Time to take another look at LNG conversion?

4 min read

16 Apr 2021

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Charlie Bass

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Tarbit Shipping AB

4 min read

16 Apr 2021

Text:

Charlie Bass

Photo:

Tarbit Shipping AB

Modern efficiency-boosting technologies can help vessel owners and operators put a big dent in their emissions levels, but hitting IMO's tough 2030 and 2050 targets requires an effort on multiple fronts. Switching to an alternative, well-established fuel like LNG offers immediate benefits in terms of carbon, Sox and NOx reductions. And with funding from various sources available to sweeten the deal, could now be the perfect time to take another look at LNG conversion?

With less than nine years on the clock until 2030, the maritime industry is fast running out of runway to reduce its carbon intensity by 40%. There is a wide range of efficiency enhancements available for vessels of all types to help minimise fuel consumption and emissions, but existing alternative fuels like LNG are often overlooked.

LNG conversion provides an established and viable route towards more sustainable fuels and has a vital role to play not only in cutting the carbon footprint of vessels but in helping to eliminate other pollutants too.  Converting engines to run on LNG also opens up the possibility to adopt future green fuels too. For instance, switching to bioLNG or synthetic methane is possible without the need for major changes.

There are a whole host of reasons why converting to LNG makes sense, not least the immediate emission reduction it provides compared to HFO. It’s readily available, affordable and is currently the only alternative fuel with an existing and well-established infrastructure in place.

- Jussi Mäkitalo, Manager, Business Development at Wärtsilä


CO2 is only part of the story

“Switching to LNG can enable an immediate reduction in CO2 emissions of around 20% on a well-to-wake basis, though this is of course heavily dependent on the application,” explains Britt-Mari Kullas-Nyman, General Manager, Global Project Sales at Wärtsilä.

“While CO2 emissions have been the hot topic for quite some years, it’s vital to remember that switching to LNG means that a vessel can also cut NOx emissions by 85–90%, reduce particulate emissions and completely eliminate SOx emissions,” she continues. "Furthermore, according to DNV the vessel’s EEXI (Energy Efficiency Existing Ship Index) is expected to be improved by approximately 25% when changing from MDO to LNG, and based on our estimates fuel costs compared to HFO can be reduced up to 50% depending on the fuel cost on the day.” 

 

A question of space, time – and reputation

When weighing up the option to convert a vessel to run on LNG, the key issue is space. Does your vessel have, or are you willing to make available, the onboard space to install LNG tanks and all the other associated equipment? Larger vessels such as tankers and container ships are ideal candidates in this regard. Kullas-Nyman explains that the routes sailed by the vessel are another important factor to take into account: “For vessels sailing a more-or-less fixed, predictable route operators can more easily plan the optimal bunkering points for refuelling.”

Kullas-Nyman is keen to point out that the decision to convert to LNG can also be a matter of reputation: “An LNG conversion represents a significant chunk of CAPEX, but it is an investment in your reputation as a responsible operator as much as it is an investment in your assets. Of course, this depends to some extent on what cargo your vessel is carrying and where it is operating. For example, passenger vessels like cruise ships and ferries and those transporting hybrid cars between Asia and Europe can strengthen their sustainability credentials in the eyes of the end consumer by cutting their emissions.”

While a conversion might be a significant investment, in the long run it will pay off as charterers are increasingly starting to favour vessels with a lower environmental footprint. It is also important to note in this context initiatives such as the Poseidon Principles and the Sea Cargo Charter, which encourage financing institutions and charterers to favour vessels with improved environmental performance.

The development phase of a conversion project can take up to a year, with the installation work itself lasting perhaps one to two months. Mäkitalo sums up the factors to consider when weighing up an LNG conversion as follows:

  • Are you able to win additional business after the conversion due to the vessel’s improved environmental performance?
  • Is LNG bunkering available in your operating area?
  • Do you have space onboard for the tanks and gas-handling and supply systems?
  • How much fuel endurance (range) do you need on LNG, and do you need additional capacity from diesel fuel?
  • What additional funding is available to you to help finance the conversion?
  • What impact will the conversion have on your operating expenses?

