Synertec’s LNG transfer tech scores regulatory approval from major global certification body
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Along with its GasLog partnership, DNV approval gives Synertec a leading position in what’s shaping up as a major addressable global market.
Diversified clean energy technology company Synertec (ASX:SOP) provided markets with a key regulatory update this morning, announcing a crucial approval for its proven LNG Custody Transfer System (CTS).
The company advised that Det Norske Veritas (DNV) has approved the technology – a key step in taking the CTS platform to the global marine market with SOP’s partners, GasLog, Trelleborg Group and Austrade.
Synertec is also excited to formally advise that their technology partner in development of the marine CTS system over the past year is Gaslog.
GasLog is a major owner, operator and manager of LNG carriers worldwide, with 36 vessels in its fleet, all managed 100 per cent in-house. This year, Gaslog merged with the Global Energy & Power Infrastructure Team of asset management giant BlackRock, after previously being listed on the New York Stock Exchange.
The company is also active in the floating terminals business, including the Outer Harbour LNG Import Project in Port Adelaide, South Australia with Venice Energy, where Synertec is currently engaged and performing Front End Engineering Design (FEED) work for the Outer Harbour LNG Import Project consortium.
Headquartered in Norway, DNV is the world’s largest classification society that provides certification services based on established standards and criteria for multiple sectors including the maritime industry, oil & gas and renewable energy.
Globally, the company provides certification services for more than 13,000 vessels and offshore units.
Synertec’s platform is an adaptation of its land-based CTS technology for marine purposes, as part of the broader shift in the global LNG industry towards the use of Floating LNG liquification plants.
Using the CTS, clients can ensure the safe transfer of fluids and gasses between vessels, together with a high degree of accuracy.
In that context, DNV’s approval amounts to an important validation of Synertec’s patent-pending Custody Transfer System for LNG.
“DNV Approval is a significant operational and technical milestone that demonstrates the transferability of Synertec’s existing land-based CTS (currently in operation at large LNG plants such as Wheatstone) to marine applications,” the company said.
And with regulatory approval in place, the company now has a major opportunity to expand its addressable market for LNG vessels through its partnership with GasLog.
Trelleborg, regarded as a world leader in its field, saw the potential in Synertec in 2018 with its expert know how in analyser systems, and specifically in LNG custody transfer, as being able to advance its own strategy.
Trelleborg AB is headquartered in Sweden and listed on the Nasdaq Stockholm, with annual revenues of around 3.3 billion euro and operations in 50 countries.
The marine operation of the Trelleborg Offshore & Construction business manufactures and installs bespoke fender systems, docking and mooring equipment, oil and gas transfer technology and vessel efficiency technology for marine environments all over the world.
Synertec is also working closely with Austrade in key territories globally to promote the technology, with several strong leads brought to Synertec now in progress.
Through its regulatory approval from DNV and distribution partnership with GasLog, Synertec now has the opportunity to capitalise on a major addressable market opportunity.
On average, revenue from the installation of its CTS technology is estimated at around $1m per ship (or more depending on specification), with additional ongoing maintenance fees over the life of the vessel.
Along with the 175 LNG-fuelled ships currently in circulation, a further 200 ships are on order as the maritime sector transitions to energy solutions that are less carbon intensive.
“IMO2020 regulations target a 40% reduction in shipping carbon emissions by 2030, driving a long-term transition towards LNG as a marine fuel for cleaner-burning vessels,” the company said.
In addition, DNV has estimated that LNG will account for more than 40% of all maritime fuel by 2050.
Combining those factors, Synertec is on track to be leading player just as demand increases for secure and accurate ship-to-ship LNG transport solutions.
Along with the other services in its environmental technology suite, the company is moving from strength to strength as part of the global clean energy transition.
“We believe CTS, coupled with our Powerhouse Project and Composite Dry Powder (CDP) technology, has the potential to aid in the rapid reduction of emissions whilst supporting economic growth,” Synertec said.
Custody Transfer refers to the metering on a transfer of fluid or gas from one party to another, where the amount of product is measured with a high degree of accuracy. A custody transfer between shore and ship (or vice versa) is referred to a land-based, while a transfer between two vessels is marine-based.
The LNG industry is moving to increased use of Floating LNG liquefaction plants, Floating LNG storage facilities and Floating Storage Regasification Units. In addition, recent changes to marine fuel regulations are moving shipping fleets away from heavy fuel oil and towards LNG as a marine fuel source.
Synertec has adapted its land-based CTS technology for marine purposes.
This article was developed in collaboration with Synertec, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.