In particular, the operational focus should be on the critical interfaces between the unit, the LNG carrier and the onshore receiving facility.

LR has more than 10 years’ experience helping owners, operators and importers achieve this operational reliability. Using its proven, risk-based approach, LR specialists carry out detailed risk assessments, then draw up an overall operational strategy, including emergency planning for extreme events as determined by the location.

In the case of the Energy Bridge project regasification vessels (EBRVs) of Exmar and Excelerate Energy, LR’s involvement started in 2006. For the project’s 138,000m³ vessels, which were classed by a different classification society, Exmar awarded LR the contract for the safety evaluation and approval of the regasification systems and the exporting buoy systems.

The regasification system of each vessel, which was based on four pairs of two-stage shell and tube vaporisers, was the first ever system installed on board an LNG carrier. The export system employs a submerged turret loading (STL) system installed in a moon pool in a hull area previously designated a fuel-oil bunker tank.

Both Exmar and Excelerate Energy have shown a clear preference for LR’s services for evaluating everything hi-tech.

The global FSRU fleet will need to expand rapidly over the next five to 10 years to keep pace with the worldwide growth in LNG. For shipyards, owners and operators, there are huge opportunities. Lloyd’s Register is here to help them realise that potential. LNG

www.lngworldshipping.com

PHOTO: 1000th STS Transfer of LNG at GNL Escobar, Argentina on August 31, 2016.

When the value chain demanded it, we developed it.

It was Excelerate Energy’s vision to develop and implement the first Ship-to-Ship (STS) Transfer of LNG protocol to enhance the capabilities of FSRUs and enable the efficient, continuous supply of natural gas to market. Since our first commercial operation in 2007, STS transfers have been commercially accepted and proven in a wide range of environments. On August 31, 2016, we completed our 1000th STS transfer of LNG, marking the successful transfer of over 108,000,000 cubic meters of LNG. At Excelerate, we turn great ideas into real energy.

www.excelerateenergy.com

2016 • A supplement to LNG World Shipping

“Our target is to be involved with two projects by year-end – and we are still on target” Bruno Larsen, GasLog head of FSRU development, see page 4

contents

Offshore LNG supplement 2016

02 04

Offshore analysis

2 Tens of floating LNG-import terminals have been proposed around the world – but tapping that demand may not be straightforward. Karen Thomas reports

Offshore interview

08

4 GasLog wants to move from conventional LNG carriers into floating storage and regasification units (FSRUs). Bruno Larsen and Jamie Buckland set out the company’s strategic plans 8 This summer, BW LNG contracted its second FSRU and ordered its third. Managing director Yngvil Asheim explains why the company favours newbuildings over conversions

Offshore profile

10 Excelerate Energy landed two of the four new FSRU contracts awarded

by October this year. Now, as founder and chief executive Rob Bryngelson explains, the US specialist is closing in on the first FSRU project in Bangladesh

Offshore solutions 10

15 Norway-based Kanfer has devised a tug and barge-based LNG-import solution. But can it find investors to turn its concept into a live venture?

Offshore viewpoint

16 Can floating LNG (FLNG) projects convert flare gas into LNG cargoes? Lanner Group consultant Steve Jones weighs up the opportunities and the challenges Front cover image © BW LNG

www.lngworldshipping.com

Offshore LNG | November/December 2016

2 | ANALYSIS

Offshore LNG supplement

THE FSRU OWNERS’ CLUB STAYS SMALL, DESPITE SOARING LNG IMPORT DEMAND Annual FSRU-based LNG imports rose last year by 46 per cent to 20.2 mta

D

espite a growing impetus for new importers to turn to gas to take advantage of its ever-cheaper prices, floating storage and regasification units (FSRUs) remain a niche activity.

At the time of writing, Wood Mackenzie figures show 17 FSRUs operating around the world, plus two buoy-based terminals. Four floating storage unit (FSU) projects are now confirmed and four new FSRU-based import projects had been contracted – or were due to start – in 2016.

The newest is the Total-led project in Cote d'Ivoire, West Africa, to which Golar LNG will supply and manage an FSRU from summer 2018. Golar has yet to say whether it will deploy one of its eight live and on-order FSRUs, exercise one of its two options, or convert an LNG carrier newbuilding order.

Singapore’s BW LNG has agreed a 15-year deal with Pakistan GasPort to place its second FSRU at Port Qasim in Karachi from next summer. Hull 2118, due for delivery by year-end, has capacity for 170,000m³. The Pakistan contract has prompted BW to convert one of its conventional LNG carrier orders at Daewoo Shipbuilding & Marine Engineering (DSME) into an FSRU, for delivery by early 2020.

This summer, US-based Excelerate Energy delivered its 138,000m³ FSRU Excelerate to new importer Abu Dhabi. The FSRU is moored at Ruwais LNG terminal under contract to Abu Dhabi Gas Industries (GASCO).

And finally, the 170,000m³ newbuilding Höegh Grace is due to handle the first imports into Colombia in the fourth quarter of the year.

Coming next is likely to be Ghana, where the 170,000m³ Golar

Offshore LNG | November/December 2016

Tens of floating LNG-import terminals have been proposed around the world – but it may be less straightforward to tap this growth than many market entrants expect, even though yet more projects are coming. Karen Thomas reports

LNG FSRU Golar Tundra is expected to enter service by firstquarter 2017.

Also due next year is the first of two planned FSRU projects to be based on Moheshkhali Island in Bangladesh. Here, Excelerate is finalising its deal with Petrobangla to supply a 139,000m³ FSRU for 15 years, to support the country’s initial US$1.6 billion import plan. Excelerate's turret loading buoy vessel will process up to 3.5 mta.

