With increasing regulatory pressure on ship emissions, there has been much focus on liquefied natural gas (LNG) - predominantly methane (CH 4) that has been converted to liquid form for ease of storage or transport - as a marine fuel.
It is seen by many as a ‘catch all’ solution to the International Maritime Organisation (IMO) MARPOL Annex VI limits on SOx and NOx emissions. It is also reported to reduce CO2 emissions by around 20%, according to shipping consultancy, Clarksons.
Further, the closing price differential between LNG and HFO has made LNG potentially commercially attractive.
However, as well as the large capital investment required, there remain other barriers to the widespread use of LNG as a marine fuel.
The limited LNG bunkering network is a key concern and many ports are investing in infrastructure, especially in Europe. There has also been a move by port authorities and class societies to establish technical standards and procedures for LNG bunkering.
Since the start of 2012, the ‘LNG capable’ fleet has more than doubled in size to 178 ships and there are now 200 units on order.
European owners account for 70% of the current fleet and Norwegians – with 70 ships - have the largest ‘LNG capable’ fleet globally. The Norwegian government imposed a NOx tax in 2007 and has also provided funding for investment in LNG technology. LNG carriers account for 31% of this Norwegian-owned fleet, while passenger ferries and offshore support units represent 37% and 21% of ships.
But, although LNG carriers account for a large part of the ‘LNG capable’ orderbook, interest in other ship types has been growing.
One German owner has two cruise ships on order.
Meanwhile, North American owners account for 24% of the orderbook and Canadian owners have the largest LNG capable orderbook globally, 27 units, with the passenger sector accounting for 30% of orders. US owners also have a more diverse orderbook, with a total of 21 ships including offshore support units, containerships and passenger vessels.
Despite limited numbers and a long way still to go, there appears to be a growing trend in investment in LNG-fuelled tonnage, Clarksons said.
Source: Clarksons
LNG the way to go?
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