India's leading gas firm, GAIL, has successfully conducted the world's inaugural ship-to-ship transfer of liquefied natural gas (LNG), aiming to optimize shipping expenses and reduce emissions. This innovative approach aligns with the state-owned entity's strategy to explore new avenues for business growth, according to company officials.

GAIL has secured a contract for 5.8 million tonnes per annum of LNG from the United States. The company transports this LNG volume to India using specialized LNG ships. Typically, these ships cover a distance of approximately 19,554 nautical miles for a round trip, traveling from Sabine Pass in the U.S. to India through the Suez Canal and Gibraltar. This journey spans around 54 days and results in the emission of approximately 15,600 tonnes of CO2.

To mitigate emissions, companies often rely on advanced technologies or alter cargo destinations. However, GAIL's pioneering contractual approach, leading to vessels following an optimized route, has yielded a substantial reduction in CO2 emissions. A recent instance, the vessel Castillo De Santisteban, commissioned by the company, transported a shipment of LNG from the United States. Notably, midway through the journey, the cargo was transferred to another chartered vessel, Al Gharrafa of QatarGas. Officials have highlighted that this innovative ship-to-ship (STS) transfer marks a groundbreaking global first.

"This is the world's first STS between a large conventional LNG vessel and a Q- K Flex LNG Vessel," an official said. The QatarGas vessel proceeded to Dahej in Gujarat to unload the cargo originally designated for discharge by GAIL's vessel. Meanwhile, GAIL's vessel returned from Gibraltar to the subsequent loading port.

This maneuver led to substantial savings, amounting to about 8,736 nautical miles, which is equivalent to a reduction of 7,000 tonnes of CO2 emissions. Additionally, this resulted in a significant reduction in the voyage duration for GAIL's chartered vessel, shortening it from the initially estimated 54 days to approximately 27 days, as reported by officials. "The total optimised gain for GAIL in this charter turned out to be more than USD 1 million," an official said.

The QatarGas vessel, on its return journey, realized savings in fuel costs and canal charges, while also generating additional revenue. Therefore, the optimization plan proved to be mutually beneficial, constituting a win-win situation for both GAIL and QatarGas.  "The proof of concept has been demonstrated by GAIL and has the potential to be scaled up. The concept has learned for the entire LNG shipping industry wherein through unique contractual arrangements, owners and charterers can significantly reduce the shipping distance and leading to substantial savings in carbon emissions," an official said.

Scaling up this concept to a minimum of two cargoes per month could yield annual distance savings of 209,664 nautical miles. This would result in a remarkable reduction of 167,731 tons of CO2 emissions and a substantial increase in vessel utilization, according to officials. Combining this innovation with the introduction of the first floating CNG station, GAIL secured the 'Innovation Award - India and Midstream Project of the Year' at the Asian Oil and Gas Awards. Recently, GAIL also launched a floating CNG station in Varanasi on the Ganges to refuel environmentally friendly boats.

GAIL developed a CNG dispensing infrastructure for boats, adapting to varying water levels and converting diesel/petrol engines to CNG. Approximately 1,200 boats, previously diesel-powered, were converted, resulting in an estimated monthly savings of around Rs 70 lakh for the boat owner community. This initiative earned GAIL recognition at the Asian Oil and Gas Awards, celebrating outstanding efforts in the Asian oil and gas industry.

Image source: Economic Times