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Wärtsilä on LNG bunker fuel: Expert answers to 17 important questions

Firm gives an expert overview on top questions on LNG bunker fuel including if LNG is a future fuel and what does LNG being a transition fuel means.

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RESIZED Chris Pagan

Technology group Wärtsilä on Wednesday (19 June) gave an expert overview on top 17 questions related to LNG bunker fuel in this insight article including if LNG is a future fuel: 

Your choice of fuel affects both your profitability and your vessel’s environmental compliance. Liquefied natural gas (LNG) is a safe and cost-effective fuel that reduces greenhouse gas emissions and other harmful pollutants. LNG is playing a key role as a transition fuel and is widely seen as the first step towards decarbonising the maritime industry.

Switching to LNG as fuel for ship propulsion requires investment but can save you fuel costs, increase your profitability and reduce compliance risks. The expert answers to these 17 questions will tell you what you need to know about LNG as an alternative fuel for shipping.

What is LNG?

LNG is natural gas that has been cooled to -162°C (-260°F), turning it into a clear, odourless liquid that is easy to ship and store. LNG is typically 85–95% methane, which contains less carbon than other forms of fossil fuels. It is a compact, efficient form of energy that is ideal for ship propulsion.

What is LNG used for?

LNG is primarily used as a clean-burning energy source. It is used for electricity generation, heating, cooking, and as a transportation fuel. LNG is also used as a raw material for products like fertilisers and plastics.

In the shipping industry, LNG as fuel is used for ship propulsion, auxiliary power generation and other onboard energy needs. LNG as an alternative fuel for shipping has gained wide popularity due to its clean-burning properties and potential to help meet stricter emissions regulations.

What are the sources of LNG as fuel for ships? What is bioLNG?

LNG as fuel for ships is produced from natural gas extracted from underground reserves, including both onshore and offshore gas fields.

BioLNG is LNG produced from biogas, which is generated from organic waste like food scraps, agricultural waste, manure and sewage sludge. BioLNG is considered a renewable fuel and can further reduce the carbon footprint of ships using LNG fuel systems.

 Is LNG just methane?

LNG is primarily methane (typically 85–95%), but it also contains small amounts of ethane, propane and other hydrocarbons. LNG can also contain trace amounts of nitrogen and carbon dioxide. The exact composition of LNG may vary depending on the source of the natural gas and the liquefaction process used.

 LNG fuel vs. fuel oil: is LNG better than diesel?

Compared to diesel fuel oil, LNG offers several advantages. LNG produces significantly lower emissions when burned, including:

  • 20–30% less CO2 
  • 15-25% less total GHG
  • 90% less NOx 
  • 99% less SOx 
  • Almost no particulate matter (PM) 

LNG engines are also quieter. 

However, LNG has a lower energy density than diesel, so using LNG as an alternative fuel for shipping will require more fuel and therefore larger fuel tanks to achieve the same range.

 What are the advantages and disadvantages of LNG fuel?

The key advantages of LNG as fuel include reduced emissions and cost competitiveness. There is also an established and continuously growing global network of LNG bunkering facilities.

The disadvantages of using LNG as fuel for ships include the need for specialised equipment and training and the potential for methane slip.

Methane slip is when unburned methane, a potent greenhouse gas, escapes into the atmosphere. Modern dual-fuel engines will minimise this issue. Depending on engine type and load, you can reduce methane slip by up to 65% by upgrading your ship’s existing engines. Over the last 30 years, Wärtsilä has reduced the methane slip from its engines by around 90%.

 Is LNG environmentally friendly?

LNG is cleaner burning than traditional marine fuels, but it is still a fossil fuel. BioLNG, which is LNG produced from organic waste or biomass, can be considered a more sustainable alternative to fossil-based LNG as it has a lower carbon footprint. However, the production and combustion of bioLNG still emit some greenhouse gases. LNG can be seen as a bridging fuel in the transition to alternative fuels like methanol and ammonia, which aren’t yet widely available at scale.

 Is LNG a future fuel?

LNG both is and isn’t a future fuel. It enables lower greenhouse gas emissions and reduces other harmful air pollutants compared to fuel oil, but it is still a fossil fuel. Sustainable future fuels are crucial for maritime decarbonisation, but the current cost, limited availability and insufficient infrastructure are challenging for operators. This gives LNG an important role to play in the shipping industry’s transition to a zero-carbon future.

