Regulations Driving Ships to LNG

by | Sep 30, 2013

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Sea StarNew regulations on engine exhaust coupled with relatively low natural gas prices are leading commercial maritime firms including Harvey Gulf International Marine and Sea Star Line to power their fleets using liquified natural gas, reports the Wall Street Journal.

The International Maritime Organization (IMO) regulations will require ships operating within 200 miles of the US to reduce their sulfur emissions beginning in 2015. Additional regulations that take effect a year later will require new vessels to cut their nitrogen oxide emissions.

Both regulations are expected to drive the adoption of LNG as marine fuel — as it burns cleaner and costs about half the amount of traditional marine fuel. Ferries, tugboats, cruise ship and the like generally run on diesel and marine oil, substances that typically have higher nitrogen oxide and sulfur emissions than the diesel used in cars.

New Orleans-based Harvey Gulf International Marine has ordered six new boats that can run on either LNG or diesel. Sea Star Line is planning to put two LNG-powered container ships into operation between Puerto Rico and Florida by 2015, according to the Wall Street Journal.

Harvey Gulf expects the roughly 50 percent fuel savings to allow the company to attract new customers and negotiate longer-term contracts, the paper reports.

Engine manufacturers Caterpillar, General Electric and Wartsila Oyj are ramping up their development of natural-gas powered engines and conversion kits, according to the Wall Street Journal.

Earlier this month, Steeper Energy, the Port of Frederikshavn and Aalborg University partnered to build what they say is the world’s first biomass-based plant to produce sulfur-free marine fuel from wood. The sulfur-free fuel will help fleet operators meet the IMO regulations, the partners say.

The plant will be located at the Port of Frederikshavn in Denmark and could potentially serve an annual marine fuel market of at least 900,000 tons, according to port CEO Mikkel Seedorf Sørensen.

The IMO sulfur rules will likely drive some shipping companies out of business and force others to close routes in 2015, Niels Smedegaard, chief executive of Danish shipping firm DFDS, tells Reuters. He says replacement fuels cost about 40 percent more than traditional fuels.


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