Supporting the developments of small scale LNG in the Iberian Peninsula

Eduardo Perez Orue's picture
Eduardo Perez Orue, Owner and Principal Consultant, Small LNG Shipping Consultants
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With numerous drivers leading the developments of small scale LNG projects around the world, the evolving technology could help solve many of the energy challenges in developing and emerging countries. Small LNG Shipping Consultants provides shipping consultancy and brokering services to assist in truly optimising projects. 

Interested to gain an expert opinion on the evolving market and what the key opportunities are, Gastech Insights spoke with Owner and Principal Consultant at Small LNG Shipping Consultants, Eduardo Perez Orue. 

Gastech Insights: The small scale LNG terminals market is expected to exceed more than 102mmtpa by 2022 globally. How much growth do you expect to see specifically in Europe?

Eduardo Perez Orue: In spite of all the announcements in developing countries, most small scale LNG projects are actually happening in Europe. Having a mature market and the right resources together with ECA restrictions is pushing, and will continue pushing, the European market.

Gastech Insights: Other than offering more economically viable solutions, what are the key benefits for small scale LNG?

Eduardo Perez Orue: There are many benefits for small scale LNG; accessing new markets and providing alternative fuels to existing markets to name a few. These benefits stand out especially in the case of islands where power generation depends on petroleum products today. Also, small scale LNG projects can help balance some of the new renewable energy projects.

Gastech Insights: Could you tell us more about any current initiatives in the Iberian Peninsula that are looking to support and develop small scale LNG logistics?

Eduardo Perez Orue: The focus is mainly in two fronts:

  • LNG bunkering: With projects in several ports in the Iberian Peninsula, so far, Bilbao has started trials with a small bunkering barge, the Oizmendi. Also, there are serious studies with dedicated ships for Barcelona, where several of the big players like Shell and Gas Natural Fenosa are exploring opportunities.
  • LNG supply to small islands: There is a flow of containers both to Madeira and to the Canary Islands. Still in small volumes, however with the potential to continue growing and eventually becoming shipments in small LNG carriers.

Gastech Insights: What would you say are the future opportunities for small scale LNG in Europe and how has the impending 2020 sulphur cap changed the industry?

Eduardo Perez Orue: LNG bunkering is important, but much more so in Northern Europe, where the sulphur cap is already pushing Ship Owners to consider LNG as a competitive fuel. This is also present all over Europe for regional ferries and for long distance ships going to Asia. For instance, Balearia has already signed an agreement with Gas Natural to supply some of their new-building ferries with LNG in Spain and Shell has done the same with SIEM Car Carriers. LNG bunkering will grow from there all over Europe, slowly but steadily.

Gastech Insights: With its geostrategic position being a relevant cross point in global shipping routes, how can the Iberian Peninsula further develop to accommodate the growing LNG supply?

Eduardo Perez Orue: All seven of the Spanish receiving terminals are already adapted to reload LNG cargoes. From the beginning, Spain, being such a big importer, has realized that small LNG cargoes and LNG bunkering will be a critical market. Several of them are exploring LNG bunkering projects as a natural expansion of their business, with Mugardos terminal in Galicia working on a 10k bunkering ship for instance. Although the competition from Northern Europe is very strong, with Zeebrugge and Rotterdam already having bunkering ships in place, all this competition should create alliances in the market.

If you would like to hear more on the small scale LNG industry from market experts, be sure to register now for the upcoming Gastech Exhibition and Conference taking place 17-20 September in Barcelona. 

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