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DNV: Taking methanol propulsion for MR tankers to the next level

With a bunkering procedure in place that has been approved and risk-assessed, the risks of methanol bunkering are lower than with conventional bunkering, says Jacob Norrby of Stena Teknik.

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dnv taking methanol propulsion for mr tankers to the next level

Classification society DNV on Thursday (4 May) released a Maritime Impact article focusing on Proman Stena Bulk’s journey for a methanol-fuelled tanker fleet and DNV’s role in it.

The article also discusses methanol bunkering and the availability of green methanol:  

Proman Stena Bulk is a joint venture between a methanol producer and a tanker operator. Its purpose is to build and operate the most efficient methanol-fuelled tanker fleet in the market with a smooth transition path towards net zero, and demonstrate the feasibility of methanol as a decarbonization option.

As the shipping industry ponders its options to reach net zero by 2050, methanol as a marine fuel is attracting attention due to the relatively mature and easy-to-adapt technology that is needed and an evolved regulatory framework in place. Furthermore, to remain compliant with tightening carbon emission limits, a methanol-fuelled ship will be able to blend in appropriate amounts of blue or green methanol when required without needing any technical modifications. 

Christos Chryssakis, Business Development Manager at DNV, sees the comparatively low capital investment as an especially attractive aspect of methanol as an alternative fuel: “The cost of building a vessel is lower, the whole design is simpler, and the fuel is easier to handle than for example LNG, ammonia or hydrogen. We believe that methanol opens a very promising pathway into a carbon-neutral future.” The question it all hinges on is the future availability of blue and green methanol, he adds.

Proman and Stena Bulk aim to prove methanol as a sustainable fuel

But the industry is not sitting idle. In 2015 ferry operator Stena Line, a subsidiary of Gothenburg-based Stena AB, converted one of their RoPax ferries to methanol in a pilot project to explore the feasibility of this technology. It was the first engine conversion to methanol performed by Wärtsilä. The ferry has been able to operate on methanol since then, demonstrating the maturity of the technology.  

Meanwhile the Swiss-based company Proman, a leading producer of methanol and ammonia, was looking for a shipping partner interested in taking methanol propulsion to the next level. “We want to drive the sustainability of all our operations as far as possible,” explains Peter Schild, Managing Director Sustainability at Proman. “Creating a fleet of dual-fuel tankers was part of that concept. Since shipping is not our core competency, we found an ideal partner in Stena Bulk, a tanker operator and a pioneer in methanol-fuelled ship operation.” 

Six methanol-fuelled tankers to operate worldwide

The two companies established a joint venture called Proman Stena Bulk and ordered six methanol-ready, 49,900 DWT medium-range (MR) chemical tankers, each with a cargo capacity of about 54,000 cubic metres. Four of the ships have been delivered already and the remaining two are due for completion in late 2023 or early 2024.  

The vessels travel from Proman’s methanol hubs in Trinidad, Texas and Oman to the Far East and Europe. “The size of these vessels is ideal for large-volume transport to China,” says Erik Hånell, CEO of Stena Bulk. “They often operate on a multi-stop route taking methanol to China, then other chemical products to Europe before returning to the hub.” Stena Teknik is in charge of the technical and operational management while Proman handles commercial management. “What could be better than a ship owner with our experience cooperating with a methanol producer – it makes a lot of economic sense,” says Hånell.

T2 Tan 459 Stena Pro Patria bunkering in Rotterdam tcm71 242709

Class partnership based on common innovation mindset on methanol

All six vessels are built to DNV class, an acknowledgement of DNV’s leading position in the field of methanol technology: the world’s first methanol-ready tanker was built in 2016 to DNV class, and 18 of the current global methanol tanker fleet of 24 vessels are DNV-classified. Jacob Norrby, Head of Newbuilds and Projects at Stena Teknik, says another reason DNV was chosen for this project was a certain affinity between the companies: “We find DNV having a similar mindset to ours with regards to innovation and exploring cutting-edge technologies.” DNV also engages with its clients actively to understand their needs, Norrby adds. “That is a very good starting point for building a strong relationship.” 

Stena enjoys the good dialogue with DNV's headquarters in Høvik and with DNV Maritime in Sweden, says Norrby. “The initial discussions with DNV to explore valuable know-how were very beneficial, helping us address the right questions. During the plan approval process it was crucial to have skilled people available at DNV who can give answers swiftly. This sort of collaboration is very meaningful to us, and we appreciate it very much.” 

