Gorskaya said last week it had placed an order for three LNG bunker vessels, making it the most advanced of the projects planned in the region.
The plant, near St Petersburg, will allow Russia to refuel LNG vessels in the Gulf of Finland and export small-scale cargoes to Europe. Initial startup is slated for December 2016. It will use a floating barge capable of producing 420,000 tons of LNG per year. The developers plan to add two further barges, giving a total capacity of 1.26 mtpa.
The companies backing Gorskaya remain largely unknown, although a list of partners on the project's website includes *Gazprom* and Sberbank among a number of other Russian state-owned enterprises. The registered owner of project company LNG Gorskaya is Lameniya - a business consultancy.
Ports in the North and Baltic seas have been investing in LNG bunkering infrastructure in response to the introduction of sulphur emission control areas (ECAs), which limit the sulphur content of fuels to less than 0.1%.
"There have been a number of such projects planned in the Baltic in the expectation that the demand for LNG as a bunker fuel will increase" Andy Flower, an independent LNG consultant, told Interfax.
However, development of infrastructure has been slow, which has hampered uptake of the fuel.
"The problem with LNG ship bunkering is the perennial one of ship owners being reluctant to invest in LNG-fuelled ships until the infrastructure to refuel them is in place" Flower added.
Despite the slow start, use of the fuel is expected to ramp up gradually. Converting existing vessels to run on LNG is expensive, and ship owners have been reluctant to make the switch - especially as the fall in oil prices has made traditional oil-based marine fuels more attractive.
"We will see some growth [in the use of LNG as a marine fuel] in Europe, but it will be slower than expected because of the low fuel prices," Eduardo Perez Orue, founder and senior consultant at small-LNG.com, told Interfax.
Ship owners have other options open to them to comply with the new rules, including using fuel oils with low sulphur content or fitting emissions-scrubbing technology to their vessels. However, for new vessels that will spend the majority of their time in ECAs, LNG is likely to be cost-effective because it eliminates all sulphur and substantially reduces nitrogen oxide emissions from a ship's exhaust.
This makes LNG immune to future increases in emission limits - including stringent nitrous oxides limits, which will come into force in January 2016, and stricter limits on sulphur emissions expected in 2020.
LONDON. June 10 (Interfax Energy)