As more ports develop LNG bunkering infrastructure and more ships are built with LNG fuel systems, the use of LNG as an alternative fuel for shipping is expected to increase. LNG is considered a stepping stone on the path to decarbonisation as the industry moves closer to using true future fuels such as methanol and ammonia.

Note: The full article by Wärtsilä can be found here.

 

Photo credit: Chris Pagan on Unsplash
Published: 24 June, 2024

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Bunker Fuel

ENGINE on Fuel Switch Snapshot: HSFO remains cheapest across hubs

Brent’s steep fall brings VLSFO down; Singapore premiums over Rotterdam narrow; EU to impose tariffs on Chinese biodiesel imports.

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ENGINE on Fuel Switch Snapshot: HSFO remains cheapest across hubs

Once a week, bunker intelligence platform ENGINE will publish a snapshot of alternative and conventional bunker fuel prices in the world’s two biggest bunkering hubs. The following is the latest snapshot:

22 July 2024

  • Brent's steep fall brings VLSFO down
  • Singapore premiums over Rotterdam narrow
  • EU to impose tariffs on Chinese biodiesel imports

A sharp drop of $2.40/bbl ($18/mt) in front-month Brent futures has pushed down conventional fuel prices for yet another week. 

Bio-blend prices have also declined amid decreases in both bio- and conventional fuel components. 

Rotterdam’s VLSFO-equivalent LNG benchmark has bucked the downward trend and inched up by $3/mt in the past week.

LNG bunker fuel is priced $16/mt higher than VLSFO in Singapore, making VLSFO the cheaper option for dual-fuel vessels bunkering there. Conversely, LNG is the more cost-effective choice for dual-fuel ships bunkering in Rotterdam.

The ARA’s B24-VLSFO UCOME price premium over Singapore’s has widened from $19/mt to $32/mt as Singapore’s price has dropped.

VLSFO

VLSFO demand has improved slightly in the ARA in the past week, following slow activity the week before, a trader said. This seems to have prevented Rotterdam’s VLSFO benchmark from following Brent's significant decline.

Singapore’s VLSFO benchmark has tracked more of the crude benchmark's price drop, slipping by $14/mt in the past week. Most suppliers recommend lead times of up to 14 days for VLSFO in the port, but some can manage deliveries within five days.

When factoring in estimated EUA costs, Rotterdam’s VLSFO price has declined by $7-9/mt, while Singapore’s price has fallen by $16/mt.

Biofuels

Singapore’s B24-VLSFO UCOME price has declined by $7/mt in the past week, while its B24-LSMGO UCOME price has fallen by $9/mt. The two bio-bunker benchmarks have declined amid declining values for pure VLSFO ($4/mt) and LSMGO ($9/mt).

On Friday, the European Commission announced that it will impose provisional duties of up to 36.4% on biodiesel imports from China. PRIMA said “the EU anti-dumping results and its associated duties (ADDs) have effectively killed off Chinese biodiesel trading prospects into Europe”.

A lack of EU demand for Chinese biodiesel could result in more Chinese UCOME being exported to meet demand in countries like Singapore, sources say.

Rotterdam’s B30-VLSFO HBE price has declined by $8/mt in the past week, while its B30-LSMGO HBE price has dropped by a greater $14/mt. A $32/mt drop in the ARA POMEME price assessed by PRIMA Markets has pulled both benchmarks lower.

Biofuel price premiums over pure conventional fuels in Rotterdam are $189/mt for B30-VLSFO HBE blends and $136/mt for B30-LSMGO HBE blends. These premiums have narrowed by $9-12/mt in the past week.

The EU’s provisional duties on Chinese biodiesel imports could tighten availability of bio feedstocks for bio-bunker blending across Europe.

LNG

Rotterdam’s LNG bunker price has risen by $22/mt to $652/mt in the past week. The price rise has tracked an increase in the front-month NYMEX Dutch TTF Natural Gas contract.

The upward trend can be attributed to supply concerns at the Freeport LNG export terminal on the US Gulf Coast, a major source of European LNG supply. Some 5.4% of Europe's total LNG imports last year came from Freeport LNG.

