LNG Markets and Carriers

LNG Markets and CarriersLNG Ship MarketNatural screw up is a hydrocarbon screw up mixture consisting simple(prenominal)ly of methane, which is utilize as an energy microbe for many applications, such as electricity generation, heating and transportation. It can be considered the cleanest of all fossil furnishs, producing up to 29% slight CO2 per joule than crude oil, and minimal issue forths of sulphur (1). Combined with its relatively low charge and towering energy content per weight, natural flatulence could admit been a operable energy solution many decades ago, relieve its widespread use was hindered by the difficulty to store and transport it. Nowadays, its majority is transported through pipelines and as turn Natural flub (LNG) by shipment (around 27%). LNG is natural gas that has been converted to liquid carcass for ease of storage and transport, requiring only when most 1/600 of its volume in gaseous state. LNG transportation by ships is employ particul arly when geographical constraints deem pipeline use unfeasible. An aspect that has held bandaging LNG, and by extension natural gas use, is the very exalted big(p) costs associated with the LNG emerge chain (gas exploration, liquefaction, transportation and regasification) (2). These required high investments, mandated aegis of LNG supply and led to long status cooperation between buyers and sellers. This resulted in a highly structured LNG market, with rigid contracts of 20 years or more and very few vessels left sp ar for use in injury trade. This initial market profile could be characterized as an oligopoly, formed by large state-controlled or regulated oil and gas companies and a small number of independent ship owners. A bad detail for the LNG market were the 1980s, where energy prices were high and the demand was low. At the time of the markets revitalization (early 1990s) the LNG trade was firmly divided between the Atlantic Basin and Asia peaceful markets. Howeve r after the 1990s, with additional liquefaction plants being built in tradeing countries and cost reductions in all segments of the supply chain, a surplus of LNG uncommitted was created and a lot of mod investments were triggered. This led to gradual liberation of the gas market with short term contracts to a fault being signed. However, long term contracts, also known as SPAs (Sale and Purchase Agreements) still dominate the market, as no supplier undertakes a new project without contracting and securing its acquittance first. At the moment spot rates represent up to 15% of the total market, with indications that contracts argon increasingly becoming more flexible in volumes and price mechanisms (3). The market is also increasingly international, with anformer(a) major export celestial orbit being the Middle East. As seen in tropes 1 and 2, Qatar is right away the biggest LNG exporting country, with a share of over 25% of world exports. The main import countries are Japan, Korea, Taiwan, China, Spain, UK and Italy all of which are either countries in ask of large energy amounts, or face domestic energy supply shortages (4). Japan in particular, after the Fukushima Daiichi nuclear disaster became an even large importer, accounting for a third of world LNG imports. China is expected to dramatically increase its LNG imports in raise to achieve its goal of decreasing send out pollution by doubling natural gas usage for personnel by 2016 and relying less on coal for energy production (5). atomic number 63 on the other hand has seen a decrease in LNG importing in recent years, mainly due to the recent financial crisis and mercurial market, and also because of the drop in spot rates and the fact that Asian and American countries are paying more for gas. The outlook on prox LNG trade is confident(p) however, as seen in Figure 3 (6), curiously when considering the steady and linear LNG market increase up to the late 90s (Figure 4) (7). In terms of th e LNG carrier fleet, there are around 380 LNG vessels operating today, with 94 new buildings scheduled for delivery until 2017 (8). In Figure 5, it can be observed that the average capacity of LNG carriers on order is between 150.000 160.000 m3 part the average operating LNG carrier has a size between 120.000 140.000 m3. This indicates a trend of increasing vessel sizes, in line with what is happening to other merchant rapture markets in recent years.LNG Ship StructuresThe most smasher difference between LNG carriers and