In what is believed to be an unprecedented move, two supply ships powered by liquefied natural gas (LNG) are to operate in Norway's offshore sector. The motive behind the initiative is environmental, as it will contribute to cutting the country's emissions of nitrogen oxide (NOx). If the experiment is successful, it could be extended to much of the country's supply ship fleet and coastal shipping.
The two newbuild vessels are due to start operation in 2003, under charter to Statoil. Under an agreement signed with the government, Statoil will be able to use the reduction in NOx emissions as a credit to offset emissions at its land-based facilities. The two vessels will reduce annual NOx emissions by 420 tons.
Norway's government has played an active role in bringing about the initiative, which could provide invaluable assistance in meeting its international commitments. Under the terms of the Gothenburg protocol, the country has undertaken to reduce its NOx emissions to 156,000 tons in 2010. Compared with 1999, when emissions totaled 230,000 tons, that is equivalent to a reduction of one third.
Oil and energy minister Olav Akselsen welcomed the development, which he sees as the start of a wide-ranging switch to LNG-powered shipping. "This agreement provides good evidence that the industrial use of natural gas is also good environmental politics," he said. "The supply ships are an important pioneer project, but only the start of a restructuring along the Norwegian coast. If we are to meet our environmental commitments, the governing powers must make it possible for all coastal traffic to use natural gas as fuel in the near term."
Offshore vessels next
The switch to LNG power is envisaged as applying to both the offshore fleet of supply and support vessels, and the coastal fleet of ferries, cargo, and other vessels. If all coastal shipping converted to LNG, the oil and energy ministry says, Norway would be 70% of the way to achieving its NOx emissions reduction target. Trials of an LNG-powered ferry are already being carried out using LNG produced by Statoil's plant at Tjeldbergodden, where gas from the Heidrun Field is landed. Statoil has two main objectives for the LNG-powered supply vessel project, according to Knut Barland, the company's Vice President for the Environment:
- Gain the benefits accruing from reducing NOx emissions
- Accelerate the use of gas in Norway.
Although Norway has large gas reserves, internal consumption is very low, and Statoil is one of many parties, including the government, which would like to see new outlets opened.
The company is involved in controversial plans to build two gas-fired power plants. One hurdle to be overcome is a very strict requirement from the Norwegian Pollution Control Authority (SFT) that the NOx content of the flue gas should not exceed 5 ppm. According to Barland, the best that can be achieved using available technology is 25 ppm. The NOx emissions reduction credit accruing from the LNG-powered supply boats could be applied by Statoil to these two plants, thus helping it to meet the SFT requirement. The 420-ton annual reduction which the two ships will achieve is equivalent to the annual emissions of one such power plant, Barland says.
If the scheme is extended more widely among the offshore fleet, other operators would also receive a NOx emissions credit, though most of them do not have onshore plants where the credit could be spent. It could be the case that some kind of trading system would have to be introduced if the benefits of the credits were to be fully realized.
LNG supplies for the two ships will be produced at a new plant to be built at Kollsnes, where gas from the giant Troll Field is landed and processed. The plant will be operated by Naturgass Vest, a gas retailer of which Statoil, Norsk Hydro and Shell are among the co-owners. The plant will have annual capacity of around 30,000 tons of LNG. The two supply boats will consume between them 7,000-8,000 tons/yr, and there will be spare capacity for other customers. In the event of growing demand for LNG as ship's fuel, it will be possible to expand this plant or build new ones, according to managing director Aksel Skjervheim.
The supply point for ships will be at the Coast Center Base near Bergen, where some 2,000 bunkering operations take place annually for supply vessels serving the Statfjord, Veslefrikk, Gullfaks, and Troll fields.
It is economic considerations which have led the search for NOx emission reductions offshore - while the unit cost of reducing NOx emissions for the two supply boats is about NKr 25/kg, it is much more expensive to achieve them at plants on land where available technology is already in use. There is some cost attached to the supply ship initiative. The vessels are more expensive to build and operate than diesel-driven ships. But this cost is more than offset by the economic benefits of the NOx credit.
These two vessels will be the first offshore supply ships fuelled by LNG, according to Nils Himle, administration director for shipowner Eidesvik. Eidesvik will own one of the vessels and M kster Shipping the other. However, the two companies plan to set up a joint company to manage and operate the two vessels, Himle says.
LNG power
Running ships on LNG is not a novelty. LNG tankers use part of their cargo as fuel. The design for the two supply ships has been developed by Eidesvik in cooperation with Norwegian naval architect Vik & Sandvik. They will be about six meters longer than conventional diesel-powered vessels, in order to accommodate the LNG fuel tank. The construction cost will therefore be some NKr30 million higher, Himle says.
Though precise design details have not yet been finalized, operating costs are also expected to be somewhat higher than for the diesel-powered equivalent. However, in terms of operability and maneuverability, the LNG vessels will perform as well as diesel vessels. They will also have greater redundancy and, as the design is new, higher safety standards. For reasons of operational flexibility the two vessels will be able to run on both diesel and LNG, but once sufficient LNG bunkering facilities are established, it is expected that LNG-only vessels will be built.
