• Follow Us On Our Preferred Social Media Platform:

EXCLUSIVE: Designer of Singapore’s first LNG dual fuel bunkering tanker talks trend

02 May 2018

Singapore-headquartered ship design firm SeaTech Solutions, the designer for Singapore's first liquefied natural gas (LNG) powered dual fuel bunkering vessel, believes the republic will be seeing more LNG fuelled ships ordered before the end of 2018. 
 
“We are working with different clients on several projects including smaller LNG carriers and should close these before end of the year,” Prabjot Singh Chopra, VP Technology at SeaTech tells Manifold Times.
 
Chopra, meanwhile, says many Singapore bunkering operators are still at a wait-and-see stage due to the extremely high incremental costs of ordering LNG dual fuel capable bunkering tankers.
 
“Everybody is waiting to confirm the availability and pricing of Low Sulphur fuels,” he notes.
 
“The biggest challenge is to reduce CAPEX and let owners see better returns on investment (ROI) as dual fuelled vessels present high incremental costs. The dual fuelled bunkering tanker may not fetch higher charter rates, and the only cost savings would be due to lower LNG prices.”
 
According to Chopra, building a LNG dual fuel vessel that can burn either LNG or marine gas oil (MGO) is between 20 to 25% more expensive compared to a similar vessel purely fuelled by LNG, due to the higher cost of the more expensive dual fuel engines.
 
However, a dual fuel engine offers flexibility and lower risk as availability and pricing of LNG are still not stable and expected to increase coming 2020. In such a case, the owner may choose to use MGO as a fuel if the price of LNG becomes too high.
 
The unpredictable LNG price, however, have not deterred some Singapore operators from exploring options for a LNG bunkering vessel capable of delivering LNG as a marine fuel to other dual fuel or pure gas fuel vessels.
 
“We are currently designing a range of smaller LNG bunkering vessels. The cost to build LNG tankers is high and we are working closely with the LNG system suppliers to integrate and optimise the design for a cost effective solution,” says Chopra.
 
“For example, building a 7,500 m3 pure LNG bunkering vessel in China will cost in region of USD$35 million,” shares Chopra.

The LNG cargo tanks of a pure LNG bunkering vessel may take up as much as 60% of the total cost of the vessel, he adds.
 
“We are looking at the same 7,500 m3 newbuild to our design below USD$30 million.
 
“The 7,500 m3 capacity LNG bunkering vessel will be adequate to deliver LNG to LNG fuelled bunker tankers, tugboats and other small and medium sized LNG fuelled vessels bunkering in Singapore.
 
“In comparison, the mega LNG-fuelled container vessels would require LNG bunker tankers with capacity of 15,000 to 20,000 m3. This requires a huge investment and a very high risk for any local bunker tanker owner to build a large LNG bunkering tanker without a guaranteed demand. In addition to the high investment and low ROI, the insufficient current demand for LNG bunkers is the second challenge.”
 
SeaTech Solutions is a vessel design specialist with more than 400 designs built and sailing worldwide. The company designed the world’s first deep sea mining vessel. In addition to Singapore, the firm has offices in China, India, Myanmar, Thailand, Japan, Vietnam, Malaysia and Korea.

Related: Sinanju, Mitsui AP orders LNG dual-fuel bunkering tanker from Keppel

Photo credit: SeaTech Solutions
Published: 2 May, 2018

 

Related News

Featured News

Our Industry Partners

  • argus

PR Newswire