LIQUID NATURAL GAS (LNG) VS.
LIQUID BIO GAS (LBG) Vaasa EnergyWeek 14.3.2016 Kenneth Engblom Director , Business Development LNG Infrastructure Wärtsila
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© Wärtsilä
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3/14/2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
AGENDA Wärtsilä is a world leader in large diesel and gas engines for power plants and ships. The technology is also prepared for renewable fuel in gas or liquid form. When will renewable fuel be the number one choice, how to make Liquid Bio Gas (LBG) the real alternative to Liquid Natural Gas (LNG)?
AGENDA WÄRTSILÄ AT A GLANCE LNG LBG LNG VS LBG CONCLUSION © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
WÄRTSILÄ CORPORATION
Marine/ Offshore
Power Generation
18,900 Professionals
Net sales by business 2015
Services 43%
Marine Solutions 34%
Listed in Helsinki 5,0 billion € turnover Energy Solutions 22%
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14.03.2016
LEADER IN
SOLUTIONS FOR
EFFICIENCY
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
FLEXIBILITY
ENVIRONMENTAL SOLUTIONS
LNG storage & regasification barge
LNG regasification
LNG satellite & bunkering terminals
BOG reliquefaction
Small/Medium LNG terminals
Mini LNG liquefaction & Bio Gas liquefaction plants
Cargo Handling System Gas and LNG Carriers
Fuel gas handling system
LIFECYCLE
OFFSHORE
ONSHORE
WÄRTSILÄ LNG SOLUTIONS
Lifecycle services © Wärtsilä
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Product and technical support 14.03.2016
Start–up support
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
Spares
Small LNG liquefaction plants
Ship and Cargo Tank design
WÄRTSILÄ CORPORATION
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
AGENDA
WÄRTSILÄ AT A GLANCE LNG (Liquid Natural Gas) LBG (Liquid Bio Gas) LNG vs. LBG CONCLUSION
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NATURAL GAS AS LNG IS CONQUERING NEW MARKETS
Global interest in LNG is driven by • Energy security and lower energy costs • Sustainability and emission reduction in power generation and shipping • Perfect balancing fuel for intermittent renewable power generation and escalating demand fluctuation.
By 2035 LNG will have overtaken pipelines as the dominant form of traded gas – BP Energy Outlook 2035
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
LNG CONSUMERS
Typical consumers: • Power generation • Baseload & peaking power plants
• Energy intensive industries • • • •
Mines & Drilling rigs Metal processing plants Petrochemical plants Manufacturing plants, e.g. fertilizer, cement, gypsum boards, glass, chemicals
• Gas driven transportation • Ships • Trucks
• Domestic gas consumption • Cooking & heating
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
NATURAL GAS - RESOURCES
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
LARGE SCALE LNG- HOW IT USED TO BE!
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
SMALL SCALE LNG- THE FUTURE ADITION!
VAASA © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
TORNIO- FINLAND
Tornio Manga LNG Customer
Manga LNG Oy
Type
Small/Mid scale terminal
Tank net volume
50,000 m3
Send out
Max 40 tonnes per hour at 6.0 barg
Scope of supply
• • • • • • •
Delivery method
EPC Turnkey
Delivered
2018
Civil works and infrastructure Full containment storage tank Regasification & gas metering BOG system Electrical and control system Unloading system Bunkering and Truck loading
”Providing the only source of gas for industries in Northern Finland.” © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
KARMØY, NORWAY
Snurrevarden Customer
Gasnor
Type
Small scale liquefaction plant
Tank net volume
2 x 250 m3
Capacity
60 TPD / 22,000 TPA
Size of liquefaction unit
16 m x 18 m
Gas source
Pipeline gas. Inlet pressure 120-150 bar.
Details
• LNG transported to customers by tanker truck
Scope of supply
Complete plant, incl. • Gas pre-treatment • Cooling system (Ambient air) • Reversed Brayton liquefaction process • Storage tanks • Electrical and control systems • Truck loading system • Gas engine Excl. Substructures
Delivery method
EPCIC
Delivered
2003
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“The first stand-alone small scale LNG plant in Northern Europe.”
