This document provides an analysis of developing liquefied natural gas (LNG) infrastructure at the Port of Piraeus in Greece to establish it as an LNG bunkering hub for the Mediterranean and Adriatic regions. It discusses tightening environmental regulations for shipping emissions and outlines the benefits of LNG as a marine fuel. Ship traffic data at the Port of Piraeus is analyzed to estimate future LNG demand. The potential for a network of LNG supply and bunkering facilities at Piraeus and satellite ports is examined. Developing this infrastructure could help meet emission limits while providing economic benefits to ship owners.

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Πανεπιστήμιο Πειραιά,
Μεταπτυχιακό Ναυτιλίας 15​ος​
κύκλος
Μάθημα: Λιμάνια και Αναπτυξιακές Πολιτικές
Professor: Dr. Aggeliki Pardali
Student’s Name​: ​Anastasia Kiritsi
The potentials of the Liquefied Natural
Gas (LNG) to be the main fuel for the
Shipping Sector
(An analysis for making the Piraeus Port the LNG
Bunkering Hub of Mediterranean and Adriatic Region,
by developing a network of LNG supply and bunkering
facilities for ships)
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Contents
1. Executive Summary 3
PART A 3
2. Environmental Regulations Affecting the Shipping Industry 3-4
PART B 5
3. LNG Description as an Energy Source 5
3.1. How does LNG work? 5
3.2. What’s LNG? 5
3.3. A typical LNG process 6
3.4. LNG Transportation 7
3.5. LNG Storage 7
3.6. LNG Regasification Terminals 7
3.7. The Benefits of LNG as Opposed to Gas Transported by Pipelines 7
PART C 8
4. LNG Demand from Shipping at the Port of Piraeus 8
4.1. Basic shipping characteristics at the Port of Piraeus 8
PART D 9
5. Analysis of Ship Traffic Data at the Port of Piraeus 9-14
PART E 15
6. LNG as Marine Fuel; the Ship Owners View 15-17
PART F 18
7. Expected LNG Demand at other Regional Satellite Ports 18-20
8. Concussions 21
9. Comments and Recommendations: 22
10. References 23-25
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1. Executive Summary
The current assignment is following the new challenges for Liquefied Natural Gas
(LNG) in Shipping Industry as the mail fuel after the latest developments on energy
security along with environmental issues.
Today is the right time for a decisive move towards the LNG as the main fuel for the
shipping industry. This will serve not only the need for security of supply but also met
the future demand for LNG as marine fuel as expected in the forthcoming years. The
alternative fuel infrastructure directive 2013/0012(COD), foresees an increased use of
LNG for sea and inland waterborne. More specific, all core marine and inland ports
(139) will have to be able to provide LNG as marine fuel from 2020 and 2025
respectively.
The directive 2012/33/EC mandates the use of marine fuel with max 0.1%. Sulphur in
EU ports and while at berth or equivalent method to achieve the required emission
standards. The limits for sulphur content in marine fuels in EU Member States territorial
Seas outside the designated Emission Control Ares (ECAs) are 3.5% from 1/1/2012 and
0,5% from 1/1/2020. Limits for sulphur content in marine fuels used by passenger ship
in EU Member States territorial Seas outside ECAs are 1,5% until 31/12/2019 and 0,1
from 1/1/2020. Additional Greece and Italy expect the EU Macro-regional Strategy on
Adriatic and Ionian region, which more likely will set strict emissions limits. ​(Buhaug,
2019)
The Port of Piraeus is the largest Terminal in the Mediterranean Sea in terms of Short
Sea and Deep Sea services. Actually it is expected that the Port of Piraeus will play the
leading role similarly to the one that the Port of Rotterdam has in the Baltic Region. The
Baltic model of a major leading hub and a set of satellite ports will be applied in the
case of Piraeus. The initial design is that Rotterdam as a hub utilizes big storage tanks
and with the use of LNG feeder vessels distributes LNG in satellite ports such as
Goteborg. Following the same scheme, Port of Piraeus will require major infrastructure
facilities ​(Theodoropoulos, 2009).
According to the Market experts LNG will play the role of the future Marine fuel able to
meet emission limits and additionally under the right price policy provide financial
benefits to the ship-owners. Analysis depicts that a ship-owner shifting to LNG will
exhibit an attractive payback period and significant operational and financial benefits.
PART A
2. Environmental Regulations Affecting the Shipping Industry
Increased emphasis is placed both globally and locally in relation to environmental
issues. This coupled with the growing awareness of the actual burden of pollution from
shipping has led to intense development of regulations at both the international and
national levels. The introduction at the global level of Emission Control Areas (ECA's) is
an attempt to address this issue and reduce the environmental footprint of the
maritime industry.
Thus abatement of air pollution in maritime transport is high on the world and on the
European agenda. As far as shipping is concerned, agreements and contracts at an
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international level and on a regional basis as well as various organizations are involved
in different ways in different places in the world. One of the oldest and most important
international bodies governing the shipping industry is the International Maritime
Organization (IMO), which is based in London, UK. IMO is responsible for improving
maritime safety, for safeguarding the environment, for addressing maritime security
and for developing of international rules to be followed by all shipping member nations.
