Shipbuilders are investing in new concepts and researching cryogenic technologies to support the continued growth of the LNG bunker vessel orderbook
After a year of landmark developments the infamous ‘chicken and egg’ conundrum – which comes first, gas-fuelled ships or bunkering infrastructure? – has finally been solved, according to SEA/LNG chairman Peter Keller.
“Bunkering infrastructure is expanding, encouraging operators to adopt LNG,” he says. “From limited availability at select ports, LNG bunkering has grown to encompass 24 out of the world’s top 25 ports and all but one of the top 10 bunker ports globally.”
The trend has been mirrored by LNG bunker vessels (LBV), where the range and flexibility of refuelling options has been extended. The one bunker vessel in service at the beginning of 2017 was joined by a further eight by the end of 2018. It is a phenomenon that is set to continue, with SEA/LNG anticipating around 30 more such vessels being delivered over the next five years. According to DNV GL’s Alternative Fuel Insight platform there are 13 bunker vessels in operation today, a further 17 decided upon (including those already ordered from shipyards or chartered out) and another six under discussion.
As some of those projects enter the construction phase, Singapore’s rival shipyard groups Keppel Offshore & Marine and Sembcorp Marine are emerging as two of the big beneficiaries.
At its Keppel Singmarine yard in Nantong, Keppel is already building the first LBV destined to serve Singapore – a 7,500 m3 vessel for the FueLNG joint venture (between Keppel and Shell) that has won a concession at the world’s biggest bunker port. That vessel will be completed in Q3 2020. More recently, in December, Russian oil tanker company Shturman Koshelev commissioned Keppel to build an LBV with ice-class 4 notation and a cargo capacity of 5,800 m3, due for delivery in Q4 2020. It will be chartered to Gazprom Neft for operation in the Baltic Sea.
The Keppel-built LBV for Shturman Koshelev will feature ice-class 4 notation and a 5,800 m3 cargo capacity
Buoyed by its early experience with bunkering vessels, Keppel is now looking to strengthen its expertise by co-operating on design and research with DNV GL. A framework agreement between the class society and Keppel Marine and Deepwater Technology covers potential newbuilding projects including LBVs, small-scale LNG carriers and floating storage regasification units (FSRUs), as well as LNG-related assets employing battery and hybrid technologies.
“We have a strong track record in delivering LNG solutions that includes the first FLNG conversion as well as LNG-fuelled vessels,” says Keppel managing director for gas and specialised vessels Abu Bakar Mohd Nor. He explains that the agreement will enable Keppel to develop a suite of LNG-related vessels to meet the needs of the market as the adoption of LNG as marine fuel increases.
“LNG bunkering now encompasses 24 of the world’s top 25 ports and all but one of the top 10 bunker ports globally”
As the first delivery in the agreement, DNV GL will issue Approvals in Principle for two LBV designs from KMDTech. Both are designed to carry up to 7,500 m3 of LNG in Type C-tanks, with one featuring a hybrid propulsion configuration with batteries. An optimised deck arrangement for the modular LNG gas supply, filling and safety systems increases the cargo capacity and efficiency of the vessels. The vessels will have a class notation for bunkering which enables the provision of LNG bunkering services if required. They are equipped with engines that can run on both diesel and LNG.
DNV GL projects that more than 10% of the world’s shipping fleet will be powered by LNG by 2030, compared to less than 0.3% in 2019. It anticipates that LNG powered vessels will make up 23% of the world’s fleet by 2050.
“One of the objectives of our collaboration with Keppel is to facilitate the increased supply of LNG bunkering infrastructure,” says DNV GL business director gas carriers Johan Peter Tutturen.
Asia’s largest LBV
While Keppel takes the honour of building the first LBV for Singapore, Sembcorp Marine will build another to serve the port that will become Asia’s largest such vessel. Mitsui OSK Lines subsidiary Indah Singa Maritime contracted Sembcorp Marine to build the 12,000-m3 vessel in February. When completed in early 2021, the vessel will go on long-term charter to Singapore state-owned Pavilion Gas for deployment in Singapore.
To be constructed at Sembcorp Marine Tuas Boulevard Yard, the vessel will be 112 m long and 22 m wide with two GTT Mark III Flex membrane tanks. The vessel, which will have dual-fuel engines running on LNG or marine diesel oil, will be managed by Sinanju Tankers, a major bunker barge company.
