Agency solutions are important no matter how large or small the LNG supply chain
Small Scale LNG (ssLNG), typically a solution for off-grid and remote power supply, has become a growing part of the LNG market. Added to the needs of remote customers is demand from sectors such as heavy duty vehicles, industry, power and maritime transport as they look to reduce GHG emissions and other pollutants from their operations.
LNG can have an immediate impact on emissions compared to coal and also produces significantly less SOx, NOx and CO2 emissions than traditional shipping fuels. It also provides a long-term pathway to net-zero with the uptake of bio-LNG and synthetic-LNG.
Global supply chains are still being developed. Even for shipping these new supply chains are important, because the vessels starting to use LNG as fuel are not just LNG carriers – there are many other ship types including container ships, offshore support vessels and car carriers. These vessels do not call at large LNG terminals, so instead smaller-scale supply is needed to allow for bunkering at many ports around the world.
In ssLNG supply chains, there is unlikely to be the pipeline delivery or large-scale regasification into networks typical of large-scale supply chains. ssLNG logistics can involve relatively small production facilities close to the point of use serviced by smaller vessels and trucks for distribution.
There are already multiple micro-LNG plants across the globe. For example, Singapore has been delivering small-scale LNG projects for many years. With major plans for the development of LNG as it strives to become the leading green bunkering hub, part of Singapore’s sustainability strategy includes the development of more micro-LNG plants.
The Philippines approved its first ssLNG terminal earlier this year. The terminal will supply LNG by truck to commercial customers for use in power supply and as transportation fuel.
Philippines welcomes its first LNG terminal (Source: https://www.gasworld.com/story/philippines-welcomes-its-first-lng-terminal/)
Investment in new, small-scale LNG infrastructure is well underway in the Americas. Last year saw small-scale LNG developers in the US advancing the Caribbean islands’ transition from heavy fuel and diesel to cleaner natural gas. Puerto Rico for example has seen the expansion of micro-LNG plants to scale up LNG as a fuel for multiple segments, including maritime.
A new agreement between a Norwegian small-scale LNG and bunker vessel company and a Brazilian LNG trader will see small and medium-scale LNG shipping, floating storage units and LNG bunkering solutions in Brazil from 2025. The development is a response to local companies that either require relatively small volumes of LNG or do not have suitable port infrastructure for a terminal.
Large-scale LNG projects are also on the rise. S5 recently agreed a contract with Deutsche ReGas to act as terminal agent at its new Deutsche Ostsee LNG terminal at Lubmin Port, on Germany’s Baltic Sea coast. The agreement will see S5 managing the incoming clearance, pilot coordination and necessary paperwork for three shuttle tankers working between a floating storage unit and a floating regasification vessel at the Lubmin terminal.
For the LNG industry, large and small-scale logistics are often viewed as distinct sectors, but from a port agency perspective, the needs of the LNG vessels distributing their cargo remains the same. The agent’s role is to ensure port visits and cargo operations are cost-effective, efficient and free of delays.
LNG is a cryogenic cargo subject to unique technical, regulatory and safety regimes, so it is important that agents have technical knowledge of LNG operations and regional experience with protocols and regulations.
By maximising efficiency, agents support the safe and compliant handling of LNG. From an environmental perspective, they also help ship operators to reduce voyage GHG emissions and meet the sometimes more stringent air emissions requirements of ports. Whatever the scale of the project, S5 will put the processes in place to ensure smooth management of the vessels, trucks or rail cars required for port efficient logistics.