Gate Terminal: A Gargantuan Undertaking
The Gate (“Gas Access to Europe”) LNG terminal project in Rotterdam, the Netherlands began in 2005 with the first feasibility study. The country’s first import and throughput terminal for liquefied natural gas, Gate terminal’s inauguration took place in September of last year.
Gate terminal has been nominated as LNG Project of the year 2011 at the European Gas Conference Awards. Gate terminal Managing Director Branko Pokorny provided an exclusive interview to Natural Gas Europe preceding the event in Vienna, Austria.
Mr. Pokorny has been involved in major project investment developments for over 30 years; in the last 10 years he has been mainly focused on oil and gas related developments.
“From 2001-2008 I was working with GDF Suez, the French company,” he explained. “One of the bigger developments at that time was the co-development of the Statoil SnØvit Project: the liquefaction export facility in the north of Norway. We had a significant contribution as Suez to the project development.
“In 2008 I joined Gate terminal, which was right after the final investment decision was taken, as the managing director, and I’m still doing that today. So my background is O&G related but involvement in LNG has been just in the last 4-5 years.”
The Gate terminal project seems like a groundbreaking project. What does it mean for the Netherlands and the rest of Europe?
For the Dutch this is quite an extraordinary step to have an LNG terminal in a country with a rich history of gas production and export. So it’s the first LNG terminal that we’ve seen in the Netherlands with a substantial initial throughput capacity of 12 bcm per annum, making it a big terminal from the start.
It’s open access, so it’s a concept where all customers are using the terminal in the most efficient way with clear rules for berthing, LNG storage and regasification. This enables new European players to enter the West European gas market.
We also fulfill a part of the Dutch ambition of being the gas roundabout of Western and Mid Europe, and that of course is adding to additional security of supply, increased liquidity and also price stabilization.
Who were the players involved and how did the project come about?
It started in 2005 with what we call the founding fathers: Koninklijke Vopak N.V. (Vopak) and the N.V. Nederlandse Gasunie.
Royal Vopak (Vopak) is the world’s leading independent provider of conditioned storage facilities for bulk liquids, has 83 terminals in 31 countries. LNG storage & regasification has been developed resulting in entering a new market segment. . Presently Vopak owns and operates two LNG import terminals in joint-ventures, one being Gate terminal in the Netherlands, the other one the LNG terminal Altamira in Mexico.
For Nederlandse Gasunie, being a wholly state-owned company, Gate terminal is part of their mission to develop the Dutch gas roundabout for Western Europe.
Gate has delivered increased security of supply, and in the long term, increased liquidity of the market. The two companies have combined its specific expertise in the Gate project, one with the know-how to build & operate tank terminals, and Gasunie with the expertise about the gas transportation aspect to bring the product to our customers.
The third party to mention that was very important is the Rotterdam Port Authorities. Gate terminal is important for them, mainly for two reasons: their ambition to stay not only the biggest European port, but also being the energy port of Europe, and secondly to strive for long-term, more sustainable solutions and an LNG hub is a cornerstone in that ambition. At the moment we can start to develop and roll-out further projects that have to do with the LNG infrastructure developments: so-called backloading to smaller ships that can transport inland and short-sea and small scale LNG developments.
The authorities were our partners from the first moment when we began developing Gate terminal.
What was the most challenging part of implementing this project?
First, the enormous size of the project. LNG terminals always create a large volume of work. It’s specialized equipment, but also a different sort of activities: main mechanical works and main civil works. So we had to execute more than 4.5 million manhours, and manage three different construction sites. We have accomplished an excellent safety performance. Our LNG harbor with its unloading system, which is quite separated from our tank and process area, is around 1 kilometer away. Our water pumping station is another 4 kilometers away from our terminal.
We had to cross the neighboring lands of six different companies with our LNG loading lines and the warm water system. You can imagine that the LNG loading lines could make other companies a little bit nervous if they are on their land, so there was a lot of effort necessary to convince them that we’re able to do that in a controlled and safe way, not only during construction but especially during operations.
The warm water system is quite big: two lines of two meters in diameter next to each other brought to a terminal that went more than 1,100 meters under a harbor with a “soft-soil” bored tunnel. It was high complexity and could have been risky, if we would not have been unable to agree with the neighboring companies.
