NGV Transportation
VOL. 23 | JUL - SEP 2015
NGV
TRANSPORTATION MAGAZINE
SPECIAL REPORT:
THE EFFICIENT POWER PLANT USING AMBIENT OR RESIDUAL HEAT AND LNG COLD AS A HEAT SINK
GAS TO POWER IN BRAZIL FEATURES:
LNG IN AFRICA - NOT A RICH MAN’S FUEL
EVENT & EXHIBITION:
NATURAL GAS TRANSPORT FUEL IN MINING, PLANTATION & LOGISTICS
LNG FORUM SERIES
2nd SMALL LNG SHIPPING AND DISTRIBUTION FORUM
2015
16 - 18 September 2015 | Bali - Indonesia
register now!
OPENING UP AN EFFECTIVE NATURAL GAS DISTRIBUTION MARKET THROUGH SMALL SCALE LNG SHIPPING The 2nd Small Scale Shipping & Distribution Forum 2015 comes at a time when LNG supply and infrastructure developments are critical in ensuring the rapid and much needed LNG distribution and integration in Indonesia. A niche, targeted and sustainable LNG shipping market – notably Small Scale Shipping – will eventually prove to be a significant and vital transport medium when more LNG Supply and LNG Infrastructures projects come online within the next few years . Small LNG ships will increasingly provide vital functions in terms of regional integration, transportation into remote areas and inter-island crossings. LNG distribution infrastructure via Small Scale LNG vessels are fast becoming a must-have solution for players wanting to effectively deliver natural gas – notably LNG – between Indonesia’s islands. In addition, the planned land-based import terminals will ensure the growth of Indonesia’s sunrise LNG industry. This will inevitably increase the utilization and need for Small LNG vessels to be deployed in various regions across the archipelago. Indonesian cabotage rules and compliance is an important aspect for ships and vessels wanting to operate in Indonesian waters. Since the cabotage rules were applied, the development of Indonesian commercial fleet increased from 6,041 ships in 2006 to 13,224 by the end of 2013. And this number continue to increase in 2014. This will inevitably open up significant opportunities for players wanting to tap into the niche Small LNG Shipping and Distribution industry. This forum will continue to offer a one-shot platform for all serious stakeholders to highlight their positions in and distinctive solutions for Indonesia’s LNG industry while establishing relationships with key policy-makers and private sector players integral to LNG Supply, Shipping, Infrastructure development, and Distribution. Developing LNG for shipping, LNG as fuel and utilizing Small LNG Shipping as a distribution tool will change the face of Indonesia’s shipping industry.
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EDITOR’S TWO CENTS
Greetings all! I hope 2015 has been kind to everyone so far! It’s been a real rush for us and here we are more than half-way through the year already. The natural gas industry shows no signs of slowing down despite the volatile oil and gas prices over these last few months. In fact, the industry seems like it might actually be picking up steam. The largest acquisition to take place in the last decade or so, just took place just a few months ago, with Shell buying over natural gas giants BG Group. This has helped propel Shell forward, making them the largest LNG producer in the world today. The merger has added some 25% to the company’s oil and gas reserves with LNG projects in Australia and deepwater projects off Brazil and Tanzania. Research and development has not slowed down either, with lots of new products finding their way into the industry – from high tech gas engines to fuel pumps. As of the recent implementation of the new Euro emissions regulations in April, many companies still continue to inaugurate new LNG vessels to their fleets. The World Gas Conference held in Paris showcased many of these technological developments and insightful talks from some of the most influential leaders in the industry this past June. The event surely resulted in high level networking across the globe and will undoubtedly lead to the generation of new and exciting partnerships and joint ventures! The global movement towards natural gas is in full force and despite the recent energy price crisis continues to make gargantuan strides forward. The industry is abundant with all sorts of opportunities and is not short on variety. You need to decide how and where you can fit in to this ever-expanding web that is engulfing the entire globe. Here at NGV Transportation, we will do our best to key you in to some of these gaps and open your eyes to some of the possibilities that might be just the right fit for you. In this issue our focus is on methane-based power generation. We’ve included some delightful studies on rankine cycles with LNG cold recovery and combine cycle gas turbines, as well as a case study on the gas power generation situation in Brazil. We’ve also included an interesting German case study on the technical requirements for LNG quality and Rudolf Huber tells us about the prospects of LNG in Africa and how they should use their vast reserves locally for growth and development. Once again, I will continue to ask that you provide us with any feedback that you might have – it’s important to us, that we know what we do is what’s good for you. Carry on putting in the effort, it’s bound to be worth it – nothing good has ever come to anyone without sacrifice and hard work!
NGV
TRANSPORTATION MAGAZINE Published by:
NATURAL GAS GLOBAL
Managing Director Vincent Choy vincent@naturalgaslobal.com Chief Editor Rizal Rahman
rizal.rahman@naturalgasglobal.com
Editor Ryan Pasupathy
ryan@naturalgasglobal.com
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samuel.tan@naturalgasglobal.com
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denise@naturalgasglobal.com
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Vol. 23 Jul - Sep 2015 NGV Transportation
CONTENTS
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NEWS AROUND THE WORLD EDITOR’S TWO GAS TO POWER IN BRAZIL ANALYSIS OF NATIONAL POLICIES AND ITS IMPACT ON NGV GROWTH IN IRAN
FEATURES:
LNG IN AFRICA - NOT A RICH MAN’S FUEL
01 36 39
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SPECIAL REPORTS: THE EFFICIENT POWER PLANT USING AMBIENT OR RESIDUAL HEAT AND LNG COLD AS A HEAT SINK
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INTEGRATED SOLUTIONS FOR LNG REGASIFICATION IN A POWER PLANT
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FEATURE: TECHNICAL REQUIREMENTS ON LNG QUALITY FOR DOMESTIC, COMMERCIAL AND INDUSTRIAL UTILIZATION & TRANSPORTATION
EVENT & EXHIBITION: NGV Transportation Vol. 23 Jul - Sep 2015
30
NATURAL GAS AS TRANSPORT FUEL IN MINING, PLANTATION & LOGISTICS 2
NEWS AROUND THE WORLD
YEMEN April 2015: Oil Tankers Diverted Amid Turmoil
DUBAI April 2015: LNG Import Terminal Expansion The UAE is mulling over expansion of its LNG terminal in Dubai to help meet rising demand for electricity and water. The plan is to increase capacity at the LNG terminal in Jebel Ali which currently has a capacity of 3 mtpa. There are already plans in place to build an import facility at Fujairah which will have a capacity of 9 mtpa. Energy Minister, Suhail Al Mazrouei said that, “In the future we will increase the amount of LNG or capacity to import to provide flexibility to power generation.” This has come about due to the drop in LNG prices which have encouraged the country to look at increasing imports of the gas. The UAE is also looking at upgrading their compression facility at Dolphin Energy which has capacity to receive 2 billion cubic feet of gas per day from Qatar via pipeline.
At least four oil tankers were diverted from docking at Yemen as chaos mounted in the country after the launch of Saudi-led airstrikes earlier in the month. Fighting in Yemen is not only scaring away oil tankers but it is also scaring off shippers that should be helping with moving the country’s LNG exports. Several companies such as Total and APR Energy Plc have evacuated staff or ceased operations due to conflict. The Aden refinery at Yemen was meant to issue a tender to seek oil import products for May but has since suspended the process to await the situation in the country to stabilise. Earlier in the month three LNG tankers were headed towards Yemen’s export terminal in Balhaf earlier in the month but all were diverted.
- The National
- Reuters
FINLAND
ENGLAND
April 2015: New Pump Is Important Enabler For LNG Bunkers
April 2015: Shell Will Buy BG Group for $70 Billion in Cash, Shares
Wärtsilä has unveiled its new Wärtsilä Svanehøj ECA Fuel Pump which it says is an important enabler for the use of LNG as a marine fuel. According to them, this pump will enable LNG as a safe and viable marine fuel as it provides advantages such as allowing there to be no tank connections below liquid level, no electrical components inside the tank and almost no contribution to the generation of boil off gas. Conventional pumps with the motor installed inside the fuel tank transfer as much as 70 percent of the electrical energy as heat to the LNG. In addition to increasing efficiency, this also enhances the operating safety of the new pump as well as helping ensure reliable operations regardless of external conditions such as the weather. The new pump has been made compatible with Wärtsilä’s LNGPac fuel bunkering and supply system with Emissions Control Area (ECA) regulations in mind.
Shell has made the decision to buy BG Group for some £47 billion, making Europe’s largest oil company the pre-eminent player in global natural gas. This is the biggest deal in at least the last 10 years and will push Shell further into producing, shipping and selling gas as the company feels that China and other emerging economies will make the switch from coal and oil to natural gas. The merged company will be led by current Shell CEO, Ben Van Beurden and will boast a market value twice the size of BP and surpass Chevron. The acquisition will cause Shell to rebound from its worst production performance in 17 years, with a gain in its natural gas reserves by 28 percent and inherit an excellent team that is responsible for having carved out a unique niche in LNG.