(Rather, 2013)
The Convention MARPOL 73/78 of the IMO is the main International Convention for the
Prevention of Pollution from Ships. Air pollution is regulated in Annex VI "Regulations for
the Prevention of Air Pollution from Ships" (since 2005). More stringent measures
adopted by the IMO in relation to SO​X and NO​X emissions are introduced with the
revised Annex VI to MARPOL. ​(Lloyd’s, 2012)
On the other hand, the EU has set a target to reduce greenhouse gas emissions by at
least 40% by 2050 (compared to 2005) for the maritime sector. EU​’​s White Paper on
Transport also states that the shipping industry should additionally contribute to the
reduction of local and global emissions. EU legislation aligned with IMO requirements
with Directive 2012/33/EU, which amends Directive 1999/32/EC on the sulfur content
of shipping fuels. Although the Directive does not contain provisions that regulate ship
emissions for NO​x or Particulate Matter (PM), it introduces, inter alia, stricter sulfur limits
for marine fuels and in marine areas outside Sulfur Emission Control Areas (SECA​’​s).
(Nilsson, 2011)
In Figure 1 we observe the sulfur limits and the corresponding dates of required
compliance both in SECA's and at a global level.​ (EU report, 2013)
Figure1. Regulations imposing sulfur limits and the corresponding deadlines in accordance with Annex VI by
MARPOL
(Source:​ ​Lloyd​’​s Register, 2012, LNG-fuelled deep sea shipping ​– ​the outlook for LNG bunker and
LNG-fuelled newbuild demand up to 2025)
PART B
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3. LNG Description as an Energy Source
In our days, Liquefied Natural Gas (LNG) seems to be one of the most favorable energy
sources mainly for the power and electricity sector across the globe. Qatar is the
world’s biggest producer of liquefied natural gas and it cut exports of the fuel for the
first time since at least 2006 as Australia and the U.S. prepare to erode the Middle
Eastern nation’s dominant position. The Qatari volumes dropped 2.1 percent from a
year earlier in 2014 after at least eight years of gains. The nation’s share of global LNG
imports shrank to 31.9 percent from a peak of 32.9 percent in 2013. The industry is
waiting for the wave of new exports from the U.S. and from Australia, who will likely top
the producers’ list by 2020. Qatar, whose North Field is part of the world’s biggest gas
reservoir, dominates the market with output from its 14 LNG plants, known as trains.
The nation has capacity to produce 77 million metric tons a year of the fuel, or 26
percent of the world’s total. That is being challenged by Australia and the U.S., which
are building a total of 99 million tons of annual capacity. ​(Theodoropoulos, 2009)
3.1. How does LNG work?
Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4) that has
been converted to liquid form for ease of storage or transport. It takes up about
1/600th the volume of natural gas in the gaseous state ​(Algel, 2012).
3.2. What’s LNG? ​LNG is natural gas that is cooled into liquid form at -160 degrees
Centigrade, reducing it to one-six-hundredth of its original size. It is stored and
transported in insulated tankers which minimize vaporization resulting from heat
ingress. The LNG is transported by tankers to different destinations. On arrival, it is
converted back into a gaseous form for delivery to users such as power stations,
industries, commercial buildings and domestic. LNG is composed of a mixture of
hydrocarbon gases that occur with petroleum deposits, principally methane together
with varying quantities of ethane, propane, butane, and other gases, and is used as
fuel and in the manufacture of organic compounds.” Liquefied natural gas or LNG is
natural gas (predominantly methane, CH4) that has been converted temporarily to
liquid form for ease of storage or transport. Liquefied natural gas takes up about
1/600th the volume of natural gas in the gaseous state. It is odorless, colorless,
non-toxic and non-corrosive. Hazards include flammability, freezing and asphyxia.
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Illustration A.​ The Energy Process – LNG Value Chain
3.3. A typical LNG process
The gas is first extracted and transported to a processing plant where it is purified by
removing any condensates such as water, oil, mud, as well as other gases like CO2
and H2S and sometimes solids as mercury. The gas is then cooled down in stages until
it is liquefied. LNG is finally stored in storage tanks and can be loaded and shipped. The
liquefication process involves removal of certain components, such as dust, acid
gases, helium, water, and heavy hydrocarbons, which could cause difficulty
downstream. The natural gas is then condensed into a liquid at close to atmospheric
pressure (maximum transport pressure set at around 25 kPa/3.6 psi) by cooling it to
approximately −162 °C (−260 °F). The reduction in volume makes it much more cost
efficient to transport over long distances where pipelines do not exist. Where moving
natural gas by pipelines is not possible or economical, it can be transported by
specially designed cryogenic sea vessels (LNG carriers) or cryogenic road tankers. The
energy density of LNG is 60% of that of diesel fuel. ​(Maffii, 2007)
The gas is first extracted and transported to a processing plant where it is purified by
removing any condensates such as water, oil, mud, as well as other gases like CO2
and H2S and sometimes solids as mercury. The gas is then cooled down in stages until
it is liquefied. LNG is finally stored in storage tanks and can be loaded and shipped.
