There’s no argument. LNG as a marine fuel offers the most environmentally superior choice to transport crude oil, dry cargo, and—yes—even shipments of LNG around the world. Within the last three years, the number of commercial tankers and cruise ships powered by LNG has grown from 118 vessels in 2017 to 143 now in operation and another 270 on order. The transition from heavy fuel oil to natural gas is, of course, driven by several influences currently at play—not the least of which is the IMO’s January 1, 2020 cap on heavy fuel sulfur from 3.5% to 0.5%. Now in effect, the new standards apply to more than 50,000 merchant ships across the globe.
For those in the market for a Very Large Crude Carrier (VLCC), a new tanker will set you back a cool $91.8 million or more. These ginormous ships—the largest manmade structures on earth— burn a whopping 55 tons of bunker fuel a day but are among the last marine vessels to hop aboard the LNG trend. That might be changing, however, with the latest report from International Shipping News, which just announced Chinese state-run Cosco Shipping Energy Transportation will upgrade a previously ordered VLCC to use LNG as its primary fuel. The company expects to pay an additional $9 million for the upgrade
To continue using cheaper high-content sulfur fuels, shippers will have to invest in exhaust cleaning systems known as scrubbers to avoid staggeringly high IMO fines. Scrubbers are considered “cheat” devices that dump pollution into the sea instead of the air, and those that manufacture them are raking in billions. Several countries are testing other more costly oil products like very low-sulfur fuel oil and marine gasoil for their Godzilla-sized VLCCs to ensure compliance.
But the tide appears to be turning in LNG’s favor as the cleanest, most economical option in what is no doubt a transformative period for oceanic transportation. Bunkering infrastructure continues to be built in the world’s busiest ports to supply marine vessels with LNG fuel. And with the ongoing shift to gas-powered marine engines for the world’s commercial tankers, the implications could mean even greater ongoing demand for natural gas to keep marine transportation moving.
What do you think?