Asst. Prof. Lawrence Henesey1 & Dr. Laima Gerlitz2

1Blekinge Institute of Technology,,Karlshamn, Sweden

2Wismar University of Applied Sciences , Wismar, Germany

INTEGRATED LNG VALUE CHAIN IN THE BALTIC SEA REGION :

CASE OF GoLNG Project

LNG as Future Marine Fuel: Trends and Challenges 3rd April 2019

Shanghai Maritime University (SMU), China

2

’

Karlshamn

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GO LNG Project

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Organisation4

BSR Blue corridor strategy

BSR LNG Business Cluster

BSR LNG competence center

LNG fuel distribution strategy

LNG Standard and regulation toolbox

LNG shipping index

LBG business concept

Functioning business network

R&D

Study visits

B To B meetings

Business plans and pilot projects

Training programs

Training & research infrastructure

Service package

Network of training institutions

Integrated value chain study

Integrated LNG Value

Chain

Launched –April 2017

Launched –April 2017

Sweden, Norway, Spain, theNetherlands

WWW.GOLNG.EU

Bringing LNG out of the “Dark Side”

…Or attend a GO LNG meeting to see how

misinformed people are?

WWW.GOLNG.EU

What is LNG?

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LNG – Governance & Regulation Drive – MARPOL VI

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LNG – Effects of MARPOL VI

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LNG – Effects of EU Policy

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The EU White Paper for Transport (2011) has set a greenhouse gas reduction goal of at least 40% by 2050.

GHG emissions reduction from transport of 60% by 2050.

Measure Coverage Timing

Electricity in urban/suburban and other densely

populated areas

Appropriate number of publically

accessible points

by end 2020

CNG in urban/suburban and other densely populated

areas

Appropriate number of points by end 2020

CNG along the TEN-T core network Appropriate number of points by end 2025

Electricity at shore-side Ports of the TEN-T core network and

other ports

by end 2025

Hydrogen in the Member States who choose to

develop it

Appropriate number of points by end 2025

LNG at maritime ports Ports of the TEN-T core network by end 2025

LNG at inland ports Ports of the TEN-T core network by end 2030

LNG for heavy-duty vehicles Appropriate number of points along

the TEN-T core network

by end 2025

Along the TEN-T refuelling stations are installed

every 400 km

AnLNG truck has an autonomy of about

800–900 k

by 2020

Why LNG?

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Turning framework conditions into opportunities:

Environment – negative footprint from air pollutants, emissions, particulate matters.

Technology – progress in technologies and infrastructure in transport, energy and other markets.

Economy – intensifying globalisation and intra-trade among global regions; increasing supply and demand conditions; cost-benefit scenarios.

Governance – international and EU regulations; local regulative incentives; collaboration and internationalisation.

Reducing Environmental Pressure from Shipping

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Ability and feasibility to reduce emissions

Durr et al, 2005. LNG Technology for the Commercially Minded.

LNG as Technologically Feasible Solution

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LNG is the most promising alternative shipping fuel technology in the short to medium term, at least for short sea, e.g. Ro-Ro vessels.

Nearly a decade of small scale LNG driven ships experience has proven the reliability of the technology.

Suitability of LNG for long-distance freight transport as an alternative to diesel.

Reduction of fuel costs of LNG in comparison with diesel for inland navigation by approx. 20%.

LNG as THE Alternative

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LNG as A Blue & Green Business Opportunity

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Building critical mass for LNG

Secure energy supply

Ensure competition

Blue & green growth and innovation

LNG As Alternative Competitive Edge for Blue & Green Growth 1

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Marine technology service providers

Shipbuilding

LNG distribution, bunkering and storage solutions across multimodal transportation

Port operation environmental performance

LNG cooling energy for storage and loading operations

Strategic approach towards the LNG infrastructure deployment in BSR shaping BSR Blue Corridor strategy

Adding users to existing LNG infrastructure –> decreasing costs

LNG As Alternative Competitive Edge for Blue & Green Growth 2

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Marine technology service providers

Technology, skills and knowledge for LNG value chain, establishing BSR LNG competence centre

Business opportunities for regions LNG industry, establishing BSR LNG business cluster.

Competence building – & sharing opportunities

Sustainability factor for LNG infrastructure, providing LBG value chain, technological concepts and business models

LNG is regarded as one of the most promisingalternative strategies and business opportunities. Yet, High infrastructure cost and limited demand, effects to the fact that cost of infrastructure is from 30 to

50 % of the LNG cost for end user.

ResearchGap

Research Question

Yet, no recent studies record approaches on LNG use as opportunity and value proposition leading towards emerging value chains that integrate different transport modes and business sectors, and where LNG is recognised as value proposition for all stakeholders involved.

