global Ship movements; Source: Lloyd’s Register LNG Bunkering Infrastructure Study Feb, 2012
Last October, Sanmar Shipyard built the first tugboat powered by LNG, and a second one was rolled out this month. The first LNG-powered ferry, Glutra, was first built by Fiskerstrand BLRT AS and first put into service in 2000 in Norway by Fjord1. Over a dozen other LNG ferries have since rolled out. The same company is rolling out LNG-powered fish-feed vessels, used to transport feed for fish farms. In February, TOTE Inc. announced the General Dynamics NASSCO shipyard in San Diego, CA would be constructing the first LNG-powered containership in the world. Expected to be put into service in late 2015 for the Puerto Rico trade, a second ship is expected in early 2016.
So why the move to LNG gas? The two main factors are abundant economical natural gas and environmental factors. Poten & Partners, in its publication, LNG as Marine Fuel, stated, "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 as an alternative marine fuel." Most ships today run on a dense oil residue commonly called bunker fuel, which is more expensive than LNG and not as energy dense.
Regulations from the International Maritime Organization (IMO) call for reductions in sulfur content of marine fuels on a global basis effective 2020, and in certain emission control zones, by 2015. Bunker fuel is a high-sulfur fuel. LNG on the other hand, has very little sulfur content, and its combustion produces low nitrous oxides.
Yet, less than 1% of the global fleet today is LNG fueled ships. Building or converting engines to LNG is expensive and takes time. TOTE has a $350 million capital commitment in constructing the above mentioned containership, and it will be over 1 ½ years before put into service. Another need is to have port infrastructure to produce, store and transport LNG. Developers may be hesitant to invest in LNG infrastructure unless they are confident of the LNG market for fueling ships. Some major ports such as Antwerp have started to build this infrastructure, and Harvey Gulf International Marine announced plans to build a liquefied natural gas marine fueling facility in Port Fourchon, LA. Some companies, such as Maersk Line, feel it is possible to reduce emissions and increase fuel use by recycling engine heat and using more efficient engines rather than investing in LNG conversion.
DNV GL, the world's largest ship and offshore classification society, estimates LNG-powered ships will increase 42-fold to almost 1,800 vessels by 2020. LNG vessels operating intercontinental routes have the potential for saving hundreds of thousands of dollars per journey. This could sift down to savings for US consumers.