LNG

Awilco LNG, the small Norwegian-based shipping provider with two 156,000 cubic metres capacity vessels, the “WilForce” and the “WilPride”, has finally received a full and final settlement for a collision involving the “Wilforce” and a bulk carrier off Singapore at the end of May 2019.

An LNG carrier, the 162,000 cubic metres “Adam LNG”, was hit by a bulk carrier while at anchor off Gibraltar’s Europa Point, and there were no injuries to either crew, though the cargo ship suffered the most damage and had to be beached off Catalan Bay, a main tourist area on the Rock.

The Australian energy safety authorities have ordered the closure of the “Prelude” floating liquefied natural gas production plant offshore northwest Australia after the latest incident in an electrical utility on board and reported on December 2.

The Shell-operated FLNG vessel is moored 400 kilometres north of the town of Broome on Western Australia’s Kimberley coast and has 3.6 million tonnes per annum of capacity.

The Australian National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) issued the order for a deeper safety probe by Shell.

This means Shell will likely be halting the offloading of LNG cargoes from “Prelude” into 2022 while the unreliable power shutdown issues are investigated .

The direction from NOPSEMA means the FLNG hull, the largest in the world, will be off stream until Shell can convince the regulators that the problem has been permanently fixed.

NOPSEMA has directed Shell to review what happened on the Prelude between December 2 and 6 and then develop a detailed plan to implement “all necessary corrective actions.”

Shell must also provide NOPSEMA with monthly reports on its progress from early March 2022.

Onboard inspectors

Shell must additionally convince the safety regulator that it can safely recover essential power and other services after a power outage alarm sounds.

“The failure to restore reliable power was seen to represent an ongoing impact and risk to the health and safety of the personnel on the facility,” said the NOPSEMA statement.

After visiting the 488m-long vessel NOPSEMA inspectors concluded that Shell “did not have a sufficient understanding of the risks of the power system on the facility, including failure mechanisms, inter-dependencies and recovery” mechanisms.

According to Shell, smoke triggered the automatic fire detection and management systems in the early December incident and an evacuation of most of the 200 or so crew on board was started. All workers on the facility were accounted for and no injuries reported.

The Shell facility was previously shut down for 11 months after electrical issues. Operations only resumed in February 2021 following an “electrical trip” in early 2020 and three incidents which NOPSEMA had described at the time as “dangerous occurrences”.

For the Shell project, the Concerto gas field and the nearby Prelude field, with combined resources of around 3 trillion cubic feet, are providing the feed gas to produce the LNG.

The Prelude joint venture is owned 67.5 percent by Shell and 17.5 percent by Inpex Corp. of Japan, operator of the Australian Ichthys project.

A further 10 percent of Prelude is held by LNG buyer Korea Gas Corp. and 5 percent by CPC Corp. of Taiwan.

Malaysian energy company Petronas has reported a fire at its main onshore liquefied natural gas production plant at Bintulu, located in the eastern state of Sarawak on the island of Borneo.

The US-based Institute for Energy Economics and Financial Analysis (IEEFA) has condemned a report in the “Financial Times” newspaper on experimental hydrogen as a fuel to replace LNG and conventional natural gas as an exaggeration that will be paid for by the poorest people in society, will cost tens of billions of dollars and ignores hydrogen’s explosiveness and the difficulties of compressing or transporting the fuel.

The author of the IEEFA article, Arjun Flora, is the director of the body’s energy finance studies in Europe, and he issued a statement opposing the whole tenor of the FT opinion piece signed by Marco Alverà, Chief Executive of the Italian natural gas grid operator Snam.

“Alverà extols the virtues of hydrogen as an energy source,” stated Flora.

Flora explained that people reading Mr. Alverà’s opinion piece should be aware of the existential dependence that gas Transmission System Operators (TSOs), such as Snam, have on the future proliferation of hydrogen infrastructure.

Flora added that people who doubt this should look over a report released last week on the extent of hydrogen lobbying in the European Union.