 

Money talks

The availability of external funding is an important factor to consider, explains Mäkitalo: “For example, through the EU Innovation Fund it can be possible to secure financing for up to 60% of the CAPEX for the conversion project itself as well as the resulting increased OPEX depending on how much the project will reduce the vessel’s emissions. There are also country-specific or regional funding sources such as the Norwegian NOx Fund, which can cover up to 80% of the CAPEX costs. These kinds of funding sources put a different spin on LNG conversion. We can work with customers to put together all the necessary details they need when applying for funding and provide estimates for the potential reduction in emissions and the cost of the project.” 

Wärtsilä has the capabilities to manage all aspects of an LNG conversion project from feasibility studies, financing solutions, solution proposals, execution planning and implementation to complete project delivery. The company has well-established conversion packages for specific engine types and can deliver LNG systems for any marine installation regardless of engine brand or type, either as a standalone gas supply solution or as a complete propulsion system conversion. The Wärtsilä offering includes Wärtsilä LNGPac™, which is a complete fuel gas supply system for LNG-fuelled ships that includes a bunkering station, LNG tank and related process equipment as well as the required control and safety system.

 

Reduced fuel expenses and emissions for the Bit Viking

In 2011 Wärtsilä achieved a world first when it finalised an LNG conversion project on the 25,000 dwt tanker Bit Viking, owned and operated by the Swedish company Tarbit Shipping AB. The vessel was the first marine installation in the world to convert Wärtsilä 46 engines to Wärtsilä 50DF engines. The scope included deck-mounted gas fuel systems, piping, engine conversion including the related control systems, and all necessary adjustments to the ship’s systems.

The Bit Viking utilises the Wärtsilä LNGPac system, which enables the safe and convenient onboard storage of LNG. The two 500 m3 storage tanks provide the vessel with 12 days of autonomous operation at 80% load, with the option to switch to marine gas oil if extended range is required.

Tarbit Shipping’s Technical Manager Anders Hermansson speaks positively not only about the vessel’s performance since conversion, but also about the collaboration with Wärtsilä before, during and after the project was completed: “ The vessel performance has been excellent since day one with no major issues at all. Typically, the Bit Viking now runs on LNG about 90% of the time, with some variations due to fuel-price or bunkering issues.”

The vessel was already fully compliant with the requirements of the IMO’s IGF Code before it became mandatory and was the first vessel in the world to run on LNG with standard gearboxes and propeller shafts rather than diesel-electric propulsion. Wärtsilä has been with us the entire way and continues to provide excellent lifecycle support. They are always there when we need them.

- Anders Hermansson, Technical Manager at Tarbit Shipping AB

Naturally, the conversion helped to cut the Bit Viking’s emissions significantly. “Converting to LNG reduced NOx emissions by about 90%, SOx by more or less 99% and CO2 by about 20%. Particulate emissions were also reduced significantly,” says Hermansson .

 

An excellent platform for decarbonisation

“We see dual-fuel engines running on LNG as an excellent platform to contribute to decarbonisation,” says Mäkitalo. “The fuel, the infrastructure and the engine technology are all there. Once the conversion is done it opens up the opportunity to further reduce a vessel’s environmental footprint with bioLNG and eventually synthetic LNG as these become more readily available and economically feasible.”

“We have a vast amount of experience not only delivering LNG installations for newbuild vessels but also from converting dozens of power plant installations with the same engines to run on LNG,” highlights Kullas-Nyman. “For example, we have been working on reducing the problem of methane slip for more than two decades and have developed upgrade kits for our dual-fuel engine portfolio that have reduced methane emissions by 50%,” she continues.

“Ours is a hard combination to beat: equipment, experience, proven technologies and successful deliveries. LNG conversions are currently the only available platform to make your vessel ready for alternative fuels while also ensuring easier access to future finance and providing opportunities to secure higher freight rates under initiatives like the Poseidon Principles and Sea Cargo Charter respectively. In the short term, converting to LNG enables immediate reductions in CO2, NOx and particulate emissions and completely eliminates SOx emissions. And with the icing on the cake in the form of the funding available for such projects, now really is the time to take another look at LNG,” Kullas-Nyman concludes.

Read more about retrofitting capabilities: https://www.wartsila.com/marine/maintain/lifecycle-upgrades 


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