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1、1 LNG VALUE CHAIN September 2023 2 Table of Contents 1.Introduction.3 2.Upstream.3 2.1.Exploration&Production(Offshore and Onshore).3 2.2.Fracking.4 2.3.Processing.4 2.4.New Trends FLNG.5 3.Midstream.7 3.1.Liquefaction.7 3.2.Transportation.8 3.2.1.Pipeline.8 3.2.2.Marine Transportation.9 3.2.3.Small
2、 Scall LNG Distribution.19 4.Downstream.20 4.1.Storage&Regasification Terminal.20 4.2.FSRU.20 4.3.Distribution.20 4.3.1.Power Generation.20 4.3.2.Heating.21 4.3.3.Chemical Plants.21 4.3.4.GTL.21 5.New Technology Trends.22 6.Colors of LNG“Gray/Blue/Green”.23 6.1.Definition.23 6.2.Incentives.24 7.Envi
3、ronmental Aspect.26 7.1.Regulatory Framework.26 7.2.Methane Slip.28 8.Market Realities.29 8.1.Global Energy Demand.29 8.2.LNGC Fleet&Orderbook.30 8.3.Contracts&Pricing.32 9.Societal Perspective.36 9.1.Livelihood.36 3 1.Introduction Liquefied Natural Gas(LNG)has emerged as a transformative force in t
4、he global energy landscape,offering a cleaner and more sustainable alternative to conventional fossil fuels.This comprehensive paper delves into the intricate LNG value chain and explores the upstream processes of exploration,production and processing.Furthermore,it addresses the new trends and inno
5、vations that have revolutionized the industry.The midstream sector encompassing liquefaction,transportation via pipelines,specialized LNG carriers and small-scale LNG distribution plays a crucial role in ensuring the efficient and reliable movement of LNG from production centers to end-users across
6、the globe.Downstream operations,including storage,regasification and distribution,facilitate the utilization of LNG in various sectors such as power generation,heating,chemical plants and gas-to-liquid(GTL)conversion.Moreover,this report delves into environmental aspects,regulatory frameworks and ef
7、forts to eliminate or mitigate methane emissions,thereby reducing the industrys environmental impact.Additionally,the market realities,with a growing LNG Carrier fleet,expanding orderbook and contracts shaping the market,are also analyzed.Finally,this report considers the societal perspective and ac
8、knowledges how the LNG value chain influences livelihoods and economies worldwide.As the report navigates this ever-evolving industry,exploring new technology trends and the gray/blue/green categorization of LNG,it aims to shed light on the significance of LNG as a vital pillar of the global energy
9、transition.This report is intended for stakeholders who are new to the LNG world.It reintroduces upstream,midstream and downstream operations and provides a comprehensive view of the LNG value chain,and it highlights actual and future environmental challenges in the eyes of world nations energy secu
10、rity.2.Upstream 2.1.Exploration&Production(Offshore and Onshore)For centuries,oil and gas have stood as steadfast energy sources,with gas found as associated gas with oil,in independent gas reservoirs and even entwined with coal as coal seam gas.Unveiling these invaluable resources lies in the hands
11、 of geological experts as they decipher the intricate puzzle of subsurface pockets and reveal the treasure hidden beneath.Geological mapping,guided by sediment types and fault lines,serves as a compass in this endeavor,revealing promising locations for further data gathering.Understanding local rese
12、rvoirs and sediment basins becomes paramount,providing valuable insights into the success rates and overall characteristics of a find,encompassing the rock and fluid properties,and offering estimations of total volumes and possible recovery.Embracing the allure of promising geology,the exploration j
13、ourney ventures further and sets the stage for gathering seismic data,initially on land.Early oil and gas exploration and production unfurled onshore,marking the advent of this industrys transformative impact.With the development of suitable offshore exploration and recovery technologies,promising g
14、eological formations on the seabed could also be 4 identified and accessed for development of previously unknown and unrecoverable resources.2.2.Fracking Fracking,short for fracturing the reservoir,is a contemporary term that has sparked a revolution in shale gas exploration witnessed in regions lik
15、e North America,China and Argentina and holds transformative power within its core.Fracking combines technical prowess with geological insight.The process entails high-pressure injection of water,effectively breaking up the reservoir,carving new pathways for precious hydrocarbons to traverse through
16、 the intricate rock formations.To preserve these newfound fissures,proppants and delicate particles strategically introduced into the injection fluid,should maintain their resilience when the pressure subsides.The result is a web of pathways ensuring fluid migration,marking a revolutionary leap in h
17、ydrocarbon extraction.As with any pioneering breakthrough,controversy inevitably follows.Given the substantial volumes required for fracturing reservoirs,water takes center stage.Environmental concerns arise and the quest for water reuse and effective management becomes paramount,which is a business
18、 endeavor in its own right.The dynamic interplay between energy exploration and responsible stewardship of natural resources remains a constant and vital pursuit.2.3.Processing Gas,often found intertwined with oil in the earths depths,is referred to as associated gas when it accompanies crude oil.Wh
19、ile gas from pure gas reservoirs necessitates less processing,historically,its value remained overshadowed by the significant revenues derived from oil and Liquified Petroleum Gas(LPG)products.The allure of the liquid riches compelled the flaring of gas,a practice that endured until recent times,and
20、 sought to prioritize oil over gas production.The journey of processing the reservoir fluid commences with the meticulous removal of sand and sediments,followed by the critical task of bulk separation,parting oil,water and gas.This separation typically unfolds in two or three stages of flash separat
21、ion and progressively lowers pressures to extract distinct components.The gas extracted during the initial inlet gas separation demands further refinement through compression before it proceeds to liquefaction and it must be compressed to an optimal pressure to facilitate subsequent treatment.In the
22、 quest for excellence in cryogenic processing,the focus turns to addressing mid-range hydrocarbons that might solidify during liquefaction.For this reason,its imperative to strive for the elimination of hydrocarbons that are heavier than butanes and most LPGs,therefore,aligning with the precise LNG
23、heating value specifications.Additionally,acknowledging that there does not exist a“one-size-fits-all global LNG specification will help with this quest,especially when considering that the quantity of LPG in the LNG varies slightly between lean 5 (low in heavier hydrocarbons)and rich(higher in heav
24、ier hydrocarbons)LNG compositions.Another facet of this meticulous process involves the removal of any contaminant present in the gas before it undergoes liquefaction.Certain gas fields harbor mercury,which poses corrosive threats to the aluminum components employed in cryogenic heat exchangers.Cons
25、equently,a guard bed is employed to effectively remove mercury from the gas,mitigating any potential hazards during subsequent cryogenic processing.Steering away from undesired elements,the LNG preparation further necessitates the eradication of acid gas,sulfur compounds and carbon dioxide.The prese
26、nce of these compounds can lead to solidification before reaching the methane liquefaction temperature.A proven method for eliminating acid gas involves passing the gas counter with an absorbing fluid such as amine,in a contactor,therefore,effectively capturing and removing acid gas from the liquefa
27、ction feed gas.The absorbing fluid,amine,emerges as an aqueous solution and renders the gas that leaves the acid gas removal section of the plant water-saturated.Prior to liquefaction,it becomes imperative to eliminate all traces of water to evade ice formation and the dreaded occurrence of hydrates
28、 within the cryogenic plants components.The most common technique for accomplishing this task involves leveraging molecular sieve absorber vessels,where several molecular sieve units play an essential role and must undergo sequential regeneration with hot gas to ensure operational efficiency and imp
29、eccable performance throughout the process.2.4.New Trends FLNG Traditionally,LNG liquefaction plants have found their homes onshore,and while some of these facilities were situated in remote areas,they demanded the establishment of entire cities and intricate infrastructures to support the plant ope
30、rations and personnel.Pre-processing and bulk separation have conventionally been conducted at the primary production site,whether situated onshore or offshore.The feed gas destined for liquefaction would thus undergo the aforementioned processing steps before it could be transformed into LNG.Ventur
31、ing into the vast and remote offshore gas fields often posed significant challenges due to the substantial upstream costs,including the construction of extensive pipelines.The quest for a more cost-effective solution led to the concept of floating liquefaction facilities(FLNGs),where both liquefacti
32、on and necessary pre-processing occur on a floating structure that is positioned in proximity to the gas discovery site.The LNG,along with potential by-products like LPG and Condensate,could be directly offloaded onto product carriers,swiftly reaching the market from the floating LNG facility.Three
33、crucial factors initially held back the widespread adoption of floating liquefaction technology.These concerns revolved around uncertainties regarding the impact of 6 motion on key process systems,the robustness of cargo containment systems,and most notably,the intricacies surrounding the offloading
34、 of LNG-to-LNG carriers.The success of the pre-processing phase before liquefaction hinges on unwavering reliability.Ensuring the absence of heavier hydrocarbons,acid gas components and water is imperative to prevent any risks of impurity solidification within the cryogenic heat exchangers during li
35、quefaction.Past experiences with distillation columns on floating production units yielded valuable lessons,necessitating the use of structured packing instead of trays or random packing.Applying sufficient design margins and considering motions and accelerations during column design and constructio
36、n have been essential learnings applied to current operational units,significantly mitigating the challenges posed by predominant,mild metocean conditions.Leveraging substantial experience gained from LNG tanks onshore and aboard ships,the transition to floating liquefaction presents a significant s
37、imilarity to existing LNG ship technology.However,one critical difference arises.LNG carriers typically operate either at full or near-empty tank levels,while liquefaction units must contend with varying tank filling levels during LNG production until reaching capacity.For large-scale LNG carriers,m
