ECOLOGICAL AND ECONOMIC ASSESSMENT OF COMPRESSED GAS MARINE TRANSPORTATION UDC 656.6.073.41:661.91 LBC 39.486.4+33.362.087 I‘78 This publication has been prepared by Scientific-Research Institute for Environmental Issues Autonomous Non-profit Organization, jointly with Vernadsky Nongovernmental Ecological Foundation. Ecological and Economic Assessment of Compressed Gas Marine Transportation. - Moscow, 2017. – 240 p., ill. ISBN 978-5-9907508-8-3 The publication presents the results of reviewing of compressed natural gas (CNG) marine transportation by ecological and economic criteria and defines the most thrifty as well as environment- and climate-friendly methods of natural gas transportation. The publication contributes to enhancing of knowledge of specialists and general audience of cost-efficient and ecological aspects of natural gas transportation methods and, consequently, to making competent management decisions as well as popularization of natural gas utilization as an environment-friendly fuel. Coordinator of IBC projects: D. Wessling, Leader of Juniper S.E. Technical Cooperation. The Project Coordinator: Industry, Innovations and Prospective Development Committee of International Business Congress. Academic supervisors of the research project: A.G. Ishkov, Dr. Chem. Sc., Prof., Deputy Chairman of Ecology and Health Care Committee of International Business Congress; V.A. Grachev, Dr. Tech. Sc., Prof., Associate Member of Russia Academy of Sciences, Deputy Chairman of Industry, Innovations and Prospective Development Committee of International Business Congress. Operating organization: Scientific-Research Institute of Environmental Problems Autonomous Non-profit Organization (NIIPE), Director O.V. Plyamina. Experts: I.V. Stepanov, Cand. Tech. Sc., Assistant Professor; I.Ye. Valiullina, Dr. Econ. Sc., Prof.; A.L. Novoselov, Cand. Econ. Sc.; Ye.V. Varfolomeyev, Cand. Econ. Sc.; O.V. Maryin, Cand. Econ. Sc.; L.V. Sharikhina; Ye.V. Kosolapova Cand. Tech. Sc; V.A. Lobkovsky, Cand. Geol. Sc. ISBN 978-5-9907508-8-3 © NIIPE, 2017 © the V.I. Vernadsky Nongovernmental Ecological Foundation,, 2017 CONTENT INTRODUCTION......................................................................................................................6 CHAPTER 1. ANALYTICAL REVIEW OF NATURAL GAS MARINE TRANSPORTATION..............7 1.1. History of natural gas transportation development..................................................7 1.2. Review of routes and means of natural gas transportation by sea........................12 1.2.1. Today‘s structure of natural gas transportation flows..................................12 1.2.2. The role of natural gas transportation by sea................................................30 1.2.3. Natural gas transportation by marine pipelines............................................38 1.2.4. Marine transportation of liquefied natural gas.............................................43 1.2.5. Marine transportation of compressed natural gas.......................................53 1.2.6. Qualitative comparison of technologies of natural gas marine transportation..............................................................................................59 1.3. Realized projects and prospects of natural gas marine transportation................60 1.3.1. Transportation of natural gas via marine pipelines......................................61 1.3.2. Marine transportation of liquefied natural gas.............................................67 1.3.2.1. Plants for natural gas liquefaction...........................................................67 1.3.2.2. The world tanker fleet...............................................................................72 1.3.2.3. Regasification terminals...........................................................................75 1.3.3. Marine transportation of compressed natural gas.......................................79 CHAPTER 2. COMPARATIVE ECONOMIC ANALYSIS OF NATURAL GAS TRANSPORTATION TECHNOLOGIES.............................................................................81 2.1. Methodology for Economic Analysis of Natural Gas Transportation Technologies............................................................................................82 2.2. Algorithm of Economic Efficiency Comparative Analysis for Various Methods of Gas Transportation...................................................................86 2.3. Design Premise and Assumptions to Simulate the Economic Feasibility of Natural Gas Offshore Transportation Technologies.................................................89 3 CONTENT 2.4. Systematization of Options for Multi-Choice Calculations to Analyze Effectiveness of Natural Gas Offshore Transportation Technologies..........................91 