Standardising LNG operations
LNG trade has moved beyond its focus on long-term contracts characterised by predictability, and diversified to encompass shorter-term, more adaptable spot contracts, triggering a demand for increased flexibility, safety, and efficiency in LNG production procedures.
Looking ahead, demand for LNG remains robust – serving as a key transitional energy source and offering lower prices and greater availability compared to other alternatives. However, supply growth slowed in 2023, and is anticipated to be constrained again in 2024, despite a strong start to the year in the spot market. The International Energy Agency (IEA) expects demand to grow by 2.3% in 2024, primarily driven by industrial use and concentrated in fast-growing Asian markets. Despite a marginal increase in gas-to-power demand, lower hydro availability in regions like China and India may boost gas-fired power plant use. However, global LNG supply growth is limited to 3%, with potential downward risks from new plant delays, geopolitical tensions, feed gas issues, and shipping constraints. This limited supply could cap demand growth in key Asian and European markets.
As energy firms navigate these market patterns, LNG supply chains are being reassessed to adapt to this more dynamic environment and ensure infrastructure remains fit for purpose; with demand for increasingly sophisticated FSRUs, one clear new pattern is emerging. Another consequence of demand for more agile operations has been the adoption of ship-to-ship (STS) transfers, a tried and trusted process for oil-based products, but a relatively new process within LNG supply chains, highlighting the industry’s shift away from traditional oil-based infrastructure.
FSRUs and ship-to-ship transfers
STS transfers involve the direct movement of LNG between two vessels at sea, bypassing the need for onshore infrastructure. This method offers greater flexibility and efficiency in LNG delivery, reducing costs, especially in regions with limited onshore terminal capacity or fluctuating demand patterns.
In an era where speed and operational flexibility are paramount, FSRUs have emerged as game-changers in LNG logistics, particularly in enabling STS transfers – receiving LNG from LNG carriers, storing it temporarily, and then transferring it to other vessels for distribution or regasification. The ability of FSRUs to accommodate STS transfers reflects a shift towards more agile and decentralised LNG operations.
Moreover, as this article will go on to explain, by embracing digitalisation, the LNG industry can tap into a future where interoperability and connectivity drive operational excellence.
Standardisation for efficiency and safety
Aligning with the momentum seen across the maritime and infrastructure industries, the LNG industry is undergoing a transformation driven by the quest for efficiency, safety, and operational agility. This is manifesting itself in a harmonisation of equipment and procedures to enhance operational efficiency and mitigate risks associated with LNG handling.
Improving STS connectivity is essential to address compatibility issues between ships’ systems, especially legacy emergency shutdown (ESD) links. Many large scale LNG analogue fibre optic links, designed in the 1980s, originally adhered to technology standards of that era. In the 1990s, efforts were made to reverse-engineer these links for compatibility, but the absence of standardised design specifications led to complexity and inefficiency, resulting in unique legacy interface support challenges.
To ensure efficient performance and safety during STS LNG transfers, one vessel must essentially replicate shoreside operations effectively. Over the last 30 years, continuous development has enabled the re-engineering of STS systems, removing traditional hardware barriers that impeded efficient ship linking. Consequently, LNG carriers equipped with the latest ship-to-ship link (SSL) models can engage in STS transfer processes using any of their ESD links, notably the fibre optic system. This transformation enables telecommunications more akin to traditional ship-to-shore connections, eliminating historical limitations associated with traditional safety links. This advancement is particularly advantageous for STS and FSRU installations, specifically those involving multiple LNG transfer processes.
As STS transfers become more prevalent, modernising and harmonising systems are crucial to mitigate risks and enhance operational efficiencies significantly. In a dynamic market where systems and processes may vary due to geographical or operational variances, the importance of uniformity cannot be overstated. Additionally, uniformity could become essential for business continuity if components in older systems become obsolete.
