Driven by the growth in new gas-fuelled vessels, small-scale LNG infrastructure, bunkering vessels and operations are expanding globally
One of the biggest obstacles shipowners initially faced when considering LNG as a marine fuel was the lack of the small-scale LNG and bunkering infrastructure needed to support it. On the flip side, private investors in LNG bunkering infrastructure were anxious about the uptake of LNG as a marine fuel. But as the shipping market for LNG as a fuel continues to mature, this so-called ‘chicken-and-egg’ dilemma appears to be fading.
Speaking during Riviera Maritime Media’s LNG as a fuel webinar, Emerson business development manager for marine fuels solutions Daniel Kemp said one of the obvious drivers for the uptick in LNG as a marine fuel was the need to comply with the IMO 2020 0.50% sulphur cap that came into force at the start of 2020. Mr Kemp also noted the emergence of international standards for LNG as a fuel, including those in Europe and Singapore, were aiding infrastructure development and uptake of the fuel.
“It is easier and more cost-efficient to go with LNG as a solution”
“As a result of standards becoming more mainstream, more OEMs and more yards are starting to see the accessibility of not just bunkering systems, but fuel gas supply systems increase, so the overall barriers to entry… are being reduced,” he said, adding, “It is easier and more cost-efficient to go with LNG as a solution.”
As of the start of the year, the number of LNG-fueled vessels had increased nearly 10% year-on-year (yoy) and 20% in terms of tonnage, said Mr Kemp. This, combined with efficiencies of scale he called “tie ups between molecule supplier, bunker-barge supplier and the consumer, the owner”, had piqued broader interest in the way the LNG marine fuel infrastructure would be developed and standardised.
The dynamics, he said, were working together to support infrastructure growth, particularly around ship-to-ship bunkering and increased access to LNG fuel at ports and terminals.
“We are seeing small bunker barges doing truck-to-ship loading or even ship-to-truck loading, all the way up to larger vessels,” Mr Kemp said.
As of July, 15 LNG bunker vessels were in operation worldwide and another 22 were on order, according to DNV GL.
One of those is for Russian domestic oil producer Gazprom Neft, which is actively developing LNG bunkering operations. Subsidiary Gazpromneft Marine Bunker will charter an ice class LNG bunkering vessel from Shturman Koshelev LLC for operation at Baltic Sea ports.
Based on an MTD 5800V LNG design, the vessel will have an ice class ARC4 notation and a cargo capacity of 5,800 m3.
Already well established in LNG bunkering in the ARA region, with one LNG bunker vessel in operation and another on the way, Dutch LNG supplier Titan LNG is also looking to the future via bioLNG. It has secured €11M (US$13M) in funding from the EU’s Connecting Europe Facility (CEF) for its Bio2Bunker project to develop a bioLNG (BLNG) and an LNG bunkering supply chain. The project will introduce three new bunker barges in Zeebrugge, Rotterdam, and Lübeck. The bunker barges in Belgium and Germany will be similar to Titan LNG’s two existing FlexFuelers. For the Amsterdam-Rotterdam-Antwerp region, Titan LNG will build “a mothership, the Titan Hyperion, that will resupply our FlexFuelers,” said the company in a press statement.
“Our customers in the shipping sector are facing a choice for the future: run on MGO, HFO with scrubbers, or go for bioLNG, the only proven alternative fuel that is scalable right now,” said Titan LNG. “Titan LNG believes that LNG-fueled ships are future proof. LNG combined with BLNG and later synthetic liquefied gas (SLG), made by combining green hydrogen and CO2, offer a credible and cost competitive path to decarbonization, whilst immediately improving local air quality,” it said.