New Coalition Aims to Support Adoption of LNG Bunkers

by Ship & Bunker News Team
Wednesday July 13, 2016

Carnival Corporation & plc (Carnival), DNV GL, ENGIE, ENN Group (ENN), General Electric (GE), Gaztransport & Technigaz S.A. (GTT), Lloyd's Register (LR), Mitsubishi Corporation (Mitsubishi), NYK Line, Port of Rotterdam, Qatargas, Royal Dutch Shell Plc (Shell), TOTE Inc. (TOTE), and Wärtsilä Corporation (Wärtsilä) Wednesday announced that they have come together to form a cross-industry coalition known SEA\LNG, intended accelerate the adoption of liquefied natural gas (LNG) as marine fuel.

"By working together proactively across the whole marine LNG value chain we can make the transition to a lower emission marine sector a reality," said Tom Strang, senior vice president, Maritime Affairs at Carnival.

The coalition says that, while LNG offers "significant" environmental advantages compared to HFO, and tightening environmental regulations are increasing demand for the fuel, infrastructure is still needed in ports around the world to facilitate quick, safe, and cost effective LNG bunkering.

Further, SEA\LNG notes that global regulation of the fuel for marine use is not yet globally consistent, which has also dampened investment in the sector.

"We recognise the need to work closely with key players across the value chain, including shipping companies, classification societies, ports, major LNG suppliers, downstream companies, infrastructure providers and OEMs (original equipment manufacturers) to ensure an understanding of the environmental and performance benefits of LNG as a marine transport fuel," said Peter Keller, SEA\LNG's chairman and TOTE's executive vice president.

"SEA\LNG aims to address market barriers and help transform the use of LNG as a marine fuel into a global reality."

The coalition's key focus areas are said to include supporting the development of LNG bunkering at major ports, educating stakeholders of the risks and opportunities of LNG bunkers, and the development of consistent regulations for cleaner shipping fuels around the world.

"SEA/LNG aims to promote the benefits and potential of LNG fuel, and create a level playing field for LNG with other fuels. It will complement the work being done by other organisations like the Society for Gas as a Marine Fuel."

While the coalition argues that LNG is a competitive fuel relative to current alternatives, and offers a solution that is compliant with current and expected future regulations, it notes that there is a price premium for LNG-fuelled vessels, making investment decisions all the more challenging.

"LNG fuelled shipping has mainly been for the visionaries and, until now, concentrated in specialist ship sectors – short sea shipping and ferries, mainly sailing between two fixed ports. We want to help drive the expansion of LNG as a marine fuel of choice, with not just more short sea and local ships burning gas, but also the deep sea trades," said Leo Karistios, gas technology lead at LR.

In February, executives from Qatargas, Maersk Group, and Shell announced that they had signed a memorandum of understanding (MOU) to explore the development of new markets for LNG bunkers.