We’re exploring a new wave of efficient LNG fueling solutions.
The shipping industry is a vital part of the global transportation infrastructure, moving large volumes of people, goods, and commodities every day. Shipowners and operators are increasingly forward thinking in how to address large-scale LNG fueling needs when faced with current and impending environmental regulations.
Effective, January 1, 2020 the shipping industry will be subject to a 0.5% worldwide global sulfur cap. In preparation for the 2020 deadline the maritime industry is faced with many critical decisions that that involve substantial cost and financial risks. LNG as a marine fuel is compliant with current and future IMO standards. Shipowners now have less than three years to decide which solutions for meeting the new emission regulations work for their ship type, size and trading activity. The top three alternatives to meet the regulations are; use low sulfur marine gas oil (MGO) full-time, continue to use HFO in combination with an exhaust gas cleaning system, more commonly known as a scrubber, or use LNG as a fuel. LNG, or dual fuel vessels, calling on any ports will need fueling solutions readily available. Small Scale LNG (SSLNG) will have to fill the demand gap that will result as the implementation of the 2020 global sulfur cap looms. SSLNG projects are also being developed to meet the needs of a range of conventional fuel-consuming markets with marine at the forefront.
LNG as Marine Fuel in Jacksonville
In 2017 Eagle LNG will supply Crowley Maritime with the LNG fuel for two of the world's first LNG-powered combination container (ConRo) vessels. These ships will operate in U.S. mainland to Puerto Rico trade. These Jones Act, Commitment Class vessels are highly advanced, environmentally friendly, and are capable of optimal transit times. To support these and future LNG-powered ships, Eagle has developed a sustainable LNG supply infrastructure with fresh, new designs for terminal and shore-side bunker operations. Eagle is meeting the maritime industry's growing need for 'LNG as a marine fuel' with advanced environmental designs capable of operating within a small footprint.
The Eagle LNG Way
Eagle LNG utilizes the type of business models that involve various ranges of risk sharing. One of the key challenges in creating SSLNG infrastructure is the need for harmonized investments and risk allocation throughout the value chain. Potential SSLNG market participants and investors are comfortable with the types of risks (pricing, contracts) they are used to. Usually, global LNG infrastructure developers and suppliers favor long-term contracts, but that trend has been changing. A shipowner considering LNG or dual fuel engines for an upcoming newbuild does not want his fuel purchasing process to dramatically change. The LNG supplier needs to ensure the fuel price is a transparent and predictable price with a commitment term that suits the needs of the customer. The Eagle LNG integrated business model takes into account the entire gas value chain with the risks being shared between partners. This approach is vital in these early stages when existing infrastructure is scarce. Eagle LNG is at the forefront of providing the infrastructure solutions that will be needed by the shipping industry post 2020.
Margaret Kaigh Doyle is the Senior Manager, Business Development, Marine for Eagle LNG Partners. Eagle LNG Partners is wholly owned by Ferus Natural Gas Fuels, a portfolio company of the Energy Minerals Group (EMG). Doyle has spent three decades working in the maritime and energy sectors and serves as an appointed member US Coast Guard Chemical Transportation Advisory Committee (CTAC) chairing its LNG Fuels Subcommittee. Margaret Doyle also participates on the U.S. Delegation to the International Maritime Organization (IMO) on LNG matters. She is a graduate of the U.S. Merchant Marine Academy and holds advanced degrees in engineering from The George Washington and Pennsylvania State Universities.
LNG as a fuel appears commercially the most attractive when comparing the expected prices from 2020 of low sulphur heavy fuel oil (LSHFO) or Marine Gas Oil (MGO), and the extensive long term availability of natural gas.
SOURCE: DNV GL Maritime
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