Owned and presented by Host IGU Member Supporting Association

LNG IN FRANCE : LEVERAGING ON 50 YEARS OF CONTINUOUS DEVELOPMENT

TO SUPPORTING A CHANGING MARKET

Raphaël PUJOL, Key Account & Marketing Manager Alain GOY, Head of Technical Department Pierre COTIN, Chief Strategy Development & Marketing Officer ELENGY, France www.elengy.com

SUMMARY In order to support the rapid development in the LNG market, Elengy has permanently

optimised its LNG terminals, expanding its services offer and developing innovative, safe and

competitive solutions.

Since 1965, Elengy has enjoyed 9 200+ deliveries (11% of all LNG cargoes that have been

delivered worldwide) and 160+ different LNG vessels (one third of all standard LNG carriers ever

built). [world record]

1960’s: Pioneering the LNG industry

Le Havre, commissioned in 1965, was the first LNG terminal in continental Europe !

1970’s: The bigger the better !

Fos Tonkin LNG terminal, 5.5 Bcma, played an important role in the emergence of the

Mediterranean LNG market.

1972: first unloading

2013: 5500th delivery ! [world record]

1980’s: Even bigger !

Located on France’s Atlantic coast, Montoir-de-Bretagne, 10 Bcma, was the biggest LNG

terminal in Europe for many years.

1980: first unloading

2012: 2500th delivery by 100th different LNG tanker [world record]

2000’s: Strengthening import capacities

At the start of the new century, decision to increase reception capacity in the South of France

led to the construction of Fos Cavaou LNG terminal, 8.25 Bcma.

2009: first unloading

2010’s: Moving forward through innovation

LNG flows to Europe collapsed in 2011. This major market change called for new services for

even greater flexibility: toward LNG hubs !

Elengy launched five new services in two years including:

Ship reloading

Transshipment (direct transfer via two berths)

2013: first commercial operation at Montoir between two large LNG tankers [world first]

Truck loading: History rhymes after the first operations in Le Havre since 1965 !

Page 2 of 16

LNG in France: leveraging on 50 years of continuous development to support a changing market

In response to the successive transformation in the LNG industry, Elengy is breaking new

ground and provides its customers with tailor-made services: ship reloading, LNG transshipment,

loading of tanker trucks and small LNG carriers.

The following historical steps illustrate the LNG industry development through the experience

of a European terminal operator, Elengy, that has continuously been operating LNG terminals

since 1965.

Figure 1: From Jules Verne (25 500 m3), 1965, Le Havre to Q-Max (267 000 m3), 2013, Fos Cavaou

1960’S: PIONEERING THE LNG INDUSTRY

In France, Gaz de France (now Engie) performed detailed studies and experiments on

cryogenic materials and LNG behavior thanks to several experimental tools:

a pilot station commissioned in 1960 in Nantes, equipped with an original LNG tank of

500 m3 of capacity designed for tests at a semi-industrial scale, and

an experimental LNG carrier, Le Beauvais, a converted Liberty Ship equipped with three

different technologies of self-standing tanks tested at sea in 1962.

Figure 2: Pilot station, Nantes – France, 1960

Page 3 of 16

Figure 3: “Le Beauvais”, experimental vessel, 1961

In parallel, Algeria’s Compagnie Algérienne du Méthane Liquide (CAMEL) was established in

1961 to develop and operate the future liquefaction plant of Arzew. This required in the first

place the confirmation of the commercial viability of LNG production at a large scale. Since then

CAMEL had successfully produced LNG until 2010, which is in itself a proof of the fantastic

accomplishment of the very first industrial project of this kind.

Figure 4: Arzew LNG plant, Algeria

French and Algerian efforts led to the demonstration of the technical and economical

feasibility of an LNG chain between both countries. French LNG industry has then become a

reality thanks to:

the conclusion of the first LNG supply agreement between Algeria and France, start of a

long term partnership which still continues today,

the delivery in September 1964 of the first commercial French LNG tanker named Jules

Verne, 25 500 m3 of capacity. She was ordered by Gaz de France to the "Ateliers et

Chantiers de la Seine Maritime, in Le Trait” in July 1962,

and the commissioning in March 1965 of the first LNG terminal in France.

