[NGW Magazine] Bunkering in the US
With the Jacksonville Port Authority leading the way, LNG as a marine fuel is gaining ground in the US
Demand in the US for LNG as a bunker fuel in the shipping industry is relatively low, but with stricter low-sulphur fuel regulations set to come into effect in 2020, LNG bunkering is expected to expand to most major ports, according to the panellists at a recent LNG conference in Houston.
Under new International Maritime Organization (IMO) rules that take effect January 1, 2020, sulphur content in bunker fuels will be limited to 0.5%, down from the current limit of 3.5%.
Aziz Bamik, general manager of GTT North America, a wholly-owned subsidiary of France’s GTT, which designs and engineers LNG shipping and storage facilities, told the 16th Americas Summit of the CWC World LNG & Gas Series that with those regulations less than two years out, the global shipping industry is at a “tipping point” for reducing emissions from its bunker fuels.
“By 2020, ship owners globally will have to limit sulphur in fuel to 0.5%, which opens opportunities for LNG,” he said. “That means that if they want to be compliant, they will either have to install scrubbers to clean the exhaust, or they will have to use LNG.”
Converting to LNG as a bunker fuel, Bamik said, is the best long-run solution for most ship operators: it’s clean – SOX emissions are eliminated, NOX emissions are reduced by 85% and CO2 emissions are reduced by more than 25% – it’s cost-effective and it’s readily available. There are now 120 ships in the global fleet running on LNG, he said, and another 124 on order that are capable of using LNG as a fuel. Around the world, there are 46 LNG bunkering stations, and six vessels capable of providing LNG bunkering services.
The global cruise industry, meanwhile, will put 13 LNG-powered vessels into service between now and 2026, according to Cruise Industry News. Carnival Corporation will operate seven of those, three under its US-based Carnival Cruise Lines flag, while the rest will be operated by Royal Caribbean Cruises and France’s MSC Cruises.
“We are now, in 2018, at the tipping point because we have seen some key decisions in the last year that will trigger the growth of LNG as a marine fuel,” Bamik added. Among those decisions was the late-2017 contract awarded to GTT by China State Shipbuilding to provide LNG fuel tanks for nine of the largest container ships – 22,000 20-foot-equivalent units (TEU) capacity – ever built. Each of those ships will have LNG fuel capacity of about 18,600 m³, and together, they will consume about 300,000 metric tons of LNG each year.
By 2028, he said, at least 10 US ports will have LNG capabilities, expanding the fuel’s maritime fuel presence in the US that began about four years at the Jacksonville Port Authority (Jaxport), on the northeast coast of Florida.
Supported by a proactive US Coast Guard presence, Jaxport has become the centre of US LNG bunkering. Encompassing three marine cargo terminals and a cruise terminal, the port will soon have two small-scale liquefaction facilities capable of producing 320,000 gallons/day of LNG, and North America’s first LNG bunker barge, the Clean Jacksonville, designed by GTT North America and nearing completion at the Conrad Shipyard in Orange, Texas.
It’s already home to the world’s first LNG-powered containerships, Tote Maritime’s Isla Bella and Perla del Caribe (which will be bunkered by the Clean Jacksonville) and will soon welcome two combination container-roll-on/roll-off ships. Crowley Maritime’s El Coqui and Taino will each have 2,400 TEU capacity, with additional space for nearly 400 vehicles.
The launch of the Isla Bella, the world's first LNG-fueled containership. It is now homeported at Jaxport in Florida (Credit: Tote Maritime)
Crowley also operates a shore-side bunkering facility, designed and built by Eagle LNG, which is currently building one of the two small-scale liquefaction facilities at Jaxport. The other is being built by JAX LNG – a partnership of Pivotal LNG and NorthStar Midstream – which will also own and operate the Clean Jacksonville.
“We haven’t really had a lot of stumbling blocks in getting LNG into the Jacksonville market,” David Stubbs, director, properties and environmental compliance at Jaxport, told the Houston conference. “Jacksonville and Jaxport started the move to LNG in the state of Florida and Florida will be a real hotbed of LNG in the maritime industry through not only the container industry but also the cruise industry, which is converting their ships.”
None of Jaxport’s LNG successes, Stubbs said, would have been possible without the active support of the US Coast Guard (USCG), which oversees water-side operations at every port in the US. Lieutenant Commander Dallas Smith, detachment chief at the USCG’s Liquefied Gas Carrier National Center of Expertise in Port Arthur, Texas, said it is the Coast Guard’s mission, through the Center, to be as proactive as it can with the development of policy and guidance for LNG as a marine fuel.
“We still don’t have any Coast Guard regulations for LNG as fuel but we have several policies and guidelines regarding operating and designing,” he told conference delegates. “We have had great partnerships with some of the different facilities like Jaxport, GTT, Tote and Crowley. We have looked at their facilities and they’ve helped us raise awareness.”
Four years ago, when Tote Maritime first approached Jaxport with the idea of home-porting the Isla Bella and the Perla del Caribe in Jacksonville, port authorities had no knowledge of LNG or its potential use as a bunker fuel, Stubbs said.
“What we did know, however, was that if we didn’t get out in front of this and get it in front of the public, it likely wasn’t going to be very well-received by the public,” he said. Tote Maritime, Jaxport and the USCG hosted numerous public meetings and hearings explaining the environmental and cost advantages of LNG bunkering, and by the time Eagle LNG brought forward its plans for a liquefaction facility, pretty much all the questions had been answered.
“A public hearing into the Eagle LNG project was convened, the company gave an overview of the project, two members of the public spoke favourably about the project, and the hearing adjourned after just 24 minutes,” Stubbs said. “I doubt major LNG terminals can get things done quite that quickly.”