Irvine: Today’s Maritime CEO is once again bunker-related as our sister title, SeaShip News celebrates the launch of a brand new bunkering magazine. This week WesPac Midstream, a provider of energy infrastructure and LNG solutions, formed a partnership with Clean Marine Energy (CME), the global facilitator of finance mechanisms for LNG conversion and Emission Control Area (ECA) compliance. This strategic partnership will ensure the supply and delivery of LNG to shipowners utilizing CME’s Emissions Compliance Service Agreement (ECSA) to convert to cleaner fueling.
The partnership is able to provide both the funding required for LNG conversion as well as the infrastructure for LNG supply and delivery. Conversion to LNG while financing the up-front investment provides the economic benefit of LNG fuelling to ship owners without capital deployment, and ensures compliance with ECA regulations taking effect on January 1, 2015.
Every shipowner wonders where it can source LNG from for its ships; this new partnership hopes to ease that concern and thus drive the growth of LNG as a marine fuel.
Funds managed by private equity giant, Oaktree Capital Management, are supporting both WesPac’s LNG infrastructure projects and CME’s ship upgrade projects.
Pace Ralli, ceo and co-founder of CME, says the service will be offered to any vessel in the world. However, the vessels most likely to be converted will be those, which travel primarily in ECAs; at present those in North America and Europe. From the LNG supply side, focus for CME will remain on building infrastructure in North American ports where natural gas is abundant and inexpensive compared to LSMGO.
The goal, Ralli says, is to convert 50 vessels over the next five years.
“The industry is coming around to LNG as a fuel,” Ralli claims, “and the value proposition of LNG is particularly clear in North America. With the abundance of cheap natural gas and the regulatory drivers of the Emission Control Area (ECA), shipowners have real, immediate incentives to find a way to convert their vessels to run on LNG. The CME-WesPac partnership addresses both of the main challenges to uptake – capital and supply – by directly funding projects and building LNG marine terminals in major ports.”
On other fuel types in the mix for future adoption by shipowners, Ralli has firm views.
“Generally we think of the landscape as split between oil derivatives and gas derivatives,” he says. Distillate fuels (DMA MGO) are being engineered to better integrate with HFO in dual-fuel engines, but Ralli reckons the cost equation probably won’t favor that direction.
“Fuels like methanol or ethane, which are derived from natural gas, are more likely to be part of the mix going forward, with LNG leading the way as the most demonstrably viable technology to date,” he says. [09/10/14]