Meanwhile, FSUs are gaining ground, too – providing employment for surplus older and unfixed tonnage. The first combined FSU/floating regasification unit (FRU) operation started in Bali, Indonesia in May. New Fortress Energy was about to take delivery of the 138,000m3 Golar Arctic, chartered for two years to store LNG off Montego Bay in Jamaica, to supply a converted power plant. Malta was about to take delivery of the Bumi Armada-owned 125,582m³ FSU Armada LNG Mediterrana to store and supply gas for Malta’s Delimara power station.

And in summer 2018, a converted Teekay LNG newbuilding, thought to be Hull 2461, will start its 20-year contract to support import start-up Bahrain LNG.

Growth prospects

The small number of live and confirmed projects disguises the surge in interest in floating imports as a cheaper and quicker route to market – and belies some impressive growth.

Last year, FSRU-based LNG imports increased by 46 per cent compared with the previous year to 20.2 mta, according to the US-based Energy Information Administration (EIA). New

www.lngworldshipping.com

ANALYSIS | 3

Offshore LNG supplement

importers Jordan, Egypt and Pakistan accounted for 85 per cent of that growth.

New proposals emerge weekly. Indonesia alone says it will need seven additional FSRUs, increasing its total fleet to nine, by 2020.

Wood Mackenzie lists up to 70 proposed FSRUs and floating storage projects around the world. It has also identified some 60 gas-to-power projects, particularly in Indonesia, West Africa and the Caribbean.

Many more projects are being discussed than will come to market – some are speculative ventures driven by private companies with no FSRU experience, while others, that may have government involvement, become mired in red tape. Even projects that reach a final investment decision find that their timeframes slip.

“In a lot of emerging markets, projects are being driven by state-owned or international oil and gas companies,” says one shipping source. “That can really make a difference to projects’ prospects. That level of involvement can make projects immediately more bankable. It’s less about geography than about finding the right customer – one that’s credible and credit-worthy.”

Höegh expects three to four FSRU contracts to be awarded every year to 2021. GasLog, hitherto an owner and operator of conventional LNG carriers, is interested in moving into the FSRU space but is more bearish. It expects two to three new projects to sign firm contracts every year for the next decade.

Just six companies own the live FSRU fleet: Excelerate Energy, Golar LNG, Höegh LNG, BW Gas, OLT and Mitsui OSK. Opportunities in floating imports contrast with a conventional LNG-carrier market in which ships are standing idle. This reflects delays to new export projects, exacerbated by closures in Yemen and Angola. Little wonder that owners of conventional LNG carriers are taking a long, hard look at FSRUs.

COMING UP – THE FSRU PROJECTS TO WATCH

Teekay LNG, Gazprom and Exmar each have one confirmed order apiece. Dynagas looks set to become the first Greek shipowner to enter the FSRU segment, having booked two FSRU newbuildings from Hudong-Zhonghua Shipbuilding in China this summer, for delivery in 2019 and 2020.

GasLog, Maran Gas and TMS Cardiff Gas now also hope to move into FSRUs. The latter may convert one of its conventional LNG carriers into an FSRU. But how quickly newcomers can move into this space is unclear. Many invitations to tender are open only to players with experience in the field. Established player Excelerate believes that FSRUs present daunting barriers to entry.

“The limiting factor is that the risks are different,” Excelerate founder and chief executive Rob Bryngelson told LNG World Shipping. “Some shipowners are OK with that; many of them aren’t. The club has stayed small because FSRUs aren’t as easy as many people think.

“The difference between us and our competitors is that we are not just focused on the ship. We build the jetties and the marine infrastructure for the project, and that’s even more risky. But it provides the customers with the complete solution.

“A big part of our job is risk management. We have the proper contracts and counterparties in place. If there are issues, we are protected.”

BW LNG managing director Yngvil Asheim agrees. “We expect the number of players in the FSRU market will remain low for some time – barriers to entry remain high,” she says.

“Project delivery requires a dedicated team with years of relevant experience. Moreover, nine of the last 12 FSRU contracts have been awarded to vessels that were ordered speculatively.

Few companies have the balance sheet to commit to a speculative newbuilding FSRU, yet this is increasingly a prerequisite to winning projects.” LNG

TBC

5 million tonnes a year (mta)

5.6 mta

Golar Power Sergipe, Brazil

Eos Investment Talcahuano, Chile

EGAS Ain Sokhna, Egypt

3.6 mta

5 mta

TBC

7 additional FSRUs by 2020

KG LNG Kakinada, India

Petrogas Krishnapatnam, India

Reliance Power Maheshkhali, Bangladesh

Various Indonesia

www.lngworldshipping.com

Offshore LNG | November/December 2016

4 | INTERVIEW

GASLOG CIRCLES THE FSRU OWNERS’ CLUB Monaco-based shipowner GasLog has set its sights on offshore LNG imports as an owner and manager of floating storage and regasification units (FSRUs). But, as Bruno Larsen and Jamie Buckland tell Karen Thomas, it takes time to land the right project

A

t GasLog’s glass-lined offices on Kings Road in west London, a new strategy team formed early this year is preparing to bring the company’s first floating storage and regasification units (FSRUs) project to fruition.

The team, led by head of FSRU development Bruno Larsen, is in talks with several yet-to-be-named prospects.

It is discussing the options with shipyards in Singapore and South Korea as GasLog

prepares to bring its first FSRU solution to market.

GasLog announced at its capital markets day in June that it intends to be involved with two active FSRU projects by year-end. It has put together a detailed pitch to persuade its investors of the business case for investing in FSRUs. The clock is ticking as the year draws to a close. So will the company meet that deadline to announce at least one deal this side of new year?

