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LNG marine fuel backers form a new association

Oct 1, 2013 11:20 AM

As liquefied natural gas (LNG) gains in popularity as a ship fuel, the industry is trying to address the lingering unease some may feel about its safety.

In May, the Society of International Gas Tanker and Terminal Operators (SIGTTO), which represents haulers of LNG, formed a new non-governmental organization (NGO) called the Society for Gas as a Marine Fuel (SGMF) at its spring meeting in Houston. “We have a substantial safety record,” said SIGTTO General Manager Andrew Clifton in an interview. “Basically, we operate far in excess of the minimum standard.”

LNG was first used to power marine propulsion systems when the 951-foot LNG carrier Provalys was delivered in 2006. There are currently 48 ships powered by LNG around the world, mostly in Scandinavia. They operate with dual-fuel and tri-fuel diesel electric propulsion. Another 85 LNG ships are on order. That figure will increase as operators deem LNG to be a cost-effective means of complying with increasingly stringent environmental standards both in the U.S. and globally. An analysis by ocean transport adviser Poten & Partners estimates that the demand for LNG as a marine fuel will reach 1 million tons in 2020 and 8.5 million tons in 2025.

“However, LNG as a bunker fuel faces a number of challenges — notably the investment required in ship propulsion and fuel handling systems and in bunkering facilities, plus development of new international safety regulations and LNG availability,” according to Poten.

The society wants to encourage the development of facilities to deliver the liquefied gas to commercial vessels in the ports where they operate.

“There is basically no current infrastructure outside of Norway/Scandinavia and nothing in the U.S.,” Clifton said. “Cost estimates are difficult as it is dependent on location and size of intended operation, but will be many millions of dollars for sure.”

These issues are not dissuading operators. Last year, Harvey Gulf International Marine ordered three LNG-powered offshore supply vessels for deepwater trade, becoming the first American company to do so. The Louisiana-based company will operate an LNG fueling facility at Port Fourchon.

Totem Ocean Trailer Express Inc. of Princeton, N.J., is building the first LNG-powered containerships. Operators of ferries in Washington state and in Staten Island, N.Y., are also studying the fuel.

Safety remains an issue for some port operators when it comes to LNG. For instance, it’s illegal to transport in New York City because of an explosion on Staten Island 40 years ago that left 37 people dead. An investigation, however, laid the blame on faulty construction, not the fuel.

“New York City is a little unique,” William Lindman, assistant professor in the Department of Marine Transportation at the U.S. Merchant Marine Academy, said in an interview. “They are going to have to address how they are going to refuel their vessels.”

More LNG-fueled ships are likely to be built because the North American Emission Control Area under the International Convention for the Prevention of Pollution from Ships (MARPOL), which established stricter pollution controls for ships trading off the coasts of the U.S. and Canada, came into effect last year.    

According to analysis done by Raymond L. Mathewson Jr., assistant professor of marine engineering and naval architecture at the U.S. Merchant Marine Academy, there are environmental benefits with LNG. Unlike residual fuel, marine diesel and ultra-low-sulfur fuel, LNG doesn’t emit sulfur dioxide or particulate matter and produces far less carbon dioxide and nitrogen oxide.

Price is another factor in LNG’s surging popularity. As the U.S. exploits more of its shale gas, supplies will increase. That’s the case even though LNG infrastructure needs to be expanded, according to a report issued by Germanischer Lloyd and MAN Diesel & Turbo SE.

Membership in SGMF is open to shipowners, bunker suppliers, bunker barge operators and other enterprises. The society promises to benefit the maritime community by developing guidance for LNG safety and vessel-operation best practices. It is seeking NGO status with the International Maritime Organization.     
 

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