Almost one-third of BW LPG’s controlled very large gas carrier (VLGC) fleet will be powered by LPG by 2022, after the Oslo-listed shipowner committed US$130M to retrofitting its fleet with dual-fuel propulsion.
As of February 2021, four of BW’s LPG VLGCs have been retrofitted, with eight others to be completed this year, and three in 2022.
Speaking to local Singapore radio talk show host Glenn van Zutphen on MoneyFM on 14 March, BW LPG executive vice president technical and operations Pontus Berg outlined the results of the retrofit programme and the VLGC shipowner’s ambitious plans to cut emissions from its fleet.
Results from the retrofits have shown operating on LPG cuts greenhouse gas (GHG) emissions by 20%, SOx by 97%, particulate matter by 90%, NOx 25% and CO2 emissions by 20%. Not to be overlooked, fuel consumption improved by 10%. While calling the environmental improvements “staggering”, Mr Berg pointed out that LPG “is not the long-term solution” because there are still CO2 emissions.
“CO2 is really on the agenda - running on LPG instead of standard compliant fuels, we are emitting about 5,000 tonnes less per ship.”
Mr Berg said the retrofit programme makes sense environmentally but is also supported by sound commercial shipping economics. “We are looking at the fuel cost deltas. What does a tonne of LPG cost versus a tonne of compliant fuel or diesel? Today that delta is much smaller than when we started; basically, it has been reduced by more than half.” He said with an investment of about US$8M to US$9M per ship, the payback period is between five and six years based on the fuel delta.
Furthermore, other underlying economic reasons supporting the move to LPG are “less maintenance because it is a cleaner fuel.” Mr Berg sees additional energy savings and time advantages. “We don’t need to heat up the LPG [like] the old asphalt-like fuels [heavy fuel oils], and we don’t need to sit and wait for bunker barges. All this takes a lot of time out of our business. We bunker while we load the cargo and then we are good to go,” said Mr Berg.
BW LPG’s fifth retrofit, BW Balder, is due for completion in about two to three weeks, said Mr Berg. Covid-related disruptions regarding personnel and materials have impacted the timeline for the conversions. Despite being “a small shipping company”, Mr Berg said BW LPG logged “over 10,000 man-days in quarantine last year. That’s close to 30 years.”
“EEXI is like only being allowed to go to second gear in your car”
In the interview, Mr van Zutphen asked, “What’s it going to take for all of the industry to move in a sustainable direction?”
Mr Berg responded candidly, saying, “If people don’t start moving voluntarily, they will be forced.” Explaining the impact of IMO’s Energy Efficiency Index for Existing Ships (EEXI), Mr Berg said, “It means the regulation puts a cap on how much engine power you’re allowed to take out. So, it means you’re allowed to emit ‘X’ amount of CO2 based on your ship type and the cargo you’re carrying. And that cap is quite restrictive as it looks now.” He likened it to only being “allowed to go to second gear in your car.”
Since shipping economics depend on speed and delivery surety to make money, Mr Berg said shipowners and operators will be driven to consider alternative fuels such as ammonia, hydrogen, methanol or other fuels that contain less or no carbon.
What’s Mr Berg’s view on the fuel of the future for gas carriers? “My bet is… we are going down the road of ammonia. Ammonia is something that is widely available - not as a fuel yet; the engine makers are just being pushed into start developing this technology. As LPG carriers we are used to handling ammonia on the ships as a cargo.”
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March 15, 2021 at 06:10PM
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BW LPG's switch to cleaner LPG as fuel underpinned by sound economics - Riviera Maritime Media
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