Wednesday, July 28, 2010

8:29 PM

WHAT IS LNG?
When natural gas is cooled to a temperature of approximately -260F at atmospheric pressure it
condenses to a liquid called liquefied natural gas (LNG). One volume of this liquid takes up about
1/600th the volume of natural gas at a stove burner tip. LNG weighs less than one-half that of water,
actually about 45% as much. LNG is odorless, colorless, non-corrosive, and non-toxic. When vaporized it
burns only in concentrations of 5% to 15% when mixed with air. Neither LNG, nor its vapor, can explode
in an unconfined environment.
COMPOSITION
Natural gas is composed primarily of methane (typically, at least 90%), but may also contain
ethane, propane and heavier hydrocarbons. Small quantities of nitrogen, oxygen, carbon dioxide,
sulfur compounds, and water may also be found in "pipeline" natural gas. The liquefaction process
removes the oxygen, carbon dioxide, sulfur compounds, and water. The process can also be
designed to purify the LNG to almost 100% methane.
HOW IS IT STORED?
LNG tanks are always of double-wall construction with extremely efficient insulation between the
walls. Large tanks are low aspect ratio (height to width) and cylindrical in design with a domed
roof. Storage pressures in these tanks are very low, less than 5 psig. Smaller quantities, 70,000
gallons and less, are stored in horizontal or vertical, vacuum-jacketed, pressure vessels. These
tanks may be at pressures any where from less than 5 psig to over 250 psig. LNG must be
maintained cold (at least below -117F) to remain a liquid, independent of pressure.
HOW IS IT KEPT COLD?
The insulation, as efficient as it is, will not keep the temperature of LNG cold by itself. LNG is
stored as a "boiling cryogen," that is, it is a very cold liquid at its boiling point for the pressure it is
being stored. Stored LNG is analogous to boiling water, only 470 colder. The temperature of
boiling water (212F) does not change, even with increased heat, as it is cooled by evaporation
(steam generation). In much the same way, LNG will stay at near constant temperature if kept at
constant pressure. This phenomenon is called "autorefrigeration". As long as the steam (LNG
vapor boil off) is allowed to leave the tea kettle (tank), the temperature will remain constant.
If the vapor is not drawn off, then the pressure and temperature inside the vessel will rise.
However, even at 100 psig, the LNG temperature will still be only about -200F.
HAVE THERE BEEN ANY SERIOUS LNG ACCIDENTS?
[See also A Brief History of U.S. LNG Incidents] First, one must remember that LNG is a form of
energy and must be respected as such. Today LNG is transported and stored as safely as any other
liquid fuel. Before the storage of cryogenic liquids was fully understood, however, there was a
serious incident involving LNG in Cleveland, Ohio in 1944. This incident virtually stopped all
development of the LNG industry for 20 years. The race to the Moon led to a much better
understanding of cryogenics and cryogenic storage with the expanded use of liquid hydrogen
(-423F) and liquid oxygen (-296F). LNG technology grew from NASA's advancement.
In addition to Cleveland, there have two other U.S. incidents sometimes attributed to LNG. A
construction accident on Staten Island in 1973 has been cited by some parties as an "LNG
accident" because the construction crew was working inside an (empty, warm) LNG tank. In
another case, the failure of an electrical seal on an LNG pump in 1979 permitted gas (not LNG) to
enter an enclosed building. A spark of indeterminate origin caused the building to exploded. As a
result of this incident, the electrical code has been revised for the design of electrical seals used
with all flammable fluids under pressure.
WHAT IS CNG?
Compressed natural gas (CNG) is natural gas pressurized and stored in welding bottle -like tanks at
pressures up to 3,600 psig. Typically, it is same composition of the local "pipeline" gas, with some
of the water removed. CNG and LNG are both delivered to the engines as low pressure vapor
(ounces to 300 psig). CNG is often misrepresented as the only form natural gas can be used as
vehicle fuel. LNG can be used to make CNG. This process requires much less capital intensive
equipment and about 15% of the operating and maintenance costs.
WHAT IS LPG?
Liquid petroleum gas (LPG, and sometimes called propane) is often confused with LNG and vice
versa. They are not the same and the differences are significant. LPG is composed primarily of
propane (upwards to 95%) and smaller quantities of butane. LPG can be stored as a liquid in tanks
by applying pressure alone. LPG is the "bottled gas" often found under BBQ grills. LPG has been