(Theodoropoulos, 2011)
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3.4. LNG Transportation
An LNG carrier is a tank ship designed for transporting liquefied natural gas (LNG). As
the LNG market grows rapidly, the fleet of LNG carriers continues to experience
tremendous growth. ​(Consuegra, 2010)
3.5. LNG Storage
A liquefied natural gas storage tank or LNG storage tank is a specialized type of
storage tank used for the storage of Liquefied Natural Gas. LNG storage tanks can be
found in ground, above ground or in LNG carriers. The common characteristic of LNG
Storage tanks is the ability to store LNG at the very low temperature of -162 °C (-260
°F). LNG storage tanks have double containers, where the inner contains LNG and the
outer container contains insulation materials. The most common tank type is the full
containment tank. Tanks are roughly 55 m (180 ft) high and 75 m (250 ft) in diameter
(=250 000 m³). In LNG storage tanks if LNG vapours are not released, the pressure and
temperature within the tank will continue to rise. LNG is a cryogen, and is kept in its
liquid state at very low temperatures. The temperature within the tank will remain
constant if the pressure is kept constant by allowing the boil off gas to escape from the
tank. This is known as auto-refrigeration. ​(Bengtsson, 2011)
3.6. LNG Regasification Terminals
LNG regasification terminals are the keys to unlocking markets. In regasification
terminals, the ultimate destination of LNG carriers, the liquefied natural gas is returned
to its initial, gaseous state, then fed into transmission and distribution networks.
­ Onshore regasification terminal – Land facility for receiving, unloading, storing
and re-gasifying LNG, usually including breakwaters, tanker berthing and other
marine facilities. ​(Levander, 2008)
­ Offshore regasification terminal – Offshore facility for receiving, unloading,
storing and re-gasifying LNG. ​(Sipila, 2008)
3.7. The Benefits of LNG as Opposed to Gas Transported by Pipelines
The biggest advantage of having access to the LNG market and being able to import
it, is the proof of the existence of alternative sources of LNG supply, which is necessary
both for the safety of the total company supply so as to meet the needs of its clients, as
well as for the correction of the Load Factor of its consumers-clients for whom the
imported LNG is intended for. Furthermore, the supply and import of LNG also
contributes to the overall security of gas supply of SE Europe, since the supply of LNG
is not affected by geopolitical or other financially problems that may occasionally
occur in transit countries from which the gas supply pipelines go through. In terms of
price, changing conditions in the world natural gas market in the last 3 years have
affirmed LNG as being a much more competitive commodity to pipeline gas, due to the
collapse of prices on the world’s largest market, the U.S., brought on by the
development of indigenous shale gas (nonconventional gas).
PART C
4. LNG Demand from Shipping at the Port of Piraeus
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The use of liquefied natural gas as marine fuel is not a science fiction vision today as
the number of ships that choose this type of fuel is constantly rising. But to be able to
adopt widespread use there should be a development of the global network
infrastructure and an efficient logistics chain. These two parameters are currently at
an early stage in most parts of Europe as companies supply natural gas and fuel
suppliers are reluctant to invest in creating the necessary infrastructure until there is
sufficient commercial demand from the shipping industry. On the other hand,
ship-owners are reluctant to invest in new construction or retrofit ships and although
they would like to use LNG even prior to the compulsory phase (2020) the initial
investment cost is a great obstacle.
In the frame of this study, the feasibility of creating a terminal supplying LNG as marine
fuel in the port of Piraeus is determined. At first, the description of a profile of the
shipping industry serving this port is drawn, and then an appropriate methodology
assesses the annual demand for LNG as presented in more detail below. The cases,
on which this method was based, were designed to provide reliable results.
4.1. Basic shipping characteristics at the Port of Piraeus
The strategic geographical position occupied by Greece renders it an obvious
gateway for ships to dock in the East, with a focus on developing countries of Eastern
Europe and the Black Sea and to the European Union member states.​(Consuegra,
2010)
Piraeus, the first in size and handling capacity port in the country and one of the
largest in the Mediterranean, is an important driver of development for international
trade and for the local and national economies. It constitutes the hub of the country for
the supply and export of raw materials and finished products. It serves both passenger
and tourist traffic. Being an international transshipment center and located at the
intersection of waterways linking the Mediterranean to Northern Europe via the
Suez-Gibraltar axis, it serves vessels of any type and size. The port has an LNG
bunkering potential covering a wide range of activities such as container operations,
movement of vehicles and conventional cargo, costal routes and the cruise industry.
(Bengtsson, 2011)
PART D
5. Analysis of Ship Traffic Data at the Port of Piraeus
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With a view to reliable study, I outlined the profile of the maritime industry in this port,
by creating a database, which includes all the ships that visited the port in 2013. Then I
made a detailed description for each ship collecting data on the basis of data from
Lloyd​’​s Register/Fairplay SEAWEB database.
