Titan Clean Fuels and Fratelli Cosulich provide insights into developments that underscore the strategic shift towards bio-LNG and e-LNG
It is still early days for the LNG dual-fuel-powered large tanker, with only 81 live tankers in the fleet, but already LNG dual-fuel tankers comprise nearly 20% of the orderbook.
The status of the bunkering industry and its ability to service the requirements of this growing portion of the LNG-powered tanker fleet and other vessel types was the subject of the Spotlight on bunkering challenges: infrastructure, storage and beyond session, held during the 2023 International Tanker Shipping & Trade Conference, Awards & Exhibition in Athens in November 2023.
Bunkering experts on the panel comprised Titan commercial director marine, Michael Schaap, and Fratelli Cosulich senior international marine fuels trader, Alexandros Anagnostopoulos.
The discussion was primarily about Titan Clean Fuels’s focus on investing in bio liquid natural gas (bio-LNG) and e-LNG as cleaner fuel solutions for marine power. Mr Schaap emphasised the importance of considering the type of fuel in the context of the longevity and cost of marine vessels, while affirming his company’s dedication to building cleaner fuel infrastructures.
“Which fuel you choose will have a very significant impact on your costs,” he said, adding. “There is the cost to comply, and the cost of having access to the green molecules.”
Mr Schaap noted there is still confusion about the viability of LNG as a long-term marine fuel, but believes it is a stepping stone towards total decarbonisation.
“Having LNG as an option or fully integrated in a newbuilding is an advantage when it comes to financing”
He shared that bigger ships fare better on LNG than smaller vessels like tugboats, due to the high infrastructure cost of LNG. But even relatively small tankers can be fitted with LNG tanks on the deck, which do not interfere with the day-to-day operation of the vessel.
Providing LNG as a marine fuel has been an activity for Titan Clean Fuel since it was established in 2012, when LNG deliveries were by truck. Since then, the company has delivered over 300,000 tonnes of LNG, with 70,000 tonnes delivered in 2022.
Today, Titan operates seven LNG supply vessels, ranging from 1500 m3-tank capacity inland waterway LNG supply vessels (the Flex-Fueler series) to 12,000 m3-capacity vessels operating in the Mediterranean.
The latest addition to the fleet is the 8,200 m3 capacity Alice Cosulich, which as the name suggest, is chartered from Fratelli Cosulich.
Mr Schaap noted that the company has been focusing on bio-LNG development, adding that it is possible to mix bio-LNG to traditionally sourced LNG.
This allows a level of scaling, and Titan Clean Fuel has developed a project for bio-LNG production in the port of Amsterdam, with the output aimed at between 160,000-200,000 tonnes per annum. Schaap asserts this as a vital step towards realising the project’s potential.
Titan has already begun delivering bio-LNG, with the key point that it prolongs the longevity of the vessels while also reducing carbon emissions by 20-25% compared to conventional fuels.
Mr Schaap sees a prominent uptake of LNG in the marine fuel market, but notes that retrofitting vessels designed for LNG has proven financially difficult.
But having LNG as an option or fully integrated in a newbuilding is an advantage when it comes to financing, where it can yield lower interest rates compared to conventional fuels and elements of green funding.
Speaking from the bunker trader point of view, Alexandros Anagnostopoulos noted how much the bunkering industry had progressed, with the introduction of mass flow meters to the arrival of LNG as a mainstream fuel. He noted as a bunkering company, Fratelli Cosulich is investing in LNG barges, with the Malaysia – Singapore region a contender for developing LNG bunkering.
“The company is heavily investing in LNG barges,” he said. He noted the company had plans for ammonia and methanol, but they have been moved further down the line.
Asked if there was an appetite for trading – a mainstream activity in the marine fuel sector – he noted that it would depend on demand. “We are currently adopting a wait-and-see approach to ([LNG bunker] trading,” he said.
Mr Schaap was asked if there were any supply agreements in place with owners planning to adopt bio-LNG. Without replying yes or no, he noted that as a relatively small company of 45 full-time employees, Titan would not be able to support such an endeavour alone, but there is a large customer in the background looking to go down this route, and Titan will be very supportive.
He noted that there is, at the moment, no formal commercial mechanism to recognise the premium of bio-LNG over conventional LNG. He felt this would come, as there needs to be a way of recognising the use of bio-LNG and adjusting CO2 ratings. This could be through a tie-up with the blockchain-based insetting bank and can offer different types of bio-LNG to customers depending on requirements.
Does Titan track and trace bio-LNG was another concern from the conference floor, to which Mr Schaap said: “Titan ensures transparency and traceability in the bio-energy supply chain by selecting the right feed gas, having the correct certification, and improving the transparency on the entire chain.”
What are the future developments in LNG bunkering? Mr Anagnostopoulos foresaw the development of a spot LNG bunkering market with brokers and credit companies, but noted that product cost and credit appetite would be deciding factors. He expected sturdy competition, but not as intense as in traditional marine fuel. Mr Schaap corroborated by stating that customer switch, caused by the high gas price scenario witnessed last year, had led to the emerging spot market for LNG.
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