A Guideline for a Feasibility

Study for the Development of a

Domestic Gas Market Using an
FSRU-based LNG Import Facility
Developing Kenya's LNG and Natural
Gas Industrial Hub

October 2017
A Consolidated Concept -“PPP”
Natural Gas Value-Add Options
Presentation Outline
Introduction……………………………………………………….. 5
LNG Market Outlook…………………………………………….. 19
LNG Pricing………………………………………………………… 31
LNG Import Project Development…………………………….. 37
LNG Import Commercial Structures…………………………. 42
LNG Project Financing Structures …………………………… 52
LNG FSRU Design Options…………………………………….. 61
LNG Project Risk and Management………………………….. 82
FSRU Economics…………………………………………………. 98
Legislative and Regulatory Requirements in LNG FRSU
Projects………………………………………………………………100
Environmental Health and Safety Guidelines in LNG
FRSU Projects…………………………………………………….. 117
Emerging Cost-Saving Technologies………………………… 157
FRSU Project Local Content Opportunities…………………189
FSRU LNG Import Optimization……………………………….229
Introduction
Natural Gas to Liquids Conversion

Natural gas is gaseous form of

petroleum mostly consisting of
methane (C1), some ethane(C2),
propane (C3), butanes (C4),
pentanes (C5), hexanes (C6) and
C7+.

The Gas-to-Liquids refining using

the Fischer Tropsch process converts
natural gas or other gaseous
hydrocarbons into longer chain
hydrocarbons such as gasoline or
diesel.
Methods

• Compress the gas at temperatures less than its critical temperature.

• Make the gas do work against an external force, causing the gas to
lose energy and change to a liquid state ( a cryogenic liquid).

• Make gas do work against its own internal forces, causing it to lose
energy and liquefy (liquefaction process achieved by lowering
temperature thus squeezing molecules together forming a cryogenic
liquid.

• Cascade process - use one liquefied gas to liquefy another.

• Joule-Thomson effect - compress and then rapidly expand the gas.

Liquefaction Temperatures

• Cryogenic LNG (−160℃) has a

potential for cryogenic energy
recovery of some 240 kWh per ton
of LNG if 100% recovery is
achieved.

• Recovering cryogenic energy as

motive power during regasification
is highly important from an energy-
saving point of view.

See:
https://www.osakagas.co.jp/en/rd/index.h
tml
Liquid Natural Gas (LNG)
• Cooled until it Liquefies @ -160°C

• Reduces volume 600 times

• Colorless, Odorless and Non-Toxic

• Safe to transport and store

• Shipped and Stored at Atmospheric Pressure

LNG Chain

Transmission
Gas Well Pipeline Shipping

Market

Field Liquefaction
Processing Receiving
Terminal
 LNG Process Chain

• In chronological order lifespan of process chain commencing from a natural gas

discovery , processing to remove undesirable impurities such as hydrogen
sulphides and carbon dioxide, transport to storage and liquefaction and then
shipment and the last phase regasification back to natural gas for utilization
LNG Import Value Chain Using FSRU

A Floating Storage Regasification Unit (FSRU) is the vital component in

the LNG value chain and is a type of vessel which is used for LNG
transfer and that stores and regasifies the LNG back to Natural Gas
Main Functions of an LNG Terminal

LNG CARRIER STORAGE REGASIFICATION SEND OUT

UNLOADING (TANKAGE) (ONSHORE
FACILITY)

VAPORIZATION METERING

LNG LNG NG

GRID

When designing a LNG receiving terminal, the basic main functions are:
• Unloading of LNG carriers
• Storage of LNG in tanks
• Onshore regasification
• Send-out of gas and/or natural gas (NG) to the consumers
Main Functions of a FSRU based
LNG Facility

When designing a LNG receiving terminal, the basic main functions are:
• Unloading of LNG carriers
• Storage and regasification in FSRU
• Send-out of gas and/or natural gas (NG) to the consumers
 Natural Gas Liquefaction Process
-161ºC
GAS GAS
Treatment
and
Purification

Storage

TANKER
• Removes
condensate, CO2,
Mercury, and H2S Refrigerant
Loop
• Causes dehydration

LNG

Compression
Environmental Advantages
• Virtually no ash, sludge or hazardous waste is produced.

• Particulate emissions are approximately 95% less than

burning coal.

• Over Coal, Distillate and Naphtha LNG has lower:

o Sulfur dioxide emissions (by 100%)
o Nitrogen Oxide emissions (by 75%)
o Carbon Dioxide emissions (by 50%)
Natural Gas Conversion
LNG Conversion
LNG Market Outlook
 Global LNG Demand/Supply Projections
• Overall LNG global supply growth is expected outpace
demand until 2023. Thereafter more capacity will be
needed to meet rising global LNG demand.

• Demand for liquefied natural gas (LNG) in 2016 kept

pace with a planned strong increase in new supplies;
with greater than expected growth in demand from Asia
and the Middle East absorbing the rise in supply from
Australia.

• In Asia an overall LNG demand growth driven by

Western Asia (India, Pakistan and Bangladesh) and
Southeast Asia (particularly Indonesia, Thailand and
Singapore) demand. In Japan, Korea, Taiwan (JKT)
demand overall remains flat as LNG looks set to lose
share in power generation due to increasing coal nuclear
and renewables capacity.

• By 2020, the size of global LNG trade is projected to

grow by 50% compared to volumes in 2014.

• Global demand for gas is expected to increase by 2% a

year upto 2030; LNG is set to rise at twice that rate at 4
to 5%.

• Future LNG demand growth will be driven by: policy,

Japan continues to be the world’s largest importer of LNG.
floating storage regasification units (FSRU’s), replacing
declining domestic gas production, small scale LNG and
transport in LNG trade is changing to meet the evolving
needs of buyers, including shorter-term and lower-
volume contracts.
 Global LNG Outlook
• Over the next two decades, as more countries have
existing infrastructure with an import terminal or FSRU,
LNG will increasingly be used when there are shortages
Global demand for gas is expected to in domestic energy supply.
increase by 86% from 258 Mmtpa in 2016
to 479 Mmtpa in 2030. • Growth is expected in both marine as well as road
transport, with LNG as a lower emissions alternative to
diesel and heavy fuel oil because LNG as a fuel contains
virtually zero sulphur versus 3.5% specification for
2030 global marine fuel.
4%
annual • The USA is expected to continue to consume more gas
growth than any other country. Russia is set to stay second,
with 2016 gas demand estimated to be 440 bcm. China’s
gas demand is expected to increase significantly,
reaching 450 bcm by 2030, up from around 200 bcm in
2016. This will be met by a mix of conventional and
unconventional domestic production as well as pipeline
and LNG imports (The Chinese government has set a
target for gas to make up 15% of the country’s energy mix
by 2030 which may result in an increase of more than
20% in total global LNG demand) by 2030.

• The outlook of LNG demand in Europe remains uncertain

2016 due to environmental policies, domestic gas production
and pipeline gas imports.

• Southeast Asia, countries such as Malaysia and Indonesia

are among the major LNG exporters in the world. But by
2035, the region is set to become a net importer. The rise
in demand is driven by economic growth in the region
coupled with declining domestic gas supplies in countries
such as Thailand.
 LNG Powered Vessels and Vehicles
Growth in LNG is expected in both marine as well as road transport,

• Compressed natural gas (CNG) vehicles work

much like gasoline-powered vehicles with
In 2019, your Volkswagen could arrive in spark-ignited internal combustion engine.
an LNG-powered vehicle carrier ship
• The natural gas is stored in a fuel tank, or
cylinder, typically at the back of the vehicle.

• A CNG fuel system transfers high-pressure

natural gas from the fuel tank to the engine.

• The pressure is then reduced to a level

compatible with the engine fuel management
system.
Global LNG Outlook

Supply/Demand
Equilibrium

Insufficient
Supply
 Growth in Gas Imports

Sharp increase in shipment demand from 2020

Africa

• Leading to 2020 the IEA projects inter-regional gas trade will expand by 40%
surpassing 780 bcm.

• LNG will account for 65% of the increase being mainly in Europe, China and
Asia. New shipment will begin to enter the Africa market for power projects.

• Distribution by pipeline is expected to remain relatively unchanged with the

dominance of LNG shipments.
 Projected Trends in Demand

F
S
R
U

• Beyond 2020 the growth in demand will shift to new emerging markets. Of this growth, most of the recent
entrants will utilize FSRU solutions because they allow LNG to be imported quicker and more cheaply than
using a land based LNG import terminal.

• The future outlook for FSRU vessels (tanker conversions and/or purpose built) from VLCC) is therefore
promising. Energy Maritime Associates forecasts the fleet could grow by an additional 4–5 units per year
through to at least 2020. (According to Excellerate, a speculative FSRU new build priced at $250-300 million USD
may be too high for half the anticipated projects).

• As of 2016 there were 21 FSRUs in operation with six more under construction and 32 under feasibility studies.

• Some of the emerging LNG buyers are expected to face challenges with credit ratings than traditional buyers un
financing imports.
Opportunity for LNG to Power Projects in
Africa
• The current energy mix in sub-Saharan
Africa is dominated by bioenergy, with
fuelwood / charcoal accounting for 60%.
Then, is coal at 18%, oil at 15%, natural
gas at 4%, and renewables at 2%.

• Demand for biomass (mostly fuelwood) is

expected to increase by 40% by 2040,
putting a great strain on forests.

• 950 million people are expected to gain

access to electricity by 2040.

• Natural gas consumption is expected to

quadruple by 2040, with gas-fired
generation increasing to 25%, (Gas is
expected to account for 50% of the
generation mix in West Africa by 2040
driven by reforms in Nigeria which has
the 9th largest proven natural gas reserves
in the world).

• Sub-Saharan economies are expected to

quadruple in size by 2040, With energy
demand growing by around 80% and
population increasing to 1.75 billion.
 Global Price Changes

A sharp fall in prices in 2016 from 2013 landed prices

Global LNG production experienced an 8.9% increase between 2015 and 2016
 Long-Term Price Scenario in Asia

USD2.5/MMbtu

If oil prices stay close to the current futures, spot LNG prices should stay close to
$6/MMBtu until mid 2020s, (the average differential between Asian LNG spot prices
and U.S. prices was just US$2.5/MMbtu which could be maintained)
 Methods of Sourcing LNG

LNG can be sourced by any of the following means:

• Gaining interests in a specific gas field,

• Establishing a long-term contract with a party that has interests in the field,

• On the spot deal,

• Purchasing through the source from more than one gas field/regions through a portfolio supplier.

Singapore and other countries source LNG from more than one gas field/region through a portfolio supplier. The
buyer can hedge to the portfolio supplier the risks involved in obtaining the amount of gas needed. The buying
price may be higher than that offered through a long-term contract with a specific gas field/country, because this
particular mode of business takes the risks of sourcing LNG, whereas this strategy allows the purchaser to
arrange the volume of purchase more flexibly than they can through a long-term contract, when the buyer is not
certain about his requirement in quantity.

If LNG is purchased through a portfolio supplier, gas purchased through long-term agreements that the portfolio
supplier has already established, and gas purchased through short-term and spot agreements are consolidated
for sale.
 Pipeline and LNG Carrier Transport
Costs Compared

= 3$Mmbtu

= 1.5$Mmbtu Over 2500 miles LNGC

more cost effective

• Evidently for short naval transport distances below 2500 miles (4023.4 km) or below 1000
miles (1609.3 km), it is more cost efficient to have either an onshore or a offshore pipeline
respectively, because LNG is expensive due to the requirement of maintaining cryogenic
temperature

• Pipeline transportation is the most cost efficient for distances below 2500 miles, for these
pipelines to be profitable gas volumes must be large.

• These comparative LNG transportation costs profiles provide credence to the proposal of
constructing a pipeline network for gas distribution along the East Africa coast.
LNG Pricing
LNG Regional Pricing Indices
Instead of being priced relative to oil LNG pricing is priced based on a variety of
established and emerging global reference prices generally referred to as "gas-on-gas"
pricing which is a measure of the relative supply and demand in natural gas markets,
quite independently of whether the oil market is in balance or not.

As opposed to crude oil, LNG does not feature a harmonized global price. In contracts,
the price of LNG is segmented into regional markets, the main ones being:

• Asian market (Japan, Korea, and China) with the Japan Customs Cleared Crude
(JCC) price index or Japanese Crude Cocktail.

o This is the average price of custom-cleared crude oil imports into Japan as
reported in customs statistics by the Ministry of Finance; nicknamed the
Japanese Crude Cocktail. As an example, a pricing formula may be "LNG price =
JCC x 0.135" where JCC is further defined as the previous three monthly
averages of JCC priced in yen and converted into US dollars.

o The JCC has been adopted as the oil price index in LNG long-term contracts
with Japan, Korea and Taiwan.

o Gas pricing in China and India is also linked to crude oil prices but at a discount
to Korea and Japan because of having other sources of Natural Gas
complementing LNG.

o Attempts are being made to establish a pricing index for the Asia-Pacific market,
(which accounts for about 70% of consumption) including the so-called JKM
index (Japan-Korea-Marker) and also the Singapore Gas Exchange (SGX) spot
price index known as SLiNG, which is intended to represent an exchange-traded
futures market for LNG based on gas being traded at or around the Singapore
LNG facilities.
LNG Regional Pricing Indices
• European market with the National Balancing Point Price index
o The National Balancing Point (NBP), is a virtual trading location for the sale and
purchase and exchange of UK natural gas.

o In UK 60% of the gas is sold at the National Balancing Point (NBP) price and the rest at
an oil index price based on old long-term contracts. The oil-indexed and hub-priced
contracts co-exist.

o On the European oil-indexed contracts based mainly on take-or-pay basis dominate,

with hardly any hub-priced long-term contracts.

o Dutch Title Transfer Facility (TTF) has now become an equally dependable
mechanism for long-term pricing, though Southern Europe is still transitioning to a
mechanism of gas-on-gas pricing, as new hubs start to emerge.

• North American market with the Henry Hub price index.

o A distribution hub in South Louisiana which lends its name to the pricing point for
traded natural gas futures contracts.

• Africa
As an increasing number of African countries are considering moving to LNG imports, or
establishing relatively smaller scale projects a regional pricing mechanism for the
continent or different parts of the continents is yet to be established
Coal Indexation has been used for Nigeria LNG contracts to Italy - This parameter may become more
common if clean coal technologies are used to satisfy incremental baseload electricity demand, or if
electricity generators come under increased pressure to reduce carbon emissions under the Kyoto protocol.
Oil Indexed Price Formula
Approximately 70% of world LNG trade is priced using a competing fuels index, generally
based on crude oil or fuel oil, and referred to as “oil price indexation” or “oil-linked
pricing”. The rationale for oil-linked pricing was that the price of gas should be set at the
level of the price of the best alternative to gas (to avoid competition in the generation of
power while setting a market price). Historically, the best alternative was heavy fuel oil,
crude oil or gas oil. The formula used in most of the Asia LNG contracts is expressed by:

P=αxP+β

Where:

P = price of LNG in US$/MMBtu (US$/GJ x 1.055)

α = crude linkage slope

P = price of crude oil in US$/barrel

β = constant in US $MMBtu (US$GJ x 1.055)

S&P Global Platts Spot Market LNG Pricing
Whilst Pricing LNG as a commodity has traditionally been sold under closed, long-term contracts A surge in
new supply from diverse sources, the entrance of a variety of new market participants and shifting demand
patterns have driven the development of spot trade. Cargoes initially sold under long-term contracts now move
into the spot market, where buyers and sellers seek to achieve the best possible value for each cargo.

Consistent and respected LNG spot price information supports critical decision-making about cargo trade,
arbitrage between regions, storing or transporting natural gas to markets; investment in infrastructure
projects, optimal production rates, processing margins and consumption levels. Platts spot prices also facilitate
hedging, transfer pricing, differential pricing and taxation.

Platts uses the following approach for LNG price assessments :

Frequency: Assessments are published each business day and reflect market values prevailing
at the close of markets in the respective region (Singapore/UK/US). On certain days
ahead of a public holiday, such as Christmas Eve or New Year’s Eve, Platts may
assess the market earlier than normal. This would typically be 12:30pm in Singapore
and 12:00pm in London.

Unit: All prices are quoted in US dollars per million British Thermal Units ($/MMBtu) to
three decimal places. ICE NBP futures in pence per therm are converted to
$/MMBtu using a US$/GBP exchange rate assessed at market close. Prices at
European gas hubs in Euros per megawatt hour are converted to $/MMBtu using a
US$/Eur exchange rate assessed at market close.

Quality: Price assessments reflect lean and rich gas. Deviations in price resulting from
extreme quality may be normalized to a medium-range grade.

Volume: Standard cargoes of 135,000-175,000 cu m. Larger Qatari Q-Flex (210,000 cu m)

and Q-Max (260,000 cu m) carriers will not be assessed directly, though they may
be normalized to the standard volume.

Timing: Platts assesses LNG markets in half-month cycles forward

* NBP=National Balancing Point (index used for UK Natural Gas)
S&P Global Platts Spot Market LNG Pricing
Spot Market Prices and Shipping Rates

Yet to evolve

DES=Delivery Ex-Ship
Shipping costs do not always correlate with gas prices and depend on individual interests in gas and market .

Spot prices:
For prompt or deferred cargoes delivered on any day during the assessed half-months of trading are normalized to
the median point of the assessment time frame for each market, by taking into account forward market structure.
This market structure is assessed using analysis of fundamental conditions of supply and demand, and using
observed bid, offer and trading price levels. Depending on market conditions, however, prices for very prompt
cargoes for delivery less than one month from the date of transaction may be deemed distressed, and not taken
into consideration for assessment.
Netback assessments:
For all netback and net forward assessments, Platts publishes a single value reflecting the implied price of a cargo
at market close using freight cost formulae which employ standard Platts freight route costs assumptions and a
relevant journey time to a base price point. This is done for different regions within both the Pacific Basin and
Atlantic Basins and based on port of loading and journey/voyage of vessel to point of offloading which is the base
price point.
See: www.platts.com and http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/lngmethodology.pdf
LNG Import Project
Development
LNG Import Considerations
Import Demand Assessment:
• An assessment is conducted of the prospective supply and demand for the target natural
gas market.

Economic Assessment:
• It is also important for the customer to perform a comparative economic assessment of the
LNG with that of an alternative fuel (e.g. replacement of diesel in power generation)

Land Based vs. Floating Infrastructure:

• In the past, regasification terminals have been exclusively land-based. However, recent
developments in marine LNG technology now offer a range of floating regasification facilities
which are currently finding favor, especially for small-to-medium scale regasification
demand.

• Floating Storage Regasification and Power Generation (FSRP),which encompasses a total

gas to power solution typically offers lower cost, more flexible financing, and greater
optionality.

