Bernhard Schulte backs LNG for the long haul

BSM expects LNG to emerge as the mainstream option among clean fuels. Credit: Southern Cross Maritime
BSM expects LNG to emerge as the mainstream option among clean fuels. Credit: Southern Cross Maritime

Bernhard Schulte Shipmanagement (BSM) expects liquefied natural gas (LNG) to emerge as the mainstream option among clean fuels, especially when taking a big-picture view of sustainability in shipping.

The focus right now is on sulphur, and beyond that, shipping’s carbon footprint will be key. This is where LNG comes into the picture, Angus Campbell, corporate director, energy projects at BSM, told IHS Markit.

Ahead of the International Maritime Organization’s (IMO’s) global sulphur cap on marine fuels in 2020, ship manager and integrated marine solutions provider BSM expects LNG to emerge as the mainstream solution, especially in deepsea shipping where energy requirements are large.

“There is a wide recognition that natural gas is the transition fuel between the hydrocarbon and hydrogen economy,” Campbell said.

While this may suggest that the role of natural gas will be brief, the transition period could span decades. This is evident from the time taken to develop existing LNG infrastructure, as well as considering the lifespan of modern vessels.

Nobody knows what the future looks like, Campbell said. In the meantime, prospects for LNG as a marine fuel look very good and it is a logical transition to whatever the carbon-free future may be.

“At least by taking the first step, we’re doing something rather than nothing,” he said.

The caveat to LNG as a marine fuel is that it applies more to newbuild vessels, as retrofitting costs are prohibitive, suggesting yards could play a bigger role in shaping the move to cleaner fuels.

As the use of LNG gains momentum, the number of orders for LNG-fuelled ships is set to rise. Separately, the IMO will want to toughen Energy Efficiency Design Index (EEDI) requirements, which are aimed at promoting the use of energy-efficient, less polluting equipment and engines.

Currently, ship design has reached a point at which efficiency has already been maximised and power consumption cannot be reduced further without compromising safety.

As such, what remains is for shipowners and yards is to consider fuel options. This will allow yards to initiate the lead in meeting EEDI requirements, taking an active role in reducing the carbon footprint of newly built ships.

A key criticism of LNG is the issue of methane slip, which is the emissions of unburned methane, which like carbon dioxide, is a greenhouse gas.

The industry is taking the issue seriously, Campbell said. Every party has an obligation to make such operations as efficient as possible, he added, and methane slip is a key consideration for BSM in developing its bunkering operations.

The technology for LNG bunkering operations is not new, although the operations require a fresh approach. As such, training and preparation is essential. BSM aims to ensure that training is available, not only to its seafarers, but also to third parties, Campbell claimed.

“The industry is going to have to develop solutions and new equipment. We don’t see it as too much of a challenge as long as people invest the time and effort to comply with the IGF code, which is quite specific,” Campbell said.

The IMO’s International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF) code came into force on 1 January 2017. For vessels operating such fuels, the code provides mandatory criteria for the arrangement and installation of machinery, equipment, and systems, to minimise the risk to the vessel, its crew, and the environment.

As 2020 draws near, the infrastructure for LNG fuelling has become more mature and established. The landscape continues to evolve rapidly, but major bunkering hubs aim to provide LNG bunkering services by 1 January 2020, Campbell said.

One of the key reasons that BSM believes LNG will be viable is its global availability. With more supplies coming up, prices will be kept at competitive levels, especially in comparison to conventional fuels.

Cleaner fuels will reduce operating costs, as through-life vessel maintenance costs are lower and parts can last longer.

Greater awareness of its carbon footprint can also bring about commercial benefits for shipping. As the world increasingly recognises shipping as an integral part of supply chains, it can play an active role in helping its customers achieve their sustainability targets.

“At the end of the day, it all comes down to price,” Campbell said. “We live in an industry that has to be competitive, and most [shipping] sectors are challenging. So whatever solution is used to move the shipping industry into a cleaner future, it has to be competitive and it has to be sustainable.”