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Natural gas for ship propulsion in Denmark

1 Introduction

• 1.1 Reduction of emissions to air from ships
• 1.2 What is natural gas and how could it be used in shipping?
  • 1.2.1 Transport of natural gas
  • 1.2.2 Liquefaction plant for LNG
  • 1.2.3 Description of CNG compression plant
  • 1.2.4 Liquid compressed natural gas (LCNG) facility
• 1.3 Energy Requirements for processing LNG & CNG
• 1.4 The biogas option

1.1 Reduction of emissions to air from ships

The MARPOL Convention (MARPOL 73/78)^[1] is the main international convention covering prevention of pollution of the marine environment by ships from routine operations or accidental causes and includes six technical annexes. Annex VI is a regulation for preventing of air pollution from ships and in August 2008 an amendment was adopted. This amendment requires significant reductions in sulphur oxide and nitrogen oxides from burning of fossil fuel for ships globally.

In certain designated SECAs stricter requirements must be met and Danish territorial waters are part of the SECAs in the Baltic Sea and the North Sea. The global reductions on sulphur will enter into force with a gradual reduction from 2010 to a full effect in 2020, but earlier in SECAs (shown below). The restrictions are:

• 1.0wt. % sulphur from July 1^st 2010
• 0.1wt. % sulphur from January 1^st 2015

Figure 1‑1 Map of existing and planned Emission Control Areas (ECAs)

Progressive reductions in NO_x emissions from marine engines have also been agreed, with the most stringent controls on so-called "Tier III" engines, i.e. those installed on ships constructed on or after January 1^st 2016. These will apply for ships operating in the emission control areas (abbreviated ECAs when covering not only sulphur). SECAs are also planned for the coasts of Canada and the USA.

To fulfil the requirements regarding sulphur a cleaner fuel or treatment of the exhaust gasses are required. It is possible to use a heavy fuel oil (HFO) with lower sulphur oxide contents or diesel oil as the main fuel in the ship, but the global refinery industry is currently not configured to supply diesel oil in the amounts required and at comparable costs if all ships abandon HFO^[2]. Removing sulphur from HFO at the refinery is a costly operation and the cost increase will have an effect on the freight rates.

Since fuel of gasoil quality may be needed from 2015, shipowners operating in the ECAs are looking for economically sustainable alternatives to diesel and heavy fuel. Although technologies for assisting propulsion exist in the form of e.g. hydrogen fuel cells, kites or solar cells these are all far from realistic alternatives as the sole means of energy for propulsion of a merchant ship or ferry.

The emerging alternative fuel solution for ship propulsion appears increasingly to be natural gas. The sulphur oxide content in natural gas is negligible and emissions of sulphur oxides and Particulate Matters (PMs) from engines run solely on gas are virtually nonexistent (although a contribution will be present and dependent on the pilot fuel used for ignition and the lube oil). Thus, the use of natural gas will also eliminate the nee of exhaust treatment systems or treatment to reduce the sulphur content in the fuel oil at the refinery.

Natural gas is transported in the form of LNG in special LNG carriers (at -161 Celcius) or transported as a gas in pipelines and compressed for storage and use as CNG. Thus, converting current use of HFO, diesel or gasoil in the shipping industry to operate on natural gas requires a string of supply chain facilities and services in addition to the investments needed directly on the vessels.

The added cost for pollution abatement or for alternative fuels to the shipping industry can be seen as a potential obstacle for the established European strategy of shifting cargo from road to ship, which is reflected in the European Commission’s support to projects under the labels of ”European maritime transport space without barriers” and ”Motorways of the Sea”.

The present study evaluates the possibilities of establishing shore based LNG or CNG facilities: supplying facilities, storing and fuelling the ships with LNG/CNG in the Danish area, and estimates the reduction in air emission from conversions to LNG/CNG. The costs are assessed for several scenarios for the conversion in the Danish ferry and short sea shipping sector.

The Chapters 2—8 deal with the following:

• Chapter 2 addresses issues related to the use of natural gas for propulsion in ships;
• The number of ports and vessels relevant in Denmark and the expected fuel consumption is addressed in Chapter 3;
• Chapter 4 assesses the reduction in emissions to air achieved under the scenarios developed in Chapter 3;
• Chapter 5 explores the synergies with the land transport sector;
• Chapter 6 investigates the overall ship operation, when using natural gas;
• In the final technical Chapter 7 the barriers related to introduction of natural gas in ship propulsion are assessed;
• The economic analysis is found in Chapter 8, where the scenarios of Chapter 3 are assessed.

The conclusions are found in Chapter 9 and in the appendices a range of technical information and background data is provided. The remaining part of Chapter 1 will introduce some basic information on natural gas, LNG and CNG occurring upstream of the use on ships.

1.2 What is natural gas and how could it be used in shipping?

Natural gas is a fossil fuel found in sub terrain reservoirs and produced in special gas fields or in a parallel stream when also producing oil. The chemical composition of natural gas varies slightly with respect to the proportions of the lower alkanes (methane, ethane, propane, butane) and also with respect to nitrogen. The composition of both LNG and CNG will vary depending on the source of the gas, but must meet certain technical specifications, and the use in ship’s engines is governed by a number of standards and guidelines.

Using engines operating on gas are not new in shipping. In particular, the use of “boil off”, i.e. the hydrocarbon vapours generated when transporting LNG, is standard in LNG carriers and in much smaller engines CNG has been used in canal boats and other small vessels (see Section 2 and Appendix 1).

