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Argus Media: LNG demand may rise with discount to bunkers

Northwest Europe LNG to conventional marine fuels price discount continued to deepen in July, meaning LNG/fuel oil dual-fuel ship owners could cut their bunker expenses by switching to LNG bunker fuel.

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The northwest Europe LNG to conventional marine fuels price discount continued to deepen in July, meaning LNG/fuel oil dual-fuel ship owners could cut their bunker expenses by switching to LNG.

24 July 2023

In June the price of northwest Europe LNG delivered on truck slipped below the price of high-sulphur fuel oil (HSFO) at -$10/t, Argus data showed. The discount widened to -$50/t average from 1-24 July. LNG's discount to very low-sulphur fuel oil (VLSFO) on 1-24 July was even deeper, at $112/t, from a $81/t discount in June. LNG was also assessed at $300/t discount to marine gasoil (MGO) on 1-24 July, from a $231/t discount in June.

LNG emits "virtually no sulphur oxides (SOx)" when burned, according to LNG energy industry coalition SEA-LNG. Thus LNG can be used in lieu of 0.1pc sulphur MGO in the global emission control areas (ECAs) such as Rotterdam, where marine fuel sulphur content is capped at 0.1pc to keep down SOx emissions. LNG for bunkering demand accounted for 2pc of Rotterdam total marine fuel demand in the first quarter of the year, up from less than 0.3pc in the first quarter of 2022, but down from 5pc in the third quarter of 2021.

Compared with MGO, LNG emits 14pc less CO2 from combustion, according to a 2021 study by the independent, nonprofit organization international council on clean transportation (ICCT). Starting next year, ship owners traveling EU territorial waters will have to pay for 40pc of their emissions from combustion. EU-traded CO2 was assessed at $95/t average on 1-24 July, which would amount to about $17/t in CO2 cost savings for vessels burning LNG instead of MGO.

Europe faces less severe natural gas supply security risks in the run-up to winter 2023-24 than it did ahead of the previous winter. Countries have succeeded in rebuilding stocks and the EU can count on much larger, and growing, LNG import capacity. But Russian pipeline deliveries to Europe are a fraction of what they were before the onset of the war in Ukraine, so supply could still be tight if gas demand rebounds. Thus it is unclear if LNG prices would remain below fuel oil's this winter.

By Stefka Wechsler

 

Photo credit and source: Argus Media
Published: 28 July, 2023

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Hydrogen

LR MDH joins call to accelerate adoption of zero-emission bunker fuels by 2030

Call to action organised by RMI, the UN Climate Change High-Level Champions, the UCL Energy Institute, and the United Nations Foundation.

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LR MDH joins call to accelerate adoption of zero emission fuels by 2030

Lloyd’s Register Maritime Decarbonisation Hub (LR MDH) on Tuesday (12 November) joined more than 50 firms across the spectrum of the shipping value chain — e-fuel producers, vessel and cargo owners, ports, and equipment manufacturers — in signing a Call to Action today at COP 29 to accelerate the adoption of zero-emission marine fuels.

Organised by RMI, the UN Climate Change High-Level Champions, the UCL Energy Institute, and the United Nations Foundation, the Call to Action demonstrates strong industry momentum to invest in decarbonisation through scalable zero-emission marine fuel pathways.

The joint statement calls for faster and bolder action to increase zero and near-zero emissions fuel uptake, investment in zero-emissions vessels, and global development of green hydrogen infrastructure, leaving no country behind.

James Forsdyke, Managing Director of LR MDH, said: “We are proud to be part of this initiative dedicated to expand the production of green hydrogen as a marine fuel or as an enabler for synthetic zero to near-zero carbon fuels. One of the biggest tasks ahead of us is developing a robust and reliable green hydrogen supply chain to deliver zero carbon fuels to vessels in key maritime hubs in ways that are safe, sustainable and that benefit all shipping stakeholders, particularly seafarers and port communities.

“In line with the Lloyd's Register Maritime Decarbonisation Hub's mission to accelerate the safe, sustainable, and human-centric transition of the maritime industry, we have spearheaded initiatives like the Silk Alliance green corridor cluster and Maritime Fuel Supply Dialogues, to aggregate first mover efforts at a regional level and create stronger infrastructure for green hydrogen projects. Being part of this call to action reinforces our commitment to advance the use of hydrogen produced from renewable resources as an important tool in decarbonising shipping.”

In anticipation of this regulatory milestone, the signatories outline several key recommendations to expedite the adoption of hydrogen-derived fuels, namely the need for clear, ambitious mid-term measures; a balanced approach to revenue distribution to help bridge the cost gap between fossil fuels and scalable zero-emission fuels (SZEFs); and evidence that key milestones for practical use of SZEFs are advancing.

To align with a 1.5°C pathway, global green hydrogen production must double by 2030, translating to the uptake of at least 5 million tonnes of green hydrogen in the shipping sector. To accomplish this, coordinated action is needed across the supply chain to expand the supply and adoption of zero or near zero-emission shipping fuels such as e-ammonia and e-methanol, build up the ecosystem synergistically, and deliver on a just and equitable transition.

Close collaboration between green hydrogen producers, shipping actors, and policymakers is vital to securing the enabling conditions and investments that will deliver shipping’s clean energy transition.