typical tankers is the complex payload containment and handling brasss imbed on LNG ships. These serve several purposes. They seal the LNG in a positive pressure, gas tight compartment to avoid mixing with air insulate it from orthogonal heat in order to keep the entire incumbrance amount at -162 oC, thus minimizing boil-off gas, and also prevent this very low temperature from stretch the hull structure and cause blade brittleness (9). LNG vessels normall y have between four and six cargo tanks which are either independent, self-supporting tanks or membrane- fictional character tanks. By default all LNG ships are double hull vessels. Self-supporting tanks are independent to the ship hull and are melt to thermally expand and contract. They are also easy to inspect for leakage, moreover on the downside they do not make in effect(p) use of berth (10). The tank type that is typically used on LNG carriers is the Type B independent tank, which is usually spherical (Figure 6). This design, also known as the Kvaerner-Moss System, ab initio used storage tanks do of 9% nickel-steel, exclusively these were quickly replaced by aluminium tanks which are more resilient to thermal and mechanical stresses are and easier to form. The tanks feature an equatorial ring from which they suspend, and therefore the majority of mechanical and thermal stresses are exerted on that area (11) . Because of their enhanced design, Type B tanks only require a partial second-string rampart in the form of a dip tray. The hold space is normally filled with dry out inert gas however dry air can also be used if the system is capable of providing inert gas to the area in a case of case leakage. A protective steel dome covers the primary barrier above deck level and disengagement is applied to the outside of the tank (12). Insulation materials are typically glass, wool, vaporisation permeable aluminium foil and a number of expansion effervesce types. Type B tanks can also have a prismatic shape to maximise volumetric efficiency. The other major tank type is the membrane-type tank, with the No.96 System from Gaz Transport and the Mk ternion System from Technigaz being the main cardinal sub categories. Both types utilize a thin and flexible primary membrane (0.7 1.5mm) which is in contact with the cargo and a secondary barrier on the outside. The pressure is applied on the membrane from both the cargo on the inside and the insulation on the outside, and the entire arrangement rests on the ships structure, forming an integral part of it. The Gaz Transport 96 system utilizes 0.7 mm stocky invar (36% nickel, 0.2% carbon steel alloy) for both the primary and the secondary story, with boxes filled with perlite used as insulation in between the membranes and in between the secondary membrane and the vessels structure. The entire construction leans on each consecutive layer and finally on the ships structure (Figure 7). Invar is used primarily because of its low coefficient of thermal expansion which makes the use of expansion boxes or corrugations unnecessary. On the other hand, the Mk III system from Technigaz features a primary stainless steel barrier of 1.2mm in thickness, with corrugations which enable thermal expansion and contraction. Polyurethane foam reinforced with fiberglass is used as insulation, while the second membrane is a simpler and cheaper one, made of triplex, a type of vapour permissible plastic mass. Both systems sanction a boil-off of up to 0.15% but in reality this is much less (12). In 1994 Tehnigaz and Gaz Transport merged and their respective systems since bore a GTT affix in their names. GTT also developed a third membrane containment system for LNG carriers named Combine System One (CSO), which combines elements from both designs (11).Propulsion Systems utilise LNG as FuelThe use of LNG as a propulsion fuel is a relatively new trend for non-LNG carrier vessels. The reason for considering LNG as a fuel for tankers, bulk carriers and ferries is mainly because it is much more environmentally matey when compared to other types of fuel such as heavy fuel oil and marine diesel engine oil. This is especially important for vessels operating in spark controlled areas (ECAs), and with future IMO plans of expanding these areas, many ship operators are considering alternative solutions. The option of using LNG offers the benefit of almost sulphur-free emissions, and the refore access to ECAs, at a price much lower than that of low sulphur