When considering how to utilise natural gas for propulsion of ships the distribution and storage are issues of concern and a short introduction to the topic as addressed in this report is given below and further detailed in appendix 1.

1.2.1 Transport of natural gas

Liquefied natural gas

LNG is transported by large LNG carriers from different parts of the World to a number of terminals in Europe to supply LNG to the storage and distribution facilities in the consumer countries and regions.

LNG may also be produced by liquefaction of pipeline gas from the gas transmission net or directly from offshore pipelines.

Compressed natural gas

CNG is typically produced locally at the storage facility or filling station by high-pressure compression of gas imported from the gas transmission net.

The transportation of CNG from offshore gas resources by vessels is under development but no projects are yet in operation^[3].

1.2.2 Liquefaction plant for LNG

LNG liquefaction plant supplied by LNG carriers

The LNG liquefaction plant considered shall be able to receive LNG from LNG carriers, store LNG and deliver LNG to be used as fuel for marine transportation.

Briefly, the LNG is pumped from the cargo tanks in the LNG carrier to the onshore LNG storage tank and boil-off vapours from the onshore LNG storage tank are displaced via the vapour return line to the LNG carrier. Alternatively, the LNG from the carrier may be directly sent to the export route to supply fuel for marine transport.

As an example of a small scale LNG terminal, information on the Nynäshamn LNG terminal (Sweden) is provided in Table 1‑1. This terminal is currently under construction.

LNG liquefaction plant supplied by pipeline gas

The LNG liquefaction plant considered can receive pipeline gas (from gas transmission net or offshore pipelines), liquefy the gas into LNG and store it as LNG. The gas would be exported as LNG to be used as fuel for marine transportation.

Some examples are available of existing LNG terminals that liquefy pipeline gas.

Tabel 1-2 summarises the information available for some of these plants and this can be used as an indication for the sizes and capacities of LNG terminals for marine transport fuel supplied with pipeline gas.

1.2.3 Description of CNG compression plant

CNG compression plant supplied by pipeline

A CNG plant is considered that shall be able to receive pipeline gas from gas transmission net (or if relevant offshore pipelines), compress the natural gas to CNG (approx. 200-250 bar), store the CNG in high-pressure (HP) containers and export the CNG to be used as fuel for marine transportation.

An example of existing CNG plants is from Kollsnes (Bergen, Norway). This plant can store 8-10 Mega m³ (Mm³) of CNG that is transported by trailer to supply industry, housing and fuel for busses (Norges Vassdrags- og Energidirektorat, 2004).

1.2.4 Liquid compressed natural gas (LCNG) facility

The LCNG plant considered is able to receive LNG from LNG carriers, store LNG and deliver either LNG or CNG to be used as fuel for marine transportation. The LCNG plant described in this section considers LNG received from LNG carriers.

The LNG is pumped from the cargo tanks in the LNG carrier to the onshore LNG storage tank and boil-off vapours from the onshore LNG storage tank are displaced via the vapour return line to the LNG carrier. Alternatively, the LNG from the carrier may be directly sent to the export route to supply fuel for marine transport.

In case of CNG export required, the LNG from the storage tanks is pumped to the re-gasification facilities where the LNG is vaporised. The outlet gas is then sent to the CNG compression facilities (including compression and cooling) and the CNG is stored in high-pressure storage facilities.

1.3 Energy Requirements for processing LNG & CNG

In general terms, the total energy losses for processing LNG from the gas well to the final consumer are estimated to be approximately 10-15% of the total gas transported (Valsgaard et al 2004, MAGALOG 2008). The processing of gas into LNG requires approximately 50 MW per Million ton per year (Mtpy)^[4] of LNG produced. These numbers are based on base load LNG liquefaction plants.

In case of liquefaction of LNG from pipeline gas, a small scale LNG plant is considered and the energy requirements may vary from 0.7 to 0.9 kWh/kg of gas (Lemmers 2009, Mustang 2008), which is equivalent to 80 - 100 MW per Mtpy of gas and depends on the composition of the gas to be liquefied.

In the case of CNG, the total energy losses from gas well to the consumer are estimated to be approximately 5-8% of the total gas transported^[5] (Valsgaard et al 2004), when considering CNG maritime transportation. When considering the processing of pipeline gas into CNG, the energy required is approximately 6 MW per Mtpy of CNG.

1.4 The biogas option

To use biogas as a substitute for fossil fuel including natural gas is part of Danish national policy. Whether biogas is transported as LNG or in the Danish natural gas network, it needs to be treated for carbon dioxide and impurities. The raw biogas, which is directly extracted from a fermentation tank comprises approx. 65% methane, 35% CO₂ and trace impurities.

The liquefaction process producing LNG will also provide the necessary purification, whereas to enter the natural gas network a purification process is needed to achieve an acceptable quality. A problem is that the suppliers of biogas occur in a less dense network. The technical challenges to use biogas in the natural gas network are not insurmountable, but because the benefits of scale are not readily achievable the cost of treating the biogas locally is still uneconomical (see Section 2 for details).

[1] The MARPOL Convention is the main international convention covering prevention of pollution of the marine environment by ships from operational or accidental causes. It is a combination of two treaties adopted in 1973 and 1978 respectively and updated by amendments of its annexes. Annex VI covers emissions to air.

[2] MAGALOG report (p. 1)

[3] No further consideration is given here to transport of CNG by sea since it is not a currently a feasible option.

[4] Million ton per year

[5] According to Asger Myken, DONG, this is a conservative estimate; the power consumption for CNG production for use in cars is 2-3%.

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Version 1.0 November 2010, © Danish Environmental Protection Agency