EUROPEAN COMMISSION DG MOVE SEVENTH FRAMEWORK PROGRAMME GC.SST.2012.2-3 GA No. 321592 LNG BC Market development LNG Blue Corridors Project is supported by the European Commission under the Seventh Framework Programme (FP7). The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the FP7 nor the European Commission is responsible for any use that may be made of the information contained therein. Deliverable No. 7.6 Deliverable Title Market development Dissemination level Public Written By Flavio Mariani (NGVA Europe) Checked by Nadege Leclercq (Westport) Approved by Javier Lebrato (IDIADA) Issue date April 2018 Executive Summary The global LNG market keeps showing a growth trend. The LNG consumption, as well as production rate is increasing at global level. At present there is a production overcapacity; this situation is anyway expected to reverse to the other way around in the short to mid-term, until new production plants planned and under construction come to completion, thus adding to total production capacity. The global LNG market in fact faces a production surplus of about 20%. Experts predict that this will last probably until the early twenties, because some new suppliers such as US and Australia will increase their production rate. The demand for LNG in mature markets such as Japan and South Korea is likely to stabilize, while Asia is expected to absorb an increasing part of production overcapacity. Especially expanding may be the demand from south Asian countries such as India, Pakistan and Bangladesh. The Association of Southeast Asian Nations (ASEAN) region is also expected to be an important market for LNG in the short term. The main features of the LNG core business market are: • Global LNG trade in 2016: 278 Mt (+5% vs 2015) – 618 Mm3 • Short term market of LNG in 2016: 73 Mt (28% of total LNG market) • Global average LNG supply price: $5.52/MMBtu ( 35c€/Kg – 48 c€/Sm3) • Global nominal liquefaction capability as of January 2017: 340 MTPA (Million tons per year) • New liquefaction capability under construction as of January 2017: 115 MTPA (+35% by 2022) • New liquefaction capability planned in January 2017: 879 MTPA • Global nominal regasification capability as of January 2017: 795 MTPA • Capability of FRSU (floating terminals) plants as of January 2017: 83 MTPA • Global LNG vessels fleet as of January 2017: 439 ships (including FRSU) • Share of LNG in the global NG offer in 2015: 10% The LNG BC Project has met its main targets. More than 150 trucks have been involved as actual Project partners, from 39 fleet operators, collecting operational data along their routes. The initial target was 100 trucks. 13 stations have been built in the Project, of which 12 are in the budget. The original target was 14. Some of the stations sold very well since the beginning. Some other increased sales over the project duration, with increasing trend to reach a reasonably good sale rate. The main Project figures as of October 2017 are: Total 13 stations (1 under construction, hence not in time to be financed by EC funds) Total 156 trucks Total 61 Partners: 22 Companies; 39 fleet operators; from 11 EU countries Total cumulative mileage of monitored LNG trucks: 31,639,938 km (early May 2018) Total number of fillings of Project LNG stations: about 111,000 Total amount of LNG sold by Project stations: 14,206,275 kg (early May 2018) Average sale rate: 128 kg/filling 3 New developments have been on the side of LNG trucks, with IVECO to put on market a second Euro VI LNG model, more powerful, i.e. the Stralis NP NP AS440S40T/P; engine: Cursor 9; with 400 HP power delivery and 1,700 Nm torque, and twin LNG tank for up to 1,500 km running range. This was followed in late 2017 by a third truck model, the Stralis NP 460, propelled by the the Cursor 13 engine, with power of 460 HP at 1,900 rpm, a torque of 2,000 Nm at 1,100 rpm, and a max running range up to 1,600 km. Also VOLVO and SCANIA are now offering new Euro VI LNG models on the market, which anyway were not launched in time to join the Project. VOLVO designed the FH LNG, and FM LNG trucks (on market in spring 2018); they are Euro VI-compliant. Power delivery and torque are respectively: 420 hp, with 2,100 Nm and 460 hp, 2,300 Nm. Fuel consumption is on a par with VOLVO’s diesel engines, but 15-25% lower than for conventional gas engines. LNG is stored in tanks at 4-10 bar and -140 to -125°C. Range: 1,000 km. In 2015, SCANIA launched on the market the P 280 model, powered by a SCANIA Euro VI engine. In 2017, SCANIA presented the new LNG truck model, the G340 LA4x2MNA; it has two LNG tanks, with a total capacity of 300 kg (190 kg in main tank; plus 110 kg in optional tank), LNG is stored at 10 bar, -130°C. Its running range