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LNG Shipping
Core Energy | Fact Sheet
Core Energy GroupT +61 8 8412
[email protected]
1. IntroductionA key component o the total delivered cost o LNG
is the cost o shipping/ transport rom theexport port to the
importing country regasifcation terminal.
The objective o this act sheet is to provide an introduction to
the shipping element o the LNGvalue chain and a guide to the
associated costs.
The LNG value chain can be summarised as ollows:
Figure 1
Normally, the transportation o the natural gas rom the
production resource to the customeris operated through a pipeline
system. However, the pipeline system is difcult and
costlytransportation in circumstances where the distance between
the production resources and themarket is urther than ~2,000
kilometres. As the countries with abundant natural gas
resourceslike the Middle East countries, including lran, Qatar, and
Yemen, etc., and Australia, are located arrom consuming countries
such as Japan Korea, Taiwan and China the economical and
efcient
method o transporting the natural gas is by ship.To acilitate
the transport o gas it must frst be liquefed to reduce its volume.
The gas iscondensed into a liquid at close to atmospheric pressure
(maximum transport pressure set ataround 25 kPa/3.6 psi) by cooling
it to approximately 162 C (260 F).
Liquefed natural gas takes up about 1/600th the volume o natural
gas in the gaseous state.
Regular, commercial, international LNG ship transportation began
in the 1960s between Algeriaand the UK.
2. SafetyLNG Shipping possesses the most envied saety record in
world shipping with no signifcantaccident or cargo spillage in its
frst 40 years spanning more than 40,000 sea voyages.
1. Introduction
2. Saety
3. Types o Vessel
4. Features o LNGVessels
5. LNG Vessel Size,Capacity and Speed
6. Global LNG ShippingFleet
7. Shipping Costs
Contents
Reerencesand Further Readings
Figure 1: LNG ValueChain
Figure 2: Core EnergyGroup
Figure 3: KCC World LNG
Tanker
Figure 4: DC LogisticsTanker
Figure 5: Norton Rose LNGShip [PDF]
Figure 6 & 7: GermanischerLloyd
Figure 8: Commodities Now- LNG Fleet Growth Set toSlow in
2010
http://www.pttlng.com/en/images/LNG_Value_Chain.jpghttp://www.pttlng.com/en/images/LNG_Value_Chain.jpghttp://www.pttlng.com/en/images/LNG_Value_Chain.jpghttp://www.kccworld.co.kr/HeavyDuty/data/news/70065_2.jpghttp://www.kccworld.co.kr/HeavyDuty/data/news/70065_2.jpghttp://www.kccworld.co.kr/HeavyDuty/data/news/70065_2.jpghttp://www.dcslogistics.com/images/Tanker4.jpghttp://www.dcslogistics.com/images/Tanker4.jpghttp://www.dcslogistics.com/images/Tanker4.jpghttp://www.lngship.net/UserFiles/2008%20Norton%20Rose.pdfhttp://www.lngship.net/UserFiles/2008%20Norton%20Rose.pdfhttp://www.lngship.net/UserFiles/2008%20Norton%20Rose.pdfhttp://www.commodities-now.com/news/power-and-energy/1351-lng-fleet-growth-set-to-slow-in-2010.htmlhttp://www.commodities-now.com/news/power-and-energy/1351-lng-fleet-growth-set-to-slow-in-2010.htmlhttp://www.commodities-now.com/news/power-and-energy/1351-lng-fleet-growth-set-to-slow-in-2010.htmlhttp://www.commodities-now.com/news/power-and-energy/1351-lng-fleet-growth-set-to-slow-in-2010.htmlhttp://www.commodities-now.com/news/power-and-energy/1351-lng-fleet-growth-set-to-slow-in-2010.htmlhttp://www.lngship.net/UserFiles/2008%20Norton%20Rose.pdfhttp://www.dcslogistics.com/images/Tanker4.jpghttp://www.kccworld.co.kr/HeavyDuty/data/news/70065_2.jpghttp://www.pttlng.com/en/images/LNG_Value_Chain.jpg
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LNG Shipping
Core Energy | Fact Sheet
Core Energy GroupT +61 8 8412
[email protected]
3. Types of VesselsLNG Carriers are classifed by their cargo
containment designs. There are three types o cargocontainment
systems:
Kvaerner -Moss spherical tank
Membrane system LNG - generally all into two categories that
were originally designed by thetwo separate companies, GAZ
Transport (GTT) and Technigaz.
