Project Featuring ‘Coselles’ in Final Due Diligence

By Lucy Hines

Confusingly named Sea NG broke cover this year when it announced it had been selected by Egyptian-Greek joint venture Medcarrier to provide the transport solution for a project to ship compressed natural gas (CNG) from gas supplier Egas in Egypt to Crete. Prospective buyer Public Power Corp of Greece is now doing final due diligence on the project.

Sea NG president and chief operating officer David Stenning said: “That is the first time [for CNG] that I’m aware of where a major supplier has gone through an evaluation and publicly announced who the winner is.” But he added: “there is still a lot of work to do.”

Stenning says he first spoke in public about his eye-catching Coselle design for CNG at a conference in 1999. Prior to that, he and his colleagues had done some business with the infamous Enron Corp. Stenning admits he has often thought that if Enron had been ExxonMobil, the CNG system would have been in service by now.

Like all the other CNG developers, Stenning remains coy about talking about any other projects but believes the company is making some great advancements in the Caribbean as well as the Mediterranean region.

“They have really been our focus areas,” he said, adding that the company is also working in the Far East on a project that looks very exciting.

Stenning is both frustrated by the time it is taking to bring marine CNG to the market but he is also very understanding of the complex discussions talking place between gas-supply owners, offtakers and would-be importers. “It took LNG a decade,” he said. “I think that energy is very conservative.”

Since introducing its radical coiled-pipe Coselle, Sea NG has tested a prototype to 65,000 cycles of inloadings and offloadings without failure. Stenning said: “We have changed the underlying design of the way we coil the pipe and organize that process. We now have something that is very robust – it always was – but now, instead of being tested to over 300 years, is tested to over 1,000 years of service without failure.”

The company has also tweaked its design. Instead of simply stacking the Coselles in the vessels, it has now integrated some of the pipework to form part of the bulkhead. Stenning says this does two things – saves steel on the ship and strengthens the structure of the vessel by turning it into a honeycomb. The company expects to have a full construction report on this from the yard by the end of the year. Stenning says this move will increase the ship’s economics by about 25% and with the more elegant design, offer some improvement on operating costs.

The integration and testing means that Sea NG is also going to be able to up its design pressure from 3,200 pounds per square inch (psi) to about 4,000 psi.

“The more you can cram in, the cheaper the ship is, since the compression is really not that expensive,” he explained.

Stenning reveals that Sea NG has started construction of its Coselle production plant at a site in the Gunsan Free Trade Zone in South Korea adjacent to several shipyards. He says this will take over a year to build.

“We are trying to break the chicken and the egg. We have enough projects in the pipeline that the cost of building the Coselle facility is pretty small compared to the cost of shipping and the first project, so it looks like a very good investment in any event. So we have an excellent opportunity to try to put a small chisel in the egg of the chicken to try and get it hatched.”

“I think we will have a very restless industry if someone isn’t building ships next year,” Stenning said.