GASLOG, FIXTURES FOR LIVE LNG CARRIER FLEET AND ORDERBOOK*, 2019-2026 Vessel name

Owner

Year of build

Capacity, m3

Propulsion

Charterer

Charter expiry

Hull 2801

GasLog Ltd

2019

174,000

XDF

Total

2025

Hull 2131

GasLog Ltd

2018

174,000

XDF

Shell

2029

Hull 2800

GasLog Ltd

2018

174,000

XDF

Shell

2028

Hull 2130

GasLog Ltd

2018

174,000

XDF

Shell

2027

GasLog Gibraltar

GasLog Ltd

2016

174,000

TFDE

Shell

2023

GasLog Geneva

GasLog Ltd

2016

174,000

TFDE

Shell

2023

GasLog Glasgow

GasLog Ltd

2016

174,000

TFDE

Shell

2026

GasLog Greece

GasLog Ltd

2016

174,000

TFDE

Shell

2026

GasLog Salem

GasLog Ltd

2015

155,000

TFDE

The Cool Pool

–

GasLog Saratoga

GasLog Ltd

2014

155,000

TFDE

The Cool Pool

–

Solaris

GasLog Ltd

2014

155,000

TFDE

Shell

2021

GasLog Skagen

GasLog Ltd

2013

155,000

TFDE

Shell

2021

GasLog Seattle

GasLog Ltd

2013

155,000

TFDE

Shell

2021

GasLog Sydney

GasLog Partners

2013

155,000

TFDE

Shell

2018

GasLog Santiago

GasLog Partners

2013

155,000

TFDE

Shell

2018

GasLog Shanghai

GasLog Partners

2013

155,000

TFDE

Shell

2018

Methane Becki Anne

GasLog Ltd

2010

170,000

TFDE

Shell

2024

Methane Julia Louise

GasLog Ltd

2010

170,000

TFDE

Shell

2026

GasLog Chelsea

GasLog Ltd

2010

153,600

TFDE

The Cool Pool

2016

GasLog Singapore

GasLog Ltd

2010

155,000

TFDE

The Cool Pool

2016

GasLog Savannah

GasLog Ltd

2010

155,000

TFDE

The Cool Pool

2016

Methane Heather Sally

GasLog Partners

2007

145,000

Steam

Shell

2020

Methane Shirley Elisabeth

GasLog Partners

2007

145,000

Steam

Shell

2020

Methane Alison Victoria

GasLog Partners

2007

145,000

Steam

Shell

2019

GasLog Ltd

2006

145,000

Steam

Shell

2020

Methane Rita Andrea

GasLog Partners

2006

145,000

Steam

Shell

2020

Methane Jane Elizabeth

GasLog Partners

2006

145,000

Steam

Shell

2019

Methane Lydon Volney

*confirmed as at 10 October 2016 Source: GasLog

Offshore LNG | November/December 2016

www.lngworldshipping.com

INTERVIEW | 5

“Our target is to be involved with two projects by year-end – and we are still on target,” Mr Larsen says. “We have managed, within a short space of time, to get close to a few good prospects and have launched a pre-engineering study with Keppel.”

Singapore-based Keppel Shipyard made its name in offshore LNG converting conventional LNG carriers into FSRUs and floating LNG (FLNG) vessels. Is GasLog preparing to convert some of its older LNG carriers into FSRUs? Whether to order newbuildings or convert older vessels divides members of the FSRU-owners’ club.

Golar LNG owns converted tonnage and newbuildings.

New entrant Mitsui OSK is retreating from ownership to focus on FSRU management, having overrun on costs for

2016

2017

2018

Charter term

www.lngworldshipping.com

As of October, GasLog had 22 LNG carriers on the water and five confirmed orders

2019

2020

2021

2022

2023

Available/under discussion

2024

2025

2026

2027

Charterer option

Offshore LNG | November/December 2016

6 | INTERVIEW

its Uruguay newbuilding.

This summer, Höegh LNG announced a U-turn on ordering newbuilding FSRUs on spec, announcing it will convert to cut time to market by six months.

At this stage, GasLog will not contemplate speculative FSRU orders, says head of investor relations Jamie Buckland. The company has identified two vessel types from its fleet that are suitable for conversion.

“We’re now moving into the next phase and have identified suitable ships for conversion,” Mr Larsen says.

“That said, we aren’t confining ourselves to converting ships within the existing GasLog fleet. We could also move into the newbuilding space and have held talks with shipyards in South Korea about ordering new tonnage. And another option is to convert conventional LNG carrier newbuildings into FSRUs. “It’s not a straightforward comparison between US$250 million for a newbuilding versus US$7080 million to convert a vessel. You have to consider where you will secure most value to your business from the vessel in question.”

At the time of writing, GasLog had 22 LNG carriers on the water and five on order at Samsung Heavy Industry (SHI), having taken delivery of the 174,000m³ GasLog Geneva in September. GasLog is expected to take delivery of the 174,000m³ GasLog Gibraltar later this quarter.

The four remaining confirmed newbuildings will arrive in 2018 and 2019.

GasLog will not comment on reports linking it to the order SHI landed for two 174,000m³ newbuildings in September.

At least six older vessels are conversion candidates, Mr Larsen told LNG World Shipping. GasLog could also

Offshore LNG supplement

Bruno Larsen: on target to confirm two FSRU ventures by year-end

GASLOG IN NUMBERS Offices

6 Employees

1,100 Live fleet

22

LNG carriers Orderbook*

5

LNG carriers Total capacity

4.3

million m³ Average age, live fleet

5.3 years

*as at 1 October 2016 Source: GasLog

Offshore LNG | November/December 2016

convert some younger, DFDE tonnage – including ships deployed on short-term and spot contracts through Cool Pool, with partners Golar LNG and Dynagas.

“In the past, only older ships aged 20-25 years would have been considered conversion candidates,” Mr Larsen says. “Now, younger vessels are also conversion candidates, as the LNG fleet keeps on growing.

“We are looking at a conversion solution as a way of inching forward into the FSRU business.