Prismatic IHI - SPB
Moss Spherical Design Vessel
Figure 2
Membrane GTT
Figure 3
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LNG Shipping
Core Energy | Fact Sheet
Core Energy GroupT +61 8 8412
[email protected]
Prismatic - IHI - SPB
Figure 4
4. Features of LNG VesselsTo deliver by ship, the natural gas
must be liquefed, and carried in the specially designed vesselwith
special insulation designated or LNG shipment. The ships are
designed with double hullsand primary and secondary containment
systems.
The sophisticated saety systems on the ships includes gas and
low temperature monitoring, heatand fre detection, cargo-related
emergency shutdowns and nitrogen and inert gas pumping.
Other standard saety eatures include global positioning
equipment, global maritime distresssystems and ship-to-shore
communications. These eatures are illustrated below and
overlea.
Inside the GTT No96 Membrane Containment System
Figure 5
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e Energy Group61 8 8412
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Membrane GTT
Figure 6
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e Energy Group61 8 8412
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Moss Spherical
Figure 7
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5. LNG Vessel Size, Capacity and SpeedThe LNG industry has
progressively been building larger ships, which results in lower
per-unitLNG-shipping costs. In recent years ship sizes have
increased rom 145,000 cubic meters to over250,000 cubic meters. A
comparison o a conventional and larger (210 cubic metre Q Flex)
ship isillustrated below.
Currently in quality improvement process or above image.
In terms o the volume o gas carried by an LNG ship a
138,000-cubic-meter-ship carries
approximately 64,000 tonnes deadweight o LNG or approximately
2.9 Bc o natural gas.A conventional 137,000 cubic metre vessels
would travel at an average speed o 19 knots. Newerhigh speed
designs are targeting average speeds o 60 knots.
6. Global LNG Shipping FleetAs the ollowing gure illustrates,
there has been a signicant growth in shipping capacitybetween 2000
and 2009, with the global feet now exceeding 300 vessels.
Figure 8
LNG Shipping
Core Energy | Fact Sheet
Core Energy GroupT +61 8 8412
[email protected]
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LNG Shipping
Core Energy | Fact Sheet
Core Energy GroupT +61 8 8412 [email protected]
7. Shipping Costs Under CIF type o LNG procurement, the seller
bears the cost o shipping. Under FOB sales, thebuyer bears the cost
o shipping.
Most ships are dedicated to particular LNG projects and are
owned by LNG importing andexporting companies or shipping
companies.
LNG transportation costs are divided into operation and voyage
costs. Operation costs are non-trading costs incurring
irrespectively o the trading commitments o the ship. These costs
includemanning costs, insurance, repairs and maintenance (spares,
store, lubricants etc, dry docking)and can be considered xed.
Manning cost is the largest among operation costs.
Voyage costs include bunker costs, port costs and canal ees.
They are associated with certaintrade routes where loading and
discharging ports are specied. Bunkers being the major cost
including boil o rate. Boil o rate is the amount o boil o gas,
which is produced due to someheat inleaks. This gas is used as a
uel or propulsion systems. Its value varies between 0.1-0.15% o the
ull content per day.
Total LNG shipping costs expressed in dollars per million Btu
are distance and time-sensitive.Representative shipping rates or
Australia are presented below. It should be noted that thesereight
rates are provided or the class o vessel specied as at late 2007
which was a periodcharacterised by high rates. Actual day rates can
vary widely depending on vessel specications.
Although the average price o purchasing an LNG tanker is varies
with customer, estimatesrange rom an average o USD 180M or a
138,000-cubic-meter-ship (which carries 2.9 Bc onatural gas) to
over USD 220M or a 219,000 cubic-meter-ship. This price range
illustrates theeconomies o scale.
Factors Used:
Size: 138,000 cbm
Speed: 19 knots
Boil o: 0.15% per day
USD/ mmbtu
Australia (Dampier) To Japan
(Round Trip voyage: 16 days)0.72
Australia (Dampier) To South Korea
(Round Trip voyage: 14 days)0.71
The following rates illustrate the competitive advantage
Australia has in Asia relative toAtlantic markets
Australia (Dampier) To Lake Charles, USA
(Round Trip voyage: 52 days)2.29
Australia (Dampier) To Barcelona, Spain
(Round Trip voyage: 34 days)1.59
