A rise in demand for LNG is expected to lead to more ships and technology improvements for the LNG market
The globe’s fleet of liquefied natural gas (LNG) carriers is expected to number around 400 vessels by the start of the next decade, with much of the new capacity destined for Middle Eastern gas suppliers. New vessel design technology is also changing the way LNG is transported from the world’s leading gas producers to the main areas of consumption. Sharply rising global demand for LNG is driving the strong order books for carriers. Annual consumption is expected to reach almost 270 billion cubic metres by 2010 from around 160 billion cubic metres in 2005. The next decade will also see demand grow, with consumption expected to total some 430 billion cubic metres by 2020.
By the end of this year, there will be 250 LNG carriers in service around the world, compared with 150 in 2000. A record number of vessels were delivered to customers in 2005, including new larger capacity vessels. According to UK shipping consultants Drewry Maritime, the capacity of the LNG fleet grew by 11.8% in 2005 to reach 23 million cubic metres. Many of these new carriers incorporated the latest advances in ship design and capacity, with new technology creating more efficient containment systems.
Recent new orders have seen an increased focus on larger vessels with a capacity in excess of 200000m3. These include the Q-Max 265000m3 vessels ordered by Qatar to carry LNG from the Qatargas 3 project to markets in the US. As Drewry Maritime, points out, “technology has made it possible to expand capacity without increasing the dimensions, freeing up more space for cargo.”
Middle East producers account for a large share of the new vessels on order. Qatar, in particular, needs a lot of shipping capacity as it expects to be supplying 77 million tonnes of LNG to world markets by 2012. In March this year, the country’s oil minister, Abdullah Al-Attiyah said Qatar would spend US $15 billion over the next five years to add 70 vessels to its fleet. Robert Curt, managing director of Qatar Gas Transport Company has said that
Qatar will have the largest fleet of LNG carriers on order within five years. By 2010, he expects a fleet of 90 ships to be in service, compared with 20 in 2005. “This will be the largest fleet of LNG carriers servicing one natural gas producing country. In addition, we will also need a number of liquefied petroleum gas (LPG) and sulphur carriers,” said Curt.
In June, Oman Maritime Transport Company took delivery of a new vessel – Ibri – with a capacity of 145000m3 bringing the company’s LNG fleet total to six. Meanwhile, Iran is expected to boost future orders for LNG carriers as it expects to be exporting around 35 million tonnes of LNG per annum by 2020. The National Iranian Oil Tanker Company is reportedly considering an order with south-east Asian shipyards for up to 10 carriers, with a capacity of 150 000m3 each, to carry LNG produced from South Pars.
The first commercial LNG vessels began operating in 1964 carrying gas from Algeria to the UK. The industry enjoys a good safety reputation, supported by statistics from the London-based Society of International Gas Tanker & Terminal Operators: since 1974 there have been on average around 75 LNG carriers in operation, with the last major grounding incident occurring in 1980 with no loss of cargo.
LNG is natural gas that has been cooled changing it from a gas into a liquid, which is one-six-hundredth of its original volume. Once it reaches its destination it is warmed and converted back into its gaseous state and delivered to customers via pipeline.
LNG is typically 95% methane with small amounts of ethane, propane butane and nitrogen. It is colourless, odourless, non toxic and in liquid form is around 45% the density of water. It can be stored and transported in insulated tanks at standard atmospheric pressure. It is not generally considered explosive and has hardly any pollution issues because any spills tend to be small and evaporate quickly.
Carriers are classified by their cargo containment designs of which, historically, there have been three types. The first and most popular is the Kvaerner Moss spherical aluminium tank devised by Norway’s Moss Maritime, a unit of Aker Kvaerner. The second is a membrane system, developed by Technigaz, made of stainless steel with ‘waffles’ designed to absorb thermal contraction when the tank cools. The third most common type is an aluminium, self-supporting tank designed by Japan’s Ishikawajima-Harima Heavy Industries.
Given the strong safety record of LNG carriers, technological advances have usually been limited and confined to trends in propulsion, rather than specifically to the carriage of LNG. The LNG industry is said to have made more than 30 000 carrier trips without a major accident or fire.
However, current technological advances are focusing on new containment systems and onboard reliquefaction facilities, as well as changes in ship propulsion. According to Norway’s Det Norske Veritas (DNV), “the development of new technical solutions has been very limited and it is fair to say that the LNG segment has been among the most conservative.”
The opening of new trades in LNG is driving some of the new technology. For example, in environments such as the Arctic waters of the North Atlantic and Barents Sea, as well as Sakhalin in Russia’s Far East, new procedures are needed for operating in colder climates. As DNV states: “Rougher sea environments and bigger cargo tanks, combined with membrane cargo containment systems, are increasing the focus on liquid motions and sloshing forces inside cargo tanks in order to ensure that no damage occurs.”
Seven of the 12 LNG carriers ordered in 2005 by Qatar for Ras Gas 3 will be built to DNV class in South Korea. All will have twin diesel engine installations and reliquefaction plants to handle the boil-off from the cargo.
Onboard reliquefaction is becoming more popular. UK company Hamworthy has an exclusive worldwide licence to manufacture and sell Moss LNG reliquefaction system technology. This has been specified for the new generation of large LNG ships, each of which will be propelled by a pair of slow-speed diesel engines. Because the engines on these large
Q-Flex and Q-Max ships are conventional units, running on fuel oil, there is no requirement for cargo boil-off to be used in a dual-fuel engine configuration. Instead, the boil-off has to be reliquefied by an onboard plant, of the type supplied by Hamworthy, and directed back to the cargo tanks.
Hamworthy has established a consortium with Atlas Copco to provide its LNG reliquefaction systems (RSs). Earlier this year, it won a US $28 million contract to supply onboard RSs for three Q-Flex LNG carriers of 216000m3 under construction at Hyundai Heavy industries in South Korea. These are being built for Qatar Gas Transport Company and will be time chartered to Qatargas 3 to export LNG from Ras Laffan to the US from 2009. The Qatar contract has brought total orders for Hamworthy RSs since December 2004 to 23 ship sets worth over US $209 million.
Dual-fuel engines are becoming more popular and have the support of Lloyd’s Register, which currently classes the largest share of the global LNG fleet. As it states: “There is a great deal of focus on efficiency and the environment, two areas in which dual-fuel engines excel. In contrast to traditional steam turbines, dual-fuel engines are capable of burning both conventional oil fuel, and gas fuel with oil fuel pilot injection, and can change between the two modes of operation when required. The high efficiency of dual fuel, combined with its low fuel consumption, allows owners and operators to reduce their operating costs. In addition, dual-fuel engines incorporating electronically controlled combustion give low nitrogen oxide and carbon dioxide emissions, potentially making them a more environmentally friendly choice.”
While the current trend is for larger carriers, one Danish firm has come up with a smaller design to meet changes in the way energy is consumed and the increase in LNG movements around the world. Lauritzen Kosan says these smaller carriers would help cope with peaks in demand – for example in busy tourist destinations where demand for energy varies greatly during the year. It claims smaller vessels can also help reduce the number of big receiving terminals and provide flexibility of supply.
The company has designed a 4000m3 and an 8000m3 Micro LNG/Ethylene carrier, which can transport LNG, ethylene, butadiene, propylene and LPG. It says the design could be modified and adapted to different needs and sizes.
According to Eduardo Perez Orue, the company is now talking to several potential customers since the design was completed earlier this year. “We foresee a huge demand for these smaller vessels, but we are aware that it will take some time for that demand to emerge. We are probably looking at building just a few ships initially as people try out the concept, but once that happens and people are comfortable with the idea, then we are sure it will take off.”