Determination of Size:
• LNG storage and regasification units could have lengths of 100m-300m with storage
capacities on the order of 20,000 -263,000 m3. The gas send-out volumes typically vary
from 50 MMscfd to about 750 MMscfd and the associated tariffs usually decrease with
increasing send-out volumes. Additional storage could be provided in the form of a floating
storage unit (FSU).
Key Considerations in an FSRU
Location Selection:
• The choice of berthing location for the FSRU and the LNG tankers is driven by the location
of the targeted market, the meteorological conditions at the port of interest and the
availability of local offtake infrastructure including pipelines.

Selection of Type of Facility:

• Delivered cost of the gas would be affected by the choice of technology employed for the
reception and handling of the LNG cargo. FSRU’s could be moored close to the port with a
jetty and breakwater (if required) or moored in the open sea, typically about 15-20 km
offshore, with an associated marine pipeline to bring the regasified LNG to shore.

Tariff:
• The FSRU in a tolling commercial structure, which is generally built and owned by an
independent third party, normally charges a tariff for the regasification service based on
contract volume (e.g. GOL Bumi Armada Sdn. of Malaysia)

Gas Price:
• Ultimately, the final delivered gas price to the end-user under a tolling commercial structure
would be the sum of the LNG price (ex-ship) plus the FSRU tariff plus the cost of transport
and handling facilities to the battery limit of the end-user (e.g., a power plant). (For example,
if the LNG price is $6.00/MMBtu, and the FSRU tariff is $1.50/MMBtu and the transmission
tariff is $0.20/MMBtu, then the total delivered gas price is $7.70/MMBtu. For LNG to be
competitive, the total delivered price must be less than the alternative fuel price).

Note: FSRU, having tank capacities of 130,000 to 150,000 m3 have been mostly in use, while the
173,000 m3 capacity tanks have become a standard size that has been ordered frequently in recent
years.
 FSRU Project Development Phases
high-level supply/demand, economic feasibility, and
Project Pre-FEED/Project project structuring alternatives (to include labor
Identification Definition requirements and lead curves for their development)

Detailed design of the facilities to be installed,

FEED and to develop a FEED package suitable for
Project Design
competitive tendering for the EPC

o 12 – 18 months

The EPC contractor is selected based on

Project EPC Bidding technical and financial assessments and
Contracting awarded after various agreements are in place
o Project Financing
o LNG Sales Agreement
o Gas Sales Agreements

Project Equipment procurement and construction

Construction EPC work for the terminal and the associated
pipeline facilities is undertaken
o 2-3 years shorter period if FSRU is ready
and available for lease

Project Start of operations

Commissioning
Completion/Operations
Complete LNG Import Facility Project Phases
The LNG Import terminal using FSRU consists of the following phases:
1. Screening
2. Feasibility
a. Technical
b. Financial
3. Preparation
a. Permitting
b. Site options
c. Investments
d. Tariff regulations
4. EPC Tender
5. Basic Design
6. EPC (Engineering/Procurements/Construction)
7. Pre-Commissioning
8. Commissioning
9. Operation
LNG Import Commercial
Structures
 LNG Import Tolling Commercial Structure
LNG Terminal Company only offers regasification services

Variable regasification Fixed monthly tariff

service payments payments

Examples of import project tolling

structure include: Sabine Pass, Freeport,
Cameron and Cove Point LNG import
projects in the US, the UK's South Hook
LNG import project, and Italy's Adriatic
LNG import project. SPA”s=Sale & Purchase Agreements

• Under the LNG import tolling commercial structure, the user or users of the LNG import terminal
are different entities than the owner of the LNG import terminal. The LNG terminal company
provides regasification services without taking title to the NG or LNG under one or more
long-term terminal use agreements. The LNG terminal company revenues are derived from tariff
payments paid by the terminal users, which typically take the form of a two-part tariff:

o Fixed monthly payments cover the LNG terminal company's debt service, return of and on
equity, and fixed operation and maintenance costs.

o Variable regasification service payments to cover variable operation, maintenance and other
costs, such as power costs.
LNG Import Merchant Commercial Structure
LNG import project company purchases and regasifies LNG
Ideal for
a Kenya
“gas hub”
LNG Import Project
Company

Revenue =
LNG cost +
regas.
costs
(+debt
service)
Merchant structure examples include:
the US Everett Massachusetts LNG, India's
Petronet Dahej and Kochi LNG and Shell's
Hazira LNG import project in India
Other users
• Under the LNG import merchant commercial or “gas hub” structure, the LNG supplier and the NG
marketing or distribution company are different entities than the owner of the LNG import terminal.
• The LNG import project company (which also regasifies the LNG either at an onshore or FSRU
facility) purchases LNG from the LNG supplier under a long-term LNG sale and purchase agreement,
and sells regasified LNG to the NG marketing or distribution company, or directly to a power
station, under a long-term NG sale and purchase agreement.
• The LNG import project revenues/profits are derived from the amount by which the revenues from
natural gas sales exceed the sum of the cost of LNG and the regasification costs (including debt
service). (Since the LNG supplier is a different entity than the owner of the LNG import project, there may be more
than one supplier of LNG to the LNG import project company, and because the NG marketing or distribution company
is a different entity than the owner of the LNG import terminal, there may be more than one purchaser of natural gas
from the LNG import project company).
• The credit of both the LNG supplier or suppliers and the natural gas purchaser or purchasers provides
the financial underpinning for the LNG import project.
 LNG Integrated Commercial Structure
LNG terminal company supplies LNG, owns terminal regasification services and NG
marketing and distribution (or power production)

Upstream

• Under the LNG import integrated commercial structure, the owner of the LNG import facilities is also
either the LNG supplier or the natural gas marketing or distribution company (or perhaps a power
producer).
• The project development for this structure is similar to the Merchant Structure, except that the terminal
is owned by an entity that undertakes a wider role in the LNG chain; e.g. a gas distribution company
(Tokyo Gas) or a power plant (TEPCO) or the LNG export company (e.g. RasGas for the Adriatic LNG
Terminal, Andhra Pradesh Gas Distribution Corporation Limited (APGDC)).
• The ultimate commodity sold may be the product of the company; thus gas, power or steel, as in the case
of Tokyo Gas, TEPCO or Pohang Iron and Steel Company (Posco), respectively.
• The project revenues for both commercial functions are integrated into one entity such that there is no
need for an LNG SPA for delivery at the terminal with respect to integrated structures that combine the
LNG supply and import terminal functions. There is no need for a natural gas sale and purchase
agreement for delivery at the tailgate of the terminal due to integration of the import terminal, NG
marketing and distribution functions and perhaps power distribution.
LNG Integrated Commercial Structure
LNG terminal company procures LNG offers terminal regasification services and NG
marketing and distribution (or power producer)

Downstream

Model probably
being considered
for Kenya ???

The difference of the downstream sub-structure from the upstream sub-structure is that the Terminal
Company procures LNG through a SPA and does the marketing and distribution of NG or utilizes it for
power production or other purposes. Since the NG distribution or marketing company is the same entity as
the owner of the LNG import terminal, there is typically no other user of the LNG import terminal (Note:
This does not optimize the possible multiple uses of gas).

Note:
Hybrid structures combining some of the attributes of tolling, merchant, and integrated models may be
used to tailor LNG import projects to the characteristics and needs of particular host governments and
project participants. For example, hybrid merchant-tolling structures may be used to allow the LNG import
project company to take title to the LNG and sell natural gas, but receive fixed monthly reservation charges
regardless of whether their customers utilize regasification services and actually import LNG.
Comparison of Commercial Structures

Structure would appear

ideal for Kenya in terms
of optimizing use of
regasification facility
(FSRU) by supplying
multiple-users for the
natural gas other than
power generation alone
Driving Factors in Choice of Structure

Legal
Regime and
Efficient Taxes
Use of Governance
Facilities

Flexibility Operational
in Efficiencies
Ownership

Desire for LNG and

Limited NG Transfer
Financing Pricing
Regulations
Driving Factors in Choice of Structure
There are a number of key driving factors that influence the choice of an LNG import
project structure for the host government, the investors, the natural gas buyer(s), the
project lenders and the other project stakeholders. Some of these key driving factors
include:

Legal regime and taxes

• The host country legal regime and local taxes often have a major impact on project
structure. An LNG import project may fall under different legal regimes in the host
country, depending on whether it is integrated with LNG supply or gas distribution
functions, acts as a merchant, or acts solely as a terminal owner and operator, e.g.
general corporate regime, special mid-stream regime or downstream regime. Additionally,
the tax rates may differ for LNG importing, terminal operation, and natural gas marketing
and distribution.

Governance

• The government, local stakeholders, lenders and the LNG buyers may desire to have more
of a direct say in the internal governance and decision making in one import function
than another import function. This needs to be reflected in the structure selected. A
poorly governed structure in any of the LNG supply, terminal ownership and operation, or
natural gas distribution components of the LNG import chain can lead to conflicts among
the parties and impact the efficiency and reliability of the LNG import project.
Driving Factors in Choice of Structure
Efficient use of project facilities:

• The LNG import project structure should encourage efficient use of all project facilities
and activities by the project owners and by third parties. In determining the optimal
project structure for LNG imports, consideration should be given to the costs and
benefits of sharing common facilities, open access to third parties for spare
capacity, and reduction of unnecessary facilities and their related costs.

• Flexibility in Ownership: There may be a desire by the government, other local

stakeholders, LNG buyers, or lenders (e.g. IFC) to have a direct ownership interest in all
or specified portions of the LNG import chain. Alternately, some of the participants in the
commodity chain may not be interested in owning an interest in the LNG terminal
company. The choice of a particular structure can enable different levels of
ownership in companies performing different components of the LNG import chain
(i.e. regasification, gas marketing and distribution , power generation etc.).

Desire for Limited Recourse Financing:

• In general, the cost and complexity of project finance are reduced when the functions
and risks of the project company borrower are reduced. Consequently, utilizing an LNG
import project tolling structure should facilitate project financing by shifting commodity
merchant functions and risks away from the terminal company (unlike in the merchant
commercial structure).
Driving Factors in Choice of Structure
Operational Efficiencies:

• The integrated structure offers operational efficiencies because only one operator is
involved in construction, operating and scheduling activities. The operational
inefficiencies of having two operators may be overcome through transparency and
coordination between the operators. In addition, separate projects can lead to project-on-
project risk i.e. where one project is ready before the other or a default relating to one
project jeopardizes another project.

Regulations:
• The choice of project structure will affect the required regulations.

LNG and Gas transfer prices:

• The LNG transfer price is the price of LNG sold by the LNG supplier or suppliers to the
terminal company in a merchant structure. The natural gas transfer price is the price of
natural gas sold by the terminal company to the natural gas buyer or buyers in a
merchant structure. These are often contentious commercial points. In addition, each
segment of the gas value chain may fall under a different tax regime such that the prices
may need to comply with an arm’s length standard to comply with tax transfer pricing
laws and regulations.
LNG Project Financing
Structures
 Integrated Structure Financing Arrangements
LNG to Power Projects See Cote d’Ivoire Model

• In the integrated model a single project company purchases LNG, owns/hires and
operates both the FSRU and the power plant, and sells power to the power off-takers
(typically a state-owned utility).

• The project sponsors would then seek finance for the entire project through debt
(Financiers) and equity (Shareholders) .
 Gas Hub Structure Financing Arrangements
LNG to Power Projects

Ideal for
a Kenya
“gas hub”

Pressure on the Power Purchase

Multiple cargoes, both spot and long-term,
will deliver to the terminal which reduces
both the risk and the impact of non-delivery
for force majeure or diversion/market
arbitrage.
Agreements is reduced since the capex
portion of the power price related to the
hub is amortized over a number of gas
sales/throughput agreements. the range
of end users for the gas (e.g. power,
industrial, domestic users) is diversified

FSRU would typically not be purchased outright, but would be chartered or otherwise provided by
a third party (and hence financed independently or possibly purchased and financed as part of the
wider gas hub financing).
• In the “Gas Hub” model the project is split into two parts that are financed separately:
i. The LNG import project
ii. The power project.

• The scope for third parties to have access to the LNG facilities, either for regulatory requirements or for
commercial reasons where regasified LNG is to be provided to other gas customers rather than exclusively for
the power plant (and thereby providing multiple independent revenue streams to underpin the “hub” financing
(as well as multiple suppliers mitigating supply and demand risks). Thus, revenues are from regasification
services and gas sales - in this structure ideal to have a single party acts as an “aggregator” at the LNG
terminal
Financing FSRU’s
The funding methods used by the select group of FSRU providers are diverse. Shipping

companies have managed to attract funding from various sources or their combination;

• Banks in the form of loans,

• Loans and political/commercial risk insurance cover from export credit agencies (ECAs),

• Retail and professional investors who have bought the company's shares or bonds.

• Project finance of SPV’s supported by a bank and export credit agency (ECA) for the FSRU
and the revenue is paid back from proceeds of its charter, or provided directly to the
company in a corporate finance transaction (Project finance is a financing scheme in which
repayments are made solely from cash flows generated by the project and secured only on
the project assets).

• Bonds have also emerged as instruments of raising debt capital to finance LNG import
projects (including sukuk bonds in Islamic Project Financing).

• Some of the shipping companies have master limited partnerships (MLPs), which are a US
tax-advantaged structure with partnership units traded on US stock exchanges. FSRUs can
be placed into the MLPs. As FSRUs are often manufactured in Korea shipyards, Korea
export credit agency funding, from KEXIM and K-SURE, is widely utilized. Increasingly,
Chinese financiers are providing funding, often through lease or sale and leaseback
transactions through entities such as China Merchants Bank Leasing (Golar LNG received
an underwritten financing commitment in October 2015 of up to $216 million for the
newbuild FSRU Golar Tundra from China Merchants Bank Leasing. Lease is for 5 years
with option for a 5 year extension).
 Financing FSRU’s
• For FSRUs, different financing considerations may apply because they are typically chartered
to the importing entity from a shipping company and the shipping company will raise the
financing This has the advantage of reducing upfront project expenditure.

• FSRU charters are typically not less than five years and are often renewed after that initial
period which makes it easier to arrange long-term financing. Charters could be as much as
USD130,000/day to USD165,000/day (including operating costs)

• Some companies that offer FSRU units for charter include:

o Excelerate Energy, Texas, USA

o Golar LNG, Norway (has starterd a subsidiary called Golar Power that now invests in power
generation)

o Hoegh LNG, Norway

o Exmar, Belgium

o BW Gas Singapore

o MOL (Mitsui O.S.K Lines), Tokyo, Japan

o Gazprom which had one unit on order in 2016), others are looking to break into the sector.

Some companies may opt to take an equity participation in an integrated project Golar LNG has
recently announced that it is in talks with Brazilian power partners to provide a FSRU to fuel a
1.5GW combined cycle power station in Sergipe (Northern Brazil). Golar will participate in up to
25% of the power project, making an equity investment in the project . Golar has taken the same
approach by acquiring a 6% interest in the Songon gas-to-power project in Cote d Ivoire.
Summary of Funding Sources and
Combinations for LNG Projects with Examples

LNG projects raise funding from a variety of private and public funding sources as
illustrated in the chart showing the different number of funding combinations
Financing LNG-to-Power Projects
The LNG-to-power sector, where LNG import projects are typically based on FSRUs
coupled with power generation facilities, is creating considerable interest in Africa.

Independent power projects have a long history of successfully attracting funds using
project finance structures. This implies that LNG off-take is guaranteed by the
government, a government entity or a creditworthy power utility company and their
steady earnings over long periods – power purchase agreements can span out beyond
20 years – allowing for debt servicing over long payback horizons.

• A single project entity could develop the power and gas operations and raise funding
as one entity.
• Separate project entities could develop the power and gas facilities (terminal), and the
gas could be bought from the LNG suppliers and regasified via a tolling contract
structure (FSRU lease). Funding can be raised in any of the following ways:

o Power utility company borrows funds for the plant (or modification to replace fuel
with gas ) and Terminal company for the storage and distribution facility
separately .
o Single financing with the Terminal Company and Power Company taking the
borrowers’ role together.

o Existing power utility company buys gas directly from supplier and regasifies it at
the terminal owned by a different entity and each seek financing separately.
Some Financing and Credit Re-payment
Considerations
LNG to Power Projects
• Sponsors want to structure their projects to minimize the extent of sponsor financial
support, so depending upon the jurisdiction in question, the level of government financial
support (or other form of partial risk guarantee) will be a key factor in determining the
projects viability.

• Whether it can be financed will ultimately rest on the risk allocation and covenant strength
of the various parties, but in particular, the credit quality of the main offtake will be of
paramount concern.

• The tariff under the PPA will need to be structured to pass through all project costs
(including fixed, variable and dispatch-related take-or-pay).

• It may make sense to treat the hire costs of the FSRU as a fixed cost in setting the PPA
capacity charge.

• On that basis the price of LNG will be the main cost to be covered in a variable PPA charge.

• Currency aspects of the PPA charges will also be important – costs incurred in US$ should
be passed on in US$.
Some Financing and Credit Re-payment
Considerations
LNG to Power Projects

• As the sole source of revenue to support the project in LNG to power projects is usually
limited to revenues derived from the off taker under the PPA, each of the principal creditors
of the project (its lenders, the FSRU owner and the LNG supplier(s)) will wish to be assured
of the financial viability of this entity (gas offtaker to generate power). A key aspect of this
analysis will be the ability of the off-taker to pass on its costs to its customers, and the
affordability of those costs for its consumers. This includes both the capacity payments
made to the owner of the plant (irrespective of dispatch), and the fuel cost component of the
PPA charges (including potential take-or-pay payments).

• Close scrutiny of the basis of regulation of tariffs in the relevant country will be critical to
this; additional contractual comfort may be required to sit alongside the regulatory regime
and to the extent there is any currency mismatch, then an appropriate hedging regime will
need to be developed, failing which, this risk is likely to be borne by the Government or one
of the Sponsors (especially if state-owned).
A Unique Privately –owned FSRU based LNG
Import Model – “Gas Hub”
Energas LNG FSRU Import Terminal Port at Port Qasim in Pakistan

Port
Qasim

• The Younus Brothers Group, Sapphire Group and the private backers of Pakistan’s Halmore Power Generation Co
are co-funding the Energas LNG Terminal at Port Qasim in Pakistan that will cost $120m to cater for their
current energy needs and those of future business endeavors. The two companies are the sole business partners
and buyers of the gas with interest in power generation, textile mills , chemicals, cement and auto and have no
supplier as partner (LNG buyers only consortium seeking 15 year LNG supply deal-will probably lease rather than
own the FSRU)
• The terminal capacity is 4.5 million tons per annum, of which 2.1 million tons is required by the two companies
which are also negotiating with other IPPs as well as industrialists for utilizing the surplus capacity, The
government is also expected to use the terminal for imports while having provided the consortium with long-term
power purchase agreements with the government (arrangement ideal for emerging market users with high credit
and non-payment risks)
• The terminal will provide a berth for a floating storage and regasification unit (FSRU) a floating terminal and an
LNG carrier.
LNG FRSU Design Options
Methodology of the Feasibility Study
Setting up a FSRU Facility
Boundary Conditions
o Functionality
o Transport capacity
o Operability safety
o Financial aspects
Preliminary o Sustainability
Design of o Technicality
Selected Process

Concept Selection

Unloading Concept

Multiple Component Analyses

Description of Regasification Process Using
FSRU
Transportation process
• LNG is delivered by LNG Carriers (LNGC) towards the receiving facility.
• (Un)loading process
• The pipeline is connected to the LNGC by (un)loading arms. Loading lines
deliver the LNG to the storage tanks, return displaced vapor and Boil Off
Gases (BOG’s) to the carriers. These lines and arms have an continuous
cryogenic requirement.

