Climateer Investing: Shipping: LNG, LNG, LNG

Thursday, August 16, 2018

Shipping: LNG, LNG, LNG

Have I mentioned LNG?
A couple headlines that have fallen out of the feedreaders and terminals this month:

Caught in the Crossfire: Why American LNG May Fall Prey to US-China Trade War
—Sputnik, Aug. 10
Icebreaking LNG Carrier Christophe de Margerie Sets New Northern Sea Route Record
—gCaptain, Aug. 1

Those are LNG as cargo. One of the more interesting developments is the use of LNG as bunker fuel ahead of the 2020 IMO low-sulphur rules.
Whether or not it pans out is still up in the air but something has to work, be it scrubbers or sails (cylindrical wind turbines) or alt-fuel because, as Junichiro Ikeda put it in a June 14 post:

Shipping: CEO of Third Largest Fleet Says "We're All Going to Go Bust"

The industry is looking at a $50 billion price hike for its fuel bill if everyone goes with more refined oil or gasoil (why hasn't anyone bought a refinery?) which leads to ideas like this from Reuters, August 15;

New fuel rules push shipowners to go green with LNG

Tough new rules on marine fuel are forcing shipowners to explore liquefied natural gas as a cleaner alternative and ports such as Gibraltar are preparing to offer upgraded refueling facilities in the shipping industry’s biggest shake-up in decades.

From 2020, International Maritime Organization rules will ban ships from using fuels with a sulfur content above 0.5 percent, compared with 3.5 percent now, unless they are equipped to clean up sulfur emissions. This will be enforced by fines levied by the IMO’s member states.

Using LNG to power ships instead of heavy fuel oil or the lighter marine gasoil can reduce polluting emissions of nitrogen oxides and sulfur oxides by 90 to 95 percent, according to industry estimates.

The stakes are high. Analysts at Swiss bank UBS estimate that the green shipping market could be worth at least $250 billion over the next five years.

To scoop up some that market, the British territory of Gibraltar is in the process of launching an LNG-fuelled power station whose accompanying storage tanks will also be able to be used to refuel cargo ships via barges.

Gibraltar already supplies the most marine fuel of any port in the Mediterranean and aims to do the same with LNG, said Manuel Tirado, chief executive of the Gibraltar Port Authority.

“The GPA’s aim is to be the number one LNG bunker port in the Med, however, this is something that will not happen overnight,” he told Reuters....MUCH MORE