The Greenstream, the first barge powered entirely by liquefied natural gas, was built in the Netherlands and will be chartered by Royal Dutch Shell for use along the river Rhine. (Royal Dutch Shell)
Posted on 04/15/2013 5:46:10 AM PDT by thackney
As it looks to boost demand for bountiful natural gas, Royal Dutch Shell figures a good way to start is by keeping the home fires burning.
The company is leveraging its position as one of the largest natural gas producers by using the fuel to power its own drilling rigs, ships and heavy trucks – with hopes of spurring others to make the same transition. At the same time, it is investing heavily in small modular facilities capable of liquefying natural gas by super-chilling it, and building the infrastructure to fuel trucks and boats that run on it.
The approach gives Shell a buffer against the uncertainties of a developing natural gas market and helps immunize the integrated oil company from the bad economics of producing natural gas while prices are relatively low.
“If you’re just producing natural gas and selling it into a pipeline, of course it’s a pretty challenging market right now,” said Marvin Odum, president of Shell Oil Co., the company’s Houston-based U.S. arm. “If you have the ability to play through that whole value chain of producing, marketing, liquefaction on through to transportation and then delivery to a higher market, you see that’s a better business.”
Odum spoke to the Houston Chronicle on the eve of next week’s 17th International Conference & Exhibition on Liquefied Natural Gas, an annual summit dedicated to exploring all aspects LNG’s production, delivery and use.
Shell is bullish on liquefied natural gas, anticipating that global demand will double to 400 million tons per year by 2020 and predicting that natural gas could represent a quarter of the world’s energy mix by 2030 – up from about 15 percent today.
And Shell has a big interest in making LNG work; worldwide, the company claimed proved developed and undeveloped natural gas reserves totaling 42.8 trillion cubic feet at the end of last year.
In March, Shell announced it is collaborating with Mack and Volvo to promote liquefied natural gas as a fuel for commercial vehicles, just weeks after launching the first-ever barge powered solely by LNG in the Netherlands.
And the company just unveiled plans to develop two liquefied natural gas corridors serving the Gulf Coast and Great Lakes region, each supported by two small-scale liquefaction units that could be built in about three years and are designed to fit into cargo containers.
Shell’s “movable modular liquefaction system” technology allows quicker deployment, with facilities able to churn out 250,000 tons per year, in contrast to massive liquefaction plants planned to process 4 million tons or more annually for export.
LNG pumping out of the planned Louisiana liquefaction plant would be delivered to Mississippi River vessels and long-haul trucks.
Odum said Shell hopes to tap into the Gulf Coast corridor to fuel the trucks, rigs and hydraulic fracturing equipment it uses in the oil field.
“Let’s get this mini-LNG plant built in the Gulf Coast and then Shell will likely be one of its biggest customers,” Odum said. “We’re running rigs, of course, throughout the area, we’re running trucks, we’re running all sorts of equipment.
“There’s such a price advantage to using LNG, all of the emission advantages to running these drilling rigs on natural gas and running frac units on LNG,” Odum added.
Whether in the oil field or on the road, natural gas offers benefits over diesel, including fewer emissions and lower costs. But there are big obstacles too.
Some companies are wary of buying new gas-powered heavy-duty trucks – with a higher price tag and untested resale value – even if the fuel costs are lower. And some fear there won’t be enough refueling stations along major trucking corridors to support a natural gas fleet.
Odum says, however, that he’s increasingly optimistic about the pace of the transition in trucking, bolstered in part by companies’ plans to build refueling infrastructure.
Shell inked a deal with Travel Centers of America last year to spend $300 million adding LNG filling stations to truck stops nationwide, and it is building facilities along a major Canadian trucking route, from Calgary to Edmonton.
Other companies are aggressively rolling out LNG filling stations too, including the private Chinese firm ENN Group, which has plans to build dozens across the U.S. this year, and Clean Energy Fuels, which is backed by Texas oilman T. Boone Pickens, and Chesapeake Energy.
Odum said building LNG facilities and using the fuel in its own oil field operations is a way to blunt the challenge of matching infrastructure with demand.
“As you think about the complications of a developing market, particularly if you’re in the business of selling LNG – the whole chicken and egg thing – (the strategy) provides a real buffer with the pace of market development,” he said. “We can clearly see the benefits in using this fuel. We will use it. And then that fuel then is also available as the market starts to come on and there’s more demand in other places. It gives you a bit of a buffer as that market begins to develop.”
The Greenstream, the first barge powered entirely by liquefied natural gas, was built in the Netherlands and will be chartered by Royal Dutch Shell for use along the river Rhine. (Royal Dutch Shell)
Shell has launched the first 100% LNG powered tank barge at a Christening ceremony attended by Shell CEO Peter Voser at Peters Shipyards in The Netherlands.
