LNG

European classification society DNV said there were eight more liquefied natural gas-powered vessels ordered in March 2023 as LNG bunkering fuel prices were much lower than at the turn of the year at just over $820 per tonne.

The European Union is moving forward with its plan to seek pooled natural gas purchases under a programme called AggregateEU and set to be launched in June with the aim of reducing prices and increasing efficiency in fully replacing Russian pipeline gas supplies to Germany and the EU.

Excelerate Energy, the leading US provider of floating LNG import terminals, said its floating storage and regasification unit (FSRU), the “Exemplar”, arrived at the port of Inkoo, in Finland to become a Baltic regional supplier of natural gas.

The FSRU was previously loaded with a partial cargo of LNG which would serve as the initial commissioning cargo for the terminal.

The FSRU “Exemplar” has been chartered to Gasgrid Finland Oy for a period of 10 years.

“It will provide flexible, reliable, and secure delivery of regasified LNG to Finland and other Baltic countries,” said Excelerate.

Inkoo port is located on the Southern Coast of Finland and provides an optimal deepwater port at close proximity to the pipelines distributing the gas mainly to industrial end-users in the Baltic region.

The developer had made the move to enable independence from Russian pipeline natural gas.

The FSRU capacity alone is sufficient for the gas needs of both Finland and Estonia. Russian gas supplies through the Imatra entry point into Finland have been stopped since May 2022.

Finland already has two onshore LNG terminals at Pori and Tornio. They have been in operation since 2016 and 2018 respectively.

Infrastructure

“The arrival of the FSRU ‘Exemplar’ at the port of Inkoo represents an important milestone for Finland as it prepares to enhance its energy security and bring essential energy infrastructure to the region,” said Steven Kobos, President and Chief Executive of Excelerate.

“This is a tremendous accomplishment for everyone involved, and we are proud to have partnered with Gasgrid on this opportunity,” added Kobos.

In addition to providing regasification services under the time charter with Gasgrid, Excelerate said that through its recently formed Finnish gas marketing subsidiary, Excelerate Finland Gas Marketing, the US firm has executed an agreement for the sale of commissioning volumes and regasification capacity rights during the commissioning phase.

“Through this agreement, Excelerate Finland will be able to provide natural gas to downstream customers in Finland and other Baltic countries,” explained the Houston-based company.

Excelerate explained that the FSRU “Exemplar” departed drydock in Spain on December 6 where it underwent customer-requested winterization upgrades.

“The vessel subsequently procured its cargo from Excelerate’s global LNG portfolio via a ship-to-ship transfer with the FSRU ‘Excelsior’ near Gibraltar,” said the company.

“The ‘Excelsior’ recently completed its 10-year service in Israel and will go on charter to the Federal Republic of Germany in 2023,” it added.

The FSRU “Exemplar” is 291 metres long and 43 meters wide. It has a storage capacity of 150,900 cubic metres of LNG and can provide more than 5 billion cubic metres per annum of regasification capacity.

Nippon Yusen Kabushiki Kaisha (NYK), the Japanese shipping line is teaming up with two Finnish entities, to complete concept design of an LNG-powered Capesize bulk carrier and a very large crude oil tanker in a project also aimed at easy conversion for other future fuels such ammonia.

The partners from Finland are the Monohakobi Technology Institute (MTI) and a company called Finnish Elomatic Oy.

A concept design of an ammonia fuel-ready LNG-fuelled vessel (ARLFV) includes ship specifications such as overall length and width, load capacity, voyage distance and ship speed.

The joint project participants listed the main challenges in designing and developing the ARLFVs .

Firstly, because of the lower energy density of ammonia compared with LNG, a larger fuel tank capacity is needed to maintain the same level of endurance.

Secondly, the space for cargo loading, as well as the loadable cargo weight, is reduced.

Thirdly, a bigger fuel tank and additional fuel tanks affect a ship’s stability and hull strength.

Fourthly, due to the extreme toxicity of ammonia, ventilation for the ammonia tanks must be designed according to international conventions and domestic laws.

More costs

Furthermore, it was noted that conversion from an LNG-powered vessel to an ammonia-fuelled ship requires additional work periods and costs.

The three - NYK, MTI, and Elomatic - said they had sought solutions to the challenges by research and study of the fuel-tank layout and other specifications of the ship.

“The three companies then completed a concept design that has viable, functional, and safe features,” they added.

“Compared to a conventional LNG-fuelled vessel, the ARLFV in this concept design is expected to feature a conversion-cost reduction of 12 percent for a capsize bulk carrier and 25 percent for a VLCC,” they said.

The next step in the process is for the three to work with shipyards and marine equipment manufacturers on the actual design of the ARLFV based on the concept design.

