A concerted push is underway across the globe to enhance the use of liquefied natural gas (LNG) as a marine transportation fuel to reduce emissions and make use of an ever-increasing supply.
A combination of environmental and economic factors, including a decision by the International Maritime Organization (IMO) to reduce sulfur content in ship fuels beginning in 2020, is driving the stepped up interest, according to researchers.
"The decision of the International Maritime Organization to limit the sulfur content of ship fuel starting Jan. 1, 2020 to 0.5% worldwide, and the recently adopted ambition to reduce greenhouse gas (GHG) emissions by 50% by 2050, have the potential to become game changers," Norwegian-based DNV GL-Maritime researchers said in a recent white paper.
The assessment determined that many viable alternatives can meet the IMO’s lower sulfur requirements, but reducing greenhouse gas (GHG) emissions is more problematic and uncertain.
In addition, LNG is considered the only alternative source with surplus quantity worldwide.
"LNG is available in sufficient quantities today to meet the potential requirements of the shipping industry for many years," DNV GL researchers noted.
Developers are taking note.
In late August, marine technology companies WinGD, Wartsila and Gaziransport & Technigaz (GTT) agreed to collaborate to make LNG a viable fuel option for ships worldwide. They plan to combine their expertise to deliver "an effective, streamlined approach" to achieving environmental compliance.
The consortium sees LNG as "a key enabler of greener propulsion for ships," offering virtually no sulfur, with 80% fewer nitrogen oxide emissions and 30% less carbon dioxide.
Swiss-based WinGD developed two-stroke gas/diesel marine engines, while Wartsila manufactures ship machinery, propulsion and maneuvering solutions. GTT is an engineering firm with expertise in containment systems used to transport and store LNG.
According to DNV GL, there are an estimated 247 LNG-fueled ships globally, with another 110 underway. Excluding LNG carriers and inland waterway vessels, 121 ships are in operation, mostly in Europe. In addition, 126 ships are on order.
Use of LNG as an alternative fuel for ships is cutting across all the major maritime segments from cruise ships (17) to container vessels (21) and oil/chemical tankers (34), researchers said. About 17 LNG-fueled cruise ships alone are expected to go into service between 2019 and 2024 involving a half-dozen operators, with Carnival Corp. considered the leader with more than half.
And to ensure safe operations using LNG fuel, Carnival Maritime and Wessels Reederei in August joined forces to provide Carnival crews with 30-day, onboard training sessions.
With the increase in international shipping using LNG, bunkering facilities also are growing, which allow ships to refuel. Deloitte conducted a recent survey of 80 industry executives across the Asia Pacific who said the lack of refueling and bunkering infrastructure is a major barrier.
To ease the constraints, developers are responding.
For example, Quality LNG Transport (Q-LNG) recently secured a letter of intent with VT Halter Marine Inc. to construct an LNG bunkering vessel. Plans are for Q-LNG and minority partner Harvey Gulf International Marine to own and operate LNG marine transportation fueling assets in various ports in Florida and the Caribbean.
Based on the IMO's revised sulfur standard, the International Association of Ports and Harbours wants global ports to build more LNG bunkering facilities.
"LNG is particularly well placed to benefit from the IMO's emissions legislation," said Deloitte’s Global LNG leader Bernadette Cullinane. "Our survey results are clear recognition that the stricter standards will open the door for cleaner marine fuels like LNG and low-sulphur marine gas and oil to displace heavy fuels. Almost every maritime authority in the world that offers bunkering is now taking a serious look at LNG as an alternative to fuel oil.”
With the globalization of the LNG market, companies “are actively looking at new applications and new markets for gas,” Cullinane said. “One of the biggest opportunities for LNG over the next decade will be in transportation, particularly as a marine fuel.
“This option is rapidly gaining momentum, presenting an attractive market opportunity for LNG producers,” she added. “With competition from alternative fuels, especially renewables in the power generation space, LNG needs to develop new customer markets to absorb supply and justify investment in new production facilities.
“Transportation is a terrific opportunity for LNG suppliers to tap into a growing market. By expanding the customer base, it’s a play that will help underwrite and de-risk future supply developments.”
Deloitte listed 11 bunkering facilities worldwide and another six in development. Europe today has the majority of LNG bunkering ports, but Southeast Asia and the United States are in the game, too.
Japan, already one of the world’s largest LNG importers, has plans to become an international bunkering hub, developing facilities in Tokyo Bay and the Port of Yokohama.
In the United States, bunkering facilities already are in Jacksonville, FL, and Port Fourchon, LA.
Jacksonville offers on-dock and near-dock LNG fueling services through a partnership between Tote Maritime Puerto Rico and Crowley Maritime. Dual-fuel container ships have used the LNG bunkering facilities at Jacksonville since 2016.
Two LNG vessels are operating between Jacksonville and Puerto Rico, with two more ships on the way from Crowley Marine, which earlier this summer took delivery of the world’s first combination container/roll on-roll off, i.e. ConRo, LNG-powered ships.
On the Louisiana coast, Port Fourchon hosted Harvey Gulf International Marine's bunkering efforts in 2016 to pave the way for the hub to become a central LNG fueling terminal in North America, where it has a 5 million metric ton/year facility.