NGV Transportation Magazine

SPECIAL REPORT:

FEATURE:FEATURE:

DEVELOPMENT OFTHE CNG INDUSTRY

IN PAKISTANLNG LOADING SYSTEMS- THE MLA

VOL. 21 | JAN - MAR 2015

NGVTRANSPORTATION

MAGAZINE

NGV Transportation

IN LNG BUNKERINGHOW TO BEAT THE “CHICKEN AND EGG”

1 Vol. 21 Jan - Mar 2015 NGV Transportation

EDITOR’S TWO CENTS

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First and foremost, would just like to wish everyone a Happy New Year and am hopeful that you are all as optimistic as I am about it. As we usher in the New Year, it comes with it new plans, new budgets and new ideas - and just how little time we have to put those plans into motion, allocate our budgets and bring our new ideas to fruition! 365 days may seem like an ample amount of time but the reality of the situation is that there really isn’t much of it.

What seemed like sluggish movement a year or two ago looks a lot more like a race these days. Nations are seemingly rushing to secure long term contracts in the quest for energy security, especially after the recent events that unfolded in Ukraine last year. The game has changed and fleeting curiosity has turned into obsession. As energy prices continue their downward tumble, it will be interesting to see how methane’s role in the global energy mix will continue to evolve and develop.

Governments worldwide have already realised that they have an essential role to play in ensuring that the use of gas continues to thrive within their constituencies. The global gas network is growing and there is far more interconnectivity between private enterprises and government linked companies than ever before. As more countries secure free trade agreements with each other, such as China did with Australia this past November, we can only imagine that the energy markets in both these countries will be significantly bolstered and that this could prompt other nations to seek similar agreements. In other words – it’s a good time to be in the natural gas industry.

In this issue, we have an article with expert analysis on the LNG bunkering situation and a possible solution to the chicken and egg dilemma which continues to plague LNG bunkering projects everywhere. There’s also a very interesting overview on the CNG situation in Pakistan, as well as a short interview with CNOOC’s Chief Energy Researcher, Chen Wei Dong, with whom we caught at this year’s Gas Asia Summit in Singapore. On top of that, we have our regular slew of event reports and technical write-ups, with one on LNG loading systems with special focus on the system aboard Shell’s FLNG platform - Prelude, among others.

Once again, I would like wish you all the best for the coming year! May your businesses continue to do well and may we each play our part in creating a clean and sustainable energy filled future for our children. Do come back to us and let us know if you like, or even more so, if you do not like our content - as we are here solely to provide you with the most relevant information that will shape and mould your business for the better.

Ryan PasupathyEditor

Greetings all!

CONTENTS

LNG Loading Systems- The MLAThe Art And Science of Piston Design In Natural Gas Engine

Longest Distance Travelled By Energy Efficient Vehicles In A Convoy - A New Malaysian Record

Chen Wei Dong Interview:GAS ASIA SUMMIT 2014

Editor’s Two Cents

Development of The CNG Industry In Pakistan

An Analysis of National Policies And Its Impact On NGV Growth in China

1030

14

3401

18

35

FEATURE:

SPECIAL REPORTS:

NEWS AROUND THE WORLD

03

Small LNG Shipping & Distribution Forum 201426

EVENT & EXHIBITION:

22

HOW TO BEAT THE ‘CHICKEN AND EGG’ IN LNG BUNKERING

FEATURE:



INDIA

MALAYSIA

December 2014: Railway’s Green Run Begins With CNG Trains

October 2014: Government Hikes Natural Gas Price by 33.33%

November 2014: Petronas And Partner To Develop LNG Project In Malaysia

Indian railways minister, Suresh Prabhu’s ‘Green Energy’ plans are beginning to take shape with the country’s CNG powered train completing all the necessary tests. The plan is that these dual fuel trains which have been manufactured by Integral Coach Factory will have one-fifth of its total fuel use come from CNG. Two sets of these rail units have arrived in Delhi and will be used in the DEMU (Diesel Electrical Multiple Unit) trains on Delhi-Rohtak-Rewari section train lines.

An advanced version of these trains that can use up to 60% CNG is currently undergoing testing. The plan is to ultimately end up using up to 500 DEMU trains

The Indian Government has approved raising natural gas prices to US $5.61 per mmbtu from the first of November but Reliance Industries (RIL) will continue to enjoy the current $4.20 rate till it makes up for the shortfall in output from the KG-D6 block.

The government has amended the previous formula set by the old UPA government to bring down the increase in rates from US$8.40 to US$5.61. The new formula will be revised every six months following the 1st of November.

RIL has flagged D1 and D3 gas fields in KG-D6 block where

Petronas has signed an agreement with Dialog Group Berhad to develop an LNG regasification terminal in southern Malaysia. Petronas will work with Dialog LNG and Pengerang LNG to construct the 3.5 mtpa regasification facility.

Under the agreement Petronas will own 65% of a ‘special purpose vehicle named after their partner – Pengerang LNG, with Dialog owning a 25% share and SSI Johor owning the remaining 20%. The project is expected to cost US$806 million.

- Ship & Bunker

which could provide a solid base for the eventual conversion to LNG run trains, of which trials are being conducted at Patiala-based Diesel Mechanical Works (DMW).

- Hindustan Times

output should have been 80 mmscfd but it has experienced a shortfall which has been said is due to geological reasons. Consumers will have to pay the revised increase price but RIL will only get US$4.20 with the difference being deposited in an escrow account.

RIL will get higher rates if it is legally able to prove that it did not intentionally cut production to result in an output fall. This gas hike comes in after having deferred the increase a previous three times.

- Business Today. In

4NGV Transportation Vol. 21 Jan - Mar 2015


Höegh LNG has announced that it has declared its option for a fifth FSRU at Hyundai Heavy Industries (HHI) in South Korea. The FSRU will be delivered early 2017 and has full trading capabilities and an increased regasification capacity compared to previous FSRUs from Hyundai.

President and Chief Executive Officer Sveinung J.S. Støhle of Höegh LNG said, “Long term contracts have been secured for the last two of the four FSRUs in our current expansion program, and we therefore continue to follow our successful strategy by ordering additional FSRUs when new contracts have been secured. The order at HHI is the initial part of the Company’s next expansion program, and we continue to see strong growth in the FSRU market over the next three to four years, and contrary to some of our competitors the Company’s main focus will remain the FSRU segment where we intend to continue building our position as the leading owner and operator.”

- Hellenic Shipping News

Shell has said that it will be building LNG facilities that will go to power generation facilities at a combined generating capacity of up to 5000 megawatts. Shell chairman, Edgar Chua said that the 5000 MW facility would be constructed in phases however he did not give any clue as to when they would begin construction.

He said that, “The first phase is floating storage and re-gas, because we can live with 1,500 MW to 2,000 MW. And if this increases, [we will] build an on-shore facility, so it won’t be expensive and will be fast.”

Chua also said, “We’ve been pushing for an energy mix policy. If you don’t have an energy mix policy, the default of IPPs [independent power producers] is to build a coal-fired plant and dispatch based on lowest generating costs,” He also added that, “Commercial off-takers will only sign up if there’s a policy that guarantees that there is a market for power produced from LNG.”

This project is seen as an important milestone in LNG infrastructure development in the Philippines as it shows that Shell sees potential for development in the country.

- Manila Standard Today

SOUTH KOREA PHILIPPINES

RUSSIA

November 2014: Höegh LNG – Places order for its fifth FSRU at Hyundai in South Korea

November 2014: Shell Building LNG Facilities To Fuel 5000-MW Power Plants

October 2014: Chinese Banks Ready To Invest $US10 Billion in Yamal LNG

Chinese banks are prepared to invest more than $US10 Billion in Russia’s Yamal LNG project according to billionaire Gennady Timchenko, who is also a shareholder in Novatek. The Yamal LNG project has come under some pressure after

Novatek appeared on the list of companies sanctioned by the EU and US over Russia’s role in the Ukraine crisis.

In light of the sanctions, Novatek will now work more closely with Chinese banks. A c c o r d i n g t o T i m e c h e n k o ,

negotiations are on-going and it is a question of conditions. The plan is to try and sell a 9% stake in the project over to the banks.

- The Moscow Times



Pakistani Minister for Petroleum and Natural Resources, Shahid Khaqan Abbasi has said that the government will cut off the supply of CNG to CNG stations in Punjab next year. The restriction imposed on gas supply would be withdrawn and that OGRA would increase the gas tariff for the latest scheme.

Secretary of Petroleum, Abid Saeed said that the CNG sector would import the gas and then sell it. It would also remain 35 % cheaper than petrol. He added that the government would be incorporating two billion cubic feet of gas into the system and that a summary has been sent to the Council of Common Interest (CCI) to reduce the price of LPG.

- DunyanNews.tv

Big gas producers have bigger things to worry about than the immediate problem of falling energy prices. In the longer term however, they should be worried that China may not be producing as large amounts of gas as previously thought as demand forecasts have been cut and both US an Russia are entering the already crowded market.

The National Development a n d R e f o r m C o m m i s s i o n recently downgraded its gas demand forecast which has caused quite stir in the markets. The NDRC forecast at 227 mtpa is 15% lower than its forecasts six months earlier.

- ABC.net.au

Myanmar Oil and Gas Enterprise (MOGE) has announced that the government will no longer issue CNG licenses for any vehicles as part of its plan to secure CNG for power generation in the country.

To complement the shortfall of CNG that will come about, the government plans to increase imports of octane and diesel. The long term plan is to phase out CNG from vehicle use and continue to run cars on octane based fuels which is the predominant fuel used for imported cars in the country according to an official from MOGE.

