The number of orders for newbuildings deploying LNG as marine fuel may have slumped in 2018, but engine enhancements aiming to attract shipowners to dual-fuel technology continue apace. In my last column I predicted that these investments would continue this year. They have already started.
With just 10 gas-fuelled ships (excluding LNG carriers, including options) ordered in 2018, according to online pricing database VesselsValue, the segment’s long-anticipated boom has yet to emerge. 2017 was an anomaly, with 34 orders including some breakthroughs – the first ultra-large container ships and Aframax tankers to burn LNG – but failed to open the floodgates that some observers had been predicting.
The slow growth comes despite relatively plentiful availability of bunkering, thus finally dismissing the ‘chicken and egg’ argument that lack of fuelling infrastructure was holding back in gas-fuelled ships. Global tramping on gas may still be a challenge, but shortsea shipping is possible in several regions, particularly Northern Europe, and container ships trading globally between Houston, Rotterdam, Singapore and Shanghai have multiple fuelling options.
Gas prospects may have been damaged by a general contraction in newbuilding. But the capital cost premium for LNG-fuelled ships – in engine and tank technology as well as the cargo space lost to bigger tanks – has not helped. According to SEA/LNG chairman Peter Keller, who in his role as executive vice president for US shipowner Tote Inc invested in some of the very first gas-fuelled container ships, this is now the biggest perceived barrier to gas-fuelled shipping. The consortium of LNG stakeholders is preparing a report that will show how this cost is being dramatically reduced.
Engine designers are a good example of these efforts to cut cost. Last year MAN Energy Solutions embarked on is ‘Mark 2’ programme to reduce the cost of its ME-GI dual-fuelled engines. A related development is its pump vapouriser unit, which will provide an alternative to high-pressure fuel gas supply systems, currently provided by third parties. Just this week the company has cited a recent container ship application to expound the further efficiencies found by combining dual-fuelled engines with power take-off, thus harnessing more efficient main engines to generate electricity.
In Winterthur, gas engine development has taken a different tack. The Otto Cycle technology deployed in WinGD’s X-DF engines means a simpler auxiliary configuration. A cheaper, low-pressure FGSS is needed, for example. Now the company is looking to optimise that set-up further by bringing the gas valve unit – regulating the supply between fuel tank and engine – onto the engine itself. That will save on space, weight and potentially cost, but more importantly will give WinGD the opportunity to further improve the integration of the system as a whole.
These efforts are not confined to two-stroke engine designers. In the past week we have reported on a project by Daihatsu that will enable cheaper, more readily available LPG to be burned in its LNG engines, potentially reducing operating costs if not capex. And Shanghai Marine Diesel Engine Research Institute’s new pure-gas engine will be positioned competitively to counterparts designed in Europe.
These projects all share a common purpose: to bring shipowners to gas fuel. Having sunk more than a decade into investing in LNG as a marine fuel, engine designers – as well as cryogenic equipment providers, bunker infrastructure companies and fuel suppliers – all have a keen interest in reducing barriers to entry. That alone may not be enough to ignite the boom, but it will remove one of the biggest obstacles to wider adoption of gas-fuelled shipping.