SEA\LNG: Compliance Needed to Achieve 2020 Sulphur Cap

| United Kingdom, London

SEA/LNG logo“LNG far exceeds alternative options in terms of emissions reductions” – Peter Keller, SEA\LNG Chairman

SEA\LNG, the multi-sector industry coalition working to facilitate and accelerate the widespread adoption of liquefied natural gas (LNG) as a marine fuel, has urged the industry as a whole to redouble its commitment to compliance with, and enforcement of, IMO Marpol VI Regulations. Three new members have joined the coalition, now with 28 members.

The coalition acknowledged that today’s shipowners are operating in a challenging economic environment amid stringent and increasing environmental regulations. With a complex investment decision matrix of risks when considering how to comply with the global sulphur cap of 0.5% from 2020, shipowners must make decisions that remain viable into the future and make choices between a limited number of options: LNG, scrubbers, or low sulphur fuels.

SEA\LNG chairman Peter Keller commented: “Shipping has made significant progress in reducing its environmental impact from harmful emissions, but more needs to be done. All parties, especially the Port State Authorities must play their part. Effective and consistent enforcement, across all jurisdictions of the IMO emissions regulations, will be essential to ensure more environmentally friendly shipping and a level playing field for all shipping companies. Flag states and port authorities have a clear and key responsibility in ensuring compliance. If we do not collectively commit to compliance and enforcement, then we will continue to miss a tangible and viable opportunity to eradicate harmful emissions such as Sulphur Oxide (SOx), Nitrogen Oxide (NOx), and Particulate Matter (PM). This seems unacceptable given the opportunity we have readily at hand.”

SEA\LNG added that in addressing the primary concerns of cost and compliance, LNG as a marine fuel provides a means of negating current and potential future local emissions challenges, and is a step in the right direction towards reducing greenhouse gas (GHG) emissions from maritime transport.

Keller explained: “LNG far exceeds alternative options in terms of emissions reductions. It emits zero sulphur oxides (SOx) and virtually zero particulate matter (PM). Compared to existing heavy marine fuel oils, LNG emits 90% less nitrogen oxides (NOx) and through the use of best current practices and appropriate technologies to minimise methane leakage, offers the potential for up to a 25% reduction in GHGs. Advancements in dual fuel technology and propulsion, enhanced control systems, and future use of gas turbine technologies present further opportunity for increased GHG reductions.”

Transition to LNG

The energy transition is moving in a clear direction. The vast majority of the world’s top ten bunkering ports offer LNG bunkering or have firm plans to do so by 2020. As this LNG bunker market continues to develop, there is already a drive to meet demand for LNG as marine fuel at these and other critical locations. By the end of 2017, six LNG bunker vessels will be in operation – expanded from one at the start of the year. These vessels are key to scaling-up demand for LNG as a marine fuel and delivering fuel in a way that is “normal” for shipowners. Added to which, new bunkering hubs are developing which will leverage existing bulk LNG infrastructure.

Keller concluded: “LNG will be one of a portfolio of solutions going forward to help lower emissions, creating a more sustainable future for shipping. We recognise that there are barriers and limitations, but we are confident that by working together, we can overcome these hurdles as the industry has always done in the past. We do, however, require a greater sense of urgency and commitment.”

SEA\LNG New Members

SEA\LNG’s membership, which spans the LNG value chain, stands at 28 organisations and continues to grow, highlighting the industry’s growing recognition of LNG as a cost effective, safe, and more environmentally friendly long-term fuelling solution. Most recent members are Mitsui & Co., Ltd., NOVATEK Gas & Power, and Sumitomo Corporation.

Mitsui & Co., Ltd. is a leading Japanese trading, investment, and service enterprise, serving several business areas. In the field of LNG, the company participates in the whole spectrum of the value chain. Mitsui has invested in 11 LNG projects, 8 of which are in production with efficient management and stable operation. The company has also been proactive in LNG bunkering, participating in an LNG bunkering pilot programme in Singapore and signing an MoU with Gazprom to cooperate in LNG bunkering studies.

Kenichiro Yamaguchi, General Manager of Gas Business Development Division at Mitsui & Co., Ltd., said: “Mitsui has an excellent track record in the field of LNG and is well positioned to affect change within the entire value chain. As the IMO’s global sulphur cap approaches in 2020, we continue to continuously advocate for cleaner energy, including the promotion of LNG as a marine fuel. We look forward to leveraging our company’s position to work with our fellow members towards promoting sustainable LNG bunkering operations.”

NOVATEK is one of the largest independent natural gas producers in Russia. The company has ambitious growth plans to become the world’s biggest exporter of LNG within the next 10 years by tapping into Arctic gas.

The Chairman of NOVATEK’s Management Board Leonid Mikhelson noted: “The recent adoption of stricter emission standards for marine transportation by 2020 is consistent with our strategy for entering into new prospective LNG market segments including bunkering. Global environmental requirements create the basis for transiting the global fleet towards cleaner types of fuels. We are confident that more shipping companies will opt for LNG to meet these stricter requirements, and we are ready to facilitate the LNG bunkering market and infrastructure development.”

Sumitomo is one of Japan’s largest trading firms, with a strong heritage within the bunker trading business totalling approximately 65 years. The company has a strong presence on pipeline gas trading in the US, and has also been involved in an LNG liquefaction project in the US, called “Cove Point LNG Project”, as well as LNG trading and owning / operating of LNG carriers.

Mr. Shuichi Suzuki, Executive Officer and General Manager of Energy Division, Sumitomo Corporation, concluded: “We are proud to be joining a coalition whose vision for LNG as a marine fuel aligns well with our mission statement and our business philosophy which is outlined in our ‘Material Issues to Achieve Sustainable Growth with Society’ framework, especially “Achieving Harmony with the Global Environment”. We place strong emphasis on making an impact by leveraging our existing strengths, which is why we are excited to work in close partnership with other SEA\LNG members to continue to accelerate the widespread adoption of LNG as marine a fuel.”

Other recent additions are Yokohama-Kawasaki International Port Corporation (YKIP), Marubeni Corporation, Toyota Tsusho Petroleum, JAX LNG, and Petronet LNG.

Source: SEA\LNG

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