Design properties enable world-leading EEDI

The Proman Stena Bulk newbuilds feature a range of finely tuned design properties, such as hydrodynamic optimization, energy-saving devices, a shaft generator and a highly efficient electrical system, resulting in a world-leading EEDI that is seven per cent better than any other existing medium-range newbuild, says Norrby. “This is really an achievement because it means we need less energy. I believe we have introduced a new standard with these ships.” Furthermore, he adds, Stena is always looking at ways to harness more waste energy from the main engine using the boiler and heat exchangers. “We have introduced another waste heat recovery stage on the scavenging air cooler which brings out a few per cent extra.” 

The methanol combustion process requires adding about three to five per cent of MGO as pilot fuel and the ships could in theory operate on MGO alone if running out of methanol, says Norrby. “But our ships run on methanol practically the entire time,” he adds. The injection water used for NOx reduction is produced on board from sea water.

Risk-assessed bunkering process for methanol

Stena has long-standing experience with bunkering methanol and the associated risk control, says Norrby. “With a bunkering procedure in place that has been approved and risk-assessed, the risks are lower than with conventional bunkering. Currently that is the information I have seen working on a bunkering standard for Methanol. We are participating in that.”

Note: The full Maritime Impact article on ‘Taking methanol propulsion for MR tankers to the next level’ can be found here

Photo credit: DNV
Published: 8 May, 2023

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LNG Bunkering

Singapore: Pavilion Energy supplies LNG to TFG Marine dual-fuel bunker tanker

“MT Diligence” was refuelled with 34 cubic metres of LNG bunker fuel, supplied by Pavilion Energy, marking the first LNG bunkering of TFG Marine’s bunker vessel.

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Singapore: Pavilion Energy supplies LNG to TFG Marine bunker tanker

Global marine fuel supply and procurement firm TFG Marine on Monday (20 May) announced the completion of the first liquefied natural gas (LNG) refuelling of its dual-fuel bunker tanker MT Diligence this week in Jurong Port, Singapore.

The 34 cubic metres (m3) of LNG to power the MT Diligence was supplied by the Marine division of Singapore-headquartered Pavilion Energy. 

“Deploying a vessel that can be powered by LNG as well as conventional low sulphur marine fuels helps TFG Marine to meet its licence requirement with the Maritime and Port Authority of Singapore (MPA),” TFG Marine said in a social media post.

Singapore: Pavilion Energy supplies LNG to TFG Marine dual-fuel bunker tanker

“Built and operated for TFG Marine by CBS Ventures Pte Ltd, the 5,000 dwt MT Diligence has been designed to our technical specifications, including stringent safety considerations and has joined our supply fleet this year in the major bunkering centre of Singapore.”

Manifold Times previously reported TFG Marine christening the first LNG dual-fuel bunker tanker to join its fleet.  

The newbuild vessel, MT Diligence, has joined the company's low sulphur fuel oil and biofuel supply operations in the major bunkering centre of Singapore.

Related: LNG dual-fuel bunker tanker “MT Diligence” joins TFG Marine fleet for Singapore ops

 

Photo credit: TFG Marine
Published: 21 May 2024

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Methanol

Argus Media: Low-carbon methanol costly EU bunker fuel option

Despite GHG emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels.

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Ship owners are ordering new vessels equipped with methanol-burning capabilities, largely in response to tightening carbon emissions regulations in Europe. But despite the greenhouse gas (GHG) emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels.

17 May 2024

Ship owners operate 33 methanol-fueled vessels today and have another 29 on order through the end of the year, according to vessel classification society DNV. All 62 vessels are oil and chemical tankers.

DNV expects a total of 281 methanol-fueled vessels by 2028, of which 165 will be container ships, 19 bulk carrier and 14 car carrier vessels. Argus Consulting expects an even bigger build-out, with more than 300 methanol-fueled vessels by 2028.

A methanol configured dual-fuel vessel has the option to burn conventional marine fuel or any type of methanol: grey or low-carbon.

Grey methanol is made from natural gas or coal. Low-carbon methanol includes biomethanol, made of sustainable biomass, and e-methanol, produced by combining green hydrogen and captured carbon dioxide.

The fuel-switching capabilities of the dual-fuel vessels provide ship owners with a natural price hedge. When methanol prices are lower than conventional bunkers the ship owner can burn methanol, and vice versa.

Methanol, with its zero-sulphur emissions, is advantageous in emission control areas (ECAs), such as the US and Canadian territorial waters. In ECAs, the marine fuel sulphur content is capped at 0.1pc, and ship owners can burn methanol instead of 0.1pc sulphur maximum marine gasoil (MGO). In the US Gulf coast, the grey methanol discount to MGO was $23/t MGO-equivalent average in the first half of May. The grey methanol discount averaged $162/t MGOe for all of 2023.

