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Deltalinqs

– Cees Jan Asselbergs, Director – Netherlands

23.10.2014 / Energyboardroom

Cees Jan Asselbergs speaks about the activity of the association which represents the interests of the Rotterdam commercial community. His comments come in the period of great activity for the port, with the emergence of the GATE terminal as a growing source of alternate fuel for companies operating in the port, and in the surrounding waters and terrestrial area. He also speaks of the innate qualities which make the port such a focal point for business.

 

With regard to the GATE terminal, an EUR 800 million (USD 1.01 billion) investment which began operating in 2011; three years on, what has been the impact of this facility for the members of Deltalinqs?

Almost ten years ago, Deltalinqs started to consider Rotterdam’s position with regard to global use of LNG. This fuel was conspicuously limited in its use in the Netherlands at that time. With Rotterdam being such a key port it was felt that LNG represented a key market to engage with- and that the Port of Rotterdam could easily cope with supplying a quarter of the regional market for this fuel. Belgium and the United Kingdom were both benefitting from trade of LNG already- Rotterdam had to catch up. Discussions with key players such as Shell and Vopak were begun. The concept of supplying fuel was felt to have a good deal of merit- a port of the scale of Rotterdam ought to be able to sell all fuel types, and LNG as a particularly clean fuel is one that offers benefits beyond some traditional fuels.

The investment was announced for the GATE terminal which was excellent. This presented a key opportunity for LNG to be used for maritime and inland shipping, as well as overland transport- transport costs and impacts of course affecting many Deltalinqs members.

The ‘Green Deal River Rhine’ was announced a couple of years after, between the government and ourselves as part of a group of commercial entities. This was trans-national, targeting shipping all down the Rhine with the aim of ensuring sufficiently large volumes of LNG would be traded to guarantee the GATE terminal’s financial viability. The Ministry of Economic Affairs were very supportive of this initiative, as an economic stimulant, but noise reduction from engines and environmental benefits were profound secondary benefits to LNG use as well. Deltalinqs is seeking to mobilize the whole chain of participants in LNG use- it is vital that utility is spread across the chain of users. Otherwise, margins will be concentrated at one end of the supply chain, which disincentivises subsequent links from actively changing behavior and adopting LNG.

There are many issues to be resolved for the ‘Green Deal’ to progress; safety is one where there are many misconceptions and we must assure people that the use of the gas is harmless and environmentally friendly. On the river, for example re-fueling stations must be created with sufficient regularity to be of use to shipping companies- all these facilities must be proven safe. Procedures developed here in Rotterdam have been adapted for inland ports in order to speed up this process.

The GATE Terminal has been the big link for new gas- a key route into the country for large scale LNG imports. Smaller facilities are to be constructed which will allow LNG bunkering of ships and the supply of fuel to lorries.

GATE stands for ‘gas access to Europe’; what is the wider significance of the terminal for both the Dutch and European oil and gas industry?

The port of Rotterdam is a logical, central distribution point for the distribution of this gas. Of course, the port competes with Antwerp and Hamburg for example, which also have LNG terminals but Rotterdam in looking to be the port of the future wants to be able to fully supply demand here, whilst maintaining strict environmental standards. However, moving towards use of LNG on a wider scale will not see a sudden step forward tomorrow- it will be steady progress, with incrementally increasing adoption of the fuel. There are many considerations which will affect how quickly LNG is adopted- for example whether the government is able to defer tax raises on LNG as a fuel, it will be adopted more quickly. That being said, the government of course will need tax revenue. Investment in new equipment is another hurdle- truck companies, with smaller capex costs will likely adopt new assets faster than that of the inland shipping companies.

For any movement to LNG to happen, however, the GATE terminal is a ‘keystone’ installation. The use of fuel in the port is enormous, and for Rotterdam to supply the wider European hinterland, a facility of the enormity of the GATE terminal is essential. A key ambition is to, by 2015 have 500 trucks, and 50 sea and river going vessels respectively running on LNG- this is a significant fleet is just the tip of the iceberg when it comes to the change GATE can create.

Many different energy types are utilized by companies in the Rotterdam port. Specifically with regard to oil and gas, what portion of your members are positioned in this industry?

Most of our members are connected to the oil and gas industry. Our members include the refineries – four of five in the Netherlands are based here in Rotterdam, and many petrochemical companies too, operate in the port. Most of the income in Rotterdam, is related to oil.

Servicing and building for the marine and maritime industries is also a prominent activity. Logistics companies source their fuel here. Rotterdam is a notable bunkering location, capable of servicing extremely large ships. Further down stream, a number of shipyards are working, which have a huge capability to deliver state of the art vessels.

Groningen is synonymous with the oil and gas industry. Can you tell us how this resource has factored into the decision making process with regard to the hub LNG development here in Rotterdam?

The ‘Green Deal’ factored in Groningen. The movement of inland shipping to LNG fuel, is a big change and this will happen through Rotterdam- the estuarine connection between the hinterland and the sea. This change to LNG, however, will affect regions far beyond Rotterdam and so we collaborated with the wider Groningen community to ensure this change benefitted both the port here, and the Groningen region as a source of gas.

Decreasing production from resources, including Groningen obviously has implications for Rotterdam’s ambition to be a ‘gas roundabout’. Falling production has huge geopolitical implications for the Netherlands, including where we source gas- the GATE terminal gives us further options in that regard. Investments in LNG developments are continuing- it is likely that the LNG terminal will become of increasing importance as gas reserves fall.

How do you represent the many differing interests of Deltalinq’s members?

We do not do it alone, but work very closely with the port authorities. Deltalinqs is a lobbying organization, and works where it can with the government owned port authority. One of few issues we have to engage constructively with the Port of Rotterdam is on fees for use of the port, which in our opinion, are too high, but for most issues we work closely together.

There are many networks of companies from refining to transport for example- and these networks often have their own lobbying groups. We collaborate where possible.

One of the key strengths of Deltalinqs is that the association does not represent just one industry; we have a ‘chain’ approach, and look for instances where our members can support each other. In that respect, we do create useful synergies.

 

To read more articles and interviews from the Netherlands, and to download the latest free report on the country, click here.

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