A series of significant technical innovations have helped the LNG sector evolve rapidly in recent years. Cryogenic cargo containment systems, new engines and re-liquefaction systems are the centre of an ever-changing landscape where shipowners must navigate increasingly complex operational challenges to develop the best global architecture for their LNG carriers.
While finding the right combination of these systems isn’t easy, it is essential in today’s market. For stakeholders across the LNG supply chain, flexibility and efficiency is more important than ever before.
How do you strike the appropriate balance between retaining cargo and consuming boil-off? What’s the most efficient, economical way to curate a fleet that can adapt to new operating patterns on demand?
In the early days, when ships were contracted for periods of up to 25 years, they were tailor-made for specific routes. Ship speed, voyage duration and quantity of landed cargo were pre-determined. Today, the growing appetite for tonnage whose size, propulsion systems and cargo management features provide operational flexibility reflects a broader shift towards more speculative orders backed by relatively short charters.
At Bureau Veritas, this demand for flexibility is where our experts focus a lot of their time these days, helping clients find the right solutions for complex challenges while addressing the related safety, regulatory and risk aspects associated with the sector’s transformation.
Containment systems commonly used for large LNG carriers, such as GTT Membrane and Moss type B systems, have evolved significantly. The boil-off rate guaranteed by the developers of these systems has been reduced by half, from values typically in the range of 0.15% of the tank volume per day in laden condition, to values as low as 0.07%. GTT has also adapted its membrane technologies for applications such as FSRUs, which have specific needs in terms of sloshing reinforcement.
New technologies able to use boil-off gas as fuel, such as dual-fuel and gas-only engines, were developed in the early 2000s and implemented for the first time in LNG carriers when the first ship with dual-fuel diesel-electric propulsion, the 74,130-cbm GDF Suez Global Energy, was delivered by what was then France's Chantiers de l’Atlantique yard in 2006.
More recently, 2-stroke engines, both high and low pressure gas injection, have become the preferred option, with installation of the first MAN B&W ME-GI engines on the 173,400-cbm Creole Spirit (built 2016), and the first Winterthur Gas & Diesel X-DF engines on the 180,000-cbm SK Audaceeighteen months later. These new dual-fuel engines also allow different fuels to be used, offering additional flexibility in terms of fuel cost optimisation.
Re-liquefaction equipment has been widely used in LPG and LEG carriers, but the technology is more complex when charterers and owners want to be able to re-liquefy LNG boil-off gas. This demand for fuel flexibility has driven leading companies such as Wartsila, Cryostar, Air Liquide and Babcock to develop a second wave of re-liquefaction systems, which are being installed in many of the new LNG carrier projects today.
The question of boil-off
The ideal LNG carrier is designed not to waste gas. This means the total system is designed to avoid producing either too much boil-off or too little.
If the boil-off rate is higher than required by the ship then there are two options: either re-liquefy with a reliquefaction plant or burn the excess in a gas combustion unit (GCU).
Nearly all LNG carriers are designed to burn their own cargo to power their engines and meet auxiliary power requirements. This fuel is the ‘boil-off’ gas from cargo containment systems (CCSs). The gas, liquefied by cooling to –163 degrees Celsius, is constantly trying to re-gasify. The rate at which it does so is known as the boil-off rate (BOR). CCSs, which tend to be the efficient membrane-type these days, are designed to minimise BOR to maximise deliverable cargo. Some boil-off is needed for propulsion, however, so finding the right balance between fuel consumption and production of boil-off for fuel is vital.
If the boil-off rate is too low then either boil-off must be forced to produce fuel for the ship or fuel oil must be used as an alternative.
Traditionally, this balance relies on a known speed and distance for the laden leg. Today, with shorter charters becoming the norm–or even spot trading– there is demand for ships that can operate efficiently with different operating criteria.
As TradeWinds reported, in late July brokers were quoting one-year charter rates at levels in the low $40,000-per-day range for steam-turbine vessels, in the mid-$80,0000-per-day range for tri-fuel diesel-electric ships and into the high $90,000-per-day range for gas-injection LNG carriers.
These rates illustrate the commercial implications of technical decisions that are increasingly important to the bottom line of shipowners and charterers operating in a sector where flexibility and efficiency are now at the fore.