A UK 'green solutions' provider offers shipowners technical and financial options to refit their vessels to burn LNG as a fuel, while a German shipping line moves ahead with its own pilot project
With over 16 years of experience in the shipping business, Newport Shipping's Lianghui Xia is well aware of the regulatory and operational pain points his customers face on an everyday basis. One of those pain points is deciding on the best path forward to decarbonisation. He also knows that the industry has no time to waste if it plans to cut greenhouse gas emissions by 40% by 2030 and meet IMO's ambitious decarbonisation targets by 2050.
"There are no lack of alternatives for technologies," says Mr Xia, "but finding the optimum one for a vessel that is going to be supported with mature infrastructure and at the same time offer owners sufficient financial incentive is a big challenge. It is not something that shipowners can handle alone."
Mr Xia has taken the experience he gained working at ship brokerages RS Platou and Lorentzen & Stemoco Shipbroking and AP Møller Group company Maersk Tankers, and applied it to helping shipowners and operators transition to a decarbonised future. Mr Xia is a managing director of Newport Shipping UK, which acts as a turnkey solution provider for refitting 'green' solutions, such as ballast water technology system, exhaust gas cleaning systems and LNG engine and fuel gas supply system conversions.
As part of its turnkey solutions for shipowners and operators, Newport Shipping provides both the technical support and favourable financing options, combining design and engineering, equipment procurement, shipyard slot scheduling and project management, and post-delivery extended payment schemes, says Mr Xia.
"We offer our turnkey solution with a five- to seven-year payment plan without fixed vessel mortgage collateral. This is a cost-effective solution to alleviate the upfront financial burden imposed on shipowners today so they can plan for tomorrow," says Mr Xia.
"Newport is taking full contractual responsibility towards our owners and the contract is based on English law. We provide a full range of services that can integrate into all the key project elements, from contract signing to vessel redelivery," he says. Mr Xia emphasises that this "tailor-made approach" is critical because "each vessel has a different design and operational profile so there is no standard approach for all clients." He also notes that just because vessels are of the same design and class there can still be differences.
"Even for sister vessels, there can be some changes during the operational life of the vessel, so we need to conduct 3D scanning for each vessel in order to do proper design and engineering work," he says.
"While LNG as a fuel won't get shipowners to the finish line, it will get them in the race towards decarbonisation
Other typical technical issues that Newport Shipping has encountered are the availability of required documents for the project vessel, tank capacity and its location onboard, stability calculation and approval based on tank size and location, safety compliance for exhaust routing and ventilation systems, and engineroom space constraints for the new gas piping system and equipment.
Besides its own in-house expertise, Newport Shipping can bring resources to bear to support its retrofit projects in order to "deliver maximum value to shipowners via technical coordination of multiple parties," says Mr Xia.
Newport Shipping has a global partner network of 12 shipyards with 28 drydocks located in China, Indonesia, Oman, Singapore, South Korea and Turkey.
To support its LNG conversion business, Newport Shipping has struck a deal announced in August under which Chinese LNG solution provider Gloryholder Liquefied Gas Machinery (LGM) Engineering will provide its equipment and services for LNG ship retrofits.
LGM Engineering supplies engineering, procurement and construction turnkey deliveries of marine LNG fuel gas supply systems and cargo-handling systems for gas carriers and LNG bunkering vessels. Known for its innovation, LGM Engineering received an Approval in Principle (AiP) from ABS for the LGM-MMC independent tank. The multi-body Type-C stacked independent storage tank is well suited for installation in narrow spaces.
Besides its technology and service partnerships, Newport Shipping recently invested in its human capital, adding ship financing veteran Ingmar Loges to its team. As managing director, Germany, Mr Loges will support Newport Shipping's group financial and marketing strategy for the German shipping market.
With 30 years' experience in financing, Mr Loges has been the global head of ship and offshore finance for the last 15 years at leading financial institutions DVB Bank SE Amsterdam, HSH Nordbank AG Hamburg, UniCredit Bank AG Hamburg and Singapore.
While LNG as a fuel won't get shipowners to the finish line, it will get them in the race towards decarbonisation. By burning LNG, ships can virtually eliminate SOx and particulate matter emissions, reduce NOx emissions by 85% and cut CO2 emissions by at least 20% as compared with than traditional marine diesel. Committing to LNG now will also allow shipowners to transition to carbon-neutral 'drop-in' fuels such as biomethane and bioLNG.
"We see LNG as a fuel to be a relatively more competitive option during the transition period towards 2050," observes Mr Xia. "The current availability of world infrastructure is giving us more comfort. For instance, we see oil majors being very organised with their supply chain which is critical for the selection of clean fuel choices by our clients. We also see a lot of advancement of bio and synthetic LNG and this development is very promising for LNG to be positioned as a competitive marine fuel for the future."
One of the shipowners considering LNG-fuelled vessel conversions as part of its compliance and sustainability strategy is container shipping giant Hapag-Lloyd. Work is underway on its pilot project, the US$35M conversion of the 15,000-TEU ultra-large container ship (ULCS) Sajir.
A milestone in the project was reported by the German shipping line in September with the lift of a 1,300-tonne fuel tank by a floating crane into the containership's hull.
Preparations at HuaRun DaDong Dockyard in Shanghai for the installation of the fuel had been underway for three weeks.
The tank will now be welded to the hold. While this is happening, the main engine and the auxiliary diesel engines will be converted to dual-fuel operation for LNG and very low-sulphur fuel oil.
Sajir is the largest containership yet to be converted to LNG, demonstrating the maturing infrastructure and commercial viability of the fuel.
Plans call for Sajir to complete its conversion phase and initial test voyages in early 2021 before being redeployed in the Asia-North Europe trade lane.
"With this unique pilot project, we hope to learn for the future and to pave the way for large ships to be retrofitted to use this promising alternative fuel," said Hapag-Lloyd fleet managing director Richard von Berlepsch. "However, our long-term goal continues to be CO2-neutral shipping operations using synthetic natural gas," added Mr von Berlepsch.