ALNG2012 Series Topic: 1 Bright LNG As Ship Fuel

Top Quote ALNG2012 will take place on May 17-18, 2012, in Shanghai China. All speakers involved these topics will be likely to be the speaker on ALNG2012 for deepening industry communications. End Quote
  • (1888PressRelease) January 03, 2012 - In the past decade, more and more stringent emission requirements are being constantly applied to land transport. Automotive diesel fuel and gasoline for now for example, are almost no sulfur. However, there is the shipping industry in the absence of emissions rules.

    According to an authoritative report, the world's shipping industry consumes 20 million barrels of oil per year, over 1.2 billion tons of CO2 emissions, accounting for 6% of total global emissions. It is predicted that by 2020 the global shipping industry CO2 emissions will reach 14 million tons.

    In order to achieve the emission reductions on a global scale, the United Nations International Maritime Organization (IMO) Convention for the Prevention of Pollution from Ship will limit big emissions of 9 kind, mainly through the mandatory energy efficiency design index (EEDI) formula, to regulate the level of energy efficiency, and provides current and future engine emission limits, from initial stage of design and construction.

    Remi Eriksen, COO of DNV Asia Pacific & Middle East Det Norske Veritas AS (DNV) said, take sulfur oxide emissions as example, its rules will generalize from ship construction to ship modernization. Ship owners are basically faced with 3 choices, 1, switch to clean fuels, 2 continue to use heavy fuel oil but need to install the water gas cleaner, and 3 switch to LNG as fuel. LNG as ship fuel is of very significant environmental benefits, it is almost 100% none of SOx, no particles, 85% -90% reduction of NOxs and 15% -20% reduction of CO2 emissions.

    Dr. Pierre C. Sames, Senior Vice President Strategic Research and Development, Germanischer Lloyds said, LNG is cheap but abundant than petroleum.

    LNG as ship fuel has now been deeply concerned, although got a slowly start. Many governments, enterprises and ship owners have started such a novel study to assessment the benefits of LNG as ship fuel and do their endeavor to introduce LNG to all areas of sipping industry.

    Gerd Würsig, deputy head of department at Germanischer Lloyd Environmental Research said, there is no doubt for natural gas to replace traditional fuel or replace marine light diesel at least, as for ship yards, there is no need to hesitate the development of these vessels because they will be soon coming into our eyes.

    Remi Eriksen, COO of DNV Asia Pacific & Middle East Det Norske Veritas AS (DNV) said, DNV predicted that new ship orders of LNG fuel will reach 500 by 2015 and 1,000 by 2020.

    China Shipping Chairman Li Shaode said, China Shipping has ordered with East Shipyard Of Shanghai four 4 LNG ships of 170,000 cubic meters, and is in negotiation with other ship yards for new ship contracts. It is expected for LNG ships will reach 12 in the 12th 5 year plans.

    DNV Vice President and Regional Manager Joerg Beiler said, China will build her fist LNG driven ship.

    The new shipbuilding project has its unusual meaning not only because it uses a pure LNG driven propulsion system, but also its design won the next generation award on Norway maritime exhibition 2011. The ship boasted great improvement in energy efficiency and multi purpose operational efficiency. The new ship will meet future needs and requirements of environmental protection laws and regulations very well, because they can reduce 35% of CO2, 90% of NOx and does not produce any of SOx and soot particles.

    Ronnie-Torsten Westerman, Business Development Manager at GL, introduced the first product carrier Bit Viking with its consumption of LNG fuel is also the first merchant ship with its drive of LNG fuel. GL did all design and modernization work for this ship. Since its first voyage on Nov 25, Bit Viking's performance is fully in line with expectations, the crew successfully passed Risavika, south of Stavanger facilities for LNG replenishments through which gained the considerable environmental benefits: 20% to 25% reduction of greenhouse gas emissions, 100% reduction of SOx, 90% reduction of NOx, 99% reduction of particulate emissions.

    There will be enormous challenges coming from the ship modernization. As the world's first LNG driven ship, the project requires special attention and understanding of the rules related to such ships, as well as flag state authorities how to understand and accept the associated risk analysis. LNG replenishment is one of the key operations, only the crew familiar with the specific steps of the process and special equipment can be responsible for that.

    As for other new LNG ships, Frederick Ebers, Vice President and Area Manager for North East Asia, GL, said market demand for cleaner transport is increasing, maritime environmental regulations are becoming increasingly stringent, which corresponding to the need for new technology. DSME and GL noted the challenge, and reached an agreement in 2010 to start the development of technical solutions and security concepts for LNG-driven development of large container ships.

    GL deputy head of environmental research Gerd-Michael Wuersig said, we will provide solutions for adequate precautions to prevent gas leak and collisions accidents. The conventional fuels will lose attracting force for this reason, but the LNG is a good choice, better energy efficiency and less impact on the environment. In the second half of this decade, cargo ship with its consumption of LNG fuel will come like bamboo shoots after a spring shower. And in cargo ships, container ships will be the first ones using LNG fuel.

    At the same time for ship construction, Ulf G. Ryder, President & CEO of Stena Bulk AB put forward another phenomena, nearly 30% of LNG ships all over the world are idle in the last 2 years. For now, they are in hot demand for different energy companies, nearly 90 ~ 95% of LNG ships have been booked to be put into use in the near future.

    The market demand is strong and charter prices are comparatively high for current. If 90% of LNG ships are put into operation for a ship owner, the income will be considerable. BW Gas CEO Andreas Sohmen-Pao said, this is the world's largest arbitrage opportunity.

    However Mærsk A/S announced its intention to sell its LNG business as it wished to reallocate resources to strategic focus areas in the Group. A.P. Møller - Mærsk A/S entered into an agreement on May 11, 2011 to sell Maersk LNG A/S to Teekay LNG Operating LLC and Marubeni Corporation at a total consideration of USD 1,402 million on a cash and debt free basis.

    LNG as ship fuel seems very bright of the future, but full of variables and the twists and turns, in the next topic, we will focus on challenges faced with the same LNG fuel.

    ALNG2012 organized by SZ Energy Intelligence and Shanghai Social Science Academy will take place on May 17-18, 2012, in Shanghai China. From now to May 2012, we will contribute series topics related to LNG hot issues. All speakers involved these topics will be likely to be the speaker on ALNG2012 for deepening industry communications, and you can contact with ecf(at)asialngsummit.com to tell us your interests or ideas.

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