Invest in LNG-Ready New Builds, or Risk Being Put at a Competitive Disadvantage: Titan LNG

Michael Schaap, Commercial Director Marine, Titan LNG

Shipowners who wait to act on preparing to use liquefied natural gas (LNG) bunkers risk being put at a competitive disadvantage in the future, Michael Schaap, commercial director marine, Titan LNG has told Ship & Bunker.

"It's hard not to recognise that LNG has gained serious traction. With the delta between LNG and oil, there is generally a healthy business case at the moment for LNG, but I think people need to look to what changes lie ahead," he said.

"Ship owners and operators need to be aware not only of the changes, but the challenges those changes will present, and the opportunities staying ahead of the game presents. "

IMO's recent decision to implement a global sulfur cap on marine fuel from 2020 is just the latest development in the ever tightening legislation for marine fuel, while the Baltic Sea and North Sea NOx Emission Control Areas (NECAs) slated to come into force in 2021 are a taste of things to come.

While LNG's ability to significantly reduce greenhouse gas emissions has been brought into question – with some estimates of the reduction varying between 5 and 30 percent – burning gas instead of oil also offers significant reductions in other key emissions such as SOx, NOx, and particulate matter (PM).

"Owners and operators should prepare for the possible eventuality of their vessels being forced out of certain trading areas due to non-compliance with legislation," Schaap warned.

"Moreover, the marketing value of LNG should not be underestimated. The public perception of shipping is changing, and more and more cargo owners are becoming increasingly conscious about where and how they ship their cargo around the world."

There is, of course, the usual temptation for owners to wait and see how the markets develop before committing their dollars - perhaps especially important in the current market environment - but Schaap says that by adopting this approach they run the risk of not being able to act at the appropriate time.

"For those owners and operators waiting to see whether the wider market decides to make the switch to LNG, there is a possibility of running into a shortage of cryogenic equipment, due to high demand and low supply when everyone else is simultaneously switching" he said.

With all this in mind, Schaap says today's newbuilds need to at least have an LNG ready notation.

"At the very least, this should help owners and operators to align with evolving legislation and increased public pressure for the maritime industry to play its part in protecting the environment," he said.

As for the argument that installing scrubbers provides a better alternative; "choosing scrubbers is more risky than choosing a vessel that is dual fueled and gives you real choice," he says.