Key features of each ship are:
▪ Type of ship
▪ Dimensions hull
▪ Capacity (e.g DWT, TEU capacity, CEU, berths etc.)
▪ Age
▪ Total installed power
▪ Service speed
▪ Number of arrivals in the port
Based on this data, I conducted a series of groupings. The main objective of groupings
is the categorization of total arrivals based on specific characteristics for each ship.
The classification of ships helps me approach the estimated number of refuelings
using LNG from the port in the coming years as well as the estimated quantity of LNG
required. (Lloyd’s, 2012)​. More specifically, the initial grouping was based on the type of
ship, identifying these categories: coastal ships, cruise ships, container ships, and
tankers. This grouping helps us draw conclusions on the routes the vessels serve and
thus the geographical areas in which they operate. To be able to better understand
the importance of the initial grouping, it is sufficient to consider the discrepancies
between the different types of ships. For example, coastal vessels operating in specific
geographic regions covering the needs of passenger traffic have a totally different
operational profile compared to the container vessels. ​(Man, 2013)
Having categorized all vessels based on their type, we conducted a further grouping to
allow a detailed description of each category in the port. For costal ships, a second
grouping was performed according to the geographical areas of routes served during
the year 2013, their service speed and age, while for other classes of ships a grouping
was performed according to the capacity and age. ​(MGFL report, 2008)
At the text below there are some details about the type of vessels which have the
majority of the port call.
➢ Container Ships
In 2013, at the Piraeus Container terminal handled a total of about 2.398 arrivals from
302 ships. As we mentioned, TEU transshipment is a major activity of the port. The
majority of ships visiting the port have small capacity, designed to feed either large
ships served in Piraeus either neighboring ports which do not have high demand from
large ships or do not have the required infrastructure to service them.
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Figure 2. Frequency of Container Ships that visited the port of Piraeus by age
In Figure 2 we can observe the ages of the TEU ships that visited Piraeus in 2013. The
set is relatively young with an average value of 12, 27 years. To be able to make a
better approximation for the profile of the ships that visited the port in 2013, I grouped
separate the ships according to the capacity in TEU.
Figure 3. Frequency of Container Ships visiting Piraeus by capacity.
In Figure 3 we can see the frequency of ships according to capacity. We observe that
the number of ships that visited the port of Piraeus is concentrated in four main
ranges. The first covers ships with a capacity of less than 2.000 TEU, the second those
with a capacity of 2.000 to 5.000 TEU, the third those from 5.000 and 10.000 TEU and
the fourth those with a capacity exceeding 10.000 TEU. These four areas have
constituted the main grouping of the study:
▪ Class A (0 -1.999 TEU)
▪ Class B (2.000 - 4.999 TEU)
▪ Class C (5.000 ​– ​9.999 TEU)
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▪ Class D (10.000 + TEU)
➢ Vehicle Carriers
In 2013 the port of Piraeus had 716 arrivals from 202 Ro-Ro Carriers. In Figure 7 we
observe the ages of Ro-Ro Carriers. The mean age was 9.3 years.
Figure 4. Frequency of Vehicle Carriers that visited the port of Piraeus by age.
As we mentioned, the transshipment of vehicles is the main activity of the port. In
Figure 5 we observe the frequency of ships by capacity.
Figure 5. Frequency of Vehicle Carriers visiting Piraeus by capacity.
We observe that the size of ships that visited the port of Piraeus was relatively large,
mainly ships capacity over 4000 ceu. For this reason we divided the ships arriving at
the port in two main categories:
▪ Class A (​≤ ​3.999 ceu)
▪ Class B (​≥ ​4.000 ceu)
The number of ships of Class B is about six times the ships of Class A, but made fewer
arrivals than Class A. They made 319 and 394 arrivals respectively.
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➢ Cruise Ship
The global cruise industry has grown rapidly over the last 15 years and is expected to
continue to grow at even higher pace. In 2013 the port of Piraeus had 770 arrivals from
109 Cruise Ships. In Figure 6 we observe the frequency of the Cruise ships by age. The
average age was close to 17,62 years.
Figure 6.​ ​Frequency of Cruise Ships by age
In Figure 7 we can see the frequency of Cruise Ships by berths.
Figure 7.​ ​Frequency of Cruise Ships by capacity
We observe that the size of ships that visited the port of Piraeus is divided into two
main categories, ships which have below 1.000 berths and ships over 1.000 berths. For
this reason we split ships that arrived at the port in two basic classes:
▪ Class A (​≤ ​999 berths)
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▪ Class B (​≥ ​1.000 berths)
The number of ships of Class B is a slightly larger than the number of ships of Class A.
However, larger cruise ships have made more arrivals than smaller cruise ships: 478
Class B arrivals, as compared to 292 Class A arrivals.