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by applying pressure alone. LPG is the "bottled gas" often found under BBQ grills. LPG has been
used as fuel in light duty vehicles for many years. Many petrol stations in Europe have LPG pumps
as well.

THE SHIPS
All LNG ships are double hulled and rely on insulation to keep LNG liquid at -260F (-162.2C). The
cargo is carried at atmospheric pressure in specially insulated tanks, referred to as the cargo
containment system, inside the inner hull.
The tanks can be either of the Moss spherical type, or the prismatic, membrane type which
conforms to the shape of the ship's hull. Or again, in a development, that was announced after our
print issue hit the street, they could be of a new pyramid type (see illustration) from
ConocoPhillips, which has just received Approval in Principle from ABS
The Moss type is the design emblematic of the LNG ship in that the tops of the spheres protrude
above the hull making the ships instantly recognizable. Pioneered by Norway's Moss Rosenberg in
the 1970's, the design is now owned by Moss Maritime a.s., Lysaker, Norway, a unit of Italy's ENI
SAIPEM.
There are three types of membrane containment systems, the Gaz Transport and Technigaz
systems and a self-supporting prismatic membrane design from IHI, Japan. Gaz Transport and
Technigaz are now one company, whose latest containment system, CS1, incorporates features
from the existing Gaztransport No 96 and Technigaz Mk III systems. CS1 uses reinforced
polyurethane foam insulation and two membranes, the first one 0.7 mm thick made of Invar (low
thermal contraction coefficient metal and high nickel content), the second made of a composite
aluminum-glass fiber called triplex. The system has been rationalized to make assembly easier and
is prefabricated allowing quick assembly on board.
THE MARKET WHERE TIME STOOD STILL
To marine industry veterans, today's LNG boom is deja vu all over again. There was supposed to
be this sort of LNG boom some 30 years ago. But in 1979, things soured when pricing disputes
between U.S. buyers and Sonatrach of Algeria eventually led to the termination of contracts, the
laying up of six LNG ships (three of which were later scrapped) and the mothballing of two out of
four LNG terminals.
There was still growing LNG demand in other areas, but international LNG ship construction
slowed until it got a further impetus in the 1990's. What's different this time around is that the
newbuilding market is dominated by South Korea, with China already entering the market. And
the technology is advancing. For the first time, some ships are being specified with diesel, rather
than steam turbine, propulsion, there are improvements in insulation of cargo containment
systems, established containment systems are being twitched and new containment systems are
being offered.
TALLER SPHERES
When is a sphere not a sphere? When it's a vertically stretched sphere. Kawasaki Kisen Kaisha, Ltd.
("K" Line), in partnership with Osaka Gas International Transport Inc. ) and Nippon Yusen Kaisha
(NYK), has concluded a contract for a new 153,000 m3 LNG carrier with Kawasaki Shipbuilding
Corporation.
The ship will be mainly used to carry LNG for Osaka Gas from the Qalhat LNG Project in Oman
from 2009. It will have four spherical LNG tanks three of which are being given a 2 m vertical
stretch. This advantage enables tank capacity to be increased by about 5.5 percent but within
almost the same ship dimensions and with the same fuel oil consumption.
THE SHAPE OF THINGS TO COME
A new entrant in the containment system market is Ocean LNG, Inc., Houston. It has developed a
"more construction friendly LNG carrier" that can be built in "non-traditional LNG shipyards."
ABS has issued Approval In Principle (AIP) to Ocean LNG's tank containment system and carrier
design.
The tank design is cylindrical with spherical dished ends. The 180,000 m3 version of Ocean LNG's
ship design features five of these large 36 m diameter and 40 m high cylinder tanks each holding a
volume of 36,000 m3 of LNG.
Compared to the spherical containment system, the Ocean system is expected to increase cargo
capacity within the same main hull dimensions by an estimated 25 percent, while still providing
full access for inspections of both the insulation and tank structure.
A key aspect of transporting LNG is the ability of the containment system to withstand dynamic
sloshing loads of the LNG cargo when a tank is partially filled.
Membrane systems are particularly sensitive to sloshing loads.<

