LNG News

(By Cassandra Sweet, The Wall Street Journal)

Energy-starved region pays up when harsh winters hit amid lack of pipelines to ferry gas from shale producers.

Natural gas is so abundant and cheap in much of the U.S. that producers want to send it overseas—except in New England, where gas is so hard to get that it is being imported from as far away as Yemen.

The U.S. shale boom that has produced a glut of gas–and helped lower many Americans’ home heating bills–has largely bypassed the energy-starved New England. Few pipelines are available to ferry gas from Pennsylvania and Ohio to…

read the full article on wsj.com

(Edited from various sources by David Rowlands, LNG Industry)

Carnival Corp. & plc recently announced its sustainability goals for 2020. In particular, Carnival Corp. will seek to reduce its CO2 emissions by 25% from its baseline in 2005.

Speaking on the matter, Arnold Donald, the CEO of Carnival Corp., stated: “Across our 10 brands, we host millions of guests a year and visit 725 ports of call around the world, and the health and vitality of the oceans, seas and communities through which we travel is absolutely essential to our business […] That makes protecting the environment one of our most critical areas of focus as a corporation, and it is why it is important for us to publicly communicate our sustainability goals.”

One way that Carnival Corp. looks to be reducing its impact on the environment is by using LNG as a fuel. In July 2015, Carnival Corp. announced that it was contracting four new-generation cruise ships which will all be LNG-fuelled – two for its German brand (AIDA Cruises) and two for its Italian brand (Costa Cruises). When AIDAprima is completed in 2016, it will be the first ever cruise ship to feature an LNG-fuelled dual-fuel engine, as well as a filter system to reduce exhaust emissions.

(By Rich Piellisch, HHP Insight)

Crowley Receives First-Ever Tanker with Provision for LNG Tanks, Matson Is Building First Container Ship, Aker Philadelphia for Both

Crowley Maritime took delivery of Ohio, the first of four new Jones Act product tankers being built with provision for liquefied natural gas fuel tanks, from Aker Philadelphia Shipyard, and Matson reported that construction of its two new Aloha-class containerships, also to be LNG-ready on deliver, has commenced, also at Aker Philadelphia.

Matson is investing $418 million in two 850-foot ‘Aloha class’ LNG dual fuel container ships to be delivered in the third and fourth quarters of 2018.

“The delivery is momentous not only for Crowley, but also for the industry because it signifies the first time a product tanker has been constructed with consideration for the future use of LNG for propulsion,” Crowley said.

“These new ships are the future for Hawaii shipping and will bring a new level of efficiency and effectiveness to our service,” Matson president and CEO Matt Cox said in his company’s announcement.

Matson’s Largest

The 850-foot long, 3,600-TEU vessels “will be Matson’s largest ships and the largest Jones Act containerships ever constructed,” the company says, citing an aggregate price of $418 million.

“They will also be faster,” the company says, “designed to operate at speeds in excess of 23 knots, helping ensure timely delivery of goods in Hawaii. Though bigger, the ships are also designed to accommodate future needs by being able to navigate safely into some of Hawaii’s smaller ports.”

The two new Aloha-class ships are expected to be delivered in the third and fourth quarters of 2018. The first will be named after the late Senator Daniel K. Inouye.

Crowley Has Proposed LNG Bunker Vessels

Crowley’s new tankers are based on a Hyundai Mipo Dockyards design with “numerous fuel efficiency features, flexible cargo capability, and the latest regulatory requirements.” The Ohio is 600 feet long and is capable of carrying crude oil or refined petroleum products.

Crowley notes that its Seattle-based Jensen Maritime naval architecture and marine unit is providing construction management services for the new tankers via a new on-site office and personnel at the Philadelphia yard.

Crowley-Jensen recently publicized designs for LNG bunker barges suitable for fueling LNG-powered vessels (F&F, August 21).

Delivery of the Ohio is ‘momentous,’ says Crowley, ‘because it signifies the first time a product tanker has been constructed with consideration for the future use of LNG for propulsion.’

(By Jeff Stagl, Managing Editor, Progressive Railroading)

In early October, the Alaska Railroad Corp. (ARRC) obtained Federal Railroad Administration (FRA) approval to move liquefied natural gas (LNG) to points in Alaska’s interior.

ARRC is the first U.S. railroad to receive such a federal permit, says Doug Engebretson, the regional’s chief operating officer. The railroad also is the first to take a significant step in the regulatory process, which eventually will help make LNG business available to others, he says.

ARRC sought the FRA approval to provide a rail option for moving LNG into communities within the state’s interior, such as Fairbanks. Alaska’s Industrial Development and Export Authority (AIDEA), Energy Authority, Department of Commerce, Community and Economic Development, Department of Revenue and Department of Natural Resources are pursuing an Interior Energy Project (IEP) to help residents reduce high energy costs associated with oil-burning and wood heating systems. As part of the IEP, AIDEA is evaluating the logistics and costs of moving LNG via rail, truck or pipeline.

Alaska Railroad aims to move LNG from points as far away as Anchorage to the state’s interior. Photo: Shutterstock

“Fuel oil prices there are extremely high, and payments sometimes are higher than mortgage payments,” says Engebretson, noting that the price at times have reached $475 per gallon. “The state needs to do something.”

In November 2014, ARRC approached the FRA about obtaining approval to move LNG in portable tanks via container-on-flat car service in both unit and manifest trains. In February 2015, the FRA sought additional information from the railroad, which submitted a formal request for approval. The agency then conducted a thorough review and analysis of the proposed LNG operations.

“This was a completely new process since there are no current regulations that allow for LNG movement by rail,” says Engebretson. “This is unchartered ground.”

The FRA approval — which remains in effect for two years — includes a number of stipulations, such as that ARRC must:

• operate only up to two trains carrying eight portable tanks of LNG per week;
• perform at least one track geometry car inspection and four internal rail-flaw inspections annually;
• provide initial training to all crews operating LNG-carrying trains and emergency responders along an LNG route;
• prohibit double stacking of the portable tanks; and
• issue a report each month to the FRA on the number of portable tank loads and other data.

The interior is in desperate need of an affordable energy source and natural gas by rail holds real promise, said U.S. Sen. Lisa Murkowski (R-Alaska) in a press release.

“With many details still to be addressed, I look forward to continued cooperation with the FRA to move LNG to our interior communities,” she said. “I appreciate the FRA working with my office on this issue and will continue to work to facilitate solutions to address our energy needs in the interior and across the state, but this is a great step.”

However, state and private entities still have much to do to bring cheaper and cleaner energy options to the region, says Engebretson. The state currently is exploring proposals from five finalists for the IEP.

Engebretson isn’t sure when ARRC would begin to move LNG since there haven’t been any determinations as to where the gas would originate and exactly how it would be moved. If the gas originated in Anchorage, it would need to travel about 350 miles to reach the interior region.

Shippers would own the portable tanks and ARRC would provide the intermodal service using its own flat cars if the state opts to move the gas via rail. And the energy market will determine whether any LNG moves on rail, says Engebretson.

“We don’t know what the growth potential is,” he says. “But we know the consumers are there in the interior.”

The FRA is considering other LNG-by-rail applications in United States, yet those proposals are different because the gas would need to be transported through or around many cities, says Engebretson.

“We are in very, very rural territory,” he says, adding that if LNG was moved from Anchorage to Fairbanks, it would only travel through three small towns.

For now, ARRC is trying to gain a better understanding of the learning curve associated with transporting the gas.

“We will have to crawl, and then walk, and then run,” says Engebretson.