Flora noted that according to the Paris-based International Energy Agency’s “Net Zero” report, the industry should be ending new natural gas investments to achieve net-zero emissions by 2050.

Problems

“This creates a big problem for many gas transmission system operators, whose business model is largely based around earning regulated revenues from making new investments, to deliver stable and growing dividends to their shareholders,” explained Flora.

Flora’s article added that to counter this trend, natural gas TSOs are looking to build new “hydrogen-ready” infrastructure instead, pushing extensively to have this and other “renewable gases” categorized as “green” by politicians and investors and calculated in their regulatory mandates.

“To be clear, it is energy consumers, taxpayers, and the poorest in society who will pay for all this new investment through rates and tariffs, taxes, and have to suffer the worst of climate change,” according to Flora.

Flora contended that the way to solve this problem is to change the way the gas sector TSOs are incentivized and rewarded.

However, Flora said that in the arguments in favour of hydrogen, such a move would involve changing the status quo and require uncomfortable conversations between familiar faces.

“So instead, governments appear to be giving way, delaying and distorting our decarbonization pathway and using public funds to keep the gas companies profitable, which all comes down to politics,” stated Flora.

“The hydrogen hype has already sucked up billions of euros that could otherwise be funding renewables and real green jobs,” he stated.

“In his post, Mr. Alverà implies favorable economics when he talks about ‘cheap green electricity’ and using ‘existing infrastructure,’ yet he does not mention the inherent difficulties with producing, compressing or transporting hydrogen gas vs. methane, the inefficiencies (and costs) involved, corrosion, leakages and explosiveness,” stated Flora.

“Indeed, the gas lobby group ‘Gas for Climate’ (of which Snam is a member) is itself seeking €43 billion to €81Bln ($50Bln-$96Bln) in investment to create a European hydrogen backbone by 2040, and that’s with 69 percent existing pipelines,” added Flora.

“Yes, hydrogen does have important potential as a fuel in certain hard-to-abate sectors,” explained Flora.

“Contrary to the image shown in the FT article, light vehicles is not one of them. In fact the CEO of Enel, the Italian energy company, recently remarked that using hydrogen for domestic heating and transport is ‘nonsensical’,” he added.

Flora argues that the potential of hydrogen should not distract from the most urgent task of this decade, which is to build out renewables, storage, energy efficiency and interconnections.

“The IEA says we need to quadruple last year’s rate of solar and wind deployment to be on track with net zero by 2050,” said Flora.

“Far from growing ‘hand-in-hand,’ as Mr. Alverà puts it, cheap renewables need to grow rapidly, while a limited number of strategic hydrogen demonstration projects do their job, safely developing the technology until costs and concerns reach competitive levels,” he concluded.

Lloyd’s Register, the UK maritime classification society, has given more details of its joint development of a dual-fuel bulk carrier, including liquefied natural gas-powered capability, with Jiangnan Shipyard Group of China.

Cheniere Energy has settled with US energy infrastructure regulators the terms and conditions under which it is allowed to bring back into service two LNG storage tanks temporarily shut at the Sabine Pass export plant in Louisiana.

US federal regulators and representatives of Cheniere Energy, owner of the Sabine Pass export plant in Louisiana, have held talks on the measures planned following an order issued in February to shut down two of the five storage tanks at the facility.

Nov 30 (LNGJ) - Inpex Corp. of Japan, developer of the Ichthys LNG plant at Bladin Point near Darwin in Australia’s Northern Territory, halted construction work on November 30 after a worker died in an accident. “Inpex Operations Australia sincerely regrets to confirm a serious incident occurred at its Bladin Point construction site in Darwin at approximately 8pm last night that resulted in the death of a worker,” the company said. Inpex is building the plant in a joint venture with France’s Total to supply Japanese utilities and Taiwan with LNG. Engineering and construction work is currently more than a year behind schedule and the start of commercial operations is scheduled for the end of the first quarter of 2018.