Lloyd's Register Partners with Penn Oak Energy on LNG Retrofit Financing

by Ship & Bunker News Team
Tuesday July 21, 2015

Lloyd's Register North America, Inc. (LR) Monday said it has teamed with Penn Oak Energy Corp (Penn Oak Energy) to develop a "a one-stop-shop solution" to assist companies in raising the capital required to retrofit their ships to use liquid natural gas (LNG) bunkers.

“Ships that are fuelled by LNG can greatly reduce operating costs while meeting stricter environmental regulations,” said LR.

“LNG-fuelled ships have reduced emissions (nitrogen oxide, sulfur oxide and particulate matter) as compared with heavy bunker oil and even low-sulfur marine diesel.

“The challenge to building these new ships has been that shipowners are unwilling to invest in LNG-fuelled ships if supplies of LNG bunker are difficult to obtain, but that has started to change as more LNG facilities are built.”

Rafa Riva, Marine Business Development Manager at LR, says that LNG is quickly becoming the most considered fuel to power newbuilds.

“The infrastructure to support this new class of ships has started to mature, and we have seen great strides in companies willing to convert their existing ships to this new fuel or constructing new ships in the U.S. Emission Control Areas," said Riva.

“Our relationship with Penn Oak Energy will help provide the private equity to ship owners to undertake these ambitious projects, and assist those ship builders that the U.S. will need to expand this growing demand."

LR noted its LNG Bunkering Infrastructural Survey 2014 indicates that major ports around the world are either planning for, or are anticipating, the wide-scale development of LNG bunkering.

In May Ship & Bunker reported that there are currently 46 global ports that are LNG bunkering hopefuls and just 15 open for general LNG bunker business today.

But the current lack of LNG bunkering infrastructure is not necessarily and obstacle to adoption, with Carnival Corporation & plc (Carnival) earlier this year telling Ship & Bunker it was undeterred by the lack of in-place facilities when it decided on its multi-billion dollar order for four LNG powered cruise ships

In July, Lloyd's Register praised Carnival's backing of LNG, saying the move reinforced the fuel's credentials.