Although liquefied natural gas (LNG) is an interesting fuel with global growth potential, the demand is limited so far in the small and medium-sized ports, a new report finds.
The report prepared for the Danish Port of Esbjerg in connection with an EU project dealing with green cruise tourism shows that it would be inappropriate to invest in LNG at the Port of Esbjerg at the current time.
“The conclusion is clear. LNG is interesting, but it is still too early for the Port of Esbjerg,” Peter Harbo, business development manager at the Port of Esbjerg, said.
The report was prepared by COWI, which consulted with the gas consulting firm Kosan Crisplant and others. The project is part of the Green Cruise Port and COWI has studied how the LNG market will evolve in the years ahead throughout the entire Baltic region. In this context, they have created various business cases for the Port of Esbjerg.
“LNG is a more eco-friendly and natural fuel, and it makes good sense to use it in some sectors. But it requires huge investments and no one will make them in Esbjerg until demand is present,” Peter Harbo explained.
Depending on the type of plant to be built at the port, the price could quickly reach EUR 10 million. It is not easy to cool down and liquefy the gas and keep it in its liquid form, which makes it 600 times more concentrated, according to the report.
At the moment, LNG is used only by some of the big cruise ships that enter Copenhagen, Amsterdam, Barcelona and other ports, but not the small ships that call at Esbjerg. At the same time, the cruise ships that actually call at Esbjerg are refueled in other ports.
What is more, installation vessels for offshore wind farms, crew transfer vessels and offshore supply vessels that currently sail from Esbjerg will not be using LNG for the time being.
The technology is also in place to ensure that trucks and buses can run on LNG, but even here the report does not show great prospects.
In fact, in addition to COWI predicting limited demand for LNG in Esbjerg, a number of ports around Denmark already have LNG and facilities for production and LNG refueling. There are LNG installations in Oslo, Gothenburg, Rotterdam, Zeebrugge and Hamburg.
The LNG supply chain can be divided into two main groups — either supply from a remote terminal, where the LNG is delivered to the port via trucks, containers or ships, or a permanent station at the port, which is a large investment and requires greater strategic planning.
COWI has investigated 12 different permanent solutions in its report. The only solution with potential that they identify is that it may be an idea to provide ships with LNG if the refueling takes place from a terminal in another port with LNG facilities. The refueling has actually been performed at the Port of Esbjerg by driving tank vehicles up from Zeebrugge and refueling directly from the vehicle to the ship.
“The problem with this way of doing things is just that when the LNG is transported by truck in this way, some of the green mindset and gains also disappear,” Harbo further said.
The report also indicates that the development of batteries for ferries is progressing so rapidly that this would seem a realistic option in the future.
“At the moment, it appears that smaller ships and passenger ferries are more interested in electrical power than LNG,” Peter Harbo concluded.