Challenges of developing

new Small Scale LNG infrastructure

Source: Gate terminal

Presentation to UNECEGeneva, 20 January 2015

18/01/2015 UNECE IGU on LNG as Fuel 1

By: D.A. van Slooten

LNG new trends

• Offshore LNG:• Floating production (FPU),Floating storage (FSU), Floating production

& storage unit (FPSU), Single-mooring (gas)buoys, etc

• Onshore LNG:• Gravity based Receiving terminals, Cryogenic caverns

• Small Scale LNG:• Satellite terminals, LNG Transport trucks, Tankcontainers, Filling

stations

• LNG as Fuel:• Fuel: Trucks, trains, inland barges, port vessels, filling stations

• Bunkers: bunker stations, bunker barges

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

UNECE IGU on LNG as Fuel18/01/2015 2

Importance of LNG in NW Europe

1.Declining domestic production is replaced by imports2. LNG offers increased security of supply 3. Gas for transport offers growth opportunities

UNECE IGU on LNG as Fuel18/01/2015 3

European traditional import model

in Jeopardy

UNECE IGU on LNG as Fuel18/01/2015 4

IMO: Emission control area’s: ECA’s

EU Directives:

Reduction of emissions from

the transportation industry

New

Old

97%86%71%78%67%Reduction (%)

0,10,51,01,01,5

3,53,53,54,54,5SOx (%)

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

¯

¯

¯

¯

¯

¯

¯

¯

¯

¯

ECA

World

78%

97%

4,5%

3,5%

1,5%

1,0%

0,5%

0,1%

SO

x(%

)

New

Old

97%86%71%78%67%Reduction (%)

0,10,51,01,01,5

3,53,53,54,54,5SOx (%)

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

202

2

¯

¯

¯

¯

¯

¯

¯

¯

¯

¯

ECA

World

78%

97%

4,5%

3,5%

1,5%

1,0%

0,5%

0,1%

SO

x(%

)

UNECE IGU on LNG as Fuel18/01/2015 5

LNG Fuel price differential

Gasoil

LNG

UNECE IGU on LNG as Fuel18/01/2015 6

LNG Fuel Challenges

Challenges ahead for downstream market penetration:

• Standard legislation and equipment standardisation;

• Safety training on how to handle liquid gasses to

maintain safety record;

• Engine management technology development;

• Incremental investments in port infra

• Incremental investments in engine rooms of vessels;

• Multiple of LNG operators requires extra Safety.

UNECE IGU on LNG as Fuel18/01/2015 7

Future: Hub- and Satellite terminals

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

Hub terminal:

• Break Bulk & Re-export

(Ship, Truck)

• Bunker & Fuel supply

Satellite terminal:

• Redistribution in local

gasgrid

• Bunker & Fuel supply

LNG’s future:

Similar infrastructure as

downstream Oil products:

• Fuel supplies

• Fuel stations

• Bunker stations

AND

• Local gasdistribution in

local grid

UNECE IGU on LNG as Fuel18/01/2015 8

Picture: courtesy Tokyo Gas

Engineering

New small scale LNG Carriers

Remarks:

• facilitators for downstream market penetration of LNG to satellite terminals

• carrier capacity: 1,250 m3 - 16,000 m3 – initial small carriers since 2005

• tank type: semi pressurized / bullet-type (example by Kawasaki Shipbuilding.Co.)

• propulsion: diesel engine or dual fuel gas/diesel

7500 m3

2500 m3

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

UNECE IGU on LNG as Fuel18/01/2015 9

Capacity 7,400 ton pa

Site area 3,200 m2

Storage capacity 3 x 100 m3

Send-out capacity 4 x 1 ton/hr

Typical small satellite (Onada – Yamaguchi Godo Gas)

Courtesy: Tokyo Gas Engineering

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

UNECE IGU on LNG as Fuel18/01/2015 10

Dedicated Bunkerships is the future

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

UNECE IGU on LNG as Fuel18/01/2015 11

LNG bunkering in Sweden

UNECE IGU on LNG as Fuel

Ferry on LNG in port of Stockholm 2014

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

18/01/2015 12

Terminals reacted

relatively fast on market

demand for truckloading

1. replicate Norwegian

story for marine

2. Truckfilling and offgrid

(Spain)

3. New facilities in

Zeebrugge and

Rotterdam

LNG truckloads for NW Europe

UNECE IGU on LNG as Fuel

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

18/01/2015 13

Dual fuel LNG propulsion in operation

The volume of future small scale LNG?

A big question!

LNG truck fuelling station Zwolle, Netherlands

Break-bulk Rotterdam

First movers are active!

UNECE IGU on LNG as Fuel18/01/2015 14

“Green River” initiative 2012

Green Deal:

LNG Rijn en WaddenSigned on the 5th of July 2012

Challenges for small scale LNG:

• Design of bunker barges;

• Design of river barges;

• Design of small LNG depots

• Modal split between water- and road

transport of LNG

UNECE IGU on LNG as Fuel18/01/2015 15

LNG Inland viable?

LIQUEFACTION EXPORT

TERMINALSPRODUCTION

SHIPPING

TECHNOLOGIES

LNG RECEIVING

TERMINALS

Small Scale& Fuel

Terminal experience end 2014:

• Shortsea hub logistics up and running @ 5.000-20.000 m3 parcels

• Truckloading hub logistics up and running @ 50/100 m3 parcels

• Meaning:• Physical available

• Robust: multiple physical assets

• Choice: multiple suppliers

• Competitive

• Bunkering hub logistics @ 100-5.000 m3 parcels under development

• LNG logistics is improving. Infrastructure still limited

• LNG is a great product but oil logistics are well established (competition)

• Still many safety, standardisation & technical compatibility issues

UNECE IGU on LNG as Fuel18/01/2015 16

Questions?

Source: Gate terminal

18/01/2015 UNECE IGU on LNG as Fuel 17

Thank you

VSC Hattem

D. A. van SlootenKoningin Emmalaan 2

8051 PD Hattem Tel: +31 38 444 0215

The Netherlands email: vsc.hattem@xs4all.nl

Source: Gate terminal

18/01/2015 UNECE IGU on LNG as Fuel 18