The November issue of American Gas magazine titled, “Sea Change,” examines the global opportunities for liquefied natural gas (LNG) and its role as a marine transportation fuel as the world continues to move toward an international emission standard.
Six years ago, the marine industry was the last large emission source that remained unregulated. Since then, mandates from the International Maritime Organization have led ship owners to develop new solutions. Today, more cruise line owners are buying into LNG worldwide, with the goal to have 80 percent of cruise ships LNG-powered by 2025.
In Central America, the expansion of the Panama Canal had a major impact on the maritime industry in 2016, boosting LNG trade by lowering costs and ramping up transport. In July, Royal Dutch Shell’s Maran Gas Apollonia tanker, loaded with a cargo of U.S. LNG from Cheniere-operated Sabine Pass, became the first standard-size LNG vessel to traverse the canal. Bloomberg recently reported that 90 percent of the world’s fleet of tankers carrying LNG exports will now have access to this shortcut to Asia, which bodes well for U.S. gas companies exporting LNG to other countries.
Meanwhile, the Paris Agreement formulated during the U.N. Climate Change Conference in December 2015 marked the first universal, legally-binding global climate deal, with 195 countries agreeing on a global action plan to limit global warming to well below two degrees Celsius. Although international shipping was not included in this agreement, amid the optimistic predictions for growth, all eyes are on the International Maritime Organization to see whether the sulfur emission standard for emission control areas will be dropped from 3.5 percent to 0.5 percent in 2020, or deferred until 2025.
Europe has spent approximately $150 million to date to develop LNG infrastructure. Before Brexit, all 28 member nations of the European Union unanimously agreed to a formal policy that said there will be LNG bunkering capability in all deep-sea ports in Europe and all inland ports on the continent by 2025. By the end of this year, several of Europe’s major ports will have bunkering capability.
While LNG remains a relatively new fuel source for oceans-going vessels, marked growth in the number of LNG-fueled ships signals the beginning of a new era. For more information on marine LNG activity, you can access the American Gas article here.