Storage
• LNG is stored in large full containment tanks, with a continuous cryogenic
temperature requirement. This can be constructed above or underground,
yet very dependable on the site location.`

• Within the storage tank LNG is either pumped by low pressure pumps
towards the recondenser or BOG’s are formed, because of heating up LNG,
until it reaches the vapor limit.
• These BOG’s are captured within a BOG-compressor, where the gas is re-
used for stabilizing the LNGC, reinjected into the recondenser or it will be
burned. The latter is only applied if the capacity is reached of the first two.
Description of Regasification Process Using
FSRU
BOG handling and recondenser
• The primary pump system allows for the conduction of LNG towards the
recondenser that functions as a collector of liquid for the secondary
pumps. Simultaneously it allows for the recuperation of the BOGS
incorporating it in the gas.
Regasification of LNG
• Secondary pumps require a high pressure to pump the LNG from the
condenser towards the vaporizers. Within the vaporizers the LNG is
heated up to T=0 °C, this causes the LNG to vaporize.
Distribution into pipeline network
• Natural gas is driven through a container with regulation, measuring
and odorizing systems, before it flows into the general network of gas
pipelines.
 Regasification Process in a FSRU

Send Out

The sketch illustrates three possible means of LNG vaporization common in FSRU’s:
• Open Loop Seawater: pumping warm seawater across the vaporizer and discharging cooled
seawater.
• Closed Loop Water: pumping fresh water through a closed circuit in which the water is warmed in
the FSRU boilers and cooled across the LNG vaporizer.
• Closed Loop Steam: Using steam produced in the FSRU boilers to vaporize the LNG and returning
the condensate back to the boilers in a closed loop.
Detailed FSRU Process
Details of FSRU Regasification Systems
 Components of FSRU

There are three methods for regasification:

Closed-loop mode
Steam from the FSRU boilers is used to heat fresh water circulated through the shell-and-tube vaporizers in the
regasification plant. This results in minimal usage of seawater by the FSRU.

Open-loop mode
Relatively warm seawater is drawn in through the FSRU’s sea chests. This warm seawater is used as a heat source
and passed through the shell of the shell-and-tube vaporizers, causing the vaporization of the LNG. During this
process, the temperature of the seawater is lowered by approximately 7 degrees Celsius. Thus, the open-loop mode
is not applicable for water temperatures below 7.2 degrees Celsius.

Combined mode
Seawater at temperatures between 7.2 and 14.4 degrees Celsius can be used when heated by steam from the FSRU
boilers to provide sufficient heat for the vaporization of the LNG.
 Different FSRU Design Options
• The FSRU concept is a converted LNG carrier or a newly built standardized unit, which results
in similarities for classification of LNGC’s and FSRU’s.

• Beneficial aspects of the FSRU compared to an onshore terminal are the short conversion
period of LNGC to FSRU , quick installation of FSRU, high mobility and low investment cost
(The cost differential between FSRUs and onshore regasification terminals is significant: a new-
build 170,000 cubic meter FSRU typically would cost in excess of US$250 million to purchase,
whereas the cost of developing a land-based terminal of comparable size is likely to be in the
region of US$1 billion-typically it is preferable to lease FSRUs rather than build or purchase and
FSRU).

• At nearshore locations the FSRU is connected to a jetty and trestle, in which the LNGC is
moored Side-by-Side (SBS) with the FSRU.

• At offshore locations the FSRU is connected to the coast via a subsea pipeline and offshore
fixed positioning of the moored carriers is provided with Single Point Mooring or any other
mooring structures.

• Since the FSRU and LNGC have different dimensions, the moored carriers react differently to
external forcing.

• The maximum technical lifespan of an FSRU is around 25 years. Thereafter the FSRU is
relocated or decommissioned.

• Maximum allowable service time required for the berthing-loading cycle is approximately 24
hrs.
Layout of a Nearshore FSRU Jetty Terminal

Key features of an FSRU nearshore terminal include;

• Jetty
o Berthing and Mooring dolphins
o Catwalks between facilities
o High pressure gas platform (HGPS)
o Service platform
• Connecting high pressure pipeline
o Gas transfer to shore through high pressure loading arms fixed to the jetty.
• Gas metering station
Berthing and unberthing process require use of Vessel Traffic Management Information
System (VTMIS) and Tugs for the LNGC in order to assure safety, maneuverability and
accessibility of the LNGC towards the FSRU.
Boundary Conditions for Berthing
and Unloading Cycle
• FSRU’s are able to (un)load any LNGC, on the conditions that the LNGC can
reach the location of the FSRU, and that the vertical movements between the
LNGC and FSRU and FSRU and mooring structure are not too large. This is
achieved by selecting FSRU’s that have a larger natural frequency compared
to the local wave frequency or by dissipation of wave energy in a sheltered
berthing location.
• Berthing of an LNGC is done with tugs and Vessel Traffic Management and
Information Systems (VTMIS)
• Unloading between ship to ship is performed with unloading arms and an
LNG hose. These loading arms need to have a higher workability range
compared to the conventional jetty because of the independent movement of
the two carriers.
• Maximum allowable trim of an LNGC unloading at an FSRU is equal to 2.0 to
3.0 m significant wave height
Effects of Waves and Currents to Unloading
Responses of a moored carrier to the action of the
waves, wind and current are:

• Mean offset due to wind, current and mean wave

drift force.

• Slow varying oscillations around the mean offset

induced by second order wave drift forces with
periods associated with the wave groups
occurring in irregular waves.

• Wave frequency component caused by the first

order wave induced vessel motions with periods
in the range of 5 to 20 seconds.

• If the Single Point Mooring structure (SPM) is

considered, then anchor legs or mooring chain
must provide the restoring capability to maintain
the carrier in the field within a limited radius
from its rest position in order to ensure steady
underwater fluid transfer system.

• FSRU’s positioning can be fixed and stabilized

with mono piles about 4 to 6 piles up to lengths
of approximately 60m.

• Another method to provide a semi-fixed and

stable situation for the offshore FSRU terminal
location is a Tower Yoke Mooring structure.,
which contains a rotatable head with a yoke that
is able to adjust the moored carriers’ position
such that incoming waves are always in aft (This
rotation by environmental forces is called
weathervaning, and reduces the transverse
loads on the moored carriers).
Offshore Buoy Single Point Mooring Systems

• The offshore-anchored loading buoy is divided into different parts each with a dedicated
functionality. The main parts include Mooring and anchoring system, buoy body and
product transfer system

• The mooring arrangement is such that it permits the buoy to move freely within defined
limits, considering wind, waves, current, and tanker ship conditions. The buoy is anchored
to the seabed using anchor chains (legs) which are attached to the anchor point (gravity
based or piled) on the seabed. Chain stoppers are used to connect the chains to the buoy.

Note: For FSRU located offshore sustainable energy such as cold energy extraction
is not possible for such an FSRU concept.
 FSRU – LNG Ship-to-Ship Unloading
Example : Escobar, Argentina

Tug Boats

Foam fender separating vessels

Ship-to Ship Transfer

 Fixed FSRU – LNG Ship-to-Ship
Unloading
Example : Kaliningrad, Russia

The Fixed Side by-Side structure is a four-point mooring structure combined with four breasting
dolphins. The positioning of the structure and moored carriers are fixed perpendicular to the
wind direction

(The Kaliningrad terminal will be connected to the existing gas pipeline near the Kaliningradskoye underground
gas storage (UGS) facility, making it possible not only to supply gas to local consumers but also to inject it into
the Underground Storage facility.)
FSRU – LNG Tanker Cross Jetty
Unloading
Example : Pecem, Brazil
FSRU Deepwater Single Point Mooring (SPM)
Systems

Subsea Pipelines to Power Plant or Other

Users

Turntable Buoy Turret Buoy

• The incoming LNG from a LNG Carrier is stored within the cryogenic storage tanks of the FSRU and subsequently
regasified and pumped to shore via a high pressure pump.
• Sustainability of offshore FSRU is realized with a Waste Heat Recovery Vaporizers linked to the dual engines of the
FSRU. The high mobility, high energy efficiency for fuel consumption and re-usability or conversion of unused LNG
by reversing the flow in the loading hoses and the FSRU can re-export the stored LNG into SSLNGC
 FSRU Mooring Systems – Tower Yoke
Example : Labuhan Maringgai, Indonesia

Tower Yoke System

by SPFPEC
LNG Offshore HTS
transfer

Remote Offshore
LNG Unloading
HTS = Head-to-Stern
 Head-to-Stern FSRU-LNG Unloading
in SPM Systems

Offshore
SPM
Mooring
System

The mooring arrangement is such that it permits the buoy to move freely within defined limits, considering wind,
waves, current, and tanker ship conditions. The buoy is anchored to the seabed using anchor chains (legs) which
are attached to the anchor point (gravity based or piled) on the seabed. Chain stoppers are used to connect the
chains to the buoy.
Elements of Multi-Criteria Analyses

See FSRU in Ukraine pgs. 127-129

 Tech-economic Analysis of Floating
and Onshore LNG Terminals
Comparing the four possessing ways of FSRU that include
i. Purchasing a new- build FSRU,
ii. Renovation of FSRU or conversion from LNGC
iii. Leasing existing FSRU
iv. Purchasing an existing FSRU
Leasing a comparatively new FSRU is a preferable option because there is less risk
in terms of investments and is quicker for start-ups compared to one-off purchase
and new construction respectively. FSRU is recommended especially when the
market is in its infancy.

Comparing the technical and economic indexes of a floating LNG terminal and of a
conventional onshore LNG terminal under the same capacity of 2600 thousand
tons per year a floating LNG terminal has a shorter construction period, less
investment, better seasonal peak shaving capability, mobility and other
advantages, except for some disadvantages like poor cost-effectiveness, unstable
gas supply, higher operating cost, etc.
Tech-economic analysis of floating and onshore LNG terminals. Available from:
https://www.researchgate.net/publication/287426202_Tech-conomic_analysis_of_floating_and_onshore_LNG_terminals
[accessed Oct 30 2017].
LNG Project Risks and
Management
Typical LNG Project Risks
Typical LNG Project Risks
Common Factors in Project Delays and
Cost Overruns
Risks and Opportunity Influences in
New Liquefaction Plants
Risks and Opportunity Influences in
New Regasification Plants
 Synchronization of Project Activities
It is essential that the risks associated with each component part of the value chain are
fully understood and allocated appropriately between the various stakeholders: the host
government, the project developers, the suppliers and contractors, and the project
lenders. In most cases, project finance lenders will require detailed assurances from
project sponsors that all technical and operational interface issues between the various
project components have been addressed: These for example include:

i. Synchronizing completion, testing, commissioning and acceptance of the FSRU with

the power facility and interconnecting infrastructure; and

ii. Synchronizing FSRU maintenance / dry-docking with scheduled power plant

maintenance to minimize any potential delay or outage penalties under the power
purchase agreement
 LNG Supply and Scheduling
• Under the LNG Sales and Purchase Agreements (note: under the gas hub or
integrated structure there may be multiple SPAs), LNG cargoes will generally be
delivered in nominated tankers under an annual delivery programme (ADP) or
90-day schedule derived therefrom, with limited flexibility for the LNG purchaser
to deviate from this delivery programme. Failure to take a cargo will (unless its
delivery is rescheduled by mutual agreement) give rise to a liability of the LNG
purchaser, most likely a “take-or-pay” liability.

• The most likely immediate cause of a failure to take an LNG cargo is insufficient
space in the storage tanks of the FSRU, because LNG inventory (from prior
cargoes) has not been sufficiently depleted for a variety of reasons, including
reduced demand for power generated (or reduced demand from other customers
of the gas hub), power plant outage, power transmission failure, or possibly
failure of part of the LNG infrastructure (either regasification or gas
transmission). If pursuing a gas hub model a series of throughput/regasification
services agreements are used, then a much more rigid timetable can be
designed allocating capacity within the terminal to each capacity purchaser.
 LNG Supply and Scheduling
• Conversely, if demand is higher than expected, or an LNG cargo arrives
late, or if relying upon a single source of LNG and that single source
fails to materialize it will be necessary to maintain a heel of LNG in the FSRU
tanks (to avoid the need for cool-down). If regasified LNG cannot be sent out, it
may result in the power plant having to burn more expensive liquid fuel
(assuming it has dual-fired capability), or even having to shut down (with
consequent loss of revenue under the PPA)

• The relationship between the storage capacity of the FSRU and the maximum
allowable LNG ship size (or LNG load) is very important. A significant margin of
capacity provides a cushion for reduced or increased demand, as well as other
unplanned events
Electricity Dispatch: LNG Procurement and
FSRU Inventory Management Considerations
• Power plants dispatched on a peaking basis (often based on daily or seasonal demand
fluctuations) create a degree of uncertainty as to the level of LNG demand and
consequentially the required level of inventory to be maintained on-board the FSRU.
Careful consideration of the power purchase agreement is required to understand precisely
how the power plant is dispatched (i.e., whether on a firm or non-binding basis and
whether daily, monthly or yearly). In many cases, a ‘peaker’ PPA may not be prescriptive in
terms of how the offtaker may dispatch the plant (or individual units) or what level of gas
may be nominated in a given period. The challenge therefore is modelling sufficient LNG
volumes to meet electricity demand / dispatch requirements throughout the year: in other
words, what baseload (LNG) volume is required and how will any shortfall or surplus (of
LNG) be addressed.
• There are various ways for IPP sponsors to mitigate against fluctuations in dispatch levels
via their LNG SPA, including annual contract quantity (“ACQ”) reductions/increases,
downward and upward quantities tolerances, call options for additional quantities,
cargo cancellation rights, cargo deferment rights, diversions and variations to LNG
ship sizes. The ability to procure spot cargoes is also an important mitigant to address a
shortfall scenario (where the baseload LNG volumes are insufficient). This calls for a highly
specialized LNG procurement strategy and a bespoke LNG SPA or SPAs which fit the
specific demand profile and requirements of the power facility in question.
• Not all LNG sellers will be willing to accommodate a high level of LNG supply flexibility.
LNG portfolio suppliers are generally better placed to meet a more flexible procurement
profile than a point-to-point/project seller. It should also be noted that LNG sellers are
more likely to price in any increase in purchasing flexibility.
Electricity Dispatch: LNG Procurement and
FSRU Inventory Management Considerations
• Peaking power plants present significant challenges in relation to the inventory
management of the FSRU. Modern-day FSRUs have limited storage capacity: new-build
FSRUs typically have a capacity of between 170,000 cbm and 180,000 cbm), (Mitsui O.S.K.
Lines through its unit, Lakler S.A., is set to take delivery of 263,000 cbm FSRU).
• The use of a single floating solution (FSU or FSRU) for a peaking power plant presents IPP
sponsors with material inventory constraints, which can prove especially challenging to
manage if the power purchase agreement permits short-term (intra-day) fluctuations in
dispatch levels.
• The IPP sponsor will need to ensure that sufficient LNG quantities are scheduled and
available for delivery to meet short-term demand peaks and also that the FSRU owner is
able to vary the regasification nominations at short notice. Typically FSRU owners will be
able to meet these short-term variations, but in return they may require relief from certain
performance warranties under the time charter party (“TCP”) or bareboat charter (“BBC”),
such as the fuel usage warranty (depending on the extent of the regasification nomination
fluctuations).
Electricity Dispatch: LNG Procurement and
FSRU Inventory Management Considerations
• Alternative mitigation strategies include:
i. Utilizing the FSU/FSRU in LNG carrier mode to help manage the potential scheduling and
inventory management constraints and
ii. Developing supplemental storage capacity, either via an additional FSU facility offshore or onshore
storage tank(s).
• In the case of (i), in order to mitigate against LNG supply-related failures (or, as the case may be,
force majeure events) the FSRU could potentially be deployed as an LNG carrier and utilized to
receive cargoes on a free-on-board basis. Further, if there are predictable periods where short-
term downstream demand is zero, the FSRU could switch to operate in LNG carrier mode so as to
sell any surplus LNG to a third party buyer. From an operational standpoint, the switch from
FSRU mode to LNG carrier mode (and subsequent demobilisation) is manageable, with the
mobilisation/demobilisation process typically taking between 24 and 30 hours, based on a
conventional mooring system (non-fixed).
• From a contractual standpoint there are a number of issues that need to be considered, namely
that the FSRU sponsor would usually seek to be held harmless by the IPP sponsor (as charterer)
in respect of any incremental costs arising as a result of the operation of the FSRU in LNG carrier
mode (i.e., taxes, port charges, etc.).
• The FSRU sponsor and IPP sponsor would in most cases agree on a separate charter party
agreement that relates to the operation of the FSRU in LNG carrier mode, which would contain a
number of market-standard concepts including: (i) a procedure for the
mobilisation/demobilisation of the vessel as an FSRU; (ii) an acknowledgement that the
regasification/boil-off warranties that apply to the FSRU in regasification mode would not apply to
the use of the vessel in LNG carrier mode; and (iii) dispensation from the permitted
maintenance/dry-docking regime (i.e., the requirements for a vessel operating in dual-usage mode
may not be the same as for a vessel operating solely in FSRU mode).
Electricity Dispatch: LNG Procurement and
FSRU Inventory Management Considerations
• Alternative mitigation strategies include: (i) utilizing the FSU/FSRU in LNG carrier mode to
help manage the potential scheduling and inventory management constraints and (ii)
developing supplemental storage capacity, either via an additional FSU facility offshore or
onshore storage tank(s).
• In the case of (i), in order to mitigate against LNG supply-related failures (or, as the case
may be, force majeure events) the FSRU could potentially be deployed as an LNG carrier
and utilized to receive cargoes on a free-on-board basis. Further, if there are predictable
periods where short-term downstream demand is zero, the FSRU could switch to operate in
LNG carrier mode so as to sell any surplus LNG to a third party buyer. From an
operational standpoint, the switch from FSRU mode to LNG carrier mode (and subsequent
demobilisation) is manageable, with the mobilisation/demobilisation process typically
taking between 24 and 30 hours, based on a conventional mooring system.
• from a contractual standpoint there are a number of issues that need to be considered,
namely that the FSRU sponsor would usually seek to be held harmless by the IPP sponsor
(as charterer) in respect of any incremental costs arising as a result of the operation of the
FSRU in LNG carrier mode (i.e., taxes, port charges, etc.). The FSRU sponsor and IPP
sponsor would in most cases agree on a separate charter party agreement that relates to
the operation of the FSRU in LNG carrier mode, which would contain a number of market-
standard concepts including:
i. a procedure for the mobilisation/demobilisation of the vessel as an FSRU;
ii. an acknowledgement that the regasification/boil-off warranties that apply to the FSRU in
regasification mode would not apply to the use of the vessel in LNG carrier mode; and
iii. dispensation from the permitted maintenance/dry-docking regime (i.e., the requirements for a
vessel operating in dual-usage mode may not be the same as for a vessel operating solely in FSRU
mode).
FSRU Service Payments in Advance
• A further challenge for IPP sponsors is to align the payment mechanism under its
power purchase agreement(s) with its payment obligations under the FSRU charter
agreement (i.e., to ensure that IPP sponsor receives payment from the power
purchaser prior to hire payments being due under the FSRU charter agreement). In
the FSRU industry this is often referred to as a “pay-when-paid” regime. FSRU owners
typically require payment of hire in advance to ensure that the FSRU owner has
sufficient available cash to cover all operating expenses (including payments to be
made to third-party service providers). In an integrated project context, the IPP
sponsors will be using revenues received under the PPA to make those hire payments
to the FSRU owner (subject to the relevant payment waterfall).
• Project finance lenders will typically prefer that the IPP sponsor first put in funds
provided by the power purchaser before it is obliged to make payments to the FSRU
sponsor, or, if this is not achievable, that the payment terms (i.e., periods) are aligned
and/or that the IPP sponsor maintains a working capital/hire reserve account to
ensure that it is able to meet its hire payment obligations to the FSRU sponsor.
• Also, to the extent that the underlying payment obligations under the PPA are
supported by credit instruments such as standby letters of credit (“SBLCs”) or
sovereign / government guarantees, lenders would prefer that the IPP SPV borrower
retains the ability to call on such credit instrument(s) before becoming liable to pay
the hire instalments, subject to a requirement to pay the FSRU owner any amounts
recovered under those instruments.
FSRU Service Payments in Advance
• The FSRU-to-power market is still evolving in this regard, and from our experience
FSRU sponsors are moving towards a broader “pay-when-paid” regime subject to the
IPP sponsor agreeing to certain conditions with respect to the credit
support/guarantee arrangements, such as posting a standby letters of credit (SBLC)
in respect of [x] months of hire and agreeing to claim against and to pass through the
benefits of any credit support provided by the power off-taker.
FSRU Economics
Economic Considerations
• Quantity of LNG required (from suppliers or domestic production)
• Cost of LNG
• Shipping Cost
• Cost of FSRU (depends on lease, purchase, conversion or new-build –
Capex:– FSRU new build USD275m – USD350m; CAPEX:– FSRU marine
terminal infrastructure – USD80m – USD400m)
• Operation and Maintenance Cost of FSRU (LNG regasification facility)
• Capex costs for pipeline (gas transfer from near or offshore to storage tanks
or user e.g. power plant )
• Operating and Maintenance costs for pipeline
• Cost of storage (capacity)
• Capex Cost for terminal import facility (depending on design option)
• Operating and Maintenance Cost of terminal import facility
• Capex cost of Power Plant
Economic Considerations
• Operating and Maintenance Cost of Power Plant
• Interest on financing
• Power offtake tariffs (must be in UDS which is the currency used for LNG
SPA)
• NPV calculations
• IRR Computation
• PBP (Pay back period) determination
• Sensitivity analyses

