NEWS

LNG is certainly not the only option for future marine fuels, but it must be the best choice in relative terms. For ships built today, they need to be prepared for the 2020 or 2025 low-sulfur oil limit. From this perspective, LNG fuel ships are a precautionary move, and this also means that a huge new market is being bred.

Global shipping companies have jointly formed the "SEA/LNG" alliance.

It is reported that a large alliance called "SEA/LNG" was formally formed recently. The alliance is jointly formed by internationally renowned shipowners, shipyards, classification societies, equipment manufacturers, port operators and energy giants. The alliance aims to break the barriers to the global promotion and application of LNG marine fuels through cooperation and improve the overall environmental performance of the shipping industry.

It is understood that the early members of the grand alliance project include Carnival Group, DNV GL Classification Society, ENGIE Company, ENN Group, GE Ship, GTT Company, Lloyd's Register, Mitsubishi Heavy Industries, Japan Postal Ship, Rotterdam Port, Qatargas Company, Shell Downstream, Tote Company and Wärtsilä Company. They will share human resources, data analysis and professional knowledge to support and accelerate the application of LNG fuel in the shipping industry.

Key areas of the Alliance include supporting the development of LNG bunkering in major ports around the world, training and educating corporate shareholders on the risks and opportunities of using LNG fuels, and driving global regulations for cleaner shipping fuels.

Compared with HFO and other traditional marine fuels, LNG has significant advantages in environmental protection, which can reduce NOX emissions by 85%. Because LNG does not contain sulfur, SOX is hardly produced. In addition, particulate matter emissions will not be produced after full combustion, which meets the current and future regulatory requirements. However, LNG facilities need to be located in ports so that fueling can be done quickly, safely and cost-effectively. At the same time, the construction and modification of LNG-powered ships are expensive, and the lack of globally unified regulations and standards are potential obstacles to the promotion of LNG fuel.

Peter Keller, Chairman of the SEA/LNG Alliance and Executive Vice President of Tote, said, "We all recognize the need to work closely with key players in the value chain to ensure that people understand the environmental and performance benefits of LNG as a marine transportation fuel, and we will address market barriers to make the global use of marine LNG fuel a reality.

It is understood that the current LNG-powered shipping is only concentrated in some special ship areas, including offshore shipping and ferries, mainly sailing between two fixed ports. The Alliance hopes to push for a wider range of options for LNG as a fuel for ships, not just offshore and local vessels, but also for offshore trade.

Two shipping giants are testing LNG for marine power.

It is reported that Maersk Group and Arab ships are recently testing the use of LNG as marine power, using clean fuel to curb pollution and create new markets.

Maersk, the world's largest shipping company, recently announced that it has agreed to carry out LNG as a marine fuel project with Qatar Liquefied Natural Gas Company (Qatargas) and Royal Dutch Shell. Maersk, Qatargas and Shell are currently focusing on the location of gas stations in the Middle East. Qatargas and Shell's joint plant will provide an annual average of 7.8 million tons of LNG, which the three companies plan to supply to commercial ships by 2020.

It follows similar memorandums of understanding with Shell and Qatargas on April 17. Qatargas, one of the world's top three LNG suppliers, and Shell, the world's largest LNG trading company, both said that in the current oversupply market, the top priority is to find new customers. According to Financial Advisors Sanford C. Bernstein & Co. It is estimated that by 2025, the average annual production capacity of LNG producers will reach 0.424 billion metric tons, an increase of 45%, which means that the LNG market will be in a situation of oversupply for at least the next seven years. At the same time, due to the United Nations International Maritime Organization's further restrictions on sulfur emissions, shipping companies are increasingly concerned about clean energy.

JornHinge, CEO of Arabian Steamship, pointed out that from a shipping perspective, LNG will be further promoted as marine power worldwide in the next two years. At present, some LNG-powered ship ecological areas are in operation in the world. These areas are mainly concentrated in Europe and the United States, and LNG is used as marine power in the region, but there is no such system in the world.

LNG-powered ships will create new markets.

For the shipping industry, LNG as a marine fuel is still in its infancy. The maritime industry is still largely dependent on oil as a base fuel. But Bernstein predicts that by the end of 2020, 2.5 percent of ships in the global fleet will be powered by LNG. Martin Wold, senior environmental consultant at DNV GL, also said that out of the current global fleet of more than 50000 vessels, 77 LNG-powered vessels are in operation and 85 LNG-powered vessels are under construction. Bernstein predicts that by 2020, the number of LNG-powered ships will reach 360, five times the number of LNG-powered ships currently in operation.

At the same time, the introduction of new regulations is also driving the growth of LNG-powered ships. New rules, which the United Nations International Maritime Organization plans to introduce in January 2020, declare a global ban on fuel with a sulfur content of more than 0.5 percent. At present, the sulfur content in general marine fuel can reach 3%. Arabian Steamship said that the company has planned to spend US $23 for LNG-powered new shipbuilding and related projects.

In the past, the lack of LNG filling stations and the tight supply of LNG led to the popularity of LNG-powered ships until 2014. LNG fueling-related facilities have been launched in parts of Northern Europe and the United States, the Rotterdam gas supply project is about to start, and projects in Singapore and China have also progressed. Emirates Shipping is also considering LNG as an alternative fuel for ships.
Due to the start of production of projects in Australia and the United States, LNG prices have been on a continuous downward trend since 2014, and have fallen by 80% so far. DNV GL said that the current business case is not yet strong enough to be used for investment by many shipowners, but when there are future initiatives on LNG fuel, these shipowners will reconsider choosing LNG as a marine fuel.

According to the Bernstein, the global shipping industry has used about 70000 tons of LNG since 2013. This demand is expected to grow to 10 million tons by 2020, but it is still a small part compared with the 0.372 billion tons of fuel used in 2013.

Gerd-Michael Wuersig, director of DNV-GL LNG fuel power ship business, has previously said that the number of ships using LNG fuel is increasing by leaps and bounds, and the planning of related infrastructure projects on the main route is also increasing. LNG applications are expected to grow even faster in the next 5-10 years. The trend of using LNG as marine fuel will continue to rise, and the number of LNG-powered ships in the world will reach 1000 by 2020.

Gerd-Michael Wuersig stressed that in the next 40 years, energy products are likely to be highly diversified. LNG is not the only option for future marine fuels, but it is relatively the best option. The application of LNG depends on the development of fuel price, technology, specifications, access to natural gas and the development of usage infrastructure.

Nevertheless, LNG power transformation takes a certain amount of time, and the promotion of LNG marine fuel cannot be achieved overnight. With the arrival of the new rules in 2015, the solution chosen by most shipowners is to use low-sulfur fuels or install exhaust gas purification systems. However, in the next few years, LNG fuel will gradually become a non-negligible item in the choice of marine fuel.

"For ships built today, they need to be prepared for the 2020 or 2025 low-sulfur oil limit. From this perspective, LNG-fueled ships are a precautionary move." Gerd-Michael Wuersig think.