38、embrane or type B tanks are predominantly employed,with the rising popularity of type A tanks and extensive use of Type C tanks in the small to mid-scale segment.Meticulous tank design and operational measures ensure the availability of reliable cargo containment systems for full offshore applicatio
39、n of liquefaction.Strengthening and modification of systems,including the number and size of individual tanks,have been pursued to optimize the technologys performance.The transfer of LNG from FLNG to the export carrier emerged as the primary uncertainty surrounding the first Financial Investment De
40、cision(FID)for FLNG projects.While most onshore terminals employed LNG loading arms connected to the midship manifold of LNG carriers,the early days of Floating Storage and Regasification Units(FSRU)business primarily relied on hoses for LNG cargo transfer,managing return boil-off gas and displaced
41、gas during loading.Emulating the successful deployment of floating hoses for offtake operations from FPSOs in benign locations and bow-loading systems in harsher conditions,the floating LNG concept sought to embrace similar methodologies.The commercial availability of floating hoses was not yet real
42、ized during the first FIDs,which necessitated alternatives.Current FLNG projects have adopted side-by-side ship-to-ship transfer systems,with larger FLNGs equipped with loading arms specifically designed to accommodate a floating structure.Smaller units,on the other hand,rely on transfer hoses in Sh
43、ip-to-Ship(STS)mode.These arrangements mandate meticulous metocean conditions and mooring system configurations to enable LNG carriers to approach,load and depart in a side-by-side configuration.Until the feasibility of shuttle LNG carriers with bow loading and dynamic positioning during cargo filli
44、ng operations is established,areas with excessively rough metocean conditions remain unsuitable for FLNG deployment.7 3.Midstream 3.1.Liquefaction Natural gas will undergo liquefaction by subjecting it to cooling at temperatures as low as-161C,reducing its volume in its liquid state by approximately
45、 600 times compared to its gaseous state.In the United States alone,there are over 100 patents related to the liquefaction of natural gas.However,the commercial use of liquefaction primarily relies on three main systems:cascade,mixed refrigerant(MR)and expansion cycles(EXP).Most available onshore or
46、 onboard liquefaction processes are based on these cycles or a combination thereof.Prior to liquefaction,natural gas requires pretreatment to remove impurities such as mercury,sour gas(CO2,H2S),non-hydrocarbon(N2)and water(drying).A typical cascade refrigeration cycle involves three interconnected r
47、efrigeration cycles using different refrigerants,including methane,ethylene(or ethane)and propane.These cycles function in series,with the first stage propane refrigeration cycle providing cooling capacity for methane,ethylene(or ethane)and natural gas(NG).The second stage ethylene or ethane refrige
48、ration cycle cools methane and NG,while the third stage methane refrigeration cycle)cools NG.Subsequently,as the NG is gradually cooled and liquefied,the transfer to an LNG storage tank takes place.Its worth noting that hydrocarbon-based pure refrigerants can also be utilized,but their flammability
49、poses safety concerns,making them unsuitable for applications like FLNG where combustibles inventory must be minimized.The expansion liquefaction process(EXP)for natural gas employs a reverse-Brayton cycle refrigeration using an expander,where the gas does work to achieve the cooling purpose.The out
50、put work of the expander is used to drive the compressor during the liquefaction process for energy-saving purposes.Nitrogen or NG is often used as the expansion working fluid and serves as the primary refrigerant for this cycle.The EXP process is simple and has a compact structure,making it easy to
51、 start and stop.However,it does incur higher energy consumption and is commonly used in small and medium-sized LNG plants.On the other hand,the mixed refrigerant(MR)liquefaction process is a frequently utilized method for natural gas liquefaction.This process involves a multi-component mixed refrige
52、rant that replaces multiple pure component refrigerants.MR offers advantages such as requiring less equipment,a simpler process and lower corresponding investment.The MR undergoes compression and cooling through compressors and air coolers before entering the heat exchanger for further cooling.After
53、ward,the MR is throttled for additional cooling via the Joule-Thomson valve,and then the vaporization heat of NG is utilized to evaporate in the heat exchanger to complete the cycle.The choice of liquefaction processes largely depends on its intended application.For large-scale onshore projects with
54、 a capacity exceeding one million tons LNG per annum(MTPA),the cascade and mixed refrigerant processes prove more suitable.Conversely,for onshore,small-scale applications with a capacity below one MTPA,the single MR process is preferred,sometimes accompanied by the EXP process.The 8 characteristics
55、of offshore applications,such as footprint,ease of maintenance,sensitivity to motion and safety considerations,make the MR and EXP processes more appropriate than the cascade process.3.2.Transportation 3.2.1.Pipeline The majority of the worlds natural gas is transported through extensive pipeline ne
56、tworks,enabling swift delivery to processing facilities and to end consumers on land.This intricate network comprises three distinct types of pipelines along the transportation route:1.Gathering Pipeline System:The gathering system consists of low-pressure,small pipelines responsible for transportin
57、g raw natural gas from the wellhead to the processing plant.2.Intrastate/Interstate Transmission Pipeline System:These wide-diameter,long-distance pipelines convey natural gas from producing and processing areas to storage facilities and distribution centers.Along the transmission route,several comp
58、ression or pumping stations are strategically placed.These stations house one or more compressor units that receive the transmission flow from a preceding station and enhance the rate and pressure of the gas to facilitate its movement along multiple pipelines,ultimately reaching various markets and
59、consumers.3.Distribution Pipeline System:The distribution pipeline system brings gas closer to cities and residential areas,where local distribution companies lower the gas pressure to a level suitable for residential and commercial establishments.Smaller service lines extend from the distribution s
60、ystem,supplying natural gas to homes,businesses,or industrial areas as needed as indicated in Figure 1.Figure 1:Distribution Network by Pipeline 9 To enable the movement of natural gas along the pipeline,it must be maintained at high pressure.To ensure consistent pressure levels,compressor stations
61、are strategically placed at intervals throughout the pipeline network.When the natural gas enters a compressor station,it undergoes compression through either a turbine,motor or engine.Metering stations are also installed at various points along the pipeline network to continuously monitor pressure,
62、flow rates,and detect potential leaks.Offshore pipelines pose higher risks for leakage and environmental impacts compared to onshore pipelines.However,significant technological advancements in pipeline materials and monitoring systems have greatly improved pipeline safety and efficiency,mitigating p
63、otential risks.While pipelines have long dominated international gas trade,the export of Liquefied Natural Gas(LNG)has experienced remarkable growth since the beginning of the century,more than tripling its volume.In their Global Gas Outlook 2050,the Gas Exporting Countries Forum(GECF)predicts that
64、by 2026 the global LNG trade will overtake the pipeline trade.Considering in 2018,LNG exports accounted for just over half of the total international gas trade,underscoring its increasing significance in the global energy market.3.2.2.Marine Transportation When transporting natural gas by pipeline b
65、ecomes unfeasible due to political,economic or environmental reasons,it is typically transported in its liquified state.This scenario often arises in regions located far from gas extraction sites without connecting pipelines but with favorable conditions for water transport.In such cases,cargo ships
66、 are used to deliver LNG efficiently at sea,as LNG exhibits excellent transport properties in its liquified form.Upon regasification,one cubic meter of LNG produces about 600 cubic meters of natural gas under normal Figure 2:Global Natural Gas Trade by Flow Type(bcm)10 conditions.The primary challen
67、ge lies in maintaining LNGs cryogenic condition at-161C,for which various containment systems(CCS)have been employed and categorized in the International Code for the Construction and Equipment of Ships Carrying Liquefied Gas in Bulk(IGC CODE-IMO RESOLUTION MSC.370(93).This resolution classifies CCS
68、 types into two main categories:Independent Tanks(Type A,B,and C),which are independent from the hull of the ship,and Integrated Tanks(Membrane Tanks),where the hull forms part of the tank.Independent Tank Type A These tanks are designed using the traditional method of ship structural design(prismat
69、ic shape)and are commonly used for LPG carriers.They can carry LPG at near-atmospheric conditions and can also carry LNG.The design pressure of Type A tanks is less than 700 mbar when constructed primarily of plane surfaces,with insulation provided on the outside.Additionally,potential leakage in th
70、e independent tank is mitigated by surrounding spaces designated as the secondary barrier which must hold the entire tank volume at a specified heel angle.For LNG carriers of this type,a full secondary barrier is required to prevent brittle fracture due to the cryogenic temperature of LNG.The space
71、between the tank and the hull,known as the hold space,must be inerted when carrying flammable cargoes to prevent a flammable atmosphere from forming in case of a leakage in the primary barrier.Over the years,the need for a full secondary barrier in LNG carriers with Type A tanks presented technical
72、and economic challenges.The first type A tank LNG carriers were built in the 1960s,but likely due to high costs were not repeated.However,about a decade ago,LNT Marine introduced its LNT-A box system.This innovation involved fixing the insulation system to the ships hull with a liquid-tight inner su
73、rface to contain any leaks from the cargo tank.Between the tank and the secondary barrier lies a cold inter-barrier space,providing direct access for visual inspections and maintenance of both barriers and tank supports.The tank itself is made of stainless steel(possibly nine percent nickel steel or
74、 aluminum)which slightly contracts under cryogenic conditions(3mm/m at-161C)and its internal structure mitigates sloshing(swash bulkhead)while eliminating loading limitations.In 2015,the first LNG carriers using the LNT-A box system were signed with SAGA LNG Shipping,CMHI Shipyard and ABS Class(SAGA
