Talking up gas and weighing the options

Malcolm Latarche
Malcolm Latarche

20 October 2016


With emissions and the availability of ultralow sulphur fuel availability high on the agenda for next week’s MEPC, the cross-industry coalition SEA\LNG has highlighted the ability of the LNG sector to meet the future emissions requirements of the global shipping industry. The recently formed coalition has issued a position statement which outlines the benefits of LNG as a marine fuel and offers its support for the implementation of MARPOL Annex VI for the prevention of air pollution by ships. The coalition supports the implementation of the MARPOL Annex VI for the prevention of air pollution by ships and believes the implementation date decision for the marine fuel sulphur cap needs to rest with the Member States comprising the MEPC. While there are movements in establishing an LNG bunkering infrastructure there are some very big obstacles still to clear if it is to become widely established. As the SEA\LNG coalition points out there are 86 LNG-fuelled ships in operation worldwide (excluding LNG carriers) and a further 95 on order. That may represent a big investment and a growing acceptance but not all of the vessels operate on LNG entirely and most are still burning fuel oil most of the time. In the Norwegian offshore sector where support for LNG has been high, some owners are publicly regretting the extra capital outlays as charterers refuse to pay premiums for these green vessels. It is true that the number of new orders for gas vessels is increasing as an overall percentage of the orderbook as proponents of LNG proudly point out but whether that is a real improvement over previous years or just a reflection of the low-level of new orders is anybody’s guess. More to the point even today the number of new orders means it will be a good many years before LNG becomes much more than a niche fuel. A 2020 date for the new global sulphur cap might increase enquiries for conversions of existing ships but there will be a lot of calculating needed to weigh the costs of scrubbers, distillates and conversions and the possible need to meet changed EEDI requirements if the changes to the ship or its engine are considered as major under the appropriate rules.