heavy fuel oil. However, LNG bunkering move are not very widespread, and the high investment required for propulsion and fuel handling systems is also a deterring factor. Nevertheless, LNG has been used as a fuel on LNG tankers ever since 1964 (13). Early systems utilise steam turbines for propulsion, which were provide by steam produced in boilers that operated by electrocution the boil-off gas from the cargo tanks. Even though this propulsion type is not very efficient (about 28%), the ability to utilise cargo which would otherwise just be disposed of provided major economic advantages to operators. This type of propulsion system is still found in the majority of LNG carriers up to this day. Nowadays however, because of the relatively high price of natural gas, re-liquefaction plants are starting to be utilised, in order to capture and re-store boil off gas, and loath speed diesel engines burning heavy fuel oil are used for propulsion. This results in of import fuel savings (slow speed diesels are around 50% efficient) but does not solve the ever growing emission problem. Therefore, dual fuel engines are also starting to be used in the industry. These are primarily diesel engines working on the same principle, with the difference that gas is also introduced with air in the induction stroke, and is burned together with diesel fuel when that is injected at the end of the compression stroke. The result is much spic-and-span emissions and fuel savings. Duel fuel engines can either be check drive or coupled to generators for electric propulsion. For direct drive systems slow speed dual fuel engines can be used but medium speed engines for electric propulsion are the predominant pickax at the moment. Dual fuel gas turbines can also be used for that matter but are not widely utilised on LNG carriers (14). In Figure 9, a distribution of propulsion systems for new LNG carriers on order can be seen.References1. Natural triggerman and the Environment. s.l. NaturalGas.org.2. LNG shipping business versus dry cargo shipping a comparative study. S.Kamalakannan and Dr.B.Madhavan. 2012, ZENITH worldwide Journal of Business Economics Management Research.3. History, trends and prospects for LNG shipping. Leroy, Paul-Albert. Athens Barry Rogliano Salles, 2012.4. White, Bill. Alaka Natural Gas Transportation Projects. Online 6 September 2011. Cited 12 exhibit 2014. http//www.arcticgas.gov/global-LNG-rapid-growth-overestimated-demand-excess-capacity.5. Cunningham, Nick. The Diplomat. Online 5 celestial latitude 2013. Cited 12 March 2014. http//thediplomat.com/2013/12/china-increases-purchases-of-lng-on-spot-market/.6. Kurt Oswald, Joerg Doerler, Akshat Seth. ATKerney. Online December 2011. Cited 12 March 2014. http//www.atkearney.com/ penning/-/asset_publisher/dVxv4Hz2h8bS/content/the-future-of-the-european-gas-supply/10192.7. White, Bill. Alaska Natural Gas Transportation Project. Online 13 August 2013. Cited 12 March 2014. http//www.arcticgas.gov/alaska-lng-could-have-right-heat-content-asia-buyers.8. Almeida, Rob. Whos Building LNG Carriers? gCaptain. Online 22 April 2013. Cited 12 March 2014. http//gcaptain.com/whos-building-carriers/.9. Michael D. Tusiani, Gordon Shearer. LNG A nontechnical Guide. Tulsa, Oklahoma PennWell Corporation, 2007.10. Zhou, Prof. Peilin. NM952/21525 Advanced Marine Engineering course notes. Glasgow s.n., 2014.11. Sacchi, Alan. Types of LNG Carriers. Hrvatsko pomorsko dobro. Online Cited 13 March 2014. http//www.pomorskodobro.com/en/types-of-lng-carriers.html.12. International Safety Guide for Inland Navigation Tank-barges and Terminals. Types of Gas Carriers. ISGINTT. Online 2010. Cited 13 March 2014. http//www.isgintt.org/files/Chapter_33en_isgintt_062010.pdf.13. MAN Diesel and Turbo. Propulsion Trends in LNG Carriers. MAN. Online Cited 13 March 2014. http//www.mandiesel.com/files/news/filesof8074/5510-0035-01ppr.pdf .14. Wartsila. LNG the Pros Cons. Wartsila. Online June 2012. Cited 13 March 2014. http//www.wartsila.com/en/lng-the-pros-and-cons.AppendixFigure 1 main(prenominal) LNG Exporting Countries in 2010 (4)Figure 2 Main LNG Importing Countries in 2010 (4)Figure 3 Projected LNG demand by region until 2020 (6)Figure 4 LNG demand up to 2012 (7)Figure 5 LNG Carrier New Build by SizeFigure 6 Self-supporting spherical Type B tank (12)Figure 7 GT 96 membrane Containment System (12)Figure 8 GT Mk III Membrane Containment System (12)Figure 9 Distribution of propulsion systems of LNG fleet on order (13)