- The Irrawaddy

PAKISTAN

CHINA MYANMAR

November 2014: Government Will Cut Off CNG Supply In 2015

November 2014: China Gas Squeeze: Demand May Fall as Supply Ramps Up

October 2014: Burmese Cars Will No Longer Run On CNG

Many Asian countries are finalising new deals to import LNG from Mozambique which could pose a problem to Nigeria, taking away some of its Asian market share. With the recent large offshore gas discoveries in Mozambique, LNG is coming at a cheaper price thus making Mozambique the new competitor on the LNG market.

The country last week signed preliminary deals to sell its LNG to China, Japan, India and the UAE. When these deals successfully go through many of Nigeria’s current buyers may scale down their request volumes from Nigeria.

The US natural gas boom could also contribute to Nigeria’s current problems by further stealing more of the Asian market share as the government has recently approved several projects that will ship LNG to Tokyo and New Delhi.

- All Africa.com

NIGERIAOctober 2014: LNG Export Threatened As Asian Buyers Turn To Mozambique



A master-plan is currently in the works as the Bangladeshi government lays out a new development strategy for natural gas in the country. State Minister for Power, Energy and Mineral Resources, Nasrul Hamid said, “We want to bring the management of the gas sector under a new master-plan. Gas is being misused because of supplies to Compressed Natural Gas (CNG) stations. This misuse of the resource is leading towards a gas deficit.”

He added that the biggest mistake by the BNP under the Jamaat regime was setting up CNG stations on a massive scale by grabbing up government land. He believes that the sector should be better managed and that CNG should be supplied to public vehicles instead of private ones.

- Dhaka Tribune

KBR Inc. announced that its joint venture with PT Rekayasa Industri, JGC Corporation and PT JGC Indonesia has been granted an onshore front end engineering and design (FEED) contract by BP for another liquefaction train at the Tangguh LNG project in West Papua.

The expansion comes after the completion of the earlier two trains at Tangguh LNG plant. The project is located at Bintuni Bay, West Papua which is the largest capital development project ever undertaken by the country.

Stuart Bradie, KBR President and CEO said that, “KBR is proud to continue our longstanding relationship with BP and our joint venture partners, PT Rekayasa Industri, JGC Corporation and PT JGC Indonesia on the Tangguh LNG expansion. This project represents KBR’s ability to bring world-class engineering skills to complex energy projects and follows KBR’s 30-year presence and successful track record in the Asia-Pacific region.”

- Globe Newswire

Wartsila and two Indonesian partners have signed a joint development agreement with plans to create the first ever bio-LNG plant in Indonesia. The co-signers of the agreement with Wartsila are PT Pertamina and PT Godang Tua Jaya.

Wartsila have said that they will conduct the feasibility study for the project to develop a small scale bio-LNG plant with a capacity of 0.75 tonnes per hour which corresponds to approximately 4 MWh of electrical production. The plant will process municipal solid waste into eco-friendly biogas for use as vehicle fuel. On top of the feasibility study, Wartsila will provide technological support and conduct an economic assessment. If found to be feasible, the other parties; PT Pertamina and PT Godang Tua Jaya will be expected to enter an execution agreement.

- Wartsila Corporation, Press Release

The Arun LNG project in Ache, Northern Sumatra has stopped producing LNG as it is switching functions to become a receiving and regasification terminal. As domestic production slides and demand rises, it is time that Indonesia turns to more foreign supplies of energy.

The country’s LNG exports have fallen by 40% since 1999 when it supplied a third of global consumption. Only in 2006 was it that, Qatar overtook Indonesia to become the worlds largest LNG exporter.

At its peak, the Arun plant had a total of six trains running but currently only one still remainds in operation. The plant has been operating since 1977. The Arun gas hub conversion is thought to cost more than 80$USD million.

Arun will become the main receiving terminal for Indonesia’s first gas imports which are due in 2018. Teuku Khaidir, president director of Perta Arun Gas, a subsidiary of Pertamina has said that, “The LNG hub will become a storage facility to support national energy security and also international trading.”

- Reuters

BANGLADESHINDONESIANovember 2014: Natural Gas Sector To Get Masterplan

October 2014: KBR Partnership Awarded FEED Contract for Tangguh LNG Expansion Project

October 2014: Wartsila To Develop Indonesia’s First Bio-LNG Plant

October 2014: Arun LNG Project To Ship Final Cargo, Imports Due Soon

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Completion of the ambitious Mtwara LNG plant is scheduled to take seven years to completion. According to Thomas Mannes, Statoil Tanzania Operations Manager, the plant will commence between 2022 or 2023. The plant will allow Tanzania to export LNG across the globe.

Mr. Mannes went on to say that, “We (Statoil) estimate the project to take seven years upon its completion. We have to make soil studies to determine the stability of the site which may take a year and two more years for engineering and design studies with another four more for construction.”

The project will be a joint venture with Tanzania Petroleum D e v e l o p m e n t C o r p o r a t i o n (TPDC), Statoil, BG, ExxonMobil, Ophir and Pavilion.

- DailyNews.co.tz

British Columbia have approved an LNG export terminal after much discussion and worry about primary investor; Petronas’ threats to pull out from the project as there were concerns about administrative delays affecting the feasibility of the entire project.

A federal review of Petronas’ Pacific Northwest LNG project is still on-going with Petronas expected to make their FID by the end of the year. Provincial environmental assessment certificates were issued for the terminal along with the Prince Rupert Gas Transmission Pipeline which was developed by TransCanada Corp and the Westcoast Connector Gas Transmission pipeline proposed by Spectra Energy Corp.

- Reuters

The head of the Canadian aborigines; the Nisga’a Nation, has said that his people are welcoming the possibility of an LNG project whereby they will share some of the benefits. They are permitting energy companies to run a pipeline through the nation’s territory in the north-western part of BC which will cut through their land.

The Nisga’a and the BC government signed a sharing agreement that will see the Nisga’a receive US$5.3 million from the development of the 97 kilometres of land that belong to the Nisga’a.

Nisga’a Nation President; Mitchell Stevens said at a news conference at the legislature that the Nisga’a people want much more than the proposed Prince Rupert Gas Transmission Pipeline project, they have already chosen four potential LNG export terminal sites on their lands which could be served by the proposed pipeline.

The Nisga’a are not the only BC First Nation to support LNG development on treaty lands and traditional territories. The Kitimat-area; Haisla Nation are supporters of LNG projects in their area and Vancouver Island’s Huu-ay-aht, have also signed a development agreement to build a proposed LNG plant on their land located near Bamfield, Vancouver Island.

- CBC News

Turkey and Algeria have extended their LNG supply contact with Turkey for another 10 years. The LNG supply contract specifies a 50% increased volume for the coming 10 years. The two countries also spoke further about possibilities of bilateral c o o p e r a t i o n i n t h e f i e l d s o f e x p l o r a t i o n , f e r t i l i z e r s , petrochemicals and other fields not relevant to hydrocarbons.

- AllAfrica.com

TANZANIA CANADA

ALGERIA

November 2014: Construction of LNG Plant To Take Seven Years

November 2014: British Columbia Approves Petronas LNG Project, Two Gas Pipelines

November 2014: Nisga’a Nation signs LNG pipeline benefits deal with B.C.

November 2014: Algeria To Supply Turkey with LNG for 10 More Years



The CEO of French Oil Company, Total has died in a plane crash in Moscow. His corporate Jet reportedly crashed into a snow plough and was engulfed in flames. All four people on board were killed in the crash. According to Russian investigators, the driver of the snow plough was intoxicated. Mr de Margerie had been CEO of Total since 2007.

Wärtsilä has said that it will equip the Middle East’s first LNG powered harbour tug. The company will ready the propulsion system inclusive of the ship design. Two nine cylinder Wärtsilä 20 DF dual fuel engines

and its WST-18 Wärtsilä Steerable Thrusters will be powering the tug. On top of this, it will supply LNGPac fuel gas handling system for ships to DDW (Dubai-based Drydocks World).

The project is part of an environmental initiative launched by the Dubai Government. Middle East Sales Director at Wärtsilä Ship Power, Ibrahim Behairy said that, “The shift towards the use of LNG fuel is building up speed across the world.”

- Ship & Bunker

Lithuania is declaring natural gas independence. After roughly three years and US$128 million, an offshore LNG vessel is anchoring on the former Soviet republic Baltic coast and will pump LNG into the mainland.

The aim is to free the country from energy dependence on Russia’s Gazprom which is currently Lithuania’s sole supplier of gas. The Independence, a South Korean made ship which was requisitioned some years ago, is docking off the coast of Klapeida and may replace all of the gas it currently gets from Russia which is about 2.7 billion cubic meters of gas each year.

- Bloomberg BusinessweekGreece is considering getting additional LNG from Algeria to cover shortages and help nearby nations should there be any disagreement between Russia and Ukraine. Depa SA may need to pay $US200 million extra charges for December and January which are the peak months of winter demand according to their Chairman, George Spanoudis.

Greece currently gets two thirds of its gas from Gazprom and they (Gazprom) may not be able to offset shortfalls under the existing contracts with Turkey and Algeria that meet the rest of the demand.

Depa SA has a contract with Algeria’s Sonatarch Group for the supply of 500,000 tonnes of LNG into Revithoussa LNG Terminal. The terminal is the only gas storage facility in the country. Depa SA is looking at extra cargoes of as much as 125,000 cubic metres each, up from 75,000 cubic meters.

- Hellenic Shipping News

FRANCE

DUBAI

LITHUANIA

GREECE

October 2014: Total’s CEO Christophe de Margerie Dies In Plane Crash

November 2014: Wärtsilä to Equip Middle East’s First LNG Harbour Tug

October 2014: Lithuania Grabs LNG In Effort To Curb Russian Dominance

October 2014: Greece Will Seek Algerian LNG If Russian Gas Supply Cut

Japan’s Chubu Electric has signed a new short term agreement to purchase LNG from GDF Suez for 1.2 mtpa with a percentage of the deal tied to spot Asian prices. The two year contract term was appealing to Chubu as it is due to carry 2.2 mtpa for 10 years from Freeport LNG on the Texas Gulf Coast starting in 2017. According to Chubu President Akihisa Mizuno, “The LNG market is going through a major change and we want more flexibility.”

