Skip to comments.How Liquid Natural Gas May Revolutionize Shipping, And Make Goods Cheaper
Posted on 03/31/2014 12:36:06 PM PDT by thackney
At a noisy, bustling shipyard 20 miles south of Istanbul, the worlds second-ever tugboat powered by liquefied natural gas sits at the end of a pier, awaiting its first water trial.
Then its off to Norway, said with no little pride Ruchan Civgin, the contracts manager at Sanmar Shipyard, of the 115-foot vessel. The first boat left in January.
Further south along the Marmara Sea coast, another shipbuilder is rolling out LNG-powered fish-feed vessels, used to transport feed for fish farms, for international markets.
These ships may be the vanguard of a global boom in LNG-powered shipping, produced by the explosion in U.S. fracking and by new international emissions restrictions. Liquid natural gas may end up turning global shipping on its head, as shipping companies look for an edge in their battle to cut costs and reduce carbon footprints.
The world as we know it today would not exist without the behemoths that traverse the high seas. An astonishing 80 percent of global trade is carried by ship: the Nikes on your feet, the gasoline in your car, the Toyota Prius in your driveway all came on container ships.
In February, San Diego-based TOTE Shipholdings ordered the world's first LNG-powered container ships. It also plans to convert its fleet of four ships to LNG power. The biggest driver is the environmental benefits of LNG, said Ben Christian, TOTE project manager.
In January, the Mississippi-based Gulf Coast Shipyard Group launched the first of six LNG dual-fuel offshore supply vessels, the first of their kind in the Gulf of Mexico.
And in Europe, French operator Brittany Ferries recently ordered a massive, 2,500-passenger LNG-powered passenger ferry expected to enter service in 2017. General Electric (NYSE:GE) and petroleum giant Royal Dutch Shell (LON:RDSA) are also looking to get in on the act.
Fuel typically amounts to 70 percent of the overall cost of moving a container ship from A to B; most ships today run on cheap, dirty bunker fuel. It's a dense oil residue said to contain 2,700 times more toxic sulfur than vehicular fuels. According to studies cited by the watchdog group Transport & Environment, air pollution from shipping causes 50,000 deaths in Europe alone every year. Regulations to be introduced by the International Maritime Organization next year and in 2020 will make high-sulfur fuels, such as bunker fuel, illegal for use in ships sailing in numerous emission-control zones around the world.
Enter LNG, which, unlike bunker fuel, contains no harmful sulfur dioxide, emits 26 percent less carbon dioxide, and produces almost zero smoke.
And its cheaper than bunker fuel too.
According to Tim Delay, vice president of fuels for liquid natural gas distributor Pivotal LNG, a unit of AGL Resources Inc. (NYSE:GAS), gas contains more energy than bunker fuel. In the U.S., he said, this works out to around $100 per metric ton cheaper than bunker fuel.
"The relative low price of natural gas and LNG compared to current high residual bunker and distillate fuel prices in the U.S and Europe has added to the attractiveness of LNG," wrote Frederick Adamchak, an adviser at New York-based brokerage Poten & Partners, in an industry publication last year.
America is also flush with gas: the U.S. Energy Information Administration estimates theres enough of it underground to last 92 years at expected demand.
And yet, of the 87,000 vessels that make up the global fleet today, LNG ships number just 50. So why isn't everybody converting their ships to a cheaper, abundant, cleaner fuel?
LNG presents challenges: building and converting ship engines takes time and is expensive. That's an important consideration in an industry where profit margins, hit hard by overcapacity after the global financial crisis, have shrunk in recent years.
Hundreds of LNG bunkering and refueling facilities will also have to be built at ports around the world.
As of today, the infrastructure of LNG supply is limited and installation of LNG engines is an expensive investment. But LNG might be a viable solution for new-built container vessels sometime in the future when the infrastructure is in place, said Mikkel Elbek Linnet, a spokesman for shipping giant Maersk Line, a unit of Denmark-based AP Moeller Maersk A/S (CPH:MAERSK-A).
Analysts say the number of ships converted to LNG will increase 20-fold by 2020. But in some cases, it's possible to reduce emissions and improve fuel consumption by using recycled engine heat and more efficient engines, rather than invest in an LNG conversion.
Maersk Line is doing just that with the launch last year of the first of a fleet of 20 massive Triple E container ships, slow-sailing giants -- the longest ships in the world at 400 meters (1,312 ft) -- that recycle engine heat. Maersk says they will consume approximately 35 percent less fuel per container than some smaller vessels.
However, many major ports have already started the move to gas. The Belgian port of Antwerp, Europes second-busiest container port after Rotterdam in the Netherlands, expects to open bunkering facilities for LNG-powered ships at the end of next year. In February, ground was broken on America's first such facility at Port Fourchon, La.
TOTE Shipholdings wouldnt say how much it expected to save by using LNG on its container carriers working the Jacksonville - Puerto Rico route.
But on a grander scale, vessels running on American LNG operating intercontinental routes could potentially save hundreds of thousands of dollars per journey. With gas prices forecast to remain steady for at least the next five years, cheaper shoes and cars may not be far off for North American consumers.
This fuel is how we break Putin’s new found wealth and stop his rebuild the Soviet empire scheme.
“gas contains more energy than bunker fuel.”
That doesn’t sound right.
No, it isn't.
LNG won't even ignite, it has to be warmed to a vapor first. The methane vapor has to be diluted down to 15% concentration with air before it will ignite.
By the time a significant quantity has warmed and diluted, it is far up in the air when the leak occurs outside.
Methane (natural gas) is only explosive when mixed with air in a confined space, trapping it from rising away.
I believe per pound, not per volume.
I guess you’ll have this and over the road trucks using it down the line.
U.S. Flag merchant ships are converting to LNG (at least one on the Great Lakes) and several ships coming out of the ship yards will be fueled by LNG.
And of course at least some of the ships that carry LNG are fueled by LNG.
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U r a gas genius..!!
Did you see this ?
Giant LNG 2 Stroke Diesels for Ships by Wärtsilä, I have never even heard of them!
You sent shudders down my spine.
The are actually a good builder of ship engines and have been for many decades.
A couple decades ago, I was on the design team then construction for a 30 MW power plant using Wärtsilä engines. Let’s just say they are better at packaging a ship engine.
Tampa port has a couple big LNG tanks,
Like small atom bombs waiting to go boom.
Educate yourself and stop repeating the NYMBY nonsense
LNG SAFETY - MYTHS and LEGENDS
That’s like the fear mongering Edison and his minions practiced over Tesla/Westinghouse building AC generation and transmission to compete with Edison’s DC projects. AC won the battle and enabled civilization as we know it today even though Edison electrocuted an elephant.
“....And Make Goods Cheaper”
You can forget that.
Some congress critter will propose the increase of taxation on these “cheaper” goods.
Shipping LNG sounds like a terrorist’s wet dream......................
Why do you think it would be worse than a crude oil or gasoline tanker?
It is actually far safer.
One hitch. EPA