As usual, last week's 8th International Fujairah Bunkering & Fuel Oil Forum (Fujcon) featured a particularly pleasant open-air dinner at Fujairah's Hilton hotel. This, of course, was the opportunity for a lot of networking, and one conversation was with a smart young shipping banker.

All was going well until the conversation turned to liquefied natural gas (LNG) as a marine fuel. The banker was perplexed when I, metaphorically speaking, tipped a bucket of cold water over the idea. I rather suspect he thought it was a case of the industry's famous conservatism coming through in the shape of a particularly dyed-in-the-wool old shipping journalist.

So I was pleased that the following day's presentations started with a call for the industry to stop and think before going ahead with plans to use LNG as a fuel for ocean-going vessels.

John Stirling, now quality manager for Norwegian-based World Fuel Services and until recently a long-serving DNV bunker expert, highlighted the issues that he believes need addressing. He pointed out that until about two years ago, all the talk from the proponents of LNG was about coastal or shortsea shipping.

He said that he thought that LNG was an excellent solution in many cases for vessels in such trades where bunkers could be taken from shoreside terminals.

Since 2011, however, the emphasis had changed and LNG has been promoted as an option for the world fleet to replace heavy fuel oil when sulphur emissions restrictions tighten up in the Emission Control Areas (ECAs) in 2015 and globally in 2020 or 2025. To do this would mean ship-to-ship transfers, which Mr Stirling described as a "game changer".

In the previous presentation, Singapore-based Douglas Raitt, Global FOBAS Manager, Lloyd's Register Asia, had spoken on the "Uptake of LNG Bunkering for Deep Sea Shipping up to 2025". He had presented the results of an LR study which showed that, even in a high-case scenario, the number of vessels likely to adopt LNG was very small, about 2,000 out of a world fleet of over 80,000 vessels.

Mr Stirling also emphasised that the numbers involved were still very small, with 37 LNG-powered ships now in service, all operating on inland, coastal or shortsea trades.

He said that the LNG carriers had an almost perfect safety record, with just 40 cubic metres of methane spilt in the 50 years since these vessels started operating. He stressed that this was due to the very high standards that are in place on LNG carriers and that are insisted on by the Society of International Gas Tanker and Terminal Operators (SIGTTO).

He pointed to SIGTTO's concerns about the widespread use of LNG as a fuel and its promotion of a new organisation, the LNG Fuel Safety Advisory Group, to represent the industry on this issue. He outlined the potential hazards of a gas that needs to be kept in a liquid state at -163° C and which reacts violently when in contact with water. In the context of general use as a marine fuel, he cited a warning that it would require "a degree of excellence never before attained in the bunker industry".

Among the "many issues that need addressing", Mr Stirling noted the need to have officers trained to the same high standards of those currently employed on LNG carriers on all ships using LNG as a fuel and also on LNG bunker barges.

He also emphasised that not all LNG was the same and that mixing of different LNGs could cause layering and very rapid boil-off, something the ship's staff would have to be able to cope with.

Mr Raitt said that he thought the media had taken up the idea of LNG as the "current flavour" and that the dangers may not necessarily have been thought through.

Interestingly, the panel chair for the session, Shahrin Osman, classification society DNV's head of Management Advisory Middle East, stressed that LNG was only one option and that his classification society was also looking at other alternatives.

DNV is at the forefront of developing the use of LNG as a marine fuel so it is reassuring to know that it is keeping this development, promising as it is for some situations, in a realistic context.

Equally reassuring was the young banker coming up to me after the presentations and saying: "Now I understand what you were saying."

So, if in the foreseeable future LNG is only going to power a small proportion of the world fleet, what will be the solution for most ships? My view is that for a while there will be no choice for most ships other than to burn distillate fuel within ECAs.

Within a short period, however, scrubbers will become common and then, by the the time the global 0.1 per cent sulphur emission limit comes into force in 2025, standard equipment.

The most pressing deadline is the January 2015 reduction of the sulphur limit within ECAs to 0.1 per cent. That will cause a lot of grief because the industry will simply not be ready to do anything other than use expensive distillate fuel. Strait Talk will be keeping a weather eye on developments.

 

 


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