Starting this year, ship owners travelling within, in and out of European territorial waters are required to pay for 40pc of their CO2 emissions through the EU emissions trading system. Next year, ship owners will be required to pay for 70pc of their CO2 emissions. Separately, ship owners will have to reduce their vessels' lifecycle GHG intensities, starting in 2025 with a 2pc reduction and gradually increasing to 80pc by 2050, from a 2020 baseline.

The penalty for exceeding the GHG emission intensity is set by the EU at €2,400/t ($2,596/t) of very low-sulplhur fuel oil equivalent. Even though these regulations apply to EU territorial waters, they affect ship owners travelling between the US and Europe.

Despite the lack of sulphur emissions, grey methanol generates CO2. With CO2 marine fuel shipping regulations tightening, ship owners have turned their sights to low-carbon methanol.

But US Gulf coast low-carbon methanol was priced at $2,317/t MGOe in the first half of May, nearly triple the outright price of MGO at $785/t. Factoring in the cost of 70pc of CO2 emissions and the GHG intensity penalty, the US Gulf coast MGO would rise to about $857/t. At this MGO level, the US Gulf coast low-carbon methanol would be 2.7 times the price of MGO. By comparison, grey methanol with added CO2 emissions cost would be around $962/t, or 1.1 times the price of MGO.

To mitigate the high low-carbon methanol costs, some ship owners have been eyeing long-term agreements with suppliers to lock in product availabilities and cheaper prices available on the spot market.

Danish container ship owner Maersk has led the way, entering in low-carbon methanol production agreements in the US with Proman, Orsted, Carbon Sink, and SunGas Renewables. These are slated to come on line in 2025-27. Global upcoming low-carbon methanol projects are expected to produce 16mn t by 2027, according to industry trade association the Methanol Institute, up from two years ago when the institute was tracking projects with total capacity of 8mn t by 2027.

By Stefka Wechsler

 

Photo credit and source: Argus Media
Published: 21 May 2024

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Bunker Fuel

Bunker Holding, 123Carbon and BV launch carbon insetting solution

Bunker Holding has concluded its first blockchain-powered carbon insetting operation in a new partnership with 123Carbon and Bureau Veritas.

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Bunker Holding:Bunker tanker vessel supplying marine fuel to a cargo ship at anchorage

Marine fuel supplier Bunker Holding on Thursday (16 May) said it has concluded its first blockchain-powered carbon insetting operation in a new partnership with carbon insetting experts 123Carbon and Bureau Veritas.

This insetting partnership allows for the additional cost delivery of lower carbon, alternative marine fuels – such as sustainable biofuel – to be shared by carriers, freight forwarders, and cargo owners within the same value chain; allocated based on a globally accepted book and claim methodology.

“We’re excited to work with 123Carbon and Bureau Veritas, as we believe in complete transparency of how insets are created and transferred. Insetting is not new, but one concern within the maritime sector is under what circumstances alternative fuels are supplied, and who owns the emissions reductions,” said Tobias Troye, Head of Carbon Solutions at Bunker Holding.

By combining its alternative fuel supply expertise, its global access to low-carbon fuels and extensive carrier network with 123Carbon’s secure platform, Bunker Holding said it can offer carriers, freight forwarders, and cargo owners complete transparency and assurance regarding how their insets reduce maritime emissions.

“We are delighted that Bunker Holding not only uses our advanced platform for the issuance of the certificates, but has also chosen a fully branded solution to deliver the certificates in a secure environment to its customers,” said Jeroen van Heiningen, Managing Director of 123Carbon.

Working with 123Carbon’s blockchain-based insetting platform, and Bureau Veritas as third-party assurance partner to verify the fuel intervention and all related documentation, ensures that all insets are issued according to Smart Freight Centre’s Book & Claim methodology and 123Carbon’s assurance protocol.

To facilitate the intervention, Bunker Holding connected three different parties: the cargo owner, who wishes to reduce their scope 3 emissions and is willing to pay the “green premium”, the ship operator, to decarbonise its vessels through the use of biofuels, and the biofuel supplier, to deliver safe, high-quality low-carbon fuels. Due to the commitment from the cargo owner to purchase scope 3 insets, Bunker Holding was able to offer the biofuel at a more competitive cost to the ship operator, enabling the carrier to use biofuels instead of conventional fossil fuels.

“As a group, we are operationalising our decarbonisation strategy, and one key component has been to develop our alternative marine fuel supply capabilities, among others by securing fully certified biofuel availability in more than 100 ports around the world. The relative higher cost of alternative fuels may still prevent carriers to bunker it. However, carbon insetting helps bridge that gap, as it enables cost sharing and also sends an important demand signal to alternative fuel producers to scale up production,” said Valerie Ahrens, Senior Director of New Fuels and Carbon Markets at Bunker Holding.

 

Photo credit: Bunker Holding
Published: 21 May 2024

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