Interview with DNV GL: The fastest growing markets for gas in Europe

Liv Hovem's picture
Liv Hovem, Senior VP and Director of Europe & Africa – Oil & Gas, DNV GL
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In this interview, Liv Hovem discusses DNV GL’s new study on the LNG market in the EU, how to maximise the use of LNG as ship fuel as well as the fastest growing markets for natural gas in Europe.

Gastech News: We have heard DNV GL has been undertaking a new study on the LNG market in the EU, what is the aim of this research?

Liv Hovem: Yes, this is related to a very exciting development for Europe: the study will contribute to the development of an EU-wide network of LNG refuelling points. While LNG has proven to be a viable option as a bunkering fuel for ships, there are still challenges to the pace of its development and demand as a fuel. One of the obstacles to the uptake is the uncertainty tied to its availability. Our study contributes to the CORE LNGas hive project which addresses this challenge; it is co-funded by the European Commission and aims to develop a safe and efficient, integrated logistics and supply chain for LNG in the transport industry.

Gastech News: In a recent report for the EU, DNV GL has come out with new recommendations on how to address barriers to the use of LNG as ship fuel in Europe, what are DNV GL’s key findings?

Liv Hovem: Our research and experience shows that more shipowners would consider LNG as fuel if reliable information on LNG availability was easily accessible. We have responded to this need for more knowledge and insight with our new online portal, LNGi. LNGi provides comprehensive and up-to-date information on worldwide LNG bunkering availability and market data on LNG as fuel for ships. It aims to bring stakeholders from across the LNG industry together to share market intelligence and contribute to the uptake of LNG as a ship fuel. LNGi is supported by The Society of Gas as Marine Fuel (SGMF).

In order to continue meeting and supporting the market in its growing demand for cleaner fuels and versatile LNG applications, DNV GL has recently updated the Recommended Practice (RP) for development and operation of LNG bunkering facilities (DNVGL-RP-G105). The RP provides the first industry guidance on how to perform quality measurements and quantity metering of LNG fuel supply. This enables the industry to understand the business impact of proper fiscal measurement.

Gastech News: Where do you see the fastest growing markets for natural gas in Europe in terms of areas such as NGVs and gas-fired power stations, for example?

Liv Hovem: One area is the shift from coal to gas for power generation, where the benefits are many. These advantages include less CO2 and much smaller amounts of NOx, Sox, as well as the absence of fine particulates and other pollutants like mercury and arsenic. In addition, there is far less power plant water usage involved. All this comes in addition to the much greater flexibility that gas offers to power grids, especially with the integration of more and more renewables. As to how much switching there will be from coal to gas-fired generation, this is mainly a USA-based theme in the medium term. We still lack a global price on CO2 emissions that would improve the competitiveness of gas versus coal.

Another area is the role of gas as a transportation fuel: The proportion of gas currently used in transport is very low – some 5% of the transportation fuel mix. While it is difficult to build projections for the uptake of gas in road transportation, it is a different matter in seaborne transport. For deep sea shipping, LNG is almost certainly the only viable alternative for significantly reducing GHG emissions apart from maybe nuclear power. However, the volume of LNG powered ships is low; we currently have 80 LNG vessels in operation and a further 90 on order. Shipping is the life blood of the global economy – it moves about 80 per cent of world trade by volume – so a cleaner alternative to bunker oil and diesel will have a massive impact. This is why DNV GL has recently launched a new calculator which helps the industry overcome reliability issues and protect engines by calculating the PKI methane number. It is based on years of research in collaboration with one of the energy majors.

Last but not least, with the demand for gas for low temperature heating diminishing over time in (Western) Europe due increasing insulation of housing and commercial buildings and substitution towards renewable energy sources, gas needs to find new markets. Gas-to-chemicals offers a higher value application of gas: gas is a cost effective and readily available source of hydrogen and hydrocarbons for the chemical industry.

Read Part 2 of Liv Hovem's interview: "Driving the European gas industry forward, DNV GL explains"

Liv Hovem will be participating in a panel discussion on "Costs in the Commodity Downturn" at the European Autumn Gas Conference in The Hague next weekBook your delegate place and join leading natural gas experts.

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