Figure 5: Jules Verne maiden voyage between Le Trait and Le Havre, 1964

Page 4 of 16

Figure 6: Jules Verne and the liner “Le France”

Among the very first LNG terminals in the world, Le Havre would be considered nowadays as a

small-scale terminal with 0.5 Bcma of capacity (0.4 mtpa) and some specific characteristics:

3 metallic LNG storage tanks of 12 000 m3 each,

an LNG truck loading facility to supply satellite stations for local distributions (Saint-Malo,

Granville…) with LNG.

Figure 7: Le Havre LNG terminal, France

7 different “small” LNG tankers with a capacity below 40 000 m3 called at the terminal which

stopped production in 1989 after a total of 690 cargo deliveries in its history.

It was dismantled for economical reasons, mainly due to the lack of space for terminal

expansion either onshore or offshore. In 1989, the standard size for storage tanks was ten times

Le Havre’s tanks capacity built in 1965 !

Page 5 of 16

Figure 8: Jules Verne ship berthed at Le Havre

1970’S: THE BIGGER THE BETTER!

To satisfy the growing needs for natural gas in France, Gaz de France then built the 5.5 Bcma

Fos Tonkin LNG terminal, which celebrated its 40th anniversary in 2012.

Figure 9: Fos Tonkin LNG terminal, France

As one of the first LNG terminals in Europe, the site played an important role in the

emergence of the Mediterranean LNG market. Accommodating LNG carriers up to 75 000 m3 the

terminal has consistently shown the highest utilisation rate in Europe. With a first cargo delivered

in August 1972, the terminal has reached an outstanding milestone in January 2009 with its

5000th delivery. Today, the figure exceeds 5600 and is probably a world record.

Page 6 of 16

Figure 10: Commissioning cargo at Fos Tonkin LNG terminal

On a more technical level, Fos Tonkin started operation with two metallic tanks of 35 000 m3

each, and was first in Europe to build a full containment LNG tank with concrete external outer

tank that was commissioned in 1978 with 80 000 m3 of capacity.

In addition, more than 40 years ago, the terminal design already included an efficient process

for energy savings and environmental optimization, Fos Tonkin being integrated with the nearby

nitrogen plant operated by Air Liquide ( “LNG-as-cold”).

Figure 12: LNG-as-cold at Fos Tonkin LNG terminal

1980’S: EVEN BIGGER!

Located on France’s Atlantic coast, Montoir-de-Bretagne, 10 Bcma of capacity, had been the

biggest LNG terminal in Europe for many years.

Page 7 of 16

Figure 13: Montoir-de-Bretagne LNG terminal, France, 1980

On top of the regasification capacity itself, its original design illustrates the fact that size used

to matter at the turn to the 80’s. Indeed, two berths were built for 300 000 m3 LNG carriers

(equivalent to ULCCs, ultra large crude carriers) at a time when such kind of LNG carriers were

not even planned. For the recollection, maximum vessel size at that time was 131 000 m3, and Q-

Flex and Q-Max type vessels were only developed in the 2000’s.

Figure 14: Montoir berth construction in 1978

From the first cargo unloaded in December 1980, Montoir has now received more than 2560

cargoes delivered by 114 different LNG tankers.

Industrial synergies have also been developed for environmental effectiveness with a

combined-cycle power station next to Montoir terminal. Heat is recovered from warm water

discharged by the power station to supply terminal open rack vaporisers used to regasify the

LNG.

During the same decade, Gaz de France pioneered R&D with new innovation series in the field

of LNG behavior and safety such as LNG ageing and quality evolution, roll-over prediction from

different LNG qualities in tank, recording effects of large LNG fires or Rapid Transition Phase

(RTP).

And whenever you think you have done something really new think twice. A noticeable

technological test for maritime security also took place in Fos-sur-Mer in November 1982 with the

world first transshipment between two LNG tankers (Edouard LD and Jules Verne)! This side-by-

side operation with flexible hoses aimed at preventing shipping risks with a scenario that would

have required to transfer an LNG cargo at sea.

Page 8 of 16

Figure 15: Ship-to-ship at Fos-sur-mer, 1982

Page 9 of 16

2000’S: STRENGTHENING IMPORT CAPACITIES

At the start of the new millennium, rising gas consumption forecasts led to the decision to

increase reception capacity in the South of France by building the 8.25 Bcma Fos Cavaou LNG

terminal.

The very first unloading, a commissioning cargo, took place in October 2009.