14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
BERGEN, NORWAY
Kollsnes II Customer
Gasnor
Type
Small scale liquefaction plant
Tank net volume
4,000 m3
Capacity
230 TPD / 84,000 TPA
Size of liquefaction unit
12 m x 38 m
Gas source
Pipeline gas. Inlet pressure typically 70 bar.
Details
Extension to Kollsnes I. Includes two truck loading stations and existing loading jetty for small LNG carriers.
Scope of supply
Complete plant, incl. • Gas pre-treatment • Cooling system (Seawater) • Double Reversed Brayton liquefaction process • Storage tank • Electrical and control systems • Civil works
Delivery method
EPCIC
Delivered
2007
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“Twice the capacity, half the footprint!”
14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
PORVOO, FINLAND
Gasum Kilpilahti Customer
Gasum
Type
Mini liquefaction plant
Tank net volume
3 x 683 m3
Capacity
55 TPD / 20,000 TPA
Size of liquefaction unit
16 m x 20 m
Gas source
Pipeline gas
Details
• Utilization of excess nitrogen from adjacent oxygen plant. • No rotating machinery
Scope of supply
• Pre-treatment • LIN liquefaction process • Storage tanks Excl. substructures
Delivery method
EPCIC
Delivered
2010
“LIN consumption reduced by 60% compared to old liquefaction plant.”
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
OSLO, NORWAY
EGE Biogas Customer
Cambi AS
Type
Mini liquefaction plant
Tank net volume
180 m3
Capacity
11 TPD / 4,000 TPA
Size of liquefaction unit
8 m x 14 m
Gas source
Biogas from 50,000 TPA of food waste
Details
Fuel production for 135 buses in the city of Oslo
Scope of supply
Complete plant, incl. • Gas pre-treatment • Cooling system (Ambient air) • MR liquefaction process • Storage tank • Electrical and control systems • Service agreement Excl. Civil works and installation
Delivery method
EPC
Delivered
2013
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“135 Oslo region buses will be able to run on biogas which means 10,000 tonnes emission reduction per year.” 14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
EGE BIOGAS- OSLO, NORWAY
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
AGENDA
WÄRTSILÄ AT A GLANCE LNG (Liquid Natural Gas) LBG (Liquid Bio Gas) LNG vs. LBG CONCLUSION
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BIO GAS - FEEDSTOCK
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
BIO GAS – ANNUAL POTENTIAL
Botnia region: (Västerbotten, Västernorrland, Ostrobothnia)
Finland*:
Potential: In use:
Potential: 7 - 17000 GWh In use: >900 GWh
>1200 GWh >180 GWh
(>82 plants)
( 12 plants )
End use:
455 GWh Heat 160 GWh El 35 GWh Fuel
EU : Potential: 740 000 GWh In Use: 133 000 GWh (>18000 plants) Of which BioMethane: 24 000 GWh Fuel (367 plants)
740 000 GWh
Finland total energy consumption: 380 000 GWh
Source : Johan Saarela, Stormossen , Ari Lampinen http://www.cbg100.net/products/finnish-biogas-statistics-2013-2014/ & European BioGas Association * Based on assumptions from 2013 © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
BIO GAS PLANTS NEARBY
Total Capacity within 100km radius
55 GWh (6.2 MW) Stormossen Gas Output: 16 GWh (=1,8MW) Jeppo Biogas Gas production: ~ 21 GWh / a ( =2,4 MW) Lakeuden Etappi Gas production: ~16 GWh / a (= 1,8 MW) Laihia Biogas Gas production: >2 GWh / a ( = 0,2 MW)
Honkajoki Biogas Gas production: >36 GWh / a ( = 4 MW) © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
Under planning! Biovakka, Lapua 52 GWh (=6 MW)
AGENDA
WÄRTSILÄ AT A GLANCE LNG (Liquid Natural Gas) LBG (Liquid Bio Gas) LNG vs. LBG CONCLUSION
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LOW OIL PRICE -
THE COMMON CHALLENGE FOR LNG AND LBG
Light Fuel Oil LNG
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
INCREASING THE VALUE OF BIOGAS
Investment:
50GWh/year Bio Gas plant.