The fact that we turned land into water is another distinctive element, and we regained land from the sea. Our LNG channel with our jetties are out in former land and the tanks and process area are basically reclaimed from the sea. It’s quite a novelty for LNG terminals that the tanks are positioned on sand with a concrete foundation, but without any piling. That saved considerable money, because piling for LNG tanks is quite expensive, especially in soft soil. The techniques the Dutch civil engineers used were developed during the Delta sea protection works, to keep the sea out of the southwestern part of our country, where we have huge dams that can be opened or closed with concrete structures on the seabed, and this was the kind of approach we wanted to use for our LNG tanks.
When we filled our tanks for the first time with 150,000 cubic meters of seawater, the setting of the tanks was just around two centimeters, so this was very good.
Gate terminal is a zero-emission terminal, which means that we are using heated seawater from a nearby power plant for our regassification process. This form of co-siting is very beneficial for both companies but especially relevant for our environment. We have developed a complete system for this process and we are not consuming any gas of our customers for the regasification process.
Another challenge was the workforce for executing the project which came from 17 different countries. Our workforce comprised 1,200 at the peak for several years. And as in any big industrial project you have to maintain your safety standards at a very high level, with LNG projects this is even more relevant . Fortunately, we were also successful at that.
Any challenges presented by public acceptance issues?
Of course it’s not easy to develop an LNG terminal in any country. I think it helped that we started in 2005 with the development of the terminal, and that a number of things were quite eminent at that time. First, within the Rotterdam region, being already a large industrial area, on the authority side there is a high level of professionalism regarding the permitting processes for this type of development.
Secondly, the Dutch are used to bigger projects and the general public knows that the authorities are very capable of handling the risks that are associated with those developments.
Thirdly, it was really important that from the first day on Gate terminal was completely transparent and we sought a continuous communication with all the local communities, and that’s still the case today – for example, I have direct contact with the surrounding communities, I know all the mayors in the region and they know me, so if they have any question, they call me.
When Gate terminal opened in September we had an open day for the general public and almost 1,000 people came to visit the terminal. This all contributes to the general acceptance of such a new facility. From the outside it could be seen to be dangerous; of course we know better, that LNG is a very safe energy source, but must be treated appropriately - that is what we needed to explain to our neighbors and the general public.
Would you say the inauguration of the terminal last year was your biggest accomplishment for 2011?
Yes, among our last year’s achievements is the timely delivery of the terminal and to do that safely and within budget. Our clients expected the project to be commissioned on time to be able to start operations in time themselves. The shipping activities of the Gate terminal are planned well in advance, so timely delivery of the project was key. These have been the biggest achievements for all the people that have worked hard to make it all happen.
Of course that was a mandatory requirement to do that in a safe way. We have established an excellent safety performance together with our construction partners. We only had three minor lost time incidents in 4.5 million manhours, and these were without any permanent injuries to people.
What’s the plan for 2012 for GATE Terminal?
We have two main goals for this year: 1st to serving our customers in a safe and efficient manner by meeting all their requirements. Secondly, looking to develop additional business concepts like small-scale LNG.
We now have the attention for LNG in the Netherlands in the Rotterdam area and the city is very receptive for developing further logistic solutions and opportunities of LNG beyond putting regasified gas into the Netherlands network. Opportunities are explored for the use of LNG as a fuel for ships, trucks, etc and the logistics solutions to make these opportunities a reality. That will be our biggest ambition for 2012.
Rotterdam is in a very good position to develop those additional services. The inland structure for handling LNG still has to be developed, but we are at the moment working together with very interested parties to do that.
Given that Gate terminal is now contributing to Europe’s natural gas supply mix, what are your thoughts on the continent’s various natural gas supplies?
There’s a large opportunity for natural gas to be the transition fuel for the next few decades within Europe. From a political point of view, there’s a long way to go. Natural gas is the cleanest fossil fuel, although we must also develop CO2 reductions for this fuel, but it’s still the cleanest and it really can bring us all together for a more sustainable future.
If we look at Germany’s ban on nuclear power, natural gas is the quick solution there.
Still, there’s a lot to do on the political side to achieve that. At this moment, for example, prices for CO2 credits are going down and in my view that’s the wrong direction – prices should go up to ensure that we are competitive with more polluting fuels.
So I believe that in the coming years, there’s a lot to do on the political platform to achieve that; there’s a very good opportunity.
Learn more about Gate Trminal its website LINK The European Gas Conference and Awards are being held 24-27 January 2012, Vienna LINK