- Ship & Bunker
- Bloomberg
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Vol. 23 Jul - Sep 2015 NGV Transportation
NEWS AROUND THE WORLD
PAKISTAN April 2015: Mystery Shrouds First LNG Shipment
The Ministry of Petroleum and Natural Resources has not been performing up to expectations especially in recent times when oil and gas shortage has been a continuous drag on the country’s economy. Though the government under the PML-N administration has been active in addressing the energy shortage problem, with particular attention to Punjab, the Ministry of Petroleum and Natural
Resources has not been able to live up to its recent gas import commitment. It has only been able to bring one shipment through private sector and spot purchases. An interesting fact about this shipment though is that the consignment came in a mysterious manner. Nobody knows who imported the gas, which has since been injected into the transmission pipeline without any proper
April 2015: OGRA Decides To Reduce CNG Prices
TANZANIA
Oil and Gas Regulatory Authority (OGRA) has decided to reduce prices of CNG. New prices of CNG will be Rs 55.39 ($US0.55) per kg for customers in Sindh and Punjab while it will be Rs 58.72 ($US0.58) per kg for those in KP and Balochistan. As of April, the change was still pending the Ministry of Petroleum and Natural Resources’ approval. - Dunya News
NGV Transportation Vol. 23 Jul - Sep 2015
transmission system in place. There are also many more unanswered questions about the LNG supply arrangement with Qatar which has still not yet been finalised. Though Elengy Terminal Paskistan Limited has set up an LNG terminal, the promised imports from Qatar have yet to begin. - The Tribune
May 2015: Tanzania to Finalise Land Acquisition For LNG Project Tanzania plans to spend some 12 billion shillings (US 6$ million) over the next year to buy land for the planned construction of an LNG terminal in the country. The terminal is meant to be a two-train LNG export terminal which could cost US $30 billion in total. The project has run into delays which are deemed to be due to complex land acquisition procedures and an uncertain legal and regulatory framework. The terminal would be built in Lindi which is located close to an offshore deep sea region where huge natural gas discoveries have been made. There is an estimated 53.2 tcf of gas reserves off the southern coast. - Reuters
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NEWS AROUND THE WORLD
SINGAPORE
UNITED STATES
April 2015: Rotterdam and Singapore Ports Sign Collaboration MOU
April 2015: World’s First LNG Powered Containership Launched
The Maritime and Port Authority of Singapore (MPA) and the Port of Rotterdam signed an MOU on information exchange and research collaboration. Under the MOU, the two parties will exchange information on various issues such as standards and regulatory frameworks for bunkering and other marine services as well as the application of information technology in providing these services. “This MOU will help strengthen the maritime linkages between ports in Europe and Asia, and forge closer cooperation at a time when ports have to work more closely with one another to ensure the safety, security and efficiency of global shipping,” said Andrew Tan CEO of MPA. President and CEO of Rotterdam Port Authority, Allard Castelein also commented, saying, “It is important that the world’s largest and most progressive ports exchange experiences and join efforts to improve their business where they can.”
General Dynamics NASSCO launched the Isla Bella, the world’s first LNG powered containership from its San Diego based shipyard. The 3100TEU containership is the first part of a two ship contract which was built for TOTE. When completed the ships will be the cleanest of their kind and size anywhere across the globe. This was also representative of NASSCO’s 100th launch. The vessel will be fuelled by LNG and aimed at decreasing emissions and increasing fuel efficiency compared to petroleum powered ships. Both the ships will also include a ballast water treatment system. - Maritime Executive
- Seatrade Maritime
April 2015: Singapore ‘Well Set Up’ To Be LNG Pricing Benchmark Singapore has its sights set on becoming a major LNG trading hub and could very well become the key pricing benchmark of Southeast Asia, according to Peter Hartley, Professor of Economics at Rice University, United States. It was his opinion that Singapore could become another ‘Henry Hub’ – which is the pricing point for natural gas futures on the New York Mercantile Exchange. He says that Singapore is well set up and already has pipeline connections with Malaysia and Indonesia and its effort to put in extra LNG storage capacity will give it the ability to engage in arbitrage opportunities. He added that, “For Singapore to fully take off as a gas trading hub that is comparable to the Henry Hub and the NBP it has to develop the pipeline trade further to create a deeper market with freer prices.” - Business.AsiaOne.com
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Vol. 23 Jul - Sep 2015 NGV Transportation
COMING
SOON
BIOGAS AND ENERGY CROPS THAILAND ROUNDTABLE 2015 Capitalising on the Next Phase of Biogas Development in Thailand: Energy Crops and Biomethane
25 - 27 NOVEMBER 2015 | CHIANGMAI, THAILAND Thailand is entering a critical new phase of development for biogas with fundamental changes in the way the industry will have to adapt in order to continue to grow. Critical challenges in coordination with key energy industry players including the management of the grid, government incentives, agricultural zoning, and pricing of fuel will determine the future direction of Thailand’s biogas program. In partnership with the Energy Research and Development Institute (ERDI), from Chiangmai University, ICESN is proud to present the BIOGAS AND ENERGY CROPS THAILAND ROUNDTABLE (25 – 27 November 2015, Chiangmai, Thailand). It is a beautiful time of the year to visit Chiangmai and chart the future of biogas growth in Thailand.
Media Partners:
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ICESN
Tel: +65 6506 0951 | Fax +65 6749 7293 | Email: info@icesn.com | www.icesn.com
NEWS AROUND THE WORLD
MYANMAR
AUSTRALIA
May 2015: Queensland Government To Rely on LNG
May 2015: Myanmar To Increase CNG Supply For Vehicles
The Queensland government has decided to continue to rely on its emerging $70 billion LNG industry to boost the states coffers. Production of LNG began at Curtis LNG’s plant near Gladstone in December last year and became the world’s first LNG facility to be supplied with natural gas from coal seam gas. Since then 16 cargoes have been shipped overseas. Premier Annastacia Palaszczuk commented, saying that, “Although there has been a downturn in commodity prices, this is a large industry that will be around for decades to come.” Federal Industry Minister Ian MacFarlane added, “That’s all part of the commodity cycle and the reality is that anyone building a plant like this would know that gas prices cycle up and down.”
Authorities in Myanmar will increase the supply of CNG for vehicles to meet the country’s growing demand. The factory for refining natural gas from nearby offshore blocks is almost complete and is expected to supply CNG without delay. Private vehicles are facing a scarcity of the gas and there are at least 230 vehicles on the waiting list. There are however, some 3500 CNG public buses that serve more than 2 million people each day.
- The Australian
THAILAND
- Xinhua News
June 2015: PTT in search of partners for LNG supply
MOZAMBIQUE
PTT Plc is currently looking for a partner to source for LNG to serve the surging demand in Thailand. PTT CEO, Pailin Chuchottaworn said that PTT would use the WGC 2015 in Paris to seek significant partners for LNG in the long term. He also said that PTT has been talking to Chevron about the extension of cooperation with Qatargas which currently supplies 2 mtpa of LNG to PTT. There have also been talks between PTT and Petronas to set up a trading deal of some sorts. Chuchottaworn also went on to say, “We would like to look for other alliances to bolster our LNG supply in the short term. We expect to talk to Total SA and Shell Corp too.” As Thailand’s petroleum reserves continue to decrease, it has been difficult to find new gas sources in the country and there is a need to come up with plans to serve this rising demand through such partnerships.
May 2015: Mozambique LNG A Step Closer Anadarko’s offshore Area 1 development has come a step closer to completion with the signing of contractors for the offshore LNG terminal. A consortium made up of Hiyoda Corp. and Saipem were picked following a front end engineering and design (FEED) tender process. Anadarko is still yet to make a final investment decision (FID) on the project. According to Anadarko, this project will be one of the world’s largest LNG developments which will cover about 17000 acres and include two LNG trains each with 6 mtpa capacity. It will also include two LNG storage tanks each with 180,000 m3 capacity, condensate storage, multi-berth marine jetty and oher associated utilities and infrastructure.
- Deal Street Asia
- Offshore Engineer
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Vol. 23 Jul - Sep 2015 NGV Transportation
NEWS AROUND THE WORLD
INDONESIA June 2015: Eni Reaches LNG Deal in Indonesia
May 2015: Donggi-Senoro LNG Plant Ready For Operation
Eni has just announced that it has signed a deal to sell LNG from a deep-water Indonesian field. Eni and Engie (formerly GDF Suez) and their Indonesian partners signed a deal to purchase and sell 1.4 mtpa from Jangkrik Complex beginning 2017. Eni CEO, Claudio Descalzi, said, “It is one of the first deepwater gas projects in Indonesia being developed under a fast track scheme, and confirms Eni’s commitment in supplying gas for the development of the Indonesian domestic market.” Engie has also signed a cooperation agreement with Perusahaan Gas Negara (PGN) which is related to a feasibility study for the LNG terminal in northern Java.
The recently completed Donggi-Senoro LNG plant is expected to begin operations in June and receive gas from nearby fields. The plant which is located in Central Sulawesi is the fourth LNG plant in Indonesia and is just ready for use. Development of the plant required an investment of around US$2.8 billion and is the first Indonesian project developed with a downstream business plan which has made a clear definition between gas production at the upstream and LNG processing at the downstream. The plan aims to give the most benefits to the country because the investment will not be subject to the cost recovery of the state budget. Lukman Mahfoedz, President Director of PT Medco Energi Internasional, said that, “The full capacity will receive 310 mmscfd in gas. However, it depends on how much the buyers can absorb. The full capacity will likely be in August.” The plant will be fitted with an LNG storage tank with a capacity of 170,000 m3, an LNG liquefaction train with a capacity of 2 mtpa, a jetty and a gas turbine generator with an output of 3 x 22.6 megawatts. - The Jakarta Post
- United Press International
CHINA
LITHUANIA
May 2015: Hehai Shipping Runs Its First LNG-powered Vessel
May 2015: Lithuanian LNG Bunker Player To Sell off Stake in Natural Gas Trader
Jiangsu Hehai Shipping announced that its first LNG powered ship is ready for operation. The company has already ordered 5 ships at a cost of RMB20.5 billion (US3.3 billion) each. Beijing is pushing more domestic shipping operators to adopt LNG powered vessels in a bid to cut the extensive pollution in the country. The government has begun offering tax exemptions for companies choosing LNG fuelled vessels. - Splash247.com
NGV Transportation Vol. 23 Jul - Sep 2015
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AB Klaipėdos Nafta has recently announced that it is looking to sell its stake in natural gas trading company UAB Litgas. This move comes after an European Commission recommendation that AB Amber Grid be certified as a transmission system operator on the condition that AB Klaipėdos Nafta release 33% of its stake in UAB Litgas. This totals some 15 million shares which are priced at 0.29 Euros each. - Ship & Bunker
NEWS AROUND THE WORLD
BOLIVIA
NORWAY
April 2015: E-xon Exports 200 Sets of CNG Engines to Bolivia
June 2015: Norwegian Firms to the Fore in New LNG Designs
Installing and matching gas energy to a vehicle
Testing gas engine power on all terrains
China’s ambassador in Bolivia participates in the promotion of clean energy vehicles.
