‘Looking at Investments that Would Begin in or Around 2016’
Food-based conglomerate Cargill – which operates more than 500 vessels – has teamed with Shell, DNV GL and the UK’s Xyntéo in a new cross-industry collaboration “to explore and assess the potential for using LNG” to fuel for dry bulk and tanker vessels.
Shell would provide the liquefied natural gas to fuel Cargill ships. “Shipping specialist firm DNV GL will provide key input on risk management, while Xyntéo will manage the development of the project and facilitate further collaboration,” states a Xyntéo release.
“The aim of the collaborative project,” Xyntéo adds, “is to develop and test the business case for using LNG to fuel ocean-going dry bulk vessels and medium-range tankers… looking at investments that would begin in or around 2016.”
‘No Single Party Can Make the Shift Alone’
The companies are looking to shift operations from heavy fuel oil (HFO) to LNG because of the increasing geographic range of emissions regulations – a phenomenon that’s making LNG ships more competitive.
They “are bringing together their shared technical and commercial expertise… As the effort moves forward, the companies will reach out to other players in the industry, including vessel owners and shipyards.”
“Transitioning to LNG represents a fundamental change in a mature industry and will require a vast number of partners,” said Steve Cadden, Xyntéo managing director of mobility. “No single party can make the shift alone.”
“Cargill operates over 500 vessels at any given time, and we have a close relationship with vessel owners,” said Cargill ocean transportation business president Roger Janson. “Together, we are continuously looking for new ways to improve the efficiency and environmental impact of the fleet, something which is also of growing importance to our customers.
‘Technical, Operational, and Commercial Challenges’
“The use of LNG as a shipping fuel for bulk vessels still poses a number of technical, operational, and commercial challenges that need to be carefully evaluated,” Janson said. “But we are confident that LNG will play an important role in the future of shipping, and we are proud to be part of this effort.”
“The objective is to develop a business view, through a positive and forward-looking format that allows knowledge sharing and open dialogue,” said Shell downstream GM Lauran Wetemans
Xyntéo notes that at present, there are just 38 LNG-fueled ships in operation in the world, in addition to LNG carriers. Today’s LNG vessels are primarily found in Scandinavia, and are mainly car and passenger ferries used in coastal and short-sea shipping. Some other types of vessels, like chemical tankers, have also started using LNG.
“The types of vessel under consideration for LNG fueling by this partnership are ocean-going dry bulk vessels, which have few opportunities to refuel while at sea,” Xynteo says. “The potential use of LNG fuel for tankers will also be explored.”
Xyntéo’s Global Leadership and Technology Exchange
“At DNV GL we have – for a long time – been convinced that LNG is an important future fuel for shipping, and we have watched the international shipping industry wake up to this reality,” said Tor Svensen, CEO at DNV GL. “But breaking into the deep sea trades has been a challenge, so we are now excited about overcoming this barrier together with Cargill, Shell, and Xyntéo.”
Cargill, DNV GL, Royal Dutch Shell and Xyntéo are collaborating under the aegis of GLTE, Xyntéo’s Global Leadership and Technology Exchange.
Michael Aasland is the bulk carriers segment director at DNV GL.Contact information is only available to premium subscribers. Click here to purchase a premium subscription.
Source: Xyntéo with HHP Insight follow-up