Moving forward with the pre-engineering studies and purchasing long-lead items is a way to shorten the time to market.”

Unlike Golar LNG, which recently set up a gas-topower business-development unit, GasLog does not seek direct involvement in integrated projects.

“Some parties will request some fixed infrastructure, maybe a jetty or pipeline connections for offshore projects – subsea moorings and risers similar to those required for FPSOs,” Mr Larsen says. “We are prepared to do that... That’s not to say that we wouldn’t join partnerships, perhaps as members of a consortium – but we’d want to keep things clearly defined.”

The next stage will be to finance the first FSRUs. “We are looking now, and, historically in the LNG carrier business, we have had access to a variety of sources of capital,” Mr Buckland says. “The risk exposure can be quite different, country to country and customer by customer.

What the banks want is longterm visibility of cashflow, which is where long-term contracts help.

“We have long-term contracts for our conventional LNG carriers with some of the biggest names in the

business – with Shell/BG and with Total. We believe we can secure financing against a contracted FSRU on a longterm charter.”

Contract length is a moot point in emerging demand for FSRUs. For would-be importers seeking to take advantage of ever-cheaper gas prices, offshore solutions offer quicker, cheaper entry – but many see floating units as a stop-gap solution.

Several recent contracts, such as those in Egypt, have featured notably short durations. That may present a barrier to securing finance – particularly for newcomers to the FSRU segment. It’s an obstacle that Mr Buckland is quick to play down.

“It may be a misconception that the market has to move towards shorter-term deals as a bridge to a land-based solution.

If a country has growing longterm power requirements it will need to secure gas for that power production.

"Often an onshore alternative may not be appropriate due to the significant upfront cost, possible land restrictions, greater environmental regulation and a lack of flexibility to move the facility if required...

“We don’t believe a fiveyear contract will be the optimum term for many new importers. Most of the talks we are having concern longterm projects. Just last week, we were invited to discuss a 20-year-plus FSRU project.”

And so the talks continue, as GasLog works to land two FSRU projects by yearend. “Some projects go to tender quickly, others don’t but are triggered very quickly, and others again are under discussion for many, many years,” Mr Larsen concludes.

“We have to be patient.

Landing our first FSRU project won’t happen overnight.

"This is a learning curve for GasLog.” LNG

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The “Voyage Repair” Specialists

8 | INTERVIEW

Offshore LNG supplement

Congratulations on placing your second floating storage and regasification unit (FSRU) in Pakistan.

Please can you update us on the project?

Yngvil Asheim: FSRUs are the ideal solution to access new markets that can absorb surplus LNG

FSRUs create opportunity for ‘homeless’ LNG, says BW LNG boss BW LNG has just decided to convert one of its four LNG carrier newbuildings to become its third floating storage and regasification unit (FSRU), having contracted its second to Pakistan this summer. Karen Thomas asked managing director Yngvil Asheim to outline BW LNG’s offshore growth plans

Offshore LNG | November/December 2016

We’re very proud to have been selected as the FSRU supplier for Pakistan’s second LNG import project and look forward to a strong partnership with Pakistan GasPort to deliver much-needed natural gas to the Pakistan market by the end of June 2017.

Our second FSRU is capable of sending out up to 750 million ft3 of natural gas per day, equivalent to more than five million tonnes a year (mta) of LNG. The project should reduce Pakistan’s gas deficit by 30 per cent and ensure fuel for 3.6GW of new gas-fired power plants, which should reduce Pakistan’s power outages by 80 per cent.

Your first FSRU is based in Egypt. Can you update us on this project?

BW Singapore has been operating in Egypt since October 2015 and its performance has been exceptional. The vessel was delivered and commissioned in only three months – faster than any other FSRU project to date.

We co-operated closely with the charterer, the Egyptian Natural Gas Holding Company (EGAS). We tapped BW’s 40-plus years of gas expertise and we leveraged BW’s size and financial strength, which enabled us to commit early to long-lead items and meet the project timeline.

Today, BW Singapore sends out more than 600 million ft3 of natural gas each day [4.5 mta of LNG] and receives a full cargo of LNG every four to five days. It recently achieved the milestone of receiving 50 LNG cargoes by ship-to-ship transfers in less than a year in operation. We

believe it is the most fully utilised FSRU in the industry.

Egypt is hungry for additional gas and is seeking a third FSRU. How interested is BW in increasing its presence there, and are Egypt’s widely reported payment terms a barrier?

We have received payments of due hire from EGAS for our FSRU. BW sees EGAS as a long-term strategic partner in the LNG/FSRU space, with our existing business providing a strong foundation. We will always see how we can support Egypt’s additional demand for natural gas.

How many FSRU projects are you discussing at any one time and how quickly do you expect to contract your third newbuilding and then to consider additional tonnage?

The FSRU market is very active. At any given time we are evaluating 30-40 potential FSRU projects. In August, we contracted our third newbuilding at Daewoo Shipbuilding & Marine Engineering (DSME) with storage capacity of 173,400m3.

This FSRU will be delivered by early 2019, enabling us to meet the timeline of many promising upcoming developments. The FSRU business is a growing one for the BW Group and we are always on the lookout for good projects and additional tonnage.

How quickly does BW expect global FSRU demand to grow and which markets most excite you?

We expect continued healthy growth in the global FSRU market. Countries are seeking reliable, efficient and affordable LNG imports that can be delivered in one or two

www.lngworldshipping.com

INTERVIEW | 9

Offshore LNG supplement

years. Only FSRUs can satisfy these requirements. FSRUs enable first time importers to access the global LNG market. The next two to three years will see a significant increase in LNG production coming online. Much of this new LNG is homeless, meaning it is contracted to portfolio players but lacking a downstream buyer.

