GIINGL Retail LNG Handbook
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gl RETAIL LNG HANDBOOK j Retail LNG & The Role of LNG Import Terminals Report by the GIIGNL Technical Study Group on the possible role of LNG import terminals within the emerging Retail LNG Market. 1st Edition: 2015 Document and Purpose This first (2015) edition of the GIIGNL Retail LNG Handbook reflects GIIGNL’s understanding of the Content Disclaimer Retail LNG market and best current practice at The purpose of this handbook is to serve as a reference manual to assist readers to the time of publication. Information is provided in summary form only and is intended to provide understand the current and future Retail LNG market, LNG supply to this market, safety and a broad understanding and knowledge of the operational aspects, applicable codes and standards, and equipment available to be used by Retail LNG market. the members of the “Groupe International des Importateurs de Gaz Naturel Liquéfié” (GIIGNL). It is neither a standard nor a specification and should be viewed only as a summary The terms Retail LNG, Mobile LNG, Small Scale of observations within the industry. LNG and other descriptive terms have been used to describe, either the miniaturization of a Although this Retail LNG Handbook may contain much useful information, it is not specifically traditional LNG value chain, or the consumption intended to work out procedures for LNG transfer, storage or distribution to end users. No of LNG by small end user applications. For the proprietary procedure, nor particular manufacture of equipment, is recommended or implied purposes of this Handbook, GIIGNL utilizes the suitable for any specific purpose in this handbook. Readers should ensure that they are in term “Retail” to cover the broad scope of LNG possession of the latest information, standards and specifications for any procedures and activities at scale far less than the traditional equipment they intend to employ. LNG value chain. Although GIIGNL used reasonable care to include in this Handbook information which it This handbook is not intended to provide the believes is up-to-date and accurate, GIIGNL makes no representations or warranty as to the reader with detailed operational procedures, as adequacy, accuracy, completeness or correctness of such information nor does it warrant or such, but sets out the practical issues and represent that such information shall be complete in every respect. GIIGNL, and any of its requirements to guide and facilitate a skilled members, disclaim any direct or indirect liability as to information contained in this document operator team to work out suitable operational for any industrial, commercial or other use whatsoever. procedures for Retail LNG applications. Please always consult the GIIGNL website www.giignl.org to check for the latest version of this handbook, especially when referring to a pdf download or a printout of this handbook. Retail LNG and the Role of LNG Import Terminals 2015 2 Summary The natural gas and liquefied natural gas (LNG) codes and standards and the use of proper scale and scope between the markets, the industries are changing. The influx of supply, equipment. The study of the aspects of LNG lessons learned, and practices employed, by low prices, and environmental benefits of supply and use including safety, security, LNG Import Terminal operators provide the Retail LNG market with demonstrative natural gas are driving consumers to convert staffing, equipment siting, and operations is guidance on what prudent operations can from other fossil fuels. Natural gas consumers hoped to provide an illustrative framework form look like. on pipeline systems have the ability to benefit, which the industry can jointly move towards Codes and Standards – Regional differences but for those not connected, LNG may be the best practices. in the application of particular codes and only opportunity to convert to natural gas. As While Retail LNG is considered by many to be standards exist. While the current operation this market evolves, a unique opportunity may of LNG Import Terminals is viewed as having “new” there is substantial historical experience emerge for some existing participants in the LNG a robust and well proven set of codes and with all aspects of the market. LNG Import market and could lead to a shift in business standards, it has been recognized that the focus, potentially adding to or even transforming Terminals, including the experience and scale and scope differences that exist with competence of their staffing, can play a key role the traditional role of LNG Import Terminals. Retail LNG have produced “gaps” in in not only the incubation and growth of the coverage that should be addressed with the As surmised by the GIIGNL’s Technical Study Retail market, but the molding and shaping of drafting of focused codes and standards. Group (TSG) at the outset of their endeavor, regulatory framework, applicable codes and Current Market – Retail LNG market drivers virtually every member company had historical standards and operational best practices. were identified and illustrative value experience with, was in the midst of expanding GIIGNL’s Retail LNG Handbook has been propositions detailed. Although it was its services to include, or was actively engaged in produced to serve as a starting point, guide and confirmed that significant opportunity exist for participants in the LNG value chain, the study of, Retail LNG. The market drivers, reference for the participants of this emerging GIIGNL’s TSG has found that many proposed value propositions, trends and future prospects market. Retail LNG developments appear to have for Retail LNG that have widely been publicized overstated economic benefits and significant were generally confirmed although in an overall With regard to the Retail LNG market, the exposure to oil pricing fluctuations. following representative examples of themes more conservative outlook. Equipment – As with other “emerging” observed by GIIGNL’s TSG are provided: markets, there can exist a corresponding As a representative body of experienced, long emergence of new technologies and term LNG Import Terminal operators, GIIGNL Properties and hazards of LNG – The inherent risks associated with LNG that has improvement in old technologies. While was uniquely qualified to stress in its Handbook been observed and carefully mitigated for some advancement with regard to the the importance of managing the inherent risk close to five decades exist in the Retail LNG equipment utilized in the Retail LNG value associated with LNG, the application of suitable market. Although there are differences in chain is being observed, much of the Retail LNG and the Role of LNG Import Terminals 2015 3 Summary improvement has been found to be in the “economies of scale” that have presented themselves due to increased utilization of proven equipment and technologies. Availability of LNG Supply – Although some challenges exist, LNG Import Terminals have been confirmed as ideal “hubs” in a distributive model of LNG supply to the Retail markets. Aspects of LNG Supply – With regard to safety, security, staffing, equipment siting, and transfer operations LNG import terminals provide excellent references for the development of the Retail LNG facilities. Trends and Prospects – The general level of interest in Retail LNG that can be observed in the press and trade publications has been observed by GIIGNL’s member companies. Although the industry “buzz” is substantial, volumes of LNG traded in the Retail Market currently and for the foreseeable future will only represent a small percentage of the global LNG trade. However, even these modest volumes will offer many opportunities for current, and new, LNG market participants to develop new business, expand their services and increase utilization of existing infrastructure. Retail LNG and the Role of LNG Import Terminals 2015 4 Table of contents List of abbreviations ......................................................................................... 7 5. Overview of the Current Retail LNG Market ........................................... 26 1. Introduction .............................................................................................. 9 5.1 Market Drivers.................................................................................................. 26 5.1.1. Market Drivers in the Americas ................................................................ 27 1.1 Background ......................................................................................................... 9 5.1.2. Market Drivers in Europe .......................................................................... 30 1.2 Organization & Resources ................................................................................... 9 1.3 Scope of Work ................................................................................................... 10 5.1.3. Market Drivers in the Far East .................................................................. 33 1.4 Organization...................................................................................................... 11 5.2 Value Proposition ............................................................................................. 36 1.5 Study Timeline .................................................................................................. 11 6. Equipment Utilized in the LNG Process Chain ......................................... 40 2. Properties and Hazards of LNG ..............................................................