LNG

Engineering firm, ABB has won orders from Chinese and South Korean shipyards to equip 18 and 12 LNGC newbuildings, respectively, with its permanent magnet shaft generator systems.

The ships are due for delivery between 2028 and 2030.

Enhancing operational efficiency by utilising the power from the main engine, ABB’s permanent magnet shaft generator system improves fuel economy, compared to solutions where power is provided by auxiliary engines, the company claimed.

By avoiding the start up of high-speed fuel intensive auxiliary engines during a voyage, ship operators can achieve significantly greater fuel efficiency.

In addition, these generators provide better efficiency than either induction or electrically excited synchronous machines, both at full and partial load.

According to ABB’s estimation, the company’s permanent magnet shaft generator system can cut fuel costs by up to 4%, compared to conventional solutions.

When combined with ABB’s ACS880 converter and control system, which ensures maximum flexibility and functionality in hybrid applications, the technology can increase fuel efficiency by a further 1%.

By eliminating the excitation unit inside the converter, combined with the compact size of the generator, the system has the potential to deliver up to 20% space and weight savings, while its simple design helps to reduce installation and maintenance costs.

“We are proud to win the largest ever combined orders for our permanent magnet shaft generator systems, with LNG carrier deliveries set for multiple AMEA owners from shipbuilders in China and South Korea,” said Michael Christensen, Global Segment Responsible for Cargo Vessels, ABB Marine & Ports.

“These agreements include first-time customers for the permanent magnet shaft generator system, further confirming its benefits across a wide scope of cargo vessel types to serve shipping’s need for the enhanced fuel efficiency that reduces operating costs and helps them to meet de-carbonisation requirements,” he said.

China LNG Shipping (International) Co’s (CLSICO), ‘Dapeng Princess’, the world’s largest shallow draft LNGC, recently suffered an unexpected failure in one of her three generators.

Russian academics and gas industry specialists have claimed that LNG shipments utilising underwater vessels are feasible and safer than transportation by surface vessels.

Click to Download

Click to Download

Last Friday, US Secretary of Energy, Chris Wright awarded the first major LNG project export permit to non-free trade agreement (FTA) countries since the lifting of the Biden/Harris administration’s freeze on approvals.

Asian spot LNG prices rose to a more than one-year high last week.

A Swiss trader expects a material increase in European LNG supplies in the coming weeks.

According to Axpo’s market outlook, the gas market was tight with European storage well down on 2024’s level and the five year average.

Gas Infrastructure Europe data showed that storage levels were at 49% of capacity on 8th February.

The tighter set-up makes end winter storage level in the 30% range more likely, Axpo said, which will leave a big gap to fill to reach the mandated 90% needed by 1st November.

One way to address this challenge was by attracting additional LNG cargoes to Europe. Prices were already signaling this move and Axpo expected a material increase in LNG cargo arrivals in Europe during the coming weeks.

However, whether this will be sufficient to fill the storage gap remains to be seen, the report said.

Little wind and cooler weather this winter thus far, compared to 2022/23, plus the end of Russian gas deliveries via Ukraine, helped to drive the largest January EU storage withdrawal seen since 2021.

European gas prices surged to two years highs last week on the back of the storage concerns and cold weather.

Under the EU’s gas storage regulation adopted in June, 2022, mandatory storage targets are set for member countries, including the interim filling levels that should be reached.

This year’s 1st November target of 90% full will be the final one before the regulation expires at the end of 2025, unless the rules are extended or new arrangements are put in place.

Equinor’s CEO, Anders Opedal has said that Europe would need more LNG to refill its stocks.

“If you want to go back to 90% storage levels, Europe needs to attract 230 more LNG cargoes than last year, which represents around a 20% increase, “ he said, adding…” I think that demonstrates the competition for LNG that we will see between Europe and Asia over the summer.”

Storage filling

The market also remains concerned about storage filling this summer given an inverted summer-winter spread.

German gas market manager, Trading Hub Europe (THE) unveiled plans last month for a new gas storage product designed to encourage market participants to inject gas into storage sites, despite insufficient seasonal spreads.

The product concept’s focus is to subsidise new injections and to provide incentives for storing gas, a THE spokesperson told S&P Global.

Axpo said that Germany and other countries were now working out how subsidy mechanisms may look to fill their out of the money (OTM) storage.

Overall, Europe’s large storage requirements this summer and the uncertainty surrounding regulatory intervention were setting up a strong, if volatile, gas market over the coming months, the trader said. 

Russian officials held meetings with Indian buyers last week to try to sell LNG from a sanctioned export facility.

At last week’s India Energy Week (IEW) Crown LNG, a wholly owned subsidiary of Crown LNG Holdings Limited, signed a Memorandum of Understanding (MoU) with Indian Gas Exchange Limited (IGX), India's authorised natural gas trading platform.