Lanner Helps Fluxys LNG Fine Tune LNG Terminal Capabilities

Fluxys LNG, the operator of the LNG receiving terminal at Zeebrugge is part of independent natural gas transport company Fluxys. One of the major LNG transporters in the heart of Europe, Fluxys LNG plays a key role in the management of gas flows across the European market.

Background

The Zeebrugge LNG terminal operates at a capacity of 4.5 billion cubic meters (BCM) of natural gas per year. This represents around one third of the gas consumption in Belgium.

The full capacity of the Zeebrugge LNG Terminal was contracted until early 2007 by a single shipper, Distrigas. In line with the European Gas Directive which provides for third party access (TPA) to key gas infrastructure assets, Fluxys LNG launched an open season to gauge the market interest in using the terminal after that period. This resulted in a number of shippers expressing a serious interest in booking capacity from 2007 to an extent that the re-commercialisation of the terminal required an expansion to take place (additional storage, additional send out capacity and a nitrogen based gas quality conversion facility).

During the negotiations, individual shippers expressed concerns over the guarantee of their individual access in a multishipper environment of the LNG Terminal. The additional planned capacity meant that most of the equipment blocks within the terminal need to be expanded, from tank storage through to vaporization equipment. Failure to create the right capacity at every one of these points would cause a range of problems including insufficient space in storage to discharge a tanker at the right time, or failure to deliver the required send out rate of the right quality of gas to the gas networks.

Fluxys LNG therefore had a requirement to provide evidence to the LNG shippers that the Zeebrugge terminal could fully operate at a capacity of 8.5 BCM per year and in so guaranteeing that the quantity of LNG the shippers intended to to deliver could be handled without interruption by the terminal. The shippers were not prepared to rely solely on Fluxys analysis and insisted on an independent assessment to certify the capacity. Lanner was contracted by Fluxys to develop a simulation model to analyse the future operational conditions and provide the evidence required by bidding shippers.

Fluxys selected Lanner based on our extensive knowledge of modeling LNG logistics and shipping sectors and our ability to incorporate the shipping activities of each of the prospective suppliers into the assessment.

Lanner LNG Logistics simulation was able to accommodate the dynamic scheduling of their deliveries to coincide with available slots, tidal and weather behavior at the port as well as operational constraints and behaviors within the terminal, while proving the viability of the expansion plans to meet the suppliers' needs.

Results

The model of the proposed facility allowed Fluxys LNG to experiment and fine tune the behavior of the planned extension while proving that the required capacity existed in the terminal. This led to contracts being set to a combined total in excess of 9 BCM per year far suppassing the initial target of 8.5 BCM per year.

Example suppliers that contracted for the right to discharge and regasify a quantity of gas per year include RasGas II with rights for 4.5 BCM per year, Distrigas with rights for 2.5 BCM per year and Tractebel Global LNG with rights for 2.1 BCM per year, for fifteen to twenty year period that started in 2007. In order to meet this demand, Fluxys LNG could justify the investment of $165 million to double the terminal’s capacity with certainty and confidence delivered by a simulated future of their terminal.

About Fluxys

Fluxys has over 800 employees and a consolidated balance sheet total of 1,836 million euro (year 2003). Some 700 collaborators are responsible for maintenance, operation and development of the gas infrastructure: a natural gas transport network in Belgium comprising some 3739 km of pipeline, associated infrastructure, an underground storage facility and also a terminal for liquefied natural gas (LNG) in Zeebrugge. With 18 points of connection to natural gas sources and neighboring networks, the Fluxys network is one of the best-interconnected systems in Western Europe.