➢ Costal Vessels
Ships of this class are coastal vessels and exhibited the largest number of arrivals at
the port of Piraeus, with large seasonal fluctuations. Indeed, these ships are
considered ideal for LNG use as they spend their entire time cruising emission control
areas. We must emphasize that ferries to the islands of the Saronic Gulf will not be
studied in the context of this work, since their fleet is much older.
❖ Vessels Serving Cyclades
In this paragraph we will deal with the description of the geographical area of the
Cyclades. This market segment was based on the assumption mentioned above about
the service speed. In Table 1 we can observe the main features of each category, i.e.
the number of arrivals, the total installed capacity, the service speed and age.
Table 1. Characteristics of ships arriving from Cycladic islands.
“​Small Ro-Ro/Pax​” “​Large Ro-Ro/Pax​”
Number of Arrivals 1132 756
Average Total installed power [kW] 12.735,6 29.090,4
Average Service speed [knots] 22,2 36,0
Average age 20,4 10,2
The "Small Ro-Ro/Pax" made 1132 arrivals, 74% of which by ships whose age was
below 15 years. In the third quarter, there were 327 arrivals by "Small Ro-Ro/Pax" by
527 "Large Ro-Ro/Pax".
❖ Vessels Serving Crete
In this paragraph we will deal with the arrivals of passenger vessels from ports of
Crete. In Table 2 we can observe the basic characteristics of each category.
Table​ ​2. Characteristics of ships having arrived from Crete
“​Small Ro-Ro/Pax​” “​Large Ro-Ro/Pax​”
Number of Arrivals 664 708
Average Total installed power [kW] 19.946,1 58.200,0
Average Service speed [knots] 21,2 29,4
Average Age 29,0 12,25
Regarding the "Small Ro-Ro/Pax" segment, all arrivals were conducted by ships whose
age was more than 15 years, in contrast to the "Big Ro-Ro/Pax" whose age was below
15 years.
In the third quarter there were 236 arrivals from "Small Ro-Ro/Pax" and 237 "Large
Ro-Ro/Pax".
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❖ Vessels Serving Northern Aegean
In this paragraph we will deal with the analysis of arrivals from the ports of Northern
Aegean. In Table 3 we can observe the basic characteristics of each category.
Table 3. Characteristics of ships arriving from the North Aegean islands.
“​Small Ro-Ro/Pax​” “​Large Ro-Ro/Pax​”
Number of Arrivals 116 408
Average Total installed power [kW] 14.594,5 31.209,5
Average Service speed [knots] 18,75 26,08
Average age 39,00 13,50
All "Small Ro-Ro/Pax" arrivals were by ships whose age was over 25 years, in contrast
to the "Big Ro-Ro/Pax", whose age was below 10 years. In the third quarter there were
46 arrivals from "Small Ro-Ro/Pax" and 179 from "Large Ro-Ro/Pax".
❖ Vessels Serving the Dodecanese
In this paragraph we will deal with the description of arrivals from the islands of the
Dodecanese.
In Table 4 we can observe the basic characteristics of each category.
Table 4. Ship statistics of arrivals from Dodecanese
“​Small Ro-Ro/Pax​” “​Large Ro-Ro/Pax​”
Number of Arrivals 238 274
Average Total installed power [kW] 10.815,5 44.480,00
Average Service speed [knots] 21,0 20,0
Average age 30,0 13,0
All "Small Ro-Ro/Pax" arrivals were by ships whose age was over 25 years, in contrast
to the "Big Ro-Ro/Pax", whose age was below 10 years.
In the third quarter were 64 arrivals from "Small Ro-Ro/Pax" and 88 "Large Ro-Ro/Pax​”​.
PART
6. LNG as Marine Fuel; Ship Owners View
The engines using LNG as fuel have proven to be a reliable solution as well as the LNG
is an environmentally friendly fuel with low sulfur content. The exhaust emissions, such
as SO​X and PM using LNG are negligible. The NO​X emissions can be reduced by about
80-90% for four-stroke Otto and 10-20% for two-stroke engines. Still LNG contains less
carbon than the other fuels, reducing CO​2 emissions by approximately 20%. In Figure 8
we can see the significant environmental advantages of the LNG fuel as compared to
other alternatives. Finally, and this is usually forgotten, due to the nature of the
combustion and the more balanced movements of the mechanical parts, engines are
significantly more quiet when using LNG. ​(Palsson, 2011)
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Figure 8.​ ​Comparison of NO​X​, SO​2​, CO​2​, PM emissions for alternative fuel oil types
(Source: TRI-ZEN International, 2012, LNG Markets Perspective)
According to the final Working Paper of the European Commission, ​“​Actions towards a
comprehensive EU framework on LNG for shipping​”​, Brussels, 24.1.2013 SWD(2013) 4
final, the use of LNG as a marine fuel is the most promising alternative for both the
short and medium term, at least for short sea shipping and sea- activities other than
transport, e.g. fishing and offshore services.