Going forward, FSRUs, being integral to the modern LNG infrastructure, will need to keep up with standardised practices to ensure compatibility and interoperability with other components of LNG supply chains. Standardisation not only streamlines operations but also facilitates regulatory compliance and risk management, crucial aspects in an industry characterised by stringent safety standards and environmental considerations.
Leveraging technology for enhanced connectivity
Advancements in technology play a pivotal role in enhancing STS connectivity and operational efficiency. FSRUs leverage cutting-edge digital systems and communications technologies to facilitate seamless transfers between LNG carriers and other vessels. Modernising STS connectivity involves transitioning from legacy analogue systems to digital platforms that support real-time monitoring, control, and data exchange.
The integration of standardised digital systems in FSRUs enables efficient management of STS transfers, reducing operational complexities and enhancing safety. By embracing digitalisation, the LNG industry is embracing a future where interoperability and connectivity drive operational excellence.
Despite the advantages offered by FSRUs, there are challenges that must be addressed to fully capitalise on their potential. Ensuring compatibility between FSRUs and LNG carriers, optimising transfer processes, and maintaining stringent safety protocols are ongoing priorities for industry stakeholders. Additionally, as FSRU technology continues to evolve, investments in research and development are essential to enhance performance and reliability.
The rise of FSRUs represents a transformative phase in LNG logistics, where flexibility and efficiency are redefining industry norms. These floating units not only enable STS transfers but also serve as hubs of innovation, driving the adoption of standardised practices and technology solutions across the LNG value chain.
The role of hose transfer systems
Integral to the efficiency and safety of STS operations involving FSRUs, LNG hose transfer systems (HTS) provide further opportunities to enhance standardisation and flexibility within the LNG supply chain.
HTS solutions are essential for accommodating new operational scenarios, such as connecting and transferring LNG from standard FSRUs to the largest LNG carriers, such as Q-Flex and Q-Max vessels. They also facilitate LNG reloading to small scale carriers or bunkering ships with minimal adjustments to existing hardware.
This adaptability streamlines operations by enabling a single connection to manage both cargo transfer and communication, thereby reducing the need for multiple setups and allowing for faster, more efficient transfer initiations. Furthermore, integrating ESD functions from both sides of the transfer into a unified system significantly improves safety, enabling a single trigger point to halt operations instantly in emergencies, reducing response times and minimising potential hazards. Real-time data exchange within this integrated system can pre-emptively identify and address potential issues, ensuring smooth and safe operations.
A comprehensive HTS package that incorporates SSL communication is essential to a practical, efficient, and safety-enhanced approach to modern LNG logistics, enabling the advancement of reliability and efficiency of STS transfers.
The importance of industry collaboration
Creating standardised systems and procedures requires collaborative efforts across industry stakeholders. Organisations such as Society of International Gas Tanker and Terminal Operators (SIGTTO), Society for Gas as a Marine Fuel (SGMF), and Oil Companies International Marine Forum (OCIMF) play pivotal roles in developing guidelines and best practices for safe and efficient LNG operations.
Collaboration between energy companies, engineers, manufacturers, and technology developers is also essential to address compatibility challenges and drive innovation in LNG logistics. By working together to establish common standards and frameworks, the industry can overcome operational barriers and unlock the full potential of FSRUs in advancing STS transfers.
Future outlook
Looking forward, it is likely that FSRUs are poised to assume an even more significant role in the LNG industry’s evolution. With global LNG demand continuing to rise and trade dynamics shifting, investments in FSRU infrastructure that embraces digitalisation will be crucial in driving interoperability and connectivity for operational excellence. This includes the development and implementation of packages that combine modern HTS systems with SSL communication functionality, as well as addressing ESD link compatibility issues.
Standardising LNG operations through greater FSRU integration signifies a shift towards a more interconnected LNG ecosystem. By fully unlocking FSRU’s potential, setting new benchmarks for operational excellence and reinforcing advancements of STS transfers and standardisation efforts, energy companies will be better positioned to enable agile and resilient LNG logistics at an unprecedented scale.