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Membrane systems are particularly sensitive to sloshing loads.<
The Ocean LNG tank design is fashioned according to IMO Type B independent tank design and
based on the "leak before failure" principle.
The tanks are designed to minimize filling restrictions due to sloshing effects. A detailed sloshing
analysis of the tank and pump tower designs was recently completed by ABS.
TO BOIL OFF ... OR NOT?
Since LNG tankers rely on insulation rather than refrigeration to keep their cargo refrigerated, a
small percentage will "boil off." Traditionally, LNG tankers have utilized this boil off as fuel in
steam turbine based propulsion plant.
That's changing. One way or another, the diesel is coming on board. One approach is to reliquefy
the boil off gas, so that it remains as valuable cargo.
Shipboard reliquefaction technology has matured considerably in recent years, making use of
experience from land-based and LPG carrier installations. Among others Hamworthy KSE's
patented Moss RS closed nitrogen cycle system for reliquefying boil -off gas offers a solution for
pumping LNG back to the cargo tanks and hence the opportunity to deliver more cargo to the
buyers.
MAN B&W Diesel has produced a paper that thoroughly examines operating costs and additional
income from the transport and sale of LNG. The paper, "LNG Carrier Propulsion by ME Engines and
Reliquefaction," analyzes fuel oil, lube oil and maintenance costs for both propulsion and electrical
power generation under various operating conditions on a comparison basis for a diesel -based
solution against a steam plant. The evaluation shows that substantial economic benefits can be
gained from diesel propulsion in conjunction with gas reliquefaction over the steam turbine -
powered option, simply because of the big difference in thermal efficiencies while the first cost of
the various propulsion systems is virtually the same.
Overseas Shipholding Group (OSG) has ordered four 216,000 m3 LNG ships from Hyundai and
Samsung. Each vessel utilizes two MAN B&W ME engines for main propulsion. Each yard will
deliver two vessels for the Rasgas II project for shipping Qatari gas to the U.K.
Main propulsion will be by two 6S70ME-C engines in each vessel. The engines for the Hyundai
vessels will be built by Hyundai Heavy Industries, and for the Samsung vessels by HSD. The engines
will be heavy fuel burning, and the boil off gas will be returned to the tanks via onboard
reliquefaction plants.
Apart from the reliquefaction solution, another means of utilizing the diesel is by using the boil off
gas as fuel. MAN B&W's ME-GI engine is a gas injection, dual fuel low speed diesel engine, which
can burn any ratio of fuel and gas desired.
Wrtsil, meanwhile, has had considerable success with its DF dual-fuel engines. The first dual fuel
electric LNG carrier, the 75,000 m3 Gaz de France Energy, was recently completed by Chantiers de
l'Atlantique of France and is in service with Gaz de France.
Furthermore, Wrtsil has now made a breakthrough into the Korean market with an order from
Hyundai Heavy Industries Co. Ltd. to supply four sets of Wartsila 50DF dual -fuel engines to power
a series of 155,000 m3 dual-fuel-electric LNG carriers, with an option on four more sets.
The ships were ordered by BP Shipping of the U.K. and each ship will be equipped with two 12-
cylinder and two nine-cylinder Wrtsil 50DF dual-fuel engines with an aggregate power of 39.9
MW, as prime movers in a dual-fuel/electric machinery arrangement. ML

These days, clean-burning liquefied natural gas (LNG) is the fuel that everyone in the world wants
and quite a bit of it will need to be transported by ship.
According to statistics from Marine Business Strategies (www.coltoncompany.com), the world
orderbook for LNG ships at press time stood at 105. At an average newbuilding price of around
$200 million a copy, that equates to some $20 billionor about twice the value of the current
world order book for cruise ships.

