Small Scale LNGCurrent State of Play in Europe and Outlook for the

next Decade

Piet KagerNV Nederlandse Gasunie

Gate Terminal Rotterdam

Break Bulk versus Small Scale LNG

Break Bulk means extension of the classic LNG chain with an extra step

Break Bulk

Small Scale LNG means a step in the classic chain where LNG will be used as a commodity in the end users market

LNG as transport fuel

Growing interest in LNG as a fuel for transportation, because of emission targets/requirements

Tightening emission norms for trucks ships

(Source: KEMA)

Emission limits for transport by truck and ship are tightened and converging. LNG as transport fuel can meet these

requirements

Truck: Euro V has been implemented in 2009, Euro VI will come into force in 2014.

Ships: CCNR v3 will have similar emission levels in 2014

0

2

4

6

8

10

12

14

Soxg/kWh

Noxg/kWh

PMg/kWh

CO2cg/kWh

Residual Oil3,5%S Marine DieselOil, 0,5%S Gasoil, 0.1%S

LNG

Emission comparison

(Source Magalog)

Where are the Small Scale Activities Spain: All terminals have truck loading facilities to

distribute LNG to various locations since many years Norway: Two Small Scale Liquefaction Units operational

and LNG transported by Small Scale Vessel or Truck Zeebrugge: Loading of LNG currently on large jetty and

truck loading. Second jetty under construction Rotterdam: Reloading at large jetties later this year, truck

loading early next year, dedicated Small Scale jetty operational in 2015

Montoir: Truck loading summer 2013 UK: Small scale liquefaction of Biomass

Current Status of Small Scale LNG

Spain: Trucking of LNG to industrial sites Norway: Kolsness (Gasnor) and Risavika (Skangass) small scale

liquefaction for shipping and industrial use– Various Fjord Ferries – Offshore Supply Vessels – Coast Guard– Export to Sweden for industry and Ferry (Viking Grace)

between Stockholm (Sw) and Turku (F)– Fjord Line between Bergen (N) and Hirsthals (Dk) will run on

LNG shortly Netherlands:

– 85+ trucks are currently using LNG as fuel– 2 Inland ships are LNG fuelled Argonon and Green Stream

Potential market near term

Import terminalLNG productionInitial Market area, Rhine ValleyRussia – NW Europe road connection

Geographical Area’s– 1 Baltic area– 2 North Sea– 3 Rhine route, inland shipping– 4 Dutch, German and Danish

Wadden area– 5 Blue Corridor

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2

3

4

5

Issues with Small Scale LNG

LNG Availability and composition LNG pricing

– Currently NBP +20/30%– + transportation– + storage

Infrastructure– Some existing terminals to be adjusted– More vessels/barges needed– Bunker locations to be established – Overall cost of Cryogenic equipment

Taxation– For use as a tranportation fuel the right tax incentives to be in place

Permits– Current use of LNG as inland ship fuel is by exemption rather than by

permit Standarization

– At the moment there are too many different ways of handling LNG as a truck fuel

– Also the marine sector needs to come to certain standards

Support from EU and Governments

EU support through TEN-T subsidies– TEN-T supported multi country “North European LNG

Infrastructure Project 2011/2012 – Several initiatives have applied for subsidy of TEN-T– Necessary because poor project economics due to slow volume

build up, while all investments are upfront.– 10% of relevant investment for a project in one country– 20% of relevant investment when two or more EU countries

join forces in setting up Small Scale chain Netherlands: Green Deal “Rhine and Wadden”

– Private Public cooperation to support the use of LNG as a fuel and to take away bureaucratic hurdles

Wadden

Rotterdam and Rhine

RegionalNationalInternational

Parties:• Min. I&M, EL&I and

Fin.• LNG Market Parties

via Nat LNG Platform

“Green Deal” LNG Rhine and Wadden

Goal of “Green Deal”

By 2015:50/50/500– This means by 2015 there will be operational in

the Netherlands and surrounding countries– 50 sea going vessels using LNG as a fuel– 50 inland ships which are LNG fuelled– 500 heavy duty trucks with LNG as fuel

Z

Rotterdam

Duisburg

Arnhem

Basel

Köln/Bonn

Koblenz

Karlsruhe

Strasburg

Wiesbaden

A

International Link:Central Commission for Navigation on the Rhine

LNG Break Bulk Rotterdam

The project: LNG supply through Gate terminalLoading of LNG in smaller carriers and bargesTruck loading with LNGLoading of LNG in rail cars containers under consideration

Project partners:

5/24/2013 13

The Next Decade

Very much dependent on– Overall economic situation, specially in shipping– Availability of LNG and more important its price– Availability of alternatives and its prices– Further development of SECA areas

010000002000000300000040000005000000600000070000008000000

2015 2030

Low LNGpriceMid LNGPriceHigh LNGPrice

2020

Ton

nes

/yr

Source DMA report 8000000tonnes = appr 10BCM

2015 2030