This LNG powered barge is a first for Shell and for the inland marine industry.
Dr. Grahaeme Henderson, Shell Vice President Shipping & Maritime commented: “We are thrilled to see this first LNG powered barge in operation. Through innovation, a shared vision and a great deal of dedication, LNG powered barging has become a reality. Shell anticipates a bright future for LNG as a fuel in both coastal and inland shipping as it can help customers meet strict emissions standards such as those that are due to apply on the Rhine.”
The LNG powered barge, Greenstream, has been built and designed at Peters Shipyards in The Netherlands and will be managed by the Dutch based Interstream Barging (ISB). This is the first of two new LNG powered barges to be chartered by Shell. Greenstream has been launched on schedule and will start operating on the Rhine in the next few weeks.
Greenstream has been designed with many new safety and efficiency features. For example, she has four small efficient engines rather than one large engine as in traditional barges. This means that power can be varied as less is required to travel downstream than upstream with potential for fuel savings. These engines will operate at lower frequency than traditional barges, reducing vibration and noise levels which could be advantageous when travelling through populated areas on the Rhine. This new LNG powered barge will operate in The Netherlands, Belgium, Germany and Switzerland.
The launch is part of the longer term development of a new European LNG marine fuel industry with the potential to fuel inland barges, ferries, tugs or even cruise ships. Shell’s recent acquisition of Gasnor, the Norwegian LNG fuel company, is another example of Shell’s confidence in this sector’s future. In addition, over the next few years Shell will develop two LNG corridors, primarily for the marine industry in the Gulf Coast and Great Lakes areas of North America.
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Peters Shipyards transfers her first LNG tanker to Shell
http://www.petersshipyards.com/node/103
On Wednesday, April 10, in the presence of Minister Schultz van Haegen, the first LNG Greenstream Tanker is festively inaugurated by Shell Netherlands. The LNG powered barge is developed by Peters Shipyards in close cooperation with local partners, and built in Kampen. Geert van Voorn, CEO of Peters Shipyards: “The LNG Greenstream Tanker is an electrically powered ship and that leads to much less impact on the environment. We walk the same way and are maybe already on the lead compared to the developments ashore, where electric powered cars are also at the beginning of a huge growth.”
Greenstream Rotterdam
The first LNG Greenstream Tanker was christened on March 15 to Greenstream Rotterdam by Daniela Voser, spouse of Shell CEO Peter Voser. A milestone that indicates that the environmentally friendly LNG Greenstream Tanker will bring about a revolution the coming years in inland and coastal navigation. Thus, for example, LNG will help carriers to meet the increasingly stringent emission standards. In the short term, these will already apply to the Rhine. That was also one of the important principles at the start of the development of the LNG Greenstream Tanker. The development and construction of the ship by Peters Shipyards in Kampen, with a broad network of partners, took more than three years.
Sustainable and silent
Geert van Voorn on the principles behind the development of the LNG Greenstream Tanker: “We wanted to make several more steps forward together in the areas of sustainability, safety and efficiency. Therefore we have skipped the step of propulsion based on ‘dual fuel’, the combination of diesel and LNG. We see ‘dual fuel’ as an interim solution. The advantages of LNG are so clear that they should be capitalized. Transport on LNG leads to much less impact on the environment. The CO2 and nitrogen oxides (NOx) are reduced respectively with more than 25% and 80%. In addition to that, no sulfur dioxide (SO2) and particles are released. The LNG Greenstream Tanker is a fully-electric LNG ship. This also means that the propulsion produces much less noise nuisance. Again, the comparison with electric cars. Especially in inland navigation, where there can be crowded shores, this is a big advantage.”
Safer with wheelhouse at front
The design of the LNG Greenstream Tanker is striking. Besides environmental aspects, there is much attention paid to energy efficiency and a comfortable working environment for the crew. The wheelhouse, ‘the bridge’, on the front of the vessel, catches the eye. Geert van Voorn: “Traditionally the wheelhouse is positioned at the back on an inland tanker. Our approach allows far more efficient propulsion through a better trim, an optimal weight distribution of the vessel. In addition, a front wheelhouse is also safer, as the crew has more overview. That is no luxury on the increasingly crowded waterways. The interior of the cockpit is spacious and with regard to the design of a high level. Why would you not have a pleasant and comfortable workspace on a ship? In the past this was always neglected. A pleasant working environment shows respect and has a positive influence on the motivation and productivity of people.”
