Repurposing LNG terminals for future fuels climbs agenda

One of the principal challenges of shipping’s fuel transition is the lack of global bunkering infrastructure for the marine fuels of the future, including ammonia and hydrogen. To have these fuels available in key ports and terminals would require capital investment running into billions of dollars, experts say.

However, according to analysis by New York broker Poten & Partners, the designs of some proposed LNG terminals are now being assessed to see whether they could be adapted and made ‘ready’ to enable the handling of carbon neutral fuels, thus preventing them from becoming ‘stranded assets’ as the fuel transition progresses.

Global LNG demand totals around 405m metric tonnes a year (MMt/y), Poten estimates, and 180 import terminals in 48 countries have capacity to handle imports of about a billion tonnes a year. However, LNG demand is forecast to rise to about 630 MMt/y by 2040, before being steadily replaced by renewables and other cleaner fuels thereafter.

Poten assesses the properties of ammonia and hydrogen and their possible impact on terminal design. The firm also analyses the scope for re-use of existing facilities. “The infrastructure of an existing LNG import terminal is not a perfect fit … however, there are components of LNG terminals that can be re-used [delivering] potential cost savings of between $100m in the case of liquid hydrogen to $300-400m in the case of ammonia,” the firm said.

Terminal designers are already considering ways in which facilities could be developed for receiving alternative fuels and/or producing hydrogen. Poten cites two examples; one, an LNG terminal is left largely intact, receiving synthetic or green LNG which can then be cracked to hydrogen on an adjacent site with the resulting carbon dioxide captured for sequestration or re-export. Or two, the jetty and flowlines are designed to accommodate ammonia as a second import commodity with space left for ammonia storage and export or cracking to hydrogen in the terminal layout.

Poten also assesses the scope to adapt existing LPG carriers for the carriage of ammonia, and products tankers for methanol. Since existing ammonia carriers will continue to work in fertiliser and chemical sector trades, additional capacity will be required. LPG carriers that have ammonia listed on their Certificate of Fitness will be suitable but other vessels are likely to require modification to materials in the cargo system and safety equipment. Conversion of LPG carriers to ammonia is not technically challenging, Poten concludes.

Repurposing products tankers for the carriage of methanol would require all cargo tanks to be recoated as week as possible replacement of cargo lines. Some chemical carriers, those with stainless steel tanks for example, could be suitable but ships with coated tanks might not be compatible with methanol. Furthermore, chemical tankers with many small tanks would not be suitable conversion candidates. Repurposing ships for the carriage of liquid hydrogen is not viable.

The Poten analysis has been carried out in advance of Hydrogen Asia, part of Asia Energy Week, to be held in Singapore in February.