This article explains the increase in the demand for LNG ships and some of the key aspects of transporting LNG by ship.
What about LNG ships?
The fortune of LNG owners
In the years to come due to the changing perspectives on fossil fuels and increasing electrification, the oil and gas industry will see further increases. Especially, natural gas will be more resilient than other fossil fuels for another five to ten years. This is primarily because natural gas is among the cleanest fossil fuels, so it will be the last to be replaced as part of the energy transition.
The liquified natural gas is the cleanest hydrocarbon energy producing 40% less carbon dioxide (CO2) than coal and 30% less than oil, which makes it the cleanest of the fossil fuels. It does not emit soot, dust or particulates and produces insignificant amounts of sulphur dioxide, mercury and other compounds considered harmful to the earth’s atmosphere.
The developments in the LNG shipping market are accelerated by the alleged sabotage of the natural gas pipeline between Russia and Europe, Nord Stream I&II. Although war results catastrophe, the alleged sabotage on Nord Stream I&II has a positive effect on the LNG charter market.
Europe is looking for new sources of energy to the US and to the Middle East results an increase in tonne-miles in LNG carrier demand. The daily rate for an LNG Carrier has exceeded $400,000 in the spot market. In the beginning of October, the Maran Gas of the Angelikousis Group LNG vessel was chartered by Shell in the spot market for $400,000 per day.
The price of the newbuild MEGI LNG carrier was around $180 million in 2021. It has since jumped to $248 million in 2022.
The global LNG tanker fleet encompassed a total of 700 vessels at the end of 2021. The global fleet grew by 9.9% with the delivery of 57 carriers and four FSRUs in 2021. At the end of Aporil 2022, 641 active LNG vessels, including 45 floating storage regasification units (FSRUs) and five floating storage units (FSUs).
The Greek shipowners play a leading role in this shipping industry with a fleet consisting of 133 LNG Carriers and another 39 under construction. The Japanese with 124 ships, followed by the Koreans with 49 ships and Qatar with 45. The Chinese are developing and currently have 25 LNG.
Will the existing yards be able to handle the rapid increase in the demand for LNG vessels?
The LNG construction specialist yards are Daewoo (South Korea) Hyundai (South Korea) and Samsung (South Korea), and Hudong (China), Dalian (China), Jiangnan (China) and Yangzijiang (China) have an annual production capacity of 70-80 ships. It is indicated it will require double of what is produced in the Pacific Rim.
On top of that about the two of the existing LNG fleet is likely to fall into categories ‘D’ or ‘E’ of the IMO’s carbon intensity indicator. This is because of relatively fuel-inefficient steam turbine and early diesel propulsion, and the lack of effective boil-off management systems.
What is an LNG ship?
An LNG carrier is a tank ship (tanker vessel) designed and equipped with containments systems for transporting liquefied natural gas (LNG) in bulk.
LNG cargo produces 40% less carbon dioxide (CO2) than coal and 30% less than oil, which makes it the cleanest of the fossil fuels. It does not emit soot, dust or particulates and produces insignificant amounts of sulphur dioxide, mercury and other compounds considered harmful to the earth’s atmosphere.
LNG ships have been operating since the late 1950s. LNG fleet ranges from small scale, handysize bulk carriers to large scale carriers.
The LNG ship is designed with heavy insulated, temperature-controlled tanks ensuring the gas is kept in a liquid state at approximately -162 C.
Commonly most of the of the LNGs have 4-5 tanks. These tanks have a working pressure of 22 kPa (3.2Psi) which can be increased in case needed. The tank is double-walled, with a carbon steel outer wall and a nickel-steel inner tank. Nickel steel inner tanks are used because ordinary steel is too brittle to use in direct contact with the cryogenic LNG. The tanks are separated by a large blanket of insulation to help maintain the cryogenic temperatures.
Normally an LNG tanker is powered by steam turbines with boilers. These boilers are dual fuel and can run on either methane or oil or a combination of both. The gas produced in boil off is traditionally diverted to the boilers and used as a fuel for the vessel.
LNG, in general terms, is considered safer than LPG. LNG is lighter than air while LPG is heavier. Natural gas liquid (NGL): it may also have ethane, propane, butane and some condensate.
LNG is stored and shipped in purpose built cryogenic tanks. Pipelines are usually used to transport LNG whereas the LPG is stored, shipped and transported in tanks or cylinders, whereas