LNG

The Galveston LNG Bunker Port project is seeking authorisation to site, construct and operate a proposed small-scale liquefied natural gas production facility on Shoal Point in Texas to provide clean shipping fuel to the Galveston Bay and Greater Houston port area.

Included in the plans are two LNG liquefaction Trains capable of producing around 600,000 gallons per day of LNG.

The LNG production plant for bunkering is a joint venture involving Pilot LNG and Seapath Group, a subsidiary of the Libra Group.

The filing with the state and federal agencies includes a permit required from the United States Army Corps of Engineers (USACE) covering the various developments.

LNG storage

In addition to the liquefaction plant, the Galveston LNG Bunker Port is also seeking approval to build two LNG storage tanks each with 3 million gallons of capacity, feed-gas pre-treatment equipment, a bunkering vessel loading berth and associated marine and loading facilities.

“We are confident that we will meet the rigorous requirements of state and local permitting authorities to ensure that the project is delivered on-time and will meet the ever-growing demand for clean fuel supply in the Galveston Bay and US Gulf Coast region by the end of 2026,” said Shaun Davison, Chief Development Officer of Pilot LNG.

Pilot LNG and Seapath said they signed a project development agreement in September of 2023 that provides a framework for the development, technical design, permitting and marketing of the proposed liquefaction project.

“Our experience in developing, building, and operating energy infrastructure will help us with this much-needed facility,” said Joshua Lubarsky, President of Seapath.

“This facility is a critical investment into the resilience of US maritime infrastructure, and upon construction will immediately provide positive environmental and economic impacts in Texas City, Galveston,” stated Lubarsky.

Pilot LNG is the frontline developer while it will receive financial support from partner Seapath.

Both companies said that the bunkering port would be “ideally situated” to supply the growing Galveston Bay Port Complex fuel and bunkering markets.

“This includes LNG marine fuel deliveries directly to customers in the port complex and surrounding areas, such as the Galveston Offshore Lightering Area,” they added.

Other permits required include those from the Texas Railroad Commission (TRRC) for the Texas Clean Water Act (CWA) and the United States Coast Guard for a Waterway Suitability Assessment.

US shipping logistics and bunkering companies Seaside LNG and Polaris New Energy gathered with Fincantieri Bay Shipbuilding executives to christen the recently constructed LNG bunkering barge “Clean Everglades” to be deployed along the US Gulf Coast.

The Society for Gas as a Marine Fuel (SGMF) has released its most detailed version yet of a publication of operational guidelines to enhance safety during the marine bunkering of LNG fuel.

The SGMF said this third revision of “LNG as a marine fuel - Safety and Operational Guidelines - Bunkering” is the most comprehensive coverage of all aspects related to LNG bunkering operations.

“The maritime industry is increasingly adopting LNG as the fuel of choice for newbuild vessels,” said the Society.

“Together with the environmental performance LNG use provides, this growing trend is also the result of the considerable expansion of the LNG bunkering supply infrastructure,” it added.

“Facilities are now well established in most parts of the world, and there are more operational LNG bunkering vessels serving the industry than ever before,” stated the SGMF.

In anticipation of this growth and beyond, the safe use of LNG as a marine fuel has been a priority issue for SGMF.

Insights

“The information contained in this publication is gold dust for anyone bunkering an LNG fuelled ship,” said the Chairman of the SGMF Samir Bailouni, who is also Chief Operating Officer of Qatari gas shipping line Nakilat.

“These practices and insights are collated from the best the industry has to offer, and I extend my thanks to our members for providing this invaluable information not only for the benefit of the industry, but for society as a whole,” stated Bailouni.

The first published version of the SGMF’s LNG bunkering guidelines was in 2014 and it has now been “significantly updated and revised for 2022”.

The SGMF said the guidelines are recommended by the society as a “must have” for anyone engaged with any aspect of LNG bunkering.

“The safety track record of LNG bunkering operations has been exceptional and SGMF has played a leading role in developing a ‘safety first’ approach to bunkering operations through its publications, work, and influence,” declared the SGMF.

The SGMF noted that among its membership organisations there were tens of LNG bunkering ships operating with hundreds of ships using LNG between them and with LNG bunkering occurrences now in their thousands.

The publication covers not only actual operations, but also the actions and activities leading up to that final stage, making the bunkering efficient and safe.