Bolivia has been actively promoting the use of CNG as a vehicular fuel in recent years. The Executing Agency for Natural Gas Vehicles Conversion (EEC-GNV) has been essential in developing the Industry in Bolivia. Hernan Vega, General Director of the EEC-GNV has been championing this cause, leading the charge Efficient production and preparation of gas for a fully run CNG public engines. transportation network. The EEC-GNV reported that there are currently 300,000 vehicles retrofitted, out of a total of 1,326,833 vehicles operating on Bolivian roads. This makes up about 30% of all vehicles in the country. The Bolivian government attaches great importance to the development of gas vehicles and promoting public gas vehicles in the city in order to promote clean energy and make full use of natural gas resources and the works by the EEC-GNV are clear in demonstrating the government’s interest in this sector. E-xon has been one of the companies who have been assisting the government in their efforts. After one full year testing for the gas energy vehicle, the quality of gas energy has been recognized by Bolivians. After a long period of technical and business communication, 200 units of gas engines have been shipped to the beautiful South American nation as of April this year.
Norwegian firms are rushing out many new LNG containment systems which are giving Membrane and Moss designs a run for their money, especially for smaller gas ships. American class society ABS during Nor-Shipping week granted Approval in Principle (AIP) to a new gas containment system concept designed by Norweigian developers, Brevik Technology. The containment system uses a series of independent, cylindrical IMO Type-B tanks and for the AIP was designed for application in a gas carrier of 30,000 m3. Christopher Wiernicki, ABS Chairman and CEO said that, “Designers are increasingly looking to extend the gas carrier concept into new trades, serving new markets.” According to Brevik, it costs 15-20% less to construct this system compared to a membrane containment system. ABS has also been selected to class a new design of medium-sized LNG carrier to be built in China for Landmark Capital. LNG New Technologies (LNT), another company with operations in Norway and Singapore has recently developed the LNT A-BOX system. LNT intends to market the containment system to thirdparty shipyards that are looking to enter the LNG market. The LNT A-BOX is designed to answer the need for a system that fills the gap between smaller ships with Type C tanks and those with larger membranetype containment systems. - Splash247.com
- E-xon Press Release
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Vol. 23 Jul - Sep 2015 NGV Transportation
NEWS AROUND THE WORLD
INDIA
May 2015: Gail in talks with Shell to sell U.S. LNG supply
May 2015: Kochi Could Become Southeast Asia’s LNG Bunkering Hub
Gail has signed a preliminary deal with Shell that would see them selling LNG which would have come from the US. Gail has also signed other preliminary deals with other companies. Gail first announced plans to sell 1 mtpa of LNG for a 5 year period but were unable to close any buyers as man were affected by differing price views. Gail’s MOU with shell was signed prior to Shell’s $70 billion buyout of BG Group. - Reuters
“Given that LNG is one of the cleanest fuels that we have today, Kochi with a state-of-the-art LNG terminal can become a bunkering hub,” said Petronet MD and CEO, A.K. Balyan. Some 36000 ships pass through the route and about 1000 ships call at the Kochi Port. Paul Antony, Chairman of the Cochin Port Trust, were in tandem with Balyan’s feelings, saying that the Trust is working toward developing Kochi as an international bunkering hub. Antony estimates that Kochi’s bunkering industry is expected to grow by more than 20 percent next year with targets at 1 million tonnes per year. He did mention however, that to achieve this goal it will be necessary to improve the ports infrastructure.
CANADA June 2015: Petronas-led Consortium Vows to Build B.C. LNG Terminal An international consortium led by Malaysian state owned, Petronas has committed to building a massive LNG terminal in British Columbia as long as the project receives Canadian federal environmental approval. Petronas have said that getting conditional approval will be a crucial milestone for moving forward. After all the hullaballoo last year with them threatening to cancel the project, the group is striving to start construction on the $CAD11.4 billion terminal near Prince Rupert by the end of this year with plans to export to Asia in 2019. The consortium released a statement saying that, “The final investment decision will be confirmed by the partners of Pacific NorthWest LNG once two outstanding foundational conditions have been resolved and that the first condition is approval of the project development agreement by the Legislative Assembly of British Columbia, and the second is a positive regulatory decision on Pacific NorthWest LNG’s environmental assessment by the government of Canada.” Despite numerous delays in the review, the agency could possibly issue a draft study with a final report by October. Any conditions attached to the final report will be legally binding if federal Environment Minister, Leona Aglukkaq gives the project the regulatory go-ahead.
- Ship & Bunker
JAPAN June 2015: Oshima Unveils LNG-Fuelled Kamsarmax Bulker DNV GL has granted an AIP for an LNG-fuelled Kamsarmax bulk carrier concept from Oshima Shipbuilding Company. The ship is of an interesting U-shaped design that will accommodate an LNG tank in its center which will allow the deck house to be completely separated from the LNG storage tank while providing scalability of LNG storage. There is also a special tank cover that adds an additional safety barrier that ensures compliance with the draft IGF code for low flash point fuels. The ship has been designed for dual fuel operation, of both LNG and HFO to power the main engine, generators and boilers. The handling system was supported by Mitsubishi Heavy Industries.
- The Globe & Mail
- The Motorship
NGV Transportation Vol. 23 Jul - Sep 2015
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FEATURE ARTICLE
TECHNICAL REQUIREMENTS ON LNG QUALITY FOR DOMESTIC, COMMERCIAL AND INDUSTRIAL UTILIZATION & TRANSPORTATION Introduction Liquefied natural gas (further referred to as LNG) has been used as a cost effective, low emission and reliable energy source for many decades in different parts of the world. First commercial applications for covering of peaks in natural gas demand were built in the USA in the 1940s. The trade in LNG began in 1964, when the first LNG cargos were delivered from Algeria to France and Great Britain. In these days there are already 19 countries exporting LNG and 30 countries, where this energy carrier will be exported to [1]. With its 27 million tonnes of LNG consumption in
2014 the European Union is the third-largest utilizer of LNG after Japan and South Korea [1]. But until recently, LNG as energy carrier remained for Germany insignificant, despite its first position in the natural gas demand among the EU-28. The gas supply situation in Germany is determined mostly by domestic gas production as well as by imports from abroad. Russia, Norway and the Netherlands are the main natural gas import countries. A relatively small remaining quantity of natural gas comes both from Denmark and in form of bio methane conditioned to the
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Figure 1 - The natural gases used in Germany [2].
Vol. 23 Jul - Sep 2015 NGV Transportation
FEATURE ARTICLE Origin
Nitrogen [mol%]
Methane [mol%]
Ethane [mol%]
Propane [mol%]
Algeria / Arzew Nigeria Norway Qatar Trinidad and Tobago
0.71 0.03 0.46 0.27 0.01
88.92 91.70 92.03 90.90 96.78
8.41 5.52 5.75 6.43 2.78
1.59 2.17 1.31 1.66 0.37
Butane and higher hydrocarbons [mol%] 0.37 0.58 0.45 0.74 0.06
Table 1 – The average compositions of LNG (chosen as being representative among compositions reported by the receiving terminals in Rotterdam, Zeebrugge and Swinoujscie; calculated at -160 °C) [7].
Figure 2 – Wobbe number range defined by DVGW Code of Practice G 260:2013. Reference temperatures being 25 °C and 0 °C for energetic and volumetric quantities respectively [4].
H-gas quality. Compared to the natural gases imported from Russia and Norway the natural gases produced in Germany and imported from the Netherlands are low calorific (L-gas). Together they cover about one third of the German natural gas consumption per annum (see Figure 1). Against this background, the cessation of the natural gas production in the Groningen gas field, the main German natural gas import source from the Netherlands, is expected by 2030 [3]. According to the German transmission network operators, the natural gas fields in Germany are being depleted as well, so one cannot rely on the long term production of the local natural gas. Germany’s ambitious climate targets, the efforts to secure the
own energy supply in the future and the understanding of the necessity of the energy supply diversification move alternative and still new energy sources such as LNG to the forefront. Technical requirements for the use of gaseous LNG in the German gas networks The estimation of the prospects of the network-connected utilization of gaseous LNG (further referred to as NG) requires the overview and understanding of the technical criteria which are needed to make the use of this energy carrier possible. NG can be injected into the natural gas network as a basic gas or added to the natural gas as a part of the gas mixture. In both these cases, the Wobbe number (here and further in the text is meant its upper value Ws) has to match. This guarantees the principle of the natural gas interchangeability in the public natural gas supply, as defined by the code of practice of the German Technical and Scientific
Origin
Wobbe number [MJ/m3]
GCV [MJ/m3]
Methane number
Algeria / Arzew
55.00
43.38
75
Nigeria
55.39
43.32
75
Norway
54.68
42.58
78
Qatar
55.18
43.34
75
Trinidad and Tobago
53.99
40.94
89
Table 2 – Quality parameters of LNG being delivered or to be delivered to the receiving terminals in Rotterdam and Swinoujscie. Reference temperatures being 25 °C and 0 °C for energetic and volumetric quantities respectively [7, 8, 9].
NGV Transportation Vol. 23 Jul - Sep 2015
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Association for Gas and Water (further referred to as DVGW) DVGW Code of Practice G 260:2013 “Gas composition”. With respect to the Wobbe number, all fuel gases being used in German public gas networks are classified into two groups: low calorific, L-gases, and high calorific, H-gases, with a low Wobbe index and a high one respectively (see Figure 2). The summarized range of the Wobbe number is shown in Figure 2 with the nominal value 44.6 MJ/m3 for L-gases and 54.0 MJ/m3 for H-gases [4]. Based on the chemical compositions of the LNGs, the gas quality parameters of them can be calculated. The results are presented in Table 2. Thus one can see, that the determined Wobbe numbers of the NGs delivered or to be delivered to the receiving terminals in Rotterdam and Swinoujscie fit the value range set for the H-gases, but do not match the range set for L-gases (see Table 2 and Figure 2), which means that these NGs can
Origin
Wobbe number [MJ/m3]
GCV [MJ/m3]
Russia
53.1
40.3
Norway
52.9
41.9
The Netherlands
46.0
36.8
Germany
44.7
35.4
Table 3 – The German natural gas sources’ Wobbe numbers and GCV. Reference temperatures being 25 °C and 0 °C for energetic and volumetric quantities respectively [4].
