LNG: Ports synergise on cleaner fuels for vessels

The shipping industry is showing increased interest in the use of liquefied natural gas (LNG) as a fuel for vessels.
It is generally expected that by 2015 a number of progressive shipping lines will lead the way and will have LNG-powered vessels in their fleet, presenting a challenge for ports around the world and shipping lines.
Some vessels today are already LNG-powered and more are on order.
According to a recent study from the Danish Maritime Authority, the current use of natural gas within the SECA-zone is expected to increase by 140 per cent by 2020, due to the use of LNG as a shipping fuel and usage on land by trucks and buses.
LNG offers substantial environmental benefits in comparison to conventional fuels.
Sulphur and particle emissions would be reduced to almost zero, nitrogen oxide emissions by 85-90 per cent and net greenhouse gases by 15-20 per cent.

Focusing on the use of LNG as a marine fuel, an “LNG Fuelled Vessels Working Group,”, has been established under the auspices of the International Association of Ports and Harbours’ (IAPH’s) World Ports Climate Initiative (WPCI).
The Working Group is tasked for one to develop guidelines on safe procedures for LNG bunkering operations providing ports around the world with an implementation guideline, if they wish to pursue this technology.
LNG is a clean and cost competitive fuel meeting the upcoming 2015 International Maritime Organisation (IMO) regulations.
LNG is obviously the ship’s fuel of the future and ports are preparing to offer safe storage and bunkering of LNG for shipping lines in or near their port areas.
The Port of Antwerp is chairing this initiative and representatives from the ports of Amsterdam, Bremen/Bremerhaven, Brunsbüttel, Gothenburg, Hamburg, Le Havre, Los Angeles, Long Beach, Rotterdam, Stockholm and Zeebrugge are also active participants in the Working Group.

The Working Group maintains close contacts with industry stakeholders currently using and/or handling LNG, as well as government agencies.
The Working Group consists of three sub-Working Groups:
• LNG Bunkering Checklist
• LNG Bunkering Risk Perimetres
• LNG Public Awareness
The “LNG fuelled Vessels” Working group falls under the auspices of the IAPH and its WPCI and has a global participation.

A DNV-led Joint Industry Project (JIP) has concluded on the likelihood of attractive payback periods from the additional investments required for LNG fuelled shipping, along with no significant legal restrictions hindering development of LNG bunkering in Australia.
This is the conclusion of a JIP focusing on LNG fuelled tugs and OSVs, managed by DNV with nine partners in Australia.
The use of LNG as a fuel for ships is seen as one of the options to address the future environmental and commercial challenges in the shipping industry.
With proper combinations of bunkering solutions such as tank trucks, permanent tanks and barges in the different ports, efficient LNG bunkering can be established.
The partners of the JIP, Australian Maritime Safety Authority (AMSA), BOC Limited (Linde Group), Farstad Shipping Pty. Ltd., Ports Australia, Rolls-Royce Marine AS, SVITZER Australia, Swire Pacific Offshore Operations (Pte) Limited, Teekay Shipping (Australia) Pty Limited, Woodside Energy Limited and DNV are optimistic about the future of LNG as maritime fuel in Australia after having screened the possibilities to establish LNG bunkering in 10 Australian ports.
This study recommends more technical guidelines and a clearer regulatory framework to be established, along with financial incentives to kick-start the development.
When establishing LNG bunkering, the critical business phase is the first 2-4 years of operation when the LNG suppliers rely on a few brave ship owners willing to be industry forerunners.
After some years of successful operation a second wave of ships is expected to enter the market, which will reduce suppliers’ uncertainty and reinforce the business case.
The JIP focused specifically on the initial phase, and created roadmaps for necessary action for most rapid establishment of LNG bunkering in shortlisted ports.
An accelerated approach can open up LNG bunkering in Australia by 2016.
DNV Maritime Country Manager, Tim Holt, stated: “We have been impressed with the interest and commitment shown by the Australian shipping industry in investigating LNG as a cleaner and locally available marine fuel.” JIP Project Manager Henning Mohn adds, “Increasing LNG production along with new international regulations boost the interest in LNG fuelled shipping; this may actually to some extent switch ships from fuelling with imported fuel to using domestically produced LNG.”