INTERNATIONAL.Liquefied natural gas will become the dominant fuel source for allmerchant ships within 40 years as environmental pressures force ownersto use cleaner burning fuel, the world's fourth-largest vesselclassifier said.
Ships must cut emissions of sulfur oxides, a pollutant said to causeacid rain, to 0.5% by 2020 from 4.5% today under rules from theInternational Maritime Organization. In more environmentally sensitiveareas, the upper limit drops to 0.1% by 2015 from 1% today.
“Environmental requirements aren’t going to get any less strict,”Lars Petter Blikom, segment director for LNG at Det Norske Veritas, acompany that verifies ships are seaworthy, said in a November 16interview in London. “That’s just going to make gas even more compellingand there’s no other realistic option.”
LNG, natural gas chilled to 1/600th of its gaseous size, costs$397.28 a metric ton, according to Spectron. Bunker fuel oil with asulfur content of 4.5% and a viscosity of 380 centistokes costsUS$475.26 a ton, according to data compiled by Bloomberg from 25 ports.Nitrogen oxides trigger reactions that lead to the formation of ozone, apollutant that irritates eyes and lungs.
By 2020, a majority of owners will ask for LNG fuel tanks every timethey place an order for new vessels to be built, Blikom said.
Orders worth about US$46.1 billion have been placed for all kinds ofships so far this year, more than double 2009’s US$28.2 billion, andbelow the US$164.5 billion in 2007, according to Clarkson Plc, theworld’s largest shipbroker. Changing specifications so that ships burnLNG will add about 10 percent to construction costs, Blikom said.
As well as generating more revenue for yards including Hyundai HeavyIndustries, the world’s largest, the switchover will bolster demand forLNG as a fuel.
Ships will burn 200 million to 250 million tons of heavy fuel oilthis year, the Southampton, England-based International BunkerAssociation estimates. Based on the higher end of that range, aswitchover of the entire shipping fleet to LNG refueling would createdemand for 360 million tons of oil- equivalent of the liquefied gas, PerWiggo Richardsen, Det Norske Veritas’s director of communications, saidin a follow-up e-mail. That would be “much more than double” existingdemand for the liquefied form of the fuel, he said.
“The shipping industry has been the main demand source for the lowestquality oil products” and environmental legislation will halt thatsituation, Blikom said.
Most likely, LNG will be shipped to ocean-going vessels by specialistbarges or small tankers from land-based LNG storage tanks in a methodsimilar to how heavy fuel is distributed today, Blikom said.
LNG cuts carbon emissions from shipping by about 25 percent, sulfuroxides by almost 100 percent, and nitrogen oxides by 85%, Blikom said.As well as fitting out new carriers to run on LNG, it’s possible toretrofit existing vessels to use the fuel, he said. Nitrogen oxidespollution is also being curtailed under the International MaritimeOrganization rules. The shipping industry will face pressure to cut itscarbon emissions too, Blikom said.
Waertsilae OYG, the world’s biggest engine maker, said November 12that 10% of ships calling at Emission Control Areas, where the 0.1%limit will apply soonest, will be running on LNG by 2015. That wouldrepresent a tenfold increase in vessels using the fuel, it said.
Excluding ships that are employed in the LNG trade already, DetNorske Veritas has certified 21 out of the 22 merchant ships thatcurrently burn the fuel. Including vessels already operating in the LNGindustry, there are about 100 carriers that use the fuel for propulsiontoday, according to Waertsilae.