12 February 2021 25COMPANY PROFILE

DESIGN SIMPLIFICATION IS KEY TO CUTTING CAPEX OF LNG BUNKER VESSELS

SMALL OPPORTUNITY: An illustration of Kanfer’s 6,000-cbm, mono-tank LNGBV, which the company plans to build at Taizhou Wuzhou Shipbuilding Image: Kanfer Shipping

Interest in LNG bunker vessel (LNGBV) newbuildings is rising on the back of increased enquir-ies from potential charterers, as more LNG-fuelled vessel projects progress towards firm orders.

Data from the Society for Gas as a Marine Fuel (SGMF) shows there are 21 LNGBVs in operation and a similar number on order, with 14 scheduled to go into operation this year.

SGMF lists projects for at least 18 vessels as “under discussion”, although brokers hint that there are more in the works.

In a new report, shipping industry coalition SEA-LNG said LNG-fuelled vessels total about 13% of the current newbuilding orderbook.

SEA-LNG cited statistics from shipbroker Clarksons that list 124 ports as offering LNG-bunkering facilities, with a projection that this will increase to 170 by 2022.

Clarksons also projects the LNG-bunkering fleet will double in size in the next two years, the group said.

Brokers working on LNG bun-ker newbuilding projects caution that the pricing for the niche vessels is not falling.

Instead, they said companies are trying to reduce specifications on small-scale ships that would limit them to functioning as pure bunkering units, rather than doubling up as trading vessels, in an effort to reduce costs.

Multi-year charters are required to back investment in these newbuildings if this sector

is to develop, one broker said.While the energy majors,

particularly Shell and Total, have taken the lead in developing LNG bunkering infrastructure world-wide, brokers now speak about a raft of new enquiries from global players.

One broker cited three potential clients for LNGBVs in North America, with two each in Asia and the Mediterranean and another in the Middle East.

Total and Shell are believed to need more vessels to fill gaps in their global supply ambitions.

In December, Shell, which at the time had six LNGBVs in oper-ation, said it expects to more than double the number of ves-sels it will be using by 2025.

An unnamed Japanese entity is also flagged up as a likely new entrant.

North-west Europe is con-sidered “quite well covered” by some players in this sector. But more, particularly smaller capacity vessels, are expected to be slotted into the mix here.

CHARTERER INTEREST FUELS LNGBV NEWBUILD ENQUIRIES

EXPANDING DEMAND: The 7,500-cbm Avenir Advantage (built 2020) refuels the world’s first LNG-powered capesize bulker, the 180,000-dwt HL Green (built 2020) Photo: Avenir LNG

■ LNG bunker vessels in operation: 21

■ LNG bunker vessels on order: 20

■ Projects for LNG vessels under discussion: 18

■ LNG-fuelled ships in operation: 193

■ LNG-fuelled ships on order: 238Source: SGMF

SECTOR STATS

traders, he said, describing discus-sions as “relatively advanced”.

Charter-hire periods on the table range between six and 12 years, with charterers showing a preference for deals of six to seven years.

He declined to discuss the pricing agreed on the vessels but he said the company has done its homework comparing capex and operating expenses on three existing LNGBVs — two in Europe and one in Asia.

Kanfer, which signed a cooper-ation deal with Adnoc Logistics & Services on small-scale LNG and bunkering in 2019 and is continuing

to work on an articulated tug barge concept for gas-to-power, has homed in on a mono-tank solution for its first newbuildings, which helps reduce costs. But this can be upscaled to 8,000 cbm.

Hagen said 6,000 cbm is the preferred size for bunkering LNG-fuelled bulkers, some container vessels and cruiseships on round-trip voyages, with char-terers generally seeking LNGBVs in the 5,000-cbm to 7,000-cbm range.

He sees the need for more and smaller ships in this evolving sector to provide the logistics that make sense for charterers.

vessels and gas-handling equip-ment.

Reducing cargo boil-off gas is another factor and, as a result of discussions on this, he said Wes-mar had opted to install a chiller unit on its newbuildings.

We want to make LNG available everywhere it is needed,” Hoepfner said. It is now available in the main ports but he said there are many vessels in inter-regional

trades that are ideal users for LNG and bio-LNG.

He anticipates the newbuildings could also be used for sole trans-portation of bio-LNG or synthetic LNG as an additive to bunker vol-umes to reduce emissions.

Wesmar estimates the most frequently bunkered parcel size of LNG will be in the 250-cbm to 1,000-cbm range. But Hoepfner says operators of existing LNGBVs,

such as the 18,600-cbm and 7,500-cbm ships, are not keen to serve bunker volumes of 500 cbm or less, especially if they have to sail longer distances to do it.

“Those vessels are not made for smaller clients,” he said.

He believes the smaller size range for LNGBV is unrepresented.

“The [LNG] bunker infrastruc-ture needs more vessels and needs smaller vessels,” he said.

FLEXIBLE DESIGN: Wessels Marine plans to order four multi-fuel bunker vessels

Photo: Wessels Marine