See paper on FINANCING STRATEGY FOR FSRU BELAWAN PROJECT_INDONESIA

Legislative and Regulatory
Requirements in LNG FRSU
Projects
 Agreements across the Value Chain
HIGH LEVEL AGREEMENTS COVERING MULTIPLE STAGES
Project Development Agreement between Project Developers
Framework Agreement(s) or Implementation Agreement(s) between Project Developers and Host Government(s)
UPSTREAM PIPELINE
o PSC – with Host Government o Transport Agreement – with
pipeline owner/operator
o JOA – between operators &
NOC (if State equity o FEED Agreement – with EPC
participant) contractor
o Processing/Aggregation o Land Use Agreement – with
Agreement - between Host Government or land
operators and service owners
provider
o O&M Agreement - with
pipeline operator
o Shareholder Agreement –
between pipeline owners
o Gas Sales & Purchase
Agreement – if ownership
changes at this point
LNG SALES & TRANSPORT
o Long Term LNG Sales
Agreement (FOB or DES) – with
LNG buyer (offtake)
o Charterparty Agreement or
Shipbuilding Contract – with ship
owner/shipyard
REGASIFICATION PLANT
o Tolling or Facilities Use
Agreement - between plant or
FSRU owner and NG user(s) or
marketing & distribution
company
o FEED Agreement – with FEED
contractor
o EPC Agreement – with EPC
contractor
o Port Services Agreement
(including site rights) – with Port
Authority
o O&M Agreement - with
Terminal or FSRU operator
o Shareholder Agreement –
between Terminal or FSRU
o Liquefaction Technology
License - with licensor
o Gas Sales & Purchase
Agreement – if ownership
changes at this point
Main LNG Supply and Purchase
Contracts
Liquefaction Project
LNG to Power Projects Contracts
Contracts Linked to Power Purchase
Agreements

See: Understanding Power Purchase Agreements for more information

Main Contents of a LNG Sales Contract
(Long Term Sales and Purchase Agreement - SPA)
• Term
o Typically 15-25 years
o Start Date and Conditions Precedent
• Delivery
o DES/DAP – Seller arranges for shipping
o FOB – Buyer arranges for shipping
• Pricing
o Asia – fixed, subject to adjustment based on a basket of alternative fuels (JCC,
JKM, SiLNG)
o U.S. – based on market index (Henry Hub)
o Europe - based on market index (NBP or TTF)
o Take-or-Pay and Deliver-or-Pay
o Buyer pays “take-or-pay” payment if does not take a minimum amount of LNG,
o but right to make-up LNG
o Seller pays “deliver-or-pay” payment if does not deliver minimum amount of
LNG
• Quantity
o Minimum annual quantity, scheduled quantity, upward or downward flexibility
o Excess quantities of LNG
Main Contents of a LNG Sales Contract
(Long Term Sales and Purchase Agreement - SPA)
• Quality
o Knowing Receipt versus Unknowing Receipt
o Scope of Damages
• Scheduling
o Annual delivery program and ninety day schedule
• Late delivery / late receipt
• Destination Flexibility
o Historically destination fixed, increasingly flexibility (subject to upside sharing)
• Loading Port
• Force Majeure and Scope of Facilities
• Title and Risk Transfer
• Taxes
o Customary for Seller to be responsible for taxes up to the point of delivery, and
Buyer to be responsible for taxes from the delivery point onwards
o Offshore title transfer
Main Contents of a LNG Sales Contract
(Short Term/Spot Sales Agreement - MSA)
• Key Features
o Short term/spot LNG sales often pursuant to a Master Sales Agreement (MSA)
o An MSA is more balanced and less customized point-to-point delivery contract,
covers limited number of cargoes and time
o Commercial terms included in separately executed confirmation memorandum
(quantity, price, delivery period, specifications, details of ports and vessel)
• Failure to deliver
o Remedy: replacement cost, downstream contract termination cost, or damages
o Sole remedy and often capped at 100% of contract price
• Failure to take
o Remedy: make-up costs and/or take-or-pay; or limited payment of damages
o Sole remedy and often capped at 100% of contract price
• Off-Spec LNG
o Spec typically reflects the composition of domestic pipeline gas
o Buyer and seller cooperate in dealing with off-spec LNG
• Knowing receipt of Off-Spec LNG
o Seller must notify Buyer of the extent of off-spec LNG
o If Buyer accepts Off spec LNG, parties agree reimbursement of treatment costs
o If Buyer rejects or parties do not agree treatment costs = failure to deliver
Main Contents of a LNG Sales Contract
(Short Term/Spot Sales Agreement - MSA)…….cont/d

• Unknowing receipt of Off-Spec LNG

o If Buyer accepts Off spec LNG, no cap on reimbursement
o If rejects, failure to deliver plus indemnity for loss (unlimited or up to 100% cap)

• Payment and Credit Support

o Parent company guarantee or stand-by letter of credit are customary
o Often include material adverse change (MAC) security provisions

• Termination
o Does default lead to termination of all or only affected transactions
Main Contents of a Liquefaction Processing
Contract – NG to LNG
• Capacity Entitlements
o Liquefaction
o Storage
• Processing Fee
o Fixed component

o Variable component

• Annual Program

• Lifting Schedules
Main Contents of Facilities Use Agreement
– LNG to NG
In the tolling LNG import commercial structure (regasification services only), an
agreement is needed between the user of the terminal and the terminal project
company for the use of the terminal. This agreement, which can go by many
names, entails the terms and conditions for the use of and payment for specific
services offered by an LNG regasification terminal or FSRU.
Key Features
• Term
• The nature and quantum of services
• The terminal fees and charges for the services
• Performance of services for other customers and conflict resolution mechanism
between customers;
• Fuel and lost or unaccounted-for gas;
• Scheduling for LNG receipts;
• LNG vessel requirements, berthing and unloading details;
• Receipt and storage of LNG and redelivery of regasified LNG
• Invoicing and payment
• Liabilities;
• Taxes
• Insurance
• Termination of services.
 Main Contents of an Operations and
Maintenance Agreement
Depending on the commercial structure of the LNG import project, the terminal
owner may elect to engage a third party to actually operate and maintain the
terminal. The Operations and Maintenance Agreement (O&M) includes the
following key features:

• Scope of services to be offered

• Standard of performance
• Term of the agreement
• Responsibilities and liabilities of the operator
• Responsibilities and liabilities of the terminal owner
• Budgets and costs
• Payments and incentives to the operator
• Employees including local employees, and their services,
• Local services to be used by operator (Local Content Obligations)
• Owner's rights to monitor and inspect the facility
• Termination rights
 Main Contents of Port Use Agreement
LNG import terminals often fall under the jurisdiction of a particular port and are
subject to the port's port use agreement. Where the terminal is considered its own
port, the terminal will adopt its own port use agreement.
The port use agreement is a set of rules and requirements applicable to all vessels
using the port and address a variety of operational and other topics, including
responsibility for damages and other liabilities. The LNG import terminal is then
responsible for ensuring that each LNG vessel calling at the terminal agrees to
comply with the port use agreement
Main Contents of a Gas Supply Contract
• Contract between Producers and Gas Buyer/LNG Seller
o Term
o Quantity
o Price and payment terms
o Obligations of the buyer such as take-or-pay obligation
o Liability (e.g. for natural gas that is off-specification or for delivery
shortfalls.

• Gas delivery points

• Gas quality and composition

• Dispute Issues such as ability of the buyer to withhold

payment or dispute invoices

• Force majeure
Project-on-Project Liabilities
• The contractual liabilities faced by IPP sponsors (under the PPA) and the FSRU
sponsors (under the Time Charter Party (TCP) or Bareboat Charter (BBC)) are quite
disproportionate. The scale of penalties and damages potentially payable under a
Power Purchase Agreement (PPA) are of a much higher order of magnitude than
those payable under a TCP or BBC.
• The difference lies in that the IPP sponsors need to assess how to allocate liability
for the failure of multiple parties (LNG supplier(s), FSRU owner(s), EPC and O&M
Contractor(s), or electricity offtaker(s),
• The FSRU owner will in most cases only limit its liability to events caused by its
own failure; that is to say, performance of the FSRU.
• In addition the IPP sponsors may performance failure of the FSRU (for example, a
failure to regasify LNG at the rate nominated by the IPP sponsor) can lead the IPP
sponsor to incur significant liabilities under their upstream (LNG SPA) and
downstream (PPA) contractual arrangements.
• The liability of the FSRU owner(s) under the TCP or BBC will almost always be
capped at a percentage of the total hire amount payable, meaning that the IPP
sponsors are unlikely to have recourse against the FSRU owner(s) for the full
amount of the liabilities that they are exposed to under the LNG SPAs and/or the
PPA.
• In the pre-operational phase, a failure of the FSRU supplier to successfully
commission the FSRU by the required commercial start date can potentially expose
IPP sponsors to take-or-pay liabilities under their LNG SPA (subject to mitigation
measures such as a diversion, rescheduling of the cargo/cancellation, etc.) and
delay liquidated damages (“LDs”) under their PPA.
Project-on-Project Liabilities
• Whilst IPP sponsors will need to assess how to allocate liability for the failure of
multiple parties (LNG supplier(s), FSRU owner(s), EPC and O&M Contractor(s),
or electricity offtaker(s), the FSRU owner will in most cases seek to limit its
liability to events caused by its own failure; that is to say, performance of the
FSRU.

• The problem that IPP sponsors face is that a performance failure of the FSRU
(for example, a failure to regasify LNG at the rate nominated by the IPP sponsor)
can lead to IPP sponsors incurring significant liabilities under their upstream
(LNG SPA) and downstream (PPA) contractual arrangements. However, the
liability of the FSRU owner(s) under the TCP or BBC will almost always be
capped at a percentage of the total hire amount payable, meaning that the IPP
sponsors are unlikely to have recourse against the FSRU owner(s) for the full
amount of the liabilities that they are exposed to under the LNG SPAs and/or
the PPA.
• In the pre-operational phase, a failure of the FSRU supplier to successfully
commission the FSRU by the required commercial start date can potentially
expose IPP sponsors to take-or-pay liabilities under their LNG sale and purchase
agreement (subject to mitigation measures such as a diversion, rescheduling of
the cargo/cancellation, etc.) and delay liquidated damages (“LDs”) under their
power purchase agreement.
Project-on-Project Liabilities
• In the operational phase, a performance failure of the FSRU vessel could result
in IPP sponsors incurring outage penalties under their power purchase
agreement if the IPP sponsors are unable to meet the dispatch requests of the
electricity buyer.

• Historically, FSRU owners have been reluctant to accept LDs for performance
failures that exceed the daily rate of hire (i.e., capital costs plus operating costs).
This mind-set is largely derived from LNG shipping market practice whereby the
risks that the vessel owner is willing to take on should be commensurate with
the return that it receives under the charter party. Generally speaking, this
mind-set is slowly changing as there are more instances, particularly in the
context of integrated LNG-to-power projects, of FSRU owners agreeing to assume
some (but only some) responsibility for liabilities incurred by IPP sponsors
resulting directly from FSRU-related performance failure.

• Notwithstanding this shift towards a more favourable liability regime under the
charter party agreement, IPP sponsors are often left with significant residual
liabilities, some of which they may be able to mitigate via insurance, such as
delay-in-start up insurance (pre-operational phase) and business interruption
insurance (operational phase), but it is unlikely that such insurances will fully
cover such residual liabilities as the policies will contain various deductible
periods, sub-limits and exclusions. Project finance lenders may require that IPP
sponsors themselves cover any remaining residual liabilities that cannot be
covered by the FSRU owner or insurance.
Environmental Health and
Safety Guidelines in LNG
FSRU Projects
 Safety Standards in LNG Industry

Safety in the LNG industry is assured by a scheme of four layers of for safeguarding the LNG industry workers
and adjacent communities. These four layers of protection are ensured by industry standards, regulatory
compliances and risk management are applied in the design criteria of LNG facilities as well as the port.

• Primary containment is the first requirement for containing LNG. This involves the use of appropriate
materials at LNG regasification terminals and also storage tanks unloading equipment, pipes and
regasification equipment in engineering design.

• Secondary containment ensures that if leaks or spills occur at an LNG facility, the LNG is fully contained and
isolated from the public.

• Safeguard systems minimize the frequency and size of LNG releases and prevent damage from potential
hazards. Multiple measurement emergency systems are applied within the port, such as fire or methane
detection, Emergency Shutdown systems and back-up generators.

• Separation distances are applied to ensure safety for adjacent communities.

Safety Siting Criteria for LNG Import
Facility
LNG Vessel Un(loading)
Safety Siting for LNG Import Facility
Example of Port Yuzhny, Ukraine

Potential terminal locations for LNG

unloading concepts based upon safety level
boundary conditions
 Other Relevant Studies in Site Selection

• Bathymetry

• Hydrological design conditions

o Wave height
o Nearshore wave transformation
o Currents
o Changing water level

• Meteorological design values

• Morphological and soil conditions

o Vertical soil structure
o Soil density
o Seismic activity (landslides, soil instability etc.)
Protective Measures to Prevent LNG
Leak and Pool Fires
Emergency Preparedness Cycle

Preparation of a formal fire response plan supported by the necessary

resources and training, including training in the use fire suppression
equipment and evacuation. Procedures may include coordination activities with
local authorities or neighboring facilities to ensure emergency preparedness.
 Hazard Identification Analysis in LNG Industry
Diagram below summarizes cause consequence chains describing the atypical incident scenarios
for innovative LNG regasification technologies.

