Tuesday, February 11, 2014

LNG Propulsion Moves Forward

By Jim Shaw

The recent announcement by Crowley Maritime that it has ordered two LNG-powered con/ro ships from Mississippi-based VT Halter Marine for Puerto Rico service has helped move the United States to the forefront of the LNG revolution – at least in terms of deadweight tonnage on order. Since Totem Ocean Trailer Express (TOTE) announced plans to convert two of its Alaska trailerships to LNG in 2012, followed by orders for two LNG-powered 3,600-TEU container carriers for Puerto Rico service, LNG propulsion has featured in almost every new large ship order for Jones Act trading. This has seen Matson Navigation order two 3,600-TEU container ships from the Aker Philadelphia Shipyard, both to be powered by dual-fuel engines, while recent tanker orders for the shale oil boom feature "LNG-conversion-ready" designs.

In the wings is a dual-fuel container-carrying ATB design being put together by Ocean Tug & Barge Engineering Corporation and Minyan Marine (see Pacific Maritime Magazine, Dec. 2013). In Canada, BC Ferries has requested proposals from shipyards for three dual-fuel ferries while Washington State is continuing to move forward with its LNG retrofit project for the Issaquah class.

To the south, Harvey Gulf has increased its order of LNG-powered offshore supply boats to six, which will make it the largest owner and operator of such vessels in the world. The stimulus for such sudden interest in LNG is the wealth of US gas reserves and increasingly restrictive environmental regulations, particularly for coastal operations. The Jones Act has also helped spur LNG usage, largely because vessels involved are tied to a specific trade lane for which refueling facilities can be easily customized.

European Technology
In northern Europe, where LNG propulsion was pioneered, the same basic forces have been driving development, with most projects involving either offshore supply vessels working the North Sea or local ferries that can be tied to a specific bunkering facility. In addition, and like US operators, European owners are facing increasingly strict environmental regulations as Emission Control Area (ECA) regulations come into force. A major difference, however, is the fact that Europe has been steadily developing LNG technology, with Finland's Wärtsilä and Germany's MAN Diesel now world leaders in LNG propulsion. American ships ordered to date will make use of this technology, often in combination with European or Asian hull designs.

China, the world's largest shipbuilder, has found itself in the same situation as the US but is quickly catching up with the help of European expertise. China's Hudong-Zhonghua Shipyard has recently gained a contract to build six 174,000-cubic meter (cu.m) LNG carriers, each to be powered by five MAN 51/60DF dual-fuel engines in an electric drive configuration (DFDE) making them the first large LNG carriers to be built in China with this power configuration. At the same time, three smaller LNG tankers in the 28,000-cu.m to 30,000-cu.m range are being built for China's coastal services, illustrating that the country is taking a hard look at LNG as a new energy source.

PetroChina is now forecasting that 3 million tons of shale gas will be produced from China's own reserves by 2015 with gas output increasing to 7 million to 8 million tons by 2020. This will help drive China's development of LNG in the marine sector, with the Nantong COSCO KHI Ship Engineering yard already working with Lloyd's Register on a new LNG-fueled 28,000dwt multipurpose vessel design.

LNG Bunkering Facilities
Beyond the storage requirements of LNG, the tanks of which can take up a large amount of space on a commercial vessel, bunkering is still acting as a constrictive force to further expansion. Ship orders, in fact, have run ahead of bunkering facilities development, although this is about to change. Late last year California-based Clean Energy Fuels announced it would begin construction of a new fuel station for cargo ships running on LNG at Jacksonville, Florida in partnership with Royal Dutch Shell and General Electric (GE). Shell had earlier stated it was planning the development of LNG plants on the Great Lakes and along the Gulf Coast while GE has been evaluating five domestic locations with the expectation that the US will need 50 to 100 small-scale LNG fueling terminals for ships, trucks and rail by 2025.

Mike Hosford, GE's general manager for Unconventional Resources in Houston, said GE "believes the age of gas is here" and that the industry now needs "bigger players" who can develop the required infrastructure. While the Jacksonville facility will offer convenient refueling for LNG-powered ships on the Puerto Rico run, where the new TOTE and Crowley vessels will trade, Shell's Great Lakes operation will initially service bulk carriers operated by The Interlake Steamship Company.