is 1,100 km; the average consumption is ~28 kg/100 km. Engine displacement is 9.3 litres; this 5 cylinders Natural gas engine is the OC09 102 Euro VI. When the LNG BC Project started in 2013 the LNG infrastructure in Europe was very poor, with just about 20-30 stations. On average 20 to 30 new stations were built per year since then, with a significant acceleration in 2017, leading to a total at end 2017 of more than 120 public LNG stations in operation. In 2018, 10 new stations already opened between January and April, with many more under construction or planned to be built throughout the year. A number of additional projects have been announced, which are expected to lead to a total of over 400 LNG stations in operation by the end of 2021. Other projects financed by the EC (particularly under the CEF – Connecting Europe Facility – programme) and the enforcement of the DAFI (Directive of Alternative Fuels Infrastructure), as well as greater vehicle availability and market demand, contribute to stimulate the European automotive LNG sector in the race to fill its gap to the LNG market in other parts of the world, such as China where it has sky rocketed, and North America. LNG, like CNG, can be produced from a variety of renewable, scalable and very low carbon intensity energy sources, such as biomethane produced from organic waste and biomass through anaerobic digestion and gasification or synthetic methane produced converting carbon dioxide (CO2) into methane by using hydrogen produced from surplus green electricity. Renewable gas is fully compatible with the current natural gas mix, allowing any blend and unlimited use in the existing infrastructure and vehicles. Liquified biomethane as biofuel for HD vehicles is a very new business. At the beginning of the LNG Blue Corridors project, there were only a few pilot plants in Europe and globally. Its development continued slowly in the 2013-2015 timeframe, essentially in Europe, with a few additional projects launched. Since 2016, the European industry has put a much stronger focus on bio-LNG, with a number of new projects announced, to demonstrate the viability of the solution, start larger scale deployment of production facilities and availability of bio-LNG for trucks. Even though there are still only few plants up and running producing bio-LNG in Europe (and globally) today, significant new development is expected in the coming years, in a growing number of countries. In the next few years, once these projects and others will be completed, bio-LNG as a fuel for LNG trucks is expected to be available in a significant number of European countries, including at least Sweden, Norway, the Netherlands, the UK, Italy, Germany, France, Slovakia and Denmark. This will mark 4 the achievement of another major milestone for the market and the environment, making almost GHG neutral operation really possible for long distance heavy duty trucks (or achieving WTW GHG emissions reduction by at least 80% compared with diesel, depending on the biomethane source). By 2030, it seems reasonable to expect that bio-LNG will be produced in much larger volumes, not only from biomethane (anaerobic digestion), but also from power to gas and gasification processes, therefore offering great opportunities for GHG emissions reduction in heavy road haulage as well as economically affordable zero or low carbon heavy goods road transport in Europe. 5 Revision History and Statement Of Originality Revision History Rev Date Author Organization Description 01 Nov 2017 Flavio Mariani NGV Europe 02 April 2017 Nadege Leclercq Westport Review and additions to the report 03 April 2017 Javier Lebrato IDIADA Review general content Statement of originality: This deliverable contains original unpublished work except where clearly indicated otherwise. Acknowledgement of previously published material and of the work of others has been made through appropriate citation, quotation or both. 6 Contents Executive Summary ................................................................................................................................. 3 Revision History and Statement Of Originality ........................................................................................ 6 1 Introduction ................................................................................................................................... 10 1.1 LNG Blue Corridors project .................................................................................................... 10 2 LNG Global market features ……………………………………………………………………………………………………..11 2.1 Global LNG market ………………………………………………………………………………………………………….11 2.2 The future role of Natural gas ………………………………………………………………………………………….13