Introduction So far Europe’s liquefied natural gas (LNG) bunkering activity has been focused around the north of the continent, Scandinavia and the Baltics. Pilot projects have developed in northern Europe, boosted by strong government support, infrastructure already in place and new environmental regulations, which came into force in January.
There could also be huge potential to expand the sector in the Mediterranean for use in tourism and passenger ferries and to tap industrial and domestic gas demand in places which are not connected to gas grids.
Whether the region reaches its LNG bunkering potential will depend on how expensive it is to build LNG-fuelled ships, whether the fuel is price competitive with traditional ones and whether the same environmental regulations in the north are applied to the Mediterranean as well.
Section 1: Northern Europe’s Success Story The world’s first LNG-fuelled vessel was the Glutra car and passenger ferry in Norway, which has been operating since February 2000. Fifteen years later the industry is growing rapidly. There are currently around 50 LNG-fuelled ships (excluding LNG carriers) in operation worldwide, while another 69 new building-orders are now confirmed, according to DNV GL – a maritime and energy sector advisory firm. They range from passenger ferries to tankers and platform supply vessels.
DNV GL expects LNG to grow even more rapidly over the next 5-10 years, with the number of non-LNG carrier vessels using the fuel approaching 1,000 by 2020.
The main driving force behind this sector development is expected to be environmental regulations set by the International Maritime Organization (IMO), which came into force on January 1, 2015.
The IMO introduced new regulations stating that ships trading in designated emission control areas (ECAs), which include the North Sea and Baltic Sea, will have to use fuel oil with a sulphur content of no more than 0.1% from January 1, 2015. This is down from a previous limit of 1%.
Shipowners operating in ECAs have three ways they can adhere to these new emissions regulations. They can choose to switch to using marine gas oil as a fuel, to fix scrubber technologies onto their ships – which capture some of the emissions but at a potential cost of €3-4 million each, according to one industry executive – or they can switch to cleaner-burning LNG.
Viking Grace – the world’s first large-scale passenger ferry
Viking Grace, launched in January 2013, is the world’s first large-scale passenger ferry to be powered by LNG. It operates across the Baltic Sea between Sweden and Finland for Finland-based ferry company Viking Line.
Kari Granberg, Viking Line’s Project & Technical Development manager, said the company’s decision to use LNG as fuel for the ferry was part of its strategy to be greener but more importantly, because it was cheaper than using gasoil.
“Heavy fuel oil wasn’t an option after January 1 this year. Then you would have needed to install a scrubber. The ship would have been like a chemical factory,” Granberg said. “We had three options: using heavy fuel oil, installing a scrubber or using gasoil –which is around 50% more expensive than heavy fuel oil or LNG.”
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