6 reasons for LNG entering the marine fuel market

Lars Petter Blikom, Segment Director LNGAugust 2011

6 reasons for LNG entering the marine fuel market

© Det Norske Veritas AS. All rights reserved.


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The fleet of LNG fuelled ships is growing – Why?

In operationYear Type of vessel Owner Class2000 Car/passenger ferry Fjord1 DNV2003 PSV Simon Møkster DNV2003 PSV Eidesvik DNV2006 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2007 Car/passenger ferry Fjord1 DNV2008 PSV Eidesvik Shipping DNV2009 PSV Eidesvik Shipping DNV2009 Car/passenger ferry Tide Sjø AS DNV2009 Car/passenger ferry Tide Sjø AS DNV2009 Car/passenger ferry Tide Sjø AS DNV2009 Patrol vessel REM DNV2009 Car/passenger ferry Fjord1 DNV2010 Patrol vessel REM DNV2010 Car/passenger ferry Fjord1 DNV2010 Tug Wuhan Ferry Company2010 Patrol vessel REM DNV2010 Car/passenger ferry Fjord1 DNV2010 Car/passenger ferry Fjord1 DNV2010 Car/passenger ferry Fosen Namsos Sjø DNV

Ships in operation Confirmed orderbook

Year Type of vessel Owner Class2011 PSV DOF ASA DNV2011 Ro-Ro Sea-Cargo AS DNV2011 Ro-Ro Sea-Cargo AS DNV2011 Car/passenger ferry Fjord1 DNV2011 PSV Solstad Rederi AS DNV2011 General Cargo Nordnorsk Shipping AS DNV2012 PSV Olympic Shipping DNV2012 PSV Eidesvik DNV2012 PSV Eidesvik DNV2012 High speed RoPax DNV2012 PSV Island Offshore DNV2012 PSV Island Offshore DNV2013 Car/passenger ferry Torghatten Nord DNV2013 Car/passenger ferry Torghatten Nord DNV2013 Car/passenger ferry Torghatten Nord DNV2013 Car/passenger ferry Torghatten Nord DNV2013 RoPax Viking Line

Planned conversionYear Type of vessel Owner2011 Car/passenger ferry Fjord1 DNV2011 Chemical tanker Tarbit Shipping AB GL

Tables above include all the LNG fuelled ships in operation and on orderbooks globally, and where yard contracts have been signed



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Reason 1: Due to stricter emission requirements shipowners must do something to their ships. Status quo is not an option

Requirement

2010: SOx < 1,0%2015: SOx < 0,1%

Compliance option

• HFO + scrubber• Distillate fuels• LNG

ECA Emissions requirements for existing fleets

Requirement

2011: NOx Tier 22016: NOx Tier 3

Compliance option

• Scrubber + SCR• LNG

ECA Emissions requirements for newbuilds



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Reason 2: LNG offers environmental performance superior to any other feasible marine fuel

Compared to conventional HFO marine fuel, LNG offer significant emissions reductions:

• NOx: 85% reduction • SOx: ~100% reduction • Particles: ~100% reduction • CO2: 15-20%

reduction



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Reason 3: LNG offers improved economic performance

An LNG fuelled ship will be more expensive than a ship with conventional fuel, but the investment will be returned through less fuel consumption, less maintenance, and most probably a cheaper fuel.



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Reason 4: Regulation, rules, and standards are already in place in many regions

Status is promising:

• The International Maritime Organization (IMO) has issued interim guidelines for a code for gas fuelled ships (IGF)

• Most class societies have now issued rules, DNVs have been available since 2001

• Procedures for bunkering and harbour operations are being worked on.

• One JIP finished• ISO work initiated



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Reason 5: The technology is already proven

20 ships in Norway are floating evidence of the technical feasibility



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Reason 6: The competitors may be doing it first

What if the competition gains a strong competitive advantage because they were quicker in implementing new technology and innovative design?



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Follow the development in DNV’s LNG blog

http://blogs.dnv.com/lng

http://blogs.dnv.com/lng



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Safeguarding life, property and the environment

www.dnv.com

6 reasons for LNG entering the marine fuel market

Technology

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