There are three major Portuguese ports that belong to the European Core Seaports Network: Lisbon, Sines and Leixões. From those, the port of Sines - a natural deep sea port located in the southernmost part of the country - offers the ideal conditions to receive a "tailor-made" supply infrastructure. Sines port displays many major competitive advantages within the new energy paradigm era.
The first advantage is the lack of LNG infrastructure in the North-East Atlantic and in particular in the Iberian Peninsula. Although there are some risks: persistent oil prices below $100/barrel and moderate economic growth in Europe together with national budgetary constraints that urges for sound financial management efforts within the allocations agreed, Sines could obtain some advantages as a first-mover. This is a new market and the first comers will get the privileged position over competition and would have better prospects than those who came later.
Secondly, Sines port is the main Portuguese seaport in terms of port throughput within the national port system and it hosts the only Portuguese natural gas terminal. This is a benefit in relation to other ports as the investment for LNG import terminal is already in place. In addition to this, the city of Sines also includes a major petrochemical complex and the port itself has a contiguous area of logistics activities with plenty available land for infrastructure construction and ancillary activities. Therefore, the existing infrastructure could be expanded to include LNG bunkering and storage facilities following the steps: first made available truck bunkering, next ship-to-ship and finally land-to-ship.
Thirdly, the geographic location at the crossroads of several east-west, north-south and diagonal shipping at the verge of the Atlantic and the Mediterranean lanes means that there is a potential market for present and future customers.
Finally, even though port economic activity reinforces upgrading mechanisms of the maritime operations-based cluster as it favours port diversification since most of the national firms cannot afford to invest in long-term profit assets, LNG infrastructure and terminals ensure a basis for the attraction of foreign direct investment. Such port diversification could act as a pivotal force for further natural gas market investment (e.g. expanded facilities to receive U.S. natural gas for distribution within the Iberian/European network thus diminishing the imports from other less reliable sources).
The EU Directive 2014/94/EU requires that major European ports have LNG supply facilities in place by 2020. Yet, at present, there is still little knowledge at the national level about LNG as a fuel, its characteristics, benefits and costs. Policy makers are therefore in need of all the scientific information and also need to be aware of the impacts on the society of delaying such decisions. It is most foreseeable that the gap in the supply chain is likely to be filled anytime soon with players positioned at critical points of the LNG chain (e.g. with the launch of the EU funding Core LNGas Hive project).
Knowing that 2020 is just around the corner, that the time mediating the transposition of the European legislation for LNG bunkering into national legislation and that specific suitability to port procedures and time required for investment approval and conclusion of civil works are usually long, it is worth to say that for the port of Sines work in progress, should have had already started long ago.
To discover more on the developing European natural gas and LNG industry from market experts, register for the 2018 Gastech Exhibition and Conference taking place 17-20 September in Barcelona.
Image courtesy of Paulo Moreira
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