FSRUs are the ideal solution to enable access to new markets that can absorb these additional supplies of LNG. Such markets may be located in Asia, the Middle East, West Africa and Latin America.

To what extent does your recent decision to switch a conventional LNG-carrier order into one for an FSRU indicate a strategic shift? Could more such conversions follow?

The LNG carrier market has always been a steady business in BW’s shipping portfolio.

Today we have a fleet of 15 LNG carriers, all on medium to long-term charters. We have been in the LNGC market since the 1980s and will continue to operate and grow in this segment.

The recent conversion was a business decision made to tap into growth in the FSRU market and to optimise our portfolio of LNG/FSRU assets.

Conventional LNG shipping remains a core focus for BW.

Could you convert older vessels to grow your FSRU fleet?

BW certainly has the in-house engineering expertise to manage conversion of older LNG vessels into FSRUs. Bearing in mind that converted FSRUs tend to have smaller storage capacities and are less fuel-efficient than FSRU newbuildings, we will undertake such conversions only if the project economics favour this approach.

www.lngworldshipping.com

How do you expect the FSRU market to evolve from the small, select club of owners it still is – how many new ships, how many market entrants?

We expect the number of players in the FSRU market will remain low for some time as barriers to entry remain high.

Operational experience is a prerequisite for many tenders, for example. Project delivery requires a dedicated team with years of relevant experience.

Moreover, nine of the last 12 FSRU contracts have been awarded to vessels that were ordered speculatively.

Few companies have the balance sheet to commit to a speculative newbuilding FSRU, yet this is increasingly a prerequisite to winning projects.

How long do you expect today’s oversupply of tonnage to continue and how soon or how long will it take for BW and the rest of the industry to resume orders for new tonnage?

We have three LNG carriers on order with DSME. With more liquefaction trains coming online over the next few years, we expect the LNG shipping market to improve.

Conventional LNG shipping remains a core focus for BW.

BW GROUP, GAS CARRIER FLEET Ship type

number

capacity, m³

LNG carriers

21

3,274,012

LPG carriers

49

3,880,141

BW LNG FLEET Ship name

Year of build

capacity, m³

DSME Hull 2489 (FSRU)

2019

173,400

DSME Hull 2488

2019

173,400

DSME Hull 2436

2018

173,400

DSME Hull 2435

2017

173,400

SHI Hull 2118 (FSRU)

2016

170,000

BW Singapore (FSRU)

2015

170,000

BW Pavilion Vanda

2015

161,870

BW Pavilion Leeara

2015

161,880

BW GDF Suez Brussels

2009

162,514

BW GDF Suez Paris

2009

162,524

LNG Imo

2008

148,300

LNG Kano

2007

148,565

LNG Ondo

2007

148,478

LNG Lokoja

2006

148,471

LNG Benue

2006

145,952

LNG Enugu

2005

145,926

LNG Oyo

2005

145,842

Berge Arzew

2004

138,089

LNG River Orashi

2004

145,914

BW GDF Suez Boston

2003

138,059

BW GDF Suez Everett

2003

138,028

Finally, these are tough times: what opportunities and challenges are keeping you busiest?

The LNG shipping industry has always been cyclical and we believe that BW, as a group, is well-positioned to ride through the cycle.

Our approach to the LNG business is based on building long-term partnerships with our customers and that approach will help us to weather the tough times. LNG

BW Singapore – “the most fully utilised FSRU in the industry”

Offshore LNG | November/December 2016

10 | PROFILE

Offshore LNG supplement

Excelerate: ‘Everyone wants an FSRU quickly – and everyone wants it cheap’ This summer, Excelerate Energy landed two of the four FSRU contracts awarded so far this year. Karen Thomas asked founder and chief executive Rob Bryngelson where the company sees its next opportunity

W Rob Bryngelson: looking at demand for small-scale LNG imports

hen LNG World Shipping met Excelerate founder and chief executive Rob Bryngelson earlier this year, he had a spring in his step and a twinkle in his eye.

Looking back, it’s hard to know whether his impending deal to place the 138,000m³ Excelerate in Abu Dhabi or more general excitement about floating import prospects put the Excelerate boss in buoyant mood.

Clearly, though, the Houstonbased company, owner of the world’s largest floating storage and regasification unit (FSRU) fleet, is in prime position to tap growing demand for these vessels.

FSRUs offer a quicker, cheaper option than landbased LNG-import terminals.

The FSRU fleet stood at 23 vessels worldwide, with a combined capacity of nearly 3.5 million m³ at year-end 2015, according to the International Group of Liquefied Natural Gas Importers (GIIGNL).

Offshore LNG | November/December 2016

Analysts expect three or four FSRU contracts to be awarded annually to 2021. At any given time, Mr Bryngelson says, around 40 FSRU projects are being proposed around the world. Of these, Excelerate is following half and working to land six to eight.

“You never know when one project that has lain dormant will start to move – because there’s a new energy minister, or new demand – and suddenly it becomes a national priority,” he says.

At the time of writing, just four new FSRU contract awards had been confirmed this year – to Excelerate in Abu Dhabi and in Bangladesh, to BW in Pakistan and to Golar LNG in Ivory Coast.

Two new floating storage units (FSUs) supplement these new FSRUs. The first entered service off Bali in Indonesia in May. The second involves Golar LNG, which is modifying its 138,000m³ LNG carrier Golar Arctic as an FSU, to be moored off Montego Bay to store LNG in Jamaica.

Hot prospects

Excelerate sees the Middle East, the Indian subcontinent, sub-Saharan Africa and South America as the most promising FSRU markets. In June, it agreed to charter a 138,000m³ FSRU to import up to 3.5 million tonnes a year (mta) through Moheshkhali in Bangladesh.