- Platts

JAPANNovember 2014: Japan’s Chubu Electric to buy 20 cargoes of Asia spot-linked LNG from GDF Suez


FEATURE ARTICLE

LNG LOADING SYSTEMS – The MLA

The LNG supply chain is a lengthy one that involves thousands of people, many of which are operating

some pretty impressive machinery. Just how impressive, you might ask? Perhaps, not too far off Isaac Asimov’s idea of robotics. The LNG loading system is a particular section of the supply chain that is responsible for the transfer and reception of our favourite liquefied gas. This is done both onshore and

offshore, and as one would expect, offshore transfer of a chilled liquid at -162oC can pose some challenging obstacles. The amazing part is really in the engineering of the equipment that has allowed us to surpass these obstacles. Let me take you on a tour through this section of the LNG chain (with special attention to the mechanisms involved). It will, without a shadow of doubt, leave you awestruck at the extent of our superior human capability for ingenuity.

Before zoning straight into the actual device, let’s take a look at the system as a whole. There are generally two commonly used methods for transferring LNG. These are side-by-side (SBS) and tandem or boom-to-tanker (BTT) methods. Besides the problem of the need to be at sub-zero temperatures throughout transport, moving this fuel in open waters does tend to make the job significantly more challenging than it would be when compared to a more simple land transfer. The workhorse behind the operation is a magnificent machine that has had a very successful track record since its inception, more than 50 years ago. Pioneered by FMC technologies, the Marine Loading Arm has been serving mankind behind the scenes as the unsung hero in the LNG supply chain.

Offshore LoadingThe BTT system basically involves the use of a ‘boom’ which is stored on deck of an FPSO (Floating Production, Storage and Offloading Unit) which attaches to the oncoming vessel delivering LNG through the use of a specially designed double pantograph system. The system is a development that was first used in Brunei with resounding success. The double pantograph system consists of two separate metal lines which are arranged in a double diamond configuration. (Figure 1) A lower cardanic assembly links to the double pantograph system via hydraulic Quick Connect / Disconnect Couplers which are attached to the LNG carrier manifold. The method of transfer needs to be dynamic enough to deal with a whole host of problems effectively, such as varying types of ships, movement of tides and varying mooring conditions. The shuttle carrier connection system is connected to the double pantograph system of the BTT. This system works together with the double pantograph system and serves as a clever solution to deal with these variations and tidal movements.

The shuttle carrier connection


FEATURE ARTICLE

system allows the operator on board the LNG carrier to connect to the double pantograph system despite the large relative motions between the two vessels in a reliable manner. The operator then becomes a pilot of sorts, allowing him to manoeuvre the connection system to link up with the double pantograph. It also makes it easy to connect and disconnect the LNG product lines separately without applying unnecessary load to the product couplers as well as allowing for the emergency disconnection with minimal loss of LNG. The system, once connected, will require no additional instruction as it will automatically follow the movements of the LNG carrier.

A slight variation to this method is the tandem offloading system which instead of a ‘boom’ makes use of a ‘yoke’ which is a large triangular shaped device that connects to the LNG carrier. One can imagine that it would make it difficult for the operator on the FPSO or LNG carrier to visualize the relative position of the two vessels during loading and unloading operations. As such, the BTT system uses a position monitoring system that displays in real time, the relative positions of the shuttle carrier

connection within the operating envelope while also measuring the speed of the relative drift.

The other method that is commonly practiced for offshore LNG loading is SBS or side-by-side loading/offloading. In this set up the ships are aligned such that they are parallel to one another rather than stern to bow. However, this system has been considered to be quite

rigid and has had many companies improving this method of transfer by incorporating some interesting technolog ica l a d a p t a t i o n s into the mix. An enthralling development by Nexans and Brugg is the Sideways O f f s h o r e T r a n s f e r o f L N G a n d LPG (SOTLL) w h e r e b y t h e transfer pipes are made extra f l e x i b l e w i t h t h e a d d i t i o n

of a special telescopic yoke that allows for different flanges from different vessels to be transported simultaneously.

An Arm Like No OtherThis brings us to my favourite part of the whole loading system; the Marine Loading Arm (MLA). The MLA is an extremely well-engineered device that does the hard work - offloading of LNG, to and from ships to FPSOs and vice-versa. These loading arms are not only specifically used for transferring LNG but can transfer almost any other liquid chemical mix.

The arm is made up of several parts; a stand post or base riser, an outboard arm, an inboard arm and a counterweight. (Figure 2) The arm possesses swivels at various points which allow for complete movement in all planes. This sort of jointing increases the life span of the swivel as there is reduced wear and tear which directly translates into lower maintenance costs.

The counterweight can be directly connected to the outboard arm with the angular position of the counterweight parallel to the position of the outboard. In some variants, the connection

Kingpost

Counterweightguide assembly

Boomlu�ngjumper

assembly

Boom

Upper cardanicassembly

Product lines thermal insulated

Doublepantograph

Stern of FPSOLower cardanic

assembly

Mechanical bearingassembly

Boom slewingjumper assembly

Shuttle carrierconnection system

Figure 1: Modified from Basic Loading Arm Schematic. Sandra Wassink, 2009. Loading Arms and their control panels in hazardous

areas. Ex-Magazine 2009.

Rigid pantograph construction for connection of outboard arm to counterweight

Tripel swivel assembly ship’s connection

Outboard arm

Inboard arm

Stand postCounterweight

Figure 2: Modified from Simple BTT Schematic. L. Terry Boatman and William B. Mitchell. 2004. LNG Tandem Offloading System. AIChE Spring National Meeting 2004.


FEATURE ARTICLE

NTM By

between the counterweight and the outboard arm can be made by a cable and wheel assembly as well. The loading arm may also use a double counterweight such that the arm will be balanced in all positions. The product line and the structure are linked at the end of the outboard structure via a horizontal rotation at the base riser through two coaxial rotations.

Intelligent Fail-SafeAll marine loading arms have an Emergency Shutdown System (ESD)

that upon activation will create a pressure surge on the loading line. The ESD system works in such a way that the surge in pressure initiates several sequential actions to protect the line from severe surge pressure. The ESD causes a rapid closure of ESD valves due to the speeding up of flow of LNG. It is necessary that the surge pressure build-up as a result of the ESD activation is set by the operator such that it is less than the piping design pressure, for the system to work correctly.

These loading arms also undergo

some intense testing to ensure that they able to function at sub-zero temperatures for lengthy periods. The arms are actually tested while transferring liquid nitrogen which is about 20 degrees colder than LNG, at -196oC. Not to mention that the arms need to be inspected at each stage of the development process, as well as hours, upon days of extensive computer simulation tests. Let’s take a look at a prime example of the most high tech MLAs at work –The OLAF Arms aboard Prelude FLNG.

Ahh... Prelude FLNG, Shell’s latest and most innovative masterpiece. When speaking of man-made marvels, this moving platform is top-of-the-line and literally ‘floating’ in a class of its own. To truly understand the magnitude of the project, you will have to have to try wrap your head around its enormity - picture more than 3000 blue whales crammed together into one giant sea bound mass! The 600,000 tonne behemoth is far from your average FLNG or FSRU, at half a kilometer long and 30 storeys high, it is one of the largest structures that man has ever sent to sea. As massive as it seems, at a production rate of 5.3 mtpa, the structure is actually 4 times smaller than a regular land-based gas facility of that capacity.

If that alone is not impressive enough, Prelude has some brilliant automatons on board - The superior marine loading arms designed and manufactured by FMC Technologies. These are actually man-made marvels all on their own and have taken approximately 50,000 man hours to develop and produce.

The Arms used on Prelude are of a new generation of marine loading arms. The OLAF or Offshore Loading Arm Footless on Prelude are for both the loading and offloading of LNG and LPG. The FLNG has 4 LNG arms and 3 LPG arms. The arms are used in

conjunction with one another. All the arms are not used. There will always be one arm used for vapor return with one more arm being kept free as a spare. All the arms are not used at a single time as the offloading system can be become bottle necked, such that should the full transfer process not work, LNG or LPG export will not be possible. The operator will decide to have one spare arm per type to keep high availability of the system.

The guidance system for connection between the arm and the carrier is very advanced. It needs to be able to calculate the fluctuations of the vessels as they float on the sea, while still making a precise connection. This is done by sending a messenger line to the carrier which will already be berthed and moored with a gap of about 5 meters. The line is then hydraulically unrolled and connected to the manifold by a controller unit.

The arms undergo a thorough battery of tests and safety protocol to ensure that they function flawlessly with utmost care when it comes to safety. The LNG arms have an automatic and manual emergency shutdown system (ESD) that analyses each and all arms during operation. In the event of an OLAF arm going outside the preset operational window, a full Emergency Quick Disconnect (EQD) could be triggered – this would close a ball valve on the arm and also a ball valve on the LNG carrier, mechanically disconnecting the arm between the two ball valves in 6 seconds flat. All of the arms can be disconnected within these 6 seconds if need be. A tiny amount of LNG (approximately 18 liters) would vaporize immediately in this disconnect with the bulk volume of LNG being sealed in the arm and the LNG carrier.

The LNG Carriers are built with minimum superstructure so as to minimize the weight on the OLAF arm when connected, ensuring that it is in ‘free operation’ mode, thus allowing each vessel to move relative to each other without imparting extra load to the carrier connection.

Prelude is probably one of the greatest man-made structures to have ever been built and it is an exciting time that we live in and that we are given the opportunity to witness the construction and the eventual operation of such a facility. It is in times like these that I am reminded how much we are able to achieve, so long as we just put our minds to it.

*Information provided by Mike Robinson was used in the writing of this article.

