Vancouver-based methanol shipping specialist Waterfront Shipping and Swedish shipowner Marinvest today held a naming ceremony for two landmark chemical tankers at Hyundai Mipo Dockyard in South Korea.
The two 49,000 dwt ships, named Mari Couva and Mari Kokako, are equipped with dual fuel engines that are capable of running on methanol, heavy fuel oil (HFO), marine diesel oil (MDO), or marine gas oil (MGO).
Waterfront Shipping will use the vessels to support growing demand for methanol transportation around the world.
Paul Hexter, president of Waterfront Shipping, said he believes methanol fuel is now a commercially-ready technology as a proven clean-burning fuel that meets stringent environmental regulations.
“Methanol is an economically viable alternative marine fuel over the cycle and has potential for short payback as modest incremental capital cost can be recovered over a short period of time in periods when oil prices are moderate to high,” Hexter said.
According to the Waterfront boss, methanol has a global 6% discount to MGO and the discount is expected to rise post-2020 and some regional markets are even more competitive, including India, where methanol has over 20% discount to MGO.
The company chartered seven newbuild vessels with methanol dual-fuel engines in 2016 and two years later the company teamed up with Marinvest, Iino Kaiun Kaisha, Mitsui & Co and the NYK Group for an additional four methanol duel-fuel vessels, which will all be delivered this year, through a joint-industry project.
Waterfront Shipping is a subsidiary of Methanex Corporation, the world’s largest producer and supplier of methanol to major international markets. The company currently operates a fleet of 28 vessels, including seven methanol dual-fuel vessels with four more on order. Following the delivery of the newbuildings, 40% of Waterfront Shipping’s tanker fleet will be methanol-fuelled.
According to Hexter, NOx saving alone from operating the methanol-fuelled ships by the company so far is equivalent to taking 3,710 heavy duty trucks off the road for an entire year.
Going forward, Hexter says the company is in a constant fleet renewal program which could involve retrofitting the rest of its existing fleet into methanol-fuelled or ordering more ships to serve future demand.
In July, Waterfront’s parent Methanex reached a final investment decision to construct a 1.8m tonne methanol plant in Geismar, Louisiana adjacent to its existing two facilities. Construction on the new plant will begin later this year and operations are targeted in the second half of 2022.
“Methanol is a cost effective and future proof fuel which can be produced from a variety of feedstocks, to include renewables, and a lower cost alternative for converting vessels while it is widely available and alleviates infrastructure and safety limitations both on land and at sea, trading within a narrower price range than competing fuel,” commented Chris Chatterton, chief operating officer of Singapore-based Methanol Institute.
According to Chatterton, methanol is already available in over 88 ports in the world and current bunkering infrastructure needs only minor modifications to handle methanol, however methanol is not as well understood as a marine fuel, even though it has similar handling characteristics as distillate fuel.
Patrik Mossberg, CEO and chairman of Marinvest, concurred, saying that the biggest hurdle for adopting methanol as marine fuel is a “lack of awareness”.
“The technology is proven, the methanol is available, price competiveness is there, it is safer for the environment, but it is relatively a new concept,” Mossberg said, adding that other shortfalls of methanol marine fuel include low flashpoint, low viscosity and low lubricity.
Mossberg said he was confident that the upcoming IMO 2020 regulations could be a driver for the promotion of methanol as alternative marine fuel.
Marinvest has been involved in methanol transportation since 2006 and currently manages a fleet of six methanol carriers on time charter to Waterfront Shipping.
The conclusions from the company’s recent tests shows that methanol fuel plus water injection can easily meet Tier 3 NOx regulations. Marine propulsion specialist MAN has developed a LGIM methanol system that is capable of handling mixtures of methanol and water without modifications.
The adoption of methanol as a marine fuel is gaining increasing attention from the maritime industry. In May, the Green Maritime Methanol consortium, formed by a consortium of major Dutch maritime companies, selected nine ships for research on the application of renewable methanol as a marine fuel. New designs, newbuildings as well as existing ships of Boskalis, Van Oord, the Royal Netherlands Navy and Wagenborg Shipping were selected.