LNG-powered ships predicted to be game changer

LNG-powered ships predicted to be game changer

TOTE's LNG-fueled Isla Bella

HONG KONG — Shipping lines cannot ignore the move to provide liquid natural gas as a bunker fuel that will be a game changer, according to Angus Campbell, managing director of Bernhard Schulte Shipmanagement UK.

“Independent industry predictions indicate that the use of LNG as a bunker fuel offers opportunities for early movers to secure a market leading position ashore and afloat, and global LNG fuelling will become a mainstream option,” he told delegates at Gastech in Singapore today.

“It has happened before,” he said. “Wind gave way to coal and coal in its turn gave way to oil. The move from oil to natural gas is simply the next progression in the evolution of maritime transportation.”

There is growing interest in using LNG as fuel, driven by increasingly strict regulations on vessel emissions of sulpfur dioxide and other pollutants. Operators in emissions control zones off North American and European waters are the first to feel the impact of the stricter rules.

Despite its relative efficiency compared with other methods of transportation, shipping has been identified by international governments as a large and growing source of the greenhouse gas emissions that are causing climate change.

Campbell pointed out that the increasing number of program and regulations concerning the impact of shipping on the environment were growing and the choice for shipowners was no longer whether to fall into line, but what option to choose in order to do so.

As far as he is concerned, there is no real choice — distillate fuels and the use of scrubbers with conventional fuel did not have the advantages of LNG.

“Distillate fuels are expensive and there is a likelihood that the price will increase due to demand as emission regulations are enforced in multiple areas,” he said. “Scrubbers may seem a simple alternative but the cost benefit calculation is actually very complex, with no guarantees that this will be accepted as a long term method of emission reduction.”

A significant obstacle that has yet to be overcome is the sophisticated supply chain required to refuel vessels with LNG bunkers across the world. Campbell said BSM has devised a gas fuel supply vessel design to support LNG-fueled ships and the delivery of gas to both small onshore facilities and large off-pipe consumers.

According to IHS Maritime 360, a sister publication of JOC.com within IHS, more than 40 container ships that are LNG-fueled or LNG-ready have been ordered or are under construction worldwide. United Arab Shipping Co. is building 10 large container ships that can be adapted to run on LNG. MOL also is building ships that can be converted to LNG operation. The list of operators building LNG-ready ships includes Nordic Hamburg Shipping and U.S. domestic operators Matson and Crowley Maritime.

Seattle-based TOTE Shipholdings Inc. in April launched the first container ship designed to run on natural gas in San Diego for operation in the U.S. mainland-Puerto Rico trade. The Isla Bella is the first of two Marlin-class vessels ordered by Seattle-based TOTE Shipholdings Inc. The ships have dual-fuel engines that will operate primarily on liquefied natural gas but will be capable of burning diesel when needed.

In anticipation of rising demand to build or convert ships to LNG, classification society Bureau Veritas has published requirements for ships that are designed and fitted out for dual-fuel or LNG fuel propulsion but are not initially intended to use gas as a fuel.

The requirements, set out in Rule Note NR 627 Gas-Prepared Ships, cover special arrangements for new ships that are designed with specific arrangements to accommodate future installation of an LNG fuel gas system.

“Many owners consider that they will switch to LNG as a fuel in the future, but are not yet ready to make that change,” said said Jean-Francois Segretain, technical director, Bureau Veritas marine and offshore division.

“It makes sense to build and lay out ships so they can easily be converted in the future. The requirements of this notation set a benchmark for designers and yards so they can ensure that every ship is future-proofed and able to be easily converted to LNG as a fuel when the market conditions are right.”

But not everyone is convinced. Seaspan co-founder and CEO Gerry Wang said last year the widespread use of LNG to power the main engines of ships was “a long, long way off.” He said the problem was that a ship would have to carry so much gas to drive the main engine that it would become an LNG carrier within a container ship.

Contact Greg Knowler at greg.knowler@ihs.com and follow him on Twitter: @greg_knowler.