The company takes a two-pronged approach. One is to convert LNG carriers into FSRUs. The other is to order newbuildings. Within the next year, Mr Bryngelson hopes to order one newbuilding and to complete “another couple” of projects under long-term discussion, including Bangladesh.

Cost, timing and fit are everything in offshore imports, he says. “Everyone wants their FSRU quickly – and everyone wants it cheap.

It really comes down to a combination of timing, price and availability. There’s no one right answer.

“If the customer has three years before they need to have an FSRU in service, they may go for a newbuild.

If they need it in 18 months, a conversion is the solution. Or we can offer an existing vessel as a bridge. With Petrobras in Brazil, we offered a bridging vessel, then delivered a purpose-built vessel in 2014.”

This summer, Norwaybased FSRU owner Höegh LNG reversed its newbuilding-only policy to

www.lngworldshipping.com

PROFILE | 11

Offshore LNG supplement

convert an LNG carrier to get the vessel to market faster. The newbuild-versusconversions debate baffles Mr Bryngelson, who prefers to decide project by project.

“I don’t know what the controversy is,” he says. “We can build a conversion that is as fuel-efficient as a newbuild ship. We can do it cheaper and in a shorter period of time. But if you need a highly specialised vessel with very large capacity – like our Dubaibased Explorer, which can put out 1 billion ft³/day – you will probably need a newbuild.

“We are not aggressively ordering speculative newbuildings – because what would you build? There are projects that probably need only 200-300 million ft³/day of natural gas and others that may need 500-600 million ft³/ day, or over 1 billion ft³/day.

“If you were to build speculatively, it could be for any one of those projects.

You’d end up forcing what you had onto a project, not delivering what it needs.

That’s not to say we may not keep a little speculative length – we may well do so at some point. But that’s really not our sole strategy.”

New business

An old hand in a new business, this year Excelerate completed its thousandth shipto-ship LNG transfer. It hit the headlines this spring, when the upgraded 150,900m³ Explorer, based in Dubai, became the first FSRU to achieve 1 bcf/day send-out capacity. Explorer is also the first FSRU fitted with an LNG-bunker port to supply gas as marine fuel.

And yes, Excelerate is pondering small-scale LNG projects too. “This is the kind of bunker-supply operation that interests us, not building bunker-supply ships,” Mr Bryngelson says. “If we can bunker from one of our FSRUs, we will definitely do

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that. It’s a value-added service that our customers can offer to their markets.”

Small-scale LNG is exciting, but complex. Excelerate has had the talks and drawn up plans. Mr Bryngelson is not yet ready to say more.

“We’ve looked at everything from regas barges with a storage of 5,000m³ up to 35,000m³-40,000m³,” he says. “We’ve also looked at small FSRUs – every permutation you can imagine, to see what makes sense.

“Then again, you don’t want a fleet of 15 very different vessels. You need some commonality for the sake of reliability, maintainability and cost. When we started to look at smallscale, we thought it would be easy. It isn’t. You have to be sensitive to the costs.”

Close collaboration will be critical, he says. “It’s complex and that’s where you really need to work closely with the customer.

“If you have a string of islands that have LNG demand in multiple locations, the question becomes how much storage you need and whether you can use other fuels as back-up in the event of disruption – that all feeds into the solution you offer.

“Is it regasification vessels or regas barges? Do you need a conventional LNG carrier or a small-scale carrier?

The technology is the same but the solutions get more complicated. Getting a costeffective solution demands a lot more collaboration. That’s the challenge.

“A conventional FSRU delivering 500 million ft³/day at one location is pretty easy.

Five or six locations force you to think about how you’ll handle the delivery logistics for that. It’s something we’re interested in, yes. But it’s a much more complicated part of the market than people may realise.” LNG

EXCELERATE ENERGY FLEET LIST: FSRUs TBD, 150,900m3 Aguirre Offshore Gasport, Puerto Rico Owner: Excelerate Energy Charterer: Puerto Rico Electric Power Authority (PREPA) Contract: Guaranteed contracted send-out of up to 250 mmcf/day for 15 years beginning 2018 Experience, 173,400m3 Guanabara Bay, Rio de Janeiro, Brazil Owner: Excelerate Energy Charterer: Petrobras Contract: Guaranteed contracted send-out of up to 700 mmcf/day for 15 years Excelsior, 138,000m3 Various – supports Petrobras’ LNG activities Owner: Excelerate Energy Charterer: Petrobras to 2017 Express, 150,900m3 Supporting Excelerate’s chartering activities Owner: Excelerate Energy Expedient, 150,900m3 GNL Escobar, Argentina Owner: Excelerate Energy Charterer: JV Repsol-YPF Contract: Guaranteed contracted send-out of up to 500 mmcf/day

Explorer, 150,900m3 Jebel Ali LNG Terminal, Dubai, UAE Owner: Excelerate Energy Charterer: Dubai Supply Authority (DUSUP) Contract: Guaranteed contracted send-out of up to 1 bcf/day delivery for 10 years Exquisite, 150,900m3 Port Qasim, Karachi, Pakistan Owner: Excelerate Energy Charterer: Engro Contract: Guaranteed contracted send-out of 690 mmcf/day for 15 years Exemplar, 150,900m3 Bahía Blanca GasPort, Argentina Owner: Excelerate Energy Charterer: YPF Contract: Guaranteed contracted send-out of up to 500 mmcf/day Excelerate, 138,000m3 Ruwais LNG Terminal Owner: Excelerate Energy Charterer: Abu Dhabi Gas Industries Ltd (GASCO) Contract: Guaranteed contracted send-out of up to 500 mmcf/day

LNG carrier Excalibur, 138,000m3 Various – supports Petrobras’ LNG activities Owner: Excelerate Energy Charterer: Petrobras to 2017

Excellence, 138,000m3 Hadera Gateway, Israel Owner: Excelerate Energy Charterer: Israel Electric Corp Contract: Guaranteed contracted send-out of up to 500 mmcf/day

“You need some commonality for the sake of reliability, maintainability and cost. When we started to look at smallscale, we thought it would be easy. It isn’t.