75、 DAWN-45km3).Originally designed for small and middle-scale LNG carriers,LNT Marines system has since gained approval in principle from ABS for a 175k m3 design as well as for a LNT Fuel-box system,which will interest other types of ships looking to utilize LNG as a fuel.11 Torgys LNG A-Tank represe
76、nts a significant advancement in type A tank systems,particularly concerning LNG usage requirements.Built upon the conventional type A tank design,commonly used for LPG,the Torgy LNG A-Tank incorporates an entire secondary barrier to meet the stringent demands of LNG applications.To achieve this,Tor
77、gy LNG utilizes a metallic barrier composed of thin plates made of stainless steel,carefully arranged to withstand the cryogenic environment and the challenging effects of cooldown during operation.The innovative pattern developed by Torgy LNG,known as the Fishbone pattern,is a patented design and l
78、ayout that plays a crucial role in ensuring the systems efficiency and reliability.This pattern is specifically engineered to release stress in the membrane plates during cooldown,enhancing the tanks structural integrity and overall performance.The Torgy LNG A-Tanks exceptional features make it part
79、icularly well-suited for small-scale LNG carriers and even more applicable for LNG fuel tanks.The system offers a compelling alternative to Type C tanks,offering greater space efficiency and enhanced functionality for LNG-fueled vessels.With its cutting-edge design and robust performance,Torgys LNG
80、A-Tank provides a valuable option for players in the LNG industry,further advancing the state-of-the-art in LNG containment technology.12 Independent Tank Type B The design of these tanks prioritizes early crack detection to provide a time margin before potential failure occurs.To achieve this,vario
81、us methods are employed,including first principle analysis to determine stress levels at different temperatures and pressures,evaluating the fatigue life of the tank structure and studying crack propagation characteristics.This enhanced tank design incorporates a partial secondary barrier,typically
82、in the form of a drip pan beneath the tank bottom with insulation applied externally.Type B spherical tanks,the most common in LNG ships,boast self-supporting spherical structures that eliminate sloshing concerns.These tanks are connected at the equator to a single cylindrical supporting skirt,which
83、 is welded to the ship structure.Made of aluminum alloy,these tanks have internal diameters above 40m and a shell thickness of up to 50mm.The outer surface of the tank and the upper part of the skirt are insulated with materials such as polyurethane,Styrofoam,or equivalent.Nitrogen atmosphere is use
84、d to check for leakages in a special thin layer called tinfoil,which also keeps the insulation dry.The tanks contraction and expansion during cool down and warm up,reaching up to 0.6m,are managed through flexible bellows connected to the ships lines via bell-shaped structures on the bottom,absorbing
85、 variations.The design allows higher pressures up to 2100 mbar,and net tonnage is determined solely by the ships dimensions rather than its cargo capacity or load.Moss tanks LNG carriers,with half the spherical shape protruding above the deck,incur higher tolls and fees,such as when passing through
86、the Suez Canal,due to the increased ship volume per cubic meter of LNG transported.Additionally,the designs protruding shape may impact the ships aerodynamics,rendering it more susceptible to wind forces compared to membrane tanks.Courtesy of Torgy LNG 13 Mitsubishi Heavy Industries,Ltd.(MHI)has int
87、roduced a next-generation spherical tank LNG carrier known as SAYAENDO,inspired by the term peas in a pod.This innovative design,first introduced in 2012,features a continuous tank cover,integrating with the ships primary strength members to house all tanks under one roof while maintaining necessary
88、 compartment divisions.This design contributes to the overall structural strength and enables hull weight reduction.By providing a continuous cover over the length of the ship,the SAYAENDO design optimizes the structural efficiency and performance of the LNG carrier.In 2017,Kawasaki Heavy Industries
89、,Ltd.made a significant announcement regarding the approval in principle for a new Moss-type LNG storage tank.This innovative concept introduces a non-spherical tank design,aimed at maximizing space utilization on board LNG carriers.By adopting this non-spherical design approach,Panamax-size LNG car
90、riers can significantly enhance their total carrying capacity,achieving a remarkable 15 percent increase in volume compared to traditional spherical tanks.The implementation of non-spherical tanks represents a novel approach to optimize the available space on LNG carriers,enabling them to transport
91、larger quantities of LNG without compromising safety or efficiency.This advancement in tank design opens new possibilities for the LNG industry,enhancing the transportation capacity of vessels and improving the overall economics of LNG shipping.The approval in principle for this cutting-edge technol
92、ogy marks a significant step towards enhancing the global LNG transportation infrastructure.Courtesy of MHI(Tech Review No.51 March 2015)14 In 1985,the Japanese shipbuilder IHI developed the SPB Tank,a Type B cargo containment system featuring self-supporting prismatic tanks.This innovative design r
93、evolutionized LNG carriers by offering enhanced space efficiency and structural integrity.The first vessels equipped with IHIs SPB cargo containment system,built back in 1993,were Polar Eagle and Arctic Sun with both being LNG carriers with a capacity of 87,500 m3.Similar to the Moss Rosenberg tanks
94、,the SPB tanks are prefabricated and installed inside the inner hull as complete units.These tanks have a rectangular shape and are constructed from aluminum plates with thicknesses ranging from 15 to 25mm and covered with heat-insulating material blocks.Supporting blocks made of reinforced plywood
95、are fixed at the bottom and top of the tanks,mounted on steel supports on the double bottom structure to ensure the tanks stable position in all directions,even in the event of flooding.Each tank is equipped with an internal centerline bulkhead and a subdividing swash bulkhead,which effectively elim
96、inate sloshing issues experienced in partially filled tanks.This design feature enhances the safety and stability of the vessel during transportation.Moreover,the SPB tank design facilitates practical access for inspection and maintenance to the inner hull,ensuring the continued integrity and reliab
97、ility of the cargo containment system.Furthermore,vessels equipped with the SPB cargo containment system boast a completely flat weather deck and a double hull,further contributing to the structural strength and overall safety of the LNG carriers.This unique design approach offers several advantages
98、,including optimized space utilization,improved vessel stability and enhanced maintenance accessibility,making the SPB Tank a significant advancement in LNG carrier technology.Courtesy of MHI(Tech Review No.51 March 2015)15 Independent Tanks Type C Type C tanks are pressure vessels designed to opera
99、te at pressures higher than 2 bar and do not require a secondary barrier.They are primarily constructed with curved surfaces and can be cylindrical or spherical in design,mounted either vertically or horizontally.Some Type C tanks utilize bi-lobe or tri-lobe designs to optimize the hull geometry.Whe
100、n fitted on fully pressurized gas carriers,the typical design pressure ranges between 10 to 18 bar,with the ability to withstand approximately 50 percent vacuum.Due to the high reliability of pressure vessel design,a secondary barrier is unnecessary.Type C tanks typically employ one of two types of
101、insulation:double shell with vacuum and insulation in the annular space or single shell with spray insulation on the outer layer.These variations in design influence the level of the hazardous area adjacent to the tank,especially if enclosed.One of the advantages of Type C tanks is the allowed press
102、ure build-up,which proves beneficial for LNG containment.The pressure rise reduces boil-off,achieving vapor saturation where the quantity of liquid transforming to gas is in equilibrium with the quantity of gas turning back into the liquid state.This equilibrium results in an increased holding time
103、compared to other tank concepts.Additionally,the pressurized boil-off gas can be directly utilized by consumers,like boilers,or serve as fuel gas for low-pressure engines.While Type C tanks are used in both LPG and LNG carriers,the tanks in the LNG trade are particularly dominant in mid-scale LNG ca
104、rriers and with ships employing LNG as a fuel.The designs versatility and efficiency make it a popular choice for vessels in this capacity range,and it contributes to the continued growth and adoption of LNG as a viable fuel source in the maritime industry.Courtesy of Watts Energy and Engineering Co
105、urtesy of Tradewinds 16 Membrane Tank Membrane tanks are non-self-supporting tanks with the double hull being an integral part of the tank structure.These tanks utilize a primary membrane,which is a thin material supported by the adjacent hull structure(inner hull)through insulation.To ensure safety
106、 and redundancy,a complete secondary barrier is required.Originally designed with a maximum pressure of 250 mbar,membrane tanks may be designed with design pressure of up to 700 mbar.Recent developments in operational requirements have seen further incremental increases in the design pressures.Membr
107、ane tanks are commonly found on LNG carriers and are commercially available in two main systems:Gaztransport and Technigaz(GTT)NO96 and Mark III systems.GTT was formed in 1994 through the merger of Gaztransport and Technigaz,bringing together two technologies with extensive experience in LNG bulk tr
108、ansportation the NO82 and Mark I systems.These technologies have become dominant in standard to large-scale LNG carrier containment systems.The NO96 concept is an evolution of the NO82 system and features primary and secondary membranes made of Invar,a 36 percent nickel-steel alloy with a thickness
109、of 0.7mm.The primary membrane contains the LNG cargo while the secondary membrane identical to the primary provides 100 percent redundancy in the event of a leak.The insulation,made of plywood boxes filled with Perlite,has been optimized by GTT to meet shipowner and shipyard requirements.Various mod
110、ifications have been made to improve boil-off rates(BOR)using glass-wool(NO96 GW)or foam(NO96 L03)instead of plywood insulation while introducing a pillar structure and employing insulating Reinforced Polyurethane Foam(R-PUF)panels.17 The Mark III concept is a containment and insulation system direc
