The gateway to a more sustainable world

The scale and ambition of Gate terminal, an LNG terminal with an initial throughput capacity of 12 billion m3 a year, is impressive. Its impact on Europe’s environment may prove to be equally profound.

Getting to Gate terminal, a vast 35 hectare liquefied natural gas (LNG) depot built on reclaimed land in Maasvlakte, Rotterdam, can seem like a trip to the end of the world. “We like to point out that it’s really the beginning of the world – it’s the first jetty you come to when you approach Rotterdam,” says Rolf Brouwer, managing director of the company.

Rolf Brouwer Gate Terminal

Gate terminal’s location might also be seen as a metaphor for its business mission: by significantly increasing the supply of natural gas in the Netherlands, the company is paving the way for a more sustainable future. “To some people, LNG doesn’t seem like an environmentally-friendly solution,” concedes Brouwer. “Certainly, gas is a fossil fuel. But its CO2 emissions are 30-40% lower than coal, it has no sulphur oxide, hardly any nitrogen oxide emissions and produces no particulates. It has a positive impact on air quality compared to other fossil fuels.”

As Europe works towards meeting its 2050 climate change targets, gas therefore has a crucial role to play. “Electricity is clearly attractive as a fuel source,” says Brouwer. “But people forget that electricity has to be produced from another source: renewables cannot provide all the capacity required in the Netherlands or elsewhere in Europe at the moment. And for some segments, such as marine shipping or heavy trucking, electricity is not yet a solution – LNG may be.”

Brouwer says that at some point, technology may evolve sufficiently to enable electricity to meet all the world’s energy needs. “But we don’t see that as likely before 2050,” he explains. “And until then, a transition fuel that is less harmful to the environment is required: LNG.” One possibility is that bio-LNG, which is produced from waste, manure or sludge, will emerge as a solution; Gate terminal is already considering the opportunities for this new fuel source.


Putting sustainability first

Gate terminal’s commitment to sustainability goes far beyond simply facilitating a product that produces less carbon and air pollution than other fossil fuels. The terminal design and operation both have ISO40001 environmental management accreditation, which requires continuous improvement in areas such as waste management.

Indeed, Gate terminal has consistently innovated to improve its environmental footprint. LNG that arrives at Gate terminal is either stored in insulated tanks at the terminal or warmed and transferred via pipelines to the national grid, or onwards to Belgium, France or the UK. Uniquely, Gate terminal uses warm water from a nearby power station for this process. “We use a heat exchanger to extract the heat from this water, which is 7°, and heat the gas from -160° to 0°-5°,” explains Brouwer. “Other terminals use LNG for heating, but we are using waste energy. Moreover, by using the water to warm the LNG, it is returned to the harbour at the right temperature, which is also better for the environment.”

Gate terminal was originally conceived solely to transform LNG to gas and distribute it. However, the company has extended support to customers seeking to develop new markets for LNG that will benefit the environment. LNG from Gate terminal is now being used as an alternative to oil fuels, especially in segments where electric power is inadequate, such as heavy trucking and marine shipping.

“We were one of the first companies to establish a significant presence in this new supply chain when we built small scale ship and truck loading facilities."

“We were one of the first companies to establish a significant presence in this new supply chain when we built small scale ship and truck loading facilities, starting in phases between 2014 and the summer of 2017,” says Brouwer. “We took a calculated risk to develop this market – the investment was not supported by customer contracts.” There are now commercial facilities available across the Netherlands for trucks and ships to refill with LNG. While the vast majority of Gate terminal’s business will continue to be gas-related, the company anticipates that much of its growth will be in LNG supply.

Brouwer sees no contradiction between Gate terminal’s business and environmental objectives. “The two are aligned for us,” he says. “One analogy is with safety. We’ve always worked hard to improve safety for our people – well beyond what is required by regulations. Our approach to the environment is the same: what is good for the environment is good for the company and vice versa. For example, we see it as good business to ‘count’ every molecule that comes into Gate terminal and every molecule that leaves while from an environmental perspective, our policy is to be a zero-emission terminal.”