You have to be sensitive to the costs”

Offshore LNG | November/December 2016

12 | GASTECH Advertorial

Offshore LNG supplement

Tokyo meeting draws gas & LNG leaders together to select Gastech 2017 programme

I

n late October in Tokyo, meeting in a room overlooking the Emperor’s imperial palace and gardens, some of the most influential figures in global gas and LNG gathered to agree on the final conference agenda for Gastech 2017: the world’s largest event for gas and LNG professionals. These meetings are a rare occurrence and take months of planning, with so many busy diaries to juggle and compromises to be made. However, with ten of the most influential Japanese companies in the energy value chain hosting next year’s Gastech, excitement has been building over the past year, and we were delighted to be able to welcome more than 40 senior individuals over the course of two days’ of meetings to help shape the agenda.

The meetings in Tokyo were led by Gastech’s organisers, DMG Energy Events, but hosted by the group of 10 Japanese companies who will welcome the global community next April. Four of these companies in particular have led the way in driving interest and awareness in Gastech Japan, namely Tokyo Gas, JERA, Mitsui and Mitsubishi who have shown great enthusiasm for bringing this global event to Japan’s shores for the first time in its 45 year history. Shigeru Muraki of Tokyo Gas (fondly known as “Mr Gas” such is his reputation both in Japan and around the world), led the way in attending the meetings, drinks receptions and evening dinner, demonstrating boundless enthusiasm and a willingness to share his extraordinary professional knowledge with the room. All six ‘supermajors’ attended, alongside Japanese stakeholders, banks and engineering project leaders, with executive representatives – including country presidents – from Shell, Chevron, ExxonMobil, BP, Total, ConocoPhillips, plus Tokyo Gas, JERA, Mitsui, Mitsubishi, JAPEX, Bechtel, KOGAS, KBR, WorleyParsons, Macquarie and many others.

What emerged from the discussions – and from the headache of trying to pick from more than 800 company applications to deliver

presentations – was an outstanding conference agenda comprising of nearly 200 speakers covering all technical and commercial aspects of the gas and LNG value chain.

The group decided that it was critical to try and understand where the gas industry was headed to in times of tighter economics, and increased obligation towards lowering carbon emissions. They wanted the agenda to examine where new opportunities and frontiers lay, and what was needed to help encourage investor confidence in new gas and LNG projects. The programme will also cover the critical and pressing issues impacting key customers (particularly Japanese and north Asian consumers) in terms of their LNG contracts, agreements, and the prices they pay. Our Japanese hosts were keen to ensure that Gastech Japan will deliver an international and yet nationally-focused agenda that gets to the heart of what matters most to executives working in challenging, uncertain yet exciting times for natural gas.

From a technical conference perspective, there’s never been a larger variety of subjects covered and the meetings helped to draw out the very best papers and case studies from a hugely-diverse range of companies. Japan too was exceptionally well-represented with speakers and Gastech will showcase more than 50 presentations from nearly 30 of Japan’s most influential companies operating in the gas and LNG sectors. Demonstrating expertise in cryogenics, processing, shipping and ship design, innovations in clean technology and carbon capture and storage, plus a wealth of operational and HSE presentations to choose from, the event is going to be an essential addition to any industry professional’s calendar for 2017.

Written by Gavin Sutcliffe, Conference Director, Gastech

Tokyo - leading global gas and LNG professionals approve the final conference agenda for Gastech 2017

Offshore LNG | November/December 2016

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Hear from Outstanding Speakers & Leadership Panels The world’s strongest speaker line-up in 2017 arrives in Japan

Patrick PouyannĂŠ Chairman & Chief Executive Officer Total

Ryan M. Lance Chairman & Chief Executive Officer ConocoPhillips

Peter Coleman Chief Executive Officer & Managing Director Woodside Energy

Maarten Wetselaar Integrated Gas & New Energies Director Royal Dutch Shell

Michael K. Wirth Executive Vice President Midstream & Development Chevron

Robert S. Franklin President Gas & Power Marketing ExxonMobil

Khalid bin Khalifa Al-Thani Chief Executive Officer Qatargas

Charif Souki Chairman Tellurian Investments Inc.

Shogo Shibuya President & Chief Executive Officer Chiyoda Corporation

Jack A. Fusco President & Chief Executive Cheniere Energy Inc.

Mary Hemmingsen Global Head of LNG KPMG

Nobuo Tanaka Chairman Japan Gastech Consortium Former Executive Director International Energy Agency

Organised by:

An unmissable opportunity to hear thought-leading perspectives on the global gas and LNG value chain.

Find out more on www.gastechevent.com/lngws5

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• A unique, free to access resource for the global shipping industry • Access whitepapers and technical documentation covering every aspect of maritime technology, equipment and new products.

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Offshore LNG supplement

SOLUTIONS | 15

KANFER SEEKS BACKERS FOR TWO-BARGE OFFSHORE LNG PROJECT The Tønsberg-based start-up seeks US$1.5 million to go live with its groundbreaking floating LNG concept based on two barges and a tug. Karen Thomas reports

N

orway-based Kanfer Shipping has built on the US concept of articulated tug barges (ATBs), in which one tug and one barge work like a conventional smallscale LNG vessel. However, it has taken the idea one step further, proposing one barge as a storage unit and a second for loading or delivering LNG. The first barge connects landside to discharge natural gas or LNG; the second replaces it when empty. A tug connected to the LNG source moves the barges to maintain buffer capacity.

Kanfer has developed a patented design for ATBs to operate in rough weather while loaded with LNG. It has now invited shipyards to quote on the designs and conducted trials that, it says, prove the concept to be robust, seaworthy and competitive in terms of capital and operating expenditure.