FEATURE ARTICLE Norway
Origin of LNG
Origin of natural gas
Russia
The Netherlands
Germany
Ballasting gas content, vol%
Trinidad and Tobago
-*
3.5
-**
11.8
Qatar
1.4
5.2
13.4
16.7
Norway
3.6
3.5
11.8
15.2
Nigeria
1.3
5.1
13.4
16.6
Algeria
1.5
5.2
13.5
16.8
Table 4 - Ballasting of the NGs to meet the GCV requirements. Reference temperatures being 25 °C and 0 °C for energetic and volumetric quantities respectively [7, 8, 9]. * NG from Trinidad and Tobago has to be treated by blending with propane instead of nitrogen. This can be explained by its lower GCV than Norwegian pipeline gas one’s. ** It should be mentioned, that a gap between Wobbe number’s nominal value of the NG from Trinidad and Tobago and natural gas from the Netherlands is too wide, so there is no technical possibility results from the calculation to inject the NG into the natural gas stream.
Germany
Norway
Russia
networks [4]. This risk occurs only in cases of air injection to each NG till the achievement of L-gas quality (see Table 4). The calculation results presented in Table Origin of natural Methane content 4 show the content Origin of LNG gas [mol%] of ballasting gas needed to the Algeria / Arzew 84.2 matching the GCV Nigeria 87.0 requirements by NGs to be injected Norway 88.9 into the natural Qatar 86.2 gas network. All Trinidad and Tobago 96.8 the presented gas compositions also Algeria / Arzew 87.6 meet criteria for Nigeria 90.4 Wobbe number. Norway 92.0 Instead of using of nitrogen, the air Qatar 89.6 admixture causes Trinidad and Tobago 96.4 the 3 mol% limit excess of oxygen Algeria / Arzew 74.0 in some NGs Nigeria 76.4 treated, which are Norway 75.6 shown in Table 4 in bold italics. Qatar 73.4 According to Trinidad and Tobago 76.7 the current DIN Algeria / Arzew 76.9 standard for the calculation of Nigeria 79.5 the compression Norway 81.2 factor of gases, Qatar 78.7 the maximum permitted value Trinidad and Tobago 88.7 for nitrogen is equal 50 mol% Table 5 – Methane content of NGs ballasted till the matching of qualities of natural gas transported and distributed in [12] that is much networks. The Netherlands
be used for substitution of H-gases in the gas networks without any treatment of them. Contrary to that, the injection of NGs as basic gases into the public natural L-gas network needs their ballasting with low calorific or even non-flammable gases. Hence, bearing in mind the upcoming L-gas supply bottleneck, the substitution of L-gas by NGs will incur additional costs. In case of the injection of NG into the natural gas network for the purpose of its use as a part of gas mixture with natural gas, Gross Calorific Value (further referred to as GCV) of the both gases has to be taken into consideration. This requirement can be explained by the fact that the Germany’s gas billing system is based on energy consumption while consumed natural gas volumes are not taken into account. That is why gas distribution system operators are obliged to avoid deviations of GCV in their networks of more than ±2 % over the billing cycle [10]. The common way to achieve this is gas blending. In case of the admixture of NGs with the relatively high GCVs (see Table 2 and 3) to the natural gas stream, NGs must be ballasted. In case of ballasting of NGs with air the content of oxygen must not rise beyond the permitted limit set at 3 mol% for distribution networks and 0.001 mol% set for transportation
more than the calculated values in each of the gas mixtures (see Table 4). All the determined gas mixtures of NGs and nitrogen or air feature the relative density range 0.59 to 0.69 which matches the requirements set in the DVGW Code of Practice “Gas composition” at 0.55 to 0.75. Apart from the Wobbe number and GCV, one of the parameters of NG, which has to be matched, is the methane number. Due to gas engines’ fuel requirements set out in DIN 51624:2008 “Automotive fuels – Compressed natural gas – requirements and test methods” every fuel gas going to be used as an engine fuel has to have a methane number over 70 in order to protect internal combustion engines from knocking [11]. Table 2 presents
13
Vol. 23 Jul - Sep 2015 NGV Transportation
FEATURE ARTICLE the calculated values of methane numbers for some NGs. All of the determined values are in the limits of 75 to 89. Furthermore, a methane content of at least 80 mol% is mandatory [11]. Table 5 shows, that not each NG of the determined above ballasted does comply with the mentioned requirement. These are presented in bold italics. This means these ballasted NGs have to be excluded from automotive usage. All the technical requirements on the NG quality mentioned above are summarized in an overview and shown in Table 6. Conclusions and outlook A good impulse to the establishment of the German LNG market might be given by the use of LNG as a solution for the upcoming L-gas supply bottleneck as well as for diversification of Land H-gas sources. The technical requirements for the ballasting of the LNGs to be delivered to Germany from the terminals in the Netherlands, Belgium and Poland from the Algeria / Arzew, Nigeria, Norway, Qatar, Trinidad and Tobago can be matched for the benefit of the German gas consumer. The financial efforts of the LNG conversion itself remain to be estimated. However
Parameter
Application field
Set of rules
Wobbe number
Interchangeability of fuel gases
DVGW Code of Practice G 260:2013 “Gas composition”
Gross Calorific Value (GCV)
Billing cycle
DVGW Code of Practice G 685:2008 “Gas billing“
Oxygen content
Natural gas distribution and transportation systems
DVGW Code of Practice G 260:2013 “Gas composition”
Nitrogen content
Thermodynamics calculations
DIN EN ISO 12213-2:2010-01 “Natural gas - Calculation of compression factor - Part 2: Calculation using molarcomposition analysis”
Propane and butane content
Operation of internal combustion engines
DIN 51624:2008 “Automotive fuels – Compressed natural gas – requirements and test methods”
Relative density
Natural gas distribution and transportation systems
DVGW Code of Practice G 260:2013 “Gas composition”
Methane number
Operation of internal combustion engines
DIN 51624:2008 “Automotive fuels – Compressed natural gas – requirements and test methods”
Methane content
Operation of internal combustion engines
DIN 51624:2008 “Automotive fuels – Compressed natural gas – requirements and test methods”
Table 6 – Overview of the technical requirements on the fuel gases for the networkconnected use in Germany.
the ballasting of gaseous LNGs with pure nitrogen instead of air is required in some cases, e. g. for the injection of NG into the natural gas flow. Therefore the implementation of appropriate technical measures is important. References
[1] “The LNG industry in 2014”, International Group of LNG Importers – GIIGNL, Neuillysur-Seine, 2015. [2] “Oil&GasSecurity – Germany – 2012. Emergency Response of IEA Countries”, International Energy Agency, Paris, 2012. [3]”Entwurf der deutschen Fernleitungsnetzbetreiber.
ALEXEY MOZGOVOY Alexey Mozgovoy is a Scientist and Project Manager for LNG Supply in the Fuel and Appliance Technology Division at the Gas- und Waerme-Institut Essen e.V., Germany. He is responsible for LNG research and development activities of the Institute and manages projects in smallscale liquefaction and distribution. Alexey Mozgovoy has spent more than 15 years studying natural gas network construction, operation and fuel gas sources in Germany and in Russia. Alexey Mozgovoy is an author of many papers on the topic of LNG application as a fuel gas for industry, transportation and network-connected gas supply published in renowned technical and scientific journals. He is a member of the German Technical and Scientific Association for Gas and Water’s (DVGW) and works actively on national regulations on fuel gases and appliances distributing them.
NGV Transportation Vol. 23 Jul - Sep 2015
14
Netzentwicklungsplan Gas 2014“, Die Fernleitungsnetzbetreiber, Berlin, 01.04.2014. [4] DVGW Code of Practice G 260:2013 “Gas composition“, Deutscher Verein des Gas-und Wasserfaches e. V., Bonn, 2013. [5] www. gie.eu. [6] “Poland: Swinoujscie LNG Terminal Secures EBRD Loan”, LNG World News, 04.10.2012. [7] “The LNG Industry in 2012”, GIIGNL – International Group of Liquefied Natural Gas Importers, Paris, 2013. [8] Cerbe, G. et al: „Grundlagen der Gastechnik“, 6. revised edition; Munich, 2004. [9] GasCalc 2.2 ©. [10] DVGW Code of Practice G 685:2008 „Gas billing“, Deutscher Verein des Gas- und Wasserfaches, Bonn, 2008. [11] DIN 51624:2008 “Automotive fuels – Compressed natural gas – requirements and test methods”, Deutsches Institut für Normung, Berlin, 2008. [12] DIN EN ISO 12213-2:2010-01 “Natural gas - Calculation of compression factor Part 2: Calculation using molar-composition analysis”, Deutsches Institut für Normung, Berlin, 2010.
NTM
Alexey Mozgovoy, Project Manager at the Gas- und Wärme-Institut Essen e.V., mozgovoy@gwi-essen.de Frank Burmeister, Dr. Rolf Albus / Gas- und Wärme-Institut Essen e.V., GermanyProject Manager at the Gasund Wärme-Institut Essen e.V.