(Mike Robinson is the Asia Pacific and Middle East Sales & Marketing Manager for Subsea Processing from FMC Technologies).

Loading System on Prelude FLNG – A Class Of Its Own

NTM Ryan Pasupathy

NTM By Ryan Pasupathy

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GDT+SMLNG2015-A4.pdf 1 14-12-16 下午3:52


SPECIAL REPORT

LONGEST DISTANCETRAVELLED BY ENERGY EFFICIENT VEHICLES IN A CONVOY

- A New Malaysian Record

I n a bold move to create awareness, the Malaysian Association of Natural Gas Vehicle Installers (MANGVI), organised a

never-been-done-before NGV convoy across the Malaysian Peninsula. The convoy was to have 57 vehicles (the number 57 being significant as it is representative of

Malaysia celebrating as many years of independence this year) that would make the 550km journey across the country from Malacca to the island state of Penang. The event was co-organised and supported by the Malaysian Automotive Institute (MAI) who have of been working closely with MANGVI as of late to promote the use of natural gas

as a vehicle fuel, in light of the government increasing gasoline and diesel prices in October 2014.

This clever method of promotion is the brain-child of MANGVI President, Dato’ Danny Tan. “The convoy is aimed at not just creating awareness and encouraging the use of natural gas as a vehicle fuel but is also an opportunity to be a


SPECIAL REPORT

part of an amazing achievement that would be one for the history books,” said Dato Danny Tan. NGV Transportation was invited to join in on the convoy and be a part of the event, of which we were delighted to be a part of. The participants driving the gas powered vehicles were representatives from installer workshops across Malaysia – many of whom gathered their families to join them in their efforts to successfully create a new national record that would go into the “Malaysian Book of Records” as the longest distance travelled by energy efficient vehicles in a convoy.

The NGVs that took part in the event were mostly converted dual fuelled variants that were made up of small lorries, taxis and private passenger vehicles. Such a conversion costs the user around MYR$4000 to MYR$6000 with possible savings on their fuel of


SPECIAL REPORT

up to 70%. A regular problem for adaptation of CNG as a vehicle fuel is the lack of infrastructure – this however is not the case in Malaysia. The country is the proud owner of a grand total of 178 CNG refuelling stations across the peninsula, the majority of which are owned and operated by state-owned oil and gas giant, Petronas. As CNG vehicles are unable to travel vast distances without a refill, two stops were made along the journey for this very reason. The first stop was at Rawang in Selangor, which was followed by another stop in Simpang Pulai in Perak. The stations sell the gas at an amazing MYR$0.68 per litre, which is significantly cheaper than petrol and diesel fuels - Petrol RON 97: MYR 2.46 per litre, RON 95: MYR 2.26 per litre and Diesel: RM 2.23 per litre. The only downside is that the average driving range of an NGV is about 300km and long journeys such as this one

will require refuelling along the way. The wonderful thing about Malaysia is that the facilities to drive an NGV are provided for and the convoy has proved just that.

The convoy began in the southern state of Malacca on the 29th of November 2014. The cars were readied and inspected the evening before and after some formalities and a few speeches, the convoy was underway. Kicking off the event with streamers and fog horns, the 57 vehicles zoomed off from the starting point and began the journey north towards Penang. The cars were separated into groups and were assigned leaders to help ease keeping track of the participants. This allowed for unforeseen circumstances such as unplanned stops or possible breakdowns to be managed and taken care of. It proved extremely successful in ensuring that all NGVs reached the CNG stations as a group and kept on time.

After stopping at the second station in Simpang Pulai, the convoy made its way to the Takasima factory just before the Penang Bridge where the cars reported in and arranged themselves in the same order that they took off in. Following some refreshments after the long ride, the cars took off for Penang and made their way past the toll towards the Penang Bridge. Almost 11 hours after taking off, the cars crossed into Penang as the sun was setting in the distance. It served as a timely symbol to represent the summation of the journey and the setting of a marvellous record that would spread the news of the beginning of a true NGV revolution; one that is not only taking place in Malaysia but a movement that is slowly spreading across the entire world.

The awards ceremony was held at the KOMTAR building which was the final stop of the


SPECIAL REPORT

NTM By Ryan Pasupathy

convoy. The handing over of the certificate of achievement for the Malaysian Book of Records was presented by Honrouable Dato Haji Mohd Rashid Bin Hasnon, Deputy Chief Minister I of Penang. Dato Haji Mohd Rashid Bin Hasnon expressed his utmost support for the convoy saying that events like these are in line with the state’s vision for a cleaner and greener nation. Founder of the Malaysian Book of Records, Tan Sri Danny was also present to congratulate Dato Danny and MANGVI on their successful completion of the record attempt. State Executive Councillor of Penang, Phee Boon Poh was also present and expressed his support for the event. It was a proud moment for MANGVI and an even prouder moment for Dato’ Danny, who praised the MANGVI organisation committee for their efforts and dedication prior to, and throughout the convoy.


SPECIAL REPORT

IN PAKISTANIN PAKISTAN

DEVELOPMENT OF THE CNG INDUSTRY


SPECIAL REPORT

P akistan faced power deficit of 1500 MW in the early nineties t h a t r e s u l t e d i n f o r c e d p o w e r

outages. To tide over the situation t h e g o v e r n m e n t e m b a r k e d on a massive programme of structural reforms which allowed the independent private power producers (IPPs) to produce electricity and sel l i t to the Water and Power Development Authority and Karachi Electricity Supply company, the public sector entities responsible for production and distribution of electricity. The contracting of the IPPs was overseen by the Private Power Infrastructure Board (PPIB) who were made responsible for implementation of the new initiative. The PPIB provided one window facility f o r i n v e s t o r s i n t h e p o w e r sector. It negotiated, executed and administered agreements wi th IPPs and provided an interface between them and the government. The IPPs policy attracted an investment of US$ 3 billion and consequently 3000 MW of electricity was added to the national grid by 1997. Pakistan became a country with power surplus and it came a time when it was negotiating export of electricity to neighbouring India.

The IPPs though helped in overcoming the power crisis but their induction in the power producing sector raised the oil import bill to astronomical proportions as they produced electricity from the imported oil and gas available within the country. This development r a i s e d t h e c o n t r i b u t i o n o f thermal power to the energy production mix to 65%, against 28% of the overall global energy production mix. With a view to curtail the spiraling oil bill and address environmental concerns, the government in the mid-nineties decided to use

CNG as a fuel for the transport s e c t o r . E n v i r o n m e n t a l i s t s recommended fuel switching from liquid fuels to natural gas as a strong measure to safeguard the environment . CNG is a lead-free fuel with no Sulphur or particulate emissions and and has one tenth of the level of carbon monoxide emissions as compared to petrol. It is a highly environmentally friendly motor fuel for improving ambient air quality. It also produces much lower carbon dioxide emissions as compared to petrol and diesel, thereby helping in mitigating global warming effects caused by green house gas emission of carbon dioxide.

T h e H y d r o c a r b o n D e v e l o p m e n t I n s t i t u t e o f P a k i s t a n ( H D I P ) p l a y e d a pivotal role in the programme of commercialization of CNG as a transport fuel in Pakistan. The pi lot projects o f HDIP were the fore-runners of large scale acceptance of CNG as a cheap and safe vehicular fuel in Pakistan. Both users and investors exhibited great enthusiasm and response to this initiative. Pakistan addressed issues related to awareness, technology, investment and institutional framework while pursuing rapid expansion of CNG industry. With a view to improving the national economy by reducing oil imports and improving the environment t h e g o v e r n m e n t m a d e w e l l considered decisions to develop the CNG industry by giving incent ives . Incent ives such as; liberal approvals to obtain l icenses for CNG, l inking of natural gas tariffs for CNG to petrol, priority of natural gas connections to CNG stations and the exemption of import duties and sales taxes on CNG related imports were given. The government also announced incentives for import of dedicated CNG buses and encouraged

their local product ion and other equipment in the country for sustainability of the CNG industry.

These measures led to an exponential development of the CNG industry in Pakistan and by the end of 2012, the country had more than 3600 CNG stations and 2.86 million vehicles running on CNG as fuel . The CNG industry has created 70000 jobs and is worth US$4.49 billion at the moment. Pakistan has become number one user of CNG as a fuel for transport in Asia.

The initiative to develop CNG industry by rep lac ing i m p o r t e d l i q u i d f u e l s h a s made some savings on the oil import bill and also addressed environmental concerns but it also contributed to a great extent to the power crisis in the country . Unfortunate ly t h e s u c c e s s i v e g o v e r n m e n t after 1997 paid no attention to the growing energy needs of the country and no power producing project was installed in the country for the next decade. To meet the burgeoning demand of the CNG industry, the government had perforce to curtail supply of gas to the power producing companies, industry and the households. A country with a surplus power generating capacity became a power deficient country and by 2008 it faced a shortage of 3400 MW.

In 2009 the government was forced to resort to load shedding of gas and a stage came when it was decided by the government to gradually phase out the CNG industry to cater to the needs of the household, the industrial sector and the power producing units. This was resisted by the investors in the CNG sector and the employees of the industry and their families. The media also supported their cause with the result that the decision to


SPECIAL REPORT

phase out the CNG industry was put on hold. Nevertheless the load shedding of gas continued and the CNG stat ions were provided gas only for two to three days during the week.

