Liquefied Natural Gas (LNG) capability for vessels 801 & 802: EIR Review

Information requested

Original request - 202400411414

1. Does the Scottish Government plan to maintain an operational LNG capability for Vessels 801 & 802 throughout their planned service life (please specify duration), or for a minimum initial operational service period (advise period, if applicable)?
2. Please specify which Scottish ports will be provided with a maintained LNG bunkering capability?
3. What is the fuel usage policy for Vessels 801 & 802 once they enter service i.e. will LNG be the prime usage fuel, or a back-up alternative?
4. What are the estimated additional Though Life Costs (TLC) and hence annual budgeted cost (over and above that associated with MGO) for maintaining an operational LNG facility for the two vessels?

Response

I have now completed my review of our response to your request under the Environmental Information (Scotland) Regulations 2004 (EIRs) for information regarding the cost of maintaining an LNG capability for the two new vessels 801 & 802 (this review is EIR review case number 202400420156, and the original request was handled under EIR 202400411414).

Your original request EIR 202400411414 was for the cost of maintaining an LNG capability for the two new vessels 801 & 802, specifically asking the following questions:

1. Does the Scottish Government plan to maintain an operational LNG capability for Vessels 801 & 802 throughout their planned service life (please specify duration), or for a minimum initial operational service period (advise period, if applicable)?

2. Please specify which Scottish ports will be provided with a maintained LNG bunkering capability?

3. What is the fuel usage policy for Vessels 801 & 802 once they enter service i.e. will LNG be the prime usage fuel, or a back-up alternative?

4. What are the estimated additional Though Life Costs (TLC) and hence annual budgeted cost (over and above that associated with MGO) for maintaining an operational LNG facility for the two vessels?

For information, it is anticipated that the TLC will include, but not be limited to the following:

• Maintenance, upkeep and certification of LNG port facilities, including safety gear.
• Operation of LNG port facilities.
• Maintenance, upkeep and certification of specific on-board LNG equipment for each hull.
• Implementation of annual supply & service agreements and specialist sub-contracts for maintaining and certifying the LNG capability.
• Through Life activities including: Continuation Training for shore and on-board personnel; Obsolescence Management; Spares Ranging & Scaling, including Lifed Items; Ongoing Review of LNG & Safety Regulations & Legislation to ensure compliance; Mid-Life Equipment Capability Updates.

I have concluded that the original decision should be confirmed with modifications. These modifications are related to your request for a review, where you asked for clarification in the information released in response to question 1, question 2 and question 4 respectively.

Question 1 clarification sought:

If the Operator is not contractually tied to utilise the lower carbon LNG fuel, for at least a minimum operating period, is there anything preventing the Operator from reverting to the permanent use of MGO shortly after the vessels’ introduction into service?

If no such contractual commitment, this would appear to render the capital costs of providing a LNG capability at risk of being unnecessary.

Question 1 modification:

Glen Sannox and Glen Rosa will have dual fuel capability, both LNG and MGO. The use of each type of fuel would be dependent on the route and service pattern. While operating on the main Arran routes, the vessels are expected to primarily use LNG. Any significant change to this assumption would need to be agreed with Transport Scotland. As with other fuels, there is a risk of supply chain, price fluctuation and other matters which may influence use of one fuel or another over time. The provision of LNG bunkering infrastructure is considered a long term requirement for the Arran route, this being the intended deployment for both dual fuel vessels. The operator, Caledonian MacBrayne Limited (CalMac) would continue to act in accordance with the commercial terms and conditions of their contract with their LNG supplier.

Question 2 clarification sought:

I understand this answer to state that only one port will have such a storage facility… at the outset, at least. 

Is this correct?

Question 2 modification

Yes.

Question 4 clarification sought:

I am astounded that a project of this scale does not have an estimated TLC as part of the contracted document pack. The future costs of fuel oils are clearly subject to variation and hence is a reason why such a baseline estimate should be made, rather than this being a reason not to do it (as stated in the response).

Please confirm that the need for a TLC is not mandated under Government Contracting Rules for a programme of this scale and complexity.

Also, your quoted percentage reduction (22%) states this to be a fuel cost reduction. This does not represent the total cost benefit, or deficit and is hence meaningless as a stand alone figure. What is this percentage value, if all costs associated with operating and maintaining the LNG capability are factored into the Ardrossan Brodick route, including, but not limited to those listed below (and included in the original question)?

• Maintenance, upkeep and certification of LNG port facilities, including safety gear.
• Operation of LNG port facilities.
• Maintenance, upkeep and certification of specific on-board LNG equipment for each hull.
• Implementation of annual supply & service agreements and specialist sub-contracts for maintaining and certifying the LNG capability.
• Through Life activities including: Continuation Training for shore and on-board personnel; Obsolescence Management; Spares Ranging & Scaling, including Lifed Items; Ongoing Review of LNG & Safety Regulations & Legislation to ensure compliance; Mid-Life Equipment Capability Updates.
• Note - the associated costs for MGO will also apply

Question 4 modification:

Under the terms of the exception at regulation 10(4)(a) of the EIRs (information not held), the Scottish Government is not required to provide information which it does not have. The Scottish Government does not have the information you have requested because that information would be held by and subject to the decisions of Caledonian MacBrayne Limited (CalMac).

This exception is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exception. We have found that, on balance, the public interest lies in favour of upholding the exception. While we recognise that there may be some public interest in information about a detailed breakdown of costings for maintaining and operating LNG capability clearly we cannot provide information which we do not hold.

The remainder of your correspondence with the asks for new additional information is being handled separately and you will receive the reply to this under the case ref: 202400421531.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.