SIMULATION-BASED ANALYSIS OF ARCTIC LNG TRANSPORT CAPACITY, COST AND SYSTEM INTEGRITY

This paper presents a design case for arctic LNG transport, where liquefied gas is shipped from the Kharasevey terminal in Northern Russia to markets in US and Europe. Based on a fleet simulation model, the trade-off between the two main performance issues related to arctic transport are investigated; namely how to maintain transport system integrity in the harsh ice conditions, while maximizing the capacity utilization in a situation with considerable seasonal variations. The fixed contract, single destination base case shows that meeting the requirements for a robust solution implies a low degree of utilization in the summer season. To improve upon this situation, several mitigating strategies are evaluated, including vessel speed and size changes, fixed and seasonally varying contract and market mix schedules, revision stop re-scheduling, storage capacity extensions and backhauling. The results indicate a high payoff from renegotiating the initial fixed schedule contract to allow for a higher degree of seasonal variations in the LNG deliveries. Further, increased storage capacity in loading port, combined with winter revision stops will have a significant impact on both fleet utilization and total system integrity. Flexible contracts that implies seasonal deliveries to the UK will help ensure continuous production and deliveries in winter season. Finally, surplus capacity gives opportunities for seasonal spot cargoes that could be exploited to increase fleet utilization rate