Risk Formula: Risk = Probability of Risk x Damages

• Damages and probability of failure can be reduced by taking preventive measures
• Safety measures require additional investment and/or operational costs.
• A Cost-Benefit Analysis is used to compare the benefits of the safety measures
employed and the investment cost required per safety measure. After the Qualitative
Risk Assessment (QRA) in combination with a Cost-Benefit analysis, is done it is
determined which risks for atypical hazards should be prevented.
Environmental Issues Associated
with LNG Facilities
Potential environmental issues associated with LNG facilities include
the following:
• Threats to aquatic and shoreline environments
• Hazardous material management
• Wastewaters
• Air emissions
• Waste management
• Noise
• LNG transport
Environmental Issues Associated
with LNG Facilities
Threats to aquatic and shoreline environments
Direct short and long-term impacts on aquatic and shoreline
habitats in LNG related projects may be caused by such activities
as;
• Construction and maintenance dredging and the disposal of dredge
spoil,
• Construction of piers, wharves, breakwaters, other water-side
structures and associated erosion that may gradually occur later.
• Physical removal or covering of sea floor and shore.
Indirect impacts may result from the following;
• Changes to water quality from sediment suspension or
• Discharges of storm water and wastewater
• Discharge of ballast water and sediment from ships during LNG terminal
loading operations may result in the introduction of invasive aquatic
species
Environmental Issues Associated
with LNG Facilities
Hazardous Materials Management
• Storage, transfer, and transport of LNG may result in leaks or accidental release
from tanks, pipes, hoses, and pumps at land installations and on LNG transport
vessels. The storage and transfer of LNG also poses a risk of fire and, if under
pressure, explosion due to the flammable characteristics of its boil-off gas.
Recommended measures to manage these types of hazards include;
• LNG storage tanks and components (e.g. pipes, valves, and pumps) should meet
international standards for structural design integrity and operational
performance to avoid catastrophic failures and to prevent fires and explosions
during normal operations and during exposure to natural hazards. Applicable
international standards may include provisions for overfill protection, secondary
containment, metering and flow control, fire protection (including flame
arresting devices), and grounding (to prevent electrostatic charge).
• Storage tanks and components (e.g. roofs and seals) should undergo periodic
inspection for corrosion and structural integrity and be subject to regular
maintenance and replacement of equipment (e.g. pipes, seals, connectors, and
valves). A cathodic protection system should be installed to prevent or minimize
corrosion, as necessary.
Environmental Issues Associated
with LNG Facilities
Hazardous Materials Management
• Loading / unloading activities (e.g. transfer of cargo between LNG carriers
and terminals) should be conducted by properly trained personnel
according to pre-established formal procedures to prevent accidental
releases and fire /explosion hazards. Procedures should include all aspects
of the delivery or loading operation from arrival to departure, connection of
grounding systems, verification of proper hose connection and
disconnection, adherence to no-smoking and no-naked light policies for
personnel and visitors
Environmental Issues Associated
with LNG Facilities
Hazardous Materials Management
• LNG is a cryogenic liquid (–162°C [–259°F]) that is not flammable in liquid form. During
regasification boil-off gas (methane) forms as the LNG warms, and under certain conditions could
result in a vapor cloud if released. Uncontrolled releases of LNG or a methane vapor cloud which is
potentially flammable (flash fire) could lead to jet or pool fires if an ignition source is present. LNG
spilled directly onto a warm surface (such as water) could result in a sudden phase change known
as a Rapid Phase Transition (RPT). Rapid phase transitions are physical explosions caused by rapid
vaporization of liquefied natural gas that do not involve combustion or burning.
• Recommended measures to prevent and respond to LNG spills include the following;
o Conduct a spill risk assessment for the facilities and related transport / shipping activities;
o Develop a formal spill prevention and control plan that addresses significant scenarios and
magnitude of releases.
o The plan should be supported by the necessary resources and training.
o Spill response equipment should be conveniently available to address all types of spills,
including small spills
o Spill control response plans should be developed in coordination with the relevant local
regulatory agencies;
o Facilities should be equipped with a system for the early detection of gas releases, designed to
identify the existence of a gas release and to help pinpoint its source so that operator-initiated
ESDs can be rapidly activated, thereby minimizing the inventory of gas releases.
Environmental Issues Associated
with LNG Facilities
Hazardous Materials Management - Spills
o An Emergency Shutdown and Detection (ESD/D) system should be available to initiate automatic
transfer shutdown actions in case of a significant LNG leak.
o For unloading/loading activities involving marine vessels and terminals, preparing and
implementing spill prevention procedures for tanker loading and off-loading according to applicable
international standards and guidelines which specifically address advance communications and
planning with the receiving terminal.
o Ensuring that onshore LNG storage tanks are designed with adequate secondary containment (e.g.,
high nickel content welded steel inner tank and reinforced concrete outer tank; single wall tank with
an external containment basin, full containment tank design) in the event of a sudden release
o Facilities should provide grading, drainage, or impoundment for vaporization, process, or transfer
areas able to contain the largest total quantity of LNG or other flammable liquid that could be
released from a single transfer line in 10 minutes.
o Material selection for piping and equipment that can be exposed to cryogenic temperatures should
follow international design standards
o In case of a gas release, safe dispersion of the released gas should be allowed, maximizing
ventilation of areas and minimizing the possibility that gas can accumulate in closed or partially
closed spaces.
o Spilled LNG should be left to evaporate and evaporation rate should be reduced, if possible, e.g.
covering with expanding foam; and
Environmental Issues Associated
with LNG Facilities
Hazardous Materials Management - Spills
o The facility drainage system should be designed such that accidental releases of hazardous
substances are collected to reduce the fire and explosion risk and environmental discharge.
o The LNG spill drainage system (trough and sump system) design should be optimized to reduce
vaporization rates to limit the overall vapor dispersion area
Environmental Issues Associated
with LNG Facilities
Wastewaters
Cool water and cold water streams
• The use of water for process cooling at LNG liquefaction facilities and for revaporization heating at
LNG receiving terminals may result in significant water use and discharge streams.
• Recommendations to control cooling and cold water use and discharge streams include the
following:
o Water conservation opportunities should be considered for LNG facility cooling systems (e.g. air
cooled heat exchangers in place of water cooled heat exchangers and opportunities for the
integration of cold water discharges with other proximate industrial or power plant facilities).
The selection of the preferred system should balance environmental benefits and safety
implications of the proposed choice.
o Cooling or cold water should be discharged to surface waters in a location that will allow
maximum mixing and cooling of the thermal plume to ensure that the temperature is within 3
degrees Celsius of ambient temperature at the edge of the mixing zone or within 100 meters of
the discharge point.
o If biocides / chemical use is necessary, carefully select chemical additives in terms of dose
concentration, toxicity, biodegradability, bioavailability, and bioaccumulation potential.
Consideration should be given to residual effects at discharge using techniques such as risk
based assessment.
Environmental Issues Associated
with LNG Facilities
Wastewaters
Cool water and cold water streams
• The use of water for process cooling at LNG liquefaction facilities and for revaporization heating at
LNG receiving terminals may result in significant water use and discharge streams.
• Recommendations to control cooling and cold water use and discharge streams include the
following:
o Water conservation opportunities should be considered for LNG facility cooling systems (e.g. air
cooled heat exchangers in place of water cooled heat exchangers and opportunities for the
integration of cold water discharges with other proximate industrial or power plant facilities).
The selection of the preferred system should balance environmental benefits and safety
implications of the proposed choice.
o Cooling or cold water should be discharged to surface waters in a location that will allow
maximum mixing and cooling of the thermal plume to ensure that the temperature is within 3
degrees Celsius of ambient temperature at the edge of the mixing zone or within 100 meters of
the discharge point.
o If biocides / chemical use is necessary, carefully select chemical additives in terms of dose
concentration, toxicity, biodegradability, bioavailability, and bioaccumulation potential.
Consideration should be given to residual effects at discharge using techniques such as risk
based assessment.
Environmental Issues Associated
with LNG Facilities
Wastewaters
Other Wastewaters
• Other waste waters routinely generated at LNG facilities include process wastewater drainage,
sewage waters, tank bottom water (e.g. from condensation in LNG storage tanks), fire water,
equipment and vehicle wash waters, and general oily water. Pollution prevention and treatment
measures that should be considered for these waste waters include:
Drainage and stormwaters
• Separate drainage systems for drainage water from process areas that could be contaminated with
hydrocarbons (closed drains) and drainage water from non-process areas (open drains) should be
available to the extent practical. All process areas should be bunded to ensure drainage water flows
into the closed drainage system and that uncontrolled surface run-off is avoided. Drainage tanks
and slop tanks should be designed with sufficient capacity for foreseeable operating conditions, and
systems to prevent overfilling should be installed. Drip trays, or other controls, should be used to
collect run-off from equipment that is not contained within a bunded area and the contents routed
to the closed drainage system.
• Stormwater flow channels and collection ponds installed as part of the open drainage system should
be fitted with oil / water separators. Separators may include baffle type or coalescing plate type and
should be regularly maintained. Stormwater runoff should be treated through an oil / water
separation system able to achieve an oil and grease concentration of 10 mg/L.
Firewater
• Firewater from test releases should be contained and directed to the facility drainage system or to a
storage pond and wastewater treatment, if contaminated with hydrocarbons.
Environmental Issues Associated
with LNG Facilities
Wastewaters
Wash waters
• Equipment and vehicle wash waters should be directed to the closed drainage system or to
the facility’s wastewater treatment system.
General oily water
• Oily water from drip trays and liquid slugs from process equipment and pipelines should be
routed to the waste water treatment system.
Hydrostatic testing water
• Hydrostatic testing of LNG equipment (e.g. storage tanks, facility piping systems,
transmission pipeline connections, and other equipment) involves pressure testing with
water during construction /commissioning to verify their integrity and to detect potential
leaks.
• Chemical additives may be added to the water to prevent internal corrosion.
• Pneumatic testing with dry air or nitrogen may be employed for cryogenic piping and
components.
• In managing hydrotest waters, the following pollution prevention and control measures
should be considered:
o Reducing the need of chemicals by minimizing the time that test water remains in the
equipment
o Careful selection of chemical additives in terms of concentration, toxicity,
biodegradability, bioavailability, and bioaccumulation potential
o Using the same water for multiple tests
Environmental Issues Associated
with LNG Facilities
Wastewaters
• If discharge of hydrotest waters to surface waters or land is the only feasible
alternative for disposal, a hydrotest water disposal plan should be prepared that
considers points of discharge, rate of discharge, chemical use and dispersion,
environmental risk, and required monitoring. Hydrostatic test water quality should be
monitored before use and discharge and should be treated to meet the specified
discharge limits in the IFC EHS guidelines.
Environmental Issues Associated
with LNG Facilities
Air Emissions
• Air emissions (continuous or non-continuous) from LNG facilities include combustion
sources for power and heat generation (e.g. for dehydration and liquefaction activities
at LNG liquefaction terminals, and regasification activities at LNG receiving
terminals), in addition to the use of compressors, pumps, and reciprocating engines
(e.g. boilers, turbines, and other engines).
• Emissions resulting from flaring and venting, as well as from fugitive sources, may
result from activities at both LNG liquefaction and regasification terminals. Principal
gases from these sources typically include nitrogen oxides (NOX), carbon monoxide
(CO), carbon dioxide (CO2), and, in case of sour gases, sulfur dioxide (SO2).
• For LNG plants with important combustion sources, air quality impacts should be
estimated by the use of baseline air quality assessments and atmospheric dispersion
models to establish potential ground level ambient air concentrations during facility
design and operations planning. These studies should ensure that no adverse impacts
to human health and the environment result.
• All reasonable attempts should be made to maximize energy efficiency and design
facilities to minimize energy use. The overall objective should be to reduce air
emissions and evaluate cost-effective options for reducing emissions that are
technically feasible. Significant (>100,000 tons CO2 equivalent per year) greenhouse
gas (GHG) emissions from all facilities and support activities should be quantified
annually as aggregate emissions in accordance with internationally recognized
methodologies and reporting procedures.
Environmental Issues Associated
with LNG Facilities
Air Emissions
Exhaust Gases
• Exhaust gas emissions produced by the combustion of natural gas or liquid
hydrocarbons in turbines, boilers, compressors, pumps and other engines for power
and heat generation, can be the most significant source of air emissions from LNG
facilities. Air emission specifications should be considered during all equipment
selection and procurement.
• At regasification terminals, the selection of Submerged Combustion Vaporizers
(SCV),Open Rack Vaporizers (ORV)14, Shell and Tube Vaporizers, and Air Vaporizers
should be assessed, taking into consideration baseline environmental conditions and
environmental sensitivities. If other thermal energy is available within a short distance
(e.g. a nearby refinery), waste heat recovery (WHR) / shell and tube vaporizers could
be considered.
Venting and Flaring
• Flaring or venting is an important safety measure used at LNG facilities to ensure gas
is safely disposed of in the event of an emergency, power or equipment failure, or
other plant upset condition. Flaring or venting should be used only in emergency or
plant upset conditions. Continuous venting or flaring of boil-off gas under normal
operations is not considered good industry practice and should be avoided.
Environmental Issues Associated
with LNG Facilities
Air Emissions
Boil Off Gas (BOG)
• After LNG liquefaction, stored LNG emits methane gas vapor, known as ‘boil off gas’
(BOG), due to heat from ambient conditions and tank pumps, in addition to
barometric pressure changes. BOG should be collected using an appropriate vapor
recovery system (e.g. compressor systems). For LNG plants (excluding LNG carrier
loading operations) the vapor should be returned to the process for liquefaction or
used on-site as a fuel; on board LNG carriers BOG should be re-liquefied and returned
to the storage tanks or used as a fuel; for re-gasification facilities (receiving terminals),
the collected vapors should be returned to the process system to be used as a fuel on-
site, compressed and placed into the sales stream/pipeline, or flared.
Fugitive Emissions
• Fugitive emissions at LNG facilities may be associated with cold vents, leaking pipes
and tubing, valves, connections, flanges, packings, open-ended lines, pump seals,
compressor seals, pressure relief valves, and general loading and unloading
operations.
• Methods for controlling and reducing fugitive emissions should be considered and
implemented in the design, operation, and maintenance of facilities. The selection of
appropriate valves, flanges, fittings, seals, and packings should be based on their
capacity to reduce gas leaks and fugitive emissions.
Environmental Issues Associated
with LNG Facilities
Waste Management
• Non-hazardous and hazardous wastes routinely generated at LNG facilities include
general office and packaging wastes, waste oils, oil contaminated rags, hydraulic
fluids, used batteries, empty paint cans, waste chemicals and used chemical
containers, used filters, spent sweetening and dehydration media (e.g. molecular
sieves) and oily sludge from oil water
• Separators, spent amine from acid gas removal units, scrap metals, and medical
waste, among others.
• Waste materials should be segregated into non-hazardous and hazardous wastes and
considered for re-use / recycling prior to disposal. A waste management plan should
be developed that contains a waste tracking mechanism from the originating location
to the final waste reception location. Storage, handling and disposal of hazardous and
nonhazardous waste should be conducted in a way consistent with good EHS practice
for waste management.
Environmental Issues Associated
with LNG Facilities
Noise
• The main noise emission sources in LNG facilities include pumps, compressors,
generators and drivers, compressor suction / discharge, recycle piping, air dryers,
heaters, air coolers at liquefaction facilities, vaporizers used during regasification, and
general loading / unloading operations of LNG carriers / vessels.

• Atmospheric conditions that may affect noise levels include humidity, wind direction,
and wind speed. Vegetation, such as trees, and walls can reduce noise levels.
Installation of acoustic insulating barriers can be implemented, where necessary.
Maximum allowable log equivalent ambient noise levels that should not be exceeded
and general recommendations for prevention and control of noise in the IFC EHS
General Guidelines
Environmental Issues Associated
with LNG Facilities
LNG Transport
Common environmental issues related to vessels and shipping (e.g. hazardous materials
management, wastewater and other effluents, air emissions, and solid waste generation
and management related to LNG tankers / carriers), and recommendations for their
management are covered in the IFC EHS Guidelines for Shipping.
• Emissions from tugs and LNG vessels, especially where the jetty is within close
proximity to the coast, may represent an important source affecting air quality.
• LNG vessel design, construction and operations should comply with international
standards and codes relating to hull requirements (e.g. double hulls with
separation distances between each layer), cargo containment, pressure /
temperature controls, ballast tanks, safety systems, fire protection, crew training,
among other issues.
• Specific recommendations to mitigate Rapid Phase Transition (RPT) which are
explosions caused by rapid vaporization of liquefied natural gas, include the
following:
• The pressure rating of the actual LNG cargo tanks should be maximized;

• The LNG cargo tanks pressure relief system should actuate as quickly as
possible, in order to relieve the large volumes of vapor that can be generated
by an RPT event.
Occupational Health and Safety
Issues Associated with LNG Facilities
Introduction
• Occupational health and safety issues should be considered as part of a
comprehensive hazard or risk assessment, including, for example, a hazard
identification study [HAZID], hazard and operability study [HAZOP], or other risk
assessment studies.

• The results should be used for health and safety management planning, in the
design of the facility and safe working systems, and in the preparation and
communication of safe working procedures.

• Health and safety management planning should demonstrate that a systematic and
structured approach to managing health and safety will be adopted and that controls
are in place to reduce risks to the lowest practicable level; that staff is adequately
trained; and that equipment is maintained in a safe condition. The formation of a
health and safety committee for the facility is recommended.

• A formal Permit to Work (PTW) system should be developed for the facilities. The
PTW will ensure that all potentially hazardous work is carried out safely and ensures
effective authorization of designated work, effective communication of the work to be
carried out including hazards involved, and safe isolation procedures to be followed
before commencing work.
Occupational Health and Safety
Issues Associated with LNG Facilities
Introduction
Occupational health and safety issues associated with LNG Facilities operations include
the following:

• Fire and explosion

• Roll-over

• Contact with cold surfaces

• Chemical hazards

• Confined spaces
Occupational Health and Safety
Issues Associated with LNG Facilities
Fire and explosion
Fire and explosion hazards at LNG facilities may result from the presence of
combustible gases and liquids, oxygen, and ignition sources during loading and
unloading activities, and/or leaks and spills of flammable products. Possible ignition
sources include sparks associated with the buildup of static electricity, lightning, and
open flames. The accidental release of LNG may generate the formation of an
evaporating liquid pool, potentially resulting in a pool fire and / or the dispersion of a
cloud of natural gas from pool evaporation.

• LNG facilities should be designed, constructed, and operated according to

international standards for the prevention and control of fire and explosion hazards,
including provisions for safe distances between tanks in the facility and between the
facility and adjacent buildings.

• Implementing safety procedures for loading and unloading of product to transport

systems (e.g. rail and tanker trucks, and vessels, including use of fail safe control
valves and emergency shutdown and detection equipment (ESD/D).

• Preparation of a formal fire response plan supported by the necessary resources and
training, including training in the use fire suppression equipment and evacuation.
Procedures may include coordination activities with local authorities or neighboring
facilities to ensure emergency preparedness.
Occupational Health and Safety
Issues Associated with LNG Facilities
Fire and explosion
Prevention of potential ignition sources such as:

• Proper grounding to avoid static electricity buildup and lightning hazards (including
formal procedures for the use and maintenance of grounding connections)

• Use of intrinsically safe electrical installations and non-sparking tools

• Implementation of permit systems and formal procedures for conducting any hot
work during maintenance activities,25 including proper tank cleaning and venting.

• Application of hazardous area zoning for electrical equipment in design

• Facilities should be properly equipped with fire detection and suppression equipment
that meets internationally recognized technical specifications for the type and
amount of flammable and combustible materials stored at the facility. Examples of
fire suppression equipment may include mobile / portable equipment such as fire
extinguishers, and specialized vehicles. Fixed fire suppression may include the use
of foam towers and large flow pumps. The installation of halon-based fire systems is
not considered good industry practice and should be avoided. Fixed systems may
also include foam extinguishers attached to tanks, and automatic or manually
operated fire protection systems at loading / unloading areas (Water is not suitable
for fighting LNG fires as it increases the vaporization rate of LNG)
Occupational Health and Safety
Issues Associated with LNG Facilities
Fire and explosion
• All fire systems should be located in a safe area of the facility, protected from the fire
by distance or by fire walls

• Explosive atmospheres in confined spaces should be avoided by making spaces inert

• Protection of accommodation areas by distance or by fire walls.

