Ins and outs of a buoyant business

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With floating regasification becoming ever more popular, and floating liquefaction fast approaching reality, the LNG industry has been working hard to develop the technologies needed to transfer cargoes between ships – safely and efficiently. Initial resistance to what at first was seen by some as an unacceptably risky technology has been largely overcome by the number of ship-to-ship operations that have been completed without accidents. Also helpful has been the publication of best-practice guidelines. Gastech News looks at what has been achieved so far in ship-to-ship LNG transfer, and the technologies still under development.

The floating LNG storage and regasification industry is growing fast. Today, eight floating storage and regasification units (FSRUs) are in operation, a further six are operating as LNG carriers while they await new floating regas opportunities, and we are likely to see another eight built by 2015. Numerous other projects have been proposed and all three of the main FSRU  suppliers – Excelerate Energy, Golar LNG and Höegh LNG – are in negotiations for a variety of new opportunities.

The table below shows how the number of FSRUs has been evolving since the first entered operation in 2005. According to Golar LNG, “half of all new LNG import markets since 2005 have chosen FSRUs over land-based facilities”.

 

The attractions are widely known: floating regas projects are generally quicker to implement, cheaper to construct and easier to permit than conventional onshore regas terminals. They can be a “bridge solution” while a country builds a land-based facility, as is happening in the Chinese port of Tianjin with a Höegh LNG FSRU called GDF Suez Cape Ann, or can provide seasonal supply for the months of peak demand and be deployed elsewhere the rest of the time, as happens at Excelerate’s Mina Al-Ahmadi project in Kuwait.

“There are three main applications for our technology,” says Rob Bryngelson, CEO of Excelerate, the industry leader, “supply shortage, fuel conversion for power generation and supply security.

“Most countries do not have the luxury to invest the time or capital required to build an onshore facility. With an FSRU, we are typically able to bring a facility into service within 10-18 months of notice to proceed. This compares very favourably to the 36-60 months typical of a land-based facility.” He adds: “The capital costs of our floating regasification solutions are typically much lower than the cost of a land-based terminal of equivalent size.”

Approaching reality: Meanwhile, after more than a decade of unfulfilled expectations, the concept of floating gas liquefaction (floating LNG, or FLNG) is fast becoming reality. Shell and Petronas are currently in a race to bring the first project on stream, having both got their projects into the construction phase. Other projects too are making progress.

Both floating regas and FLNG projects face the challenge of having to transfer LNG between two vessels. In the case of floating regas, the ship-to-ship (STS) transfer of LNG allows FSRUs to be permanently moored and to receive cargoes from LNG carriers (LNGCs), rather than travelling to liquefaction terminals to load up, making possible a continuous baseload supply. In the case of FLNG, STS transfer will be inevitable for those projects that are stationed out at sea.

The pioneers of floating regas, Excelerate and Exmar, began developing STS transfer at around the time their first FSRU entered operation in 2005. Their rationale was that STS transfer would allow them to optimise the operation of their FSRUs. They began working on a technology that employs flexible cryogenic hoses, “dry-break” emergency release couplings, and control systems which “replicate, in all respects, the conventional LNGC-LNG terminal cargo transfer”.

After dry-run trials in November 2005, the first physical transfer took place in August 2006 in the Gulf of Mexico, when 20,650 cubic metres of LNG was transferred from the Excelsior FSRU (50:50 owned by Excelerate and Exmar) to Excalibur (an LNGC owned by Excelerate).

The first commercial STS transfer of a full cargo took place in February 2007 at Scapa Flow, off the Orkney Islands in Scotland, when Excalibur offloaded into Excelsior. That cargo was then used to inaugurate Excelerate’s Teesside GasPort project in the north-east of England.

Also involved in the early STS transfer operations were the Skaugen/Teekay joint venture SPT, a company with many years of experience in ship-to-ship cargo transfers, the Dutch company Gutteling, which supplied the flexible cryogenic hoses, and UK-based KLAW, which supplied the required emergency release couplings (ERCs).

Overcoming resistance: Not everyone in the industry was initially convinced that STS LNG transfer was a good idea. As shipping consultant Sandy McNay explains, “STS transfer involves both vessels moving. Though one may be anchored, there is movement depending on the wind and tide and so on – so it is a greater risk than having an LNG carrier berthed alongside a stable, stationery terminal. Flexible cryogenic hosing presents a greater risk of problems occurring than hard arms.”

What was not known in the early years was how much greater the risk would turn out to be in practice. Today, acceptance has grown significantly because of the track record that has been achieved. Says Bryngelson: “We have had nearly 350 successful operations in STS, with full safety precautions and without incident in nearly 7 years of STS activities.”

The use of STS has accelerated rapidly over the past couple of years. As of May 2010, Excelerate had completed around 40 STS operations. Less than a year later, in April 2011, the number had risen to 100 and it took only a matter of months, until December 2011, for the number to rise to 200. Today, as Bryngelson says, the number of operations is approaching 350.

