Advantages Seen for Methanol Bunkers Over LNG

Methanol does not need to be kept under pressure like compressed natural gas (CNG) or kept very cold like liquefied natural gas (LNG)

With the first ships running on methanol set for delivery next year, industry players see a number of advantages for the fuel as compared with liquefied natural gas (LNG), Reuters reports.

The fuel, which is already used in light aircraft and race cars, is currently more costly than diesel and less efficient to burn, but prices could come down as more projects begin producing it.

"Compared with LNG as an alternative shipping fuel we see methanol in an early stage of development," said Thomas Wybierek, a shipping analyst at Norddeutsche Landesbank.

Because methanol does not need to be kept under pressure like compressed natural gas (CNG) or kept very cold like LNG, it can be stored it existing ship tanks, explained Joanne Ellis, an analyst with Swedish maritime transport consultant SSPA.

While its relatively low flashpoints makes it trickier to handle than diesel, it does not have the same risks as LNG, which could expand and explode.

"From a risk perspective I can't see that methanol has any drawbacks as compared to LNG," Ellis said.

The first orders for ships running on methanol, which will use 95 percent methanol and 5 percent diesel, are being built in South Korean and Japanese shipyards, with delivery scheduled for mid-2015.

Draft safety guidelines from the International Maritime Organisation (IMO) are set to be finalized this year.

Methanol is generally produced from natural gas, but can also be made from other materials, including household rubbish.

Canada's Waterfront Shipping Company, a subsidiary of methanol supplier Methanex Corp., will charter some of the vessels now being built, and Swedish operator Stena will also start using the fuel to power one of its ferries next year.

Still, many in the industry do not see methanol coming into wide use in the near future.