Global Issues

The development of LNG bunkering facilities in North- European ports

Siyuan Wang and Professor Theo Notteboom, ITMMA, University of Antwerp,

As the schedule for the application of the bunkering since it has operated one of strict sulphur limits (enacted by IMO The LNG bunkering perspective started the oldest LNG terminals in Europe from 2015) in the emission control areas in 2011 when the port of Antwerp since 1987. The promotion of LNG (ECA) is fast approaching, ports not only accepted the invitation to be the leading as a ship fuel provides an excellent find it their responsibility to quickly adapt port for the LNG working group that opportunity for to strengthen to the upcoming emission regulations, but forms part of the World Ports Climate its status as a main gas hub in North- they also intend to rapidly respond to port Initiative (WPCI) in an organisation of Europe. In order to achieve the goal, users’ environmental needs for obtaining the International Association of Ports and the port of Zeebrugge is constructing a competitive advantage. Liquefied natural Harbors (IAPH). The main objective of second jetty which will enter into service gas (LNG) as one of the attractive fuels for this working group is to standardise the in 2015. The jetty will be able to flexibly ships can help ports to achieve these goals. port regulations governing LNG, evaluate load and unload a wide range of LNG This contribution is based on the bunkering risk perimeters, and raise carriers, from 2,000 cm³ (the smallest our extensive study on the current public awareness. At the end of 2012, the bunker ships) to 217,000 cm³ (large development status of LNG bunkering draft ‘truck-to-ship bunker checklist’ was Q-Flex and Q-Max types). For LNG facilities in North-European ports. All submitted by the WPCI LNG working bunkering operations, Zeebrugge joined ports considered are located within the two group. In December 2012, the first LNG the Flemish LNG study in January 2012 European ECAs (The Baltic Sea and the bunkering was successfully operated at the together with the ports of Antwerp ). Eight ports are included in port of Antwerp when the dual-fueled oil and Gent. In September 2013, an the study. These ports cover large world- tanker Argonon was bunkered via truck. international cooperation was established class gateway ports such as Rotterdam, In August 2013, the port was granted a among the ports of Zeebrugge, Antwerp Antwerp, Hamburg and Bremen, and subsidy by the European Commission and Singapore for developing LNG also four medium-sized to smaller ports to build an LNG bunkering station bunkering infrastructure together. like Zeebrugge, , Stockholm for barges. In September 2013, after Currently, the Port of Zeebrugge is and Helsingborg (in Sweden). The eight completing a public tendering procedure, perfectly equipped to introduce several ports all share the traditional ‘Hanseatic’ the port of Antwerp appointed the gas pilot projects in the near future in order culture featuring municipal governance ship owning company EXMAR as its to kick-start the market development. and their port authorities are either public strategic partner for building an LNG or hybrid public/private. In addition, bunker ship aiming to realise ship-to-ship Port of Rotterdam all eight ports operate according to the bunkering to sea going vessels by 2015. The port of Rotterdam started to operate ‘landlord’ model while they intend to go In a first development stage, the bunker LNG bunkering via truck when the beyond the traditional approach by adding vessel will load LNG from the nearby dual-fuel oil bunker ship Argonon was more facilitating and coordinating roles. terminals in Zeebrugge or Rotterdam. If christened in Rotterdam in November Although the selected ports all aim for the market condition is promising, the 2011. From March 2013, two new LNG an LNG-fuelled future, the development port of Antwerp will further extend LNG powered inland barges mainly operating plans vary in line with different market facilities to on-shore storage tanks or even on the Rhine started to be bunkered in expectations and operational conditions. to a small liquefied plant in the future. Rotterdam. Thanks to the great efforts The following sections briefly discuss of the port authority, the municipality LNG projects in the eight ports. Figure Port of Zeebrugge of Rotterdam amended the Port 1 illustrates the timeline of the LNG The port of Zeebrugge has a rather Management Regulations to allow LNG bunkering facilities planning in these ports. favourable position to develop LNG to be bunkered to inland ships from July

Edition 62: May 2014 23 Global Issues Figure 1: The timeline of LNG bunkering projects in the eight ports.