“The overall aim of this new publication is to ensure that gas-fuelled ships can be bunkered safely, reliably, efficiently, and in an environmentally responsible way,” said Mark Bell, General Manager of the SGMF.

“The industry now has a comprehensive portfolio of publications for LNG as a marine fuel and the Society will continue to update them with good, if not the best, practice the industry has to offer,” he added.

Mitsui OSK Lines (MOL), the Japanese shipping company with an operating fleet of almost 100 liquefied natural gas carriers, said it would use cash flow from the energy transportation boom to invest in a huge fleet of LNG-powered vessels of all types rather than wait for any future fuels.

The company, involved in all shipping sectors from oil tankers to car carriers and containerships, said it planned to launch 90 LNG-powered vessels by 2030 and has already announced an order for four car carriers.

“Strong demand for shipping services has given us more freedom on management decisions,” said MOL President and Chief Executive Takeshi Hashimoto in an interview with the Japanese financial daily newspaper Nikkei.

“The stepped-up investment will speed Mitsui OSK's shift towards LNG-powered vessels, which emit 25 percent less carbon-dioxide than ships running on conventional fuel oil,” stated Hashimoto.

Hashimoto noted that Mitsui was also investing in “green ammonia” as a key carbon-free fuel source for the future.

However, while ammonia is expected to start powering real-world vessels in the late 2020s, import limitations may pose a challenge for Japanese shipping companies.

“We don't have enough volume to use ammonia to fuel ships,” declared Hashimoto.

Can't wait

“We can't afford to wait for somebody else to produce the material,” he added.

The company announced in May 2021 that it would resume transporting ammonia for the first time in half a decade.

MOL will consider producing and exporting ammonia derived from natural gas.

“We will look into ammonia-related mergers and acquisitions as well,” he added.

MOL is making the LNG-powered shipping investment in response to growing demands from the logistics sector to reduce carbon emissions.

Volkswagen, for example, requires shipping companies to be using LNG-powered vessels to even bid on a contract.

Japan’s Honda Motor is also urging key suppliers to reduce emissions by 4 percent every year.

Another Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK) has already revealed plans to replace 100 of its 215 large and midsize bulk carriers, as well as 30 to 40 of its 117 car carriers, with LNG-powered vessels by 2030.

“We'll be able to put in a few hundred billion yen into this soon thanks to improvements in our performance,” said NYK Line President and CEO Hitoshi Nagasawa.

Nippon Yusen Kabushiki Kaisha, the Japanese shipping company known as NYK Line, plans to order 12 new LNG-powered vehicle carriers for $100 billion yen ($911 million) from two shipyards in Japan.

NYK Line will order six car-carriers, called Pure Car Carriers, each from Nilaijima Shipyard and Nippon Shipyard, a joint venture between Imabari Shipyard and Japan Ocean Union.

The carriers will each have a loading capacity of around 7,000 vehicles.This is the biggest LNG fuel ship order in Japan, according to Japan's Nikkei news.

A statement given to Japan’s Nikkei said there were only about 10 vehicle carriers powered by LNG, out of about 700 globally.

NYK’s order is the biggest received by Japan shipyards for LNG-powered vessels.

The use of LNG for the ships delivering cars is part of an effort by the auto industry to try to reduce emissions in their supply chains.

Such ships are expected to produce 25 percent fewer carbon-dioxide emissions compared with current transporters fuelled by heavy fuel oil or diesel.

Pure Car Carriers, as they are known, are already required to be powered by LNG as a bidding requirement for companies wishing to work with Germany's Volkswagen.

The Japanese report said Japan's Toyota Motor began to demand Co2 emission reductions from major suppliers that it has direct transactions with, and is expected to make similar requests of its maritime transportation companies in the future.

Honda Motor is also expected to try to cut emissions in its supply chain.

NYK is the biggest owner of such PCC vessels and is making a large shipbuilding investment to guard its market share.

NYK Line had 110 PCCs in operation as of April 2021. Only one of them is fuelled by LNG.

By the end of 2028, the company aims to have 20 LNG-fuelled transporters. 

The South Korean company, Hyundai Engine Machinery, has completed the tests for six gas engines for LNG power from MAN Energy Solutions, bound for a series of container ships ordered by Singapore-based Eastern Pacific Shipping.