Singapore: In the final report of our four-part series covering Tuesday’s Eco-Dollars Business Breakfast, sponsored by Ideocean and Lloyd’s Register we look at LNG as a marine fuel. LNG remains a long way from gaining global acceptance as a marine fuel, panelists at the event held at Singapore’s Fullerton Hotel concurred.
Iain Wilson, regional marine manager for Lloyd’s Register Asia, said: “It is all driven by the price of bunker gas. The problem at the moment there is not a global mechanism to monitor that pricing so there are too many unknowns at the moment. It is down to economics.
Wilson said gas acceptance would be largely driven by regulations and the ECAs, but it will not be a single solution to the green conundrums facing the industry.
Shaj Thayil, VP, Technical Services & Ship Management at NOL said his company was looking at dual fuel technologies at the moment. “It is a huge investment but one we are reviewing at present,” he revealed.
Manish Singh, group managing director, Ideocean Holdings questioned how long it would take to get the supply chain aspects of LNG into place. “Predictable supply of LNG will be an issue,” he noted.
LR’s Wilson was more optimistic about the supply chain issue, pointing out: “70% of bunkering is done today in 10 ports worldwide so the infrastructure can be done relatively simply.”
What concerned Wilson more was the lack of global standards and regulations for LNG as a fuel, whether it be for ship to ship transfers, defining the exclusion zones. “There is a lot of procedural things that need to be done as well as the training qualifications,” he said, musing: “Will you need a gas-qualified engineer onboard?”
Another big problem, Ideocean’s Singh pointed out was the practical implications of bunker gas storage onboard. “Gas will take three or four more times as conventional fuel holds.”
NOL’s Thayil agreed noting that LNG pricing was likely to be 15% more expensive than bunker oil, that added with the loss of cargo space because of the larger fuel tanks needed means it will take a long time for the industry as a whole to accept gas a fuel.
In a report published by Lloyd’s Register at the end of August, the British classification society said global acceptance of LNG as a marine fuel will depend on pricing.
The study found that the establishment of LNG bunkering infrastructure capable of supporting most of the world’s consumers will be highly sensitive to the price of LNG relative to alternative fuels.
The study’s base-case scenario predicted that by 2025 there could be 653 deepsea, LNG-fuelled ships in service, consuming 24m tonnes of LNG annually. These ships are most likely to be containerships, cruise vessels or oil tankers.
When the study modelled relatively cheap LNG — for example, 25% lower than current market prices — the projected number of LNG-fuelled ships rose to approximately 1,960 units in 2025. If the cost of LNG increased 25% against current prices, the model found that hardly any new LNG-powered tonnage would hit the water. [26/10/12]