Wärtsilä and ENGIE to co-operate on LNG

12 December 2016

Wärtsilä has signed a Memorandum of Understanding (MoU) with the French multinational energy company ENGIE to develop solutions and services within the small scale LNG business sector.

Wärtsilä has signed a Memorandum of Understanding (MoU) with the French multinational energy company ENGIE to develop solutions and services within the small scale LNG business sector.

The co-operation agreement covers four areas: LNG for seagoing vessels; LNG distribution in islands and remote areas; LNG-to-power solutions; and small scale LNG and bio-liquefaction. Both Wärtsilä and ENGIE believe that shifting the focus towards LNG solutions is an important step in the direction of a low-carbon economy.

Through this partnership, the two companies will share Wärtsilä’s technical expertise and EPC (engineering, procurement and construction) capabilities, along with ENGIE’s technical expertise, and experience in natural gas distribution and commercialisation. Operation and maintenance services will also be offered.

“ENGIE has taken key positions in the small scale LNG market. This agreement with Wärtsilä will help develop innovative small scale LNG solutions with quicker implementation time and enhanced competitiveness,” says Jean-Marc Leroy, ENGIE’s managing director, Gas Chain.

“We are excited to be working with ENGIE and developing together more sustainable energy solutions for our customers and society as a whole. This co-operation is an important step towards Wärtsilä’s goal of growing its presence in the small to medium scale LNG terminal business,“ said Alexandre Eykerman, vice president for LNG Solutions at Wärtsilä.

Wärtsilä is currently the EPC contractor for an onshore small scale LNG terminal in Finland, and has successfully delivered several small scale power barges and a biogas liquefaction plant. ENGIE is one of the pioneers in the development of small scale LNG markets and innovative solutions. This includes small liquefaction plants, LNG truck loading, LNG bunkering, LNG fuelling stations, LNG for power applications, and supplying LNG to remote customers.

This MoU is a strong incentive to co- develop technical solutions that would enable both Wärtsilä and ENGIE to expand their small scale LNG businesses.

Already moving in Iran

The agreement was signed on 7 November, a few days after Wärtsilä and Iran’s IDRO corporation signed a co-operation agreement to develop power generation in Iran based largely on LNG firing.

IDRO (Industrial Development & Renovation Organisation of Iran) the largest industrial corporation in Iran has signed a memorandum of understanding with Wärtsilä to co-operate on the development of decentralised power generation in Iran, including power plant operations and maintenance services and related LNG infrastructure.

Wärtsilä will provide relevant expertise and resources to support IDRO in its objective to improve the infrastructure and develop the Iranian industrial base. In a second phase this co-operation will be extended to the marine sector and the Iranian shipping industry.

Currently IDRO owns more than 120 subsidiaries and affiliated companies operating both domestically as well as internationally. Iran, which ranks among the two largest countries in the world in terms of oil and gas reserves, plans to invest more than $100 billion in its oil and gas industry in the next 5 years. The country’s nominal power generation capacity is planned to grow by more than 25 GW in the coming 5 years.

Several major contracts

Elsewhere, Wärtsilä has in recent months completed negotiations for several large power plants. The largest is for a 135 MW Flexicycle combined cycle power plant in Indonesia, to be supplied under an EPC contract in consortium with Indonesian construction company PT PP (Persero). The consortium will also operate and maintain the power plant for a 5-year period. The project includes 13 Wärtsilä 34DF engines that can operate on multiple fuels, including liquid fuels and natural gas.

The power plant will be built in Lombok Island in Indonesia. Lombok Island is located east of Bali and is home to more than 3 million inhabitants. When operational this will be the first engine-based combined cycle power plant in the country.

The two parties recently signed an MoU to build power generation in Indonesia. When the Lombok plant is operational Wärtsilä’s installed capacity in the country will exceed 3.1 GW.

Wärtsilä will also supply a 100 MW dual-fuel plant to Albares Renovables in Argentina. The turnkey order includes six Wärtsilä 50DF dual-fuel engines running on gas and heavy fuel oil. The original order was, after negotiations, extended from equipment delivery only to a full turn- key project, with a value estimated at €72 million. The plant is expected to be delivered in early 2017 and be operational in August the same year.

Natural gas is not available for the power market in Argentina all year round. Wärtsilä’s dual-fuel technology was chosen to enable the power plant to run on heavy fuel oil for part of the year. When installed, the Central Termica Pilar power plant will also recover waste heat from the plant and make it available to nearby companies.

The order is one of five contracts that Wärtsilä has been awarded recently in Argentina, including a €30 million order to supply a 92 MW gas-fired baseload power plant to Sullair’s Caimacinto plant The equipment delivery project includes 50SG engines running on natural gas.

The new power plant will be situated in the north west of Argentina and reinforce the grid in the area. Due to the long distances and weight and height constraints along the road, Wärtsilä’s engines will be transported to the site in parts and be reassembled there. Delivery is due for 2016 with completion of the plant scheduled for 2017. 

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