2.5. Characteristics of Technical Solutions for Natural Gas Transportation..............92 2.5.1. Characteristics of an Onshore Gas Pipeline Usage.......................................92 2.5.2. Characteristics of an Offshore Gas Pipeline Usage.......................................95 2.5.3. Characteristics of Liquefied Gas Offshore Transportation..........................97 2.5.4. Characteristics of Compressed Gas Offshore Transportation..................101 2.6. Capital Investments into Implementation of Technical Solutions for Natural Gas Transportation......................................................................................108 2.6.1. Capital Investments into the Onshore Pipeline..........................................108 2.6.2. Capital Investments into the Offshore Gas Pipeline..................................111 2.6.3. Capital Investments into Offshore Transportation of Liquefied Natural Gas........................................................................................113 2.6.4. Capital Investments into Marine Transportation of Compressed Natural Gas...................................................................................115 2.7. Gas Transportation Tariffs.......................................................................................117 2.7.1. Onshore Gas Pipeline Tariffs........................................................................117 2.7.2. Offshore Gas Pipeline Tariffs........................................................................118 2.7.3. Characteristics of Marine Transportation of Liquefied Gas......................119 2.7.4. Compressed Gas Marine Transportation Tariffs........................................120 2.8. Matrix of Effectiveness: Comparison of Technologies by Economic Criteria......................................................................................................121 CHAPTER 3. SELECTING AN ALTERNATIVE METHOD FOR TRANSPORTING NATURAL GAS OVERSEAS IN TERMS OF THE POTENTIAL PROJECTS..................................129 3.1. Analytical Review of Freight Traffic Flows in the Black and Baltic Sea Regions.....................................................................................................129 3.2. Analysis of Alternative Engineering Solutions for Transporting Gas in the Black Sea and the Baltic Sea Regions..................................................................132 4 CONTENT 3.3. Estimated Natural Gas Offshore Transportation Tariffs for Alternative Projects...................................................................................................135 CHAPTER 4. ENVIRONMENTAL IMPACT ASSESMENT IN THE PROCESS OF MARINE TRENSPORTATION OF NATURAL GAS.................138 4.1. Methodological Aspects of the Carbon Footprint Assessment Technique.......138 4.2. Environmental Aspects of Natural Gas Offshore Transportation.......................142 4.3. Natural Gas Offshore Transportation Effect on the Atmosphere.......................145 4.4. Environment Analysis of Natural Gas Offshore Transportation Effect on the Atmosphere................................................................................................153 4.5. Calculating a Carbon Footprint of Natural Gas Offshore Transportation........159 CONCLUSIONS AND RECOMMENDATIONS..............................................................170 BIBLIOGRAPHY....................................................................................................................172 Appendix A INDICATORS OF ECONOMIC EFFICIENCY.................................................................175 Appendix B INDICATORS OF ECONOMIC EFFICIENCY OF THE GAS SUPPLY THROUGH THE BLACK AND BALTIC SEA........................................................................................218 ABBREVIATIONS.................................................................................................................238 5 INTRODUCTION Ensuring of stable supply of natural gas to customers is one of the most topical economic and political issues of today. At the same time, strengthening of security of energy supply and ensuring of continuous gas supplies must not cause deterioration of the environment. Different methods of gas supply (as liquefied natural gas (LNG), by marine and land pipelines) possess various specific effect indicators. In addition to the methods of supply existing at present, new methods of marine transportation of natural gas are being developed now, e.g. in form of compressed natural gas (CNG). In this connection, the International Business Congress (IBC) initiated realization of the Project «Ecologic-Economic Estimation of Compressed Gas Marine Transportation» aiming at determining of the most thrifty and environment- and climate-friendly methods