Port of Antwerp APA became lead Flemish LNG First bunkering via Granted subsidy Selected EXMAR First bunkering for port of WPCI WG study (market, legal, truck from EU as the strategic seagoing vessels via logistic issues) partner to build a STS by 2015 bunker vessel

May, 2011 Jan, 2012 Dec, 2012 August, 2013 Sep, 2013 2015

Port of Zeebrugge LNG terminal Flemish LNG study Started to build the LNG bunk supply chain The second jetty started up (market, legal, logistic second jetty design and development completed for breakbulk issues) activity by 2015

1987 Jan, 2012 Oct, 2012 2015

Port of Rotterdam Gate terminal started to Dual-fuel tanker Built an alliance LNG-powered barge LNG breakbulk operate Argonon started to with port of Greenstream started to terminal starts up by operate Gothenburg be bunkered via truck 2015

Sep, 2011 Nov, 2011 Oct, 2012 July, 2013 2015

Port of Bremen Selected the LNG terminal Cooperated with Bomin Linde VIA BREMEN operates the location to develop LNG bunkering first LNG powered harbour barge

Oct, 2012 Sep, 2013 Mid 2015

Port of Hamburg Signed MOU with Completed a successful Bomin Linde and HPA HPA operates the first Bomin Linde to do a feasibility cooperate to develop LNG powered patrol feasibility study LNG bunkering facilities ships by 2014

Feb, 2012 Nov, 2012 Dec, 2014

Port of Stockholm LNG terminal started First LNG bunkering First LNG bunker Feasibility study for to operate via truck via STS the second LNG bunkering terminal

May, 2011 Jan, 2013 Mar, 2013 Jan, 2014

Port of Gothenburg Built an alliance with Got EU funding for Cooperate with Vopak and Provide LNG bunker port of Rotterdam LNG project Swegas to develop LNG by 2015 (35m Euro) bunkering facilities

Oct, 2012 July, 2013

Port of Helsingborg Market, stakeholders’ analysis Design of terminal and quay Permit process, tender Start LNG bunkering in 2016 & Investment calculation, risk procedure and LNG facilities or 2017 assessment development

Jan, 2012 Sep, 2013 Jan, 2014

2011 2012 2013 2014 2015 2016

Note: APA: Antwerp port authority WPCI WG: World Port Climate Initiative (WPCI) working group for standardising the port regulations governing LNG VIA BREMEN: the brand name of port management company for port of Bremen MOU: Memorandum of understanding HPA: Hamburg port authority

1, 2013. Therefore, the port of Rotterdam the Gate LNG terminal (which started trucks. The terminal is expected to be became the first port in Europe where operations in September 2011) together operational by 2015. Furthermore, the bunkering of LNG was legally regulated. with Vopak and Gasunie (two of three port of Rotterdam has extended its LNG On the other hand, in order to develop initiators and partners of Gate terminal) ambition to be one of main gas hubs and LNG bunkering for seagoing vessels, where LNG can be handled as fuel for LNG feeder distribution centres in the the port is developing a terminal next to small seagoing ships, bunker barges and Europe.