• The ventilation air intakes should prevent smoke from entering accommodation
areas;

• Implementation of safety procedures for loading and unloading of product to

transport systems (e.g. ship tankers, rail and tanker trucks, and vessels), including
use of fail safe control valves and emergency shutdown equipment/structures.

• Preparation of a fire response plan supported by the necessary resources to

implement the plan;

• Provision of fire safety training and response as part of workforce health and safety
induction / training, including training in the use fire suppression equipment and
evacuation, with advanced fire safety training provided to a designated fire-fighting
team.
Occupational Health and Safety
Issues Associated with LNG Facilities
Roll-over
• Storage of large quantities of LNG in tanks may lead to a phenomenon known as
“roll-over”. Roll-over may occur if LNG stratifies into layers of different densities
within the storage tank, resulting in pressures that, in the absence of properly
operating safety-vent valves, could cause structural damage.

• Recommended measures to prevent roll over include the following:

o Monitor LNG storage tanks for pressure, density, and temperature all along the
liquid column

o Consider installation of a system to recirculate the LNG in within the tank;

o Install pressure safety valves for tanks designed to accommodate roll over
conditions

o Install multiple loading points at different tank levels to allow for the distribution
of LNG with different densities within the tank to prevent stratification.
Occupational Health and Safety
Issues Associated with LNG Facilities
Contact with Cold Surfaces
• Storage and handling of LNG may expose personnel to contact with very low
temperature product. Plant equipment that can pose an occupational risk due low
temperatures should be adequately identified and protected to reduce accidental
contact with personnel. Training should be provided to educate workers regarding
the hazards of contact with cold surfaces (e.g. cold burns), and personal protective
equipment (PPE) (e.g. gloves, insulated clothing) should be provided as necessary.
Occupational Health and Safety
Issues Associated with LNG Facilities
Contact with Cold Surfaces
• The design of the onshore facilities should reduce exposure of personnel to chemical
substances, fuels, and products containing hazardous substances. Use of
substances and products classified as very toxic, carcinogenic, allergenic,
mutagenic, teratogenic, or strongly corrosive should be identified and substituted by
less hazardous alternatives, wherever possible. For each chemical used, a Material
Safety Data Sheet (MSDS) should be available and readily accessible on the facility.

• Facilities should be equipped with a reliable system for gas detection that allows the
source of release to be isolated and the inventory of gas that can be released to be
reduced. Blowdown of pressure equipment should be initiated to reduce system
pressure and consequently reduce the release flow rate.

• Gas detection devices should also be used to authorize entry and operations into
enclosed spaces. Liquefaction facilities with gas treatment operations may have the
potential for releases of hydrogen sulfide (H2S). Wherever H2S gas may accumulate,
the following measures should be considered:

• Development of a contingency plan for H2S release events, including all necessary
aspects from evacuation to resumption of normal operations;
Occupational Health and Safety
Issues Associated with LNG Facilities
Contact with Cold Surfaces
• The design of the onshore facilities should reduce exposure of personnel to chemical
substances, fuels, and products containing hazardous substances. Use of
substances and products classified as very toxic, carcinogenic, allergenic,
mutagenic, teratogenic, or strongly corrosive should be identified and substituted by
less hazardous alternatives, wherever possible. For each chemical used, a Material
Safety Data Sheet (MSDS) should be available and readily accessible on the facility.

• Facilities should be equipped with a reliable system for gas detection that allows the
source of release to be isolated and the inventory of gas that can be released to be
reduced. Blowdown of pressure equipment should be initiated to reduce system
pressure and consequently reduce the release flow rate.

• Gas detection devices should also be used to authorize entry and operations into
enclosed spaces. Liquefaction facilities with gas treatment operations may have the
potential for releases of hydrogen sulfide (H2S). Wherever H2S gas may accumulate,
the following measures should be considered:

• Development of a contingency plan for H2S release events, including all necessary
aspects from evacuation to resumption of normal operations;
Occupational Health and Safety
Issues Associated with LNG Facilities
Contact with Cold Surfaces
• Installation of monitors set to activate warning signals whenever detected
concentrations of H2S exceed 7 milligrams per cubic meter (mg/m3). The number
and location of monitors should be determined based on an assessment of plant
locations prone to H2S emissions and occupational exposure

• Provision of personal H2S detectors to workers in locations of high risk of exposure

along with self-contained breathing apparatus and emergency oxygen supplies that
is conveniently located to enable personnel to safely interrupt tasks and reach a
temporary refuge or safe haven;

• Provision of adequate ventilation of occupied buildings and of adequate safety

systems( e.g. airlocks, ventilation shut down by gas detection) to avoid accumulation
of hydrogen sulfide gas

• Workforce training in safety equipment use and response in the event of a leak.
Occupational Health and Safety
Issues Associated with LNG Facilities
Confined Spaces
• Confined space hazards, as in any other industry sector, are potentially fatal to
workers. Confined space entry by workers and the potential for accidents may vary
among LNG terminal facilities depending on design, on-site equipment, and
infrastructure. Confined spaces may include storage tanks, secondary containment
areas, and stormwater/wastewater management infrastructure.
Occupational Health and Safety
Issues Associated with LNG Facilities
Community Health and Safety
• Community health and safety impacts during the operation of LNG Facilities are
related to potential accidental natural gas leaks, in either liquid or gas form.
Flammable gas or heat radiation and overpressure may potentially impact
community areas outside the facility boundary, although the probability of large
magnitude events directly associated with storage operations in well designed and
managed facilities is usually negligible. The layout of a LNG facility and the
separation distance between the facility and the public and/or neighboring facilities
outside the LNG plant boundary should be based on an assessment of risks from
LNG fire (thermal radiation protection), vapor cloud (flammable vapor-dispersion
protection), or other major hazards.

• LNG facilities should prepare an emergency preparedness and response plan that
considers the role of communities and community infrastructure in the event of an
LNG leak or explosion.

• Ship traffic, including at loading and unloading jetties, associated with LNG facilities
should be considered, with respect to local marine traffic patterns and activities.
Location of ship loading / unloading facilities should also consider the presence of
other shipping lanes and other marine activities in the area (e.g. fishing, recreation).
Occupational Health and Safety
Issues Associated with LNG Facilities
Community Health and Safety
Security

• Unauthorized access to facilities should be avoided by perimeter fencing surrounding

the facility and controlled access points (guarded gates). Public access control should
be applied. Adequate signs and closed areas should establish the areas where
security controls begin at the property boundaries.

• Vehicular traffic signs should clearly designate the separate entrances for trucks /
deliveries and visitor / employee vehicles.

• Means for detecting intrusion (for example, closed-circuit television) should be

considered.

• To maximize opportunities for surveillance and minimize possibilities for trespassers,

the facility should have adequate lighting.
For more detailed references :

i Environmental and safety Guidelines for Liquefied Natural Gas

Facilities.

ii Environmental, Health, and Safety (EHS) Guidelines: General

EHS Guidelines: Environmental

iii EHS Guidelines for Shipping

iv EHS for Onshore Oil and Gas Developments

Emerging Cost-Saving
Technologies
 Heat Generation Based on Combination of
Open and Closed Ranking Cycles (Scheme 1)

• LNG from the tank it is charged by a pump (up to 53 bar) to an evaporator-condenser. LNG flow
rate is 10 t/h. After the evaporator-condenser natural gas is charged to over-heater. where it is
heated by seawater to 24 o C. Then it is charged to a circuit of turbines with intermediate
seawater. Heat exchangers. Gas is charged to a finishing heater after the circuit of turbines and
then to a cryogenic heat power plant (CHP).

• The second circuit is a steam-turbine plant with propane as working fluid. Propane
condensation is executed by heat rejection to a LNG (which is evaporating)-Evaporator 1).
Pressure is increased by a pump up to 9 bar at 23o C. Evaporating is executed by heat addition
from the seawater and then propane is charged to a turbine where it is expanded to 2 bar.
Propane flow rate is approximately 2.91 t/h.
 Heat Generation from LNG re-gasification,
based on combination of open Rankine cycle
and closed Brayton cycle (Scheme 2)
LNG

A • In a combination of Brayton cycle and open

Rankine cycle. LNG is stored in a tank A. It is
charged by pump in heat exchangers C1 and
C2, where LNG evaporation and nitrogen
cooling take place.

• Nitrogen is working fluid of the second cycle.

After heat exchangers LNG is charged into
overheater D and then it is expanded in
turbine L. Nitrogen is used in Brayton cycle,
where it is cooled before compressors and
then overheated by waste heat. Regenerative
heat exchanger is used for increasing the cycle
efficiency. Turbine power is partially used for
the drive of compressors I1 and I2.
NITROGEN
• Thus, this plant utilizes two thermodynamic
cycles – open cycle of expansion for LNG and
closed Brayton cycle for nitrogen
Heat Generation from LNG re-gasification,
based on combination of open Rankine cycle
and closed Rankine cycle operating on binary
mixture (Scheme 3)

The LNG re-gasification takes place in open steam-power circuit where heat added to LNG in
evaporator is rejected from binary water-ammonia mixture, which operates in closed steam
power cycle. Mixture overheating is executed by waste heat utilization.
 Heat Generation from LNG regasification
based on LNG preliminary thermal
compression (cryogenic fuel-cold energy power)
(Scheme 4)

• In this scheme of LNG regasification contains a circuit of turbines. Gas flow rate is 0.06 kg/s,
mass of the gas in one cryogenic fueling tank (CFT) is 1543 kg, time of tank operation is 7
hours.
• Inner volume of CFT is fueled by LNG from the low pressure tank with the temperature of 112 K.
Further, it is gasified in the tank by heat fluxes from the environment or any other way up to
temperature of 300 K and pressure 30 MPa.
• After reduction, gas is charged to pipelines with certain pressure and temperature where it is
expanded in turbines which generate useful work (turbine power). Then gas is used in gas
reciprocating unit as fuel. It is suggested to use a FG Wilson PG1250B gas station as gas-
reciprocating unit with power output 1MW. This station is equipped by four-stroke piston engine
with liquid refrigeration system and has a fuel rate equal to 0.06 kg/s.
Most Optimal Heat Generating Scheme
• It may be affirmed that the area of cold temperatures (temperatures which are lower than
temperature of environment) produces useful work in more effective way than are of hot
temperatures (temperatures higher than temperature of environment). It is obvious that
contribution of the cold area in useful work generation (i.e. moving turbines for heat
generation) is larger than contribution of hot temperatures area.

Cold Exergy

Hot Exergy

Note however that exergy efficiency is not always suitable for estimation of cold energy use efficiency
because exergy efficiency is not readily creatable with the amount of work reduced in driving turbines
for heat generation.

• The plant, which utilizes thermal compression in tank and turbine circuit, can be
considered as most effective because its reduced specific work is the highest among the four
schemes of plants presented in the foregoing slides.
Technologies Used in LNG Cold Energy
Utilization
LNG Cryogenic Power Generation
System

• The LNG pressure is increased to 3.5 to 4.5 MPaG by LNG

pumps (MPaG = Megapascal measure at a Gauge and 1 MpaG =
145.037738007 PSIG (Pounds per square inch)
• The LNG vaporizer transfers heat from propane gas to LNG.
• Vaporized LNG then enters the NG trim heater and is heated to
0ºC or higher by sea water.
• The liquid propane condensed in the LNG vaporizer via heat
exchange with LNG is pressurized by the circulation pump and
sent to the propane vaporizer where it vaporizes at a pressure in
accord with the temperature of sea water.
• Vaporized propane gas drives the turbine during the expansion
process and generates electricity. Subsequently, the propane gas
is condensed again in the LNG vaporizer
Cryogenic Power Generation

• Osaka Gas of Japan pioneered research and development of LNG cryogenic power generation
facilities and constructed the first commercial unit and has operated cryogenic power
generation systems safely and stably for more than 30 years, the longest period in the world.

• Osaka Gas s still actively working on R&D of LNG cryogenic utilization technology.
LNG Cryogenic Power Output
Recovery, in form of electric power,
of cryogenic energy, which would
otherwise be wasted from LNG
vaporization facilities, reduces
power consumption at LNG import
terminals, and by extension CO2
emissions from thermal power
plants. Cryogenic energy as motive
power is highly important from an
energy-saving point of view

• Cryogenic LNG (−160℃) has a potential for cryogenic energy recovery of some
240 kWh per ton of LNG if 100% recovery is achieved
Recycling and Utilizing the Cold
Energy - India
 Energy Lost During Regasification

Examples in India and Indonesia

(US$550 million Bantaeng receiving
terminal in South Sulawesi, Indonesia
with an adjacent industrial park)

• During regasification LNG is reheated and vaporized for end use handling.
• Free source of heat is used by circulating seawater (or blowing atmospheric air).
• The transferred cold is lost back into the air and essentially wasted. This stranded
cold is zero CO2 energy. The cold energy can be captured stored and used for
several purposes including cryogenic heat generation by driving turbines.
Captured Cold Energy

For a typical 5.5 million tonnes per annum (mta)

import terminal, up to 110MW of LNG cold energy
could be available at the maximum send-out
rate, depending on the capture process and
application involved.

• Cost of recovering the energy is minimal with maximum value achieved from the
extraction and capture
• A port based cold hub can be created for temperature controlled operations and
other optimization opportunities
 FSU and Offshore Regasification Concept
by Foster Wheeler

Floating Storage Unit (FSU) Modular Regasification Unit

• A commonly-required send-out
capacity is 500 MM Scfd of gas
with an additional 50% peak
capacity.

Modular Regasification Unit • The Foster Wheeler’s design is

based on three trains, each with a
send-out capacity of 275 MM
Scfd, assembled together on one
module.

• The system is configured as

3x33% regasification trains.

• The module contains the required

Vessel transporting modular regasification unit pumps, motors, heat exchangers,
to place module on offshore jetty platform instrumentation and control
systems, and interconnecting
piping between the trains.

• Target gas outlet pressure is 33-

Concrete Reinforced 95 barg at the module edge.
Caisson Turndown capability for each
train is 100-20%.
 FSU and Offshore Regasification
Concept by Foster Wheeler
Structural Design Layout

The loading platform (including mooring and fendering system) and dolphins will serve to host the
shuttle LNG Carrier and unload the cargo via arms to the FSU. The FSU will be permanently
moored on the other side of the platform. Liquid cargo will be transferred from the FSU to the
platform top regasification unit via LNG loading / unloading arms.
Comparative Analyses with Other Options

• Leased FSRU appears to be a better option

 Comparative Analyses with Other Options

• Comparable to FSRU (where FSRU is leased rather than built (remember 170,000 cubic meter
FSRU typically would cost in excess of US$250 million to purchase, whereas the cost of developing
a land-based terminal of comparable size is likely to be in the region of US$1 billion)
New Horizons for Small Scale LNG Value
Chain

• Countries entering the LNG chain that are not interested in importing large quantities of LNG as their market cannot
make use of it all may find small scale LNG as a suitable option.
• The increasing capacity LNG carriers and equipment, does not support the development of small scale terminals with a
capacity in the range of 0.5 Mtpa.
• The investors and developers tend to consider these small scale LNG terminals in the same way as a typical large scale
LNG terminal but with a reduced send-out.
• Such an approach would not make the terminal economically profitable as only a portion of the CAPEX consisting of
jetty, tanks, utilities, etc. is driven by the send-out rate. These CAPAX elements are independent of the send-out rate
and remain the same irrespective of the capacity of the terminal.
• Potential design alternatives can be adopted to help develop profitable small scale LNG terminals.
• Typically, the send-out rate of such small LNG terminals is ranging from 0.2 to 1 Mtpa. And are dedicated to small size
power plants or consumers
Comparison of Small and Large Scale LNG
Terminal
Annual LNG Requirements for Different
Power Plant Capacities and Send-Out Rate

2 Typical efficiency of open-cycle gas turbine

3 Typical efficiency of Dual Fuel Engine
4 Typical efficiency of combined cycle gas turbine
Small Scale LNG Import Terminal
Downscale of Large Terminal

• Simply downscaling a Large LNG termal for lower send-out gas rate does not achieve an
economically feasible solution because the parameters that influence CAPEX such as the import
infrastructure (jetty, storage tanks, regasification facility) are independent of send-out rate and
remain the same irrespective of the size and capacity of the terminal

• Cost reduction is a critical need to make the small scale LNG receiving terminals projects
economically feasible and requires an appraisal of the main cost factors (CAPEX and OPEX wise)
Small Scale LNG Import Terminal
Optimized

Design optimization requirements include:

• Process Optimization
• Technology selection
• Layout optimization
Design Optimization Requirements for a
Small Scale LNG Import Terminal
Design Optimization
• In the case of a small scale LNG terminal feeding gas to a power plant (typically up
to 30-40 barg), the multiple level of pressure in the LNG send-out could be
avoided. The required send-out pressure can be reached by pumping LNG directly
from the LNG tank with In-Tank LNG pumps without the need of HP pumps. The
cancellation of the second level of pumping allows to cancel the LNG buffer at HP
pump suction, function typically ensured by the absorber.
• Lower pressure send-out in case of Dual Fuel Engine gas supply allows use of
compressors to handle BOG directly to grid without any absorber. As a result of
absorber deletion, the possible minimum send-out rate of the LNG terminal will be
reduced thereby giving more flexibility to the LNG terminal operations.
• Removal of the vapour return line connection from the terminal to the unloading
LNG carrier. The required vapour return quantities can be reduced to an extent
that the benefit of this return connection is eliminated
• Reduce the quantities of piping and equipment on the jetty head and
consequently the required unloading platform area, reduce the size of the piping
rack to the jetty head and the related infrastructure towards and eliminating the
need of a desuperheater for gas returning to ship.
• Reducing the number of equipment simplifies the process of the small scale LNG
receiving terminal, the required foot print for installation, and hence the CAPEX .
It also has an a positive impact on the operating costs (less maintenance, less
power consumption, less consumables, less spare parts to store, etc.).
Design Optimization Requirements for a
Small Scale LNG Import Terminal
Technology Selection
• LNG tanks full containment technology widely used in large scale LNG terminals can
obviously be downscaled to be installed in a small scale LNG receiving terminal.
However, since the storage cost per cubic meter will increase when the tank capacity
decreases, the suitability of the full containment technology for LNG storage tank
can be assessed. The potential alternatives is either a single containment API type
metallic tank if spacing allows or full containment tank with outer container in 9%
Ni or Stainless Steel, or double membrane inner container with low temperature
cCarbon Steel outer tank.