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SPECIAL REPORT
THE EFFICIENT POWER PLANT USING AMBIENT OR RESIDUAL HEAT AND LNG COLD AS A HEAT SINK
Abstract This work is an extended summary of a recent publication by Ferreiro Garcia R. et al., aiming at the efficient extraction of electric power using the cold available as heat sink in the regasification process of LNG. Thus, an efficient power plant composed of three series Rankine cycles (RCs) combined with a direct expansion based turbine has been proposed, where the rejected heat from each cascade power unit is used to heat the liquefied natural gas in a regasification plant. As a result of the optimisation of an objective function, taking the ratio of the obtained power to the mass flow rate of LNG as the performance
criteria, the cascaded Rankine cycles operating with argon and methane, combined with a direct expander working with regasified LNG, yield the highest possible exergy efficiency (approaching 300 kW/kg-LNG). 1.- Introduction In conventional regasification plants, the LNG is pumped from the storage containers to the vaporisers where heat is added at a high enough pressure (above 60-70 bar) to provide the desired gas pressure for entry into the transmission or distribution system. Nevertheless, in order to use the regasification task as heat sink to convert ambient or
17
low temperature heat sources into electric power, the LNG must be pumped from the storage containers to the vaporisers at a sufficiently high pressure high (above 300 bar) to favour the conversion process and thus, achieve high efficiency. Thus, in this work a cascade of three RC based transcritical power plants condensing at quasi-critical conditions and a direct expander is analysed, wherein its scheme is depicted in Fig. 1. As will be shown in this work, the proposed cascaded Rankine based power units combined with a direct expander power unit provide a higher ratio (power kW/kg LNG) than the most recent studies in the
Vol. 23 Jul - Sep 2015 NGV Transportation
SPECIAL REPORT field. The next sections are devoted to power plant modelling and analysis in order to obtain the operating conditions corresponding to the maximum attainable performance, expressed as the ratio of the net power to the mass flow rate of regasified LNG. The results of the study are compared with affine referenced previous works. 2. Description of the regasification plant structure based on three cascade RCs combined with a direct expander. Given the characteristics of the LNG associated to the objective, consisting of the LNG regasification task to be delivered to the supply chain under the required temperature and pressure at maximum possible efficiency, it has been determined that two important design interdependent factors exert influence on the optimal design procedure: plant structure and operating conditions (operating parameters). While a feasible structure, according to the scheme depicted in Fig.1, deals with a combination of some cascade RCs cooled with the LNG being regasified, and combined with a direct expander unit installed downstream from the first two cascaded RCs, where the cold generated by the direct expander
Fig.1. Detailed flow diagram of the LNG regasification system equipped with three cascaded RC based PCUs, where each PCU uses the LNG cold as the heat sink and, as the heat source, seawater and residual heat, combined with a direct expander unit operating with supercritical NG
is applied as heat sink for the last RC, optimal plant parameters are conditioned by the chosen structure of the plant as well as by the results of an optimisation problem, considering the plant structure, the working fluids and the operating conditions. Thus, the proposed cascaded power conversion in its (PCUs) based on the three RCs, combined with a single-stage expander that is arranged as the structure of Fig. 1, where the five optimised plant options are analysed, in which the three RC based PCUs work with Ar, CH4 and, CH4 or R14 respectively,
Table 1. Basic data used in the analysis of the plant
LNG storage tank pressure
1.30 bar
LNG storage tank temperature
-162.00 ºC
LNG mass flow rate
1.00 kg/s
isentropic efficiency of pumps
0.90
isentropic efficiency RC turbines
0.92
isentropic efficiency of expanders
0.90
internal losses per device
1.00%
seawater temperature
>15.00 ºC
residual heat temperature
>80.00 ºC
pinch point temperatures
5.00ºC
NGV Transportation Vol. 23 Jul - Sep 2015
combined with a direct expander operating with NG. The working conditions of the used working fluids are shown in Table 1, where the topping PCU (RC1) consists of an RC operating with Ar, the following downstream PCU (RC2) consists of an RC operating with CH4, the following downstream PCU consists of a direct expander operating with NG, and finally the last downstream PCU (RC3) consists of a non regenerative RC operating optionally with: • CH4 when the demand of delivery pressure is above 30 bar and no residual heat is available, and • R14 when under any delivery pressure within the range of 30-70 bar, residual heat is available. In order to effectively utilise the exergy acquired by the LNG during the regasification task, a PCU based on an expander has been installed before RC3 at the distribution line. The expander favours the plant performance by means of two relevant technical contributions: 1. converts some heat of the regasified NG into electric
18
SPECIAL REPORT
Fig. 3. Total heat flows (kJ/kg-LNG) for seawater and the residual heat based heat sources associated with each case study.
Fig 2. The residual heat demand for each case study associated to its particular plant structure and operation conditions.
power and 2. is responsible for cooling RC3 condenser by using the expanded NG exhausted by the expander. Under this structure, the proposed power plant derived from the regasification process appears to be in line with the schemes depicted in Fig. 1. 2.1. A feasible implementation approach The proposed plant is structured under the most compact format to operate with low temperature heat such as residual heat, including local environmental heat, preferably seawater heat as a stand alone power supply when residual heat is not available. The LNG regasification process is used as the necessary heat sink of the
Fig. 4. The power plant performance (Po) studied cases
Rankine cycle based PCUs. Given that a main objective consists of achieving the highest ratio of the attained electric power to the mass flow rate of regasified LNG, several attempts to achieve the mentioned objective have been carried out. In this way, a combination of three cascade RCs with a direct expansion turbine operating with heated NG, according to the structure depicted in Fig. 1, has been chosen as a viable option. 2.2. Power plant modelling The partial power and efficiency of the each PCU as well as the overall power and efficiency of the power plant, including the exergy analysis, is modelled following the below common methodology: The power plant modelling task requires the optimisation of the inherent operating conditions. This task consists of finding the operating conditions that maximise the value of an objective f u n c t i o n assumed as the performance index, which requires solving an optimisation p r o b l e m (objective for the five function), based
19
on the ratio of the overall net power Po (kW) to the LNG mass flow rate (kg/s). Solving this problem for every plant structure, working fluid and restrictions, will yield the optimum operating points that must be taken into account in the optimal designing task. 2.3. Main results derived from the optimisation criteria, based on the maximum specific power In order to have an insight of the plant structure possibilities, the most relevant five case studies are considered. Two different heat sources are used: • the seawater at ambient temperature and • optionally, a residual heat based source at a minimum temperature of 80 ºC, assumed as capable to heat the working fluids of the Rankine cycles to approach 60 ºC. Only case study number one operates with a single heat source (only seawater). As consequence of its lower heat flow and lower temperature, the achieved net power is lower than the rest of the carried out case studies. However, indeed, the attained net power is significant with respect to the conventional plant structures operating with a single power
Vol. 23 Jul - Sep 2015 NGV Transportation
SPECIAL REPORT Reference
Ρex (%)
kW/kmol-LNG
kW/kg-LNG
Case 1
35.17
3260.00
192.60
Case 2
58.07
4289.00
253.40
Case 3
70.21
5125.20
302.80
Case 4
78.38
3640.80
215.10
Case 5
85.60
4333.00
256.00
Table 2. Comparing the attained results with affine recent references
source (seawater) implemented to date. The availability of heat from seawater can be assumed as unlimited in practical applications. Nevertheless, according to the availability of residual heat, it might be interesting to know the appropriate plant structure (among the structures of cases 2 to 5) as function of the heat demand and residual heat availability. In this way, Fig. 2 depicts the plant structure associated to its correspondent case study as function of the residual heat availability between 461.70 and 834.40 kJ/kg-LNG. With regard to the residual heat demand, it follows that case study 3, according to Table 3, provides a power of 302.80 kW, when the demand of residual heat approaches 751.80 kJ/kgLNG, also shown in Fig. 3. On the
NGV Transportation Vol. 23 Jul - Sep 2015
contrary, case study 5 exhibits the highest residual heat demand (834.40 kJ/kg-LNG) when the power approached only 256 kJ/ kg-LNG The partial heat flow supplied by seawater (SEAWATER) and the residual heat is depicted in Fig. 3. As shown there, for cases 3, 4 and 5, the proportion of residual heat is greater than for the SEAWATER. This alerts us to take into account the availability of residual heat before deciding the case study associated with a plant structure. The performance of the regasification plant is depicted in Fig. 4. It shows that with only seawater as heat source (case 1), although performance is relatively high, when compared with the cases for which residual heat is available at no economic cost (cases 2, 3, 4 and 5), performance is poor. However, the installation
20
is far more simple and economic in terms of heat exchangers cost, since the heat exchanger for residual heat recovery is avoided, which exerts some positive influence on the installation and maintenance cost. 2.4. Comparison with recent affine works For cases where the heat source is cost free so that we need not pay for it, it is good practice to consider the specific power production. Some technical contributions in the field of LNG regasification that use the environmental heat energy from seawater to obtain electric power, using the cold exergy of the LNG, are compared in Table 2 with the attained results of the five studied cases. The differences are due to the chosen plant structure associated with the different conversion strategies and the operating characteristics. While the operating characteristics are deterministically achieved by solving an optimisation problem for a particular plant structure associated with a particular working fluid, every chosen structure must satisfy economical and/or technical constraints, including physical requirements such as size and weight or environmental constraints. 3. Conclusions The ratio of the power attained to the mass flow rate of LNG as performance index has been
SPECIAL REPORT optimised for the five case studies carried out. Therefore, satisfactory overall results have been achieved mainly due to the taking advantage of the optimisation of the performance index. However, the successful results obey the fact that, as has been said, the condensation of the RCs’ working fluids at quasicritical temperatures contribute considerably to avoiding superfluous heat rejection to the heat sink, thus contributing to the increasing of useful exergy. Furthermore, relevant considered characteristics are: • the optional plant structures according to the availability of residual heat capable of admitting the proposed working fluids, • the working fluids selection that fulfils quasi-critical condensation conditions. • the lowest delivery pressure demand which contributes to the maximisation of the net power. • an optimised performance
Case
pNG (bar)
specific power (kW/kg_NG)
plant power= 50 x Po (kW)
US$ /day at 40 $/MW-h
1 (seawater alone)
30
192.6
9630
8985
2 (seawater + residual heat)
30
253.4
12670
12163
3 (seawater + residual heat)
30
302.8
15140
14534
4 seawater + residual heat)
70
215.1
10755
10324
5 (seawater + residual heat)
70
256.0
12800
12288
Table 3. Daily revenue
index based on the ratio of the attained power to the mass flow rate of regasified LNG, which approached 302.8 kJ/kg-LNG. This quantity, compared with the most recent contributions carried out in this field, represents a significant improvement.