Figure 16: Fos Cavaou LNG terminal, France, 2009

More globally, this period was characterized by a high utilisation rate of the LNG terminals in

France, 60 to 80%, with LNG representing roughly 25% of French consumption.

Simultaneously, 2004 was the first year of third party access to LNG terminals in France in the

frame of the opening of the gas markets in Europe. This regulated process has proved to be

sound with thirty different customers registered in Fos and Montoir terminals to date.

Finally, the end of the decade was full of hope as regards to gas consumption perspectives

mainly linked in France to the development of combined-cycle power plants. In parallel, gas

market liquidity was significantly and continuously increasing by up to two digits a year.

As a result of these record years for LNG imports, the French LNG terminals showed

significant achievements:

Fos Tonkin

2002: 235 deliveries with one berth, 22 unloadings in one month [world record]

December 2008: highest peak send-out of the terminal with 2300 m3LNG/h

2009: annual record with a total send-out of 5.8 Bcm (4.7 mt), i.e. utilisation rate >80%

2011: successful Open Season to extend terminal operations up to 2020

Montoir

2006: annual record with a total send-out of 8.3 Bcm (6.7 mt) and 118 deliveries, which

gives a utilisation rate above 80%

2007: successful Open Season to extend terminal operations up to 2035 that led to

renovation works for an investment of € 165 million

May 2009: delivery into Montoir of an Australian cargo !

November 2009: first call of a Q-Flex type vessel, with a full cargo

2010: 4 spot deliveries from 4 different shippers

2011: berth revamping in order to accommodate Q-Max type vessels

Page 10 of 16

2010’S: NEW PARADIGM

After 45 years of continuous increase of LNG imports, LNG flows to Europe collapsed in 2011

thus providing flexibility to a global market in search of LNG to cover Asian additional

requirements.

At the same time, the LNG market dramatically accelerated its evolution moving from long-

term dedicated chains to a much bigger and dynamic market: more producers and many new

importing countries, an increased share of spot deals and more liquidity, arbitrage between

Atlantic and Pacific basins, new maritime routes and reversing flows, unpredicted schemes…

This new context called for innovative services in European terminals for even greater

flexibility and optimization opportunities for shippers, toward LNG hubs. Then, Elengy launched

five new services in less than 2 years:

1. Ship reloading (indirect transshipment)

Transfer of LNG from shore tanks to the receiving vessel at 4 000 m3LNG/h.

2012: first commercial operations at both Montoir and Fos Cavaou.

2. LNG transshipment

Direct transfer of LNG between two vessels via the two existing berths at 5 000 m3LNG/h.

August 2013: first commercial operation at Montoir, a “world first” between two large LNG

tankers.

Figure 17: First LNG transshipment at Montoir, August 2013

3. Retail LNG

Elengy positioned itself rapidly on that promising market, offering truck loading services in

Montoir since July 2013 and in Fos Tonkin since June 2014.

History rhymes after the first operations in Le Havre from 1965 !

Figure 18: First LNG truck loading station at Montoir, 2013

Page 11 of 16

Figure 19: Upgraded LNG truck loading station at Montoir, 2015

4. Downstream flexibility

Fast track development at no cost of a weekly send-out flexibility nomination procedure with a

partial dedicated inventory.

5. Gas booster

Service for Boil-Off Gas recovery at Montoir with a mobile gas booster has been running

successfully since May 2014 in order to avoid flaring in periods of lack of LNG deliveries.

Final Investment Decision was also taken for a “permanent” HP gas compressor that will be

running from 2017 !

Figure 20: temporary gas booster installed at Montoir LNG terminal

Page 12 of 16

Direct and indirect LNG transshipment

The new millennium came along with an increasing diversity in the trade flows and maritime

routes, and Montoir-de-Bretagne LNG terminal was connected to Asia via Northern Sea route. In

October 2012, the LNG tanker Ob River coming from the Pacific Ocean through the Northern Sea

Route (first LNG carrier NSR transit) called at Montoir LNG terminal for a cool-down operation

(heel supplement). Then, the vessel performed a laden voyage through the NSR after loading a

cargo in Norway. Therefore, a few thousand cubic meters of LNG loaded from Montoir shore

tanks have transited the NSR from West to East !

Figure 21: LNG carrier Ob River at Montoir, October 2012

In addition, nearly 40 ship reloadings and 4 LNG transshipment operations have been

performed to date at Fos and Montoir LNG terminals. Thanks to a transfer rate up to

5 000 m3LNG/h these operations are due to last less than two days at berth, from mooring to

unmooring, for a standard cargo.