“The Green Hydrogen Catapult is proud to support this initiative. Collaboration across the maritime value chain is key to an accelerated, just, and equitable transition of the sector to renewable fuels, and partnerships are key to building and maintaining momentum,” said Oleksiy Tatarenko, the leader of RMI’s hydrogen initiatives and the Green Hydrogen Catapult, a coalition of green hydrogen market leaders promoting the aggressive global adoption of green hydrogen.

Ports and port service companies, alongside financiers, have also added their support to the Call to Action, committing to investing in hydrogen-derived fuel infrastructure and safety projects to support bunkering of e-fuels.

 

Photo credit: Lloyd’s Register Maritime Decarbonisation Hub
Published: 13 November 2024

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Alternative Fuels

IMO advances training for seafarers on LNG-fuelled ships

Subregional ‘train-the-trainer’ workshop focused on seafarers onboard LNG-fuelled ships subject to the IGF Code.

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The International Maritime Organization (IMO) on Monday (11 November) said seafarer trainers from Indonesia, the Philippines and Viet Nam were put through their paces for liquefied natural gas (LNG) fuelled ships with advanced simulator and practical training at a workshop in Ashiya and Yokosuka, Japan.

The subregional "train-the-trainer" workshop (30 October to 6 November) focused on seafarers onboard LNG-fuelled ships subject to the International Code of Safety for Ships Using Gases or Other Low-flashpoint Fuels (IGF Code).

The workshop is part of IMO efforts to ensure seafarers are well-equipped to operate LNG-fuelled ships safely and effectively. The workshop included three major components: classroom lectures; LNG bunkering simulator trainings at the Marine Technical College in Ashiya, Japan, and advanced emergency responses exercises at the Maritime Disaster Prevention Centre (MDPC) in Yokosuka, Japan.

The participants gained hands-on experience with LNG bunkering simulators. They learned how to use Self-Contained Breathing Apparatus (SCBA) and other Personal Protective Equipment (PPE), gas detector, emergency measures for LNG leakage, low-temperature brittleness, as well as fire control, extinguishing agents and firefighting procedures and in particular, LNG (stored and supplied in -162 °C) had been utilised during the exercises.

The nine trainers gained knowledge and experience, and were ready to take the skills back to their own training institutions, to enhance their programmes and strengthen training capacity for seafarers on LNG and other alternative-fuelled vessels.

The workshop was based on the requirements under the Standards of Training, Certification, and Watchkeeping for Seafarers (STCW) Convention and Code, taking into account model courses 7.13 and 714 on the Basic and Advanced training for masters, officers, ratings and other personnel on ships subject to the IGF Code.

In accordance with regulation V/3 of the STCW Convention, every candidate for a certificate in advanced training for service on ships subject to the IGF Code shall have completed at least one month of approved seagoing service that includes a minimum of three bunkering operations on board ships subject to the IGF Code. Two of the three bunkering operations may be replaced by approved simulator training on bunkering operations.

The workshop was co-organized by the Ministry of Land, Infrastructure Transport and Tourism of Japan and the IMO Secretariat, under IMO's Integrated Technical Cooperation Programme (ITCP), with sponsorship from the Nippon Foundation and support from the Japan Ship Technology Research Association and the Japan Agency of Maritime Education and Training for Seafarers.

The IMO Secretariat is collaborating closely with Member States and international organizations to advance training of seafarers operating LNG-fuelled and other alternative-fuelled ships, supporting the maritime industry's need for skilled and qualified personnel.

 

Photo credit: International Maritime Organization
Published: 13 November 2024

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Alternative Fuels

Singapore: A*STAR advances safety in handling of future marine fuels

Funds project to develop tool to predict the dispersion of ammonia and methanol in the event of accidental leakages during bunkering operations.

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Singapore’s Agency for Science, Technology and Research (A*STAR) on Thursday (7 November) awarded funding to a bunkering project at the 14th edition of the Singapore Maritime Institute (SMI) Forum.

The project, titled Dispersion Analysis and Simulations for Handling (DASH) of Future Fuels, is led and hosted by A*STAR Institute of High Performance Computing (A*STAR IHPC).

This joint initiative includes other A*STAR research institutes and public research partners such as CNRS@CREATE, the Technology Centre for Offshore and Marine, Singapore (TCOMS), and the Tropical Marine Science Institute (TMSI) at the National University of Singapore (NUS).

The project focuses on developing a multi-fidelity planning tool to predict the dispersion of ammonia and methanol in the event of accidental leakages during bunkering operations.

Essentially, the tool will integrate dispersion analysis, consequence simulations, and real-time environmental data to create a safety and risk management system that provides insights into the behaviour of these next-generation fuels.

The developed tool will be used to develop effective preventive measures, emergency response strategies, and mitigation plans for such scenarios.

“A*STAR IHPC is dedicated to developing next-generation tools to improve the design and safety of multi-fuel bunkering operations,” said Dr Su Yi, Executive Director of A*STAR IHPC.

“Through close collaboration with our partners, we aim to equip industry stakeholders with advanced simulation tools that assess potential leak scenarios and enhance safety planning, operations, and emergency response.

“This enables more informed, strategic decision-making that supports the maritime sector’s journey toward safer, more sustainable fuel solutions,”

Dr Chen Xinwei, Deputy Executive Director of SMI added, “Decarbonisation and sustainability are critical challenges facing the maritime industry.”

“SMI is pleased to support the DASH project with funding, highlighting our commitment to advancing the safe handling of alternative fuels – an essential step in achieving the sector’s decarbonisation objectives.”

 

Photo credit: Singapore Maritime Institute
Published: 11 November 2024

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