111、tly supported by the ships hull structure.It consists of a primary corrugated stainless-steel membrane(1.2 mm thick)positioned on prefabricated polyurethane insulation panels.It includes a complete secondary membrane made of composite material(Triplex 2 Glass clothes with an aluminum foil in between
112、).Improvements to decrease BOR led to the development of Mark III Flex and Flex+systems,with focus on enhancing insulation thickness.The latest evolution,GTT Next1,features a 1.2 mm stainless steel primary membrane and a 0.7 mm Invar secondary membrane with Reinforced Polyurethane foam insulation.Th
113、is design allows for potential optimization of tank arrangements by having three tanks instead of four,therefore,reducing costs and increasing overall efficiency.LNG Propulsion Due to the cleaner-burning properties of natural gas,using it as a propulsion system for ships has been an attractive optio
114、n for companies looking to comply with IMO and MARPOL environmental regulations.For LNG carriers,utilizing their cargo for propulsion offers significant advantages,and various options are available.Boil-off gas(BOG)is a natural occurrence in LNG carriers due to heat transfer and ship motion,and if n
115、ot managed properly,it can increase the pressure inside the tanks to critical levels.Venting the BOG is not a viable solution as methane,being a greenhouse gas,has been forbidden except in emergencies.Additionally,it must be recorded in the ships logbook.Approximately two decades ago,reliquefaction
116、plants were expensive and complicated to operate,thus making the use of BOG 18 for propulsion a viable alternative.Burning methane as a fuel in the propulsion system results in reduced emissions of sulphur oxides,nitrogen oxides and approximately 26 percent lower carbon dioxide emissions.If there is
117、 insufficient BOG for propulsion,it can be forced back into a gaseous state with compressors and heat exchangers.Another alternative to this is using Heavy Fuel Oil(HFO)to power the propulsion.Initially,steam turbines(STPS)were the dominant propulsion machinery for LNG carriers due to their ability
118、to burn BOG while at sea despite their relatively low efficiency.However,the low fuel efficiency of steam turbines led shipowners to explore other propulsion systems.The Slow Speed Diesel with Reliquefaction Plant(SSDR)combines a single fuel diesel mechanical propulsion system with a re-liquefaction
119、 system.The entire BOG is liquefied and returned to the cargo tanks instead of being used as fuel.A Gas Combustion Unit(GCU)is typically fitted for Boil-off management and tank safety,and diesel or HFO is injected into the slow-speed diesel engines which are usually in a twin-screw configuration.Imp
120、rovements and simplification of reliquefaction plants have contributed to the adoption of SSDR propulsion.The Dual Fuel Diesel Electric Propulsion(DFDE)uses diesel engines designed to burn BOG as well as diesel fuel oil.Multiple diesel generators provide all the vessels power requirements,including
121、propulsion,and a GCU is typically present to manage BOG when the main propulsion system is not in use.DFDE engines offer increased fuel efficiency and cargo capacity,lower fuel consumption,higher flexibility in operation and lower emissions.Around 2002,owners began building LNG carriers with dual-fu
122、el diesel engines,accounting for the bulk of the modern LNG carrier fleet.These engines provide operational benefits and environmental advantages.Since 2012,engine makers have offered engines with slow-speed,two-stroke engines known as MEGI(high pressure)or X-DF(low pressure).They were specifically
123、designed for natural gas-propelled ships.The MEGI engine operates on a high-pressure natural gas(350 bars)and fuel,and it generates minimal methane slip during gas operation.On the other hand,the X-DF engine operates on the Otto cycle when running on gas,meeting IMOs Tier III NOx limits in Emission
124、Control Areas(ECA)and significantly reducing particulate matter emissions.Both engines offer environmental benefits,though the MEGI system is more fuel-efficient than the X-DF.Another player in the market is the Steam Turbine and Gas Engines(STaGE)propulsion system,which is a hybrid between the STPS
125、 and DFDE.This innovative configuration combines an ultra-steam turbine with a dual-fuel diesel electric system,with waste heat from exhaust gases used to improve efficiency.The Sayaringo STaGE,developed exclusively by Mitsubishi Heavy Industries(MHI),is an advanced version of the Sayaendo LNG carri
126、er.19 Overall,the LNG carrier propulsion options offer various benefits in terms of fuel efficiency,emissions reduction,and cargo capacity,allowing shipowners to choose the most suitable system for their operations.3.2.3.Small Scall LNG Distribution LNG carriers are primarily used to transport LNG f
127、rom export terminals in one country to import terminals in another.Additionally,they are designed to handle large capacities to make the transfer economically viable.The standard capacity for LNG carriers is approximately 174,000 m3 currently,although it can vary between 138,000 m3-266,000 m3.In reg
128、ions where LNG demand fluctuates significantly during the year such as during peak shaving in winter or due to geopolitical tensions affecting demand there is a need for supply flexibility.Additionally,there may be requirements to cover areas that are distant from existing LNG terminals,like remote
129、islands or newly developed LNG bunkering facilities.To meet these smaller and specific LNG needs,the small-scale LNG carriers market has emerged,catering to local trade or bunkering operations.The market for small LNG carriers received a boost from the IMOs Energy Efficiency Existing Ship Index(EEXI
130、)and Carbon Intensity Indicator(CII)regulations,which gives a good opportunity to shipowners to turn to LNG to comply with environmental regulations.As a result,there has been an increase in the construction of small LNG carriers for bunkering purposes.The bunkering vessels market,which involves ref
131、ueling LNG-fueled vessels,has seen growth in recent years.Truck-to-ship transfer is currently the most common configuration at terminals and ports due to its low capital investment and minimal infrastructure requirements.However,ship-to-ship and shore-to-ship transfer methods are gaining popularity
132、due to their ability to handle larger storage capacities and higher flow rates.Europe and Asia have been at the forefront of adopting these newer transfer methods.Source:IGU 2023 World LNG Report Source:IGU 2023 World LNG Report Figure 3:Historical and future vessel deliveries by propulsion type,201
133、7-2028 20 Most LNG bunkering vessels use Type C tanks,but some newer vessels employ membrane tanks,specifically those with GTT Mark III Flex technology.These newer designs focus on improving the bunkering operation and fender installation.Pressure differences between bunkering vessels with Type C ta
134、nks and dual-fuel ships with membrane tanks can be an issue during the transfer of LNG,necessitating decompression.Regulations for bunkering conventional fuels were already in place,but for LNG transfer,port authorities had to start from scratch.Establishing bunkering regulations involved creating w
135、orking groups and gaining acceptance from local authorities,government officials and the public which led to a slower development process.Nevertheless,the number of ports worldwide offering LNG bunkering has been steadily increasing,with plans for more facilities in the future to meet the growing de
136、mand.According to Clarksons research,there are 185 ports offering LNG bunkering,and this number is expected to reach 235 by 2025.4.Downstream 4.1.Storage&Regasification Terminal Traditionally,LNG has been re-gasified at its destination for utilization as natural gas,a predominant practice to this to
137、day.The exception lies in a portion of LNG used solely as transport fuel for road,rail or maritime transport.Conventional regasification terminals are onshore facilities equipped with jetties to receive LNG carriers and large storage tanks for liquid LNG storage.Sufficient storage capacity is vital
138、to maintain a steady market supply between incoming cargoes and to accommodate a full cargo with each ship arrival.The process involves pumping LNG through onshore regasification facilities before distributing it via pipelines or delivering it to end consumers.4.2.FSRU The emergence of Floating Stor
139、age and Regasification Units(FSRUs)occurred in the early 2000s,introducing a floating counterpart to the onshore regasification terminal.FSRUs are predominantly ships with added regasification capabilities,allowing them to serve as carriers or be anchored in specific locations to provide storage and
140、 regasification services.The inherent advantages of FSRUs include swift deployment,mobility to shift between locations,construction in a controlled shipyard environment and cost-effectiveness for entering new markets.Additionally,the risk associated with FSRU deployment is considerably lower compare
141、d to developing new land-based solutions,as the unit can be moved or traded in response to market changes.4.3.Distribution 4.3.1.Power Generation Regassified LNG is,most commonly,utilized for power generation.It is not unusual for the power plant and regasification unit to be situated adjacent to ea
142、ch other.Innovative applications of regasification cold energy have been employed in specific locations like Malta and the Netherlands.In Malta,the cold energy is 21 harnessed to chill the inlet air to the gas turbines used in the power plant,effectively increasing the thermal efficiency of the faci
143、lity.Conversely,in the Netherlands,where seawater temperatures are too cold for use as a heating medium during wintertime and freezing or clogging of the vaporizer heat exchangers must be avoided,the vaporizer circuit exchanges energy with onshore industrial waste heat to mitigate these challenges.4
144、.3.2.Heating Regassified LNG,in its natural gas form,serves as an excellent medium for providing heat in both distributed and centralized systems.Often,steam or hot water is employed for heating and heat distribution purposes.Utilizing natural gas as a clean and efficient burning fuel supply renders
145、 it an ideal choice for such applications.4.3.3.Chemical Plants Natural gas serves a dual role in chemical plants,acting as both a valuable feedstock and a reliable fuel source.While providing an exhaustive list of the various chemical plant applications is impractical,it is noteworthy that natural
146、gas can serve as the foundation for essential greener fuels in the energy transition like methanol,hydrogen and ammonia.The environmental attributes of these emerging fuels will be determined by the origin of the natural gas and the processing methods employed,including the management of waste strea
147、ms.4.3.4.GTL Gas to Liquids(GTL)primarily involves the widely employed Fischer Tropsch reaction wherein natural gas serves as the feedstock for a catalytic conversion process,producing longer hydrocarbon chains that find application as transport fuel.Leading energy companies have devoted substantial