Intercontinental Exchange, a leading global provider of energy trading platforms for futures and options, said it planned to launch two liquefied natural gas futures contracts for North-West Europe and South-West Europe and three supporting French, German and Italian natural gas futures.

European maritime classification society DNV said that there was still momentum in orders for LNG-powered vessels from ship owners in the month of September even at a time of very elevated LNG bunker prices in ports such as Rotterdam in the Netherlands.

The DNV report said that at the end of September there were 833 confirmed LNG-powered ships, six more than in August, and 229 additional LNG-ready ships, while LNG bunkering infrastructure was continuing to be developed worldwide.

“According to the latest figures from DNV’s Alternative Fuels Insight (AFI) platform, 14 LNG vessels were added in September. However, contract cancellations limits the net increase to six ships,” explained DNV.

“This last quarter was the slowest on record since the fourth quarter of 2020 with a net increase of 26 ships, which we attribute mainly to reduced newbuild contracting in general,” said the Norway-based class society.

“The total order figure for the year to date has reached 179 with mainly container liners helping to keep the momentum up this month,” stated DNV.

For methanol-fuelled ships the data showed the total at 66 vessels with around 40 percent of the fleet also transporting methanol as cargo.

Containerships lead

The DNV data showed that total number of LNG-powered ships in operation or on order at the end of September 2022 comprised in the largest sectors 211 containerships, 106 car carriers, 89 crude oil tankers and 54 oil-chemical tankers.

There were also 66 bulk carriers using and planning to use LNG, 50 car and passenger ferries, 39 cruise liners, 38 tugs, 37 offshore supply vessels and 33 RoPax ships.

This data does not include smaller inland vessels and barges that are part of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub transportation in northwest Europe.

Analysts note that LNG remained the preferred low-carbon solution despite current gas pricing which is expected to last into the near future.

That’s as LNG priced in fuel oil terms at Rotterdam declined sharply at the start of October to $2,870 a tonne, well down from the previous record of around $4,545 per tonne at the start of September 2022.

Among other emissions-reducing fuels, Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port declined during the period and was priced at the start of October at around $915 per tonne compared with $990 per tonne at the start of September.

European maritime classification society DNV said that ship owners placed orders for 14 liquefied natural gas-powered vessels in March 2022, mostly for containerships and car carriers even as LNG bunkering fuel prices continued to increase.

Fluxys, the Belgian gas grid and LNG terminal owner, reported annual increased consolidated turnover of €573.2 million ($638.3M) and more shipping traffic and truck-loadings as expansion plans progressed.

Fluxys of Belgium, the gas grid and LNG terminal owner, and investment firm EIG Global Energy Partners have acquired the Quintero LNG import terminal in the South American nation of Chile.

Kanfer Shipping AS, the Norwegian-based company focused on small-scale LNG transportation and LNG bunkering, has signed a construction contract for two newbuilds with the Chinese shipyard Taizhou Wuzhou Shipbuilding Co. and with ambitions to build up a larger fleet of small and medium-scale LNG delivery vessels.

The first two vessels are scheduled for delivery by the second half of 2023, with the option for the Taizhou Wuzhou yard, based in China's eastern province of Zhejiang,  to build additional ships.

Kanfer said the Norwegian firm, CGR Arctic Marine AS, had come up with a concept design for the two LNG bunker and distribution ships, including their specialized cargo and gas processing plants to address industry needs.

The initial two small-scale carriers will have capacity of 6,000 cubic metres and the firm contract followed a letter of intent signed in January 2021.

The CGR design includes mono-tank design, with simple arrangement and minimal boil-off and pure gas-electric power production combined with hybrid battery technology.

The manoeuvrability will come from Azipull thrusters and a bow thruster combined with a joystick operation.

Kanfer said “significant capital expenditure savings’ will come from choosing LNG fuel propulsion over dual-fueled design.

“This is an important step for Kanfer in realizing its goal to provide cost-efficient and environmentally friendly bunker vessels,” said Stig Anders Hagen, Chief Executive of Kanfer.

“Having strong cooperation with blue-chip shipping companies and LNG terminal owners has positioned Kanfer to move forward ith these two new LNG bunkering vessels,” explained Hagen.

“This is just the start. We will be building a large fleet of small-scale and medium-scale LNG distribution and bunkering ships,” the CEO declared.

“We see a rapidly expanding market for LNG bunker vessels as the world maritime industry continues to pivot towards its decarbonisation goals through LNG,” stated Hagen.

Kanfer noted that CGR founder, Captain Bård Nordberg, had already led the design and construction of 10 small-scale gas carriers at the Chinese shipyard, including several LNG vessels.

“Such extensive ship-building experience is unique in this space, and Kanfer is excited to leverage this,” said the company.