2015_2 Creating Optimal lng storage solution master

Small carriers diversify the LNG fleet

A new breed of LNG consumers has spurred on smaller-scale deliveries. Forward-thinking companies are taking note, not least Wärtsilä whose, cargo handling systems can easily be adapted to all size requirements.

Text: ISABELLE KLIGER Photo: WÄRTSILÄ

The small-scale LNG market may still be in its infancy, yet it is starting to draw more and more attention, with industry players from around the world showing growing interest in both trading and bunkering LNG in smaller quantities. 

“Unlike the large-scale market, which saw a massive boom for several years and then slowed down quite dramatically at the end of last year due to the low price of oil, the growth of the small-scale LNG market has remained gradual and positive,” comments Stein Thoresen, Director, Business Unit Marine, at Wärtsilä Gas Systems.

Many analysts agree that the long-term outlook for LNG remains positive as countries commit to phasing out coal and adopt a stricter environmental stance following the Paris climate change summit. As part of this transition, power plants and fuel suppliers will be looking to secure reliable access to LNG, resulting in a growing need for small-scale supply.

“Small-scale LNG vessels are typically used for short-distance coastal trading, distributing LNG to end users such as power generation plants, land-based industries and suppliers of LNG as fuel for vehicles or ships,” Thoresen says. “As more users transition from oil and coal to gas-based fuels in the coming years, we expect this market to grow significantly.” 

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“THE GROWTH OF THE SMALL-SCALE LNG MARKET HAS REMAINED GRADUAL AND POSITIVE.”

The need and the desire for greener options

Kjell Ove Ulstein, Business Development Manager at Wärtsilä Oil & Gas Systems, says multiple factors will drive the speed of transition. 

“In Europe, where LNG is expensive, the main driver is environmental legislation, which is requiring us to go greener. In other places such as the US and Asia, it’s driven by a combination of economic and environmental concerns,” he comments. 

“In China, the level of pollution is forcing policy makers to realise that they simply can’t keep using coal the way they do now. They need a greener energy source, and LNG is the option that makes the most sense.”

“Meanwhile, in Indonesia, where some places still aren’t covered by the power grid, it doesn’t make sense to start building oil-powered power stations now, so they’re building them for gas power or dual fuel from the outset,” continues Ulstein, who underscores that accessibility has historically been a stumbling block to adopting LNG. However, as the number of small-scale LNG shuttle tankers, bunkering vessels and barges continues to grow, it will enable smaller users and ports to secure a reliable supply of LNG. 

“As we have already seen on the large-scale market, once the supply lines are available, it gives users the confidence to invest in LNG facilities.”

What is “small scale”?

While there is no industry-wide accepted definition of what constitutes a small-scale LNG carrier, the maximum size of the tanks on board these ships is typically around 30,000 to 40,000 m3, as compared with a large-scale LNG carrier with a capacity of approximately 160,000 to 170,000 m3. The smaller vessel can therefore be transporting as little as a sixth or a fifth of one of the huge carriers’ cargo volume. According to shipping services company Clarksons, there are currently 26 of these smaller vessels in existence, with a further 13 on order – a number that does not include multigas carriers, many of which also fall within this size range. 

One such example is Evergas’ “Dragon Class” range of eight 27,500 m3multigas carriers, three of which have been delivered to date. Originally contracted to ship ethane as part of a 15-year contract with Ineos, these ships are also fully equipped to carry LNG. This built-in flexibility makes the new Evergas vessels “future proof” – meaning that they have been adapted from the outset for possible redeployment at the end of their contract.

World’s largest multigas carrier

At 180 metres long and 26.6 metres wide, with a draft of approximately nine metres, Evergas’ Dragon Class vessels are the world’s largest multigas LNG-ethane carriers. For each of these ships, Wärtsilä is supplying two Wärtsilä 50DF dual-fuel engines, propulsion equipment including the gearbox, two Wärtsilä 20DF auxiliary generating sets, a LNG fuel system, Wärtsilä cargo pumps and a Cargo Handling System custom-made for C-ethane from US shale gas. 

And while the ships were originally designed to run on LNG, the Wärtsilä dual-fuel engines were re-engineered also to be able to run on ethane, following a request from the customer. “The delivery of these Dragon Class vessels – which allowed Evergas to be the first mover into the shale gas trade out of the US – marks the beginning of a new era in the transportation of liquefied gases,” comments Evergas CEO Steffen Jacobsen. 

“No other vessel in the world fleet today is able to burn ethane as a fuel in the engine,” continues Jacobsen. “The advanced technology solution, whereby the cargo handling system, the gas supply system and the propulsion machinery are fully integrated, make the vessels probably the most modern and environmentally sustainable LNG carriers ever built.”

“[At the outset] Evergas had a lot of questions, because the 4-stroke was uncharted terrain, and, you know, when you stick your neck out, there will always be competitors going ‘Boys, what are you doing?’, the kind of Cassandra pessimists that think it will never work,” says Jens Karlsson, General Manager, Sales, Wärtsilä Denmark Marine Solutions. “But you know what, it’s gone tremendously well, and will keep doing so. 

“We had an enormous number of good references,” he adds. “We showed them all our LNG carriers, and we said, ‘There’s nothing remarkable here. If you want a gas-driven engine design with a proven track record, here you go!"

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What Wärtsilä offers: Cargo handling for every size

Wärtsilä offers the most advanced cargo handling systems in the world for gas carriers of all shapes and sizes. When Wärtsilä acquired Hamworthy, it secured its ability to deliver the broadest portfolio of gas handling systems for gas carriers in the world (see factbox).

In November, complete Wärtsilä Gas Cargo Handling Systems were ordered for a series of six new type Very Large Gas Carriers (VLGCs), as well as for two conventional VLGCs, and for three Medium Gas Carriers (MGCs). The total of 11 systems represents one of the largest single deals for gas cargo handling solutions ever received by the company. 

The complete systems also included the latest Wärtsilä Gas Reliquefaction Plants, with three identical units being installed in each vessel, as well as Wärtsilä Purge Gas Recovery Units that collect the hydrocarbons in the purge gas, resulting in a significant reduction in hydrocarbon emissions.

Wärtsilä offers a wide range of technologies including cargo handling for LPG, LEG and LNG vessels, reliquefaction systems for LPG and LNG, regasification systems for LNG, LNG fuel systems, LPG and LNG pump systems, vapour recovery systems for crude carriers, as well as on-shore LNG liquefaction systems. In addition to the complete cargo handling system design, Wärtsilä also offers a newly developed reliquefaction plant specially adapted for the small-scale segment. 

 

Thinking smaller on LNG

World leading Wärtsilä technologies

Further orders for Wärtsilä

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