DNV GL says
that uptake of LNG as fuel for shipping has almost become a certainty, though
earlier there were doubts because of poor bunkering facilities and slower than
expected development of bunkering infrastructure. The situation has not grown
more favourable for LNG as fuel for shipping. To support the view, DNV GL
details facts of the vessels now using LNG and also the vessels which are LNG
ready on order. Today, there are 117
vessels burning LNG, of which more than two-thirds are operating in Europe. A
confirmed order book of 111 vessels will see that figure double. In addition,
there are 114 vessels that are classified as LNG-ready. A quicker uptake of LNG
as a fuel for shipping is thus clearly visible.
bunkering, bunkering options are expanding on a global scale. Today, there are
60 supply locations worldwide, including Singapore, the Middle East, the
Caribbean as well as Europe, according to the latest data in DNV GL’s LNGi
business intelligence portal. A further 28 facilities have been decided and at
least 36 are under discussion.
beginning of 2018, six LNG bunker vessels will be in operation globally, and
four more projects are confirmed. Major players including Total, Shell, Gas
Natural Fenosa, ENN and Statoil have announced plans for new LNG bunker
vessels, which, according to DNV GL’s Senior Consultant for Environmental
Advisory, Martin Christian Wold, are likely to materialize in the near future
at key locations in northern Europe, the Middle East, the Gulf of Mexico,
Singapore, and the Mediterranean.
like China, Korea and Japan are striving to meet the targets combating local
pollution and reducing greenhouse gases (GHGs).
explains: “For suppliers, it’s very much a question of timing. They won’t bring
these facilities online until they see sufficient confirmed orders for
LNG-fuelled tonnage to justify the investment. Yet, they are also jostling to
secure an anchor customer and gain first-mover advantage to deter their rivals
from setting up nearby.”
example, has just signed a long-term charter agreement for a 4,000m3 bunker
barge to supply LNG bunkers along the U.S. east coast. Meeting growing demand
for LNG from cruise lines was cited as the major impetus behind the decision.
factor that works in favour of LNG is IMO’s decision to introduce its global
cap on fuel sulphur content and any softening of the regulation or significant
slippage is regarded as unlikely.
“Evaluating whether LNG as a fuel will provide
a competitive edge is difficult enough for ship owners. Having to anticipate
various regulatory scenarios on top of that complicated matters further. IMO’s
decision brings much-needed clarity to owners considering switching to LNG and
other alternative fuels,” says Wold.
SEA\LNG, a multi-sector industry coalition working to facilitate and accelerate
the widespread adoption of LNG as a marine fuel, and the Society for Gas as a
Marine Fuel (SGMF), a non-governmental organisation dedicated to promoting the
safe handling of LNG as a fuel, have watched the developments and they are sure
that LNG fuel for ships will become a mainstream option within the next five to
General Manager Steve Esau says that the pivot will hinge on global
availability of bunkering infrastructure close to traditional bunkering ports.
“Nine of the top ten oil bunkering ports already offer LNG or have firm plans
to do so by 2020,” he says. Slicing the statistics another way, there are
already large scale terminals nearby 24 of the world’s top 25 ports ranked by trade
volume. With a little more investment in the ‘last mile’ to bring LNG from the
bulk infrastructure to ships, he believes the foundations are in place for a
wider switch to LNG from 2020.
objective is to provide guidance for safe and responsible use of LNG as fuel,
and General Manager Mark Bell has been watching the development from the start:
“Right now just 0.2% of the addressable global fleet is running on LNG. But
with regulatory clarity and established standards for safe handling of gas as a
marine fuel, I believe we will see LNG fuel for ships become a mainstream
option within the next five to seven years.”
operators like Maersk and CMA CGM have made it clear that they prefer to use
LNG as their ‘fuel’. Maersk said that it views ‘ alternative fuels’ as a better
long-term solution to meet tougher environmental regulation that exhaust gas
recently, CMA CGM made an announcement timed to coincide with the COP23 talks
in Bonn, Germany, that it will equip nine 22,000 TEU vessels with engines
burning LNG, thereby improving their EEDI by some 20% over comparable HFO
for LNG by such major operators could serve as the catalyst that triggers a
stampede. DNV GL’s Wold comments: “While speculation about orders for large LNG
fuelled container ships on the Far East-Europe route had been mounting, few had
expected a breakthrough contract to arrive this year. It marks a significant
turning point for LNG as a fuel and the shipping business more generally.”
LNG fuel as
a solution to curb harmful emissions is indisputable. It emits zero sulphur
oxides (SOx) and virtually zero particulate matter (PM). Compared to HFO, it
emits up to 90% less nitrogen oxides (NOx).
environmental agenda is today shifting to focus more on greenhouse gases.
Employing current best practices and appropriate technologies to minimize
methane leakage, gas offers the potential for up to a 25% reduction. “Gas is
not a silver-bullet, but it is a step in the right direction when it comes to
reducing carbon emissions,” says SGMF’s Bell.
Esau believes that there is considerable scope for refinements and improvements
to be made and engineering manufacturers with engineering ingenuity could achieve major advancements for
engines operating on LNG.
conventional LNG alone cannot cut CO2 to the extent required by the COP21
agreement, it remains the best commercially available and proven technology to
reduce CO2 emissions for most ship types and trades, states Wold: “With no
definitive zero-emissions solutions yet on the horizon, it makes sense to do
what you can today to improve air quality and lessen the carbon entering the
associations SGMF and SEA\LNG are engaging with shipping companies, LNG
suppliers, industry regulators and other stakeholders to promote a safe and
accelerated uptake for LNG as a marine fuel. They aim to instil investor
confidence for its adoption through a combination of education and outreach.
must be based on objective data, as it may feed into investment decisions
running into the tens of millions dollars,” remarks SEA\LNG’s Steve Esau. To
this end, both are capitalizing on DNV GL’s LNGi business intelligence portal,
which provides comprehensive insights on worldwide bunkering availability and
keeps a close eye on fleet development.
It is now
supported by LNG Fuel Finder, an online tool that lets ship owners and
charterers register their interest in using LNG as a ship fuel, and alerting
LNG suppliers to the fact. Esau believes this digital marketplace will boost
transparency and raise confidence in the availability of LNG as a bunker fuel.
“It could provide an effective channel for buyers to meet sellers.” Mark Bell
of SGMF echoes this sentiment: “As a consolidated source of credible data, LNG
Fuel Finder could remove the suppositions from the equation.”