Register for a free trial
Social
LNG World Shipping

LNG World Shipping

Grain LNG to capitalise on breakbulk LNG demand

Mon 07 Jan 2019 by Ed Martin

Grain LNG to capitalise on breakbulk LNG demand
Paul Ocholla (Grain LNG): "We believe there is a future for marine LNG; it’s one reason why we are now looking into the breakbulk marine side"

The UK's main LNG import terminal intends to meet breakbulk demand with an innovative solution

Speaking at Riviera Maritime Media’s LNG Ship/Shore Interface Conference in London, which ran from 22-23 November 2018, Grain LNG’s commercial advisor Paul Ocholla outlined the terminal’s approach to logistics, trends in end-use applications and future plans.

The UK has been a net importer of gas since 2004 and the Isle of Grain LNG terminal plays a key role in this process. Comprising two jetties on the river Medway, Grain LNG is the largest LNG import terminal in Europe and the eighth-largest in the world. It offers a 644 GWh per-day regasification capacity, more than 200 berthing slots per annum and has 1,000,000 m3 of storage capacity; a truck-loading facility was launched in 2015 and a rail route in 2017.

Mr Ocholla looked over trends in truck loadings for various markets, covering road fuel, off-grid power and marine bunkering. While road-fuel loadings were subdued in 2018, Mr Ocholla noted that the UK government’s decision to extend the tax duty differential in October 2018 out to 2032, “[gives] a clear signal that it supports gas trucks and the gas market”; hence, growth in this area is anticipated as confidence returns.

The off-grid market has remained fairly stable, he said, explaining that competition with other fuels, such as LPG, coupled with the relatively far off adoption date (2025) for regulation forcing the use of cleaner fuels, means this stability is expected to continue into the 2020s.

Looking at marine bunkering demand, Mr Ocholla noted that while there are orders coming through, uncertainty over the 2020 sulphur cap and confusion over which emissions reduction method will eventually win out, is exerting downward pressure. With vessels potentially having working lives of 20 or more years, investment decisions must be made carefully and high initial capex requirement for LNG, uncertainty about security of supply and competition from other low-sulphur options must all be factored in.

Still, Mr Ocholla is confident about the future of LNG: “We believe there is a future for this and this is one reason why we are now looking into the breakbulk marine side.”

The market for LNG-fuelled vessels is growing and set to continue doing so, and Grain LNG aims to meet this demand with a breakbulk facility expected to be introduced in 2020 or 2021, to coincide with IMO’s 2020 sulphur cap coming into force.

Bringing this facility to fruition requires balancing Grain LNG’s commercial requirements with the needs of potential customers. A low-capex solution that utilises existing jetties is required, while the activities of current primary capacity holders must be minimally impacted, and the UK’s stringent Health and Safety requirements must be met.

Breakbulk customers demand a flexible service: “They don’t want to be pushed aside when a big ship is there,” Mr Ocholla said. Any solution would also need to be compatible with a wide range of vessel sizes, from 1,000 m3 to 30,000 m3.

Any solution must also be able to handle the large tidal differences experienced due to the terminal’s position on the Medway estuary. It would also need to be compatible with a wide range of manifold and vessel designs, as well as being capable of operating from the facility’s existing jetties.

This factors all contributed to the development of an innovative solution. “What we ended up with is what we call the floating loading unit, or the FLU,” said Mr Ocholla.

The FLU is a floating adapter barge that mimics a jetty on a smaller scale. The unit is not self-propelled and will be moved from one jetty to another using a tug. Two fenders on each side allow for ship-to-ship transfers between vessels. The FLU barge attaches to the jetties using clamps that mean existing pilings on either of Grain’s jetties can be used; the unit will be stable laterally and able to rise up and down with the tide. Hard loading arms were chosen over hoses as a more “fit-for-purpose” solution: “That will give us a more stable and enduring design that we can take [into] the next 20 years,” said Mr Ocholla.

“It’s going to be a fairly simple design to make sure we minimise capex and we are still able to load the smaller ships, which currently can’t load on our main jetties because they are too small,” he said.

National Grid hopes to take a Final Investment Decision in April 2019, subject to market interest, with a view to project completion and launch by the first-half of 2021.

Recent whitepapers

Related articles

 

 

 

 

Knowledge bank

View all