Friday, January 27, 2006

Atlantic Sea Island: Another Proposal for Offshore LNG

How’s this for optimism: the thus-far anonymous people who want to create an island in the Atlantic and build a liquefied natural gas terminal there hope to have it finished by 2010. They announced that yesterday, at a press conference on Long Island’s south shore.

On the other hand the Broadwater people, whose expectations are widely regarded as irrationally optimistic, have already been working publicly for 15 months on their plans to put a floating LNG terminal in the middle of Long Island Sound, and they hope to be finished by 2010.

Do we need two offshore LNG terminals, or are the Atlantic people expecting to fill the breach if and when Broadwater fails?

Yesterday’s announcement Atlantic Sea Island Group wants to build a 53-acre island, in 60-feet of water, 13.5 miles south of Long Island and 19 miles east of New Jersey. Up to 220 tankers a year would supply it with LNG, which would be piped to suppliers in the metropolitan area.

The company’s chairman is named Howard Bovers. Apparently he didn’t feel like telling reporters who his investors were, and the reporters either didn’t want to or couldn’t find out anything more about the company.

Considering all the trouble it will take to get either of these proposals approved and built, about all I can conclude is that the profits from LNG must be enormous.

Here’s Newsday’s story, and here’s what the Times published.

10 Comments:

Blogger Jason Leow said...

Tom, can I speak with you about your blog? I'm a graduate journalism student at NYU hoping to pitch a story about bloggers (and relatedly the Broadwater proposal) to my class and to several magazines. I, too, blog here.

12:31 PM  
Blogger Sam said...

You're right about the profits, although the hydrocarbon business is notoriously volatile. One thing to note is that LNG tankers can have exceptionally low emissions, since they use "blow off" natural gas from the tanks to fuel the main engine or boiler, which could be about 40,000 HP.

During ship maneuvering, the engineer would typically switch to fuel oil about 25 miles from the terminal. The fuel oil has very high air emissions compared to natural gas.

So lets compare an offshore terminal to one located in the Sound. At the offshore facility one would make the switch 25 miles out at sea. I should imagine for the inland route, one would make the conversion 25 miles off Montauk Point and run the rest of the trip on "residual fuel oil" which is similar to Bunker C.

You can do the math yourself about how many hours the LNG Carrier ship would have to run on residual fuel for the entire inland route, figuring a reduced speed zone of approximately 10 to 15 knots per hour.

Oh, I forgot to mention that two or three tugboats in the 4,000 HP category as also required during maneuvering operations?

11:42 AM  
Anonymous rj3 said...

This sort of stuff is happening on both coasts - if all proposals were followed through to fruition, there would be a massive overbuilding of LNG capacity. Since that will never happen, the initial costs are low enough for many investors to throw their hats in the ring and attempt to survive the whittling-down by regulators, local opposition and market forces. I think either one or the other will be built, if either gets built at all.

3:36 PM  
Anonymous Bryan Brown said...

I don't know whether the LNG business is significantly more profitable than other energy businesses, but the demand for natural gas continues to increase, making LNG at least reasonably profitable.

Case in point, LIPA just announced that it was negotiating with FPL for 685MW over the soon-to-be-completed Neptune cable from NJ to Long Beach. LIPA is purchasing power from plants located in PA that are fired by natural gas and, according to LIPA, "have modern pollution control equipment."

This deal stems from an RFP that LIPA issued last February for off-island power. At the time, LIPA said the one of its objectives was to "increase its fuel diversity by reducing reliance on natural gas and oil used to fuel the generating facilities currently providing electricity to its customers."

So, despite LIPA's stated intention of achieving "diversity", it seems that it's too hard to wean itself (or us) off natural gas.

[Personally, I don't fault them. I was concerned when they announced their "diversity" program because what does it mean? Coal and nuclear? No, thank you.]

The energy market is changing because of the ability to store LNG and inject it into the grid based on demand. This portability also reduces the impact of constraints imposed by pipeline capacity. In short, it solves, at least temporarily, some major problems. Whether it creates new problems is the big question.

