A transformation in US gas production could prove the basis for new export trades in ethane, according to a study published by Lloyd’s Register (LR) this week. Produced from natural gas and a by-product of the oil refining process, ethane is a vital component in the production of ethylene which is itself used to make polythene, PVC, ethylene glycol and styrene. If the LR analysis proves correct, long-haul trades from the US to Europe and Asia could prove the catalyst for a new generation of so-called VLECs – very large ethane carriers. The shale gas revolution in the US and soaring production of gas is leading to growing volumes of ethane in the US for which there is no demand and which is therefore potentially available for export. The LR analysis suggests that 200,000 barrels of ethane are currently being “rejected” in the US every day because there is insufficient domestic demand. “Rejected ethane represents a potential surplus to drive increased domestic demand or exports,” the report states. “When domestic demand is insufficient there currently is no mechanism to export the surplus to balance the market.” However, new capacity to distribute ethane domestically and to pipe it to new export terminals will come on stream in the US soon. The 50,000 b/d Mariner East pipeline, for example, is scheduled to become fully operational in the first half of 2015 and will facilitate the delivery of propane and ethane to Marcus Hook. The project is being undertaken by Sunoco and will enable ethane and other products to be processed, stored, chilled and distributed to local, regional and international markets. Ethane exports to Europe will flow through a new export terminal. Meanwhile, a new LPG export terminal also capable of exporting ethane is under development in Houston. Mostly concentrated in the Middle East and the US, global ethane production last year totalled about 2.6m tonnes, according to the LR study. But the ability to handle and process more ethane in the US and make it available for export means that volumes could more than triple in the coming years – to around 8.5m tonnes by 2020. However, most seaborne movements of ethane are shipped in relatively small liquefied ethane/ethylene carriers with...
Read MoreThe global gas supply business may have suffered a double whammy since 2008 when demand evaporated and the world’s largest consumer, the US, turned to unconventional domestic supplies in the form or shale gas, rather than imports by sea. But energy analysts are now predicting a firmer future for gas, with the International Energy Agency’s recently released report, “Are we entering a Golden Age of Gas” suggesting that recent over-supply could disappear completely by 2015. According to industry statistics the rebound has already happened in large parts of the world. Global gas consumption in 2010 rose by 7.4% year-on-year whilst growth in the Asia-Pacific region broke through 12%, according to BP’s Statistical Review of World Energy. In a recently published report, energy analyst Infield notes the turn-round in gas fortunes, and predicts that the long-term growth trend has resumed and will continue, with global gas demand likely to reach 4,300bn m3 by 2025, giving gas a likely share in the world energy mix of close to one quarter. Meanwhile, the broadening of gas sources – and the advent of new technologies including fracking and offshore floating facilities – are likely to ensure that gas prices remain competitive for the foreseeable future, according to Infield. The analyst predicts that the link between oil and gas prices is likely to become harder to sustain in the medium term, with tighter fundamentals in the oil market likely to cause a wider de-coupling between oil and gas prices in the future. The Infield report also notes growing price variations between gas markets in the Atlantic and Pacific. In fact, this growing gap has meant that plans for various new US LNG import facilities have gone on hold, and a number of LNG carriers have been diverted from long-term US gas import trades to new short-term business, taking advantage of arbitrage opportunities between the US and Asian markets. Asian demand has, of course, been fuelled by the fall-out from Japan’s Fukushima accident. Nuclear power has provided about 30% of Japan’s energy mix in recent years, but this share is likely to fall as the country seeks to diversify its energy base. Meanwhile, the Fukishima disaster has had global repercussions – Germany, for example, is...
Read MoreSo far this year France’s Sobrena, Brest has repaired a total of ten LNG tankers. The main customers have been France’s Gaz Ocean, which has placed repair contracts with Sobrena for the 74,500 m3 GDF Suez Global Energy, and the 154,500 m3 Provalys, which is currently in the shipyard, Norway’s Hoegh LNG – the 147,200 m3 Arctic Lady and the 145,000 m3 GDF Suez Cape Anne, Norway’s BW Gas – the 145,700 m3 LNG Benue and the 141,000 m3 LNG River Niger and Algeria’s SNTM Hyproc – the 129,767 m3 Bachir Chihani and the 126,130 m3 Mourad Didouche. Also repaired this year has been STASCO’s 137,500 m3 LNG Bayelsa and K Line’s 140,000 m3 Arctic Voyager. Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com The views of the Publishers do not necessarily correspond to the views of Lambos Maritime Services...
Read MoreLiquid natural gas (lng) could well become shipping’s dominant fuel within the next ten years, according to the head of DNV, Henrik Madsen, who revealed the results of the class society’s latest innovation project to journalists in London this week. DNV’s concept, Triality VLCC – powered by lng – is one of the first examples of an ocean-going merchant vessel fuelled by gas. Madsen believes the first such vessels could be ordered as soon as 2012 and delivered to owners some time in 2014. Whilst most major class societies are vigorously pursuing new technologies to improve shipping’s overall fuel consumption and emissions profile, DNV is spearheading the dash for gas propulsion which has already produced a series of gas-powered coastal craft, notably ferries working on the Norwegian coast, as well as offshore support vessels operating in the North Sea. Until now, convenience and availability of the fuel have been held up as obstacles by those resisting the developing technology. But already this is changing, with bunkering facilities available at various locations in Norway, as well as the development of other gas-bunkering facilities in the Baltic. Madsen points out that although the availability of natural gas has been limited to some extent until now, gas is increasingly widely available in various locations, notably those which dominate global VLCC trades, including the Middle East, the Far East, Europe and the US. And in any case, he says, the new DNV concept design – already discussed in outline with three major shipbuilding groups – envisages that the new VLCC will have sufficient fuel capacity on board, with lng stored in two 6,750 cubic metre tanks on deck, forward of the bridge, to enable the vessel to circumnavigate the globe, if required to do so. Marine gas oil will be used as a pilot fuel. He also highlights two other significiant developments which could prove to be important catalysts in the development of gas propulsion. Firstly, he refers to the new 200 nautical mile Emissions Control Area around the north American coast, requiring the owners of ships trading there to burn increasingly costly low-sulphur fuels. And secondly, he says, lng is already significantly cheaper than heavy fuel oil and, as more reserves come...
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