148、 resources to the development of GTL technologies and cutting-edge catalysts.Additionally,methanol represents another form of gas to liquids conversion wherein gas acts as the feedstock,yielding methanol as the liquid product.In the past,methanol was predominantly produced as a feedstock material.Ho
149、wever,with the ongoing energy transition,methanol has evolved into a preferred fuel choice,serving both as a standalone fuel and as an additive to enhance the oxygen content in transport fuels.As the industry looks ahead,a surge in gas to liquids projects is anticipated,driven by the objective of cr
150、eating cleaner fuels to support the energy transition.These projects may encompass diverse applications such as methanol,ammonia and other promising ventures.The level of environmental friendliness of these initiatives will hinge on multiple factors:the source of the feed gas,the processing techniqu
151、es employed along the value chain,the management of fugitive emissions and the incorporation of mitigating technologies such as carbon capture and sequestration.22 5.New Technology Trends In recent times,there has been a notable inclination towards floating applications,primarily driven by the advan
152、tages they offer(e.g.,rapid project development,ease of redeployment and the convenience of constructing in a controlled environment within shipyards).Floating LNG(FLNG)made its first Financial Investment Decision(FID)in 2011,and the initial operational unit,the Golar Hilli conversion for Cameroon,c
153、ommenced production in 2018.Subsequently,several more FLNG units have become operational,with many others progressing through the project execution phase.The nature of wellstreams extracted from gas reservoirs can significantly vary.Consequently,feeding these wellstreams directly to the floater woul
154、d entail distinct feed separation and clean-up requirements,depending on the characteristics of the field.To address this challenge and enhance the units ability of redeployment,certain designs are tailored to handle pipeline quality gas.In such cases,a sweet gas stream can be directly fed to the FL
155、NG unit,while bulk separation of liquids and/or acid gas treatment(for associated or sour gas)can be accommodated on another production unit or onshore,if necessary.These considerations highlight that the entire processing chain may be distributed across one or more units.For instance,the Prelude FL
156、NG,a sizable unit,performs all inlet processing,liquefaction and storage of condensate,LPG and LNG on the same floater.Conversely,the more generic floaters like Golar Hilli and Exmar Tango address bulk separation before reaching the FLNG,with onboard storage dedicated solely to LNG.In cases where Ex
157、mar Tangos feedstream contains LPG,it is commonly utilized as fuel for power generation.As Tango moves to its next assignment in Congo,it will require increased LNG storage capacity and will thus collaborate with an FSU to ensure seamless filling of an LNG carrier without excessive demurrage.Innovat
158、ive approaches,like combining Floating Storage Units(FSUs)with regasification on barges,have also been explored.This setup combines a suitable storage vessel with a regasification unit featuring some storage capacity.Notable instances include applications in Ghana and Eemshaven in the Netherlands.In
159、 Ghana,a regas barge with buffer storage complements an FSU while Eemshaven utilizes a full-scale FSRU alongside a barge FSRU.The latter configuration provides larger peak regasification capacity.Additionally,it provides the storage volume of the full-scale FSRU in combination with the 26,000 m3 sto
160、rage of the regasification barge.To maximize the utility of these assets throughout their lifespan,most FSUs intended for these purposes are either converted into permanently moored floating storage or serve intermittently in a storage function before resuming trading of commercial cargoes.This ensu
161、res their continued viability even if they no longer boast the most cutting-edge propulsion technology.Furthermore,LNG storage and regasification technology have found synergy with floating power generation.While diesel-powered power barges have been 23 operational for some time,gas-fueled power bar
162、ges and power ships have recently entered service.In cases where these gas-fueled power generating units are not connected to a gas grid,they are typically equipped with a dedicated FSRU,either in the form of a ship-shaped unit or a barge.Kar-power,a significant player in the floating power arena,ha
163、s established a gas-fueled power ship with a desiccated FSRU in Senegal,further exemplifying the diverse applications and innovative solutions in the domain of floating LNG and power generation.6.Colors of LNG“Gray/Blue/Green”6.1.Definition Blue:Blue LNG refers to conventional LNG produced using the
164、 traditional method of extracting natural gas from underground reserves,liquefying it and transporting it via LNG carriers.In this context,the term blue represents the efforts to reduce or offset carbon emissions through carbon capture and storage(CCS)technologies.These technologies capture the carb
165、on dioxide emissions generated during the LNG production process and store them in geological formations deep underground,preventing them from being released into the atmosphere.By doing so,blue LNG aims to reduce the overall carbon footprint and environmental impact associated with traditional foss
166、il fuel-based LNG production and transportation.However,the environmental impact of blue LNG is still a point of concern as it involves the release of carbon dioxide and other greenhouse gases(GHG)during the extraction and liquefaction processes.Green:Green is often used to symbolize environmentally
167、 friendly or sustainable practices.In the context of LNG,green LNG refers to liquefied natural gas that has been produced using low-carbon or zero-carbon sources.This might include LNG derived from renewable energy sources like biomethane or synthetic methane(e-methane)produced using a low emission
168、hydrogen and carbon component from CCS technologies.Green LNG is seen as a cleaner alternative to traditional LNG as it has a reduced carbon footprint.Gray:Gray LNG is not a type of LNG with environmental benefits.Instead,it refers to conventional LNG produced from fossil fuels without any efforts t
169、o reduce GHG emissions or carbon footprint.Gray LNG is the most polluting and environmentally detrimental type as it releases significant amounts of carbon dioxide and other GHGs during its entire production and transportation process.For this reason,it lacks the efforts towards sustainability and e
170、mission reduction found in green LNG options which prioritize renewable and low-carbon sources.It also lacks efforts found in conventional blue LNG which often implements carbon capture and storage technologies to mitigate environmental impact.However,its important to note that the specific meanings
171、 associated with colors in the LNG industry may vary depending on industry practices,regulations or specific initiatives.24 6.2.Incentives Green and blue LNG are terms often used to describe more environmentally friendly options in the liquefied natural gas industry.However,there are several potenti
172、al incentives for using green or blue LNG:Regulatory Incentives:1.European Union(EU):The EU has been actively promoting the use of cleaner and more sustainable energy sources,including LNG.It has implemented regulations and initiatives such as the European Green Deal and the EU Gas Market Directive
173、which is aimed at decarbonizing the energy sector and reducing greenhouse gas emissions(GHG).These policies provide incentives and support for the development and utilization of blue and green LNG,encouraging investments and regulatory backing for environmentally friendly projects.The EU recognizes
174、the important role that LNG plays in its energy security,especially after recent geopolitical events led to a shortage of gas supply followed by volatile LNG prices globally.Furthermore,the EU parlement amended regulations EU 2017/1938 and EC No.715/2009 in 2022 regarding gas storage imposing on mem
175、ber state.Effective on 1st November 2023,a minimum filling limit of 90 percent will be enforced each year.The regulation also addresses the sharing of storage between member states,the advantages of pool ordering and the certification of underground storage sites.The EU recognizes that the importanc
176、e of LNG is the transport,heat and power sectors.Using LNG in lorries and shipping can reduce emissions of various pollutants,offering a pathway for ships to meet decreasing sulfur and nitrogen content targets in marine fuels used in the Emission Control Areas.When blended with liquid biomethane,the
177、 use of LNG can have significant GHG emissions reductions,particularly for heat and power.In line with its sustainability goals,its expected that the EU will continue supporting the growth of LNG as an alternative fuel as part of its future energy mix,especialy where LNG replaces more polluting conv
178、entional fuels and does not compete with renewable energy sources.In 2023,the EU has adopted,as part of the Fit for 55 package,the deployment of the Alternative Fuels Infrastructure Directive(AFID).It requires EU countries to develop national policy frameworks(NPFs),aiming to put in place enough ref
179、ueling and recharging facilities for certain alternative fuel vehicles and vessels.For natural gas supply,the AFID requires Member States to ensure that,by the end of 2025,an appropriate number of compressed natural gas(CNG)refueling stations are available for CNG motor vehicles along the core netwo
180、rk of the trans-European transport network(TEN-T).The directive recommends that the distance between these stations shouldnt exceed 150km.To allow the free circulation of LNG heavy-duty motor throughout the EU,the directive suggests keeping the maximum distance between refueling 25 stations to 400km
181、.The AFID also requires Member States to ensure that an appropriate number of refueling points for LNG are put in place at maritime ports by 2025 and inland ports by 2030.This can help enable LNG inland waterway vessels or seagoing ships to circulate throughout the TEN-T core network.2.United States
182、:In the United States,regulatory incentives for blue and green LNG vary at federal,state and local levels.While the federal government provides oversight and regulations for LNG exports,states like California have implemented policies and incentives to promote cleaner and lower-carbon energy sources
183、.Additionally,incentives such as tax credits and grants for clean energy projects may indirectly support blue and green LNG development.The below list contains highlights of some Federal laws and incentives related to natural gas.Incentives Highlights Advanced Biofuel Feedstock Incentives(Reference
184、Public Law 113-79 and 7 U.S.Code 8111)-Qualified feedstock producers are eligible for a reimbursement of 50 percent of the cost of establishing a biomass feedstock crop.-Matching payments for the collection,harvest,storage and transportation of their crops to advanced biofuel production facilities f
