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SIBCON 2020: Methanex Corporation explains its case for methanol as a marine fuel in interview

12 Oct 2020

The following article is part of event coverage for the upcoming Singapore International Bunkering Conference and Exhibition (SIBCON) 2020; where Manifold Times is an official media partner:

Methanex Corporation, a Canadian company that supplies, distributes and markets methanol worldwide, believes the product makes for a practical and flexible marine fuel that would benefit all shipping sectors and geographic locations.

Deepak Devendrappa, Director, Global Market Development at Methanex Corporation, recently shared his perspective of the case with Singapore bunkering publication Manifold Times in an interview below:

Overall, how has the global methanol industry changed in the past five years, and has this changed encouraged the adoption of methanol as a marine fuel?

  • The methanol industry has grown substantially over the last five years. We estimate that the methanol market was approximately 84 million tonnes at the end of 2019 compared to approximately 58 million tonnes at the end of 2014.
  • We continue to see energy demand growth, including marine fuel, driven by regulations for clean-burning fuels such as methanol. We expect that the implementation of the 2020 IMO regulations and 2050 goals will increase interest in methanol as a marine fuel.
  • Beyond the impact of COVID-19, we expect to see strong demand growth for methanol globally as a chemical building block, where growth is linked with GDP and industrial production levels, and in an increasing number of energy-related applications and as a clean-burning and economic alternative fuel.

What factors led to the decision of Waterfront Shipping/Methanex to order methanol carriers which are able to consume the product as a bunker fuel?

  • We continually keep abreast of all possible fuel options, but we know the benefits of methanol very well, and we believe it has advantages for the wider shipping industry and will continue to champion this technology as a wider industry solution.
  • Adopting methanol dual-fuel engine technology enables us to diversify our fuel options and operate cost-effectively regardless of market conditions. Dual fuel engines give us the choice of using the lowest cost fuel that meets regulations. Methanol, as a liquid fuel, is compatible with existing bunkering infrastructure which simplifies this dual-fuel approach.
  • When we look to the future, methanol is also future proof because it can be produced from renewable sources providing a pathway to compliance with future IMO emission regulations.

Do you foresee all future newbuilding orders from your company to feature vessels using methanol as a marine fuel?

  • Methanex’ subsidiary, Waterfront Shipping, has a fleet of 30+ vessels and has a constant renewal and expansion strategy.
  • It will have to continue to upgrade and grow its fleet to keep up with market demand and we believe that methanol, as a marine fuel option, is best suited for our future fleet.
  • At the end of 2019, Waterfront had eleven of the world’s first 2-stroke dual-fuel vessels representing ~40% of its fleet and we look forward to growing this.
  • We are excited by the performance of our methanol-fueled vessels with over 80,000 operating hours experience which has proved the safety and reliability of the technology.  We, along with our partners, will continue to invest in new and improved methanol-fueled vessels.

What are the technical differences and advantages of using methanol as a bunker fuel, when compared to traditional bunker fuels?

  • Methanol is a liquid marine fuel that is clean-burning, cost-effective, globally available, safe and technologically proven.
  • From an environmental perspective, methanol reduces the emissions of:
    • Sulphur oxides (SOx) by ~99%
    • Nitrogen oxides (NOx) by at least 60% and to Tier III NOx (>80%) standards through water injection;
    • Particulate matter by 95%;
    • Carbon dioxide (CO2) by up to 15% (on a combustion basis) compared to conventional marine fuels
    • Renewable and bio-methanol provide a pathway to reduce GHG emissions up to 95% over the lifecycle.
  • From a safety perspective, methanol has been shipped globally for over 100 years. It is biodegradable in water in the event of a spill and much more benign and cleaner than other marine fuels.
  • From a cost efficiency and availability perspective, the infrastructure for methanol already exists in most of the world’s major ports and is easier and significantly less costly to establish than infrastructure required for other alternative fuels, since it can be stored in unpressurized containers.
  • Methanol has remained cost-competitive with MGO over the past 10 years on an energy equivalent basis.
  • From a technology perspective, methanol is technologically proven as a marine fuel.

Currently, methanol is mostly being used as a fuel by methanol carriers. Apart from methanol carriers, which other vessel segments will be ideal candidates to use methanol as bunkers during the initial stage of adoption and why?

  • Methanol could be used by any ship segment and, as a liquid fuel, by using a dual-fuel engine, you can mix with conventional marine fuels (or biodiesels) to provide an even lower cost solution and deliver on practical requirements.
  • Methanol’s flexibility as a fuel is embraced by a range of adopters and advocates:
    • WFS – chemical tankers
    • Stena – passenger ferry
    • Maersk – containers
    • Fassmer – research vessels etc
    • Proman/Stena build – chemical tankers
  • The incremental cost to build new vessels to run on methanol is significantly less than alternative fuel conversions.
  • The differences between a standard vessel design and a methanol dual-fuel design are minimal and revolve around the add-on methanol components to the 2 stroke engine and the additional methanol fuel supply system.
  • Some industry segments may be more challenging due to methanol’s lower energy density than conventional fuels, but this is even more of a challenge for other alternatives such as ammonia or hydrogen with even lower density.

Moving forward to the next five years, do you see the use of methanol as marine fuel spreading to other sectors? Can you give some examples of this already happening?

  • As above, methanol is a practical and flexible fuel that would benefit all shipping sectors and geographic locations.
  • We see growing interest from industry leaders like Maersk, Stena etc. in adopting methanol as a marine fuel and we anticipate this trend to grow stronger over the coming years.

Photo credit: Methanex Corporation
Published: 8 October, 2020

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