Gate terminal’s emphasis on sustainability has instilled tremendous pride among its workforce. “People like working for a company that is seen to be doing good,” says Brouwer. “We have used that goodwill to start a debate within our company about how we can improve. For example, by engaging with our workforce on environmental issues we have improved procedures to prevent spills.”


A bold plan

The idea for Gate terminal emerged in 2005 when Gasunie, a European gas infrastructure company, and Vopak, the world's leading independent tank storage company, saw the potential for an LNG terminal in Netherlands. “At the time, gas production was falling in the Netherlands,” recalls Brouwer. “It was anticipated that domestic gas production would reach a peak in 2014-2015. We saw an opportunity and a way to help the Netherlands and North West Europe with energy security and to cope with the drop.”

At the same time, gas production was increasing worldwide. While there has long been a belief that the world is close to peak oil – and that production would thereafter inevitably decline – there are few such concerns about gas. “Gas reserves around the world are enormous and can be accessed relatively cheaply,” says Brouwer. “The trouble is most of the gas is in areas where there is little demand.” The answer is liquefaction, which cools gas to -160°, at which point it becomes 600 times denser and financially viable to transport over long distances.

While the Netherlands already had access to gas via pipelines from Norway and Russia (and there is an LNG terminal in Belgium), energy security was also emerging as an important issue at that time. “There was a broader strategy of ensuring a guaranteed supply, should pipelines be interrupted for technical or other reasons,” says Brouwer. Gasunie and Vopak also saw that Gate Terminal could play a role in boosting energy security at a European level.

Pushing the button on this €1 billion project required a lot of preparation. Gate terminal needed anchor customers to make commitments that span years to provide a solid financial foundation; the ideal location had to be found (accessible both for huge LNG carriers and the domestic and international energy market); and the expertise to construct and manage an LNG terminal had to be sourced. “Fortunately, we were able to draw on a lot of knowledge within Gasunie and Vopak but we also brought in external experts,” says Brouwer.


Making a connection

Perhaps the most important factors in getting Gate terminal up and running have been communication and trust, which are at the heart of the company’s relationships, according to Brouwer.

The genesis of the project was the strong connection at the top of Gasunie and Vopak. “The two executive boards really drove Gate Terminal and their personal dynamics helped to overcome the inevitable obstacles that arise during any major project,” he says. “Their soft skills in building a partnership inspired a joint venture where both companies could bring their knowledge to the table.”

Another important relationship, especially as the project was being planned, was with local people. Gate terminal made sure to take the time to meet them, understand their concerns and explain the company’s plans in detail. “We took great care to describe to locals what we hoped to do at the terminal,” says Brouwer. “The feedback we got was positive: people really appreciated our approach and understood that we have a good track record in the industry and can be trusted on safety.”

Establishing a solid relationship with the government was critical to the project. “This industry is heavily regulated, with many specific laws governing gas terminals and infrastructure,” says Brouwer. One important objective was to get an exemption from the Department of Economic Affairs on price rules. Ordinarily, as a monopoly provider, Gate Terminal would have its prices set by the government. “We achieved an exemption to this rule because we were able to show that our pricing would be transparent and equal for all customers,” he explains.

Annuziata Tripodi Gate Terminal

The partnership between Gate terminal, which is an independent service provider, and its customers, which actually own the LNG, was also essential. “Ultimately, we are here because we have customers, such as utility companies, which have their own retail or business customers,” explains Annuziata Tripodi, finance manager at Gate terminal. “We engage with our customers constantly. Our commitment to transparent pricing and an independent model is preferred by our customers and that has strengthened our relationship with them.”

Another essential external partnership was between Gate terminal and its banks, including ING. “When we raised finance for our third jetty recently, ING was part of the deal – just as it had been in the previous tranches – and acted as agent to the banks,” says Tripodi. “We value that commitment, knowledge and understanding of our objectives. We feel supported by ING at all times and appreciate the fact that ING really knows what we trying to achieve at Gate terminal.”