MHI eyes gas-fuelled future
The last few years have been hard on Japanese shipbuilding in general, and on Mitsubishi Heavy Industries in particular. but a focus on new fuels could offer a fruitful future for the shipbuilder. Stevie Knight reports
Firstly, a major recession hit Japan’s yards: according to the Japanese Vessel Exporters Association figures, 2016 saw a truly terrible crash, with new orders plunging from 20,177,535gt to a truly miserable 2,598,849gt.
It wasn’t helped by the year-late deliveries of the two, very high profile, 300m cruise ships, Aida Prima and Aida Perla constructed by Mitsubishi Heavy Industries. Unfortunately, this pair were dogged by faulty engines, late design changes and to cap it all, onboard fires, reports finally pinning the yard’s losses at a little over US$2bn for the three combined fiscal years 2015 to 2017. So, although Perla was finally delivered in 2017, it was the final straw for MHI’s cruise segment and the company withdrew from the sector entirely
However, last year saw Japan’s general order book sprout some (admittedly still modest) green shoots. Taken January to December 2017 new contracts were up to 9,453,629 gt, mostly accounted for by 156 bulk carriers that makes up around 80% of that figure. Overall, this puts last year 2.5 times up on 2016’s low point.
But this still left MHI facing some tough choices, so the beginning of this year saw its shipbuilding business split into two companies in a fundamental reorganisation that will allow each to play to its strengths.
On one hand, the new Mitsubishi Shipbuilding Company is, says Genki Ono of MHI Group, retaining its yard in Shimonoseki with its capacity for builds up to 200m, focusing “on ships that require intensive outfitting”. This includes roro and ropax ferries, special-purpose projects such as patrol and survey support plus other government agency vessels. For contracts over 200m, it’s still going to be able to turn to its sister yard (which comes under the new Marine Structure Company) for the loan of extra space.
Japan has a credible history in green tech and many companies are looking to make the most of the windfall from the coming global sulphur cap: certainly Ono points out that MHI Group has not just one but two scrubber offerings on the table.
There is a fly in the ointment: cost. In short, Japan’s yards are up against much cheaper rivals in China, so it remains to be seen how much value can be added with the inclusion of ‘compliant’ kit, and how much extra revenue it will generate.
However, MHI’s new Marine Structures business has a rather different outlook. This is now using MHI's Nagasaki Shipyard & Machinery Works Koyagi Plant and is concentrating on the big projects: Genki Ono explains it has a 1m DWT capacity dock, room enough for LNGC, VLGC (LPGC) type ships along with structures such as the huge hybrid (steel and concrete) caissons for port and harbour development.
But it’s also capitalising on MHI’s track record with gas to specialise in new and novel fuels.
Certainly, according to Genki Ono, the Marine Structure Co is well positioned for pursuing an LPG-powered ship market. Ono points to MHI’s development of the Japanese marine industry’s first high-pressure natural gas system (MHI-GEMS) as well as its solid LNG carrier experience; it’s worth remembering that the first uptake of dual fuel engines was prompted by carriers, and it looks as if other segments might follow the same pattern. Mr Ono says yard has the advantage of already being used to tie together “sophisticated” modular gas-powered equipment.
However, a rather different concept could find a nearby niche market.
MHI Group’s Marine Structure Co could see a revenue stream from floating LNG power plants. These could solve a number of electrical supply issues faced by remote Japanese and Southeast Asian island communities in a far more cost-effective way than trying to connect them to a distant grid. Further, as they would be straightforward to deploy, they could be used as a stop-gap measure to support the building of more permanent power facilities.
The idea is fairly simple: moor up, run a line to the shore, and generate power from onboard gas engines or a gas turbine combined-cycle plant; the onboard LNG tanks could be topped up by a small-scale LNG carrier or FSRU.
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