Technical visits enhance Gas Fuelled Ships conference appeal
Some 140 delegates packed the room to hear about the big questions facing the shipping industry
The Motorship’s 2014 Gas Fuelled Ships conference was held 25-27 November in Stavanger, Norway, and once again proved a great success.
As well as two days of presentations, including round table discussions, the package enjoyed by some 140 delegates included the conference dinner, supported by GE Marine, and three technical visits – two including the chance to go on board actual gas-fuelled ships – at the end of the event. The final visit, to a dual-fuel offshore supply ship, was arranged as a very worthwhile last-minute bonus.
First day chairman Lars Robert Pedersen, deputy secretary general of BIMCO, gave the welcome address, summarising the last GFS conference. Anders Mikkelsen, business development leader DNV GL, gave the first keynote speech. He explored the ‘big questions’ of pricing, availability, the risks and opportunities of new low sulphur fuels and the uncertainty of what will happen after the low sulphur limits come in. Despite this, there is a lot of optimism in the industry. The small scale LNG value chain is critical, and users and potential users need to understand how this will work. Globally, infrastructure clusters are fast developing to support bunker supplies. 52 LNG fuelled ships are in operation worldwide. Previously almost entirely Norwegian, the fleet is getting more international. There are 78 confirmed orders, with greater variety of ship types and more outside Europe. So with 130 confirmed ships, excluding gas carriers and inland vessels, we will reach 2020 with strong momentum for the gas fuelled ship orderbook.
Jaroslaw Kotowski, project manager INEA for the EC, gave the second keynote speech, on encouraging LNG bunkering opportunities in Europe. There has been considerable support for ‘green’ shipping projects, particularly LNG, and funding is still available for such developments.
Aksel Skjorvheim, Shell LNG business development manager, gave the third keynote address, outlining the development of small scale LNG supply in Europe. He believes there is a strong case for gas as ship fuel, and Shell intends to play a strong role. The company believes in small-scale plants feeding off the large ones, to supply smaller quantities of gas, as part of a network of regional and local hubs, which will include bunker vessels. The challenge is to do this in a cost effective way, to compete with other fuels, and this will depend on volume. There are no technical or logistic limitations, the market just needs the right concentration of end users.
First speaker was Ivan Bach, commercial marine sales manager of GE Marine, who described the first LNG-fuelled gas turbine fast ferry, the Incat-built Francisco, operated by Buquebus in South America. In this case, the operator has set up its own small-scale LNG infrastructure. Both Incat and Austal have concept designs for larger dual-fuel fast ferries powered by GE LM2500 engines. Other concept designs for the same power unit include the COGES LNG carrier, designed for increased efficiency.
Carlo Contessi of Wärtsilä Italy recounted new experience and future expectations for gas powered ships. Conversions have been proved feasible, as well as newbuild. The offshore sector lends itself particularly well to dual fuel power, with capability to operate in arctic and tropical temperatures, and over a wide load range, including heavy load in-ice operations.
Conversions were the focus of a presentation by Henning Pewe, of DNV GL. He looked at two projects, the established Bit Viking tanker and the new conversion of the Ostfriesland ferry in Germany. The ferry project involves lengthening the ship, with a new aft ship section to include the gas systems, and new dual fuel engines. Experience with Bit Viking has shown that all of the expectations have been met and the system has worked reliably and safely.
Morten Larsen, technical director of Fjord Line, spoke about the company’s two LNG fuelled ferries, operating alongside one conventional ferry and one fast ferry. The two ships were changed, during build, from conventional propulsion to pure gas engines. The ships have performed well in service, with only one problem, i.e. gas pressure build-up in bad weather, but this was simply solved by Rolls-Royce with a modification, incorporated in the second build. There has been one bunkering incident, attributed to handling the hose with a crane. Mr Larsen said that even with gas oil prices falling, LNG is still competitive.
The merchant ship LNG fuel system designed by DSME subsidiary DSEC was described jointly by chief engineer Lim-Jong-uk and assistant engineer Park Sean-jun. The system has been developed principally for a US container ship project, powered by the MAN ME-GI low speed dual fuel engine.
Leonidas Karistios, global gas technology manager, Lloyd’s Register, looked at sustainability of LNG as fuel. The decision on investment has to be made based on both commercial and technical considerations, though currently commercial and right-time considerations are more important than technical, where many of the questions have now been solved. LR has developed a ‘gas fuelled readiness’ (GR) class notation to help guide clients to valid decisions.