The use of LNG as marine fuel mainly depends on the LNG Spread over Heavy Fuel Oil
(HFO) and Marine Gas Oil (MGO). Furthermore, the financial feasibility of LNG-as-fuel
projects will affect the trend of retrofitting existing ships and new buildings for using
LNG. Ship owners also usually base their investment decisions on payback times, i.e.
they compare how many years are needed for the respective investments to generate
revenues (or cost savings) that add up to the same amount as the investment.
The most important parameter for determining payback time is the relation between
fuel use and installed engine power. ​(Belkin, 2013)
In the forthcoming years, as a proper infrastructure and an efficient supply chain will
be developed, the amount of the ships that use LNG as marine fuel will increase
significantly. ​(Levander, 2008)
Figure 9 shows the estimated number of ships that will do their bunkering with LNG as
marine fuel in the port of Piraeus.
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Figure 9​ ​The number of ships, except Costal Ship that will do their bunkering in the port of Piraeus.
Figure 10 shows the estimated number of Costal Vessels that will do their bunkering
with LNG as marine fuel in the port of Piraeus
Figure 10.​ ​The number of Costal Ship that will do their bunkering in the port of Piraeus.
Figure 11 at left vertical axis we can see the total demand of LNG as marine fuel at
Port of Piraeus and at right axis we observe the number of LNG fuelled vessel
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Figure 11. ​The demand estimation for LNG as marine fuel and number of ships that will do their bunkering in
the port of Pirae
The LNG demand for 2025 is estimated at 2.042 million cm. I observe that the
"Ro-Ro/Pax" serving routes including Crete and the large cruise ships will be the two
classes that will show the largest annual LNG demand reaching 1.439 million cm and
224.000 cm respectively. The annual demand for LNG from other classes of ships of
coastal ranges from 20.000 cm to 230.000 cm.
The middle container ships will exhibit a significant LNG demand with approximately
233.000 cm annually. The smallest annual LNG demand will come from small vehicle
vessels and small cruise ships with 25.000 cm and 28.000 cm respectively.
Generally, the Coastal Vessels are expected to largely determine the demand for LNG
fuel shipping in Piraeus. They are expected to consume more than 50% of the total
annual demand (2.04 million cm of LNG, 2025). This is reasonable since coastal vessels
call at the largest number of ports as compared to any other ship class. They are
expected to refuel in the port of Piraeus. ​(Maritime GasFL report , 2008)
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PART
7. Expected LNG Demand at other Regional Satellite Ports
The EU in the White Paper on Transport has set a target to reduce greenhouse gas
emissions at least 40% by 2050 (compared to 2005) in the maritime sector. It also
states that the shipping industry should also contribute to the reduction of local and
global emissions. EU legislation aligned with IMO requirements with Directive
2012/33/EU, which amends Directive 1999/32/EC on the sulfur content of shipping
fuels. ​(DNV report, 2012)
The European Commission has planned a strategy to shift to cleaner fuels and
proposes installing LNG fueling stations at a total of 139 marine and inland ports
(generally around 10% of all ports in Europe) for the TEN-T (Trans European Core
Network) from 2020 and 2025 respectively. These stations are not based on large gas
terminals, but are either fixed or mobile refueling stations covering all major ports of
the EU. ​(EU Com. Report, 2013)
The strategic geographical position of FSRU offer a great opportunity to supply with
LNG the Ports considered in the study. A sample of these ports is shown in Table 5.
Table 5. Distance between FSRU and Various Satellite port.
Distance between ports
Port of Patrai 305 nm
Port of Thessaloniki 251 nm
Port of Volos 186 nm
Port of Brindisi [Italy] 540 nm
Port of Bari[Italy] 598 nm
Port of Limassol [Cyprus] 532 nm
Port of Malta [Malta] 534 nm
Port of Marmara [Turkey] 290 nm
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19.
Figure 12.​ ​Potential Regional Satellite Ports in East Mediterranean.
Figure13. ​Timeline of potential expected demand of LNG as Marine Fuel at Piraeus & regional Satellite Port in
East Mediterranean Sea
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20.
Figure 14 shows the timeline of infrastructure, bunkering facilities, annual demand and
number of LNG ships at FSRU LNG terminal in the port of Piraeus.
Figure14.​ ​Timeline of infrastructure and bunkering shipping faciliti
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21.
8. Conclusions
The use of LNG as fuel for the shipping sector and the developments of Piraeus Port as
an LNG bunkering hub along with other satellite Ports, seems a very good concept
which fulfills the obligations of directive 2012/33/EC mandates the use of marine fuel
with max 0.1%. sulphur in EU ports. ​(Ratner, 2013)
Today is the right time for a decisive move towards the LNG as the main fuel for the
shipping industry. This will serve not only the need for security of supply but also met
the future demand for LNG as marine fuel as expected in the forthcoming years. The
alternative fuel infrastructure directive 2013/0012(COD), foresees an increased use of
LNG, NG and CNG for sea and inland waterborne and mainland transportation.
(Wartsila report, 2012)
More specific, all core marine and inland ports (139) will have to be able to provide LNG
as marine fuel from 2020 and 2025 respectively. The directive 2012/33/EC mandates
the use of marine fuel with max 0.1%. Sulphur in EU ports and while at berth or
equivalent method to achieve the required emission standards.
