The case of LNG as a marine fuel: Latest developments

At a time when several studies have recently forecasted a limited use of LNG in the future alternative fuel mix, noting that its benefits are not enough to support carbon reduction goals, GREEN4SEA panelists agreed that LNG has many advantages and a more mature technology than other fuel options, but it has to tackle the disadvantage of methane emissions. Currently, there are hardly other alternative fuels that provide GHG emissions in their unburnt form.

As a bridge fuel -because it is available now-, LNG is seen as maybe the best way today to accommodate the zero-carbon fuels of tomorrow, the panel heard. Shell LNG Outlook 2020 said the global LNG demand increased by 12.5% to 359 mtons in 2019, an increase that boosts LNG’s role in the switch towards a lower-carbon energy system, while Shell LNG Outlook 2021 predicted that global LNG demand is expected to reach 700 million tonnes by 2040.

Research by industry coalition SEA LNG shows that LNG uptake is accelerating with currently 191 ships in operation, -excluding LNG carriers- and more than 250 on order, informed Steve Esau, General Manager for SEA\LNG. Recently, oil major Shell revealed ambition to have half of their chartered tanker fleet LNG-fueled by 2023. Key advantages of LNG include:

• LNG is commercially competitive; is cheaper than other marine fuels, so the investment case is compelling;
• Immediate GHG reductions, meets IMO 2030 targets with EEDI and operational measures;
• Long-term, ships using LNG may meet IMO 2050 targets through use of bioLNG and synthetic LNG as drop-in fuels;
• It offers a lower risk decarbonization pathway than other options discussed.

Meanwhile, there are three key factors building the competitiveness of LNG as a fuel, said Panos Mitrou, Global Gas Segment Manager for Lloyd’s Register:

• LNG bunker price savings (and what can be further saved by the increase and the uptake of the bunkering supply chain)
• Interim carbon savings/benefit (and what will derive from EEDI and CII compliance of LNG)
• LNG longevity prospects (bioLNG, carbon capture solutions, synthetic LNG etc.)

Bunkering availability is now a reality across the world. Both capacities, as well as global outreach of specific suppliers has been reached, so it will be easier for deep-sea shipping now to move on to LNG as option,

…he stressed.

While there is a criticism to LNG with respect to its carbon emissions and tank-to-wake performance, there are a lot of options for a pathway to net-zero carbon, thanks to the existence of cryogenic equipment which can facilitate a plethora of zero-carbon fuels, such as ammonia (with fuel retrofit), bio-methane, synthetic methane and coupling with carbon capture and storage, noted Lampros Nikolopoulos, Projects & Dry-Docking Engineer at Euronav.

On LNG, we tend to assess things on an average basis, however, there are huge differences between diverse LNG and its origins, added Mr. Mitrou:

The EU MRV and further control of upstream, midstream emissions, as well as the recognition of negative emissions for both Biogas and carbon capture systems, can add more.

Although the available LNG technology today is ready for alternative fuel engines, building a strong case for LNG as the fuel of the future, the big question mark is lack of regulation on methane slip because this paralyzes investors, noted Carmelo Cartalemi, Business Development Manager, WinGD, while LNG availability continues to be a problem, added Antonis Trakakis, Technical Director for marine, RINA.

The make-or-break element for the future of LNG is whether it will be able to tackle its methane emissions. This is a key differentiating point against other fuels,

…pointed out Mr. Mitrou.

On his part, Mr. Nikolopoulos cited the challenges on shipbuilding specifications of LNG-powered tankers:

#1 Containment system design and rating: The biggest parameter here is the Capacity, which has a very high impact on CAPEX, the Containment system type, the pressure rating, the material and the insulation and detailed design.

#2 Selecting the main engine: The debate lies between high pressure and low-pressure engines, as well as the recently 4S variants with CPP emerged propeller.

#3 Boil of Gas (BOG) management, consumers, and fuel gas supply: BOG compressors are easier with a low-pressure engine, but not so easy and reliable with a high-pressure engine. Small scale reliquification in the form of subcoolers is also a good option, but very expensive. There is also a range of dual-fuel consumers (diesel generators, auxiliary boilers, and composite boilers).

Operational and maintenance issues:

• Bunkering operations: A compatibility test is required by the Class
• BOG pressure management onboard
• LNG aging
• Maintenance: Focus on inspections of insulation, cracking, repairs, high-pressure BOG compressors and pumps (PVU), extended gas detection system servicing, etc.

What would you like to see in the market to push forward the case of LNG as a fuel?

A. Trakakis: “What we need is to settle down the dust for what we can expect in the future, rely more on technology which has always been the key driver for humans to survive and I think that the market uptake is certain.”

St. Esau: “LNG is something you can do now and has the lowest risk profile and provides a lot of optionalities for decarbonizing the shipping industry.”

P. Mitrou: “In terms of transition, we need a concrete regulatory regime as soon as possible, we need to work on lifecycle analysis, and a unified interpretation on lifecycle analysis. Once this is available, then we will know how to get there and what kind of technology development we need.”

C. Cartalemi: “If we think of 5 years ago, the blocking point was the infrastructure, now a lot of progress has been done with infrastructure. Now is the time to give a very clear regulatory framework.”

L. Nikolopoulos: “You cannot make a multi-billion investment with uncertainty about the future, so this is the foremost barrier. What can act as leader could be an enhanced carbon taxation.”