Esa Jokionen of Rolls-Royce gave a presentation jointly authored with Oskar Levandar, on efficient gas fuelled ferry concepts. The two proposals, known as Clear Blue and Dynamic Blue, concentrate respectively on simplicity, i.e. low investment cost, and efficiency, i.e. lower operating cost. These have previously been described in The Motorship. Clear Blue is said to compare, in build cost, favourably with that of a refurbished second-hand vessel fitted with a scrubber.
Mathias Jansson of Wärtsilä described the thinking behind the LNGPac fuel gas handling system. The current reference list stands at over 30, with the latest version designed for compactness and simplicity.
Dr Jorge M.G. Antunes, marine CEO of TecnoVeritas examined some of the challenges of LNG as a fuel on existing ships, and how these can be overcome. Many short sea ships and ferries are prime candidates for LNG conversion. TecnoVeritas is able to carry out conversions of existing engines to dual fuel, normally using a low percentage of diesel fuel mixed with gas.
Finally on the first day, Linda Sigrid Hammer, principal engineer with DNV GL, looked at modern rules, formulated to keep up with the technology of gas fuelled ships. Rules have evolved over some 14 years and will reach maturity when the mandatory IGF code enters force in 2017. Recent changes at MSC94 included relaxation of regulations concerning location and length of LNG tanks. Importantly, there is still a high level of risk, even though no accidents have yet occurred.
A question and answer session produced a lively debate, culminating with a shipowner, Patrick van Eerten of Boskalis, urging the engine companies and classification societies not to forget the plight of the owners in their upgrading and rule-making.
Day two was introduced by chairman-for-the-day Martin Shaw of MOAMS. Mr Shaw reviewed the first day, reminding those present that a sharp increase in orders for LNG ships was anticipated in five years. He also recalled the fact that the EU had considerable funding available for LNG ships, and LNG fuel was being adopted across many sectors. He thanked Fjord Line for being a pioneer.
Roger Gothberg, Skangass marine sales manager, described the company’s current and future plans for supplying LNG to ships, including truck-to-ship, fixed bunker stations, and the latest plans to offer ship to ship bunkering on the Norwegian west coast and in the Baltic.
Small scale LNG terminals were examined by Stig A Hagen, director of Kanfer Shipping. The company claims to have a solution, not expensive or land-based, but cost effective, mobile, flexible, scalable and offering a low financial risk. Exact details are still confidential.
Arthur Barret of GTT explained technology transfer from large LNG carrier cargo containment systems to the LNG fuel supply chain. Various methods of handling boil off gas during bunkering must be provided.
Jesper Aagesen of Lloyd’s Register in Denmark referred to a survey of shipowners, revealing a strong expectation in most sectors that LNG would be adopted as fuel in the future. Some 11% of deep sea ships were expected to be LNG fuelled by 2025, while 23% of ports surveyed said they would be offering LNG fuel.
Mark Callaway, a naval architect with Rolls Royce, explained the company’s LNG tank technology. A project looking at a small LNG tanker/bunker ship examined a range of different tank configurations. All tanks technologies have strengths and weaknesses, and there has not yet been any clear winner.
Erik Admiraal of Demaco explained how vacuum insulation technology can be applied to pipelines to lower costs and increase profitability. Vacuum insulation results in around 15 time less boil off than uninsulated pipes, and payback is likely to come within two years. Demaco is going through the class approval process to allow the technology to be used onboard.
Bureau Veritas business development manager Carlos Guerro considered design aspects of safe LNG bunkering ships for future larger scale refuelling. The need for high delivery rates, alongside safety, means factors such as additional boil off gas and vapour return lines have to be considered. BV has issued guidelines for LNG bunkering, but technical specifications of bunker ships will need to be properly addressed..
The afternoon was given over to round table discussions. Delegates were divided into groups, charged with discussing one of three topics, under the direction of moderators. Topics were LNG pricing forecasts, LNG bunkering strategies and infrastructure for the future, and LNG supply and availability.
The first discussion centred on demand for LNG as ship fuel. Obviously the economics are important, and the participants felt that although LNG is economic against distillate fuels, comparisons with HFO are still too uncertain. In North America, thanks to cheap and plentiful gas supplies, LNG is clearly competitive, but there is still a long way to go where ‘flexible’ routes, i.e. most chartered vessels, are concerned. The lack of clear and transparent pricing is holding LNG back, particularly as other solutions such as scrubbers are attractive, as is MGO for ships not operating full-time in ECAs. Another conclusion of this discussion was that suppliers are reluctant to develop a new market segment, i.e. gas as ship fuel, so synergies need to be found with other potential markets. The LNG markets are still hard to understand, being regional whereas oil is global. Logistical costs for LNG are still above those for oil distribution and this issue is affecting the bunkering and infrastructure questions.
