Concerns about methane slip prompt LNG carrier owners to order more ships with high-pressure, two-stroke, dual-fuel engines, writes Maritime Strategies International senior gas shipping analyst Andrew Buckland
2021 was a record year for orders for new LNG carriers, with contracts signed to construct 86 vessels of 60,000 m3 and above. Even if the 10 new ships announced by Qatar but not confirmed by South Korean shipyards aren’t counted, this comfortably beats the previous record of 64 ships ordered in 2014.
And this year is off to a fast start, with another 12 new LNG carriers ordered in January.
Business has been brisk due to a combination of owners looking to book yard capacity ahead of the Qatari newbuilding programme, robust demand from charterers for greener ships, and rising newbuilding prices prompting owners with options (agreed when prices were much lower) to declare them.
Recent orders have begun to focus increasingly on CO2 emissions reductions, through improved vessel efficiency features such as air-lubrication systems, shaft generators, optimised hull designs, greenhouse gas (GHG) emissions detection systems and improved engine configurations.
“Recent orders have begun to focus increasingly on CO2 emissions reductions”
These features make the vessels more appealing to charterers, given the increasing pressure exerted by buyers to reduce the carbon footprint of LNG supply chains. The superior environmental performance of these new designs also creates pressure on older steam turbine- and tri-fuel and dual-fuel, diesel-electric-propelled LNG carriers, either to pursue economically feasible retrofits, convert into floating storage and regasification units or floating storage units, or be scrapped.
WinGD’s low-pressure X-DF units have been the engine of choice for newbuild LNG carriers for the last four years, but 2021 saw MAN Energy Solutions fight back with its new low-pressure ME-GA engines. It also saw a resurgence of popularity for its high-pressure, two-stroke ME-GI engines, despite the additional capex required for a more expensive fuel gas supply system.
The new lease of life for the high-pressure ME-GI engine can be attributed to the focus on methane emissions during the year – and especially at COP26 – which has seen some owners prepared to pay the extra cost for the ME-GI engine, which has much lower methane slip than the low-pressure engines.
In November, South Korea’s Daewoo Shipbuilding & Marine Engineering won eight orders which specified an ME-GI (two for Maran Gas at US$206.5M each, two for BW Gas at US$206.3M each and four for GasLog at US$210.2M each). Maran Gas ordered a further two ships with ME-GI engines in January.
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