This will be the first LBV built by Sembcorp Marine, which will also fabricate the vessel’s membrane tanks under a licensing agreement with LNG containment specialist GTT. Mark III Flex membrane tanks have a lower internal pressure, temperature and boil-off rate than IMO Type-C tanks. This translates into greater tank durability, safer fuel transfer operations and reduced cargo loss through evaporation. The Mark III Flex membrane tanks also weigh less and occupy less ship space, allowing the vessel to carry more cargo and consume less fuel during transportation.
“This project marries Sembcorp Marine’s ship design and construction expertise with GTT’s industry-leading membrane tank system,” says Sembcorp Marine president and chief executive Wong Weng Sun. “We are confident the outcome will be a sophisticated newbuilding that not only delivers optimal technical performance, but also helps MOL and Pavilion Energy contribute to the expected standard of LNG bunkering operations in Singapore.”
While vessels under construction by Keppel and Sembcorp Marine will fulfil the LNG needs of the world’s busiest bunker port, plans are also progressing to develop bunkering infrastructure in one of the most mature markets for gas as marine fuel. On 18 March this year Damen Yichang Shipyard cut steel for what Estonian owner Eesti Gaas hopes will be the first of a series of short-sea bunker vessels. The 6,000 m³-capacity vessel and its future sister ships are intended to accelerate the adoption of LNG in the north-eastern Baltic Sea by providing a ship-to-ship bunkering service in that part of the region for the first time.
“More than 10% of the world’s shipping fleet will be powered by LNG by 2030, compared to less than 0.3% in 2019”
“Eesti Gaas and our launch client, ferry operator Tallink, will become the companies with the most LNG competence in this region,” says Eesti Gaas board member Kalev Reiljan. “Eesti Gaas has performed over 1,500 port-based LNG truck-to-ship refuellings of Tallink’s LNG-powered Megastar ferry and now we are moving on toward offshore, more mobile solutions.”
The Eesti Gaas LBV will supplement a busy shore-based bunkering schedule in Estonia
The LGC 6000 LNG vessels are designed to meet ice-class 1A certification, allowing them to operate all year in the Gulf of Finland and the northern Baltic. A dual-fuel propulsion system will be used for the management of the boil-off gas in combination with a gas burner. The vessel will host two Type-C tanks of 3,000 m3 each, with Chinese supplier Gloryholder Liquefied Gas Machinery providing the cargo handling and fuel gas supply system.
Following sea trials, the ship will arrive in Estonia in mid-2020 and will start serving LNG clients in the third quarter. The new vessel will be capable of carrying out bunker activities at designated locations both in and outside ports. Eesti Gaas will operate the vessel under a long-term charter from parent company Infortar.
Coastal bunkering
The addition of more bunkering vessels in the Baltic will supplement the already strong shoreside bunkering infrastructure there. In other markets, bunker vessels play a more central role: South Korea is likely to be one such example. Increasing demand for LNG bunkering has led the country to launch a development project for coastal ships with customised bunkering systems. The project aims to develop and validate bunkering facilities along the coast.
South Korean LNG engineering, procurement and construction company Trans Gas Solution has received approval in principle from Korean Register for a 500-m3 bunker barge design that will be part of the new coastal bunkering system. The LNG bunkering barge concept, Kolt-05B, is a 48.5-m vessel with an IMO Type C pressurised fuel tank with a storage capacity of 500 m3, including a low-pressure LNG fuel gas supply system CryoPac-L. The barge will have a bunkering arm to assist in fuelling vessels at a flowrate of 200 m3/h, and the ability to handle return gases during bunkering operations.
Funding for the LNG bunker barge concept is through a government-backed project supported by South Korea’s Minister of Maritime Affairs & Fisheries and organised by the Korea Research Institute of Ships & Ocean Engineering (KRISO). Following construction, testing and commissioning in the first half of 2021, the LNG bunkering barge system is expected to operate from 2022.
The wider coastal project brings together South Korean Government and industry. KRISO is joined in the project by steel-maker POSCO, shipbuilder, offshore and industrial construction company EK Heavy Industries, pressure vessel manufacturer Mytec and LNG fuelling station developer Valmax. Trans Gas Solution will oversee the development of the control system of the vessel, including the cargo handling system, which covers the basic and detail design of the vessel.
