Trump's LNG boost is helping power



[ad_1]

Per Brian Parkin, William Wilkes and Vanessa Dezem in 04/20/2019

BERLIN and FRANKFURT (Bloomberg) – President Donald Trump's attempt to dump an excess of liquefied natural gas in Europe is receiving an unlikely boost: stringent regulations on ship emissions are leading European shipbuilders to seek alternatives to highly polluting diesel.

The International Maritime Organization will crack down on sulfur and carbon emissions from diesel-powered ships next year. This led to a search for less polluting fuels, with global LNG surplus attracting European cruise and non-cargo lines to the fuel. And this is benefiting Germany's shipyards, home to the world's largest merchant marine fleet, which is exploring an expanding cruise industry.

"Germany can not make LNG cruise ships fast enough – we are at the top of the store now," said Ralf Soeren Marquardt, managing director of the German shipowners' federation VSM, on the Hamburg telephone last week. "The special shipbuilding that Germany has been leading for so long is receiving a major boost."

All but two of the 11 cruise ships ordered at the Cloppenburg dock at Meyer Werft GmbH in the North Sea are powered by LNG. Quotes from the dock are full by 2023, spokesman Guenther Kolbe said on Thursday by telephone. In November, the shipyard completed the 180,000-ton AIDAnova coating, the world's first LNG cruise ship. The owner of Carnival Corporation & Plc, the world's largest leisure travel company, plans to increase its LNG fleet on 11 ships in the coming years.

Getting funding

Germany's main remittance lenders, including NordLB AG and Commerzbank AG, are losing their loan portfolios. The government and its development bank, the KfW Group, are working to help finance the construction of LNG ships.

LNG propulsion is 20% to 30% more expensive than diesel engines and the government subsidizes up to 60% of the higher costs, said George Ehrmann, director of Germany's Maritime LNG Platform, which promotes the new technology.

Only 0.4% of the world's total tonnage is composed of cruise ships, but the LNG sector change will, in time, give support to other German special vessels, such as wind power research and installation vessels , and conversion of diesel into LNG. Ehrmann said in an interview earlier this month.

Without terminal

Germany has been slow to heat the possibilities of LNG and is the only major European market without a fuel import terminal. Until the middle of the decade, the Berlin government rejected pressure from the Group of Seven partners, including the US and Japan, to expand the diversity of its natural gas supplies, instead disclosing its reliance on pipeline gas.

The stance began to collapse last year under US pressure, and politicians, including Chancellor Angela Merkel, began to line up with naval builders, coastal administrations seeking to build LNG terminals and logistics companies to explore the possibilities of LNG as revenue of the IMO. Pollution clamps appear.

For the first time in her 14-year term, Merkel will open the country's annual maritime congress next month. LNG propulsion for inland navigation is an important issue. At the end of this year, his government is scheduled to nominate two locations for the North Sea LNG terminals.

Skeptics point to formidable barriers to entry-level LNG. Storage tanks and cooling equipment limit the space available to the crew and the usual cargo load. Unlike diesel, fuel is potentially explosive when leaks occur and large spills of deep-frozen fuel would break ships' steel hulls.

The navies do not plan LNG ships for these reasons. LNG refueling infrastructure is still scarce in international ports and shipping companies and banks are having little money in investments after a brutal industry crash that has triggered a wave of bankruptcies.

"There are no filling stations around the world to supply LNG fuel to ships, which is a bottleneck," said Basil Karatzas, chief executive officer of Karatzas Marine Advisers in New York, who compared the steamer transition. "It is enough that ships are built for LNG, and they can not be built unless there is enough capacity for supply."


comments powered by

[ad_2]

Source link