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A tale of two European markets

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Uniquely located to two key markets, the largest LNG terminal in continental Europe promises to put itself on the global LNG map by improving competition within the market and securing supply across the continent.

The Dunkerque LNG terminal in the Port of Dunkirk will have an annual regasification capacity of 13 billion m3 of gas, which represents around 20% of France and Belgium’s annual natural gas consumption – making it the largest terminal in continental Europe.

Additionally the terminal will also be able to accommodate the world’s largest LNG tankers in France at the western outer harbour from a jetty that can accommodate Qmax methane tankers with a capacity of 266,000 m3.

Following the projects inception in 2005, when EDF investigated possible sites for a new LNG terminal in France, it is expected that the first ship will arrive at the terminal’s port in October 2015 and that the terminal will be fully operational on schedule at the end of the year.

Once complete, the terminal will comprise three LNG storage tanks of 190,000 m3 each – where one tank measures around 50 meters high and 90 meters in diameter. Each tank comprises three layers – a concrete outer wall (the secondary container wall) with perlite protection insulation followed by a primary container made of steel and 9% nickel holding the LNG product. All three tanks sit on a reinforced concrete slab and are covered with a reinforced concrete dome roof.

There will also be one regasification unit extracting LNG from the tanks and vaporising it by heat exchange in open-rack vaporisers that use sea water, one LNG unloading system as well as a 5km tunnel carrying warm water to the tunnel to warm up the LNG, which is stored at -163 degrees.

Strategic location
Sylvain Ringot, technical director of the project, which is the second largest industrial construction site in France, says that the location fits a number of strategic objectives including the fact that it is positioned close to the main market that EDF wants to target.

‘It is in the centre of Europe and close to Belgium, UK, Germany and France and this is the main market that EDF wants to target.

‘There is also plenty of space in Dunkirk – it is far enough away from another port or residential areas and that is important from a safety perspective.

‘No one is living close to or around the terminal – when building an LNG terminal you have to have a safety distance of 1km from main pipes due to the fact that if there is a leak it may form an inflammable cloud.

‘Another advantage of the location is the ability to handle large methane tankers and the quality of the port environment.’
As conventional gas production in the North Sea draws to a close and Europe’s dependence on natural gas imports from outside the EU grows, the terminal is expected to create a flexible import location in Europe, located close to a high-consumption area. A key aspect of the terminal is that it will be able to import and supply gas physically to two of Europe’s main markets – France and Belgium – and from there to the whole of northwest Europe.

This, according to EDF, will significantly improve competition within the gas market. Overall investment in the terminal project is €1.2 billion with €150 million for the port development works and €80 million to connect the terminal to the Pitgam compressor station. €250 million is being spent on the construction of the storage tanks, which represents around a fifth of the total cost.

‘We are close to the end of the project,’ says Ringot. ‘We are beginning to organise the other part of the project including the process facility and we are preparing for the commissioning of the port.’

The challenges of such a large construction project were compounded in 2013- a year after building work started – when workers experienced a very cold winter coupled with snow up to May. However, Ringot says that despite having to reduce construction speed of the concrete tanks during this time, the project is still on schedule and closely working with the contractors mitigated any significant impact.

Upon laying the foundation stone of the project in 2012, Henri Proglio, chairman and CEO of EDF, said that the terminal will ‘play a major part in safeguarding and diversifying European gas supplies’ and goes some way to develop a real gas platform.

The importance of LNG has been a key industry discussion point. It has been predicted that worldwide LNG demand is expected to increase at a rate of 5% per year until 2025. According to BP’s Energy Outlook 2035, global LNG imports in Europe are expected to increase to 19% between 2013 and 2035 coupled with an additional 10 billion cubic feet per day of LNG demand.
Ringot is personally confident that the LNG market will continue to grow in years to come. ‘LNG has increased over the past 25 years and I am really confident that LNG is something that will continue to grow over the next few years as a form of energy. ‘‘LNG is a growing market and will remain a growing market.’