LNG supply vessels – a growth story in the making

Gas supply vessel MV Kairos has a carrying capacity of 6
Gas supply vessel MV Kairos has a carrying capacity of 6

Liquefied natural gas (LNG) supply vessels are an evolving, nascent sector, but no less competitive, said Angus Campbell, corporate director for energy projects at Bernhard Schulte Shipmanagement (BSM).

There are currently just a handful of purpose-built LNG supply vessels in the world.

The world’s first purpose-built LNG bunkering vessel, Engie Zeebrugge, was launched by ENGIE in 2017, along with joint venture partners Fluxys, Mitsubishi Corporation, and NYK. The vessel can hold just under 5,000 m³ of LNG fuel and began offering ship-to-ship LNG bunkering operations at the port of Zeebrugge, Belgium, in June that year.

Shortly afterwards, Shell took delivery of its first LNG bunker supply ship in September 2017, the 6,500 m³ Cardissa. The vessel conducted its first ship-to-ship bunkering operations this year at the port of Rotterdam.

More recently, in September, Babcock Schulte Energy took delivery of MV Kairos, currently the world’s largest LNG bunker supply vessel with a 7,500 m³ capacity. Babcock Schulte Energy is a 50:50 joint venture between Babcock and BSM.

A clear trend emerges from these examples: more of such vessels are on order and they are getting larger than ever.

By 2020, Total is expecting the delivery of an 18,000 m³ gas supply vessel that will service nine LNG-fuelled, 22,000 teu container ships by CMA CGM.

According to Campbell, Babcock Schulte Energy is keen to increase its presence in the gas supply vessel area and is participating in a number of competitive tenders.

“While the capability of bunker supply vessels that we build against long-term contracts will be similar, the capacity and size may increase to meet the demands of new LNG-fuelled ships built, with bigger LNG tanks to improve endurance.”

The sector is still evolving, so the technology chosen for bunker vessel will be determined by the area of operation and specific requirements of each charter.

MV Kairos, for example, is operated on a timecharter basis by Nauticor and deployed to the Baltic region. The vessel is 1A ice-class and DP-capable, with a transfer rate of up to 1,250 m³/hour. It emits zero methane gas during bunkering operations and uses LNG as fuel, either in the form of boil-off gas or vapourised liquid.

LNG as a bunker fuel remains a relatively new concept, and its safety is a key concern. From BSM’s point of view, all personnel, systems, and procedures contribute towards the safe and efficient delivery of LNG, which is a cryogenic fuel.

Underpinning this is the uniformity of standards, through adherence to the International Code for the Construction and Equipment of Ships carrying Liquefied Gases in Bulk and International Code of Safety for Ships using Gases or other Low-flashpoint Fuels.

Despite its rising popularity, Campbell reaffirms that LNG remains a solution more suited for new ships, on which design and cost can be controlled to minimise the loss of cargo capacity caused by larger LNG tankers.

Whether the global shipping market will be ready for LNG as a cleaner marine fuel, he said, is likely to develop with availability, pricing certainty, and an enhanced appreciation of the need to reduce emissions in line with new regulations, as well as the sustainability targets set by major charterers.

“The biggest challenge is securing adequate utilisation in the early years, caused by the time taken for the LNG-fuelled fleet to build acceptable scale,” he said.

Currently, Babcock Schulte Energy will consider building LNG bunker vessels only against long-term contracts and will not order speculatively.

Beyond 2020, the focus will switch from compliant conventional fuels to reducing the carbon footprint of shipping. Campbell believes this is where the momentum towards the use of cleaner fuels will increase.

LNG offers several advantages – reduced through-life operating expense, competitive fuel price, regulatory compliance, and commercial acceptance – enabling it to remain a sustainable option.