The present government however, made a commendable effort to address the grievances of the CNG industry. It has signed an agreement with Qatar for the import of LNG which after re-gasification would be supplied to the CNG stations by the Sui Southern Gas Company Limited and Sui Northern Gas Company Limited who already have an elaborate distribution network in place. Government has already completed the construct ion of an LNG terminal at Port Qasim and construction of the second terminal has also already been launched. According to a negotiated agreement between the government and the All P a k i s t a n C o m p r e s s e d G a s Association ( APCGA), the latter would maintain a price parity of gas with petrol to the extent of 30-35%. It is estimated that this agreement between the government and the APCGA would become fully operational within eighteen months and the CNG station would have an uninterrupted supply of

gas to cater to the needs of the motorists. This decision of the government is likely to accrue multiple benefits such as savings of US$2.5 billion in the oil import bill, cheaper and environmentally friendly fuel , protect ion of jobs for employees and production of 1600 MW of electricity from the sector, leading to ceasing of the power shortages. It is indeed a win-win s i tuat ion for all the stakeholders. The experts believe that the industry has the potent ia l to create one million more jobs, owing to the prospects of lucrative investments in the CNG industry and government commitment to protect and support the i n d u s t r y . T h e g o v e r n m e n t has also exempted LNG from Infrastructure Development Cess and imposed a 5% nominal GST on its imports.

P r e s e n t l y , a c c o r d i n g t o the f igures compiled by the authorities, 0.8 millon vehicles and automobiles are coming on the roads annually, thanks to a liberal commercial credit and car financing policies of the banks. With so many vehicles j o i n i n g t h e t r a n s p o r t f l e e t every year, there wil l be an ever growing demand for LNG

and Pakistan will perhaps soon become the largest importer of LNG in the world. That prospect seems assured in view of the fact that the government is giving top priority to the production of electricity in the country through all available resources. The government has also made a policy decision not to supply the indigenous CNG for use as a transport fuel after the arrangements for import of LNG have been completed and its supply to the CNG stations after re-gasification comes through.

NTM By Malik Muhammad Ashraf

MALIK MUHAMMAD ASHRAF

Malik Muhammad Ashraf is a free lance journalist and a member of the visiting faculty of Institute of Media Sciences, Riphah International University in Islamabad.

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FEATURE ARTICLE

HOW TO BEAT THE “CHICKEN AND EGG” IN

LNG BUNKERINGJ u s t i m a g i n e i t ’ s

Christmas but nobody is there. That’s a bit what LNG for bunkering feels like. It has it all:

LNG is cleaner than anything else, cutting some cheese with the environmentalists, it’s cheaper than diesel which must make sense to the shippers, and when you put the cost of scrubbing in, it even beats heavy fuels hands down. It’s cool and hip and a safe, tried and tested solution for propelling ships.

And yet it is not yet the party you might want to think it becomes. Why is that?

For a start - shipping companies can hardly be described as an innovative and risk happy bunch. They usually are found on the very conservative side of life so their readiness for anything new is paper thin at the very best. So, it all comes down to personal attitudes of the players you might be tempted to say.

Not so quick. No matter how risk happy you are - will you happily jump for a new fuel while you are not even sure that your vessels will be able to fuel up always, and reliably so. OK, we get closer. My vessel is here and here I can fuel because yada, yada but tomorrow my vessel will be there and how shall I fuel there because yada, yada?

That’s what we call the chicken and egg dilemma. Who will be first - the chicken - in our case the fuelling infrastructure AKA bunker stations and logistics. Or

shall it be the customers who shall convert their vessel first in order to provide a nice, chummy market the infrastructure operators can feast on?

Depending on who bites the bullet, he carries a huge risk. Imagine you invest in infrastructure and then the market does not follow suit. You will have spent yourself out of this world and now everything goes mush. Same thing on the other side as you have bought a lot of expensive new vehicles or vessels and now you cannot use them as fuelling is not available.

OK, now we understand the problem. How do we solve it?

Little baby step by little baby step as mobster Paul Viti was told when he submitted to a shrinks service. Sounds simple, doesn’t it?

Big bangs don’t work (at least in the economy) so there simply won’t be fuelling infrastructure for everyone from day one. One always needs to start with those who have at least part of their fleet on a very tight leash.

What does this mean now? We talk about vessels that have a pre-determined chore to accomplish for their entire lifetime. Hence, you know exactly when the vessel is going to be where on the globe, doing what at the moment when you decide to buy it.

Plenty of RoPAX and RoRo ferries as well as container feeders meet these criteria. They often serve one single route only and steer away

from it only for maintenance. If you have LNG bunkering infrastructure in place at each end of the route, problem is solved for these particular vessels. But those two points are usually called by a lot of service vessels that essentially either never leave port or stay very close to it such as tugs, power barges or police boats.

They can tie into the now existing LNG hotspot (just thought that to be a cool name) and get their fill if they buy new vessels running on LNG. See how it works? And that’s exactly what comes to happen in those places that do develop LNG fuelling infrastructure now.

In some places it feels safe to start going without safe eggs in place. Rotterdam is just such a place as there is a big LNG terminal (that has been paid for by other businesses) and a lot of shipping traffic ready to convert a small portion of it to LNG. A small portion of Rotterdam’s traffic is still an enticing business plan for entrepreneurs. And the investment needed is limited.

In the end, all you need is a little jetty for bunkering and possibly a bunkering vessel but I would count that as a luxury in the beginning. Imagine a ferry service that runs between a city like Rotterdam and some other place in the region. It would just have to make sure that the vessel has enough fuel on board to make the trip from Rotterdam to its destination and back and something on top for safety. As


FEATURE ARTICLE

you know that there will always be fuel in Rotterdam and as the vessel does not stray from its plough line, you are safe. Even if no other place on earth offered LNG as a fuel for vessels, you would be good.

OK, it’s not that simple. You need also a supplier who is willing and able to give you assurances that you will get the LNG every time you show up and you also need price security but that can be dealt with. Even if the terminal runs at low capacity, vessels usually don’t need tens of thousands of tons of LNG at every refueling, especially not those smaller ones. It’s a very small volume that is needed at any given

time which could even be served out of the heel of the terminal in case of extreme emergency. And mechanisms for dealing with the commercial uncertainty can sure be dreamt up - I will probably step forward with a post on my blog on this very topic some time. It’s on my list now – you have been warned.

Something else before I forget - I just picked Rotterdam as an example. This would be equally true to any other place with a harbor and a base load terminal in place.

When in the Seventies, diesel was introduced as a fuel for heavy vehicles in Austria, it also started

with those vehicles running on predictable routes and then slowly moved into all other areas of transport.

A few points with heavy traffic would already suffice to kick start LNG as a fuel for those who don’t stray from the beaten path. Then it’s in place and others can take their chances. Slowly, a network starts to spring up. Bunker vessels will bring the fuel to places nearby for those who are not able to come to the jetty and also to use scarce jetty space a little better for bigger lumps of LNG. Satellite terminals would emerge and spread the network further, gradually extending the


FEATURE ARTICLE

reach of the infrastructure. That’s how a region slowly goes LNG but just imagine two or three regions on earth doing the same thing at a time.

Just imagine it happened in North Western Europe with Rotterdam as the seed, in North Eastern US with Boston as the seed and on the Yellow Sea with one of the terminals there acting as the seeder. Throw in something at the US West coast and all of a sudden, a global LNG fuelling network springs up. I’m sure it’s

going to happen in other places as well and it will be financed all from catering to local plow runs. Then it’s just there and long distance shipping could slowly start making the transition. I am sure that there are some long distance operators that have pretty inflexible routes for some of their vessels. They could take a chance which would not feel so scary to them anymore - did I tell you that the shipping folks are pretty conservative? Oh, I did.

No Master plan needed, no

colossal upfront investment needed. It’s enough to use much of the existing stuff and pimp it up. We are talking about millions in order to kick it off, not billions. Earth shaking changes don’t happen in a rush and they cannot be forced. The time for LNG as a fuel in shipping is here. Some smart regulations and a couple of entrepreneurs willing to take very limited risks will be all it takes. There is no two ways about it.

Let ’s scrap a l l those b ig plans and get some small stuff working on some limited routes. Regulation like the new ECA and SECA reinforced rules coming into force in NW-Europe will just put water on the mill and might also provide the spark jumpstarting it all but it’s always from little, limited baby steps to build momentum.

When the time has come, the wave will swell out of control and suddenly there is a market which some will build their entire business line around. When it comes - its comes real thick.

NTM By Rudolf Huber

Rudolf is an entrepreneur and consultant active in the “methane based fuels and energy” industry. He is the founder of countless initiatives all with the aim to promote a methane based economy and affordable environmental protection.

He is a professional business developer and negotiator who is involved in all aspects of the LNG business. He is also very actively promoting green technologies that work well with methane based technologies.

Rudolf has helped secure first Regasification capacity for his former employer EconGas at the GATE terminal in 2007 and holds a Masters degree in Commercial and Taxation law from the Jean Monnet faculty in Paris. He also runs a number of blogs, among them www.lng.guru and www.lng.jetzt.

RUDOLF HUBER

WHY LNG PHILIPPINES? For the Philippines – which is currently one of Asia's fastest-growing economy –, importing LNG is only a question of when and how, and no longer if. To prepare for the energy future of the Philippines – especially with the inevitable decline of Malampaya–, this forum will continue to lay the groundwork for the establishment of a natural gas master-plan incorporating the entire value chain which is anticipated to be announced end 2015. Taking the theme, “Continuous Push to Utilize Natural Gas and LNG by Fast Tracking LNG Supply Imports and Infrastructure Development”, the timely 2nd LNG SUPPLY, TRANSPORT & STORAGE PHILIPPINES 2015 will continue to addresses issues with LNG imports and infrastructure developments that will definitely be taking place in the Philippines and the region. This is the perfect opportunity for all serious stakeholders to highlight potential opportunities for development and establish their position in the upcoming LNG boom.

For more information please visit: www.lng-world.com/lng_phil2015/

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EVENT & EXHIBITION

Opening up an effective natural gas distribution market through small scale LNG shipping


T he inaugural Small L N G S h i p p i n g a n d D i s t r i b u t i o n Forum 2014 proved s u c c e s s f u l i n

showcasing the latest LNG supply and infrastructure developments and how essential it is for small LNG shipping and infrastructure projects in Indonesia to take flight. The event was co-organized by All Events Group and Jurnal Maritim.

