• 2019 December 10

    They have ships running on gas …

    In view of the IMO 2020 Sulphur Cap coming into force on January 1, an increasingly high number of ship owners opt for LNG with gas fuel system already being installed on Ultra Large Container Vessels (ULCVs). Infrastructure for LNG bunkering is underdeveloped in Russia yet, while liberalization of LNG export and its price deregulation can facilitate investments in this segment.

    What about us?

    Liquefied natural gas (LNG), as it was expected, is getting more and more popular.

    In China, Hudong-Zhonghua Shipbuilding had designed the world’s largest containership of ULCV type (Ultra Large Container Vessel) which will be equipped with a gas fuel system to run on LNG. DNV GL has recently awarded an Approval in Principle (AiP) certificate to Hudong-Zhonghua Shipbuilding for its new gas-fueled 25000 TEU ULCS design.

    It was earlier believed that LNG is more applicable for passenger ships and gas carriers rather than for container carriers since space is crucial for the latter when calculating the cost per transported container. Nevertheless, owners of boxships are increasingly interested in LNG as fuel for their vessels. Actually, the larger the container ship is the less expenses the ship owner will bear with installation of LNG tanks.

    CMA CGM was the first player in the shipping market to use LNG as marine fuel to power its future 15,000-TEU container ships that will operate between Asia and the Mediterranean, and that are scheduled for delivery starting in 2021. Total will provide a suitable solution for the bunkering of these container ships with the positioning of a LNG Bunker Vessel at the port of Marseille-Fos.

    In September 2019, CMA CGM Group announced the launching of the world's largest containership (23,000 TEUs) powered by liquefied natural gas (LNG) at the Shanghai Jiangnan-Changxing Shipyard. The CMA CGM JACQUES SAADE is a lead ship a series of nine 23,000-TEU containerships that will join the Group's fleet in 2020 on the French Asia Line (Asia-Northern Europe) and will operate under the French flag.

    Installation of gas fuel systems is not only a solution for VLCV and ULCV, but also for mid-size containerships. DNV GL has recently entered into a Joint Development Project (JDP) with Huangpu-Wenchong Shipbuilding Company (HPWS) on a 5,000 TEU LNG dual-fuel containership. The new energy-efficient 5,000 TEU Panamax container ship is intended for the fast-growing intra-Asia trades.

    It should be noted that all the above-mentioned designs foresee special shape of hulls to reduce operational costs (to increase fuel efficiency) and equipment with smart systems of navigation, cooling of refrigerated containers etc.

    If LNG fuel systems are considered to be promising and economically viable even for mid-size containerships we can expect the appearance of such ships on feeder lines. In this case, the demand for LNG is likely to grow in the Baltic Sea basin (the more so as it is among emission control areas with sulphur cap of 0.1%) and in the Azov-Black Sea and Far East basins. The plans on development of the required infrastructure in those basins were covered in one of our articles >>>>

    Investors’ interest to creation of small-size LNG production facilities can be encouraged by a recent decision on deregulation of gas prices focused on reduction. Besides, Russian Gas Society suggested liberalization of LNG export market for small-size production facilities.

    According to calculations of IAA PortNews, the cost of one tonne of LNG in Russia is about $450. This figure is increased with the cost of logistics and bunkering infrastructure.

    It should be noted that PortNews Media Group integrates activities promoting LNG as a marine fuel in Russia. The participants of the 3rd “LNG Fleet and LNG Bunkering in Russia” conference organized by PortNews Media Group initiated the creation of a working group on development of national regulations for introduction of LNG in water transport industry. Its activities are currently coordinated by Admiral Makarov State University of Maritime and Inland Shipping.

    Vitaly Chernov