Skip to main content

Small scale LNG bunkering made easy

Published by
LNG Industry,

Larissa Hirst, Online Content Manager at The CWC Group Ltd, interviews Lars Sall, LNG Group Manager, Kosan Crisplant, Denmark, on bunkering of LNG for ferries, short sea and inland ships.

What factors are prompting ship-owners to switch to LNG as a fuel?

It is a good mix of the ‘carrot and stick’ approach you could say; the stick being the restrictions on sulfur emissions that have been imposed in the emission control area (ECA) zones as of January last year, and the carrot being the price difference between LNG and marine gas oil (MGO). And with the current low oil prices, the stick approach prevails. Even with a considerable decrease in the price of LNG, the price hasn’t dropped as much as the price of MGO. However, projections for the future claim that LNG will be the cheaper option, but the question is when. Not only does the argument of sulfur emissions vouch for switching to LNG, but there is also the expectation that ship owners will be met with restrictions on NOx emissions at some point in the future. When that will happen is difficult to say, but when it comes LNG will gain even more momentum.

What are your thoughts on marine emission control areas driving the use of LNG as a marine fuel?

I am by no means an expert on ship management, but I believe it is fair to say that emission control is here to stay. We expect the ECA zones to extend geographically and we expect the NOx Tier III emission levels to be introduced in the near future. Furthermore, a global sulfur cap of 0.5% is being imposed as of 2020. And it works - not long ago, I read in a Danish newspaper that only six months after the sulfur cap had been imposed, the sulfur pollution in Denmark had lowered by 50% compared to before 1 January 2015.

So I would suggest a ship owner who expects to operate in Northern Europe or even the Mediterranean will have to consider LNG as the fuel that, for now, is the safest bet when it comes to fulfilling future requirements as well.

How is the oil price impacting end user investment in the LNG industry?

Well, you can read this quite well from DNV GL's projections of LNG penetration: DNV has succeeded in projecting the number of LNG ships up until now, but has had to adjust its 2020 projection downwards from, I believe 1000 vessels to 600. I think the oil price is the primary reason for this, directly because it makes ship owners think twice about their choice of fuel, and indirectly because the shipping industry is suffering from the reduction of world trade due to the present lack of growth in many countries in the world.

However, a ship is an investment with a 20 - 30 year horizon, and therefore LNG still makes good sense. For industrial heavy energy consumers or for large trucking companies considering switching to LNG, the decision has to make more sense economically in the long run and they would thus be tempted to wait. But we have to remember that the LNG/oil price dynamics is only one of several parameters in this decision. Unilever recently announced that [it] will opt for LNG fuelled transport in the distribution of their products. This kind of commitment is great news for all of us.

Is infrastructure still a challenge in fuelling the marine shipping industry?

Most probably yes, but I have also seen a number of positive developments in the past one to two years. As a ship owner you can now buy LNG from numerous suppliers. Competition is there already and supply chains are diversified. So ‘the chicken or the egg’ paradox is evaporating little by little.

I am probably biased in this regard, because bunkering systems is what we do, and we talk a lot about it with our clients and partners, and solutions are available in the market. From a ship owner's point of view, LNG at this early stage requires more involvement in the supply chain and some ship owners are not comfortable with that. This involvement may also require that ship owners invest in bunkering facilities - or convince their bunker supplier to do it for them. And these investments have to be accrued over time tying the ship owner to assets or a long-term supply contract with one bunker supplier - and who wants to make long-term commitments in a market that is young and keeps changing?

Here is where we offer our solutions; we have modularised bunkering equipment that allows ship owners to have efficient LNG bunkering at a low CAPEX.

Tell us about what LNG solutions/ facilities Kosan Crisplant offers?

We are engineers and we have been in the gas business, mainly LPG though, for 65 years. Within LNG, we supply bunkering solutions and small scale liquefaction.

We do not sell gas and we do not operate terminals. What we do is help LNG users build their bunkering solutions to fit their specific needs. We operate in terms of modularised standard equipment, which means we have the building blocks to put together in order to fit the specific requirements of each client without costs going through the roof. This goes for both bunkering and liquefaction as well.

If you are operating a ferry, a short sea or inland ship on LNG, you will typically need to bunker anything from 20 - 300 m3 of LNG per hour. In the low end of this continuum, you can bunker directly out of a tank trailer or an ISO tank. It would be time consuming, but it is quite simple and it is done hundreds of times every day already.

If you require faster bunkering, or more volume than one tank trailer can offer, this is where we come in. We offer different solutions to bunker directly from one to four trailers at the same time or from an intermediate tank on the quayside with flow rates up to 150 -300 m3 per hour. We can do this with a very high level of safety, with no fixed staff to operate the system and with no emissions of LNG. There are quite a lot of ships in this segment, some with projectable sailing routes for which a fixed land-based bunkering installation is suitable. Others are a bit more unpredictable in their sailing patterns, and we can supply them with a movable solution instead.

In terms of liquefaction, we have developed a small scale liquefaction plant that is able to draw natural gas directly from the gas grid or from a bio plant. This equipment is modularised to produce LNG/LBG in modules of 50 tpd. It would make sense to combine up to five to six of these to reach the capacity needed or as demand rises in order to ‘grow as you go.’ The liquefaction process can be started or stopped in only 30 min., which makes it possible to balance production with power price variations and short term market demands.

In countries with a dense natural gas grid, it is a bit foolish to drive a tank trailer to a terminal far away to pick up LNG. We believe it makes better sense to liquefy the gas locally, thereby minimising the distance between the source of the LNG and the consumer. This would entail faster delivery times and in countries where biogas is produced and sent into the natural gas grid, it opens a whole new market for CO2 neutral LNG - or LBG as it would be called in that case.

In Denmark, we have a case that describes this vision perfectly. The small island of Samsoe is already 100% fossil free in its electricity production. Now they have their eyes on the transport sector: they are currently investigating the possibility of using local waste in the biogas production and subsequently liquefying the biogas to make fuel for their municipal vehicles and their new dual fuel LNG ferry, MS Isabella, which connects the island to the mainland. We believe we will see more of these examples in the future.

What are you looking forward to at CWC’s LNG Fuels Summit?

I’m looking forward to hearing the latest developments in LNG for marine, industry and heavy transport. We participated last year as well, and the outcome was very valuable for us in the sense that all the key people are there and the presentations are good and relevant to us. Besides, I am looking forward to presenting some new things as well - we are working on some very exciting projects that I think will be interesting for the Summit to hear about.

CWC's LNG Fuels Summit will take place in Amsterdam, the Netherlands, from 14 - 16 June 2016.

Edited by


Read the article online at:

You might also like


Embed article link: (copy the HTML code below):