The forum – attended by over 147 people– served as one of the most important platforms that would allow stakeholders in the industry to make known their positions and their relevant solutions for small scale LNG shipping and distribution in the country. The forum allowed those involved to gather and discuss pertinent issues whilst networking and exploring the potential of other

possible business opportunities in the LNG sector in the region.

The event was sponsored by GTT, DNV GL, Galileo Technolgies, Hexagon Lincoln, Norgas Carriers and PT Trakindo with strategic partners INGTA and SGMF.

Welcoming remarks were opened by Indonesia’s renowned maritime expert Dr. Chandra Motik Yusuf which was then followed by a keynote speech

Agus Cahyono Adi, Director of Oil and Gas Development Program, Directorate General of Oil and Gas

Dr. Chandra Motik Yusuf, Expert Council, Jurnal Maritim

Harry Boediarto Soewarto, Director General of Sea Transportation, Ministry of Transportation


EVENT & EXHIBITION

Opening up an effective natural gas distribution market through small scale LNG shipping


by Harry Boediarto Soewarto, Director of Sea Traff ic and Transportation from the Ministry of Transportation in Indonesia who spoke on the supporting regulations for LNG vessels, shipping and ports in the country.

Agus Cahyono Adi, Director of Oil and Gas Development Program at the Ministry of Energy and Mineral Resources spoke on the allocation and availability of natural gas as a fuel for shipping. He described Indonesia’s current natural gas situation and where they stand in the global gas markets, the current allocation policies in place and the prospects that Indonesia has to offer with its rising energy demand and infrastructure development.

The next speech was on LNG in Indonesia - Its challenges and opportunities which was presented by Iwan Ratman, Deputy of Operations from the Special Task Force for Upstream Oil and Gas Business Activities from SKK Migas. He highlighted the various challenges that were being faced in socio-political areas, technical and economic areas and what the government has planned to combat these challenges. It was his feeling that, “Once the base demand and infrastructure are in place; gas consumption will proliferate”, hence creating Indonesia not only as an important place for LNG consumers but also for LNG buyers.

The talks then went on break and then resumed following some refreshments, resumed with Director of PT ASDP Ferry

Indonesia, Rudi Meiyansyah speaking on ASDP’s Fleet Roadmap for Moving Forward into Natural Gas Conversion for Short Sea Shipping. He spoke about the importance of coastal shipping on the java north coast road and how it was no longer adequate to support the needs of development and the acceleration and expansion of Indonesian Economic Development and how this could be solved through ASDP setting up shipping supply routes taking traffic away from the java North Coast Road.

The next talk was then on small scale LNG vessels and was given by the main sponsor - Stephane Maillard of GTT. He spoke on GTTs current projects with regards to small scale LNG carriers and how there is a forecasted demand in numerous countries across the globe. He also went over GTT’s presence in Southeast Asia and their involvement in Lekas Terminal and Lampung FSRU and their current developments in Sengkang, Indonesia and Pagbilao LNG in the Philippines. He also discussed

some current cost cutting strategies and GTT’s design specifications of ships and barges.

Following the networking lunch the ta lks reconvened with a speech on The Future Transportation Value Chain of LNG in Indonesia by Theo L e k a t o m p e s s y , P r e s i d e n t D i r e c t o r o f P T H u m p u s s Intermoda Transportasi . He spoke on the general oil and LNG value chain, inclusive of an overview of LNG vessels, small and mini LNG projects in 2014 to 2016 and the costs involved of LNG transportation as well as possible global strategic alliances for LNG development.

Jane Carland of Shell Eastern Petroleum then spoke on the opportunities in Developing LNG as a marine bunker fuel and how Shell is involved across the value chain. She also spoke on the drivers and challenges that are being faced in terms o f s u p p l y , i n f r a s t r u c t u r e , environment, technology, costs and regulations.

Stephane Maillard, Business Development Manager, Gaztransport & Technigaz (GTT)

Iwan Ratman, Deputy of Operations, Special Task Force for Upstream Oil and Gas Business Activities (SKK MIGAS)

Rudi Meiyansyah, Director, PT ASDP Ferry Indonesia

Theo Lekatompessy, President Director, PT Humpu SS Intermoda Transportasi

Jane Carland, Downstream LNG Business Development Manager -East Region, Shell Eastern Petroleum


EVENT & EXHIBITION

This was then followed by a talk on Innovative LNG Logistics Solutions for Indonesia which was presented by Saunak Rai, Vice President of LNG Business Development at Norgas Carriers. The importance of LNG in small scale shipping and the growing incentives being provided by the government were discussed. A solution to the lack of infrastructure in the region was also proposed, suggesting that LNG Trucks, LNG ISO containers or regasification barges could fill the space while infrastructure is being built.

After another short networking coffee break, Lyndon Ward of Sea NG Corporation gave a talk on The Emerging Role of Marine CNG Transportation in Indonesia. He explained possible annual fuel savings that could be achieved through the use of CNG in power plants and the current options that are available for execution of CNG projects.

The day was then concluded by two separate talks, one on comparing CNG and small LNG vessels by Hexagon Lincoln’s Regional Sales Director, Goh Tat Chuan and another on an Engine Maker’s perspective on the golden age of gas in the maritime industry which was presented by PT Trakindo’s Marine Product Manager, Heru Hermawan.

The second day began with a q u i c k r e c a p a n d T a m m y Meidharma, President Director a t P T N u s a n t a r a R e g a s o n Facilitating the Integration of Small LNG Shipping with FSRU.

She covered areas such as drivers for gas development in Indonesia and the Indonesian gas supply and demand.

This was followed by PT Gagas Energi Indonesia’s President Director, Danny Praditya speaking on Natural Gas Multimodal Transportation. He explained that to profitably serve customers who have low unit demand and are dispersed over a large area, PGN will have to utilize non-traditional modes of gas supply such as CNG and Mini LNG movement.

Just before the morning networking coffee break, Hasbi

Assidiq Syamsuddin, Director of the Maritime, Aerospace and Defence Devices (IMKAP) of the Ministry of Industry spoke on The utilization of gas as a fuel for domestic shipping. He gave a recap on the current condition of Indonesia’s shipbuilding market and the potential for business opportunity in the country with regards to ship building.

The conference resumed with Elsie Tang of DNVGL who spoke on the topic of Developing Small LNG logistics and Bunkering hubs. She presented an overview of the current development of

Tammy Meidharma, Peisdent Director, PT Nusantara Regas

Hasbi Assidiq Syamsuddin, Director of Maritime, Aerospace and Defence Devices, IMKAP, Ministry of Industry

Elsie Tang, Consultant Shipping Advisory, DNV GL

Danny Praditya, President Director, PT Gagas Energi Indonesia

Saunak Rai, Vice President, LNG Business Development, Norgas Carriers

Lyndon Ward, Marketing Director, SEA NG Corporation

TC Goh, Regional Sales Director, Hexagon Lincoln


EVENT & EXHIBITION

small LNG logistics and bunkering from a global perspective before looking at the possible areas that one could look at in order to move forward and establish LNG bunkering in Indonesia.

Indonesia Port Corporation’s Technical Director, Ferialdy Noerlan then gave a speech on the journey towards a world class green port – supporting a n d c o m p l e m e n t i n g s m a l l LNG distribution and terminal operations. Mr. Ferialdy basically gave an overview on IPC’s activities and projects. He then moved on to explain what he meant by ‘green

port’, underlining some key issues such as waste management systems, reduction of CO2 emissions, saving energy and implementation of regulations according to EIA.

This was then followed by a presentation by Dr. Karthika Kus Hendratna, Senior Offshore Development Manager at PT Biro Klasfikasi Indonesia (BKI) on the classification of LNG vessels and floating facilities.

The conference then adjourned for the second day’s networking lunch session. It was resumed by a speech by Eddy K Logam, Chairman of Indonesia Ship Building and

Offshore Association (IPERINDO) who gave an overview on the ship building industry in Indonesia and the current key issues that the industry is facing. He also spoke on some important areas where he feels support from the government is needed to ensure the continued success of the industry.

F o l l o w i n g t h a t , O s v a l d o Del Campo, CEO of Gali leo Technologies spoke on nano LNG stations or more specifically the Galileo Cryobox. He explained that this is actually a small scale LNG liquefaction plant with low installation and operation costs yet is highly reliable and produces almost no emissions.

The day then took its final networking coffee break and was resumed with Cryogas Industries’, Chairman and Managing Director, Nayan Pandya who gave a speech on small scale LNG entitled, “The Last Mile for Connectivity to Indonesia”. He spoke about the LNG chain, nano-liquefaction and the various solutions that were provided by Cryogas Industries.

The last talk of the day was given by Eduardo Perez of Small LNG who spoke on small scale LNG shipping opportunities in Southeast Asia. The event proved to be an incredible success as information was disseminated across industry players and new ties were made between them. With so much opportunity for LNG shipping coming to light it is without a doubt that there will be similar events on the way to help mould and gel the industry for further integration, cooperation and joint development across the sector.

It was a successful forum which opens up a lot of niche, feasible business opportunities for the almost untapped small LNG shipping market in Indonesia. Most of the participants and sponsors express their keenness to participate at the follow up event in 2015 in Bali.

Eddy K. Logam, Chairman, Indonesia Ship Building And Offshore Association (IPERINDO)

Nayan B Pandya, Chairman & Managing Director, Cryogas Industries

Eduardo Perez, Principal Consultant, Small LNG

Osvaldo Del Campo, CEO, Galileo Technologies S.A

NTM By Rizal Rahman

Ferialdy Noerlan, Technical Director, Indonesia Port Corporation II.

Dr. Kartika Kus Hendratna, Senior Development Manager Offshore, PT Biro Klasifikasi Indonesia (BKI)


FEATURE ARTICLE

THE ARTand

SCIENCEOF PISTON DESIGN IN NATURAL GAS ENGINES

H ave you ever really thought about how an engine works? All of the different c o m p o n e n t s ?

