Gastech ’15: Wärtsilä proposes all-in-one barge for LNG power generation

By Ann Törnkvist

SINGAPORE -- Floating an idea has never been a more apt metaphor, as Wärtsilä proposes an all-in-one barge that receives and regasifies LNG for power generation and distribution. The Wärtsilä Mobile LNG solution could unleash the economic potential of many regions that are struggling to reinvent their energy mix and lower electricity prices.

Because the current LNG infrastructure is mostly large-scale and of limited reach, wide-spread implementation of the Wärtsilä Mobile LNG for medium- and small-scale consumption could democratize this clean and safe fuel.

“The spot trading market in oil has been so dominant that the infrastructure has been built to reflect this dominance. We now see that the balance, as well as the politics, are changing,” says Reidar Strande, midstream director at Wärtsilä Gas Solutions. “In the past, the LNG infrastructure was huge because of the necessity to achieve economies of scale. Now, however, the market is driven also by environmental pressures and by the fact that many countries want to reduce their dependence on oil.”

Widening LNG implementation. In some places, where policymakers are ready to diversify the energy mix, LNG could ultimately help to lower electricity prices. The businesses, communities and households that would stand to gain represent untapped markets for oil and gas majors and utilities looking to extend their reach—a clear win-win situation. This is true without mentioning the environmental and economic gains from weaning away from oil.

With a smaller format than the current LNG infrastructure, a widened implementation of LNG could alter the gas equation fundamentally. Building the LNG system on a barge makes it even more flexible, and Wärtsilä is in an ideal position to make it happen.

“We have an understanding of the entire LNG value chain, so we are in a good position to help different stakeholders come together and make this happen,” says Kenneth Engblom, director of LNG business development at Wärtsilä Energy Solutions. “A barge-mounted solution is a quick and reliable way to get LNG delivery started also on a small scale.”

All building blocks in place. The Wärtsilä Mobile LNG solution represents the union of Wärtsilä’s two-pronged expertise in its Marine Solutions and Energy Solutions divisions.

“We have all the building blocks and experience to put this concept together,” says Timo Koponen, vice president of flow and gas solutions at Wärtsilä Marine Solutions. “We are the only player in the market that can build these different elements from our in-house competences and portfolio.”

The all-in-one solution includes a jetty-based LNG receiving system, LNG storage and a regasification barge. The barge can be used in combination with a fixed or floating power plant with an installed capacity of up to 250 MW, which is ideal for many medium-sized communities that lack or have limited access to the national grid. The capacity can be ramped up by floating a second barge or ship next to it, not unlike an Ikea flat-pack option. Would you like to add extra drawers to your shelving unit? Or, in this case, would you like the possibility of processing more LNG with your barge?

As a flexible and easy-to-set-up option, the Wärtsilä Mobile LNG could help avoid time-consuming red tape in some locations. As it is mobile, investors should feel safe in the knowledge that should demand change, the barge provides accessibility and can be transported almost anywhere, including places where a pipeline would never be feasible. Furthermore, the green credentials of LNG make it also the optimal fuel for emission-controlled areas. This should open up financing options to would-be customers and facilitate a broader range of viable financial models.

“On land, you cannot take your investment with you. You are stuck, which means an investor needs to know that there is a sustainable and long-term need,” Mr. Engblom explains. “Compared to constructing conventional land-based terminals in difficult soil conditions and areas with an undeveloped infrastructure, the barge concept can represent a lower capital investment.”

“The Wärtsilä Mobile LNG solution has been developed for shallow water areas where access is restricted for larger vessels with a draft of more than 6 metres, unless major dredging operations are carried out. It is also intended for challenging locations where large-scale LNG receiving terminals are not feasible or where the demand quantities of the LNG are smaller,” Mr. Koponen says.

Solution for isolation. The Wärtsilä Mobile LNG could be of immense benefit to islands, such as the Caribbean or Indonesia, or otherwise isolated communities. The Caribbean, for example, currently struggles with high electricity prices which, the World Bank argues, is holding back the otherwise tourist-magnet islands.

“Most small Caribbean countries, particularly the Eastern Caribbean States, depend almost entirely on petroleum to supply their electricity needs, with oil and gas expenditures taking between 7% to 20% of a country’s GDP,” a 2015 World Bank report states. “With an average cost of electricity that is four times higher than in wealthy nations such as the US, high energy costs are one of the key bottlenecks for unleashing economic growth and prosperity in the region.”

Of course, it is not just consumers who stand to benefit, but the suppliers, too. Many oil and gas majors have expressed interest in accessing this market if only the LNG value chain could be expanded, Mr. Koponen noted after attending the Offshore Technology Conference (OTC) in Houston, Texas, earlier this year.

“Almost everyone had many more questions than there were answers. There is a huge demand for people who can consult the customer and sit down and think together with them,” Mr. Koponen says.

Mr. Strande adds, “Wärtsilä is in prime position with the technology, the references and the building blocks to enable us to make a complete offering to the customer, along the entire gas value chain.”

 

Gastech 2015 continues through Friday in Singapore. As the official conference newspaper provider, stick with Gas Processing for continued live coverage from the event.

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