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The 3rd International LNG Conference for Transport Italy and the Mediterranean Area
Rome, 11‐12 June, 2015

Organized by Symposia & World Energy Council Italy

More than two hundred representatives among international organizations, institutions, companies and associations which have developed business strategies for LNG in the Mediterranean Area met in Rome, to discuss the state of the art and the perspectives in the use of LNG in maritime, road and rail transport and in off-grid plants.

 

Rome, at the centre of the Mediterranean, is probably the best location to extend the so-called “LNG revolution” from Northern Europe and North America to Southern Europe and the Mediterranean coasts of the Middle East and Africa.

The topics discussed were, among the others: the development of logistics and transport capacity of small quantities of LNG to supply coastal storage, filling stations, factories and off-grid facilities. The state of implementation of the European Directive 93/2013 for the realisation of filling stations for alternative fuels to oil.

The programme of the 3rd International LNG Conference was also enriched by a Ministerial roundtable where representatives from Energy Ministries of Mediterranean Countries and Mediterranean Organizations debated about the security of Mediterranean energy supplies and the environmental protection of the Mediterranean Sea, focusing on the Mediterranean energy dialogue and the LNG option for secure-affordable supplies and clean Mediterranean seas.

Main Findings

 

  1. The global LNG market is experiencing major change: 2014 was a year of relative stagnation due to increased demand from several regions and delays in new supply projects. Intra Pacific and Middle East – Pacific dominated global trade, with Asia covering 75% of global demand;
  2. China’s LNG demand growth has been impressive. The country went from 0 to 20 million metric ton per annum (Mtpa) of imports in less than 10 years making China the third LNG largest importer in the world. On the contrary, European LNG imports declined (-1.5Mt). Europe’s share of LNG global imports decreased from 14.3% in 2013 to 13.6% in 2014;
  3. LNG demand will be increasingly fragmented in the coming years due to the emergence of new importers. There were 23 importers in 2010, 30 in 2014 and probably 35 in 2015;
  4. During the second half of 2014 the sharp decrease in crude oil price, combined with a looser supply situation, drove down prices in Asia, where spot prices were halved between March and October. Historically, for the first time this March, Asian LNG spot prices (EAX price) were lower than NBP (National Balancing Point – UK) prices: $6.85/MMBtu versus $6.92/MMBtu. On the same period of the previous year, the EAX price stood at $19.84/MMBtu with the British equivalent contract at $9.90/MMBtu;
  5. The global climate debate and the subsequent interest to reduce emissions is the driving force for the use of cleaner fuels. From an environmental emission perspective, LNG is a viable mitigant, significantly reducing emission of CO2 up to 20%, sulphur oxide (SOx) up to 100%, nitrogen oxide (NOx) up to 90% and particulate matter (PM) up to 99%;
  6. A key enabler in the evolution of LNG as fuel is the availability of Small-Scale LNG (SSLNG). Actually, the global SSLNG installed production capacity is of 20 Mtpa. Most of the growth is in China, where efforts are in place to get clean fuels to fight air pollution, stimulated by the availability of gas and the price differential between natural gas and diesel oil;
  7. Data on the world fleet powered by LNG (either single or dual fuel) presented by DNV GL indicate 134 LNG-fuelled ships in operation or in order as January 2015. Previsions expects by 2020 one thousand new-builds to be delivered equipped with natural gas engines. Additionally, 600 t0 700 ships could be retrofitted to run on LNG;
  8. The On-Road transportation sector driven by commercial fleet owners in LNG-fuelled vehicles has grown significantly over the past decade. In Europe the Blue Corridor project is underway to build LNG fuelling infrastructure and to demonstrate the economic viability of LNG fuel for heavy trucking. In this field, the Natural Gas Vehicles developed by Iveco (Stralis Natural Power L-CNG) represent a successful example for a decarbonized transport sector;
  9. At a European level are being discussed crucial regulation for the future development of liquefied natural gas in road transport and shipping: on the 25th of February the European Commission has launched its new “Energy Union” strategy, identifying as the first pillar the security of supply. The spread of LNG for all uses is highlighted as the preferable solution to guarantee an adequate level of energy security in Europe. Within this strategy a new Directive on LNG is under development, following the Directive 94/2014 for the realization of land and maritime infrastructures for the distribution of liquid methane. At the moment, this Directive is being transposed by member states;
  10. EU is driving the development of LNG infrastucture mainly for two reasons:
    • Enviroment: important projects mainly related to the transport sector both at sea and at land was launched:
    • First SECA area, that went into force 1 January 2015, was the Baltic Sea and for part of North Sea with Mediterranean and remaining part of North Sea to follow in 2020 with the aim to have LNG bunkering facitilties in 139 ports;
    • GAINN initiative, the COSTA project follow up, will set the basis for the creation of a Mediterranean LNG refueling infrastructure. Italy is part of this initiative with the GAINN_IT network that in 2030 foresees that each Italian port that is an element of the network (9 ports) will be equipped with: LNG receiving system, LNG storage system, LNG refuelling for ship and/or LNG fuelled ships, LNG refuelling for vehicles and/or LNG fuelled vehicles;
    • Blue Corridor Project that to date has achived 9 LNG stations completed and 75 trucks on the road.
    • Security of Supply: with the largely dependance on Russia for EU’s natural gas imports, EU wants to diversify its natural gas imports by both promote new pipeline like TAP and TANAP as well as increase the number of LNG receiving terminals;
  11. In Italy, some of the largest energy companies are developing strategies to promote the deployment and use of liquefied natural gas in road and marine transportation, for example Eni launched in 2014 the first Italian LNG/LCNG Station (Piacenza) and plans to commence similar projects in Pontedera (LNG/LCNG Station), Livorno (modular LNG storage tank), Venezia (LNG/LCNG Station for both road and marine transport) and Gela (feasibility study for a liquefaction, storage and distribution facility of LNG, as well as feasibility of CNG application);
  12. During 2015 OLT (Offshore LNG Toscana) concluded a preliminary feasibility study to identify the capability of its terminal, anchored about 22 km off the coast of Tuscany, to perform the transfer of the LNG to LNG shuttle carriers and the consequent modifications needed. The study was co-financed by European Union through the “SEA Terminal project” in cooperation with Valencia Port Foundation and Livorno Port Authority under the supervision of the Italian Ministry of Transport. OLT is also collaborating with Livorno Port Authority to install at the port of Livorno, LNG supply and Dual Fuel LNG powered machinery;
  13. Also Liquigas has decisively invested in LNG, opening a new supply route for Italy, obtaining LNG from the regasification terminal of Fos-sur-Mer in Marseille, as an alternative to the already used Rotterdam terminal, managed through iso containers. Liquigas presents LNG to its customers as a positive solution for the transition of the several industrial plants and heating systems in Italy from obsolete and highly polluting fossil fuels, such as fuel oil. Already ten major industrial customers have chosen Liquigas as their LNG supplier;
  14. To develop a sustainable market it is however necessary to define a stable and clear regulation plan for bunkering operations and define clear measures (emission reductions, fiscal regime etc…) for the use of LNG for transport. In this field it is crucial the involvement of all the countries bordering the Mediterranean Sea as well as the LNG end users.

First LNG Fair of the Mediterranean

In conjunction with the 3rd International LNG Conference, was held the first LNG Fair of the Southern European and Mediterranean area. A wide audience of professionals, experts and students had the chance to see the technology of the LNG industry, to attend education courses, meet individually representatives of companies and discuss the results of the most research analyses. In the designated external area, LNG and duel fuel trucks was exposed and also available for test-driving.

 Photos by Alessandro Marchetti

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