References
Ramon Ferreiro Garcia, Jose Carbia Carril, Javier Romero Gomez, Manuel Romero Gomez. Power plant based on three series Rankine cycles combined with a direct expander using LNG cold as heat sink. Energy Conversion and Management 101 (2015) 285–294. NTM
By Ramon Ferreiro Garcia, Jose Carbia Carril, Javier Romero Gomez, Manuel Romero Gomez
RAMON FERREIRO
JOSÉ CARBIA CARRIL
Professor Ramon Ferreiro is the head of a research group that conducts technological investigations dealing with systems engineering in the University of A Coruna, Spain. His research interest during the last decade has been focused on power plants efficiency including LNG reliquefaction, regasification and energy conversion. ferreiro@udc.es;
José Carbia Carril holds a PhD in Marine Engineering and is a Professor in the Department of Energy and Marine Propulsion at the University of A Coruña, Spain, and a member of the research group Energy Engineering at the university. His research focuses on the optimisation of energy systems, energy conversion and waste heat recovery. Carbia@udc.es;
MANUEL ROMERO GOMEZ
JAVIER ROMERO GOMEZ
Manuel Romero Gómez holds a PhD in Marine Engineering and is a Professor in the Department of Energy and Marine Propulsion at the University of A Coruña, Spain, and a member of the research group Energy Engineering at the university. His research focuses on the optimisation of energy systems, energy conversion and waste heat recovery. m.romero.gomez@udc.es;
Javier Romero Gómez holds a PhD in Marine Engineering and is a Professor in the Department of Energy and Marine Propulsion at the University of A Coruña, Spain. He belongs to the Energy Engineering Research Group at the university. His research is concentrated on optimising energy, energy conversion, LNG reliquefaction, refrigeration and air-conditioning systems. j.romero.gomez@udc.es;
21
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SPECIAL REPORT
INTEGRATED SOLUTIONS FOR
LNG REGASIFICATION IN A POWER PLANT
T
he present work discussed below is about the energy integration of LNG import terminals to adjacent power plants with the aim of generating mutual profits for both systems. There are opportunities for performance enhancement and clever use of the residual non-workable energy from the power plant side into the regasification process, as well as the regasification process lowering the reservoir temperature level for heat rejection, working as a virtual dead state. The combined cycle gas turbine (CCGT) plant is a very efficient assembly of a gas turbine (GT) to a Rankine cycle, whose goal is to prioritize the electrical output conversion. Flue gases are rejected
NGV Transportation Vol. 23 Jul - Sep 2015
by the GT allowing production of steam that drives the steam turbine (ST) of a coupled Rankine cycle. Overall performances superior to 65% are not unusual, and explain the huge number of power plants based mainly on natural gas, a suitable and convenient fuel to this kind of application. A conventional CCGT power plant was thermodynamically modelled and simulated under steady state conditions, and results were taken as a base line to examine the advantages of its integration to an LNG regasification process. The schematic view of the CCGT plant is shown in Figure 1, displaying the two integration alternatives. In the conventional CCGT power plant, NG is burned at the NG Combustor of the GT with air at atmospheric conditions, captured
24
from the environment (see Air Inlet-Conventional). Right after the conversion into workable power, flue gases from the discharge of the Gas Turbine are directed to the Heat Recovery Steam Generator (HRSG), which drives the Rankine cycle, with a secondary conversion of energy. The rejected energy streams of the CCGT system are flue gases released at the Stack and heat at low temperature at the Steam Condenser. The two proposed LNG to CCGT coupling alternatives promoted the fuel regasification by recovering available heat streams, avoiding auxiliary output for the regasification process at high rates. From the power plant point of view, the coupling brought performance enhancement. The first integration alternative was built around the GT, where
SPECIAL REPORT
Fig. 1. Scheme of the conventional CCGT power plant and LNG regasification alternatives
the LNG exchanged heat to the turbine air inlet, replaced to Air Inlet-Alternative 1. A first heat exchanger was placed to act as the LNG evaporator, and a second one as an intercooler. Gains came from the rising of air density due to a temperature drop, and though the increase on the volumetric performance of the GT air compressor. The intercooler is a standard exchanger for GTs, and was forced to operate at lower temperatures, and again bringing better performance to the engine. The second integration alternative added to this last one an extra coupling around the vapour cycle condenser. Heat integration started at the condenser unit, where LNG changed phase from liquid to gas, while the cycle working fluid was condensed at a lower temperature level than the
regular dead state. Air intake was changed to a NG Superheater (Air Inlet-Alternative 2) and is cooled down with the aid of a stream of NG at low temperature. Both alternatives were able to deliver a surplus of regasified NG to be injected to any distribution pipeline, besides the amount of fuel that is consumed by the power plant, as a result of the heat rejected by the system. All systems were simulated at steady state regime, and LNG was assumed to be pure methane, for the sake of simplicity. The gas turbine was set to produce a fixed electrical output of 30 MW, allowing the Rankine vapour cycle and all other systems to deliver a variable output. Figure 2 shows energy flows for each of the cycles. The energetic performance of the reference CCGT plant was
computed by the ratio of net electrical output to NG input. Efficiency of the 2 integrated alternatives with LNG was enhanced by two main factors: specific gains in electrical output from the power plant side, and avoided energy for LNG regasification, from the supply chain point of view. Main results are displayed on the next table. The gas turbine was set to deliver a fixed electrical output (30 MW), leaving the Rankine cycle free to reach a net output WRankine according to the changes in the amount of flue gases produced by the topping machine. The highest CCGT electrical net output was obtained for the reference cycle, without the coupling to the LNG heat recovery. This can be seen as a contradiction at a first glance, but it came from the fact that the integrated cycles demanded less fuel to deliver the fixed output at the gas turbine as compared to the reference one, which consumed the highest amount of fuel and therefore produced more flue gases. This behavior makes sense by observing the net electrical efficiency, which showed higher performances for the integration strategies, as the fuel consumption dropped for both GT and Rankine cycles working at a lower environmental temperature. The overall energetic efficiency went from approximately 50% for the reference cycle up to 86% when considering both the performance gains of the power cycles and the avoided energy of the LNG regasification process. Heat exchange process was able
Fig. 2. Control volume of the conventional CCGT power plant and LNG regasification integration alternatives
25
Vol. 23 Jul - Sep 2015 NGV Transportation
SPECIAL REPORT Output
Reference
Integration 1
Integration2
Inlet air temperature at gas turbine, Point 1 [째C]
25.0
-28.0
7.3
W Rankine[MW]
10.16
4.52
9.22
W Brayton + W Rankine [MW]
40.16
34.52
39.22
Net electrical efficiency [%]
49
56
58
Overall energetic efficiency [%]
50
63
86
Fuel consumption [Nm3/h]
8,194
6,225
6,728
Specific power output [kW/Nm3]
4.901
5.545
5.829
Regasification capacity [Nm3/h]
0
31,330
112,669
Ratio of regasified to consumed natural gas
NA
5.03:1
16.74:1
Table 1. Main system outputs for the reference CCGT and the two proposed integration alternatives depicted in Figure 1, for a fixed gas turbine electrical output of 30MW
to deliver 6.6 times more natural gas to the pipeline than the power system consumed amount in alternative 1, and about 21.7 times in alternative 2 The EROI of a power plant is the ratio of usable energy returned by the plant along its lifetime to the overall invested energy needed to make this energy usable. The returned energy is the product of average power P to the assessed elapsed time t. Invested energy has a fixed part for construction and
deconstruction Efix, and a variable time dependent amount PI, that stands for maintenance and fuel provisioning. EROI=(P t)/(E_fix+P_I t) In the present work, the focus was on the EROI gain of the proposed integrations. The energy required for provisioning fuel for the three simulated plant scenarios was considered the same. Although the reference plant needs an
additional regasification system, the energy consumption of the regasification process with open rack vaporizers is approximately 28.8 kJ/kg for driving seawatercirculating pumps. This number is negligible when compared to the energy consumption of the liquefaction process (1800 kJ/kg). As PI was considered the same in all scenarios, the EROI gain of the proposed integrations will be the power output enhancement, expressed by the specific power output, displayed in the previous table in kW/ Nm3. Thus, integration 1 and 2 lead to a 13% and 19% gains in the EROI compared to the same parameter of the reference plant. This is an important parameter in investment decision in the energy sector. In conclusion, both integration alternatives lead to an electrical efficiency enhancement when compared to the non-integrated cycle: from 49% for the reference case to 56% for alternative 1 and 58% for alternative 2, a gain of 6.32% and 9.09%, respectively. When considering the overall performance, which includes the thermal energy for LNG regasification, alternative 1 reached 63% and alternative 2 reached 86% considering a 1st law efficiency analysis. The energy return on investment of each alternative was also enhanced by 13% and 19%, respectively.
