Charterer’s perspective: ‘enthusiastic’ OSV owners key to halving CO₂ emissions

“Our ambition is to transform our logistics organisation into sustainable solutions for the decades ahead,” Equinor manager, marine logistics & emergency response Morten Sundt told delegates at Riviera’s Maritime Hybrid & Electric Conference in Bergen, Norway on 4 September. To accomplish its goal, however, Mr Sundt said Equinor needs the close co-operation of “enthusiastic” OSV owners and suppliers to reach its ambitious CO₂ reduction goals, since it does not own its own resources.

“We want to provide energy for a low carbon future. As such, we want to be the most carbon-efficient oil and gas producer,” he said. Mr Sundt says Equinor generates 9 kilos of CO₂ emissions for every barrel of oil it produces – about half of the industry average. He expects Johan Sverdrup, Equinor’s newest offshore oil and gas project on the Norwegian Continental Shelf, will produce less than 1 kilo of CO₂ per barrel.

Indeed, Equinor has set goals of cutting its CO₂ emissions from offshore oil and gas operations by 50% by 2030, using 2011 levels as a baseline. Critical to the plan is getting insight and control over the large and complex logistics chain and close co-operation from OSV owners.

“We transport about 350,000 passengers annually through our heliports and our platform supply vessels carry about 1.5M tonnes of cargo annually from six shore bases,” said Mr Sundt. He pointed out that none of the vessels are owned by Equinor. “For the most part,” he said, “those vessels are hired through long-term charters, but Equinor also secures additional vessels on the mid-term ad spot markets. We are a buyer of logistics services; about 95% of our spend goes toward suppliers.”

Besides close co-operation with OSV owners, another strategy enabler cited by Mr Sundt is digitalisation.

“We gather an enormous amount of data. How can we use this data to optimise our logistics?” he said. Data helps optimise a vessel’s speed and route planning and implementing technologies such as battery-hybrid propulsion and shore power connections for OSVs has been successful.

Battery-hybrid propulsion has yielded several benefits beyond cutting fuel consumption and reducing greenhouse gas emissions. He told delegates OSV battery-hybrid applications:

• Increased safety during dynamic positioning operations, with the battery acting as a spinning reserve;
• In combination with shore power, it provides a better working environment for the crew;
• When the vessel is recharging via shore power, it improves the public perception of the operation, emitting no emissions and noise;
• Shipowners report a reduction in vessel maintenance.

Raising awareness internally and externally underpins the success of the programme, said Mr Sundt.

“There is not a day that passes when a request isn’t sent to speed up a delivery. If that happens they will receive an e-mail asking how much extra fuel will be consumed and CO₂ emitted as a result? We try to build a consciousness throughout our organisation,” he said.

Results from the green logistics programme to date have been encouraging. Adjusted for reduced activity levels as compared to the baseline year of 2011, Equinor slashed CO₂ emissions by 26% in 2018 and reached 30% by July 2019.

“Much of the credit has to go to our suppliers, shipowners and the crews,” said Mr Sundt. “Fuel reduction comes down to how the crews are operating their vessels.” To underpin the effort, Equinor has focused on fuel consumption as an evaluation criteria in new vessel contracts and has implemented risk-sharing agreements with shipowners.

While he envisions the day when Equinor will be able to charter a zero-emissions vessel, Mr Sundt realises the oil company’s green logistics journey is not nearly complete and that the Norwegian government has set even steeper emissions cuts, which might mean “moving the goal posts” for its reduction targets.

“There are about 4,000 days left until 2030. How do we reach our target by 2030? Some of the vessels operating today will still be trading in 2030. A lot has to be done. How can technology help us further? We want to work with shipowners and ship designers on solutions.”

Quoting from the movie Smokey & the Bandit, Mr Sundt said, “We have a long way to go and a short time to get there.”