Ship-to-ship transfer of LNG at the GNL Escobar facility in Argentina. The terminal, one of Excelerate’s projects, serves the Buenos Aires region. (Courtesy of Excelerate Energy)

Also using STS transfer are some of the projects developed by Golar LNG, namely the Golar Freeze FSRU in Dubai and the recently commissioned Nusantara Regas Satu FSRU offshore Indonesia. Höegh LNG too has built up experience of STS transfer. Its Norman Lady LNGC regularly transfers cargoes to Excelerate’s Escobar LNG terminal in Argentina using flexible hoses, and the company has also conducted 48 STS transfers from the Höegh Galleon to a small LNGC called Pioneer Knudsen.

Best practice: An important milestone in the development and acceptance of STS LNG transfer was the publication in March 2011 of best-practice guidelines by the Society of International Tanker and Terminal Operators (SIGTTO).

“Excelerate and Exmar first proposed STS transfer in about 2004,” says SIGTTO’s General Manager Captain Andrew Clifton. “It had been done three times before, I believe, in the LNG industry but each time on a contingency basis not on a routine commercial basis.

“We produced the best-practice guidance about two years ago. And, as quite often happens, regulators and insurance bodies now say that any STS operation must be done in compliance with the SIGTTO guidelines.  Excelerate and Exmar have been the trailblazers and have provided a large bulk of the best-practice guidance. We’re very grateful to them.”

Cryogenic challenge: Ship-to-ship transfer has been widely used over many years to transfer a variety of commodities at sea, including crude oil. Some of the largest oil tankers, for example, have to offload to smaller vessels to get their oil into some ports, a practice called lightering.

The big challenge with STS transfer of LNG is the temperature of the cargo: minus 162°C. This introduces a range of challenges, not the least of which are the complications involved in handling the equipment and the safety implications of any cargo release.

Moreover, the transfer rates need to be high enough to make commercial sense. According to TNO, the Netherlands-based contract research organisation, which has been working with Exmar and Gutteling to test cryogenic hoses, the flow velocities need to be up to 10 metres/second (m/s). This compares with typical flow rates in most process industries of 1-4 m/s.

Flow rates of this magnitude impose considerable stresses on the hoses, because of the high turbulence levels and the possibility that bubbles can form as the LNG being transferred is close to its boiling point.

Given also that the STS transfer systems are equipped with emergency shut-down (ESD) valves and emergency release systems (EMSs), the combination of a high flow rate and a fast-closing ESD valve can lead to high-amplitude shock waves, which can affect piping, seals and cryogenic hoses.

Sea states: Both of the methods most commonly used to effect STS transfer require relatively benign sea states. One way is for both ships to use hard arms mounted onto a jetty, so that the LNG flows through piping across or along the jetty. The Al-Ahmadi terminal in Kuwait, for example, uses the latter of these two options, with the FSRU and the LNGC moored in tandem.

The other way is to moor the ships side-by-side (SBS) and to connect cryogenic hoses between the mid-ship manifolds. The big problem here is that the ships have to be moored very close together – just a handful of metres apart.

Ship-to-ship lightering of LNG. (Courtesy of Excelerate Energy)

FSRUs and LNGCs are very big toys, with price tags to match: upwards of $200 million for a large LNGC and approaching $300 million for one of the latest FSRUs. No captain is going to be comfortable moored just a few metres from another large ship in anything except a benign sea state. Moreover, the tugs needed to position the ships are only able to work in wave heights up to around two metres. It is also important that the cryogenic hoses are not stressed by being bent beyond an acceptable radius, or hit by other pieces of equipment, such as mooring lines.

For these – and other – reasons, a number of companies are working on new technologies that would allow LNG transfer in rougher sea states, by allowing the two vessels to maintain a distance of anything up to 100 metres.

Search for the “holy grail”: Of the various configurations that have been proposed – which include articulated loaders, aerial hoses and floating hoses – the “holy grail”, according to David Haynes, Principal Consultant at GL Noble Denton, is the floating cryogenic hose. Such hoses would allow the two vessels to maintain a safe distance, in tandem, and could be connected to the mid-ship manifold of any LNGC; some of the other proposed configurations would require LNGCs to be modified in various ways, reducing the flexibility of operations.

Among the companies working on floating cryogenic hose technology are Technip, SBM Offshore, and a joint venture of Framo Engineering, Nexans, Aker Pusnes, MIB and Seaflex.

A lot of engineering and testing has been carried out and what is now required is a real-life project to prove the technology in commercial operations. The development of Shell’s Prelude FLNG project and the FLNG vessel being constructed for Petronas could well provide just the right kind of opportunity. It is worth noting that Technip, regarded by some as the leader in floating cryogenic hose development, is involved in both projects.