The second round of discussions looked specifically at safety issues of LNG supply and bunkering. International standardisation was needed, particularly for connections and for emergency shutdown procedures. The participants recognised that progress was being made, but one outstanding issue was whether or not bunkering can be allowed when passengers are onboard. The final point of discussion, and one where little progress seems to have been made, is that every port has different standards and procedures for bunkering – a global framework, or at least an EU-wide framework, is needed.
The third set of discussions centred on technology, firstly onboard ships, and this followed two threads – propulsion and storage – and secondly bunkering. Moderator Lars Robert Pedersen recognised that there was a degree of overlap with the other groups, particularly where issues like bunkering and safety are concerned. One area of concern is the different requirements pertaining to different areas, with the US Coast Guard, for example, taking a different approach to regulation and standardisation from other nations. Owners are still experiencing road blocks to LNG, the most important of these being the uncertainty of the cost of LNG, particularly in the longer term in comparison with other fuels. Oil is familiar, safe and simple to handle, whereas LNG is, for many owners, novel and complicated. A dual fuel solution will allow owners to use the most economical fuel choice at any time. On the other hand, LNG technology is proven and available, at least for mainstream regional shipping though less so for more specialised markets, and for larger ships, propulsion using LNG is still at a comparatively early stage. The new IGF code has been overtaken by technology in some respects, so there is a need for improvement in international regulation. Looking at bunkering technology, there is still a way to go in transfer from large scale to small scale LNG supply. The human element, equipment standards and procedural standards all need a lot more work on the regulatory front. Although the EU is making progress regionally, more work is needed globally. There are even differences between flag states that need to be ironed out. LNG quality, insurance and legal aspects of bunkering need more standardisation too. Differences in tank types need to be clearly understood when bunkering. Other issues include vetting of ships, lightering and training of crew.
Economics of LNG, from both shipowner and supplier perspectives, were the focus of the third discussion group. Newbuild gas fuelled ships currently carry a considerable price premium, reflecting the investment in R&D, but price levels are moving downwards. With comparatively few suppliers there is little competition in pricing of LNG equipment. It is the actual cost of bunkering that is scaring shipowners at present though, rather than the cost of ships or equipment. Aside from the cost of fuel there are positive aspects, in maintenance and operational costs, of using LNG. It is fuel costs that are still unclear, distribution and supply costs still being too uncertain. Environmentally, LNG looks like being a very sound solution. SOx and the EU MRV regulations are helping LNG, while the lack of a European NOx ECA is holding back progress. Suppliers felt that in the US market, low prices meant LNG as fuel was definitely “green to go” but elsewhere there were cautions as far as economics are concerned. Within the European ECAs, then LNG looked more feasible. The market is not mature enough for vessels on varied global trade – but this is less a matter of economics, more a lack of infrastructure. The main hurdle is lack of visibility on LNG pricing structures. Shipowners are conservative by nature, and while other solutions are more transparent in cost, and still just about affordable, then HFO/scrubbers or, for ships spending more time in ECAs, MGO, still look safer options. Larger gas fuelled ships, outside the Nordic areas, are needed to demonstrate the fuel’s viability. Before LNG can take off, a stronger demand must be created, probably through synergies with other users, the market needs to become global rather than regional, and more standardisation is needed in the rules.
Finally, chairman Martin Shaw summed up the day, thanked the delegates and sponsors, and looked forward to the visits that had been planned to follow the conference proper, when delegates had an opportunity to witness live bunkering of a Fjord Line ferry and see the Skangass LNG terminal.
First visit was to the Fjord Line ferry Stavangerfjord. Guests were given tours of the ship’s public spaces, the Rolls-Royce Bergen-equipped engine room, and the bridge, while the ship was bunkering alongside from two trucks.
This was followed on the next morning by a return to the Risavika harbour, where Stavangerfjord had moored the previous evening, this time to visit the Skangass LNG terminal. As well as a tour of the actual LNG facility, visitors saw the pipeline under construction, linking the terminal and the ferry berth.
A third, last-minute visit was arranged to a gas-fuelled offshore support ship moored elsewhere in Stavanger. This was the PSV Rem Leader, built by Kleven, designed and equipped by Wärtsilä, and powered by that company’s dual fuel engines. It was good to contrast a working gas-fuelled ship with the cruise ferry, but each offered equally high standards of cleanliness, comfort and quietness.
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