LNG: Shorter Payback Times than Scrubbers

LNG conversion means significant investment costs and lost TEU slots.

Liquefied Natural Gas (LNG) is more cost effective than scrubbers according to a Joint Study published by Germanischer Lloyd SE (GL) and MAN Diesel & Turbo SE (MAN).

Comparing investment cost, price differences and the share of operation inside Emission Control Areas (ECAs) between LNG and scrubbers, the study said that LNG promised “less emissions and, given the right circumstances, less fuel costs.”

With stricter International Maritime Organization (IMO) guidelines to reduce sulfur oxide (SOx) in ECAs on track to come into force by 2015 and worldwide by 2020, the study estimates that ships using LNG as fuel will cut SOx emissions by between 90% – 95%.

LNG, with its lower carbon content also means reduced carbon dioxide (CO2) emissions by up to 25% and is expected to cost less than Marine Gas Oil (MGO), which is what ships will have to use within ECAs, if they do not implement other sulfur reducing measures.

Costs involved with installing an LNG system include the loss of Twenty-foot equivalent slots (TEU) which will have to make room for tanks - resulting in lost earnings, as well as the price of tanks, bunker station, gas preparation, gas line, main engine and generator sets.

The report compared and contrasted different sized vessels with the share of ECA operations to assess the benefits of other technologies, such as Waste Heat Recovery systems (WHR), and evaluate “payback” times.

The joint study concludes that, “when standard assumptions are used, LNG systems offer shorter payback times than scrubber systems.”

Reportedly the world's first LNG powered container ship, the Bit Viking was converted from using Heavy Fuel Oil (HFO), before re-entering service in October 2011.