Several LNG cargoes from Freeport LNG were held back from being exported by supply disruptions caused by Hurricane Beryl. This has contributed to push Rotterdam's LNG price higher in the past week.

Singapore's LNG bunker price has decreased by $11/mt, driven by a falling NYMEX Japan/Korea Marker (JKM) price.

The JKM price increased some in the middle of last week due to active deals to meet summer demand, before falling amid ample supply and high inventory levels, according to a report by the Japan Organization for Metals and Energy Security (JOGMEC).

By Konica Bhatt

 

Photo credit and source: ENGINE
Published: 23 July 2024

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LNG Bunkering

Shanghai SIPG completes three LNG bunkering operations of newbuildings

Ships involved were 7,500 CEU dual-fuel PCTC “Liao He Kou”, “CMA CGM FORT BOURBON”, a 7,300 TEU dual-fuel container ship, and “CMA CGM BELEM”, a 13,000 TEU dual-fuel container ship.

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Shanghai SIPG completes three LNG bunkering operations of newbuildings

Shanghai SIPG Energy Service Co.,Ltd on Tuesday (16 July) said it successfully completed LNG bunkering operations of three newly-delivered dual-fuel ships at the Luhuashan anchorage.

The operations took place from 10 to 13 July for a total of 70 hours with a total bunkering volume of 9260.9 cubic metres (m3).

Shanghai SIPG completes three LNG bunkering operations of newbuildings

The ships involved were Guangzhou Yuanhai Automobile Shipping Car Carrier 7,500 CEU dual-fuel PCTC Liao He Kou, CMA CGM FORT BOURBON, a 7,300 TEU dual-fuel container ship and CMA CGM BELEM, a 13,000 TEU dual-fuel container ship.

The ships were refuelled by bunkering vessel Hai Gang Wei Lai. To date, Hai Gang Wei Lai has completed bunkering at anchorage for 13 ships with a cumulative bunker volume of 48,220 m3.

640 (6)

640 (7)

Disclaimer: The above article published by Manifold Times was sourced from China’s domestic market through a local correspondent. While considerable efforts have been taken to verify its accuracy through a professional translator and processed from sources believed to be reliable, no warranty is made regarding the accuracy, completeness and reliability of any information.

 

Photo credit: Shanghai SIPG Energy Service Co.,Ltd
Published: 18 July 2024

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LNG Bunkering

Peninsula completes LNG bunkering op of “Thor Highway” in Gibraltar

Peninsula’s LNG bunker vessel “Levante LNG” successfully carried out the operation to deliver fuel to the car carrier, which is a newly built vessel chartered by “K” LINE.

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Peninsula completes LNG bunkering op of “Thor Highway” in Gibraltar

Marine fuel supplier Peninsula on Wednesday (17 July) announced the successful LNG bunkering of the car carrier Thor Highway by Peninsula’s LNG bunker vessel Levante LNG

The supply operation was carried out for its customer “K” LINE in Gibraltar.

The Thor Highway, operated by “K” LINE, is a newly built LNG dual-fuelled car carrier chartered by the company and was delivered this year. 

The vessel is part of “K” LINE’s continued commitment to lower carbon shipping solutions. Peninsula’s Tokyo office was integral in facilitating this deal through the strong relationship built with “K” LINE locally.

The smooth delivery also highlights Gibraltar and its Port Authority’s ambition in making their Port a key hub for LNG bunkering in the Mediterranean.

Peninsula’s Head of Sustainability and Alternative Fuels, Nacho de Miguel, said: “The LNG powered vessel order book is looking very healthy over the coming years. This further validates our decision to develop LNG bunkering solutions in the early stages of the marine fuel transition.

“Due to the ever-growing experience in supplies undertaken by our Alternative Fuels, Physical and Reselling desks, we are constantly increasing our ability to better service our customers. “K” LINE’s trust in Peninsula for supplying the Thor Highway is a testament to our growing presence in the LNG space and our ability to service customers from across the globe.”

Related: Peninsula sees ‘uplift’ interest in LNG bunker fuel among customers

 

Photo credit: Peninsula
Published: 18 July 2024

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