185、or up to two years.Alternative Fuel Corridor(AFC)Grants(Reference Public Law 117-58 and 23 U.S.Code 151)Provide funding for designated Corridor-Pending AFCs to install infrastructure to convert to Corridor-Ready AFCs,and for Corridor-Ready AFCs to install alternative fuel infrastructure to provide s
186、tation redundancy and meet higher demand.Alternative Fuel Excise Tax Credit(Reference 26 U.S.Code 6426 and Public Law 117-169)-For alternative fuel sold to operate a motor vehicle.-$0.50 tax credit per gallon Alternative Fuel Infrastructure Tax Credit(Reference 26 U.S.Code 30C,30D,and 38 and Public
187、Law 117-169)Fueling equipment is eligible for a tax credit of 30 percent of the cost or six percent in the case of property subject to depreciation(Max$100,000).Alternative Fuel Tax Exemption(Reference 26 U.S.Code 4041)-Are exempted motor vehicle used:on a farm for farming purposes;in certain interc
188、ity and local buses;in a school bus;for exclusive use by a non-profit educational organization;for exclusive use by a state,political subdivision of a state,or the District of Columbia.3.Japan:Given Japans heavy reliance on imported LNG,there is a strong incentive to promote the use of cleaner and m
189、ore sustainable LNG.The Japanese government has implemented various policies and regulations to support green and blue LNG,including financial incentives and subsidies for low-carbon projects.Japanese institutions like the Japanese Bank for International Cooperation(JBIC)and Nippon Export and Invest
190、ment 26 Insurance also play a significant role in providing financial support to LNG projects.Financial Incentives:1.Green Financing:Financing institutions are increasingly interested in supporting environmentally sustainable projects,including green and blue LNG.They provide financial incentives in
191、 the form of green bonds,green loans or sustainability-linked loans.These financial products offer favorable terms,lower interest rates,or longer repayment periods to projects that meet specific environmental criteria,encouraging the development of green and blue infrastructure.2.International Finan
192、cial Institutions:Development banks like the World Bank,European Bank for Reconstruction and Development and Asian Development Bank,actively support sustainable energy projects,including blue and green LNG.They provide funding,grants or guarantees to mitigate risks and incentivize investments in env
193、ironmentally friendly initiatives.3.Export Credit Agencies(ECAs)and Export-Import Banks:ECAs,such as the Export-Import Bank of China(China Exim)and Japan Bank for International Cooperation(JBIC),can provide financial support to LNG projects.They offer loans,credit guarantees and insurance to mitigat
194、e financial risks and promote investment in clean energy projects.While the specific incentives and involvement of financial institutions may vary by region,the overall trend is toward supporting and incentivizing blue and green LNG through regulations,policies,green financing options,and involvemen
195、t from international financial institutions.7.Environmental Aspect 7.1.Regulatory Framework The regulatory framework for environmental considerations of LNG encompasses various aspects,including the transportation of LNG for large vessels and small-scale vessels,regulations related to LNG bunkering
196、and LNG as fuel and industry standards set forth by organizations like the Society for Gas as a Marine Fuel(SGMF)and the Society of International Gas Tanker and Terminal Operators(SIGTTO).Regulatory framework for the transportation of LNG:The transportation of LNG involves adherence to specific regu
197、lations to ensure safety and environmental protection.For large vessels,the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk(IGC code)sets out the design,construction and operational requirements for LNG carriers.It covers aspects such as materials,insu
198、lation,containment systems,ship structure and safety systems,to name a few.The IGC code aims to prevent accidents and minimize the release of gas or vapors during transportation.27 When it comes to small-scale LNG vessels,regulations may vary depending on the jurisdiction.In the United States,for ex
199、ample,the U.S.Coast Guard and the Department of Transportation have established regulations such as Title 46 Code of Federal Regulations,Subchapter D-Tank Vessels,which provides requirements for the safe transportation of LNG on small-scale vessels.Regulations related to LNG bunkering and LNG as fue
200、l:The bunkering of LNG refers to the process of supplying LNG to ships or other vessels for use as fuel.The International Code of Safety for Ships using Gases or other Low-flashpoint Fuels(IGF code)regulates the safe use of gases or low-flashpoint fuels as ship fuels.The IGF code provides guidelines
201、 for the design,construction and operation of ships using LNG as fuel,as well as fire safety measures and training requirements for crews.Additionally,several countries and regions have developed their own regulations specific to LNG bunkering operations.For instance,the European Union has instrumen
202、ts like the Alternative Fuels Infrastructure Directive(AFID)and the standard EN 1474,which establish requirements for the design and operation of LNG bunkering facilities in Europe.Industry standards by SGMF and SIGTTO:The Society for Gas as a Marine Fuel(SGMF)and the Society of International Gas Ta
203、nker and Terminal Operators(SIGTTO)are industry organizations that contribute to the development and promotion of best practices and standards for the safe and environmentally responsible use of LNG.SGMF develops guidelines,recommendations and industry best practices for the safe and sustainable use
204、 of gas as marine fuel.They cover areas such as bunkering operations,storage and handling of LNG,risk assessments and emergency response procedures.SIGTTO focuses on the safe and efficient operation of gas tankers and terminals.They provide guidance and standards related to LNG carriers,terminals an
205、d utilization of LNG as fuel for marine applications.These industry standards developed by SGMF and SIGTTO complement existing regulatory frameworks and help ensure consistent practices and high safety standards in the LNG industry.To conclude,the regulatory framework for environmental consideration
206、s of LNG encompasses regulations for transportation,bunkering and the use of LNG as fuel.It is guided by international codes such as the IGC code,the IGF code and regional regulations.Additionally,industry organizations like SGMF and SIGTTO play a critical role in developing industry standards and b
207、est practices for the safe and environmentally responsible use of LNG in various applications.28 7.2.Methane Slip Methane slips in the LNG value chain refer to the unintentional release of methane during the production,transportation,storage and use of LNG.Fugitive emissions are a significant contri
208、butor to methane slips and can occur from various sources such as processing equipment,pipelines,storage tanks,valves and compressors.These emissions should be measured and mitigated to minimize their impact on the environment.The greenhouse gas(GHG)impact of methane slip is of particular concern du
209、e to the potent warming effect of methane compared to carbon dioxide.Methane has a much higher global warming potential(GWP)over a 20-year timeframe(84-86 times that of CO2).Therefore,even small leaks or slips of methane can have a significant impact on climate change.It is crucial to address methan
210、e slips to ensure that the use of natural gas and LNG remains environmentally sustainable.While the International Maritime Organization(IMO)does not have specific regulations for methane slips yet,efforts to develop such a regulatory framework show that such regulations might be enforced by EEDI pha
211、se 4.During MEPC 80,IMO has adopted the“Guidelines on Life Cycle GHG Intensity of Marine Fuels”(LCA Guidelines)which will address Well-to-Tank(WtT),Tank-to Wake(TtW)and Well-to-Wake(WtW)GHG intensity,including methane emissions.Under MARPOL Annex VI,ships will be required to control and minimize met
212、hane emissions during operation.In the European Union(EU),regulations for methane slip are incorporated into the broader framework of reducing GHG emissions Fit for 55.As methane slip is considered as a percentage of the fuel mass used by the engine,the EU has set targets for reducing methane emissi
213、ons from various sectors,including the maritime industry.The EUs Monitoring,Reporting and Verification(MRV)regulation requires ships to report their CO2 emissions and provides a framework that indirectly addresses methane slips.In 2025,the FuelEU for Maritime regulation plans to limit CO2-eq emissio
214、ns from ships on a well-to-wake basis.In the U.S.,regulations related to methane slip from LNG operations have evolved over time.The Environmental Protection Agency(EPA)has implemented several initiatives to address methane emissions,including from the oil and gas sector.Although there is no specifi
215、c regulation solely focused on methane slips in the LNG industry,existing regulations and initiatives such as the EPAs New Source Performance Standards(NSPS)for the oil and gas industry indirectly contribute to reducing methane slips.It is worth noting that regulations related to methane slips from
216、LNG operations are continually evolving as policymakers,and governing bodies become more aware of the environmental impact.The focus on reducing methane emissions and addressing methane slips aligns with the global commitment of combating climate change and achieving GHG reduction targets.As a resul
217、t,it is essential for the industry to maintain compliance with current regulations and stay informed about any future regulatory developments regarding methane slips.29 8.Market Realities 8.1.Global Energy Demand The global demand for liquefied natural gas(LNG)has witnessed a significant increase ov
218、er the past decade and is expected to continue growing rapidly in the future.This surge in demand can be attributed to the increased interest in cleaner energy sources to fuel economic growth to replace coal and traditional oil-based fossil fuels.LNG,which is produced through the liquefaction of nat
219、ural gas,has emerged as a crucial component in meeting the energy requirements of various regions across the globe.One of the key factors driving the development of gas resources in developing countries is the promotion of domestic access to energy resources and the growth of the electricity and ind
220、ustrial sectors.LNG exports have become a viable option for those countries to secure the financial resources required for developing their gas resources.Furthermore,LNG export projects typically allocate a portion of the gas for domestic consumption while the rest is directed towards the liquefacti
221、on plant.This approach enables countries to meet their domestic energy needs while also tapping into the global LNG market.As a result,LNG plays a critical role in promoting energy security by diversifying energy sources and reducing reliance on traditional fossil fuels.In the context of recent even
