LNG AS FUEL FOR MARINE VESSELS CURRENT STATUS AND FUTURE PROSPECT Sören Karlsson Business Development Manager Ship Power Gas Solutions 1 / 36 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Doc.ID: Revision: Status: More than 3 500 people in Finland Vaasa Turku Helsinki 2 900 340 285 Vaasa • • • • • • 2 Ship Power Power Plants Services Product development Engine assembly Support functions © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Helsinki Turku Our expertise in the Oil & Gas value chain LNG terminal & Regasification (FSRU/JRU) Distribution & transport Power generation LPG/LEG/LNG tanker Small-scale LNG plants LNG receiving terminal LNG liquefaction & terminal LNG carrier LNG fuelled vessels LNG fuelled vessels Oil tanker with VOC Production FPSO Flare recovery Oil separation Exploration & development Exploration & Drilling • LNG fuel gas systems for OSVs & Sciesmic vessels 3 © Wärtsilä Transport & storage Production & liquefaction • On- & Offshore small scale liquefaction • Antiflaring/VOC • Oil separation • Gas FPSO March 18, 2015 Receiving terminals & regasification • LNG fuel gas systems • Jetty & Floating regasification • LPG, LEG & LNG • Bunkering & barges cargo handling • Receiving terminals EnergyVaasa Sören Karlsson LNG bunkering & barges Distribution & transport to the users • Gas/LNG distribution/logistics • Feed gas to Power plants Wärtsilä Flow & Gas, core competences LPG marine LNG & Midstream Gas Recovery Separation Technology Aftermarket LPG cargo handling system BOG reliquefaction plants VOC recovery systems Separator Design Commissioning Cargo heaters & vaporizers LNG regasification plants Zero Flare solutions Reliquefaction & coling plants 4 Small scale LNG plants Ship- and Cargo Tank design LNG Fuel gas systems © Wärtsilä EnergyVaasa Sören Karlsson March 18, 2015 HC Blanket Gas and Recovery Flare Gas Recovery and ignition VIEC /VIEC-LW Internals Start–up support Interface level and Profilers Project life time support Compact Separation DRIVERS FOR NATURAL GAS 5 © Wärtsilä March 18, 2015 March 18, 2015 EnergyVaasa Sören Karlsson Natural gas – towards a globalised market World Energy Outlook by OECD/IEA: Major global trade flows 2035 • • • • 6 • Gas production to increase >50% by 2035 Growth mainly driven by power generation • CO2 emissions reduced 60% compared to coal Highest demand growth in emerging economies/non• OECD countries © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Mismatch between location of resources and consumers Gas traded as LNG fastest growing energy source (6-8% p.a) Global as well as regional/local LNG infrastructure under strong development Introduction: Why LNG? NOx SOx PM CO2 Acid rains Acid rains Harming humans and animals Greenhouse gas Tier II (2011) Tier III (2020?) 3.5% (2012) ECA 0.1% (2015) Along with SOx reduction Under evaluation by IMO ) 7 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Current and potential emission control areas 8 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Reduce emissions - What are the options? Back in the day’s HFO or MDO Today and in the future What to select? HFO MGO? GAS Aftertreatment Scrubbers SCR NOx Tier 3 complient engine + Low sulphur fuel Gas as fuel And in the end it all boils down to $$$ (and the global sulfur limit 0,5% in 2020 is getting close) 9 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Survival of the fittest: DF or SG technology? DF has won the battle! Source: DNV-GL Update on the global LNG fuelled fleet, Anders Mikkelsen, 25 November 2014 10 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson LNG: A global phenomenon DF has won the battle! Source: DNV-GL Update on the global LNG fuelled fleet, Anders Mikkelsen, 25 November 2014 11 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Engine characteristics - Operating modes Gas mode: Ex. Otto principle Low-pressure gas admission Pilot diesel injection In. Ex. * * ** * ** * * **** * * Intake of air and gas Ex. In. Ex. In. Ex. In. Ex. In. * ** ** ** * Compression of air and gas In. Ignition by pilot diesel fuel Diesel mode: Diesel principle Diesel injection Intake of air 12 © Wärtsilä March 18, 2015 Compression of air EnergyVaasa Sören Karlsson Injection of diesel fuel Strong growth in Gas Fuelled Vessels (52) (78) Source: DNV-GL Update on the global LNG fuelled fleet, Anders Mikkelsen, 25 November 2014 13 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson LNG PROCESS AND TANK DESIGN 14 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson TANK DESIGN – Double-Walled Fuel Storage Tank Double-Walled Fuel Storage Tank Capacity range from 30-1000m³ Tank Material: Inner/outer vessels manufactured in austenitic stainless steel or 9% Ni steel Outer tank: function of secondary barrier, creating a double containment system Perlite / Vacuum insulation or optional Multi Layer Insulation (MLI) / Vacuum Class acceptance of bottom pipe connection Tank Saddles & Tank Connection Space directly attached to the outer tank 15 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson LNGPac™ Inner tank Annular space, Perlite / Vacuum insulation Outer tank Tank Connection Space LNGPac™ Simplified P&ID –vacuum- Cryogenic pump 16 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson The new Wärtsilä LNGPac™ 17 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson TANK DESIGN – Single-Walled Fuel Storage Tank Single-Walled Fuel Storage Tank Capacity range from 300-2500m³ Tank material: 9% Ni steel or austenitic stainless steel Tank Saddles to be mounted at yard during installation Dome on top of Tank for all tank pipe connections above maximum liquid level Tank Connection Space separated from Tank Dome LNGPac™ IMO “type C” tank Polyurethane insulation Galvanized sheet steel, GRP or SS316 cladding 18 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Tank Connection Space LNGPac™ Simplified P&ID –PUR- Cryogenic pump 19 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson TOTE MIDNIGHT SUN/NORTH STAR: 2 X 1100M3 LNG TANKS 20 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson New alternative LNG storage designs • There’s are surge of developments across the industry and several tank concepts are being developed (A, B and C) • New entrepreneurs entering the marine market • Design typically based on welded stainless steel construction with Polyurethane insulation • Alternative materials, with aim of reducing CAPEX • Land based technology as fuel tanks or large scale technology being down-sized (GTT) • New concepts are everywhere , with some hot projects Uncertainties: Operational performance and economics Potential for research & funding in universities 21 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson TANK DESIGN – Classification and legislation All LNG powered vessel need, as a minimum, to comply with: IGF Code - International Code of Safety for Gas-Fuelled Ships (estimated officially to enter into force 2016?) Wartsila is participating into IGF workgroup for definition & development of this code. Current vessels under construction already need to comply with the intermediate code, defined by the main classification societies in its own rules and regulations. Experiences with classification societies and local governmental bodies: Det Norske Veritas 22 © Wärtsilä March 18, 2015 Germanischer Lloyd EnergyVaasa Sören Karlsson Lloyd’s Register American Bureau of Shipping United States Coast Guard Risk assessments required Risk assessment is the new darling among classification societies • New rules, regulations and guidelines require risk assessments • Also applied when prescriptive rules do not exist • Final Design approval received very late in project => project risk • We reduce the risks with a high degree of standardization and modularization Conceptual design 23 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson contract Manufacturing MAINTENANCE AGREEMENTS ENSURING CERTAINTY OF OPERATIONS 24 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Wärtsilä’s Service Agreement types Asset Management Maintenance Agreements • • • • • • • • • • • • 25 Full responsibility for operations & maintenance Lifecycle cost guarantee Risk management Performance guarantee Extending lifetime of asset Responsibility for maintenance Financial predictability Partnership with common goals Ensured performance Online operational support World class technical expertise Global and local coordination Technical Management Supply Agreements • • • • • • Consisting of one or more of the following • Manpower • Spare parts • Workshop services • Online services • Competence development and training Classification society approved concept Maintenance planning Maintenance cost prediction Condition evaluation Condition monitoring Periodical inspections © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson Putting the pieces of the puzzle together in a smarter way! 26 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson EnergyVaasa - Good business environment The most significant energy cluster in the Nordic countries guarantees diverse know-how and strong resources in the energy and environmental technology industry. 27 • 140 companies Many of them are global market leaders. • 10,000 employees ¼ of the energy industry employees in Finland. • 1,000 developers Considerable human resources in research and development work. • 4.4 billion euros The energy cluster’s combined turnover. • 80 % export The technology industry exports from the Vaasa region amount to 12% of the whole country’s exports in the field and to 30% of the country’s energy technology exports. March 18, 2015 EnergyVaasa Sören Karlsson www.wartsila.com 28 © Wärtsilä March 18, 2015 EnergyVaasa Sören Karlsson