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Shipping Industry Increasingly Turning to LNG to Meet Clean Fuel Rules

With new global emissions standards looming, the marine shipping industry is increasingly looking at liquefied natural gas as alternative to high-sulfur bunker fuel, shipping and energy executives said at a global gas summit this week.

Though shipping industry is conservative, slow to any major change, ‘It is going to happen’ said Peter Keller, chairman of SEA\LNG and executive VP of maritime firm Tote Inc.

 “Every year the percentage of LNG powered ships out of the new-build market is increasing.”

According to DNV, being “LNG Ready” could be the best option for many ships.

IMO has cut the sulfur content in marine fuel to 0.5 percent from 3.5 percent by January 2020.  Shift to an alternative fuel has become mandatory. And LNG is sulfur free, thus making it a very IMO regulation-compliant choice.

The industry however still remains divided over what fuels ships will use.

With regard to LNG, analysts raised the question of availability of the fuel at port; but now the situation has changed into the positive.

 “In 2017, there was only one bunker vessel for LNG anywhere in the world. Today, there are five and 14 more on order,” he said, adding that the vast majority of bunker ports in the world are expected to have LNG capabilities in place by 2020.

Part of the draw of LNG over low-sulfur diesel or other alternative fuels is that even if emissions standards become more stringent in the future, natural gas falls well below any threshold.

“LNG is the fuel that is future proof,” said John Hatley, Americas VP Marine Solutions for Wartsila.

In terms of cost, building a new ship to run off LNG is comparable with traditional diesel fuel-powered ships.

 “The fuel cost to operate on LNG is approximately half of what it cost to operate on ultra-low sulfur marine diesel,” said Deborah Marshall, a spokeswoman for B.C. Ferries, which runs four LNG ferries in the West Coast province.

For Keller, of SEA\LNG, the proof is in the engine room.“When you go in the engine room of a ship, you’re typically gonna put gloves on, you’re gonna put a boiler suit on, you’re gonna do that, because it’s dirty,” he said.

“You go into the engine room of … our first LNG-powered container ship and it looks like it just came out of the yard yesterday.”

 

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