How to integrate LNG stakeholders involved in diverse LNG activities, with different needs, capacities and capabilities into one macro-regional transport and energy supply and value chain?

Domain of LNG Value Chain Integration

Segments of LNG Value

Chain of the BSR

Segment SpecificationKnow-

ledge & Skills

Infra-structure

& Technolog

y

Economy & Business

Environ-ment & Gover-nance

LocationEvaluation

criteria

Shipping

LNG feeder vessels +++ + 0 0 SE Existing +++

LNG bunker vessels +++ ++ ++ ++ SE Developing ++

Ship-to-ship bunkering (STS) +++ ++ ++ ++ BSR Projected +

LNG Terminals LNG Import terminal +++ ++ ++ ++ LT, NO, PL SE Planned 0

LNG onshore infrastructure

Small-scale export / bunker facilities +++ + + + DK, LT, PL, SE Missing -

LNG bunker stations ++ 0 - 0 DK, NO, SELNG filling stations ++ ++ - 0 DELNG fuel tank containers +++ +++ ++ ++ BSR

LNG trucks +++ + + + DE, LT PL, SE

End-users

Tank & bunkering solutions +++ ++ ++ ++ BSR

LNG trucks for roads +++ ++ - ++ LTLNG-fuelled buses for public transport +++ ++ - ++ NO, PL

LNG power supply ++ - - - DE, NO, SE

LNG ferries +++ +++ ++ ++ DE, DK, NO, PL, SE

LNG tank containers for railways ++ 0 - - LT

LNG value chain integration for BSR - 2017

Lack of Refuelling Infrastructure

Source: NGVA, 2018

Overall Strategy for LNG Value Chain Integration

Source: Gerlitz, 2018

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Theory based and practice related research have been applied and built upon …

MarTechLNG

Marine Competence, Technology and Knowledge Transfer for LNG in the South Baltic Sea Region

Go LNG

LNG Value Chain for Clean Shipping, Green Ports and Blue Growth in Baltic Sea Region

Qualitative expert interviews

Surveys

Practical findings

INTERREG IV A South Baltic Program

INTERREG V B Baltic Sea Region Program

EU Clean Fuel Strategy

EU Directive on Deployment of Alternative Fuel Infrastructure

Research findings mainly

based on primary

and qualitative

data

Primary empirical data sources were gained in form of:

Evidence-based observations (here: case studies),

Empirical data from quantitative surveys and qualitative expert interviews

Obser-vationsgained from project activities

Findings have been validated & verified by the project target groups:

• Policy makers• Ports’ &terminals’ operators• International associations &

corporations• Shipping companies & ship building

yards• Academic & research institutions • Regional industries

WWW.GOLNG.EU

Strategic ecosystem approach for macro-regional and cross-sectoral LNG value chain integration

• LNG knowledge basis & skills development

• Education & Training• Research tools & infrastructure• Accessibility to knowledge &

skills• Cross-sectorial and

multidisciplinary capacity building

• Organisational culture & learning

•Availability of LNG technology & resources

•Cross-industrial LNG applications

•Macro-regional infrastructure development

• Shared technology & infrastructure

•Digitalisation & advanced IT toolkits

•Macro-regional governance• Strategic future foresight•Harmonisation of regions'

framework conditions• Sustainability compliance• Social responsibility

•Access to finances & LNG infrastructure funding

schemes•Co-funding & crowd funding

opportunities• Shared ownership and joint

projects•Open innovation

•Cross-sectorial collaboration and internationalisation

Knowledge & Skills

Infrastructure & Technology

Environment & Governance

Economy & Business

Integrating LNG Value Chain

Source: Gerlitz, 2017WWW.GOLNG.EU

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Small-Scale LNG Terminal & Distribution – Lithuania

Source: Klaipedos Nafta 2018

25Source: Becker Marine Systems, 2018

LNG for End-Users: LNG for Energy – Germany

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Half of all ships on order are LNG driven !LNG is obviously the fuel of the future, at least if you studythe list of ships in order with any relation to Sweden.

Sjöfartstidningen, 4 april 2017, kl. 11:30

Source: Furetank

LNG Ships – Sweden

27Source: LNG Cluster Lithuania, 2018

Small-Scale LNG Distribution – Lithuania

28Source: LNG Cluster Lithuania, 2018

LNG for Transprotation: LNG Hybrid Locomotive – Lithuania

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Functional LNG Value Chain Integration in the BSR

Source: Gerlitz, 2018

Example of Value Chain at a Port…

QUESTIONS?

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GO LNG PROJECTTHANK YOU