Raw material processing
3 M€
+9M€
Gasification or Anaerobic digestion
+5 M€
Gas Upgrading
Value of Biogas n.a
Flare: 0 M€ Heat: 5- 15 €/MWh El: 38% of 30-35 €/MWh (With Feed in 83,5€ / MWh) 12€/MWh or 32€/MWh Same as above, slightly better el. efficiency
or +1,5 M€
or
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Compression (CBG)
+5 M€
14.03.2016
CNG: 1,25€/kg- Without ALV 1,01€/kg – Duty (0,21€/kg) = 0,80 €/ kg = 59€ / MWh CBG: 1,45€/kg - Without ALV 1,17€/kg = 86€ / MWh
Liquefaction (LBG)
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
LBG >>86 €/MWh
LBG PLANT INVESTMENT AND PRODUCTION COST ASSUMPTIONS: 30 % Investment support, 6,5% WACC, Feedstock delivered free of charge to plant, approx. 1/3 of Income from digestate
Investment (M€) & Production Cost (€/MWh)
Typical max size for Biomass collection & distrubution of digetsate
CBG (ALV0%) Sales price in Finland
Ideal size for LBG Production 30- 130 GWh Plant Size
Recommended size by ELY
Wärtsilä Large LBG Wärtsilä Small LBG
Plant Size GWh / Year
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10
20
0
20000
40000
0
5 .
14.03.2016
10 Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
40
30
Tonne LBG / day
60000
80000
m3 raw gas / day
15
20
MW (gas energy)
FUEL - SALES PRICE AND COSTS
Investment (M€) & Production Cost (€/MWh)
All prices without value added tax (ALV 0%)
Gasoline CBG = 1,17 €/kg (with ALV 24% = 1.45 €/kg)
Diesel LFO Tax
CNG
Logistics Profit CBG conv. Natural Gas
Tax
Tax
Tax
(Polltoöljy)
Handling fee
Handling fee
Handling fee
LNG – Estimated landed price in Finland
Plant Size GWh / Year
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10
20
0
20000
40000
0
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14.03.2016
10 Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
40
30
Tonne LBG / day
60000
80000
m3 raw gas / day
15
20
MW (gas energy)
FUEL - SALES PRICE AND COSTS
Investment (M€) & Production Cost (€/MWh)
All prices without value added tax (ALV 0%)
Gasoline CBG = 1,17 €/kg (with ALV 24% = 1.45 €/kg)
Diesel LFO Tax
CNG
Logistics Profit CBG conv. Natural Gas
Tax
Tax
Tax
(Polltoöljy)
Handling fee
Handling fee
Handling fee
LNG – Estimated landed price in Finland
Plant Size GWh / Year
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10
20
0
20000
40000
0
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14.03.2016
10 Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
40
30
Tonne LBG / day
60000
80000
m3 raw gas / day
15
20
MW (gas energy)
AGENDA
WÄRTSILÄ AT A GLANCE LNG (Liquid Natural Gas) LBG (Liquid Bio Gas) LNG vs. LBG CONCLUSION
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LNG VS. LBG IN FINLAND
Today Natural Gas (and soon LNG) can be imported for a fraction of the cost of domestic CBG or LBG production. So why LBG ? • Create jobs & potential new income for farmers • Reduces fuel import • Almost CO2 neutral • The most efficient & environmental friendly biofuel • Energy storage & potential off-taker for wind methane Synergies between LNG and LBG • LNG = LBG • Building LNG infra will enable LBG production & consumption • Both utilizing same infrastructure and consumers (Trucks, Marine sector, Industry & Power plants) • LNG is back-up to LBG and CBG/CNG • LNG + LBG is a the ultimate low CO2 fuel mix. © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
MAKING LBG MORE FEASIBLE
How to make LBG feasible? LBG could be produced for < 60€/MWh with: • • • • • • • •
Larger plants, > 40 GWh / year Co-operation/ Pipelines between neighboring bio gas plants Easier permitting of larger plant Finding valuable use for the digestate Choosing locations close to major agricultural and industrial waste Financial support for the biogas upgrading & liquefaction Further R&D to make small scale liquefaction plants more feasible Preparing the infrastructure & consumers for LNG, thereby enabling LBG
THANK YOU FOR LISTENING !
Please visit us at Wartsila.com or Energy Week -Stand B5 © Wärtsilä
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14.03.2016
Vaasa Energy Week- LNG vs. LBG / Kenneth Engblom
