What’s in the pipeline for LNG? Spotlight on Fluxys LNG terminal in Zeebrugge

Fluxys’ LNG terminal in Zeebrugge has been in operation for over 25 years and their LNG Projects Manager, Dirk Nous*joins us to discuss what’s in the pipeline for LNG demand and infrastructure requirements. 

Can you briefly update us on the current supply and demand for LNG?

Dirk Nous: The worldwide prices of LNG are driving the markets where LNG goes to, and with a distribution of about 2 à 5 $/MMBTU in the US, 8 à 12 in Europe and 15 à 20 in Asia and South America, it is clear that most LNG is flowing to Asia and South America. At the same time, gas demand in Europe is struggling to get back to pre-crisis levels as the economic downturn continues.  Gas-fired power generation in Europe is going through a difficult period due to imports of cheap coal from the United States and rock-bottom carbon prices among other things.In Zeebrugge, we have seen for the year 2013 a total of 37 large LNG ships coming in, 21 of which were reloaded for export.

It is very difficult to predict how long and to what extent this situation will last. It’ll be interesting to consider the impact of new sources of LNG coming on stream from Australia, USA, Russia and the impact of new energy policies such as the option of nuclear versus gas energy.

On a positive note the Zeebrugge LNG terminal has a favorable utilization rate compared to other terminals in Western Europe as a result of the flexibility and versatility of services offered. We are set to further successfully diversify the facility into a hub for small-scale LNG.

Looking at your current infrastructure capacity, are there any restrictions to the size or type of LNG carriers that can bunker at the terminal?

Dirk Nous: At our actual terminal, which has been in operation since 1987, we can receive vessels up to Q-Max. At the lower side, we’ve already received the Coral Methane, an Anthony Veder ship, for loading a couple of times from 2008. With a dedicated superstructure on the ship, this vessel has a capacity of 7.500 m³.

At our second jetty, which will be operational by the second half of 2015, we will be able to receive ships up to Q-flex at the upper side, and at the lower side ships with volume of about 2.000 m³.

Special design features have been built, such as:

• special fenders which go very deep and allow sufficient fender contact for very small vessels at low water level

• quick release hooks at different dolphins in different angles which allow us to moor vessels of different lengths

• a dedicated loading / unloading arm, which can go down to 1,8m above low water level, allowing reach for ship manifolds of very small LNG ships, even if they don’t have a dedicated superstructure on the ship

Some years ago, people were still a bit worried that LNG terminals had the potential to ‘go boom’. How has the industry managed concerns about the safety of LNG terminals? 

Dirk Nous:  Safety in the LNG industry has always been priority N°1 and the safety records in the industry are outstanding.

In the case of the LNG Terminal at Zeebrugge, which was designed and built in the early 1980’s, there was a lot of initial concern by the population along the nearby coastline. At the time, many severe safety prescriptions were established in an Interministerial Working Group, whose advice is still heard today with regards to important projects or modifications.

From the outset, we established open communications with the nearby population and gave them ample opportunity to visit the Terminal.This is a continuous and never-ending process and through communication and our safety record, we have noticed that when proposing new projects, very few concerns are now raised.

It is crucial for the entire LNG industry to maintain its outstanding safety record for the continual development of LNG infrastructure. It is very important that international organization such as SIGTTO, ISO, SGMF, IMO and also the legislators on a European and national level develop the required standards and legislation to maintain this safety record.

The European Commission has released a number of clean fuel strategy propositions and around the world, agencies are working on clean transport goals and solutions. What do you believe are some of key drivers in the growth of LNG? 

Dirk Nous:  On a global level, the growth of LNG will be determined by the LNG producers and the business cases they can develop. Where the LNG flows to, is then the next question. One of the sectors where the need for LNG will increase the most, is without any doubt the maritime sector, either in frame of more stringent emission rules in ECA zones, or where LNG is price-competitive to other fuels (or both). A key factor in this development is the price of LNG (is it low enough compared to other fuels to compensate for the higher infrastructure costs?), and linked to this question, is the availability and accessibility of LNG at the correct prices at the correct locations.

Fluxys’ LNG terminal in Zeebrugge has been in operation for 25 years. What have been some of the most significant changes during this period and what new technology and innovation can we expect to see in the future?

Dirk Nous: The decision to build the LNG Terminal of Zeebrugge was made during the of oil crisis, when the Belgian state concluded a long term supply contract with Algeria.For the first 20 years, the terminal was a one-user throughput terminal, in order to regasify the LNG supplied under this long term supply contract.

After this period, the LNG Terminal became an open access facility with long term services contracts concluded with 3 users: Qatar Petroleum/ExxonMobil, Eni Gas & Power and SUEZ LNG Trading. At the same time, regulation with requirements on Access codes and clear rules on non-discrimination and transparency came up. So the main change came in 2007-2008, with a completely new market and services model.

From 2008, we commenced re-loading services, which at the time was somewhat frowned upon by other terminal operators. The numbers of 2013 (21 reloadings) has shown that is a very successful service and it is now copied by many other terminal operators.

Plus, after closing down our Peak Shaving Plant in 2010, we started to commercialize truck loading services to the market. This is a booming business, with about 1900 truck loadings booked in advance for 2014.

Most recently, Fluxys has decided to develop an LNG Truck fueling station in Veurne, in collaboration with the company Mattheeuws. The next major evolution will be our second jetty and the development of the small scale LNG bunker chain downstream from the terminal.

Some European shipping companies have or are effectively deciding to switch to LNG as a fuel for their ships, so the prospects are promising.

The 2014 IHMA Congress includes a site visit to the LNG Terminal in Zeebrugge. What can attendees expect to view? 

Dirk Nous: Attendees will see a large import terminal with 4 LNG tanks (totaling 380.000 m³) and two regaseification trains, a combined heat & power unit, a truck loading station, an existing jetty and one jetty under construction. Specific to the LNG Terminal of Zeebrugge is that the LNG storage tanks are semi-buried due to height limitations and in order to reduce the visual impact.

In addition to our infrastructure, attendees will also get to see that the safety distances between installations are very large and the firefighting and deluge systems are very extensive.

*Dirk Nous will be delivering a talk on the risk assessment for the LNG supply chain at the IHMA Congress in Bruges this May.  The IHMA Congress will also feature a technical site tour of the Fluxys LNG Terminal at the Port of Zeebrugge on Monday 26 May 2014.