Interview: Dunkirk LNG arrivals expected to double in 2018

France’s Dunkirk LNG import terminal, the country’s fourth regasification facility, could double the number of ships calling at the facility this year, boosted by the volumes from Russia’s Yamal project in the Arctic.

Dunkirk LNG terminal started commercial operations in January 2017, following more than six months of testing and five years of construction works.

Since then it has received 13 ships from Qatar, Peru, Norway and Russia. In 2017, the facility received 10 carriers totaling some 866,000 tonnes of LNG.

The Qatari volumes are being imported under a deal France’s EDF, the majority owner of the Dunkirk LNG facility has with RasGas, now Qatargas, as the merger with the two Qatari producers was completed earlier this year.

The Dunkirk LNG terminal is one of Europe’s largest import facilities with a regasification capacity of 13 billion cubic meters (bcm) and is operated by Dunkerque LNG, a company 65%-owned by EDF, 25% by Fluxys and 10% by Total.

Worth mentioning, Dunkerque LNG has last week offered up to three bcm of annual regasification capacity for a period 18 years at its Dunkirk LNG terminal.

Now, as previously reported by LNG World News, utilization of the total installed capacity at the European LNG import terminals had been critically low during 2016, a trend that has continued into 2017 with an average rate of about 22 percent, the LNG data by Gas Infrastructure Europe shows.

In order to keep their facilities as attractive as possible, European operators have to constantly optimize utilization at their terminals and invest in new infrastructure such as small-scale LNG.

Dunkerque LNG has also several plans to expand service offerings in 2018 such as the modification of the terminal’s reloading infrastructure, adding a truck-loading station, as well as adapting its jetty to provide vessels with bunkering services.

That is the reason why LNG World News sat down with Christophe Liaud, Commercial Director at Dunkerque LNG, to discuss these developments and the company’s throughput expectations for this year.

Dunkirk LNG terminal received its first cargo from the Novatek-operated Yamal LNG project in Russia on January 25. The ice-class tankers carrying volumes from Yamal LNG will regularly transfer cargoes at north-west European terminals during winter, where conventional vessels can pick them up for delivery to Asia or other higher-paying markets.

The Yamal LNG cargo to Dunkirk was delivered onboard the ice-class tanker Boris Vilkitsky, chartered by Total. On the other hand, Engie’s LNG carrier Provalys docked at Dunkirk just a day after to pick up these volumes for further delivery. This was the terminal’s first reloading operation. The Provalys was en route to Engie’s Everett terminal in the US by the time this article was published.

Yamal shipments to boost Dunkirk LNG’s throughput

Discussing the throughput volumes at the Dunkirk terminal and at north-west European terminals in the ongoing year, Liaud said he expects that most of the LNG supplies would continue to go to better-priced markets such as Asia, however, the Yamal shipments could change the overall picture, especially at Dunkirk.

“In a NW European market completely driven by price, I am not really sure that throughputs of the European terminals in this area will be increasing dramatically in 2018 as the premium of other markets at the beginning of this year moves LNG away from Europe,” Liaud said.

“One thing has changed with the start of the Yamal plant last December. Due to the winter maritime constraint, the number of vessels that will be received by those terminals should be higher than last year and most of this volume should be transshipped or reloaded to be rerouted towards other markets.”

“So reasonably we foresee for 2018 that the number of LNG ships calling at Dunkirk should double,” he said.

In line with the expected increase in reloaded volumes, Dunkerque LNG plans to boost the reloading rate at the terminal’s jetty to 8,800 cbm per hour thereby reducing the vessels’ layover time from 48 hours to 24 hours.

“Indeed, LNG pumps into the tanks are going to be changed and the BOG (boil-off gas) compression capacity will be boosted,” he said.

“Those main equipment are on site or well on their way and works on site are expected to be achieved before next winter this year,” Liaud added.

LNG bunkering boost

Many European ports are pushing forward to speed up the transition from fuel oil to LNG as a fuel for the shipping sector.

LNG as fuel for ocean-going vessels has been constantly growing in the last couple of years boosted by the IMO’s decision to implement a global sulfur cap and as shipowners are looking to reduce their carbon footprint.

French shipping line CMA CGM announced in November last year it decided to equip nine of its newbuild 22,000 TEU containerships with engines running on LNG. This announcement is a big boost for the LNG bunkering market.

As the LNG bunkering market continues to grow, Dunkerque LNG started building a truck loading station and is planning to adapt its current jetty to be able to bunker vessels with the chilled fuel.

“Clearly the announcement of CMA CGM marks a turning point for the development of LNG as a marine fuel. No matter from what angle we are looking at: type of ship, size of the ship (400 m), number of ships ordered, the volume of each tank, volume of LNG to be consumed per year, etc.,” Liaud said.

“Another news was also important last year with the choice made by Brittany Ferries to order a new ferry that will run on LNG. After a first attempt 5 years ago, this pioneer company has finally succeeded in moving forward with a new LNG supply scheme using ISO-containers. It will be the first cross-channel ferry of this kind and there is no doubt that in a near future other operating companies in the same area will switch to LNG as well,” he said.

France’s Total has signed deals with both CMA CGM and Brittany Ferries to supply the chilled fuel for their vessels.

“The construction of our LNG truck loading station is part of this innovative supply chain set up by Total” and is expected to be completed by the end of this year, according to Liaud.

This would allow the terminal to load up more than 3,000 trucks per year with LNG.

New LNG jetty

Regarding the plans for adapting the terminal’s current jetty to be able to bunker vessels, Liaud said that “all studies have been completed.”

This would allow LNG bunkering vessels to be loaded with LNG at the jetty and then supply vessels running on LNG once they arrive in the port of Dunkirk.

Taking into account the anticipated increase in the number of ships using LNG “we are now studying with the Port of Dunkirk the implementation of a new jetty dedicated to this activity allowing us to perform additional operations in the future,” he said.

By Mirza Duran