LNG propulsion

Will shipping enter a new age and become sustainable with LNG propulsion?
My SWOT analysis.

Many studies are published nowadays predicting a new age for shipping. With LNG, shipping would be able to meet the new and future IMO emissions restrictions rules and become sustainable.

LNG is not only environmental friendly; it is also the cheapest fuel available, and this trend is likely to continue due to global reserves. Since Fuel costs represent the majority of shipping lines fixed costs, it seems a no brainer for shipping lines to switch to LNG, reap major savings and obtain an amazing competitive advantage.

At the end of this discussion you will find a link to a very interesting and complete presentation from Wartsila R&D Director dated from 2008, however still very relevant.

To facilitate reading, here is my SWOT analysis on the LNG. In short, you will see that LNG applications are still limited due to space and power constraints. So far LNG only apply to medium speed engines and therefore to small short sea units (ferry, supply, tug, except LNG tanker) , moreover the space required to store the LNG is 4 times bigger, which is at the expense of commercial space, and prevent good payback.

Strengths
• Main competitive advantage: Lower fuel costs per ton vs. even HFO (same energy content), lower energy consumption (less overall power needed i.e. no need to heat fuel) and lower maintenance costs (machinery)
• Environmentally friendly, cleaner emissions: No Sox, 85% lower Nox, 30% lower CO2
• Higher engine efficiency than HFO engines (+10%)
• Best sustainable shipping solution

Weakness
• Space for tanks (4 times HFO) main factor limiting application as taking cargo space
• Limited power output. Propulsion only for small units and short sea (ferry, tugs, feeders), except LNG tankers.
• For all other vessel type application so far limited to aux power, eventually quick coastal navigation within IMO emission restrictions zones (payback vs. MDO)
Unburned methane being 30 times more potent grenhouse gaz than CO2
• Investment cost, clarity on payback time since it depends on LNG cost developments
• Restrictive availability/supply and bunkering rules in many ports

Opportunity
• Future tank development reducing space needed
• Two strokes slow engine ongoing developments (Wartsila RT-Flex50 )
• Ship to ship transfer for bunkering
• Increase pressure from society for clean air
• Increase commercial pressure from customers for clean ships/operations
• Further improvement in engines efficiency

Threats
• Lack of supply infrastructure?
• LNG price development?
• Long term global economic recession

Wartsila presentation can be found here: http://www.dieselduck.ca/library/05%20environmental/2008%20Wartsila%20propulsion%20alternatives.pdf