Clean Marine Energy, WesPac Midstream Partner to Fund LNG Engines and Infrastructure

CME's ECSAs fund the full capital cost of the upgrades to LNG fuelling or scrubbers.

WesPac Midstream LLC and Clean Marine Energy LLC (CME) are teaming up to fund liquefied natural gas (LNG) engine upgrades aboard ships and develop LNG infrastructure. 

U.S.-based Wespac will help to supply and deliver LNG to ships who use Netherlands-headquartered CME's Emissions Compliance Service Agreement (ECSA) to convert their ships to cleaner fuel. 

"The first question every ship owner asks is 'Where will I get the LNG?' because if they cannot ensure the future delivery of LNG then they will not see the investment payback," said Pace Ralli, CEO and Co-Founder of CME.

"CME's partnership with WesPac provides the answer to this question and greatly simplifies the decision to convert to clean, lower-cost LNG fuel."

CME is a global provider of financing solutions for converting vessels to LNG fueling or installing scrubbers. 

Its ECSAs fund the full capital cost of the upgrades and retrofits, which CME said aims to help companies become compliant to emission control area (ECA) regulations. 

Beginning in 2015, sulphur content in marine fuel used in ECAs cannot exceed more than 0.10 percent by weight. 

Companies have the option of converting to LNG or scrubbers, or they can also switch to marine gas oil fuel, which has lower sulphur content.

The joint project is backed by Oaktree Capital Management, L.P., who supports both WesPac's LNG infrastructure projects and CME's ship upgrade projects. 

Wespac is currently planning a $600 million LNG bunker facility in Alaska.

In June, CME's Pace Ralli discussed "Financing the Cost of ECA Compliance" as part of Ship & Bunker's Industry Insight series.