LNG as Marine Fuel

Conferenza GNL – III Workshop

Civitavecchia – 25th February 2014

Andrea COGLIOLO

Deputy General Manager Marine

Index

Regulation

Laws & Authorizations

Financial Issues

Technical Solutions

Social Perception

Logistic Scenario

MARPOL Annex VI

IMO require a progressive reduction of emissions from ships

- ECAs (Baltic and North Sea, English

Channel and USA /Canada coastal

- Global

1. Technical measures:

Energy Efficiency Design Index (EEDI) new ship

2. Operational measures :

Ship Energy Efficiency Management Plan (SEEMP)

SOX NOX

CO2

Regulations

Means to reduce

emission are available

NITROUS

OXIDES NOX

SULPHUR OXIDES SOX

CARBON DIOXIDE CO2

• Dual fuel engines (LNG)

• Exhaust gas treatment (SCR Selective Catalytic Reduction)

• Dual fuel engines (LNG)

• Sulphur content in fuel

• Exhaust Gas Treatment (scrubber)

• Dual fuel engines (LNG)

Regulation

LNG Carrier

IACS – UR 1996

Control and Safety

Systems for Dual Fuel

Diesel Engines

Pt.C , Ch 1, App 2

RINA Rules – 2000

DUAL FUEL DIESEL

ENGINES

Regulation

Present and future

Regulations

IGC ???

Regulation

IGF Code

Exp. 2014

Ship’s Flag

Administration

authorization

Present and future

Regulations

Regulation

Future Regulations

Low temperature of liquid gas

freezing - cold leak/jets -

brittle cracks

flammability after vaporization

- hazardous area - electrical

equipment

Gas tanks:

large energy content

Regulation

Hazard Identification and Risk Ranking

Hazard Control

Technological Safety – Safety Management - ERP

Future Regulations Regulation

Source Ship spotting

Technical Solutions

by courtesy of Lauro Shipping SPA

Technical Solutions

by courtesy of Rosetti Marino SPA

Technical Solutions

Technical Solutions

LNG tanks fixed

longitudinal position

transversal position

vertical position

portable

Engines gas only

dual fuel

high and low pressure

Propulsion Diesel Electric

Diesel

Fuel (LNG) automation alarm systems

control systems

safety systems

LNG storage

delivery

bunkering

New design solutions

new training needs

Technical Solutions

Technical Solution Training needs

Safety first in the dash for gas Monday 25 July 2011, 16:53

As more vessel types take up the cost and environmental benefits of gas-powered shipping, it is becoming

increasingly important that crew are trained properly in its use. GAS-fuelled ships are one way forward to

reduce air emissions.

But in the dash for gas we must ensure that lower emissions don't mean less safety.

Carrying and using gas at sea requires a culture that is present on gas carriers, but which is not found on

most other ship types. We need to take great care when we extend gas power to other ship types.

Substantial changes are needed to the structure and outfit of the vessel, and the crew need to be trained

to understand the new fuel and its risks.

RINA - Lloydlist

Training needs Logistic scenario

A13 – I13 Lack of skilled seafarers

Depending on the number of LNG propelled ships in 2020/2030 the number of seafarers can be (…) a

significant fraction of the more than 1,2 millions seafarers demanded in 2020 (…).

The likelihood of the issue not to be solved is judged low since it will be demand driven and passage to

LNG will occur gradually.

The direct impact of not having the necessary workforce trained is high since it directly affects the

possibility to safely operate LNG fuelled ships.

The possibility to manage the issue is judged high since training programmes can be established in due

time before 2020.

Aspects related to this issue are:

- lack of training infrastructures

- training of ashore personnel

Source

Marino Rosetti

Small scale

distribution:

Norwegian solution

not existing in other

countries

Where is LNG ? Logistic Scenario

Where is LNG ? Logistic Scenario

Fig. is courtesy of The DMA

Logistic Scenario

Authorization Aspects

Regulation & authorization procedures for on shore installations

On shore rules & local authorization

for LNG Terminals

Laws & Authorizations

Authorization Aspects

A study on LNG bunkering rules and procedure, commisioned by EU, has been just published

Common standards and procedures for LNG bunkering

Fig. is courtesy

of The DMA

Laws & Authorizations

Authorization Aspects

Common standards and procedures for LNG bunkering

Laws & Authorizations

Actual context

The market currently does not exist

An effective mechanism to create such a market is needed

The capital involved has to cover investments for :

• new LNG fuelled Fleet

• existing ship retrofit

• logistic infrastructures

Not all existing infrastructures are fit to serve the LNG ship related

market

Financial Issue

Four Main Actors

Market start up

Shipbuilders

& Makers

New buildings &

retrofits

Gas providers

Gas supply & pricing

Infrastructure develop.

Management of logistic

Shipowners

Strategic view

Regulations

Authorizations

Governmental

Authorities

Logistic Scenario

LNG price

Price highly dependent on

the considered country.

Difference:

from 3 to 19 $/MMBtu.

However…

The difference between

U.S. and Asian gas is

poised to drop by more

than 60 percent by 2020.

Source Bloomberg

Jan 2013

Financial Issues

LNG price

650 USD/t (=15.3 USD/mmBTU) for HFO.

900 USD/t (=21.2 USD/mmBTU) for MGO.

13 USD/mmBTU for LNG (considering 4 USD/mmBTU + small scale distribution costs).

Financial Issues

Social Perception

LNG is flammable

LNG is dangerously cold

LNG is clean YES but Not In My Back Yard

Social Perception

Transparent communication on real facts • Overall, the LNG industry has an excellent safety record

• LNG has been safely delivered across the ocean for

– over 40 years

– over 45,000 LNG carrier voyages

– more than 100 million miles,

without major accidents or safety problems either in port or on the high seas.

Social Perception

Some countries have already solved the NIMBY issue

Are we going to experience a similar epochal change ?

Wind

Coal Oil

LNG

Thank You !