NTM
Diogo Angelo Stradioto diogo@apsengenharia.com.br APS Engenharia, Porto Alegre, Brazil, Marina Fonseca Seelig marinaseelig@mecanica.ufrgs.br Paulo Smith Schneider* Department of Mechanical Engineering UFRGS Porto Alegre, Brazil pss@mecanica.ufrgs.br, *Corresponding author
NGV Transportation Vol. 23 Jul - Sep 2015
26
SPECIAL REPORT
LNG- NOTINA RICH AFRICA MAN’S FUEL
I
have been writing about LNG in Africa for years now. Remember? SubSaharan Africa is going to be one of the most exciting plays in the LNG world for the next two decades. But it’s not going to be a walk in a Japanese garden – more like walking on burning charcoals barefoot. Africans are slowly (very slowly) waking up to the fact that it might be better and more profitable to keep their home-produced LNG close to
themselves and develop their own continental economies instead of exporting every last drop. Let’s see the issue with the eyes of those affected. Wouldn’t it be nice to be able to replace expensive and dirty diesel and gasoline with cleanly burning natural gas? Especially those producing electricity would love to make the leap. But we face a chicken and egg dilemma here. Natural gas distribution grids in African countries are either
27
failing or do not even exist in the first place. And in those rare cases when there is a distribution grid, it is insufficient so all transport and storage can only be done by using LNG. Every MMBtu of LNG converted to electricity or used as a fuel is oil products that do not have to be imported expensively. In case those oil products are produced locally, they could be exported more profitably than LNG. But even one of the real big oil producers such as Nigeria
Vol. 23 Jul - Sep 2015 NGV Transportation
FEATURE ARTICLE
or Angola import refined fuels so for the next decade or so it going to be a reduction of imports instead of new exports. Besides, as transport is a regional affair and hence distances are smaller than what we are used to in LNG, smaller vessels and smaller terminals can be used economically which will in turn lower cost of investment and operations. Quick, flexible terminal solutions will give the market a shot in the arm. Besides, interested consumers will be able to transform their currently operating electricity production infrastructure (a backyard generator usually) into a much cleaner and quieter appliance. This will strengthen
NGV Transportation Vol. 23 Jul - Sep 2015
allover electricity production infrastructure and help to avoid huge investments in new power plants and in the upgrading of failing or non-existing grids. Let’s be frank on this – the African reality is the backyard generator as this is the only thing that assures homes, offices and industries of stable and secure power supply. This would not be a bad thing if those generators would not be so loud, so dirty and so expensive to run. Natural Gas (aka LNG) would make those generators a lot quieter, real clean and if the LNG is locally produced, it would be a lot cheaper as well. Does that make sense to you? It sure makes a hell of a lot of
28
sense to me. Big power plants were built in the emerged world decades ago because at the time, the economics of centralized power production seemed to make sense. Distributed power is a relatively new fad but with LNG, Africa could grab a ride early and skip a lot of the big stuff. That’s a bit like with the mobile phones which made developing better landlines obsolete. I have been working on a project in the Caribbean and one of the first questions I faced was - how can a comparatively less wealthy country such as Jamaica afford to pay for LNG if rich Europeans cannot afford it? Let’s face it - it’s a question of alternatives. If your world is a world of diesel and gasoline generators which is a very expensive fuel, then LNG looks pretty cheap to you. Let’s remember that in spite of the Asian madness that had us in its grip until a couple of months ago, LNG was always the cheaper option than oil products. Anyone able to pay for oil distillates must therefore be able to pay for LNG too. The only hitch is that LNG requires special infrastructure. Diesel or gasoline remain liquid at ambient temperatures and pressures. They are very flammable and pretty dangerous to deal with but we are so used
FEATURE ARTICLE to them that no one ever thinks of the potential consequences of a mistake. LNG on the other side requires an insulated chain that is a little more complex. How complex? Let’s be honest - we handle LNG as an industrial product for half a century now and we have done so in the unlikeliest of all environments - so that bit of complexity is more excuse for inaction than anything else. What’s the real problem then? Oh easy - it’s a classic chicken and egg dilemma. The market does not want to make the move unless there is security of supply (i don’t blame them) and the supply side does not want to jump in unless there is a market they can lean on in order to finance their investment. Classic catch 22, isn’t it. As so very often someone will have to kick the door open and take a little risk. Someone must provide the first LNG supply line and build up a market on a back to back basis. Africa is a good place to start as they already have LNG producing ventures, plenty of flares to convert to fuel (that means a lot of potentially cheap
feedstock) and huge numbers of customers that cannot easily get connected to something that remotely resembles a grid that works. Even with lower oil prices now, last time I looked diesel and gasoline were pretty expensive. Looks like those subsidies are going down as the national governments can simply not afford them anymore. The retail price is not at European levels yet but it’s getting there and
RUDOLF HUBER
Rudolf is an entrepreneur and consultant active in the “methane based fuels and energy” industry. He is the founder of countless initiatives all with the aim to promote a methane based economy and affordable environmental protection. He is a professional business developer and negotiator who is involved in all aspects of the LNG business. He is also very actively promoting green technologies that work well with methane based technologies. Rudolf has helped secure first Regasification capacity for his former employer EconGas at the GATE terminal in 2007 and holds a Masters degree in Commercial and Taxation law from the Jean Monnet faculty in Paris. He also runs a number of blogs, among them www.lng.guru and www.lng.jetzt.
we are beyond US levels now. Compare that to the purchasing power of the average African and we have a calamity. Nobody has ever done anything towards “LNG as a fuel” in those countries because subsidies kept the pressure to the economy lighter than it should usually have been. With prices high, anyone is looking for an alternative. That makes the region ready for LNG as a fuel. Oh, shall I repeat the green properties of LNG to you for the zillionth time? Probably don’t need to as I have done that in many other posts on my blog. I know that many switchers don’t care now but once one becomes used to the clean, efficient and silent power generator in the backyard, I have a hunch that there will be appetite for more. African LNG should stay in Africa - at least a portion of it as it is more profitable for Africans to use it at home and build their economies rather than exporting it and importing expensive distillates in turn.
NTM
29
By Rudolf Huber
Vol. 23 Jul - Sep 2015 NGV Transportation
EVENT & EXHIBITION
NATURAL GAS AS TRANSPORT FUEL IN MINING, PLANTATION & LOGISTICS 5 -6 NOVEMBER 2014 | NOVOTEL HOTEL, BALIK PAPAN, INDONESIA
T
he 1st Natural Gas Transport Fuel in Mining, Plantation & Logistics enlightened all those who attended, on the prospects of utilizing CNG, LNG and biomethane as a transport fuel in aid of reducing operational costs and the ever present issue of an increasing carbon footprint. The event was
NGV Transportation Vol. 23 Jul - Sep 2015
organised by All Events Group and supported by gold sponsors Hexagon Lincoln. The event was opened by keynote speaker, Robbi Sukardi, Chairman of the CNG Association of Indonesia (APCNGI). This was followed by a short speech by Lee Giok Seng, Executive Director, Asia Pacific Natural Gas Vehicles Association (ANGVA).
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The first speech was presented by Kusdi Widodo, General Manager of PT Pertamina Gas Niaga who spoke about , ‘Natural Gas Supply and Utilization – Supplier’s Perspective’. His speech covered areas including an overview of the gas business in Indonesia, the LNG market in Indonesia and an energy cost comparison between the
EVENT & EXHIBITION
Lee Giok Seng, Executive Director, Asia Pacific Natural Gas Vehicles Association (ANGVA)
Kusdi Widodo, General Manager of PT Pertamina Gas Niaga
Lukas Novak, Bifuel Business Development TC Goh, Regional Sales Director from Director ComAP A.S. , Mitondho, Hexagon Lincoln Management Improvement Manager – Mining Division, PT United Tractors Tbk (UT), Alexandre Hintz, Director, PT Power Service Indonesia
Nattadate Fuangworawong, Senior Specialist for Technology Department, PT Indo Tambangraya Megah (Banpu Group)
Robbi Sukardi, Chairman of the CNG Association of Indonesia (APCNGI)
available fuels. CNG was found to be 50% cheaper than regular fuel oil in 2013. He ended the speech talking a bit about their new pilot projects. After a short networking coffee break, the conference resumed with a Spotlight Session on dual fuel applications for mining. The first to speak on this issue was Lukas Novak, Bifuel Business Development Director ComAP A.S. After speaking a bit about ComAP, Lukas then explained the reason for pushing bi-fuel over using pure gas and the implied cost savings involved. The next to speak on this topic
was Mitondho, Management Improvement Manager – Mining Division, PT United Tractors Tbk (UT). Mitondho spoke on the dual fuel applications with respect to mining activities in Indonesia. He recommended some of the products that were supplied by Tractors Tbk with special attention on Komatsu and Scania systems. The last speech on this segment was by Alexandre Hintz, Director, PT Power Service Indonesia who spoke on, ‘LNG for Mining DDF application’. Alexandre made clear a to the benefits of LNG as in a dual fuel engine for mining in terms of cost savings,
31
environmental benefits and reduction in operational costs. The next speech was by TC Goh, Regional Sales Director from Hexagon Lincoln on the topic, ‘Move Gas Further – Transporting CNG to Remote Locations. He proceeded to discuss the evolution from steel to composite cylinders in the industry and explained their different uses depended on the distance to the client needing the gas and the amount of gas used per day, such that composites are better for larger amounts of gas while steel cylinders are better for lower amounts that are nearer to clients. He
Vol. 23 Jul - Sep 2015 NGV Transportation
EVENT & EXHIBITION
Tony Regan, Principal Consultant of TriZen International
Rachen Sillapavitsawakul, Director of Tiger Automotive Company
William Aw, Managing Director of Bukit Sedap Pte Ltd
Pung Andita, Head of Biogas and Engineering of PT REA Kaltim Plantations
Micheal Yeong, Business Development Manager – Sepuran from Evonik Industries
Dr. Pipon Boonchanta, Associate Professor at Kaesetsart University
finished his speech talking about the various uses in the virtual pipelines and c o s t savings that have been realised in North America in exploration and fracking activities. After the networking lunch, Lee Giok Seng, Executive Director of ANGVA spoke on, ‘Reducing Fuel and Operational Cost and Carbon Footprint of Heavy Duty Vehicles by Using Natural Gas’. After giving a brief overview of the global NGV situation, Mr. Lee spoke of the many applications and benefits of using gas in mining and plantation sectors. The next speech was by Nattadate Fuangworawong, Senior Specialist for Technology Department, PT Indo Tambangraya Megah (Banpu
Group) who spoke on, ‘LNG for Mining Operations from a Mine Owner’s Perspective’. Nattadate covered similar issues to what was covered previously as to the benefits that could be reaped through the use of natural gas as a fuel for mining operations. She then spoke more about a trial project that had been carried out by Banpu Group on a coal hauling truck at Indominco. She went over the challenges of the project, the parties involved and technology options. She concluded saying that there are huge opportunities in Indonesia’s mining industry in the forms of OEM LNG Fuelled trucks and after-market conversions to use natural gas as a vehicular fuel in mining. This was followed by Dag
Lilletvedt, Managing Director of Fuel Garden LNG who spoke on, ‘Small LNG Infrastructure to Support the Development for the Mining and Logistics Sector’. After that, Tony Regan, Principal Consultant of Tri-Zen International spoke on the topic, ‘Natural Gas as a Transportation Fuel’. It was explained that there were various reasons that were driving demand such as substitution of coal in the power sector among many others including previously discussed reasons such as cost savings and environmental concerns. He also presented on a a few regional examples of developing markets making use of natural gas such as North America and China.
