The Department of Thermal Engineering at Tallinn University of Technology (TUT), Elering and AGA Estonia have launched a study to analyse the options for switching to liquefied natural gas (LNG) in boiler plants fired with liquid fuel.
The initiative for the study was triggered by plans for the reorganisation of the shale oil industry, which may reduce the competitiveness of shale oil as a boiler plant fuel. So far, shale oil has been an important fuel for generating heat in areas located far from the natural gas pipeline network, which now gives rise to the strategic need for developing a new solution.
According to Andres Siirde, TUT Professor of Thermal Power Equipment, who will lead the study, the strategic plan for Estonian shale oil producers to start producing motor fuels from shale oil in a few years, although in general a welcome idea, is unfortunately bad news for existing consumers of shale oil. It is obvious that turning the industry’s focus to the production of motor fuels will significantly reduce its availability for boiler plants, driving up the price of heat for residential customers. As Professor Siirde says, there are currently hundreds of boiler plants in Estonia using shale oil as their only fuel. “Liquefied natural gas has great potential, both in technical and economic terms, as a replacement boiler plant fuel. Our study aims to identify the modifications required in boiler plants in order to switch to the new fuel, how the liquefied natural gas supply chain will be organised, and to determine the economic effect resulting from such a reorganisation.”
The study was initiated by Elering, since one of the important recommendations of the report on the liberalisation of the Estonian gas market was to determine additional possible sources of demand for gas on the Estonian internal market.
“Liquefied natural gas can definitely offer new solutions for Estonia,” explains Janek Parkman, Elering’s natural gas business developer. “On the one hand, imported liquefied natural gas will start competing with pipeline gas. On the other hand, it will have the potential to compete with liquid fuels in energy generation both for sea and land transport,” he added.
AGA Estonia participates in the study as an industry partner, whose main areas of activity include the production, transport, storage and sale of different gases. According to Andrus Laur, managing director of AGA Estonia, they have lengthy experience in the production and transportation of different industrial and medical gases. “As yet, AGA Estonia does not sell liquefied natural gas in Estonia, but we want to be ready and prepared if an LNG terminal is built in Estonia,” explains Laur. “The first and so far only LNG terminal on the shores of the Baltic Sea, which is located in Nynäshamn, Sweden, was built and is owned by AGA, so we can rely both on the Swedish experience as well as the global experience of AGA’s parent company, the Linde Group, in trading LNG,” added Laur.
The report on the liberalisation of the Estonian gas market, prepared by Pöyry Management Consulting, recommends a complete set of activities in order to liberalise and develop the Estonian gas market. First of all, the natural gas transmission grid must be separated from Eesti Gaas, alternative gas suppliers must be ensured access to the market by constructing an LNG terminal, demand for natural gas must be increased and the gas markets of Finland and the other Baltic countries must be integrated. In December last year, the Port of Tallinn and Elering agreed to commence preparatory work for constructing an LNG terminal at the port of Muuga.
LNG World News Staff, February 20, 2012