• Replacement of the vaporizer technology used in large scale LNG receiving terminal
consisting of Submerged Combustion Vaporizers (SCV’s), Open Rack Vaporizers
(ORV) or Shell and Tube Vaporizers STV (with various heat sources e.g. seawater or
ambient air) by using passive equipment like Ambient Air Vaporizer (AAV). This type
of vaporizer allows a better matching of the installation capacity to the demand for
small sale LNG receiving terminals. A major benefit of this type of installation is that
it will reduce the energy costs to zero in most cases by using a free heat source. (In
most cases because, for some extreme conditions, a back-up heater could be
required to operate for a very limited duration and/or some fan could be required to
optimize the heat exchange by dissipating the fog due to the air condensaion).
Design Optimization Requirements for
a Small Scale LNG Import Terminal
Layout
• Reducing the number of equipment will reduce the required foot print of the LNG
receiving terminal The lower inventories , the reduced quantities that could be
released, the potential lower pressure of hazardous materials involved, will allow a
more compact design of the LNG receiving terminal by reducing the required safety
distances.
• Reducing storage facility for a capacity in the range from a couple of hundred of
m3 to around 20,000 m3, thus further reducing land size requirements and
required layout design

Operational
• Minimum staff with outsourcing can be considered. Synergies with consumers
(power generation, etc) for maintenance and administrative activities can be
considered if possible, related buildings and resources can be shared
Summary of Design Optimization Choices
for a Small Scale LNG Import Terminal
Small Scale LNG Carrier
Small Scale Power Plant
 Floating Storage Regasification to
Power (FSRP) Technology
Floating storage regasification and power generation integrates functions of LNG
loading and storage facilities, regasification and power generation.

Key features of W-FSRP are as follows:

• Integrated on board LNG storage,
regasification facility, and power plant
• Can be easily towed/shipped and installed
in remote areas
• Re-Gas capacity-10MMSCFD
• Dual fuel Engine and Dual fuel system (in
case of unstable LNG supply)
• Either LNG storage or MDO storage allows
about 14 days operation. However a larger
hull to accommodate more MDO storage or
bigger LNG tanks can be designed
Barge Mounted Power Plants

These complete, self-contained power plants can be equipped with almost

any type of power generation equipment plant, including:
• Gas Turbines; Heavy Industrial, Light Industrial, Aeroderivative
• All Styles of Reciprocating Engines
• Simple and Combined Cycle
• Multiple Fuel Sources
All that is required is a fuel source and HV electrical interconnection.
Barge Mounted Power Plants

• The barges can be configured to also store liquid or LNG fuels.

• The units can either be connected to the local grid or operated as stand-
alone island plants, ready to run at 100% load within just ten minutes
from cold start
• Power barges can be easily mobilized to provide emergency power in times
of need, and humanitarian and relief initiatives around the world
FRSU Project Local Content
Opportunities
Common Local Content Objectives
Common Elements of Localization
 Local Content Supplier Models

Increasing value retention

Local content objectives may be designed to achieve multiple and varied outcomes: for
example;
• It may be expected that local communities gain access to employment opportunities
• It may be anticipated that an internationally competitive supply chain industry be
developed elsewhere in the country
• Development plans may provide incentives to develop certain economic sectors which
could be linked with the oil and gas value chain
• There may be established programmes to develop the SME sector, which could align
with the oil and gas industry’s own efforts to develop SME suppliers
• There may be established programmes to develop historically under-represented or
marginalized groups (e.g. women, Indigenous Persons), or SMEs owned by them.
• Initiatives may be under way for other industrial sectors (e.g. mining,
construction, infrastructure, etc.) that could benefit the oil and gas industry.
Local Content Supply of Goods
Local Content Supply of Services
Additional LNG Specific Goods and
Service Supply Opportunities
• Tug boats design, commissioning, service and maintenance of
maritime safety
• Assets including: visual signaling equipment, electronic aids (AIS,
DGPS)
• VTS, Radar), high-reliability remote area power supplies, tide gauging
• Equipment, telemetry and monitoring systems, search and rescue
equipment, buoys towers, piles and composite structures
• Manufacture and distribution of pipe supports, pipe suspension
equipment & associated products, cryogenic, hot services &
commercial plumbing

See Australia Local Content Report

Lead Times for Developing required Personnel
(Example: LNG Plant Technicians )

Workforce and supplier development requires medium-term planning horizons. The earlier
these efforts are started, the more likely the labor market and enterprises will be both
prepared for the demand and available in future to serve additional projects and sector-
related activities. Timely workforce and supplier development is particularly important
during the construction phase when opportunities are many, but the activity time span is
short. In practical terms, other workforce requirement and development curves associated
with the project need to be developed at pre-FEED stage.
Human Resource Capacity Development
• Professional/Technical
o Mechanical Engineers
o Electrical Engineers
o Occupational Health and Safety Specialists
o Environmental Health and Safety Specialists
• Legal
o LNG Contracts and Negotiations Legal Specialists
• Technicians
o LNG Plant Operators (focus on loading and unloading)
o LNG leak or spill controllers and fire fighters
 Requirements for Technicians
CUSTOMER
SERVICE

PIPELINE OPRATIONS
AND MAINTENANCE

SAFETY

GAS CONTROL
CORROSION
CONTROL

GAS QUALITY

REGULATION &
OVERPRESSURE
PROTECTION

GAS
MEASUREMENT

STORAGE
OPERATIONS
LNG Emergency Response Training
Training on Control of LNG Fires and Spills

Important to have a special dedicated team for LNG Facility control

escalation of any leaks and suppress any fires
LNG Spill and Fire Suppression
Response Services
Fire Fighting Boat and Rescue Services
Distance between Dongo Kudu and
Port Reitz General Hospital

Need for an emergency

tug boat or ambulance

Port Reitz Hospital largely a

mental institute probably lacking
emergency out-patient unit
Boat Ambulance Services

http://www.munsonboats.com/fire.php
Training on Safe Operations of LNG
Vessel Tug and Tow Boats
SME & MME Business Enterprises:
Under Different Industry Clusters
Plastic Packaging Cluster
Construction Cluster
Automotive Cluster
 Ethylene and Propylene Uses
Ethylene and propylene are the
precursor components for the
manufacture of many products
such as polyethylene and propylene
glycol
 Olefins and their Utilization
Olefin, also known as polypropylene or polyethylene, is a long-chain polymer synthetic
fiber. It is created when ethylene and/or propylene gases are polymerized under very
specific conditions. the polymers are melted to a liquid, then run through a machine
called a spinneret, which forces the material through small holes to produce a long
fiber.
• Many companies favor this product because of its easy, inexpensive manufacturing
process and the material is relatively environmentally friendly due to the few
byproducts produced when it's made.
• Olefin is also easily recycled.
 Lurgi MegaMethanol®: Basis for
More Valuable Products

• The term MegaMethanol® refers to plants with a capacity of more than one million metric tons
per year, the actual “standard” size being 1.7*106 t/a (equivalent to 5,000 t/d). To achieve such
a large capacity in a single-train plant a special process design is required. For this reason Lurgi
focused on the most efficient integration of syngas generation and methanol synthesis into the
most economical and reliable technology for the new generation of future methanol plants.

• Atlas/Trinidad and Zagros/Iran, are running the above design and capacity commercially.
 Manufacture of Ammonia and Process
Ammonia is synthesized from hydrogen (in Natural Gas
Natural Gas) and Nitrogen (from the air ).
atmosphere
The hydrogen sulfide in natural gas is first Desulfurizer
removed using a Zinc Oxide catalyst in Steam Reformer
flue gas
the chemical process shown below: steam

ZnO + H2S - ZnS + H2O Air Air Reformer Waste Heat

water
Boiler
steam
The Methane in natural gas is then
Waste Heat
converted to hydrogen water
Boiler
CH4 + H2O 3H2 + CO
water Shift Converter
CH4 + 2H2O 4H2 + CO (CO CO2)

CO + H2O + H2 + CO2
saturated UCARSOL CO2 Removal ^ UCARSOL
Air is mixed with the gas stream to
produce a hydrogen nitrogen ration of 3:1 CO2 Stripper Methanation water
Water, carbon dioxide are removed by
converting it to carbon monoxide, Which is Compression and
CO2
used in Urea synthesis. The process is as Cooling
follows NH3 Unreacted gas and NH3
Mixer
CO + H2O CO2 + H2 Urea
Plant Synthesis
Remaining traces of carbon monoxide and NH3 Converter Loop
carbon dioxide are converted to methane
and then the gases are cooled until the Cool to 30o C
water becomes liquid and can be easily NH3
impurities
removed. Decompression NH3 Recovery
The nitrogen and hydrogen are then NH3
reacted at high temperature and pressure Ammonia purge gas
using an iron catalyst to form ammonia
N2 + 3H2 + 2NH3 * UCARSOL™ AP 814 Solvent For CO 2 removal
Urea Plant Industry
Some Uses of Ammonia
 Manufacture of Urea and Process
CO2 NH3
Urea is made from ammonia and carbon
dioxide. The ammonia and carbon dioxide
are fed into a reactor at high temperature,
and the urea is formed in following two Synthesis
stage process
Urea, excess NH3
2NH3 + CO2 + NH2COONH4 (ammonium Carbamate, H2O
carbonate) NH3 , CO2
heat Decomposition Recovery cooling
cooling
NH2COONH4 H2O + NH2CONH2 (urea)
Urea, H2O
The urea contains unreacted NH3 and CO2
and ammonium carbamate. As the heat Concentration H2O H2O
pressure is reduced and heat applied the
NH2COONH4, decomposes to NH3 and CO2. Urea

The ammonia and carbon dioxide are Granulator

recycled.

The urea solution is then concentrated to

give 99.6% w/w molten urea, and Granulated
granulated for use as fertilizer or chemical Urea
feedstock
Some Uses of Urea
 Vessel Tug Boats

A public watchdog yesterday upheld a Sh1.48 billion tender awarded to a Dutch firm for the supply of tugboats to the
port of Mombasa. The deal - to supply three tugboats to replace the port's ageing fleet of seven, supply spare parts for
eight years and train the crew at Kenya Ports Authority - had been challenged by one of the losing bidders, a local
firm called Baumann Engineering _ 24th December 2003

The Kenya Ports Authority tugboats have been certified safe to operate by the Lloyds Register of Shipping Quality
standards. Kiboko II, Simba III and Nyangumi II passed the annual inspection conducted by the LIodys Surveyors
last week. – 29th April 2011
 Local Participation by other Sectors
of the Economy
Construction – LNG storage tanks and pipelines
Local Participation by other Sectors
of the Economy
Financial Services Sector
• Given that LNG import facilities will earn money in local currency,
they will be more likely to attract domestic bank participation, if the
domestic banks are sufficiently liquid or can raise syndicate
financing
• Development banks will often fund infrastructure associated with
FSRUs, such as pipelines, jetties, and berthing for LNG carriers
Examples
Standard Chartered Bank has closed a $309 million export credit
agency (ECA) backed financing deal for a floating storage and
regasification unit (FSRU), with PT Hӧegh LNG Lampung, Indonesia
In April 2015 a group of 11 Indian banks provided 35.287 billion
rupees ($560 million) to fund the 5 MTPA Mundra LNG import project
in India’s Gujarat state. The project has a total cost of around $730
million and is being sponsored by government-owned Gujarat State
Petroleum Corp and Indian conglomerate Adani Enterprises.
Local Participation by other Sectors
of the Economy
Financial Services Sector
Elengy Terminal in Pakistan, which is a fully-owned subsidiary of
domestic company Engro Corp attracted funding from the IFC and the
Asian Development Bank to fund its FSRU-based import operations at
Port Qasim. The project cost was $130 million and IFC provided $7.5
million for an equity stake and a loan of $20 million, while ADB
provided a loan of $30 million.
The Japan Bank for International Cooperation (JBIC) signed on
October 29, a loan agreement in project financing, totaling up to
approximately USD 2.6 billion (JBIC portion) with FLNG Liquefaction,
LLC (FLIQ). The loan is co-financed with private financial institutions
including the following 6 private financial institutions; The Bank of
Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation,
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mitsubishi
UFJ Trust and Banking Corporation, and ING Bank N.V., Tokyo
Branch. The financed portion is insured by Nippon Export and
Investment Insurance (NEXI)
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
Risks that can be insured:
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
Insurance Solutions vary on type of FSRU project design

Construction interruption by say hurricanes or storms can be as onerous a loss

as business interruption
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
Insurance Solutions vary on type of FSRU project design
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
Typical project and operational insurance program design

Sophisticated insurance solutions are built for both project and operational phases to protect the
balance sheets of both parties to FSRU agreements.
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
FSRU Insurance Protection and Contract Risk Mitigation
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
FSRU Insurance Protection and Contract Risk Mitigation
 Local Participation by other Sectors
of the Economy
Insurance Services Sector
Other types of insurance requirements
• LNG Vessel Insurance

o Hull and Machinery Insurance

o Protection & Indemnity Insurance (P&I Insurance)

• Commercial General Liability Insurance / Marine Terminal Operator’s Liability

Insurance

• Workers’ Compensation / Employer’s Liability

• All-Risk Property Insurance

• Wharfingers Liability Insurance

• Loss of Product Insurance

The range of premiums to be collected is vast — from the marine risk involved in delivering
equipment and supplies to construct and operate facilities; to the construction risk of
processing plants; to the petrochemical facilities turning the gas into plastics; to the
buildup of LNG export terminals on the coast — involving all lines, from property to
casualty, from environmental to business interruption and everything in between.
 Local Participation by other Sectors
of the Economy
Legal Services Sector (the various agreements and contracts)
FSRU LNG Import
Optimization
LNG Developers of East Africa’s Natural Gas
 LNG Developers of East Africa’s Natural Gas
Mozambique LNG from Area 1
Target Markets

In addition to long-
term SPA’s some gas
production will be sold
on a spot and/or
short-term basis
Singaporean-based
company called
"Mozambique LNG1
Company Pte. Ltd."
has been incorporated
to be the seller
Approximately 75 Tcf counter-party on all
of recoverable NG has SPAs.
been discovered in the Agreement reached on the
Offshore Area 1 project’s first long-term SPA for
2.6 MTPA with PTT, Thailand’s
national oil and gas company. The
SPA has been approved by PTT’s
Board and is subject to the
approval of the Government of
Thailand.

Source: Anadarko Mozambique Fact Sheet October 2017

 LNG Developers of East Africa’s Natural Gas
Mozambique LNG Development Costs - 5 MMpta (750Mscfd)

Source: Gaffney Cline & Associates

 LNG Developers of East Africa’s Natural Gas
Mozambique LNG Development

Mozambique LNG plans to build

2 initial LNG trains, each with
capacity of 6 million tonnes per
annum (MTPA). The LNG park
will be scalable to 6 LNG trains
so that over time, it can be
expanded up to 50 MTPA.

The Mozambique LNG participants

1. Anadarko Petroleum
Corporation
2. Empresa Nacional de
Hidrocarbonetos E.P. (ENH)
A subsea development with subsea
3. Mitsui E&P Mozambique Area1 wells tied directly to shore via a
Ltd. subsea gathering system and
4. ONGC Videsh Ltd. capable of handling 2 billion cubic
5. Bharat PetroResources Ltd. feet per day of natural gas
6. PTT Exploration & Production
Plc
7. Oil India Ltd.

Source: Anadarko Mozambique Fact Sheet October 2017

LNG Developers of East Africa’s Natural Gas
Mozambique Capo Delgado (Palma Bay) LNG and Industrial Complex

LNG Industrial Park on the Afungi Peninsula in Cabo

Delgado province of northern Mozambique
LNG Developers of East Africa’s Natural Gas
Mozambique FLNG in Area 4 (East of Anadarko’s Area 1)
Total Reserves in
Area 4 = 85 Tcf
Coral South =
16 Tcf
Eni (35.7%), ExxonMobil (35.7%), CNPC (28.6%),
Empresa Nacional de Hidrocarbonetos de Mozambique
E.P. (ENH, 10%), Kogas (10%) and Galp Energia (10%).
• Eni’s Coral South Development Project is
located in the deep waters of the Rovuma Basin,
which straddles Mozambique’s Northern border
with Tanzania.
• Eni expects to start first shipment from
Mozambique FLNG in 2022.
Project Cost USD 8bn
The Floating LNG facility will be moored in 2,000
meters of water depth. will have a production capacity
of 3.4 MTPA
An FLNG unit is able to process and convert natural
gas to liquefied natural gas (LNG) on site and ready
for export. This method of LNG production is cheaper
as there is no need for construction of subsea
pipelines and onshore processing plants. It is also
easy to mobilize to
LNG Developers of East Africa’s Natural Gas
Mozambique FLNG in Area 4

BP signed a 20-year SPA Contract with Eni of Italy to LNG from the Coral South FLNG
Development Project guaranteeing a customer for the entire output of the Coral South
field
LNG Developers of East Africa’s Natural Gas
Artistic Illustration of FLNG Development
LNG Developers of East Africa’s Natural Gas
Mozambique –Area 1 and Area 4 Unitization

Anadarko and Eni have signed a unitization agreement for the giant gas reserves
that straddling Offshore Area 1 and Offshore Area 4 in Mozambique’s Rovuma
Basin. Thi allows for development of the Mamba-Prosperidade complex, estimated to
hold more than 850 billion cubic metres of reserves.
LNG Developers of East Africa’s Natural Gas
Mozambique Gas Reserves
Naval Distance from Capo Delgado, Mozambique to Dongo
Kudu

604 miles
 Kenya LNG Import Options
Tanzania Gas Discoveries

Most of the gas discoveries in Tanzania

are in deep-sea offshore Blocks 1, 2 and
3 south of the country near the site of a
planned two train Liquefied Natural Gas
(LNG) plant at Lindi
First cargoes expected at the end of 2020

Total proven reserves currently standing at over 46.5 trillion cubic feet (TCF), with main
player being BG Group plc, Statoil ASA, Exxon Mobil Corp. and Ophir Energy Plc are,
in conjunction with the Government of Tanzania (GoT),
Kenya LNG Import Options
Tanzania Lindi LNG Plant

Project Cost USD 30 bn

Developers : Statoil and Shell/BG
FID: Approximately in 4 years from 2017 (not time bound)
Tanzania Ports Authority (TPA) has begun improving infrastructure at
Mtwara, Lindi and Kilwa ports to prepare the infrastructure required
for the LNG facilities
 LNG Developers of East Africa’s Natural Gas
Mtwara to Daresalaam Gas Pipeline
532 km
o The Songo Songo
plant in Mtwara.
o Building of the
facility was financed
by a $1.2 billion
loan from Export-
Import Bank of
China.
• Maurel & Prom and Mnazi Bay licence partners Wentworth
and Tanzania Petroleum Development Corporation (TPDC
have signed a gas sales and purchase agreement with
TPDC for the long-term sale of natural gas from the Mnazi
Bay and Msimbati to the government owned and operated
Mtwara to Dar es Salaam pipeline and Madimba central
processing facility at Mtwara.
• The GSA, provides for the supply of natural gas to the
Pipeline Project up to a maximum 80 mmcf/day of natural
gas in the first 8 months with the option to increase to a
maximum 130 mmcf/day for up to 17-years at at a fixed
price of S$3.00 per mmbtu (approximately US$3.07 per
mcf) escalating with United States CPI Industrial index.
• The Gas Supply Company (Gasco), a subsidiary of TPDC,
responsible for processing, transport and distribution will
be the link between gas producers and users,.
• The gas delivered to Dar es Salaam by TPDC will be used
by power generation firms, industries, compressed natural
gas vehicles, households and institutions
• The Energy and Water Utilities Regulatory Authority
(Ewura) has set $2.14 for TPDC for handling one million
metric British thermal units of natural gas
• The gas processing tariff has been set at at $0.95 and
transportation tariff of $1.19 per million metric British
thermal units to be levied by TPDC
LNG Developers of East Africa’s Natural Gas
Kilwa LNG Facility and Petrochemical Complex

Adjacent to the LNG Plant a petrochemical complex is

to be constructed by the state and managed by the
Petroleum Development Corporation.
Naval Distance from Lindi, Tanzania to Dongo Kudu

409 miles

It would appear if the LNG carrier transport distance below 2500 miles is not
cost-efficient import from Middle East may be an economical consideration
LNG Developers of East Africa’s Natural Gas
Dare salaam-Tanga-Mombasa Gas Pipeline
• The local market routing option (T1
+ K1) is designed to address the
opportunity of future connections
of local markets in Tanzania
(Arusha and Moshi) and Kenya
(coastal area between the border
and Mombasa). This results in a
longer pipeline and has the highest
investment costs of 630 million
USD (550 + 80 for compressor
stations).