The limits for sulphur content in marine fuels in EU Member States territorial Seas
outside the designated Emission Control Ares (ECAs) are 3.5% from 1/1/2012 and 0,5%
from 1/1/2020. Limits for sulphur content in marine fuels used by passenger ship in EU
Member States territorial Seas outside ECAs are 1,5% until 31/12/2019 and 0,1 from
1/1/2020. ​(EU Com. report, 2014)
The Port of Piraeus is the largest Terminal in the Mediterranean Sea in terms of Short
Sea and Deep Sea services. This justifies the proposal for installing LNG bunkering
facilities in the port along with many operational, business and financial benefits for all
involved parties. ​(Theodoropoulos, 20
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22.
9. Comments and Recommendations:
The current assignment shows that there are many challenges regarding the LNG fuel
for the shipping industry. Bellow we can place some basic comments and
recommendations, as follows:
­ LNG seems that it will play a crucial role in terms of energy security, mainly,
across SE Europe, which mainly depends on Russian natural gas;
­ along with energy security issues, LNG shows main environmental benefits
especially for the shipping sector, as all core marine and inland ports (139) will
have to be able to provide LNG as marine fuel from 2020 and 2025 respectively;
­ addition, Greece and Italy expect the EU Macro-regional Strategy on Adriatic
and Ionian region, which more likely will set strict emissions limits;
­ The Port of Piraeus, as the largest Terminal in the Mediterranean Sea in terms
of Short Sea and Deep Sea services, has all the potentials to be the HUB of LNG
BUNKERING across the region, supporting other satellite ports;
­ Piraeus port will require major infrastructure facilities in order to provide
services to ships
­ The analysis shows that a ship-owner shifting to LNG will exhibit an attractive
payback period and significant operational and financial benefits;
­ A detailed financial model is needed in order to take into consideration all
financial aspects;
­ Analysis of LNG prices VS HFO prices is requested;
­ Analysis of the LNG supply-chain and LNG sources sustainability is requested;
­ The costs of retrofitting the existing vessels and build new LNG fuelled ships
should be requested;
­ Port licenses and regulation framework should be examined and further
reviewed;
­ Environmental issues should be discussed and communicated with the local
community.
10. References
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23.
1. Algel J., Bakosch A., Forsman B., December 2012. Feasibility Study on LNG
Fuelled Short Sea and Coastal Shipping in the Wider Caribbean Region.
SSPA SWEDEN AB, pp: 2, 5, 19, 34.
2. Ashworth J., January 2012. The Genesis of LNG Bunkers, LNG Markets
Perspective. TRI-ZEN International, pp: 7, 45.
3. Buhaug, ​Ø​., Corbett J.J, Endresen, O., Eyring, V., Faber J., Hanayama, S., Lee,
D., Lindstad, H., Mjelde, A., Palsson, C., Wanquing, W., Winebrake, J.J.,
Yoshida, K., April 2009. Second IMO Greenhouse Gas Study. International
Maritime Organization, London, , pp: 6, 23, 34, 125.
4. BP Group, June 2013, Statistical Review of World Energy, pp: 127, 134.
5. Consuegra, S. C. & Paalvast, M.S. M., November 2010. Sustainability in Inland
Shipping-The use of LNG as Marine Fuel. Delft University of Technology,
Delft, pp: 122, 234, 237.
6. Det Norske Veritas, 2012. Shipping 2020 DNV, pp: 18, 23.
7. European Commission, January 2013. SWD (2013) 4 final: Actions towards a
comprehensive EU framework on LNG for shipping, Brussels, pp: 19, 34.
8. European Commission, 2013. Quarterly Report Energy on European Gas
Markets: Market Observatory for Energy. DG Energy Volume 5, issue 4, pp: 5,
8, 123, 125, 234, 267.
9. Groenendijk W., March 2013. LNG in transport: The views of the European
LNG terminal operators. Gas LNG Europe, Hamburg, pp: 12, 23, 45.
10. Levander O. & Sipil​ä ​T., February 2008. LNG auxiliary power in port for
container vessels, pp: 19, 34, 67.
11. Lloyd​’​s Register, August 2012. LNG-fuelled deep sea shipping: The outlook
for LNG bunker and LNG-fuelled newbuild demand up to 2025, pp: 19, 34, 89.
12. Lloyd​’​s Register, June 2012. Understanding exhaust gas treatment systems:
Guidance for shipowners and operators, pp: 34, 46, 234,
13. Maffii F., Molocchi A., Chiffi C., June 2007. External Costs of Maritime
Transport. European Parliament, Policy Department B: Structural and
Cohesion Policies: Transport and Tourism, Brussels , pp: 7, 17, 34.
14. MAN Diesel & Turbo, Propulsion Trends in Container Vessels, Copenhagen,
pp: 123, 236, 238
15. Maritime Gas Fuel Logistics, December 2008. Developing LNG as a clean
fuel for ships in the Baltic and North Seas, pp: 34, 76.