8:47 PM  
Blogger Sam said...

I was rather confused as to the last statement abut storing natural gas, other than in a few floating-roof tanks. The ship has natural gas cooled to minus 300-400 F and to get it off the boat it has to be heated, thus turning the liquid into a gas. These things, called evaporators, usually work on seawater, boiler exhaust, steam, or other external heat source. Once the LNG is evaporated it typically goes straight into the pipeline, although there is some on-site storage in case of pipeline failure (e.g., time to turn off the ship's LNG evaporators and perhaps get the emergency flare going). Storage of LNG is dangerous by itself because it is always warming up and "gassing off." My understanding is that the LNG ships pull a 48-hour permit and offload during that time and then leave as soon as possible, since ships do not make money when docked in port.

1:38 PM  
Anonymous Bryan Brown said...

Sam,

I'd be happy to clarify my comment and clear up your confusion, I'm just not sure how to go about it.

That LNG can be stored is a fact. There are peak-shaving storage plants on LI and in NYC. There's a new one under construction in Waterbury, CT.

Your reference to "floating-roof tanks" sounds like natural gas storage tanks, a la the old Elmhurst tanks made famous in traffic reports. Different things, no?

So let me know how I can clarify my comment.

It's obvious you're certain that LNG is too dangerous to deal with. I should leave it to the LNG industry to defend itself, but I am interested in your sources. Can you elaborate on your comments to Tom's post on 1/22, when you mentioned mandatory 5 to 10-mile buffer zones and an LNG accident in Japan? I'm not having any success finding them in my references. Also, the personal protective equipment that you mentioned, is it any different than what would be required for handling other cryogenic material? Thanks.

7:44 PM  
Blogger Sam said...

This comment has been removed by a blog administrator.

9:03 PM  
Blogger Sam said...

The reference to an LNG explosion in Japan was I think before 1983 and I will try to find it; the first LNG carrier operations were started in 1979 (Moss Maritime). The information source was from a study my masters professor William Gordon in an environmental law class. I think Bill is now at URI and I will send him an email as to some hard documentation.

I do not think transportation and storage of LNG is bad in of itself. Having been close to some major hydrocarbon releases and explosions in Texas, I would not say there was zero risk. Thanks for keeping me in line, guys.

10:21 PM  
Blogger Sam said...

CROW EATEN HERE:

There has never been a fire or explosion in a ship carrying LNG. There have been some minor incidents (collisions, allisions) but nothing that ever threatened the storage of LNG on a ship. The only catastrophic failure was at a WWII-era facility in Ohio more than 40 years ago.

10:23 AM  
Blogger Chuck said...

Couple of facts I thought I could share on the topic:

1. All LNG facilities in the US approved by FERC are built based on guidelines set forth by the NFPA59A and additionally the DOT.

2. LNG is in a cryogenic state during transit and transfer.

3. Cryogenic liquids are not stored in floating roof tanks.

4. The vaporization of LNG would happen off the ship. It changes state at -260 degrees. It's volume expands 600 times going from a liquid to a gas.

5. When it comes to generation of electrical power natural gas powered turbine generators pollute less than Coal. The majority of the generation in the US is coal fired. Nuclear is hands down the cleanist emissions wise.

6. Emissions of LNG tankers are significantly less than other bulk carriers because they keep the temperature of the LNG just slightly below boiling (-260) and the boil off gas can be used to power the ship.

My opinion, for what its worth: We haven't built a new refinery in the US since 1976. We will not drill for oil in Alaska. Our dependance on foreign oil and other energy products to support our economy is an energy crisis we have created by imposing restrictions on our selves. I think all environmentalists are pretty much all thinking globally but why is it then okay to build an energy based industrial facility in the part of the world where there is no EPA and ship it here when it could be done more cleanly, safely, and efficiently in the US and our dependance on foreign energy products would decline. Construction of import terminals would not be as profitable and popular. Energy has got to come from somewhere...just a thought.

1:03 AM  

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