IAMU News No.12, June 2006

1. LNG and the Role of AAST&MT

Capt. Mohye El Din El-Ashmawy, M.Sc, Master Mariner
Consultant to President
Arab Academy for Science,
Technology and Maritime Transport

Introduction

Global demand for crude oil and natural gas is rapidly growing and prices are soaring. As a result, large integrated oil companies and those operating in related sectors are experiencing record profitability and cash flows. Additionally, there is a shift to natural gas which is the fastest growing primary energy source in the world market with unprecedented levels of investment in liquid natural gas plants, pipelines and ships for production and transportation.

Consumption of natural gas is expected to increase by nearly 70% between 2002 and 2025, with the most robust growth in demand expected among the emerging economies. International trade in natural gas and pipelines is increasing. In the industrial sector, natural gas use is projected to grow by 4% per year, accounting for more than two-thirds of the overall incremental growth in gas demand in the Middle East from 2002 to 2025.

Many gas-rich countries in the Middle East are developing projects to utilize their natural gas resources, in particular through LNG and, more recently, gas to liquid (GTL) projects. Qatar has secured several high-profile deals that, when realized, will eventually boost its total LNG exports to 77 million tons/year. One such deal is for the construction of what will be the two largest liquefaction trains in the world, at 7.8 million metric tons per year each.

In Egypt, a series of significant natural gas deposits were found. Today, Egypt's natural gas sector is expanding rapidly. Major foreign companies involved in natural gas exploration and production in Egypt include BG, BP and Shell. The Egyptian Government formed a new state-owned entity in August, 2001 to manage the natural gas sector: "Egyptian Natural Gas Holding Company" (EGAS). The rapid rise in natural gas reserves has led to a search for export options, which has become particularly important to Egypt's future international balance of payments due to the decline in oil exportation.

Since the Middle East and Egypt belong to the high natural gas reserve regions, it becomes imperative to offer comprehensive educational programs dedicated to this promising market. With the increased investment levels and huge capital involved in the natural gas market, the demand for highly qualified candidates has greatly increased.

Growing of World LNG Carriers Fleet (1)

The LNG carrier and its cousin LPG carrier are products of the late twentieth century. The world fleet of LNG carriers is growing due to the growth of world LNG trade which is driven by the increasing demand and declining domestic NG resources in gas-consuming countries, and by the desire of gas-producing countries to commercialize their resources.

According to the recent statistics (2), 151 LNG tankers were in operation worldwide as of October 2003. As of 24th December 2005, the world fleet of LNG carriers is 192 tankers, with an approximate growth of 127%. Statistics also indicate that 133 LNG carriers are in order or under construction.

The Role of The Arab Academy for Science, Technology and Maritime Transport (AAST&MT)

The increasing global concern about the availability of oil & gas and the need to efficiently manage the huge investments in this sector has created a growing demand for education and training in this field.

The Proposed International Natural Gas Institute (INGI) (1)

Since Egypt is at the heart of the Middle East and LNG business, the Academy being always ahead of the events, took the initiative of creating the first LNG Institute in the Middle East, and orientating its maritime education and training towards covering the requirements of this vital industry. Their Excellencies Egypt's Minister of Transport and IMO's Secretary General laid the foundation of the institute in July, 2005.

The main idea of establishing INGI is to combine the efforts of the Egyptian Government/AASTMT and the Gas/Petroleum Industry under the umbrella of IMO or in other words to found an IMO institute similar to the World Maritime University (WMU) in Sweden, the IMO International Maritime Law Institute (IMLI) in Malta and the International Maritime Academy (IMA) in Trieste, Italy. The following is the proposed role of each partner:

The Role of the Egyptian Government (3)

The Egyptian Government will participate by offering the hardware part of the INGI through the Academy’s existing resources, institutions and facilities which qualify it to host and run the proposed institute under the umbrella of IMO, and according to the soundest academic, professional and vocational criteria. Here are some brief hints on the Academy resources in Egypt.

