EU backs UK LNG bunkering amid fresh developments across NW Europe

04 December 2014 | Ludovic Aldersley, ICIS LNG Market Reporter

The EU will provide €4m ($4.93m) for a pilot LNG bunkering facility at Teesport in northeastern England as well as LNG propulsion systems for two new ships, it said on 1 December.

The project, which the EU considers to be a “real breakthrough in the use of LNG for short sea shipping” will develop “a dedicated LNG supply and demand chain in the UK” and will be completed by December 2015.

Northern Europe is enforcing tighter marine emission rules from 1 January 2015, driving a transition towards using LNG instead of ultra low-sulphur fuel oil.

The Teesport project will test an innovative LNG fuel system on two sea-going ethylene carriers. It will also encourage the wider use of LNG for marine and road transport in the UK by performing technical and market studies in other ports with the aim to roll -out LNG technology countrywide.

Teesport currently has a dockside floating LNG regasification facility, which was supplied and commissioned by US-based Excelerate Energy in 2007. With no LNG storage however, the existing infrastructure is not capable of supporting the pilot bunkering project, ICIS understands.
Investment in the physical small-scale LNG infrastructure that underpins this emerging market has been encouraged by the EU’s Innovation and Networks Executive Agency (INEA), formerly known as TEN-T.

Shell invests in bunkering vessel
In a separate move, Anglo-Dutch major Shell has confirmed plans to build an LNG bunker vessel that would supply LNG as a fuel in ship-to-ship transfers across northwest Europe, it said on 4 December.

The 6,500 cubic metre (cbm) feeder vessel which will be built by South Korea’s STX Offshore & Shipbuilding will be based at the port of Rotterdam in the Netherlands. It will load from the new LNG break-bulk facility and jetty to be constructed by the existing Gate terminal at the port.

The dedicated LNG break-bulk terminal is expected to be operational in the fourth quarter of 2016 after a final investment decision (FID) was taken earlier this summer (see GLM 3 July 2014).

Although the newbuild has been designed to integrate with the break-bulk infrastructure alongside the conventional Gate terminal, it will also be able to load from other terminals, both large and small. The design will also enable it to bunker a wide variety of customer vessels.

Small-scale vessels already load from the existing infrastructure at the 12 billion cubic metre (bcm)/year Gate terminal in order to transport LNG to Scandinavian bunkering infrastructure. Gate, along with the neighbouring LNG terminal in Zeebrugge, Belgium, also supplies truckloads of LNG to the emerging marine and road transport market.

Montoir renews bunker hub efforts
The authorities behind the northwestern Atlantic port of Nantes St Nazaire and the Montoir LNG terminal have confirmed market interest to supply LNG as a bunker fuel.

The port, which hosts a 10bcm/year LNG terminal, is located just outside the entrance to Europe’s sulphur emission control area (SECA).

A study by the port authority and terminal operator, Elengy, has resulted in support towards a local LNG hub to supply the emerging LNG bunker market in the SECA and to meet wider EU requirements, according to a joint statement issued on 2 December.

Although Nantes St Nazaire has until 2025 to meet the new clean fuel regulations adopted in September by the European Parliament, the port authority has “decided to anticipate this deadline by teaming up with Elengy and opting for LNG as a fuel.”

Truckloads of LNG from Montoir can already supply LNG bunkers to ships in the port, but Elengy is looking at setting up a logistics chain to supply feeder ships, roll-on/roll-off carriers and ferries, as well as service vessels. The port authority and Elengy are currently working to identify potential pilot LNG projects.


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