NGV Transportation Vol. 23 Jul - Sep 2015
32
EVENT & EXHIBITION
The first day of the conference was then concluded with a panel discussion: utilizing CNG, LNG and Biomethane for Transport to reduce fuel costs, operational costs and the carbon footprint. The panellists were made up of previous speakers; Lee Giok Seng, Robbi Sukardi, Tony Regan, Eri Purnomohadi and Lukas Novak. Day 2 began with Jonas Giuliani, Asia Pacific Markets Development Manager from Safe S.p.A who presented on the topic, ‘Successful Infrastructure Development Across the Value Chain’. Jonas spoke about the various product solutions that Safe has to offer, from compressors to storage. He also spoke on the potential of Biogas in Indonesia and how Safe’s products could fit into this value chain. This was followed by Rachen Sillapavitsawakul, Director of Tiger Automotive Company. The benefits of using dual fuel was reiterated. Rachen did point out though that there were greater savings to be had through a 100% gas substitute compared to employing the use of a dual fuel engine. William Aw, Managing
Director of Bukit Sedap Pte Ltd was next to present on, ‘River Refuelling LNG Infrastructure to Support Remote Mining Locations’. It was made clear that LNG was a safe, easy to transport, difficult to pilfer and less polluting fuel for riverine transportation. The conference then took a break for the 2nd day’s networking coffee break and was resumed by Pung Andita, Head of Biogas and Engineering of PT REA Kaltim Plantations. Pung spoke on the palm oil mill effluent treatment system parameters and fleet composition as well as total costs of setting up a treatment plant. The conference itself was brought to an end after the networking lunch by Micheal Yeong, Business Development Manager – Sepuran from Evonik Industries who spoke on the topic, ‘Biogas for Vehicles: How membrane Technologies are Critical to the Biogas Upgrading process’. He explained that it was essential that the gas underwent this upgrading process to remove various impurities with ease through Evonik’s Sepuran membranes.
33
After the conference had concluded, the workshop entitled, ‘Heavy Duty Vehicle Conversion Workshop – Effective Dual Fuel Applications To Help Reduce Costs in The Mining, Plantation & Logistics Sectors. This training workshop was conducted by Dr. Pipon Boonchanta who is an Associate Professor at Kaesetsart University. NTM
By Ryan Pasupathy
Vol. 23 Jul - Sep 2015 NGV Transportation
GAS TO POWER IN BRAZIL
A
hh.. Brazil, the largest nation of the South American continent. It covers some 8.5 million square kilometers with a population of more than 200 million. There are about 24 people for every square kilometer with 85% of the population living in urban settings. Brazil is facing very important challenges these days. In the political arena, huge corruption scandals are involving all major parties. The economy is stagnant, the inflation is in the 8% range and the Federal Government is not exactly honest, efficient or reliable. Not a rosy scenario and by far.
NGV Transportation Vol. 23 Jul - Sep 2015
But‌the good news is that there is hope! The corporate world still bets on Brazil. It is the 7th largest global economy, with vast natural resources, great people, mild climate (no freezing temperatures), excellent food and ultimately, great potential.
Application
There are two natural gas applications which might make a lot of sense from a business standpoint. Onsite power projects: Generation projects Given the high power rates, natural gas driven power projects
Peaking power (3 hours/weekday)
Base load (all hours except the peaking hours)
Typical regulated rates (depend on each utility company)
USD 225/MWh
USD 260/MWh
Type of rates
Permanent
Temporary (to be defined by ANEEL)
Natural gas cost (considering regulated rates)
USD 150/MWh
USD 150/MWh
Added value to pay for O&M and profit
USD 75/MWh
USD 110/MWh
The table shows a typical situation for these two applications.
36
should be considered. There are two very specific applications: peaking power and base load , not to mention emergency (when there is no power coming from the grid). Peaking power generation is a very interesting situation because the regulated on-peak rates are well above a natural gas driven genset. Base load is a nice application also. Right now the regulator (ANEEL) is about to publish a Resolution which will enable onsite base load generation for some time (not defined yet). The corporate energy user who dispatches natural gas gen sets will receive a hefty compensation. Cogeneration projects Natural gas driven turbines associated with heat recovery steam generation, especially for industrial energy users, might become a very competitive solution. Thermal efficiencies are in the range of 80% - it means that the fuel cost referred to the delivered energy package is around USD 60/MWh. Most importantly though is the way these solutions should be structured. The corporate world is, in my opinion, interested in closing deals by which the supplier will invest, own and
operate the solution throughout the contracted term. Like a BOT (build, operate and transfer). An example of such an arrangement was presented and awarded at Power Gen in 2011. The case involved a global training (pilots) company which has one site in Guarulhos, in the greater SĂŁo Paulo Metropolitan area. The company was facing more than 50 hours/year of unplanned interruptions in the power supply and this was hurting their business. The solution was installing a 1 MW genset. In order to make it feasible from an economic standpoint the technical solution was running the
genset during the on-peak hours (3 hours/weekday). The savings (as compared to the utility’s rate) were good enough to make the investment very attractive. The business arrangement was a BOT for 8 years. The client is paying for the BOT provider the same value as if it were using the power from the grid during the on-peak hours but there is an emergency option - with no additional cost – to cover for the unplanned interruptions by the local utility company. A win-win situation. NTM
By Rafael Herzberg
RAFAEL HERZBERG is a consulting partner at Interact Ltda Energy Consulting, a Brazilian based company he co-founded in 1982, specialized in energy (power, gas, biomass, diesel, etc) contracting, its efficient use and power projects. He is an electric engineer, started his career at ELTEC in 1976, a leading Brazilian electrical power connector manufacturing company where he became its CEO in 1987. In 1992 led ELTEC to joint-venture with ALCOA (its cable division in Brazil).
37
Vol. 23 Jul - Sep 2015 NGV Transportation
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ANALYSIS OF NATIONAL POLICIES AND ITS IMPACTS ON
NGV GROWTH IN IRAN
T
he Islamic Republic of Iran or what was formerly known as the Persian Empire is the 2nd largest nation in the Middle East and has the 17th largest population in the world. Though Xerxes is no longer leading the old nation towards global domination, the new nation is still charging ahead towards global domination of a different kind – an NGV revolution. Iran’s conquest began in 1975 with the conversion of 1200 taxis and private cars in Shiraz and was equipped with two refuelling stations. After a lengthy period of market stagnation for a period of 10 years, a full-fledged CNG program kicked off in Marshad where another 1200
vehicles were converted with 22 refuelling stations built to supply this fleet. Why Natural Gas? In the early 2000s the majority of fuel being used for vehicles in the country came from gasoline. This was actually costing Iran around US$3 billion on fuel subsidies each year. The government was also importing close to 19 million litres of gasoline for transportation each day. It was calculated that there would be a significant shortfall in the availability of gasoline in the near future and that continuing in this manner was not the best course of action. Looking for an alternative, the government would soon realise that the solution was literally,
Figure 1: No. of CNG Vehicles in Iran
right under their noses. Iran has vast reserves of natural gas and it was really a no-brainer to adopt the fuel as a primary fuel source. Iran is currently has reserves of some 900 trillion cubic feet which is about 16% of total global natural gas reserves. This makes Iran the owners of the 2nd largest natural gas reserves in the world. Replacing gasoline for localized sources of natural gas would have the potential to save the country billions. This was also during a time when there were more than 2 million old vehicles on the Iranian roads that were due for replacement or upgrading. It was the perfect time to make the switch to natural gas and the government
Figure 2: No. of CNG Stations in Iran
39
Vol. 23 Jul - Sep 2015 NGV Transportation
began shifting their natural gas policies into full gear. National Policies In 2000, IFCO (Iranian Fuel Conservation Organization) a subsidiary of NIOC (National Iranian Oil Company) was established. Its aim was to manage the fuel consumption between different sectors through the review and survey of consumption trends and to execute conservation projects nationwide. One of IFCO’s main missions was establishing CNG infrastructure and promotion of NGVs. In 2001, IFCO started a full-fledged project for creating infrastructure and developing CNG in the country focusing on conversion retrofit vehicles to CNG, OEM CNG vehicles manufacturing, legislation of national directives and regulations and the construction of CNG fuelling stations. As part of this master plan IFCO conducted feasibility studies as well as macro and micro economical evaluations to identify the potential of developing an NGV industry in the country. This led to IFCO developing an overall conversion policy to support NGV growth in Iran. The executive policy for using natural gas instead of gasoline which was based on the following initiatives: • Manufacturing of heavy and light duty NGVs • Conversion of gasoline and diesel engines to natural gas engines • Providing CNG for both manufactured and converted engines • Developing a support and promotion program for natural gas as a vehicular fuel According to this NGV master
NGV Transportation Vol. 23 Jul - Sep 2015
Figure 3: Top 10 Countries CNG Fleet Numbers
plan, Iran is to convert up to 46-70% of their vehicles to run on CNG as well as have 29504500 CNG stations constructed. Part of this plan involves the conversion of public transport facilities, mainly consisting of taxis and buses. Subsidies The government also began a subsidy programme which would ensure that consumers would choose natural gas over gasoline or diesel. Government subsidies were paid for converting regular vehicles to NGVs. Each person who was converting his car to NGV would pay 15% of the total cost of the conversion, in other words an 85% discount on conversion costs. The government also decreased subsidies on gasoline which made CNG cost just a mere quarter the cost of CNG. Education The government also made it a key part of their plan to educate the public. The government felt that as the changes were related to the actions of the public, education would play a key role in their move towards widespread use of CNG as a vehicular fuel. IFCO with the
40
help of NIOC conducted large scale advertising campaigns and carried out numerous gatherings and seminars such as ‘Clean Air Day’ among others. These events even had activities that were targeted at children which had games and puzzles which were related to proper energy consumption practices. The Global Leader in NGVs It can be seen that it did take some time for the policies to take full effect, with a real surge in number beings apparent from 2007 onwards. The following NGV plan conducted by the Iranian government turned out to be a very successful operation that eventually took them to the top of the NGV charts endowing them with the largest NGV fleet in the world. Though some would argue that this success is due to the fact that the country had vast reserves of natural gas and this is primarily the reason why the country had so much success converting its fleet to run on CNG. It has been demonstrated that the government did have a holistic plan that included numerous aspects NGV development. NTM
By Ryan Pasupathy
NGV
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