Americas News
Dual-fuel LNG Engines Could "Oust" Oil-Based Fuels
Dual-fuel engines capable of running on natural gas could "oust" oil-based fuels from a variety of areas including marine fuels, according to an analysis by Reuters financial columnist John Kemp.
"The diesel market is fast approaching a tipping point," he wrote, and unless prices for natural gas and crude start to converge soon in the U.S., the overwhelming incentive to switch to dual fuel engines "will be overwhelming."
Kemp says the "hassle" of retrofitting engines and installing all the infrastructure needed to distribute liquefied natural gas (LNG) and compressed natural gas (CNG) has encouraged most businesses to stick with diesel only engines, even though gas has been cheaper.
But if enough businesses convert, and enough distribution infrastructure is built, conversion costs will fall and competitive pressure will force others to follow suit.
Kemp writes that the biggest opportunity for conversion in the U.S. is highway vehicles, which consumed 2.4 million barrels per day (bpd) in 2011, but other relevant areas included marine bunkers, which accounted for 139,000 bpd.
Globally, a number of projects to facilitate the use of natural gas for transportation are already underway including the construction of LNG bunkering infrastructure in Europe, and Royal Dutch Shell Plc's decision to build small-scale liquefaction plants in Louisiana and Ontario to support LNG transport corridors in the Great Lakes and Gulf Coast regions.
Shell said in December that it wants to expand LNG sales for transportation purposes to more than 5 million tonnes per year over the next decade.
European government and industry players have been taking a number of steps toward building up an LNG transport infrastructure, including the Port of Antwerp's recent announcement that it is leading a working group to create guidelines for safe LNG bunkering.