Figure 22: Number of LNG reloading at Fos and Montoir LNG terminals

The transshipment service makes use of pipelines that connect the two berths directly,

meaning that the transferred LNG is neither mixed nor stored in the terminal tanks. From

“vessels’ point of view”, a transshipment is operationally similar to an unloading operation at

reduced rate (delivering vessel) and a reloading operation (receiving vessel) that are performed

simultaneously.

Page 13 of 16

Figure 23: Direct LNG transshipment at Montoir LNG terminal

Transshipment operations can be carried out offshore, but are subject to weather constraints.

On the contrary, in Montoir, each carrier is moored and connected to articulated rigid transfer

arms, and the terminal benefits also of good weather conditions and easy nautical access.

This ensures that transshipment operations are conducted reliably and safely.

Figure 24: 4 LNG transshipment operations performed with 7 different LNG carriers

Thanks to a long term commitment finalised in June 2015, Elengy took final investment

decision in September 2015 in order to develop an upgraded LNG transshipment service.

LNG transfer between the 2 berths at higher rate is technically easy to implement at

reasonable investment costs :

Page 14 of 16

10 000+ m3LNG/h rate for a 24-hour call (instead of 5 000 m3LNG/h today),

14 000 m3LNG/h being foreseen as a maximum

Upstream berth to be revamped (downstream berth revamped in 2011)

Cryogenic line to be adapted for new transfer rate (pressure surge management)

Transshipment slots are offered and capacity is subscribed on the long term [2035+]

instead of intra-monthly today

Capacity is scheduled (ETA) on an annual basis [ADP], then rescheduling flexibility is

offered

“No flaring” package

Work duration: 2 years from FID

Commercial start-up in Q4 - 2017

Loading of tanker-trucks and ISO containers

Alongside large scale LNG business, small scale LNG has now emerged and is growing. In

2015 alone, Montoir and Fos terminals completed more than 1500 LNG truck loadings, LNG being

supplied to more than 45 different industrial sites. And before commercial operations, more than

1000 trucks were loaded from Montoir and Fos Tonkin since 1980 for internal or technical uses

such as LNG fire fighting training, R&D or temporary supply to off-grid sites.

Figure 25: Loading of tanker-trucks and ISO containers at Montoir and Fos terminals – capacity and use

The use of LNG as fuel will increase the number of operators involved in handling LNG. Know-

how and expertise are key issues for a safe, reliable and sustainable small scale LNG market. In

order to support this development Elengy has launched a new training offer. This training at the

terminal includes a theoretical introduction along with hands-on fire-fighting exercises supervised

by trainers fully qualified as field operators.

Page 15 of 16

Figure 26: 2 courses dedicated to small-scale activity focused on technical and safety aspects,

“Fire fighting” and “Safe handling of small-scale LNG”

MOVING FORWARD: FLEXIBILITY IS KEY TO ADAPT TO MARKET CHANGES !

In order to support the rapid development in the LNG market, Elengy has permanently

optimised its LNG terminals, expanding its services, offering and developing innovative, safe and

competitive solutions.

The high level of adaptability and operational reliability of Elengy’s facilities is then

demonstrated by a world record of diversity. Since 1965, Elengy has enjoyed more than:

9 200+ deliveries (280+ mt originated from 12 countries), which represent 11% of all

LNG cargoes that have been delivered worldwide since the start of the LNG industry,

160+ different LNG carriers that berthed in its terminals, which means more than one

third of all LNG tankers ever built.

Various ship sizes, from the first tanker with a capacity of 25 500 m3 (Jules Verne) to

267000 m3 (Q-Max)

Figure 27: Elengy people celebrating 50 years anniversary, 2015

European terminals still face many challenges with the uncertainty on the future of LNG

imports. Having already moved from integrated LNG chains to global LNG hubs, this trend can be

expected to intensify with the appetite of shippers for even more operational and commercial

flexibility, not to mention the expansion of the retail LNG and LNG-as-fuel markets.

Outside Europe, Elengy leverages its combined expertise as owner and operator through

strategic partnerships or advisory services for LNG terminal projects, notably in Asia and the

Page 16 of 16

Middle East. This ambition is based on experience and knowledge from design to operation that

has been built up over the course of 50 years.