16. Nilsson L., Bengtsson N., P​å​lsson C., July 2011. Ships Visiting European Ports.
IHS Fairplay, Gothenburg, pp: 34, 63.
17. Ratner M., Belkin P., Nickol J., Woehrel S., March 2013. Europe​’​s Energy
Security: Options and Challenges to Natural Gas Supply Diversification.
Congressional Research Service, pp: 123, 344.
18. Swedish Marine Technology Forum, LNG bunkering Ship to Ship procedure,
pp: 2, 66.
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24.
19. Swedish Marine Technology Forum, May 2011. LNG supply chain definition.
CNSS WP4 Activity 2, Action D, pp: 22, 34, 77
20. The Danish Maritime Authority March 2012. Appendices, North European
LNG Infrastructure Project-A feasibility study for an LNG filling station
infrastructure. DMA, Copenhagen, pp: 6, 56, 78.
21. Theodore Theodoropoulos, 2009, ‘’The Secret World of Energy’’, 3​rd​
Edition,
pp:12, 23, 25, 60, 70, 72, 106, 134, 230, 260
22. Theodore Theodoropoulos, 2011, ‘’Future Energy’’, 2​nd​
Edition, pp: 11, 18, 23,
60, 126, 236, 238, 266.
23. The Danish Maritime Authority, October 2011. Baseline Report, North
European LNG Infrastructure Project-A feasibility study for an LNG filling
station infrastructure, DMA, Copenhagen, pp: 34, 36, 38, 123.
24. The Danish Maritime Authority March 2012. Full Report, North European LNG
Infrastructure Project-A feasibility study for an LNG filling station
infrastructure, DMA Copenhagen, pp: 77, 123, 343.
25. W​ä​rtsil​ä​, December 2012, W​Ä​RTSIL​Ä ​50DF Product Guide, pp: 2, 5, 19, 34
26. W​ä​rtsil​ä​, June 2012, W​Ä​RTSIL​Ä ​34DF Product Guide, pp: 12, 34, 126.
Internet Links:
http://www.onthemosway.eu/poseidon-med-lng-european-project/
http://inea.ec.europa.eu/en/cef/cef_transport/apply_for_funding/cef_transport_call_for_proposal
s_2014.htm
http://blogs.dnv.com/
http://ec.europa.eu/​ - http://tentea.ec.europa.eu/
http://wpci.iaphworldports.org/
http://www.aga.com/
http://www.emsa.europa.eu/
http://www.imo.org/
http://www.mandieselturbo.com/
http://www.olp.gr/
http://www.portofrotterdam.com/
http://www.rae.gr/
http://www.whitesmoke.se/
http://www.qp.com.qa/​ - ​http://www.rasgas.com
ANNEX
Figures:
Figure1. Regulations imposing sulfur limits and the corresponding deadlines in accordance with
Annex VI by MARPOL 4
Figure 2. Frequency of Container Ships that visited the port of Piraeus by age 10
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25.
Figure 3. Frequency of Container Ships visiting Piraeus by capacity 10
Figure 4. Frequency of Vehicle Carriers that visited the port of Piraeus by age 11
Figure 5. Frequency of Vehicle Carriers visiting Piraeus by capacity 11
Figure 6. Frequency of Cruise Ships by age 12
Figure 7. Frequency of Cruise Ships by capacity 12
Figure 8. Comparison of NOX, SO2, CO2, PM emissions for alternative fuel oil types 15
Figure 9. The number of ships, except Costal Ship that will do their bunkering in the port of Piraeus
16
Figure 10. The number of Costal Ship that will do their bunkering in the port of Piraeus 16
Figure11. The demand estimation for LNG as marine fuel and number of ships that will do their
bunkering in the port of Piraeus 17
Figure12. Potential Regional Satellite Ports in East Mediterranean 19
Figure13. Timeline of potential expected demand of LNG as Marine Fuel at Piraeus & regional
Satellite Port in East Mediterranean Sea 19
Figure14. Timeline of infrastructure and bunkering shipping facilities 20
Tables:
Table 1. Characteristics of ships arriving from Cycladic islands 13
Table 2. Characteristics of ships having arrived from Crete 13
Table 3. Characteristics of ships arriving from the North Aegean islands 14
Table 4. Ship statistics of arrivals from Dodecanese 14
Table 5. Distance between FSRU and Various Satellite port 18
Illustrations:
Illustration A. The Energy Process – LNG Value Chain 6
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26.
Interviews
Piraeus Port Authority- Ship-owners - Industry Experts
- ​H.E. Sheikh Ali Al-Thani,​ CEO of MILAHA
- ​Giannis Papagiannopoulos​, General Manager of Piraeus Port Authority
- ​Vassilis Terzis,​ Ship-owner, Queensway Navigation Company
- David Liner,​ LNG fleet Manager & Director of Business Development of NAKILAT
- Richard Gilmore,​ MARAN GAS LNG Fleet Director
-​Theodore Theodoropoulos,​ Aegean Gas CEO
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