Have you ever considered all of the work a piston performs? A piston is a very complicated component in any engine, and there are many considerations when designing a piston.

An internal combustion engine is a heat machine that turns heat energy into mechanical energy by means of the piston, connecting rod and crankshaft. The piston is subject to movement, direction change, heat and various stresses; therefore, it is critical to determine the best piston for the application intended. A daily commuter car requires a very different piston than a race car or a big diesel truck. Converting a diesel engine to run as a dual fuel or as a natural gas powered engine requires careful consideration as well.

The engine builder needs to consider the vehicle use, type of fuel, materials, design, compression ratio and costs, as well as many other criteria. When does the engine builder decide to use one aluminum alloy versus another, or when should the engine receive steel pistons? The proper selection of a piston is critical to the durability

because of various mechanical and thermal stresses encountered.

Alternative fuels like dedicated CNG applications in trucks, and dual fuels require that the engine builder addresses the higher temperatures and higher pressures to be encountered. The higher temperatures can lead to thermal fatigue, detonation and even melting of aluminum pistons. In addition the higher pressures associated with CNG engines may necessitate steel pistons. A diesel engine may see pressures as high as 180-200 bars, but with CNG pressures as high as 250 bars. The engine builder will

decide what the ideal compression ratio is, and whether or not it should it be lowered.

Engine manufacturers have enjoyed the benefits of aluminum pistons for many years, but as ecological standards are increasing, the temperatures and pressures against the pistons are increasing as well. Do you choose forged versus cast pistons? Do you use a 2518 or a 2618 aluminum alloy? The 2618 aluminum piston performs very well at higher temperatures, but has little silicon and so it’s subject to wear. Aluminum helps reduce heat better than steel, but many aluminum


FEATURE ARTICLE

MELTED PISTON/PISTON WITH HOLE IN TOP

This engine has been running too hot. An EGT gauge would have alerted the driver to this condition. The engine likely suffered detonation or perhaps pre-ignition. The engine ran too hot and the aluminum piston started to melt.

Aluminum 2618 can withstand higher temperatures, but still melt at 510°C (970°F).Other aluminum alloys start to melt as low as 463°C.

Other causes of melted pistons include wrong heat range of spark plugs, poor fuel quality, advanced timing, bad sensors, low coolant levels, failed coolant systems, improperly tuned turbochargers, restrictions in the exhaust and failed catalytic converters.

CRACKED PISTON Detonation, and the causes above as well as failed EGR. Hitting valve train, as well as other root causes.

SCUFFED PISTON Excessive heat in combustion chamber, overheating that reduces tolerances and too little lubrication as might be found with alternative fuels.

SCORED PISTON Grooves and scratches along the side of the piston are typical of dirt and debris. The location of the scratches are a good indicator of the origin of the problem.

DAMAGED PISTON RING LANDS OR GROOVES

Too much heat. The first set of rings take an incredible amount of heat and so the selection of the piston rings are critical as well.

DESTROYED PISTON Most likely caused by hitting a valve.

P ISTON WRIST P IN DAMAGE

Premature wear due to inadequate lubrication, rod flex, high revving engine.

PISTON SLAP Too much clearance between piston and cylinder. Too much wear.

MISASSEMBLY Incorrectly installed parts will lead to premature wear or failure. One of the most common symptoms of misassembly is increased heat.

WRONG COMPONENTS Restrictions in the exhaust system, undersized catalytic converters, poorly matched turbochargers as well as undersized cooling systems can raise temperatures leading to detonation and piston failures.

COLD ENGINES Cold engines account for a very short period of operation time, but accounts for a very large amount of engine wear due to lack of lubrication and the oil has not warmed up to operating temperature. 10W-40 WT oil has a dyn viscosity of 735.42mPa at 0 degrees Celsius but at 90 degrees Celsius the viscosity is reduced to 15.093 mPa. Obviously, oil flows much better and pumps more effectively at operating temperatures.

COOLANT LEAK Gasket failure, which can be a result of reusing already stretched torque to yield bolts, using the incorrect gaskets when using CNG, as well as the more common causes associated with head gasket failures.

LINER CAVITATION As liner cavitation progresses damage occurs. Liner cavitation is a result of the movement of the piston and the shock waves create tiny bubbles which is the area that that the piston liner fails. CNG One Source Inc offers the best coolant in the world to reduce cavitation. Our product does not use SCA and independent tests have shown it to cause the fewest pits on a liner.

The above is a Piston Troubleshooting Guide and is intended as general information to help the operator understand likely causes of piston failures.

THERE ARE MANY MORE REASONS FOR THESE TYPES OF PISTON FAILURES, AND THE ENGINE REBUILDER SHOULD CAREFULLY STUDY THE CAUSE OF THE FAILURE TO ADEQUATELY CORRECT THE ROOT CAUSE.


FEATURE ARTICLE

pistons are limited to 380-420 degrees Celsius. Above these temperatures, the engine builder needs to consider steel pistons with a shorter skirt. Application of a dry film lubricant to reduce friction and temperatures on the piston skirt is helpful, especially with low lubrication fuels such as CNG.

To change the compression ra t io or not to change the compression ratio!

That i s the quest ion! A university studied the effects of different compression ratios on pressure distribution, temperature distribution and stream function. W h e n t h e e n g i n e b u i l d e r modifies the piston to reduce the compression ratio, the compression pressures likewise decrease, but if the compression ratios are still high, the CNG-diesel fuel blend still ignites near bottom dead center. Lower compression ratios also recorded peak temperatures below the ignition point of CNG. Finally lower compression ratios allow for better turbulence and therefore better mixing of the fuel and the air. Dedicated CNG engines benefit from reducing the compression ratios as well. CNG One Source Inc is finishing studies on an improved

pre-chamber that can run leaner, reducing emissions and allows the piston to run cooler. Running an engine rich or lean affects temperatures and the likelihood of detonation which is one of the greatest causes of piston failures. Common symptoms of piston failure include a lack of power, misfiring, oil burning, engine noise or rattling, smoke and Check Engine Light.

Piston development is a well researched science, but the piston is a component of a system, and any failure to use proper components and properly tuned components can result in detonation and therefore piston failure.

The operator is well served to maintain a good oil analysis program, monitor engine temperatures and to work with a company like CNG One Source to resolve costly mechanical issues early. Further information about pistons is provided by SAE J2612 and ISO6621-3. To learn more about this or to improve your natural gas engines, contact CNG One Source Inc at [email protected].

CNG One Source is “One Source for all your CNG needs”, specializing in natural gas engine design and development. CNG

One Source is headquartered in Erie, Pennsylvania, and serves a worldwide market. Our company is a leader in the research and development of natural gas engine technologies and is a natural gas engine manufacturer for on road and off road applications. CNG One Source assists fleet companies navigating through the conversion process, serving as a single point of contact. CNG One Source has engineers and technicians to build and install CNG systems for a number of engine platforms, and can design and build refueling stations as well. In addition to engine development, CNG One Source provides other essential services such as feasibility studies, engine conversions, refueling options, training, service and maintenance.

CNG One Source, Inc.1620 Harper DriveErie, PA 16505814-835-0200www.cngonesource.com

NTM By Karen Teslovich

NATURAL GAS VEHIC

LES & INFRASTRUCTURE INDO

NESIA FORUM

& EXHIBITION

CNG & LNG

Vehicles and CNG/LNG

& LCNG Infrastructure Developm

ent

Jakarta, Indonesia | 18 - 20 March 2015

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Veronica Dong

Business Developm

ent Manager

ALL EV

ENTS G

ROU

PT : +65 6506 0954M

: +65 8692 1258E : veronica.dong@

alleventsgroup.com

The time has com

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V markets in

the world. W

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GVs uptake is anticipated to increase

signi�cantly and natural gas is touted to be the most favoured

alternative fuel of choice moving forw

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limitless

business opportunities in Indonesia and the A

sia Paci�c region. This event is hosted by A

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Association of Indonesia) and supported &

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gatherings in 2015, the event promises to bring together all the

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For more inform

ation, please visit: ww

w.cngngv.com

/cngindo2015/

STAN

DA

RD BO

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Consists of:

Wall Panels; 1 x Reception Table; 2 x Chairs; 1 x

Powerpoint; 1 x Spotlight; 1 x W

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Includes 2 Conference Passes

09 SQM

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SD 6,800

12 SQM

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SD 8,500

EXHIBITIO

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Samuel Tan

Business Developm

ent Manager

Email : sam

[email protected]

Phone : +65 6506 0963M

obile: +65 8777 0237Fax : +65 6749 7293

Information is correct at the tim

e of print


NATURAL GAS VEHIC

LES & INFRASTRUCTURE INDO

NESIA FORUM

& EXHIBITION

CNG & LNG

Vehicles and CNG/LNG

& LCNG Infrastructure Developm

ent

Jakarta, Indonesia | 18 - 20 March 2015

IN PA

RTNERSH

IPW

ITH

010203

0405

060708

09

10

11

23

2425 26

27 28 29

30

31

32

33

12 13 14 15 16

17 18 19 20 2105

RESERVED

29RESERV

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LINCO

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LU XI N

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24RESERV

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9 sqm12 sqm

18 sqm24 sqm

For More Inform

ation, Please contact:

Veronica Dong

Business Developm

ent Manager

ALL EV

ENTS G

ROU

PT : +65 6506 0954M

: +65 8692 1258E : veronica.dong@

alleventsgroup.com

The time has com

e for Asia Paci�c's N

GV industry to converge again in

Jakarta, Indonesia – taking advantage of the next big NG

V markets in

the world. W

ith diesel and petrol prices scheduled to be further increased by late 2014, N

GVs uptake is anticipated to increase

signi�cantly and natural gas is touted to be the most favoured

alternative fuel of choice moving forw

ard.