The concept features dual-fuel tugs and LNG storage and supply barges of 2,000m³-20,000m³. A two-barge offshore LNG solution offers transport, floating storage and, potentially, regasification.

It can serve smaller power stations, power-intensive industries and pipeline systems, and offer bunkering to marine industry clients.

This is significantly cheaper than the conventional solution of shipping to an onshore small scale terminal, says managing partner Stig Anders Hagen.

Mr Hagen estimates that the cost of a solution based on two 7,000m³-8,000m³ barges and a tug will come in at US$50-60 million. “We have reason to believe that this is similar in price to the Bomin Linde bunker ship that is about to be constructed,” he says.

Kanfer believes its barge-based solution also delivers a fresh

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approach to offshore LNG. “The ability to move such barges around a country – or even a continent – offers considerably more flexibility and less financial risk, as it allows you to move around to find and meet demand,” Mr Hagen says.

Speaking on the fringes of SMM in Hamburg this autumn, Mr Hagen told LNG World Shipping that Kanfer has signed letters of intent in Europe, the Caribbean and South America.

Its first project will reach a final investment decision in the first quarter of next year. If all goes to plan, the company hopes to charter out its solution for up to 10 to 15 years.

In Europe, Kanfer is working with Swedegas, which wants to develop gas supply, an import terminal and storage infrastructure at Gävle, north of Stockholm. Kanfer is working on a front-end engineering design (FEED) study for the project.

Kanfer is also working with GasEner in the Dominican Republic to produce a case study to provide turnkey logistics solutions for Caribbean power plants and power intensive industries. It concluded that to serve a client with an annual demand of 200,000 mt LNG some 500 miles from the LNG source will require a 5,000m³ barge and that transport and storage will cost about US$1/mmBtu. Scaled-down versions of existing LNG-carrier and storage solutions will not work in small markets with tight budgets, Mr Hagen argues. ATBs are ideal for island nations like Indonesia and the Caribbean, which rely for power generation on polluting diesel or fuel oil – and whose ability to switch to cleaner fuels is hampered by shortages of infrastructure and under-investment.

He highlights research by Clarksons that suggests that smallscale LNG demand will support six to eight new small-scale LNG carriers a year from 2018.

“That might look speculative now,” he concludes. “We believe these vessels are already a serious consideration. In a market like the Caribbean, our solution could deliver gas to several island markets. You could serve a market like the Caribbean with LNG from Trinidad & Tobago, Dominican Republic, Jamaica or even from the US. “Our focus is less on bunker-supply barges than on delivering LNG to power stations however we are involved in bunker projects where we have a highly attractive solution. The world’s shipyards are also pretty desperate for new orders now. We think this is good timing when it comes to ordering an LNG ATB solution.” LNG

Offshore LNG | November/December 2016

16 | VIEWPOINT

Offshore LNG supplement

COULD FLNG AND FLARE GAS JOIN FORCES? H Steve Jones

ow much gas is flared or vented from oil and gas fields depends on a facility’s capacity and the field’s remoteness – but the amounts are massive.

The World Bank’s Global Gas Flaring Reduction Partnership (GGFR) claims that converting gas wasted through venting into electricity would produce enough power for Africa.

At its highest levels, flaring and venting is equivalent to quarter of the annual natural gas consumption of the US and 30 per cent of that of the European Union.

Brought to market at a rate of US$5.62/ 1,000ft³, this gas would be worth US$29.8 billion.

That kind of money could be better reinvested in aiding energy supply where it is needed.

We are wasting huge resources, due to safety protocols, or because it is not efficient to capture, store and transport this gas to market at current prices. This is particularly true for remote oil and gas fields.

Under climate goals agreed at COP21 in Paris, US president Barack Obama and Canada’s prime minister Justin Trudeau have signed up to the World Bank goal to end routine flaring by 2030. Governments now face the problem of how to achieve that target within 14 years If it was simple to convert the wasted resource into profits, no doubt the market would do so – so could LNG offer a viable solution?

Reports say a deal is being brokered to convert Iranian flare gas into LNG on a floating vessel. Floating LNG (FLNG) has had mixed fortunes of late, but it could provide an exciting and lucrative opportunity.

Lanner’s experience simulating proposed FLNG projects shows that investors will not proceed without thorough, evidencebased analysis and proven results – a natural response to the risks involved.

Offshore LNG | November/December 2016

Although Inpex’s and Shell’s Abadi FLNG moved on shore this summer to boost jobs and save costs, the long-term trend is likely to favour floating units, which offer shorter lead times and re-use potential, overcoming difficulties securing space for new projects onshore.

Lanner has simulated specific scenarios and constraints applicable to floating units for specific projects. We have also carried out simulation and predictive modelling to answer more general questions facing liquefaction terminals, such as how train maintenance affects schedules and how weather can disrupt loading.

We have simulated floating units that have constraints around storage, not just in the case of LNG but also condensate, as space is at a premium.

Another example of our analysis is the effect on operations of longer connection times due to an LNG carrier’s careful approach to the floating unit, when both may be moving, and the effect on connection operations to sensitivity in weather conditions.

Converting flared gas into LNG faces several hurdles – and there are cheaper sources of gas in the shale fields of the US and Canada.

But Iran’s keenness to enter the LNG market makes it a good test of the flaregas-to-LNG proposition, given the political hurdles around pipelines. Governments that wish to use this valuable resource – rather than waste it – would do well to study how to remove the barriers and help LNG players to get started.

So could FLNG projects convert flare gas into electricity and gas for our homes and help nations reach their climate targets sooner by displacing high-carbon alternatives?

We will have to wait and see – but the possibility is up for debate and on the table. LNG Steve Jones is a consultant at the Lanner Group

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