LR – Penn Oak Agreement Provide Equity for US LNG Bunker Infrastructure

| USA, Scottsdale AZ

“LNG as a fuel has emerged as one of the most considered choices for a new generation of vessels” (LR)

Classification society Lloyd’s Register North America, Inc. (LR) and Penn Oak Energy Corp, an LNG fuel solutions provider based in the U.S. state of Arizona, will together help companies raise capital and mitigate the technical risks associated with retrofitting ships fuelled by liquefied natural gas (LNG), by providing a one-stop-shop solution to the industry.

Ships that are fuelled by LNG can greatly reduce operating costs while meeting stricter environmental regulations. LNG-fuelled ships have reduced emissions (nitrogen oxide, sulphur oxide and particulate matter) as compared with heavy bunker oil and even low-sulphur marine diesel.

Historically, the leading expense for ship operators is fuel and personnel. The challenge to building these new ships has been that shipowners are unwilling to invest in LNG-fuelled ships if supplies of LNG bunker are difficult to obtain, but that has started to change as more LNG facilities are built. LR’s LNG Bunkering Infrastructural Survey 2014 indicates that major ports around the world are either planning for, or are anticipating, the wide-scale development of LNG bunkering. The other challenge for shipbuilders is the large initial capital costs to build these new ships.

“LNG as a fuel has emerged as one of the most considered choices for a new generation of vessels. The infrastructure to support this new class of ships has started to mature, and we have seen great strides in companies willing to convert their existing ships to this new fuel or constructing new ships in the U.S. Emission Control Areas. Our relationship with Penn Oak Energy will help provide the private equity to ship owners to undertake these ambitious projects, and assist those ship builders that the U.S. will need to expand this growing demand,” said LR’s Rafa Riva, Marine Business Development Manager.

Penn Oak Energy, based in Scottsdale, Arizona, specializes in turnkey solutions that take into consideration technology, natural gas liquefaction and supply, as well as logistics and financial considerations. The value that Penn Oak Energy adds to ship-owners and their fleets is through a fuel-procurement agreement, where they can spread the cost of the LNG conversions and the upfront capital requirements for these conversions over the life of the project.

“Working with Lloyd’s Register and various shipyard owners throughout North America, Penn Oak Energy has been able to sign up exclusive relationships with various shipyard builders to bring their yards up to spec on certification, safety and standards required to convert ships to dual-fuel solutions,” said Philip Parker, head of business development for Penn Oak Energy.

(Source: Lloyd’s Register)

Editor Note: NGV Global News provide multiple sarticles about LNG bunkering – click here.

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