Less use of energy with LNG Packs®
A notable feature on the stern of the LNG Greenstream Tanker are the two modules, the Peters LNG Packs®, containing four LNG gas engines. Thanks to the four engines, capacity and power consumption can be deployed much more flexible to save energy. For example, when moving downstream a limited number of motors can be used. The arrangement of the two modules with a total of four engines is also designed to ensure safety and efficient maintenance. Safety, because no problem arises when an engine fails. The vessel can simply continue on three engines. In addition, the modular arrangement of the gas engines provides to do maintenance ashore. The Peters LNG Packs® can easily be removed from the vessel which means that the ship does not have to remain idle for a long time as a result of maintenance or breakdown. Exchangeability means that the ship can remain in operation almost continuously.
Thanks for this thread.
While US O & G Companies cower from the fear of the mighty fist of Commie B. Hussein Obama, Shell hits a homerun for the O & G Industry. THANKS, Shell!
Thanx
This is what the nuclear power industry predicted would happen. The next step is higher domestic prices.
Production and distribution costs, vehicle conversion costs?
Using LNG looks like a major PITA. But what about the company “Synfuels International” (GTL) out of Texas A&M, claiming that on a production scale, they can produce a barrel of high octane gasoline (not alcohol) for around 25 bucks?
They also would produce no-sulphur diesel, alcohol and other hydrocarbon products.
Since we appear to be sitting on all these zillions of cubic feet of NG, it appears that the gas to liquid fuels refinement process is a lot cleaner and less complicated than the traditional crude-oil/feedstock method.
Plus, you could sell the fuels at the same filling station, and haul it in the same way they do now.
I don't think it every going to make sense for residential type of use. But for Fleet service returning to the same yard/garage every night, it seems to be very cost effective for companies. Waste Management and others have been doing it for years and keep expanding the operations.
But what about the company “Synfuels International” (GTL) out of Texas A&M, claiming that on a production scale, they can produce a barrel of high octane gasoline (not alcohol) for around 25 bucks?
So far, it is just a claim and not a commercial operation. Shell and Sasol have built commercial sized operations in other parts of the world and I believe both have announced intentions of doing it here in the US. We are a more expensive place to operate, with our rules, regulations and also more competition for the natural gas market.
Just to be clear, I do think this is the way to go for the individual consumers like you and me. It allows the existing infrastructure to be used as well as our existing vehicles.
I believe the LNG makes sense for the big, bulk users of fuels like large ships, trains, long-haul trucking and fleet service.
Are you down there, have you visited the pilot plant at A&M or the commercial facility near Houston?
Apparently they differ in design from the traditional conversion plants. Also they are relatively small and the SFI designers claim they can be built as portable units for field use.
Thanks. Pretty stable prices for the next 18 months. No real change in consumption either
The nuclear industry was looking at a longer-term projection that considered a significant increase in demand most from exports, but also from domestic gas turbines, automotive, residential heating, etc.
It’s called eating your own dogfood.
I am in the Houston area. I have not visited any plant. I am not aware of any existing commercial Gas-to-Liquids facility in the US. Shell has two, one in Qatar and an older on in Malaysia. Sasol has one under construction in Nigeria, final planning for a plant in Uzbekistan and early planning for one in the US.
http://www.shell.com/global/aboutshell/our-strategy/major-projects-2/pearl/overview.html
Apparently they differ in design from the traditional conversion plants.
What are you calling a traditional plant in Gas-to-Liquid Conversion? As far as I know, there are two in commercial operations in the whole world and the oldest is about 15 years.
I have no idea what you are trying to communicate.
I would hope Shell and others are simply using nat gas for process in their own refineries.
No sense cracking crude with crude, when nat gas can be used.
In almost every location, that has been the case for a long, long time.
It was one of the reasons for the North Pole, Alaska refinery shutdowns. No local natural gas or pipeline supply. They were burning up expensive crude for heating in the process. It is cheaper to send the crude down to Washington State, use natural gas, then ship the products back up to Alaska.
Well, from my limited knowledge of it, the Nazis were using this in addition to the gasification technology after the allies cut off their petroleum supplies. This and subsequent GTL developments used the so-called "Fischer-Tropsch process".
The Dallas A&M prototype is, and the Houston production plant will be utilizing A&M's recent discovery, which is much simpler and requires a fraction of the hardware.
Here's a link to a press release about the company
And here is their web site
I get the feeling that the patented process works, but they may be having a little problem getting the show on the road in Houston. I'd say the Dallas prototype is the one to check out.
That was Coal-to-Liquid, not Gas-to-Liquid conversions.
Do you have links to any of this?
They operate one pilot plant in Robertson County, Texas. Which is about halfway between Houston and Dallas.
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