222、ts,such as the Russia-Ukraine war,the role of LNG in global energy security becomes even more significant.This conflict has highlighted the vulnerabilities associated with relying heavily on a single source or route for energy supplies.2022 has been a year of all exceptions in the LNG market.With th
223、e cut of gas supplies from Russia,the EU needed over 45Mt of LNG to meet its energy needs.Supply routes shifted from the traditional Fareast consumers to Europe.LNG prices tripled compared to the pre-war within just three months to reach over$95 MBTU.Furthermore,Figure 5 shows how the LNG import mar
224、ket over the last two years flipped from the Asian market being the largest importer of LNG in 2021 to the European market leading the imports in 2022.The ability to transport LNG from producing regions to distant countries provides an opportunity to diversify energy supply chains and reduce geopoli
225、tical risks.By unlocking stranded natural gas resources and establishing LNG infrastructure,countries can enhance their energy security and reduce their dependency on specific regions for energy imports.LNG offers several advantages in terms of flexibility,reliability and lower emissions compared to
226、 other fossil fuels.Its ability to be transported over long distances makes it an attractive option for meeting the energy demand of countries that lack domestic gas reserves.Furthermore,LNG can contribute to a more sustainable energy future by significantly reducing GHG emissions when compared to c
227、oal or oil,especially when its Well-To-Tank CO2 footprint has been reduced through carbon capture and storage(CCS)technologies producing blue LNG.This makes LNG an important part of the global strategy to transition to cleaner energy sources and address climate change concerns.30 In conclusion,LNG w
228、ill continue to play a crucial role in meeting the future global energy demand.Its significance is amplified by recent geopolitical events and the need to enhance energy security.By leveraging LNG as a cleaner and more flexible energy source,countries can diversify their energy supply chains and red
229、uce their reliance on specific regions.This,in turn,contributes to a more secure and sustainable energy future for the global community.8.2.LNGC Fleet&Orderbook The global LNG carrier fleet plays a crucial role in the transportation of LNG from production facilities to consumption markets around the
230、 world.The LNG carrier fleet consists of specialized vessels designed to safely transport LNG at extremely low temperatures and under precise storage conditions.These vessels are equipped with advanced technology and insulation systems to ensure the integrity and safety of the cargo throughout the j
231、ourney.The LNG carrier(LNGC)fleet is constantly evolving and expanding to meet the growing demand for LNG.The LNG carriers orderbook shows almost 50 percent growth.Over 300 vessels have been ordered to the existing world fleet of just over 650 vessels(see Figure 6).This historical orderbook reflects
232、 the investments and commitments made by companies to meet the anticipated increase in LNG production and consumption.By analyzing the LNGC fleet and orderbook,industry stakeholders and market analysts can assess the supply-demand dynamics of the LNG market and make informed decisions regarding infr
233、astructure investments and energy strategies.Source:Shell LNG Outlook 2023 Figure 4:Global LNG Trade reversed in 2022 31 The size and capacity of LNG carriers vary,with vessels ranging from small-scale carriers to large-scale vessels capable of transporting huge volumes of LNG.The LNGC fleet include
234、s both single-screw and dual-screw vessels,each designed to cater to specific operational requirements and trade routes.The fleet is predominantly made up of vessels with membrane-type cargo containment systems,which provide excellent thermal insulation and allow for efficient loading and unloading
235、of LNG.It is important to consider factors such as vessel age,technological advancements and environmental regulations when evaluating the LNGC fleet.As older vessels are retired from service,new orders are placed for technologically advanced carriers that offer improved efficiency,safety and enviro
236、nmental performance.The adoption of new technologies and design features helps to reduce fuel Source:Clarkson Source:Clarkson Figure 6:Gas Carrier Fleet and Orderbook by size Figure 5:Evolution of Gas Carrier Fleet and Orderbook 32 consumption and greenhouse gas emissions,contributing to sustainabil
237、ity efforts in the maritime industry.The retirement of the older vessels,which are mainly steam propelled,accounts for about of a third of the existing fleet.This transition is expected to further test the resilience of the LNG supply chain in the coming years while maintaining high prices for LNG.I
238、n recent years,the LNGC fleet has witnessed significant growth,driven by the expansion of LNG production and the development of new liquefaction plants in various regions.This growth is expected to continue as demand for LNG increases,particularly in Asia,where countries like China,Japan and South K
239、orea have been major LNG importers.The orderbook reflects this trend,with a substantial number of LNG carriers being built to cater to the anticipated demand from these markets.It is to be noted that there are some uncertainties related to countries commitment in pushing regulations and implementing
240、 measures to support their respective pledges to reduce GHG emissions.With these uncertainties,investors have shied away from reaching FID for several LNG projects.Figure 8 shows that,after 2028,demand overcomes supply mainly because of a lack in investments.Unless the energy demand is met by new re
241、newable sources of energy,this situation might stress the global energy market further.In closing,the LNGC fleet and orderbook are critical indicators of the current and future state of the LNG industry.The fleet consists of specialized vessels designed to transport LNG safely and efficiently,while
242、the orderbook reflects the investments and commitments made by companies to meet the growing demand for LNG.By monitoring the LNGC fleet and orderbook,industry stakeholders can gain insights into the supply-demand dynamics of the LNG market and make informed decisions to support the growth and susta
243、inability of the industry.8.3.Contracts&Pricing LNG sales contracts are crucial components of the LNG industry as they define the terms,commitments and pricing arrangements between sellers and buyers.There are different types of LNG sales contracts,each with their own advantages and disadvantages.Be
244、low is a list of the various contracts with their pros and cons:1.Long-Term Contracts:o Pros:Long-term contracts provide stability and security for both sellers and buyers as they typically span over several years or decades.They allow for long-term planning,investment and project Figure 6:Global LN
245、G Supply vs Demand Forecast 33 development.Additionally,these contracts often include firm commitments and fixed or indexed pricing mechanisms,providing price stability for both parties.o Cons:Long-term contracts can limit flexibility and responsiveness to market changes.The fixed pricing mechanisms
246、 may not always reflect current market dynamics,and buyers may be locked into higher prices during periods of low LNG market prices.Additionally,long-term contracts may not allow for easy diversification of supply sources.2.Short-Term Contracts:o Pros:Short-term contracts offer more flexibility and
247、allow buyers to procure LNG on shorter notice,adapting to changes in demand or market conditions.These contracts usually have more flexibility in pricing arrangements,such as pricing based on gas indices.They provide an opportunity for buyers to secure LNG cargoes during periods of low prices.o Cons
248、:Short-term contracts may be subject to higher price volatility compared to long-term contracts.The availability of LNG cargoes under short-term contracts is dependent on spot market availability and can be uncertain.Sellers may also prioritize long-term contract customers over short-term buyers dur
249、ing times of limited supply.3.Spot or Spot-Flexible Contracts:o Pros:Spot contracts provide the highest level of flexibility,allowing buyers to procure LNG on the spot market and usually on a cargo-by-cargo basis.These contracts offer the advantage of capitalizing on favorable market conditions such
250、 as lower prices or abundant supply.Spot-flexible contracts provide the option for a mix of spot and long-term volumes,allowing buyers to optimize their procurement strategy.o Cons:Spot contracts can be subject to significant price volatility as they are influenced by short-term market conditions.Th
251、e availability of spot cargoes may vary,and buyers may face challenges in securing desired volumes during peak demand periods.In terms of trends in LNG sales contracts,there is an increasing focus on pricing mechanisms that are more gas-linked rather than oil-linked.This shift is driven by the desir
252、e for greater transparency,fairness and alignment with natural gas market fundamentals.Gas-linked pricing allows for a more direct reflection of supply-demand dynamics in the LNG market,therefore,reducing exposure to oil price fluctuations and geopolitical factors.Another trend is the emergence of p
253、ricing review clauses in LNG sales contracts.These clauses enable periodic re-evaluation and potential adjustment of LNG prices based on specified market conditions.This mechanism allows for a degree of flexibility and adaptability to evolving market dynamics,ensuring that contract prices remain ref
254、lective of prevailing market conditions.34 Moving on to LNG carrier chartering contracts,there are various types available to meet the transportation needs of LNG.Each type has its own advantages and disadvantages as indicated below:1.Time Charter:o Pros:Time charter contracts provide long-term vess
255、el availability and dedicated use for a specific period.Charterers have more control over the vessels schedule and flexibility in terms of loading and discharge ports.This type of contract offers more predictable costs and allows for better planning and optimization of logistics.o Cons:Time charter
256、contracts can be expensive as charterers bear the cost of vessel operations.In case of low cargo demand,charterers may face idle time or underutilization of the vessel.2.Voyage Charter:o Pros:Voyage charter contracts provide flexibility and cost efficiency,as they are signed for specific voyages or
257、cargoes.Charterers pay only for the voyage undertaken,reducing costs during periods of low cargo demand.This type of contract allows for more flexible scheduling and greater access to available vessels.o Cons:Voyage charter contracts can be subject to spot market rates,leading to price volatility.Ch
