Guidance for the Sustainable and Long-term Use of LNG Terminal Sites as Logistics Hubs for Hydrogen and Its Derivatives

Abstract

On 1 June 2022, the German Act to Accelerate the Use of Liquefied Natural Gas (LNG Act) came into force. According to this law, a permit for the continued operation of LNG facilities after 31 December 2043 can only be granted if the facilities are operated with climate-neutral hydrogen and its derivatives. In this context, the research and development requirements for the conversion of LNG terminals to hydrogen and its derivatives were formulated. These requirements will be investigated in the new TransHyDE project LNG2HyDE which started on 1 June 2023. Central questions of the project are: What are the technological, regulatory and normative challenges for the conversion of LNG terminals to green hydrogen from renewable energy sources and its derivatives? What are the research and development needs? To what extent can and should the conversion of LNG terminals to hydrogen and its derivatives take place gradually? Is mixed operation feasible? What time and capacity requirements can be estimated for the conversion of terminals from LNG to hydrogen and hydrogen derivatives in the light of the global hydrogen value chains that are being set up?

The aim of the project is to develop, within 18 months, a scientifically sound, sustainable data base and recommendations as a basis for decision-making on the viable and long-term use of LNG terminal sites as logistical hubs for hydrogen and its derivatives. In order to achieve this goal, a technology-open investigation is to be carried out, so that in addition to liquid hydrogen and ammonia, the hydrogen carriers and hydrogen derivatives methanol, liquid organic hydrogen carriers, synthetic natural gas (SNG) and dimethyl ether are to be investigated. All of these promising candidates will be investigated in parallel.

The new TransHyDE project will define H₂ transport vectors in the context of LNG terminals and provide a technological inventory of terminals for the import of SNG, LNG, LH₂, NH₃, LOHC, MeOH and DME with the aim of identifying the main infrastructure components. Another important part of the project is the development of concepts for the further development and use of LNG terminals for other H₂ transport vectors. The terminal concepts include all process steps and infrastructures from ship docking, storage and conversion to the injection of the liquefied gas into the H₂ backbone network as well as filling facilities for domestic road, rail and ship transport. The starting point is the LNG terminal infrastructures currently being planned and built. In particular, it will be examined how existing facilities, infrastructure and components of the LNG terminals can be further used and which process steps and facilities will have to be replaced or newly constructed for the alternative utilization paths.

The project will also include an analysis of the materials used in the terminal components regarding their compatibility with the use of the above-mentioned transport vectors and an assessment of their service life. The project is intended to provide an overview of the standards and regulations that have to be considered in the operation of the respective transport vectors (status quo) and to compile the resulting need for action for the regulatory institutions for the development of new standards and regulations or for the extension of existing standards and regulations. The project also includes the clarification of different legal and regulatory treatment of LNG and H₂ transport vectors, the presentation of how a technical conversion from LNG to H₂ transport vectors is handled in terms of planning and approval, and the subsequent formulation of proposals for regulatory measures and incentives for the earliest possible conversion or construction of terminals for the import of hydrogen-based energy carriers.

The impact of converting a LNG terminal to a H₂ terminal on the downstream transport chains will also be considered. A comprehensive comparison of the possible transport vectors (truck, barge, rail, pipeline) for H₂ transport vectors will be prepared. Technical, economic and environmental aspects will be examined. An important building block is the cost structure of different H₂ transport vectors, so that the supply chain to the consumer can be economically represented for different purchase quantities and distances to the terminal.

The project will be complemented by a techno-economic analysis of the H₂ transport vectors. This will provide an economic assessment of reutilization scenarios and thus help to prepare investment decisions. Within the framework of the analyses, the transport vectors are to be examined from a techno-economic point of view and conclusions are to be drawn regarding the degree of effectiveness, costs and other criteria (Figure 1).

In the long term, hydrogen will replace natural gas as an energy carrier. Until now, natural gas has been imported to Germany exclusively via pipelines. The current crisis shows how sensitive pipelines are to external influences, e.g. transit countries or attacks preventing transport. For this reason, the import of hydrogen to Germany will take place not only via intra-European pipelines but also via international or intercontinental transport, which is much more flexible and thus increases the security of supply.

Until the end of last year, there were no LNG terminals in Germany. For this reason, there is little to no experience in dealing with large-scale liquefied gas imports. Through the construction of LNG terminals and this research project, the operators can learn which special features need to be considered in the construction and conversion of future terminals. In addition to design changes, experience with permitting and subsequent operation is of particular interest. Approval of a terminal usually takes about two years. By converting existing terminals, investment costs could be reduced, approval processes simplified and the overall commercial risk reduced. This makes the conversion of LNG terminals to H₂ derivatives highly attractive from an operational and economic point of view.

The TransHyDE project will provide a detailed basis for the planning and implementation of the conversion of LNG terminals to import facilities for green molecules. The results of the project will feed directly into current and future planning, both for LNG terminals and for H₂ transport vectors, so that potential future conversions can be considered at an early stage in the planning of these terminals. A future conversion to green H₂ derivatives will be facilitated as necessary interfaces and space requirements can already be considered. In addition to the planning optimization potential and the possibility of reducing the investment costs for an integrated LNG terminal converted to green H₂ derivatives, the work and results of the TransHyDE project will make approval processes more efficient, as future requirements can be identified at an early stage and coordinated with the authorities.