The Role of Gas/Petroleum Industry (3)

Since the Gas/Petroleum companies are the prime beneficiary from INGI, it may be suggested that these companies will support both software and liveware. The software will be the curricula approved by IMO to qualify seafarers (officers – engineers – technician – ratings) according to international standards on board vessels carrying LNG, LPG and other petrochemical products. The liveware will include both the INGI staff and students. The suggested role of the companies is the financial support for employing staff and setting the standards of recruiting the students to join INGI from all over the world.

First: Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG) Training

It is widely quoted that 80% of maritime casualties are attributed solely to human error. Some critics may focus on fatigue as the major driving force behind this high percentage, while others may promptly argue that poor training is the cause.

Furthermore, with modern technologies applied on board ships today, such as integrated bridge systems and nitrogen membrane LPG ships, training seafarers and shore-based staff attending to LPG/ LNG vessels has become a crucial matter.

The LPG & LNG Training Center in the Arab Academy for Science, Technology and Maritime Transport, which is equipped with the latest Technology and expertise, conducts training workshops in LPG/LNG handling for specialized and non-specialized personnel serving in the industry, with the prime purpose of enhancing safety and promoting quality as per IMO requirements and courses. The objectives of such workshops are:

• Safe LPG/LNG handling.
• Better job acquaintance resulting in higher efficiency and effectiveness.
• Minimizing casualties resulting from human error.
• Promoting safety awareness and enhancing safety culture.
• Enhancing the social life of employees.
• Marine environment and property protection.

Second: Oil and Gas Logistics Management Program

AAST&MT is a pioneering institution in providing logistics and supply chain management studies in Egypt and the Arab world. It offers a program in: Oil and Gas Logistics Management. The objective is to provide Egypt and the Arab world with graduates who have the knowledge and skills necessary for working in the oil and gas industry.

Moreover, AAST&MT offers oil and gas short training courses and workshops for those who are engaged in the oil and gas industry. These courses could be tailored according to the needs of organizations and individuals.

Conclusion (4)

Natural gas is one of the largest sources of energy worldwide. It is found in countries with large reservoirs all over the world. The largest gas reserves are found in the Middle East region. NG is likely to be the primary growth engine of Egypt's energy sector for the foreseeable future. Oil companies from different countries began more active exploration for NG in Egypt in the early 1990's, and very quickly found a series of significant NG deposits in the Nile Delta, offshore from the Nile delta, and in the western Desert.

Egypt has hosted the Academy in Alexandria since 1972. During the past thirty years, the Academy has succeeded in forming an excellent centre for maritime education and training. The Egyptian proposal is a tripartite partnership between the Egyptian Government, the Academy and the gas/petroleum industry to establish the first natural gas institute in the Middle East, under the umbrella of IMO, to serve the whole world. The Egyptian Government and the Academy will provide the hardware facilities, while the gas/petroleum companies will financially support the employment of INGI staff and set the recruitment standards for the students. With technical and financial support of Industry/donors, this facility can provide a state of art institution to provide the human resources needed for an ever expanding LNG institute.

Notes:

(1) Extract from the paper titled "Proposal to Establish The First Natural Gas Institute in The Middle East" presented by Dr. M. Farghaly Sayed, Executive Vice President, AAST-MT, in IMO Feb. 2006.

(2) http//www.Coltoncompany.com/shipbldg/woldbldg/gas/Ingactivefleet.htm

(3) Extract from the paper titled "Proposal to Establish The First Natural Gas Institute in The Middle East" presented by Dr. M. Farghaly Sayed, Executive Vice President, AAST-MT, in IMO Feb. 2006. Realizing its cultural responsibility to provide education and training programmes in this needed worldwide field, AAST&MT is initiating programmes covering different aspects of oil and gas technology and logistics.

(4) Extract from the paper titled "Proposal to Establish The First Natural Gas Institute in The Middle East" presented by Dr. M. Farghaly Sayed, Executive Vice President, AAST-MT, in IMO Feb. 2006.