• The least cost routing option (T2 +

K2) is designed to minimize
investment costs resulting in an
investment costs of 515 million
USD (435 + 80 for compressor
stations) or 25% below the
investment costs of the local
market routing option.

Feasibility of proposed pipeline routes completed in June 2011

Kenya LNG Import Options
Other LNG Exporters
 Kenya LNG Import Options
LNG to Power Requirements and Utilization Calculation

LNG Conversion Factors

Note:
• Modern-day FSRUs have limited storage capacity: new-build FSRUs typically have a capacity of between
one hundred and seventy thousand cubic metres (170,000 cbm) and one hundred and eighty thousand
cubic metres (180,000 cbm), although Mitsui O.S.K. Lines through its unit, Lakler S.A., is set to take
delivery of a two hundred and sixty three thousand cubic metre (263,000 cbm) FSRU later this year.

• The relationship between the storage capacity of the FSRU and the maximum allowable LNG ship size (or
LNG load) is very important. A significant margin of capacity provides a cushion for reduced or increased
demand, as well as other unplanned events
Kenya Gas Resource Potential
Pate Gas

Unrisked recoverable resources = 1 Tcf (P50)

Kenya Gas Resource Potential
Mbawa Gas

Total resources in Mbawa North and

Mbawa South = 547 Bcf (P10)
Kenya Gas Resource Potential
Block L8 Prospects and Leads Inventory

P10 = 2.5 Tcf

P10 = 5.2 Tcf

Total unproven gas resources in Block L8 = 7.7 Tcf (P10 resources)

Kenya Gas Resource Potential
Block L8 – Nanaa North Prospect

Nanaa North Prospect 1.3 Tcf (P10)

• Total Nanaa North and Nanaa South 2.6Tcf (P10) (excludes other segments of
Nanaa North and Nanaa South prospects probably separated by faults with Total
2.5 Tcf (P10)
• Nanaa Prospects straddle the Blocks L8 and L9 boundary
Kenya Gas Resource Potential
Block L8 and L6 Untested Prospects

GIIP 809 Bcf (P10 = 500 Bcf)

Kenya Gas Resource Potential
Block L6 Untested Prospects
Kenya Gas Resource Potential
Block L6 – Kifaru Structure and other untested Prospects

30 sq. km.
of closure

Kifaru a stacked reef structure with 30 sq km of closure mapped

by 3D seismic and ready for drill (oil and gas potential)
Kenya Gas Resource Potential
Block L10A and L10B Untested Prospects and Leads

Sunbird-1
well

Sunbird well
encountered a gas
zone @ 1653 m .net
pay 23.6 m
Reserve estimates
(P50) = 6.56 Bcf
Kenya Gas Resource Potential
Southern Offshore Lamu Basin Delta Play – Gas Prone Province

L9

All Blocks located within a proto-Tana

Delta and likely to be gas prone
 Kenya Gas Resource Potential
Southern Offshore Lamu Basin Reef Play – Oil Prone Province

Gas prone sand

Miocene Reef dominated
Trend province (Proto-
(Simba Reefs) Tana Delta)

Mapped prospects straddle Blocks L8 and L9 boundary hence need to amalgamate into single Block to avoid
lengthy unitization arrangements and also interest a large company with financial capacity to develop and
monetize any gas discovery
Fast-tracking Offshore Exploration
Design and undertake 3D Multi-Client Seismic Survey to better define Prospects and
Leads especially in Blocks L6, L8 and L9 to determine yet-to- find gas resources
Undertake joint interpretation of
the data between seismic
contractor and personnel from
both NOC and MoE&P for two
key objectives :
Area under
o Transfer technology in the Moratorium due to
Kenya/Somalia
prospect and economic
maritime boundary
evaluation
dispute

o Develop better understanding Opportunity

of the geology and resources in for 3D pre- Open
licencing Open Block L25
the offshore area of the coastal Block
round Multi- L26
Lamu Basin
client seismic
survey (Five
Offer open blocks and require open blocks –
drilling commitments in initial L8, L9, L15,
exploration period (L8 and L9 L29, L30, L31)
can be offered through direct
negotiations to further hasten
start of exploration activity
(require NOC to be partner of
any consortium for further
capacity and competence
development of human
resources)
New Isometrix 3D Seismic Technology

The IsoMetrix system uses calibrated, multisensor MEMS technology that

forms part of the new WesternGeco Nessie-6 point-receiver seismic streamer
Obtaining Seismic Data in True 3D
 The 3D CSEM Overlap to Constrain
Structure and Reduce Drilling Risk

The past 10 years have seen the development of the marine controlled source electromagnetic
(CSEM) method for hydrocarbon exploration. The survey method exploits the increased
electrical resistivity of hydrocarbon-saturated rocks to detect likely accumulations of gas or oil
in the subsurface. Subsurface resistivity is measured by creating a strong EM field from an
electric dipole source, and placing receiver electrodes at a distance. The EM field propagates
through the water column and into the subsurface, and the measurements at the receivers
can be used to determine the resistivity at various locations and depths.
 Gas Hub Incorporating Multiple Users
Structure
Cost Reduction
(use of innovative technologies for
FSRU terminal design-fixed or floating
and optimizing use)

Value-add Opportunities
Energy Savings (opportunities to increase
(cold thermal KEY DRIVERS add on value of gas
energy extraction – utilization that support
only if terminal is industrialization
located onshore or opportunities)
nearshore)

Sustainability
(synergy with port infrastructure
to minimize environmental
impact)
Note: Gas hub in this model refers to domestic multi-user structure rather than capturing
regional market granted the large reserves in Tanzania and Mozambique which have a competitive
advantage and are setting up their own domestic hubs or industrial parks.
 Status of Mombasa Port Development Plan
in 2022

• Approximately 22 ordinary existing berths for cargo allocation with 180m length and -10m depth and related
mooring facilities are expected to be developed by 2022

• Port must be accessible to large LNG carriers (VLCC) – required minimum water depth for average carrier is 13m
for safe entry. For the new jetty to receive LNG carriers, new tugboats and crews of the boats must be arranged,
and where to anchor the boats and how to operate them around the jetty must be determined.
Status of Mombasa Port Development
Plan in 2030

• Approximately 30 ordinary existing berths for cargo allocation with 180m length and 10m depth
and related mooring facilities are expected to be developed by 2030
 LNG Import Facility at Dongo Kudu

• Approach of the LNG ships, will be along the channel into the deeper water at Port Reitz. Dredging for the
approach channel for the LNG ships and turning basin will be required the timing of which is not yet known,

• Berths at Dongo Kundu for nearshore FRSU terminal should be large enough for the FSRU.
 FSRU LNG Import Hub at Dongo Kudu

FRSU
Location

The energy company Great Lakes Energy Africa Ltd is planning to introduce LNG (Liquefied Natural
Gas) into Kenya by placing an FRSU (Floating Storage and Regasification Unit) in Mombasa. SSPA
has been contracted to perform a feasibility study as one of the major decision-support documents
for the introduction. The objective of the study has been to look at the technical, operational,
practical, risk and safety aspects of introducing LNG, and to present recommendations for the
optimal way of establishing LNG as an energy source in Kenya.
 Proposed FSRU Location at Dongo Kudu

Kipevu II of Power plant

The location of the suggested FSRU, with a risk contour

marked in purple, green and blue.
LNG Import Facility at Dongo Kudu
Consider Petrochemical Feedstock Industrial
Clusters (e.g. Egypt)

• The planned location of the LNG power plant is on the western part of the
Dongo Kundu . Areas to the east will be developed for enterprise start-
ups.
 Petroleum and Petrochemical Hub
Development

FRSU based LNG Terminal with Natural Gas to Olefins through Methanol
Special Economic Industrial Zones Intermediate

• Technologies have evolved that provide alternative route to petrochemicals. Almost all steps are
technically proven and the economic competitiveness mainly depends on the natural gas price.
This again follows from market pressures and the need or willingness to monetize gas reserves
• Financial, strategic and political interests will determine the ultimate selection of any “gas-to-
value” technology.
Process Integration of Refining and
Petrochemicals
“The Beauty of Integration”
Use of
Aromatics

Health-
care

Auto-
motives
Foods

Electro-
nics

Clothing

Const-
ruction
Sports
Equip.
Importance of Aromatics (BTX) in
Secondary Industries for Multiple
Byproducts
Natural Gas Feedstock Integrated
Approach-Vietnam
Natural Gas Petrochemical Complex
Key Features of Egypt’s Petrochemical
Industry Vision
Gas to Olefins Complex -Egypt
Petrochemicals Downstream
Industrial Clusters-Egypt
Plastic Packaging Cluster
Construction Cluster
Automotive Cluster
Petrochemicals in Automotive
Industry
Egypt Port Ain Sukhna Gas Tankage for
Power Plant
Example of Multi-User Project Structure (Power and Petrochemicals
(Ammonia Fertilizer)

• Doosan Heavy Industries &

Construction has been awarded
a $137m contract for gas
turbine and generator
installation work on two power
plants in Egypt.

• The deal is the Korean firm’s

first successful bid for contacts
in the country since 2010 –
when the firm won a 400 billion
won ($337m) deal for work on
the El Ain El Sokhna Power
Plant.

• The Zohr discovery, made by

Eni in August 2015 in Egypt , is
the largest gas discovery ever in
the Mediterranean and Egypt
will cut imports of LNG to 80
cargoes in the 2017/2018
Financial year
 Thai Oil’s Business Synergy and
Strategic Role Across Petroleum Value
Chain (with PTT)
A Business Diversification Model for NOC ?
Concluding Thoughts
• Accelerate Offshore exploration in Kenya especially southern part of Lamu
Basin where there is significant gas resource potential, to reduce dependence
on LNG imports if sufficient gas reserves are discovered offshore and
consequently reduce power tariffs (Note: Pate Gas to Power imminent in 3-4
years same period LNG Project could materialize)- Would be ideal to adopt an
integrated approach to development in order to reduce development costs and
optimize use.
• Consider FSRU charter/lease rather than build in case of viable gas
discoveries offshore Kenya. The LNG shipping or FRSU company will raise the
financing which has the advantage of reducing upfront project expenditure.
Charters allow for debt servicing across long-term repayment profiles for
services offered. (refer: case of Cote d’Ivoire Golan has an equity) It is
important to note that the cost differential between FSRUs and onshore
regasification terminals is significant: a new-build 170,000 cubic meter FSRU
typically would cost in excess of US$250 million to purchase, whereas the cost
of developing a land-based terminal of comparable size is likely to be in the
region of US$1 billion. Used as a mid-term solution until offshore gas
discoveries are commercialized (e.g. Egypt)
• Develop cold thermal energy extraction for power generation if FSRU is located
offshore using buoy mooring systems
Concluding Thoughts
• Water conservation opportunities should be considered for LNG facility cooling
systems (e.g. air cooled heat exchangers in place of water cooled heat
exchangers and opportunities for the integration of cold water discharges with
other proximate industrial or power plant facilities).
• Seek integrated financing structure (Cote d’Ivoire Model)-opportunity for NOC
probably in partnership with ENI or TPDC having an equity-)
• Consider multiple user commercial structure to create opportunities for power
use, petroleum fuels and petrochemical production to develop industrial
clusters (utilizing NG for fuels e.g. Vietnam, Thailand and Egypt). The
arrangement mitigates against take-or-pay liabilities, termination, diversion in
case of excess gas
• Consider procurement through LNG portfolio suppliers who are generally
better placed to meet a more flexible procurement profile than a point-to-
point/project seller. Not all LNG sellers would be willing to accommodate a
high level of LNG supply flexibility.
• Determine gas supply requirements for needs beyond power generation (i.e.
for proposed industry clusters and petroleum fuel production). Therefore
capacity of FSRU should consider the total NG requirements.
• The development of a gas market that takes into consideration multiple uses
for gas could create the demand that could stimulate the development of any
gas resources by companies operating offshore Kenya.
The End
Additional Information
Cote d’IVoire to Build FRSU LNG Import Facility
An IOC’s-NOC-LNG Carrier & FRSU Operator Integrated Financing Structure
Partnership
• A TOTAL led (34% interest) consortium that includes; the
national companies PetroCI (11%), State Oil Company of
Azerbaijan Republic SOCAR (26%), and local power
company CI Energies (5%) as well as Royal Dutch Shell
(13%), Golar LNG (6%) and Endeavor Energy (5%). is to
build a floating storage regasification unit (FSRU) with
initial capacity of 100 Mmcf that would gradually be
brought up to 500 Mmcf at a cost of $200 million, as part
of the Songon gas-to-power project in Côte d’Ivoire
expected to add approximately 375 MW to to existing and
planned power plants in Abidjan, as well as to regional
markets connected to the Ivorian network.

• TOTAL, the project operator will use the terminal to

supply LNG volumes from its global portfolio in
proportion to its participating interest in the project

• The re-gasification terminal project is expected to

become operational by mid 2018 will enable Ivory Coast
to become the first regional LNG import Hub in West
Africa,

• Songon, a greenfield development, will consist of

combined cycle gas to power generation with an
integrated fuel solution

• BMT Asia Pacific, a unit of the UK-based engineer BMT

Group, has been appointed owners engineer and lead
design consultant by Endeavor Energy to develop LNG
import infrastructure. BMT will be conducting FEED level
studies including operability assessments, infrastructure
design and optimization studies for the supply of gas
from the LNG FSRU via subsea infrastructure to the
onshore gas turbines
Egypt Port Ain Sukhna FSRU
Two FRSU’s were deployed on charter basis as a mid-term solution until
offshore gas discoveries are commercialized (Zohr Gasfield)

Port Ain Sokhna Beach Resort

Ain Sukhna

BW Singapore FSRU receiving LNG transfer –ship-

to-ship (regasified gas used for fertilizer plant)
Egypt’s Zohr Offshore Gas Development
• Egypt’s imports of LNG should
end in 2018 and the country may
eventually restart gas exports,
once the Zohr gas development
starts production.

• The majority of the output from

ENI’s Zohr project which hopes
to reach a production of 75Tcf of
gas per day by 2019 will go to
supply the domestic market, with
any surplus available to be
120 km processed at one or both of the
country’s two existing LNG
EGYPT facilities for international sale in
2019.

• If Zohr and other gas fields

generate enough supplies, Egypt
may consider adding a third LNG
export terminal.
ENH Logistics: Mozambique
ENH Logistics: Mozambique
ENH Logistics: Mozambique
 North America LNG Import/Export
Terminals

Numbers ?
 Europe LNG Import/Export
Terminals

Numbers ?

Ireland is the only country in NW Europe without an LNG terminal

Europe LNG Import/Export
Terminals
Middle East and Asia LNG
Import/Export Terminals
A Closer Look at ASEAN
Worldwide LNG FSRU Projects
LNG Import Project Critical Success
Factors
LNG Dimensions and Classes

The most commonly applied LNG carrier is the Large Conventional

class, yet the number of ports accessible for the Qflex class carriers or
larger is increasing
Africa LNG Import/Export Terminals

Scope and
opportunity

• Mozambique-South Africa
gas pipeline Initiative
• Saldanha-Cape Town LNG
Import Initiative
Potential for Regional Use of East Africa’s
Natural Gas

Economic viability by using future demand and pricing data inferred for biomass, charcoal, and liquid fuels
currently being used in the continent has been assessed for investment in a new regional transmission and
distribution gas pipeline network for Eastern and Southern Africa and found feasible (The Earth Institute
Colombia University_Colombia Engineering)

Note: over distances less than 4000 km it is more cost-effective to transport LNG by pipeline
Operational FSRU as of 2015

LOA –Length Overall

Scheduled FSRU LNG –to-Power Plants
 LNG Exporting Countries as of 2012

• Qatar has led the world in annual LNG exports, producing a volume of 77 million tons per year (MTPY) at its 14
gas processing and liquefaction facilities.

• RasGas and Qatargas, joint venture companies with state-owned Qatar Petroleum, produce the country’s LNG at
the Ras Laffan Industrial City, a compound of gas processing facilities that is home to the largest LNG export
terminal in the world and located around 50 miles outside of Doha.

• Qatar enters into many short-term and spot agreements for sale of LNG as she made a huge investment in
liquefaction plants to export LNG to the United Kingdom and the United States until 2011. Due to the shale gas
revolution in the US Qatar has to had to review its plans to sell gas to the United States,. If Qatar finds another
customer who will buy a large quantity of LNG, it may agree on sale that includes long-term fixed contracts.
FSRU Containment Tanks Design
LNG Carriers – Section Diagrams

Moss Tank Section

LNG Powered Ferry
LNG Trucking
LNG Trucking
Static grounding protection
Fixed Foam Fire Fighting System
Installation on FSRU’s
Database and References on Single
Point Mooring Systems
https://www.infield.com/oil-gas-database/offshore-single-point-
moorings-database
Other Highly Specialized Vessels
Light Construction Vessels
Other Highly Specialized Vessels
Anchor Handling Towing Supply Vessels
Other Highly Specialized Vessels
Multi-purpose Supply Vessels
Other Highly Specialized Vessels

Platform Supply Vessels

Other Highly Specialized Vessels

Oil Spill Supply Vessels

Selected Vessel Manufacturer