24 Edition 62: May 2014 www.porttechnolog y.org Global Issues

The ports of Hamburg and infrastructure company Swedegas (the LNG bunkering facilities could be a vital Bremen owner of the Swedish gas transmission driver for a quick market introduction Both German ports plan for small grid), the Dutch company Vopak LNG (a of this new LNG application in a global to medium scale LNG storage tanks specialist in LNG storage) and the port context. particularly for supplying fuel for ships and of Gothenburg. The terminal will be built trucks. After the completion of feasibility adjacent to Vopak’s oil facility in Skarvik studies at the end of 2012, the two ports Harbour and will be ready in 2015. have been developing LNG bunkering About the authors facilities by cooperating with Bomin Port of Helsingborg Linde LNG, a joint venture between Although the Port of Helsingborg is Siyuan Wang joined ITMMA Bomin (a bunker supplier) and Linde (a a rather small regional port located at (an institute of the University of German gas supplier). The port authorities the narrowest bypass of the Oresund, it Antwerp) as a PhD student under the take initiatives to promote the market is one of the busiest ports in Northern CONNEC scholarship programme of development of LNG as a ship fuel by Europe and the biggest ferry port in the European Commission in 2010. investing in LNG-powered port vessels. terms of volume in Sweden. Helsingborg She holds a MSc in Transport and The two ports hope to start operating shows great interest in offering LNG Maritime Management from ITMMA these ships by 2015. or liquefied biogas (LBG) in the port and a Master in Maritime Law from pursuing its environmental targets and Shanghai Maritime University. Port of Stockholm improving its green image to the local Her research activities at ITMMA In the beginning of 2013, the port of community. In the beginning of 2012, particularly focus on the LNG market. Stockholm became one of the first ports the port of Helsingborg took the leading in the world to offer a LNG bunkering position in coordinating the EU funded Theo Notteboom is president of solution to a large passenger ferry. On project ‘LNG in Baltic Sea’ aiming to ITMMA, professor at the University January 14, 2013, Stockholm refuelled establish a stakeholder platform with of Antwerp, a part-time professor at the Viking Grace, a new Viking Line (a six other ports in the Baltic Sea to share the Antwerp Maritime Academy Finnish ferry operator) passenger ferry, knowledge and skills on the development and a visiting professor at Dalian by LNG truck. Viking Grace is unique as of LNG infrastructure. The other ports Maritime University in China and she is the first large passenger ferry in the in the project of ‘LNG in Baltic Sea’ are World Maritime University in world to be powered by LNG. In March the ports of Aarhus (Demark), Sweden. He is published widely on 2013, the first ship-to-ship bunkering (Finland), Turku (Finland), Copenhagen- port and maritime economics. He is to Viking Grace was realised by a small Malmo (Denmark and Sweden), Tallinn also president of the International LNG fuelling vessel, the Seagas, which (Estonia) and Stockholm (Sweden). At Association of Maritime Economists was converted from a retired Ro-Pax with present, various pre-investment studies (IAME), chairman of the Board a 180 m3 tank onboard. The LNG source have been started up and the port hopes of Directors of Belgian Institute for the bunkering operation is mainly to start LNG bunkering operation in of Transport Organizers (BITO, from the import terminal in Nynäshamn, 2016. an institute of the Belgian Federal south of Stockholm, which is operated by Government) and co-director of AGA. The infrastructure is the first LNG Conclusion PortEconomics.eu. terminal in the Baltic Sea and came into The overview of the development operation in 2011. However, the LNG progress of LNG bunkering projects About the organisation bunkering in Stockholm at this moment in the eight North-European ports is specifically designed for Viking Grace. If shows that the eight port authorities more LNG-fuelled vessels are brought into are currently playing a proactive role in operation, the LNG infrastructure needs to facilitating and promoting the use of be developed further. Currently, the port of LNG as a marine fuel. Although the PortEconomics is a web-based Stockholm is looking for the opportunity main investors and operators for LNG initiative aiming at generating to build a new LNG infrastructure at port bunkering facilities are private industrial and disseminating knowledge of Kapellskär, a port in the northern part players, the capital intensive nature of about seaports. It is developed and of Stockholm. the LNG business and the high risk empowered by the members of the prevent a smooth market development PortEconomics group, who are Port of Gothenburg and create a ‘chicken-and-egg’ problem. actively involved in academic and The port of Gothenburg plays an active The proactive role of port authorities contract research in port economics, role in various collaborative ventures can help to kick-start the business and management, and policy. Since designed to speed up the development promote new innovative applications. In October 2012, Port Technology of LNG as a marine fuel. In October addition, it is noted that the eight ports International and PortEconomics 2012, the port signed a collaboration adopt cooperative development policies have been engaged in a partnership. agreement with the port of Rotterdam with various stakeholders in or outside the www.porteconomics.eu. for a cooperation to develop the necessary port perimeters by establishing strategic in-port infrastructure for LNG bunkering. alliances or partnerships. This suggests that Enquiries In July 2013, this collaborative project cooperation is an effective way to reduce was granted €35.5 million from the EU. and share the uncertainties over availability ITMMA – University of Antwerp Currently, Gothenburg is planning to build of infrastructure; LNG demand and price, Kipdorp 59, 2000 Antwerp (Belgium) a medium-scale LNG terminal with the etc. and help to break the ‘chicken-and- Email: [email protected] capacity of around 10,000-25,000cm3. egg’ dilemma. or [email protected] Three strategic partners are taking part The current practices in the above eight Website: www.itmma.ua.ac.be in the initiative for the terminal: the European ports on the development of

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