LNG

Pilot LNG, a US infrastructure company, said it had filed with regulators for the first dedicated liquefied natural gas bunkering facility to serve the Texas Gulf Coast ports of Galveston, Houston and Texas City.

The bunker terminal will be located on Pelican Island in the Gulf with a final investment decision scheduled for the second half of 2021 and operations starting in 2024.

“Pilot LNG has filed regulatory applications with relevant government agencies, including the US Army Corps of Engineers (USACE) as the lead permitting agency,” said the company.

The facility infrastructure will be designed around floating liquefaction (FLNG) technology to be engineered, and constructed by Wison Offshore & Marine of Nantong in China.

The Chinese yard is best known for constructing the FLNG barge “Tango FLNG” built in 2017 and currently deployed at the port of Bahai Blanca in Argentina.

“Wison is pleased to be part of this breakthrough US project by designing and building the liquefaction unit, that will supply LNG to the end-user market in the Galveston, Houston and Texas City port complex,” stated Vivian Li, head of Wison Offshore & Marine in North America.

“Since delivering the world’s first FLNG facility currently operating in Argentina, Wison has developed numerous floating solutions across the LNG value chain, with a focus on promoting a cleaner energy infrastructure alternative to the global market,” she added

As international regulators tighten emissions standards, the maritime industry is increasingly turning towards LNG as the marine fuel of choice due to its significantly lower emissions profile and cost competitiveness.

“Pilot LNG’s Galveston LNG Bunker Port will provide clean-burning LNG to one of the US’s largest Port complexes,” said Pilot LNG Chief Executive Jonathan Cook.

“The proposed Galveston LNG Bunker Port would provide the necessary infrastructure to supply the growing market for LNG marine fuel, substantially reducing marine emissions and cutting shippers’ fuel costs at the same time,” Cook added.

He explained that the Galveston Bay area, which encompasses the industrial Ports of Houston, Texas City and Galveston, is an ideal location to add LNG bunkering infrastructure.

It had more than 10,500 deep-water vessel visits in 2019 and over 133,000 tug/tow movements on the Houston Ship Channel and is the nation’s fourth busiest cruise terminal.

The company pointed out that Emission Control Areas (ECAs), including US coastal waters and the Galveston Bay area, and the 2020 International Maritime Organization sulfur cap on fuel make it more difficult for traditional marine fuels to comply with regulations and more expensive for shipping companies to operate their vessels.

The company noted that LNG when used as a marine fuel significantly reduces vessel emissions, including eliminating virtually all sulfur oxide emissions without the need for expensive exhaust-cleaners or other technologies.

Crowley Maritime Corp. and subsidiary Jensen Maritime, the company’s Seattle-based naval architecture and marine engineering firm, have been honored with awards for the LNG-powered ships engaged in the US-Puerto Rico trade route.

Siem Industries, the company run by Norwegian Kristian Siem and whose interests include shipping and offshore oil and gas engineering and services through the Subsea 7 company and Siem Offshore Inc., has attended the naming ceremony for its two LNG-powered car carriers at the Chinese Xiamen Shipbuilding yard in southeastern Fujian province.

The Swedish Gothia Tanker Alliance has had its sixth vessel with LNG-powered capability named “Ramelia” at a ceremony held at the Avic Dingheng shipyard in eastern China from a series of seven orders and one option.

The Baltic Exchange in London has opted to keep its benchmark shipping indices unchanged, even as some market players had called for the inclusion of exhaust-cleaning systems that vessels can fit due to the International Maritime Organization ban on ships using fuels with a sulfur content above 0.5 percent from 2020.

In one of the biggest changes in the oil and shipping markets in decades, only ships fitted with exhaust-cleaning systems, known as scrubbers, will be allowed to continue burning high-sulfur fuel.

The Baltic Exchange, whose indexes for global shipping rates are also used in the derivatives market, said that after extensive consultation with members and market participants its indices would show “non-scrubber fitted” vessels in its descriptions.

As preparations for the changes  advance, many operators expect that there will be enough low-sulfur fuel readily available to avoid the need to fit the exhaust-cleaners.

However, some ship owners have been switching to LNG propulsion, though this is a slower process in meeting the IMO curbs and other future anti-pollution measures because new ships have to be built.

The Baltic Exchange was acquired in 2016 by the Singapore Exchange and has been looking for new areas to develop such as introducing LNG charter indices.

In its latest ruling the Baltic Index Council (BIC) announced its decision on the implications of the IMO 2020 sulfur cap for the Baltic Exchange’s time charter indices.

“As formally announced to the Baltic Exchange members, the Baltic will be adding clarificatory wording to its Capesize, Panamax, Supramax and Handysize vessel descriptions to confirm that the index vessels are not scrubber-fitted,” said the Exchange in its short statement.

Explaining the consultative decision-making process, BIC Chairman Stefan Albertijn said it was presented with extensive submissions and views from across the market.

“Our unanimous decision to clarify the vessel descriptions as a response to the IMO 2020 change in sulfur limits, involved careful examination of all the data and feedback received from the consultation process,” he explained.

“We are confident that it is the right decision and one which best meets the needs of the shipping markets we serve,” stated Albertijn.

The Exchange said that the clarified vessel descriptions will be applied from 1 April 2019.

“This was a lengthy and rigorous process that underscored the robustness of the Baltic’s IOSCO-based index administrative practices,” said Baltic Exchange Chief Executive Mark Jackson.

“It was essential for us to take the time to gather the necessary evidence and collective feedback, ensuring that our diverse membership and the wider market was properly consulted and provided with an opportunity to be heard,” added Jackson.

Swedegas, the Swedish gas network operator and liquefied natural gas distributor, said its LNG bunkering station at the Port of Gothenburg is ramping up for growing demand expected from Nordic shipping companies as using clean-fuel also qualifies operators for lower port charges.

A coalition of energy and shipping companies backing the increased use of liquefied natural gas as a maritime fuel said it strongly supported the decision by the International Maritime Organization to reaffirm the January 2020 implementation date of the sulfur cap on ship fuel.

German marine engine maker MAN Diesel and Turbo, a supplier of propulsion for many of the world’s first LNG-powered vessels as well as conventional LNG carriers, has been rebranded under the new name MAN Energy Solutions.

The South Korea government said it would develop advanced bunkering technology with two research institutes aimed at the liquefied natural gas maritime re-fueling market to increase the number of vessels the nation can supply in its ports.

The South Korean government will place the first order for vessels powered by liquefied natural gas by August to support a more environmentally-friendly shipping sector and to develop associated industries as well as more LNG bunkering facilities in its ports.