Cryogenic research
The coastal project may be providing the impetus for the deployment of bunker ships in South Korea, but other projects are aiming to develop some of the technologies needed both for the country’s fledgling bunker vessel market and for its well-established gas carrier business. Shipbuilder Daewoo Shipbuilding & Marine Engineering has struck a partnership with Inha University to open a new marine and offshore research institute. There, Daewoo aims to study insulation systems and processing systems for cryogenic cargos applied to LNG carriers. The collaboration with the university is expected to continue until 2023.
“As the demand for environmentally friendly energy is increasing, so is the need for cryogenic technology development,” says Daewoo Shipbuilding & Marine Engineering director Lee Seong-keun.
The LNG bunker vessel market shows little sign of slowing and competition for orders is likely to remain fierce. As shipyards continue to establish their expertise, evidence of investment in better technologies – including teaming up with class societies or academic institutions – is one tool for attracting buyers. If it also drives higher standards in building vessels, so much the better.
LNG bunker vessel projects decided and under discussion, 2019-2021
Year | Owner | Operator/charterer | Home port | Country | LNG capacity (m3) | Status |
2019 | Korea Line | Kogas | Busan | South Korea | 7,500 | Decided |
2019 | Titan LNG | Antwerp | Belgium | 1,680 | Decided | |
2019 | LNG Shipping (Victrol) | Shell | Rotterdam | Netherlands | 3,000 | Decided |
2019 | Titan LNG | Amsterdam | Netherlands | 1,480 | Decided | |
2020 | ENN Energy | Zhoushan | China | 8,500 | Decided | |
2020 | CLS (Kawasaki Kisen Kaisha, Ltd., Chubu Electric Power Co., Inc., Toyota Tsusho Corporation, and Nippon Yusen Kabushiki Kaisha) | Central LNG Marine Fuel Japan Corporation | Chubu | Japan | 3,500 | Decided |
2020 | Ecobunker Shipping | Yokohama | Japan | 2,500 | Decided | |
2020 | Q-LNG | Harvey Gulf/Shell | TBD | US | 4,000 | Decided |
2020 | MOL | Total | Amsterdam/Rotterdam/Antwerp | Netherlands/Belgium | 18,600 | Decided |
2020 | Shturman Koshelev | Gazpromneft | * | * | 5,800 | Decided |
2020 | Eesti Gaas | * | * | 6,000 | Decided | |
2020 | NYK, Kyushu Electric Power Co, Saibu Gas Co and The Chugoku Electric Power Co | Setouchi/Kyushu | Japan | Under discussion | ||
2020 | Naturgy | Barcelona | Spain | 6,000 | Under discussion | |
2021 | MOL | Total | Singapore | Singapore | 12,000 | Decided |
2021 | Woodside | Dampier | Australia | 12,000 | Under discussion | |
2021 | Avenir LNG | Oristano | Spain | 7,500 | Decided | |
2021 | Avenir LNG | Oristano | Spain | 7,500 | Decided | |
TBD | Q-LNG | Harvey Gulf | TBD | US | 8,000 | Under discussion |
Note: * Eesti Gaas and Shturman Kosheleve vessels will serve the Baltic Sea
Source: DNV GL Alternative Fuels Insight; LNG World Shipping
LNG-fuelled newbuilds, 2019 deliveries
Shipowner | Vessel type | LNG fuel capacity (m3) | Operating area |
AET | Crude oil tanker | 1700 | Global |
AET | Crude oil tanker | 1700 | Global |
AET | Shuttle tanker | n/a | Global |
AET | Shuttle tanker | n/a | Global |
CMA CGM | Container ship | 18600 | Global |
Containerships | Container ship | n/a | Europe |
Containerships | Container ship | n/a | Europe |
Containerships | Container ship | n/a | Europe |
Groupe Desgagnés | Chemical tanker | 620 | America |
Sovcomflot | Crude oil tanker | 1700 | Europe |
Sovcomflot | Crude oil tanker | 1700 | Europe |
Sovcomflot | Crude oil tanker | 1700 | Europe |
Siem Car Carriers | Car carrier | 3600 | Global |
Siem Car Carriers | Car carrier | 3600 | Global |
Note: Two-stroke engine vessels only
Source: DNV GL Alternative Fuels Insight; LNG World Shipping
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