2020 November 6

(Igor Tonkovidov, President & CEO of SCF Group - On operation of LNG-powered tankers )

- In our opinion, among all available types of fuel, LNG is the optimal solution for reduction of CO2, NOx, SOx and soot emissions. It is available in the market and the industry has enough competence to build LNG-powered ships and to use LNG parallel to conventional fuels with bunkering infrastructure showing high rates of development in Europe and worldwide...

The fleet of SCF currently numbers six oil tankers running on LNG. They are primarily involved in exports from the North-Western ports of Russia. Five more LNG-powered tankers are to be put into operation by Sovcomflot in 2022-23. LNG is considered as the key type of fuel for new ships of the company.

Practical experience of using this type of fuel allows for distinguishing its advantages in operation of ships: safe bunkering, absence of risk to spill the fuel and harm the environment, reliability of equipment, absence of dependence on coastal infrastructure as compared with operation of ships with liquid fuel and scrubbers.

Apart from LNG, the market offers other fuels and technologies to meet the IMO requirements on emissions but they either imply using liquid fuel or do not ensure sufficient flexibility and operational convenience, or even neither of them. For example, removal of sulfur oxides while using closed loop scrubber systems lead to accumulation of toxic residues onboard the ships with the ability to discharge them into shore-based tanks for further treatment not always promptly available. Besides, regular acquisition of expandable materials is needed... That results in the increase of operational expenses and lower economic viability as compared with the use of LNG.

By today, Sovcomflot has successfully conducted over 100 bunkering operations having fueled its ships with more than 43,000 tonnes of LNG. No incidents related to using LNG as a fuel (spills, injures or breakdown) have been registered. 

The efficiency of LNG-powered ships in terms of time charter equivalent is 23% higher as compared with conventional Aframax tankers operated by Sovcomflot. The company’s data show that introduction of LNG as a marine fuel on SCF ships let the company reduce CO2 emissions by 6.5% in 2018, by 9.1% in 2019 and by 19.2% over 9 months of 2020. Average reduction for 2018-2020 is estimated at 13.3% per year (the dynamics is improving with LNG bunker getting more available).

However, the area of efficient operation of LNG-powered tankers is limited by the current level of bunkering infrastructure. Today, it is the N. Europe and the Baltic but the infrastructure is being rapidly developed.

Further development and expansion of such tankers’ operational practices in the industry will require verification of LNG bunkering standards related to location and design of manifolds, design of LNG tanks and their impact on layout of other ship equipment including ladders. Besides, boiloff gas issue should also be taken into consideration as it requires a flexible approach to operation of ships.

As for price environment, retail value of LNG fuel is considerably less as compared with LSMGO, that clearly demonstrates economic viability of investments into dual-fuel ships.

When it comes to alternatives like LPG, methanol, hydrogen, ammonia, they can only be used locally. The key challenges here are availability in the market, storage, capital expenses and competence needed for designing of engines powered by such fuels.

Said at the 4th “LNG Fleet, LNG Bunkering and Alternatives” conference organized by PortNews.