258、arterers may face uncertainty in vessel availability,especially during peak demand periods.The cost per ton of transported LNG may vary for each voyage.During the last decade,the global supply and demand trends have had a significant impact on LNG prices.The LNG market has witnessed a shift from a s
259、upply-driven market to a more demand-driven market,with increasing competition among suppliers.This change in dynamics has put downward pressure on LNG prices.The global LNG market has experienced a surge in liquefaction capacity,particularly in the United States and Australia.This increase in suppl
260、y,combined with slower demand growth in certain regions,has created an oversupply situation which leads to lower prices.Additionally,the COVID-19 pandemic and its impact on global energy demand has further affected LNG prices,resulting in a temporary decline in prices.However,recent geopolitical eve
261、nts overturned this dynamic after sudden drops of approximately 82Bcm in gas supply to the European Union,therefore,creating a shortage of supply that saw historically high prices.35 On the demand side,Asian markets particularly China,Japan,Korea and India traditionally drove the primary growth of L
262、NG demand while Europe demand was balancing the global market.Since 2022,the roles reversed with the European market being the primary driver while the Asian markets became less demanding due to government commitment to diversify their energy mix,including more renewables,developing their own domest
263、ic production and increasing regional pipeline gas import.Figure 9 highlights the shift in LNG import between China and the EU.As these countries shift towards cleaner energy sources,LNG consumption is expected to increase significantly in the coming years.However,the pace of demand growth has varie
264、d,and temporary market imbalances have led to periods of higher LNG prices.The recent trend of global LNG supply and demand has prompted a more flexible approach in LNG pricing.Buyers are increasingly seeking flexible pricing arrangements that are linked to gas indices or market fundamentals.This al
265、lows for a more transparent and responsive pricing mechanism that reflects current market conditions.Furthermore,even though recent supply disturbances have led to an increase in signing of Sales and Purchase Agreements(SPA)between major buyers and main LNG exporters to secure their energy supply an
266、d control the volatility of LNG prices(see Figure 10),there is a growing emphasis on shorter contract durations and greater flexibility in contract terms.Buyers are seeking shorter-term contracts that provide the ability to adjust procurement strategies based on evolving market dynamics.This flexibi
267、lity allows buyers to take advantage of market opportunities and optimize portfolio management.In terms of the impact on LNG prices,the oversupply situation has resulted in a more competitive market,leading to a downward pressure on prices.Pricing mechanisms that were predominantly oil-linked in the
268、 past are being revised to ensure a closer correlation between LNG prices and natural gas market fundamentals.This trend is driven by the desire to eliminate the disconnect between oil prices and gas prices which can be influenced by different factors.Source:Shell LNG Outlook 2023 Figure 7:Global LN
269、G Imports 36 On the other hand,emerging trends such as the rise of LNG spot trading and the development of LNG trading hubs are contributing to price transparency and liquidity in the market.Spot trading allows for more short-term price discovery and flexibility while trading hubs provide a central
270、platform for buyers and sellers to trade LNG on a more standardized basis.In summary,the LNG market is witnessing changes in contract types,pricing mechanisms and transportation agreements.Long-term contracts provide stability but may limit flexibility,while short-term and spot contracts offer more
271、adaptability to market conditions.Pricing is shifting towards gas-linked formulas,driven by the need for transparency and alignment with natural gas market fundamentals.The recent global supply and demand trends,including increased liquefaction capacity and shifting demand patterns,have impacted LNG
272、 prices,therefore,leading to a more competitive market and pressure on prices.However,market participants are adapting to these changes by seeking more flexible contracts and pricing arrangements that reflect current market dynamics and allow for optimization of LNG procurement strategies.9.Societal
273、 Perspective 9.1.Livelihood Liquefied natural gas(LNG)projects have the potential to significantly impact both positively and negatively livelihoods in communities where they are located.The impact can vary depending on the type of LNG project and its approach to environmental and social responsibil
274、ity.The development of green and blue LNG,which prioritize reduced emissions and sustainable practices,can have several positive effects on livelihoods.Green LNG,also known as renewable or decarbonized LNG,involves the production of LNG from renewable energy sources such as solar,wind or hydropower.
275、This form of LNG significantly reduces greenhouse gas emissions compared to conventional LNG.The impact of green LNG on livelihoods can be beneficial in several ways:Source:Shell LNG Outlook 2023 LNG SPA Signing by Main LNG SPA Signing by Main B LNG SPA Signing Figure 8:Global LNG SPA Outlook 37 1.J
276、ob Creation:The development and operation of green LNG projects can create employment opportunities for local communities.This includes jobs in renewable energy infrastructure such as solar or wind farms,as well as in the LNG production and supply chain.These job opportunities can contribute to the
277、economic development and prosperity of the communities.2.Sustainable Economic Growth:Green LNG projects promote sustainable economic growth by supporting the transition to a low-carbon economy.By embracing renewable energy sources,these projects contribute to energy diversification,reduce dependence
278、 on fossil fuels and foster the growth of sustainable industries.This can lead to long-term economic stability and improved livelihoods for local communities.3.Environmental Benefits:Green LNG projects help mitigate climate change by reducing carbon emissions.This has positive implications for the e
279、nvironment and the health of communities.The improved air quality and reduced environmental pollution associated with green LNG can have direct benefits on the health and well-being of individuals,thereby positively impacting their livelihoods.On the other hand,blue LNG refers to LNG produced from c
280、onventional natural gas sources,with carbon capture and storage(CCS)or carbon offset measures to mitigate emissions.While blue LNG may not have the same level of immediate environmental benefits as green LNG,it still offers potential positive impacts on livelihoods:1.Job Opportunities:Blue LNG proje
281、cts require skilled labor and expertise in natural gas extraction,processing and CCS technologies.This can create employment opportunities in the local communities,providing income and livelihood support for individuals and their families.2.Energy Access and Affordability:Blue LNG projects contribut
282、e to the availability of clean and affordable energy sources.This can improve access to reliable electricity and clean cooking fuels in remote and underserved areas,enhancing the quality of life and economic opportunities for communities.3.Infrastructure Development:The establishment of blue LNG pro
283、jects often involves the development of infrastructure such as pipelines,LNG terminals and storage facilities.This infrastructure can facilitate economic development,attract investments and provide opportunities for local businesses and services,thereby positively impacting livelihoods.It is importa
284、nt to note that while green and blue LNG projects have the potential for positive impacts on livelihoods,there should also be a focus on addressing potential negative effects.This includes ensuring that proper safeguards are in place to protect the environment,local communities and biodiversity.It i
285、s crucial to engage with stakeholders and local communities in the planning and implementation of LNG projects to ensure their voices are heard and their 38 concerns addressed.This collaborative approach can help maximize the positive impacts of LNG on livelihoods and create a sustainable and inclus
286、ive energy future.Acronyms CAPEX=Capital Expenditure CNG=Compressed Natural Gas DFDE=Dual-Fuel Diesel Electric EU=European Union FEED=Front-End Engineering and Design FID=Final Investment Decision FLNG=Floating Liquefied Natural Gas FPSO=Floating Production,Storage and Offloading FSRU=Floating Stora
287、ge and Regasification Unit FSU=Floating Storage Unit GCU=Gas Combustion Unit GTT=Gaztransport&Technigaz IMO=International Maritime Organization LPG=Liquefied Petroleum Gas MEGI=M-type,Electronically Controlled,Gas Injection MEPC=Marine Environment Protection Committee MR=Mixed Refrigerant OPEX=Opera
288、ting Expenditure SPA=Sales and Purchase Agreement STaGE=Steam Turbine and Gas Engine SSDR=Slow Speed Diesel with Re-liquefaction plant STS=Ship-to-Ship TFDE=Triple-Fuel Diesel Electric US=United States YOY=Year-on-Year Figures Figure 1:Distribution Network by Pipeline Figure 2:Global Natural Gas tra
289、de by flow type(bcm)Figure 3:Historical and future vessel deliveries by propulsion type,2017-2028 Figure 4 EU infrastructure relevant for the LNG and storage strategy Figure 5:Global LNG Trade reversed in 2022 Figure 7:Gas Carrier Fleet and Orderbook by size Figure 7:Evolution of Gas Carrier Fleet a
290、nd Orderbook Figure 8:Global LNG Supply vs Demand Forecast Figure 9:Global LNG Imports Figure 10:Global LNG SPA Outlook Tables No table of figures entries found.39 References 1.American Bureau of Shipping,Sustainability Whitepaper:LNG as Marine Fuel 2.International Energy Agency(IEA)Gas Market Repor
291、t Q1 2023 3.LNG supply chains:A supplier-specific life cycle assessment for improved emissions accounting by Selina A.Roman-White,James A.Littlefield,Kaitlyn G.Fleury and David T.Allen 4.Shell LNG Outlook 2023.5.EPA.Greenhouse Gasp Reporting Program(GHGRP)https:/www.epa.gov/ghgreporting 6.EU Commiss
292、ion:EU-US LNG Trade 7.US Department of Energy.Understanding Natural Gas and LNG Options 8.EIA.U.S.Energy Information Administration(EIA)Natural Gas Processing Capacity in the Lower 48 States https:/www.eia.gov/analysis/naturalgas/9.EIA.U.S.Energy Information Administration(EIA)Natural Gas Natural Ga
293、s-U.S.Energy Information Administration(EIA)10.EIA.U.S.Energy Information Administration(EIA)Natural Gas https:/www.eia.gov/naturalgas/11.EIA.U.S.Energy Information Administration(EIA)Natural Gas Annual Report https:/www.eia.gov/naturalgas/annual/12.The LNG Industry.(2022).GIIGNL Annual Report 2022.
294、https:/giignl.org/wp-content/uploads/2022/05/GIIGNL2022_Annual_Report_May24.pdf 13.International Gas Union(IGU)2023 World LNG Report 14.Gas Exporting Countries Forum(GECF)2023 World LNG Report 15.United States Government Accountability Office(GAO),Report to Congressional Requesters:GAS TRANSMISSION PIPELINES 40