The U.S. Department of Energy's Energy Information Agency says that from 1986 to 2000, U.S.
natural gas consumption grew from 16.2 trillion ft3 to a high of 23.3 trillion ft3 with 40 percent of
the increased demand being met by imports, predominantly from Canada. Based on the latest
assessment from Canada's National Energy Board, however, says EIA, it is unlikely that future
production from Canada will be able to support a continued increase in U.S. imports.

In the EIA's Annual Energy Outlook for 2005 reference case, U.S. natural gas consumption is
projected to grow from 22 trillion ft3 in 2003 to almost 31 trillion ft3 in 2025. Most of the
additional supply is expected to come from Alaska and imports of LNG.

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But it is not U.S. demand alone that is powering the LNG boom. LNG has also whet the appetite of
other energy-hungry economies, including Korea and China.

LNG SHIPPING: THE BASICS

When natural gas is cooled to minus 259 F (-161C) it becomes a clear, colorless, odorless liquid.
Natural gas is primarily methane, with low concentrations of other hydrocarbons, water, carbon
dioxide, nitrogen, oxygen and some sulfur compounds. During liquefaction, natural gas is cooled
below its boiling point, removing most of these compounds. The remaining natural gas is
primarily methane with only small amounts of other hydrocarbons. LNG weighs less than half
the weight of water and will float if spilled on water.

In January 1959, the world's first LNG tanker, The Methane Pioneer, a converted World War II
liberty ship, carried an LNG cargo from Lake Charles, La. to the United Kingdom. The U.S. began
exporting LNG to Asia in 1969, when Phillips Petroleum built a liquefaction facility, about 100
miles south of Anchorage, Alaska. The plant is still in operation.

Worldwide, there are currently 17 LNG export (liquefaction) terminals and 40 import (re-
gasification) terminals handling about 120 million tons of LNG every year. A report from Sandia
National Laboratory for the Department of Energy cites estimates that worldwide LNG trade will
increase 35 percent by 2020. The major areas for increased LNG imports are Europe, North
America, and Asia.
Four LNG marine terminals were built in the U.S. between 1971 and 1980: Lake Charles, La.;
Everett, Mass.; Elba Island, Ga.; and Cove Point, Md. After reaching a peak receipt volume of
four million tons in 1979, LNG imports declined when de-control of natural gas prices produced
an economic supply of natural gas within U.S. borders.

After being mothballed in 1980, the Elba Island and Cove Point terminals have been refurbished
and reactivated, and both are currently receiving LNG shipments. The Lake Charles and Everett
terminals, which have operated below design capacity for many years, have also recently
increased receipt of LNG. Import of natural gas into the U.S. is expected to double over the next
20 years. Four to eight new LNG terminals are expected to be constructed in the next four to
five years and more than 40 new terminal sites are under consideration and investigation . A
factor in the siting of LNG receiving terminals is the proximity to market. Thus terminals are
being considered in areas with high natural gas demands, which include locations on all three
U.S. coasts. Most are being planned to handle one to two LNG tanker shipments per week.
Licensing of LNG terminals located on shore is handled by the U.S. Federal Energy Regulatory
Commissionand you can see the FERC's most recent update on existing, planned and proposed
North American LNG terminals here:http://www.ferc.gov/industries/gas/gen-info/horizon-
lng.pdf
Responsibility for licensing floating LNG terminals, which are termed "deepwater ports" in U.S.
regulatory parlance, is handled by the U.S.Maritime Administration--and you can get up to date
information on the number and status of ap[plications here:http://www.marad.dot.gov/dwp/

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