This business-critical

forum

will

open up

limitless

business opportunities in Indonesia and the A

sia Paci�c region. This event is hosted by A

PCNG

I (CNG

Association of Indonesia) and supported &

endorsed

by A

NG

VA. Touted

to be

the m

ost im

portant N

GV

gatherings in 2015, the event promises to bring together all the

relevant stakeholders to one room, one location.

For more inform

ation, please visit: ww

w.cngngv.com

/cngindo2015/

STAN

DA

RD BO

OTH

Consists of:





o.

3m x 3m

PREMIU

M BO

OTH

Consists of:





o.

4m x 3m

Includes 2 Conference Passes

09 SQM

BOO

TH U

SD 6,800

12 SQM

BOO

TH U

SD 8,500

EXHIBITIO

N PRICE

Samuel Tan

Business Developm

ent Manager

Email : sam

[email protected]

Phone : +65 6506 0963M

obile: +65 8777 0237Fax : +65 6749 7293

Information is correct at the tim

e of print


CHEN WEI DONG INTERVIEW:

GAS ASIA SUMMIT

2014

W e m a n a g e d t o c a t c h M r . C h e n W e i D o n g o f C N O O C

at this year’s recent Gas Asia Summit held at Marina Bay Sands, Singapore from the 28th – 30th of October and asked him his thoughts on what he felt was the most difficult challenge for the China LNG Market.

NGV Transportation: What is the most difficult challenge for the China LNG Market?

Chen Wei Dong: Ultimately, a sustainable environment is the long term and final objective for China. We need to lower

the proportion of coal use and increase natural gas use, which is currently the most effective way to reduce carbon emissions. Not to mention that many other countries are also moving towards increased natural gas use.

The plan is to reduce the use of coal and increase the implementation of natural gas for sustainable use. However, the price of gas is too expensive which is a huge barrier that we are facing now. As you can see, this is not a simple problem that can be taken care of by us (CNOOC) alone; we need help from the politicians. It is not simply a problem based on economics.

The politicians must take care of the employment rate which

is a big problem in China. This will allow for the price of coal to decrease slowly while at the same time causing the need for natural gas to increase accordingly. In the near future, it can be expected that the entire existing infrastructure will change to become one that is more suitable for widespread LNG use.

When all the current high emission energy sources can be replaced, the price will be a systemic issue instead of a binary one.

China is very different from its neighbouring countries in many ways. Firstly, is the fact that its energy demand is the largest in the world. Secondly, the price of electricity in the country directly determines the source of energy which is used. Therefore, if the price of electricity never changes, other sources of energy will be unable gain widespread use, especially because there already are alternatives that are cheaper to LNG.

If you really want to change the electricity generation system in China, it’s going to be a big chal lenge because China is currently a very active import and export country in constant n e e d o f a c h e a p s o u r c e o f power. In conclusion, the China government will take action, but it’s going to be a very long and drawn out process.

Mr. Chen Weidong is the Chief Energy Researcher at CNOOC Energy Economics Institute (Office for Policy Research). He received an MBA from Peking University in July 2001 and graduated from China University of Political Science and Law with a Master Diploma in July 2005.

NTM By Veronica Dong

ANALYSIS OF NATIONAL POLICIES AND ITS IMPACT ON NGV GROWTH IN CHINA

It is thought to be one of the most influential nations in recent times and it might have the potential to supersede

most other nations where NGV use is concerned. The Chinese government has had their eye on natural gas as a vehicle fuel for close to 30 years now. The government has seen natural gas as a possible escape route from their problem of a rapidly increasing demand for oil which has been brought about by the surge in the number of road vehicles. The NBS (National Bureau of Statistics in China) estimated that within a ten year period (2000 – 2010), the civil ownership of vehicles increased from 16 million to 70 million and was deemed responsible for a 48% increase of total oil demand in the country.

On top of the accelerated demand for fuel, road vehicles have been inadvertently polluting the country with large amounts of greenhouse gases (GHGs). Luckily the country had enough foresight to make efforts to initiate some NGV developmental plans early, with their first program being launched in 1988. The IANGV (International Association for Natural Gas Vehicles) estimated that the number of NGVs in the country went from just 2000 in 1999 to 450,000 in 2010. These numbers are quite impressive but are still relatively low when compared with other countries with similar sized NGV fleets who have been leading the pack consistently. (Figure 1)

Uneven DevelopmentSo as to achieve a greater understanding of the situation, let us examine the country’s NGV roadmap right from the beginning.

The country carried out another NGV program in 1999 – Clean Vehicle Action of Air Purification Engineering; which proved to be one of its great successes. The program’s aim was to promote the use of CNG vehicles in 12 cities across the country. The program proved to be successful enough such that almost 20 years later China has managed to develop a significant amount of NGV infrastructure; boasting total production of 57,000 CNG vehicles in 2007, being manufactured by 58 different companies. This does however, not serve as an accurate representation of the country as a whole. The spread of NGV use in the country has been somewhat dispersed and varies greatly from province to province. Over half of the 450,000 vehicles were concentrated in only 16 of its 34 provinces. What then, is the cause of such a clumped distribution of NGVs in a country that seems to strongly favour natural gas as a vehicle fuel?

Let’s take a look at an excellent example that demonstrates this uneven distribution – Let’s compare the growth of NGVs in Shanghai and Chongqing, both of which were focal

Figure 1: NGV Population in China and Top 6 NGV fleets in the world (000’) The Development Of Natural Gas as an Automotive Fuel in China. Ma et al. 2013. Energy Policy (62) p.535.

points of the initial 1999 program. In 2006, Shanghai only had 281 CNG buses and only 4 CNG stations. This sluggish development has been attributed to higher investment costs of vehicles (compared to diesel / gasoline alternatives), high CNG prices due to unstable supply, poor placement of CNG stations (distance from downtown area) and insufficient subsidy from the government (only one policy being a one-time 80,000RMB (US$13087) subsidy per bus purchase).

In Chongqing however, over 90% of the buses and taxies were using CNG by 2007, including a large amount of privately owned vehicles which helped the number of NGVs in the province push past the 40,000 mark.The primary reasons for this rapid development were low CAPEX and OPEX of stations in the region, ample supply of natural gas resources (low gas prices), rampant growth in number of CNG stations (61 stations in total by 2007) and strong government support in the form of a municipal government body developing a series of favourable research and development policies and localized standards.

The direct cause for the success in Chongqing was deemed to be the availability of an ample supply of natural gas reserves that were located significantly nearer to the province. To put this theory to the test, Ma et al. 2013, conducted an on-site investigation in nearby Sichuan province, comparing CNG prices to gasoline prices being used by retrofitted CNG taxis (inclusive of retrofit costs). Their analysis found that in 2009, due to the low costs of natural gas in the region, the fuel cost for a taxi driver in the province was reduced by more than half. (Figure 2) These results supported their hypothesis that the price of gas is a major determinant of the success of NGV growth.

Inadequate PoliciesThe policies in place at the time were evaluated in the study conducted by Ma et al. The main barriers preventing success of NGV growth evenly across China were identified as the following:

1. Insufficient policy support for CNG filling stations across the country

(Lack of subsidies supporting CNG vehicles and construction of filling stations).

2. Varying and sometimes increasing natural gas prices due to short supply

3. Lack of planning for CNG infrastructure – CNG stations, sub-stations and distribution infrastructure poorly connected.

4. Lack of national standards for LNG stations and vehicles. (Immature LNG market preventing wide scale use and lack of availability)

NGV ProsperityAs with our own past mistakes, the errors that have resulted in uneven growth in China, it should not be looked upon as a failure. The country’s policies were merely inadequate to deal with the vast spread of such a fast growing country. There is evidence that the country is sorting these issues out and that they are working towards extensive use across all provinces. Key issues such as shortage of supply and supply infrastructure which have been plaguing the country are being resolved as networks of CNG stations are slowly becoming more readily available and more evenly distributed across the country, which is expanding outwards to north-westerly and north-easterly provinces. (Figure 3) The country is also securing some long term LNG deals which will come to fruition in 2018, with supply from Russia of 38 billion cubic metres of LNG per year over a 30 year period through the Power of Siberia pipeline which began construction in September last year.

Item Cost (2009 Price) RemarksNatural Gas Wellhead Price

0.146 US$/cubic meters The gas field is only 100km away and is owned by the China Petrochemical Corporation (Sinopec)

Natural Gas Sales Price

0.263 US $/cubic meters

The natural gas pipeline is owned by the China National Petroleum Corporation (CNPC). The price listed is the price that the station pays for it.

CNG Sales Price 0.395 US $/cubic meters This price is the price from one of the only two stations in Sichuan city. CNG sales here are approximately 130,000 m3 per day.

Vehicle Fuel Cost (CNG)

3.79 US $/day Taxi retrofit costs at 439$ which is normally paid by the station and returned over time from the driver during refuelling. Consumption estimates are around 8m3/100km travelling roughly 120km/day.

Vehicle Fuel Cost (Gasoline) Gasoline prices

8.54 US $/day are $0.89/L. Consumption estimates are around 8L/100km travelling roughly 120km/day.

Implied Savings 4.55 US $/day Based on these estimates the implied savings of using CNG are 55.6% lower compared to using gasoline.

Figure 2: Economic Analysis of CNG vehicles in Sichuan, China. The Development Of Natural Gas as an Automotive Fuel in China. Ma et al. 2013. Energy Policy (62) p.535.

Figure 3 : Distribution CNG stations across China. (Standard Chartered Research, China Natural Gas Vehicles: Fuel of Opportunities. 2012. *This does not include CNG stations operated by companies outside the 5 aforementioned suppliers (Actual numbers are significantly higher in some provinces). NTM By Ryan Pasupathy

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NGV Transportation Magazine

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Transcript of NGV Transportation Magazine