David Haynes

Society for Gas as a Marine Fuel

Sept 2015

LNG as a Marine Fuel

David.Haynes@sgmf.info

Who are SGMF?

• The Society for Gas as a Marine Fuel is• A non-governmental, non-profit making,

industry membership based organization

• Objective is to establish and encourage the safe and responsible operation of gas fuelled vessels and their fuellinginfrastructure

• SGMF is developing and delivering best practice and guidance on most aspects of the marine gas fuelled industry avoiding duplication and where it matters most

• As for regulations……• Gas as Fuel = SGMF + IGF code

• Gas as Cargo = SIGTTO + IGC code

TECHNICAL

SAFETY

ENVIRONMENTAL

CONTRACTUAL

TRAINING & COMPETENCE

Clean fuels

• Shipping facilitates over 90% of all global trade

• However, ship fuels contains 10,000 times the sulphur in road fuel meaning that shipping accounts for 2.7% of world CO2 emissions and 14% of sulphur oxide pollution.

• IMO stated in 2011

• “[Shipping must] make its fair and proportionate contribution towards realising the objectives [pollution control] … that the global community pursue”

ECAs

• Worldwide ship fuel contains 3.5% sulphur

• IMO wishes to reduce this to 0.5% by 2020 or 2025

• NOx is at Tier II level

• Environmental behaviours are being reinforced by lower limits in IMO’s Emission Control Areas (ECAs) (in green on map).

• Sulphur content in ship fuel today is 0.1%

• NOx moves from Tier II to Tier III in 2016

• Many more ECAs are proposed (in yellow)

Cleaner Fuel choices

Fuel Sulphur content

• HFO (RMA, RMB, IFO) <3.5%• MDO (DMB, DMC) <2.0%• MGO (DMA) <1.5%• MGO (DMX) <1.0%• LS HFO <1.0%

• LSMGO <0.1%

• ULSMGO <0.0015%

• LNG/CNG <0.0015%• Methanol <0.00005%• Hydrogen <0.00005%

Existing worldwide S limit 3.5%

Proposed worldwide S limit 0.5%

Existing inland waterway S limit 0.0015%

Existing ECA S limit 0.1%

ExhaustScrubbing

What is LNG?

• Methane rich gas (>80%)

• Liquefied at -160°C at 1 bar pressure to 1/600th

of its gaseous volume

• All hydrocarbons above pentane (C5) removed

• Sulphur removed to less than 15 ppm

• Colourless

• Odourless

• Non toxic

• Boiling liquid

• Non flammable but its vapour is flammable in the range 5 – 14% in air

Why does LNG work as a fuel?

• Worldwide commodity

• Growing transport fuel

• Non toxic

• Low sulphur content

• Relatively high energy density

Fuel energy densities

• HFO 37.3 MJ/litre

• MDO 35.9 MJ/litre

Alternative fuels

• LPG 26 MJ/litre

• LNG 22.2 MJ/litre

• Methanol 15.6 MJ/litre

• CNG 9 MJ/litre

• Hydrogen(l) 8.5 MJ/litre

• Pipeline NG 2.5 MJ/litre

Regulations and RulesInternational Code of Safety for Ships using Gases or Other Low-flashpoint Fuels (IGF)

Covers design standards for gas fueled ships

Adopted at IMO, Maritime Safety Committee (MSC) 95 with entry into force 1 January, 2017 based on contract, 1 July 2017 based on keel laying or 1 January 2021 based on delivery

Existing gas fueled ships grandfathered

Does not cover crew training requirements or bunkering interface

Does not address port specific or operational procedures

Status report: ships• 54 gas fuelled ships in service

• 59 vessels under construction

• Short Sea and Regional ferries currently make up the majority of the LNG fuelled fleet 26 (48%) in operation and 15 (25%) on order.

• Offshore support vessels make up the second largest contingent at 29% and 18% respectively

• Most types of ship now represented by a gas fuelled variant

• 15% of deep sea fleet (LR)

• 1500 Ships (DNV-GL)

0

10

20

30

40

50

60

70

Norway Other Europe US/Canada Rest of World

Nu

mb

er

of

gas

fue

lled

sh

ips

Other (order)

PSV (order)

Ferry (order)

Other Ships

PSV

Ferry

• 70,000 ships - world fleet

• 250 – 2500 in next 5-7 years

• 9000 fold increase in transactions!

LNG AVAILABILITY• Everywhere and nowhere

• Delivery by road tanker can be arranged in most of Europe, North America and the Far East

• Bunker vessels under construction for US, Europe and China

• Many current projects are providing for themselves• Dedicated terminals for liner trades in

Norway, Denmark and US, so far• Not going to happen overnight

• Regulatory processes take time• Capital intensive

• Most excess LNG supply has already been allocated – new LNG facilities required

LNG Price

• Energy markets are changing

• Volatility in markets and no stability yet in crude prices• Further falls after resurgence in oil

production from Iran?• Falls in LNG price by restart of

Japanese Nuclear plants following Fukushima?

• LNG prices vary regionally• Gas vs oil differentials variable but

low• Economics remain attractive in

North America

Summary

• Gas is a clean marine fuel and has a future market share

• Technology is not an obstacle to market development• IGF Code is adopted

• Jan 2015 and ECA 0.1% has passed, global sulphur cap next…..

• Current crude price drop / HFO is masking the apparent cost benefit of LNG

• SGMF aims to establish and share best practice worldwide• Working groups lead industry thinking • Knowledge to become available to the whole industry

• SGMF looks forward to your assistance and input…so please join us and join in!

LNG fuelling manifold

How do you use LNG?

Photo from Wartsila website

Two, independent LNG fuel tanks

Pump/fuel vaporiser cabinets

Pipe-in-pipe gas pipework

Two independent gas fuelled engines/power generators

Hose or hard armconnection

Bunker vessel Road TankerBunker terminalContainer

LNG supply via LNG delivery system

LNG Geography 2014

Key: LNG producing country/projectLNG consuming country/project