To better understand the evolving outlook for LNG and its role in the U.S. gas market, Fortnightly assembled a group of LNG specialists with various perspectives on the issues.
Evolving Risks in the LNG Supply Chain
Some supplies may not make it to U.S. ports.
leakage problem, according to an advisory note issued by a shipbuilder. The leakage is said to involve the permeation of nitrogen gas through the secondary barrier of the ship’s GTT membrane containment system in two of the four cargo tanks, the report said. Nitrogen, an inert gas, is injected into the inter-barrier space of membrane containment systems for monitoring and safety purposes, and a certain amount of permeation is allowed. In this instance, however, the escape of gas is said to have exceeded permissible levels.
The report says GTT Mark III membrane containment system utilizes a secondary barrier composed of Triplex, a 0.6mm-thick lining consisting of bound layers of aluminum foil and glass cloth. Triplex also is used as the secondary barrier material in the CS1 system, a third membrane developed by GTT to incorporate the best features of its NO 96 and Mark III membrane systems.
The delivery of the first ship ordered with a CS1 system has been delayed for 18 months because of permeation problems with the containment system. Allegedly, the glue and the gluing process used to bind the layers of the Triplex secondary barrier have given rise to the problems on the ship, which is under construction in France.
Of the current 127 LNG ships, 60 have been specified with Mark III membrane cargo tanks, according to the report.
Emerging Risks: New Technology and Coordination
Major expansion of traditional producing markets and infrastructure is underway in Qatar, Algeria, Australia, Nigeria, and Trinidad, with Qatar’s plans by far the most significant driver of the world’s LNG trade growth. Process units and ships are being scaled up for economic efficiencies, increasing the size of physical, marine hull, contingent business, liability, and contractual risks.
Project finance and insurance markets are meeting most of the challenges of the scale-up in risks and investment costs. Most LNG companies in these countries have multiple LNG liquefaction trains lined up, with each train dedicated to specific value-chain contracts. Separation of processing generally is good. However, risk studies show that discrete value-chain contracts could be interrupted by events emanating from adjacent process units, common utility systems, or shared infrastructure. Emerging LNG producing countries such as Peru, Yemen, Egypt, Russia (Sakhalin), Norway, Libya, Equitorial Guinea, Venezuela, Angola, and Iran all are creating new liquefaction capacity to be available in the next four years. Egypt has successfully started new LNG liquefaction projects this year.
New LNG technologies are being implemented on ships with onboard revaporization, offshore liquefaction ships, offshore revaporization terminals, new buoy unloading systems, and platform conversions. Such offshore systems generally will feature proven technologies, but some performance risk will be associated with technological innovations.
In addition, there has been an increase in LNG ship capacities from the 150,000 to 165,000m 3 level to the 220,000 to 250,000m 3 mega LNG carriers now under construction.
A total of 20 ships of the 210,000m 3 Q flex size have been ordered to serve future Qatargas II and Rasgas III projects. Six additional ships of the so-called 250,000m 3 Qmax size also are about to be ordered. Prices