Last March, Shell reached an agreement in principle with Interlake to supply LNG in support of the Ohio company's conversion of its vessels to LNG. Interlake currently operates a fleet of 10 ships and expects to convert the first to gas by early next year. An Interlake spokesman said the conversions will require "significant capital investments," but that the investments are expected to result in "significant environmental benefits."

Port Fourchon Terminals
Along with the agreement with Interlake, Shell also announced an accord with Edison Chouest Offshore under which it will supply LNG to Chouest vessels operating in the Gulf of Mexico. Shell plans to build a small-scale liquefaction unit at its existing facility in Geismar, Louisiana which will have an output of about 0.25 million tons of LNG per annum. Once operational, the plant will supply LNG along the Mississippi River, the Intra-Coastal Waterway and to the offshore Gulf of Mexico and onshore oil and gas exploration areas of Texas and Louisiana. To provide for storage, transportation and distribution, Shell is expanding its existing relationship with fuels and lubricants re-seller Martin Energy Services, a wholly-owned subsidiary of Martin Resource Management Corporation (MRMC).

Shell plans to move LNG to Port Fourchon, Louisiana, a major supply base for the offshore industry, by barge. Three companies, Harvey Gulf, TY Offshore and Waller Marine, have already responded to a Shell request for proposals on this project and have submitted the design of an articulated/tug barge (ATB) that would carry LNG storage tanks internally, with the expectation that three would be built. Harvey has already launched construction of its own LNG fueling facility at Port Fourchon, which will consist of two terminals, each having 270,000 gallons of LNG storage capacity and the ability to transfer about 500 gallons of LNG per minute.

The company has selected Houston-based CH·IV International as the engineering, procurement and construction contractor for the project while Middletown, Rhode Island-based Maritime Simulation Institute will develop an LNG bunkering safety training course for Harvey employees.

Roll-On/Roll-Off Fueling
While the Shell and Harvey facilities are expected to center around facilities using permanent tanks for storage, both on land and on ship, with trucks and/or barges being used for supply, Finland's Wärtsilä has developed a way of making LNG available when a stationary tank solution is not possible. Its LNGPac™ ISO system, developed for small and medium-sized vessels that don't require a large LNG capacity, uses LNG fuel tank containers that can be transported by road to the nearest LNG terminal for refilling and then loaded onboard ship ro/ro style with no bunkering procedures required. Besides the LNG tank, which is mounted on a standard IMO dimension frame (20ft, 40ft and 45ft), the system consists of a docking station and an evaporator skid installed permanently on the ship. The connection points are located at the end of the fuel tank containers, allowing easy hook-up to the onboard fuel gas handling system.

The tank container is also fitted with processing equipment, including the valves and instruments required for operational and safety purposes, along with a pressure build-up evaporator (PBE). The PBE is used to build up and maintain an operational pressure of approximately 5 bar in the tank, with the pressure then feeding gas to the engines instead of relying on rotating pumps or compressors. This feature makes the fuel tank containers completely redundant. If a container must be taken out of service for some reason, another can easily be placed into operation. Because of its roll-on/roll-off nature the LNGPac™ ISO system is seen as particularly applicable to ro/ro ships employed on short sea routes or in the coastal trades.

Bunkering Harmonization
Unfortunately, the various bunkering systems being developed for LNG have caused a problem of their own to date, because of the lack of harmonization, but classification society DNV GL has responded to this by launching a Recommended Practice (RP) that provides guidance on how LNG bunkering can be undertaken in a safe and efficient manner. With the EU poised to help 139 European seaports and inland ports inaugurate LNG bunker stations by 2025, DNV GL felt the time was ripe for standardizing development processes as well as designs and operations.

Jan Tellkamp, project manager for the RP, said its development is based on extensive experience of LNG bunkering-related projects over the past decade, as well as on knowledge that can be drawn from other relevant industries, in particular from the large-scale LNG industry. According to Tellkamp, the RP covers all modes of bunkering a ship with LNG and provides guidance on how to work on the three key topics suggested by recent ISO guidelines – planning, design and operation; safety management systems; and risk assessment. He noted that the concept of "layers of defense" is detailed on both the equipment and procedural levels and that the RP is expected to be formally published later this year after input from the LNG industry.

In Asia, Japan's classification society Nippon Kaiji Kyokai is working on a similar set of guidelines as compatriot shipowner NYK Line prepares to order its first dual fuel tugboat in a project to be subsidized by Japan's Ministry of Economy, Trade and Industry.