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Rotterdam is at the forefront of the drive for alternative fuels © Floris Oosterveld

Turning to gas

Preparation for an LNG-heavy future continues apace across northern Europe as infrastructure, bunkering capacity and financial support builds across the region. Meanwhile, investigations are ongoing into a possible bunker cartel, John Rickards reports

This summer saw the German government introduce a financing programme to subsidise conversion of existing ships to dual-fuel and the fitting of LNG propulsion to newbuilds, something the German Shipowners’ Association (VDR) has long been pushing for.

“In [completing this conversion], we trust that the dramatic reduction in emissions will mark the beginning of a trend towards the adoption of LNG as an environmentally friendly fuel within the maritime sector.”

 

Speaking to World Bunkering, the VDR said it welcomed the stimulus package. CEO Ralf Nagel said: “Since retrofitting or building ships to run on LNG is a complex and expensive endeavour, the stimulus programme will help German shipowners cope with the substantial capital costs associated with gas-operated ships – while delivering major environmental benefits.”

 

Asked whether the programme did enough to support owners looking to adopt LNG, the VDR said: “The stimulus package has the right amount to enable shipowners to invest in LNG technology. We are confident that the increased demand for LNG will lead to a better LNG infrastructure.”

 

The move is a timely one, with this autumn seeing what’s supposedly the world’s first LNG box ship conversion taking on its first cargo –

and first LNG loading by truck from Nauticor – in Bremerhaven.

The conversion of the 1,036 TEU Wes Amelie was sponsored by Germany’s Ministry of Transport, with the new engine plant supplied

by MAN. The Wessels Reederei-owned ship has 15 sister vessels,

on which more conversions to LNG are reportedly planned.

 

All parties have been keen to promote the work as an example for the wider shipping industry. Dr Uwe Lauber, CEO of MAN Diesel & Turbo, said at the time of the Wes Amelie’s handover: “There are roughly 40,000 cargo vessels in operation worldwide. If we are serious about decarbonisation and want the shipping industry to be climate neutral by 2050, we need to take action today.”

The German government has at least opted to follow its own initiative to some extent, with the Federal Maritime and Hydrographic Agency (BSH) research vessel Atair, now under construction at Fassmer shipyard and due to enter service in 2020, to use a dual-fuel engine and selective catalytic reduction technology from Wärtsilä.
The ship, a replacement for its 30-year-old namesake, will be the first in the German research fleet to run on LNG bunkers.

 

Kai Twest, head of the Ships and Equipment Division at BSH, said: “With Wärtsilä’s dual-fuel and SCR technologies, the vessel will fulfil the IMO’s Tier III regulations in all operational conditions, whether sailing on LNG or on diesel fuel.” It’s not only LNG that has a role to play in German’s future fuel sector, however.Shell has announced that ahead of the 2020 sulphur cap, it is looking at upgrading residue processing facilities at its Rheinland Refinery in Wesseling to allow for desulphurisation and
increase the volume of light products produced there.

 

The proposals would be part of a wider string of measures to see the refinery maintain operations in what the oil major referred to as “a radically changing energy market” increasingly focused on sustainability.

 

The upgrades are still very much in the planning stages, with the refinery’s head of technology Dr Jörg Dehmel explaining that the company wanted to seek the opinions from other factors in the industry before forming a detailed plan and seeking regulatory approval for the development. The refinery is Germany’s largest and produces 2.4m tonnes of fuel oil annually.

 

Essen-based innogy has, meanwhile, launched Germany’s first methanol-powered ship, a small passenger vessel operating on Lake Baldeney.

The methanol used in the ship’s fuel cells is generated renewably at the lake’s hydroelectric plant from atmospheric CO2 and water.

 

“With MS innogy we are enabling people to experience the energy revolution directly. We obtain high-tech research from the lab and show in a very practical way what a clean energy future without oil could look like, and that includes quiet, clean propulsion systems that conserve our climate,” said Peter Terium, CEO of innogy.

 

“In many areas of logistics, such as in the case of ships, trucks and aircraft, it will take a relatively long time until they can also be operated on a purely electric basis. In this case, the ‘green fuel’ solution presented by innogy could be an interim solution to reduce climate-damaging emissions in the transport sector quickly and efficiently.”

 

Interest in methanol propulsion has so far largely been confined to powering tankers carrying industrially-produced methanol, and infrastructural availability is even tighter than for LNG, but it remains a fuel with recognised potential. If the type of fuel cell technology used by innogy is scalable and suitable to larger applications, it may offer an additional approach to using methanol as regular liquid fuel.

 

The centre of northern European LNG bunkering at present is, of course, Rotterdam. The Dutch hub has continued to see further growth in its LNG capabilities as the market blossoms. Gas4Sea, a three-way collaboration between ENGIE, Mitsubishi and NYK, is to use its Zeebrugge-based ENGIE Zeebrugge to supply Statoil’s four dual-fuel shuttle tankers due to come into service in 2020. Shell, which already has two LNG bunker tankers operating out of Rotterdam, loading gas from the Gate terminal, has reportedly earmarked the LNG/LPG carrier Coral Methane to become its third bunkering-capable vessel serving the market, with another two either planned or on the way.

 

Shell Energy VP Steve Hill said: “LNG as a marine fuel has an important role to play in the future energy mix. With these bunker vessels, as well as the Gate terminal, Shell is demonstrating its commitment to building a robust and reliable supply chain to meet customer needs. With tougher emissions regulations on the horizon, we will continue to work closely with our customers and partners on cleaner energy solutions.”

 

Gate terminal, run as a joint venture between Gasunie and Vopak, added a third berth for LNG vessels in 2016, including bunkering ships. The Port of Rotterdam itself joined the IMO’s Global Industry Alliance (part of its snappily-named Global Maritime Energy Efficiency Partnerships project) this year. While the GIA – and GMEEP – covers supporting countries in reducing most shipping emissions, a major part of its strategy is the use of alternative fuels. Shell itself is already a member of the alliance.

 

The Port of Rotterdam overall has been pushing its commitment to sustainability and alternative fuels with the aim of improving the port environment and reducing carbon emissions. In late summer it launched its “building a sustainable port” campaign to highlight measures made to improve biological habitat and design for a greener
port environment.

 

At the same time, the port authority announced it had signed a declaration of intent to look into building a new multi-fuel bunkering station for refuelling with LNG and other cleaner fuels on Krabbegors/Duivelseiland at Dordrecht Inland Seaport. The agreement with PitPoint.LNG will look into the feasibility of building such a facility on the Duivelseiland as well as consulting with potential customers regarding the level of demand for it.

 

Port of Rotterdam COO Ronald Paul said: “As operator of Europe’s largest port, the Port Authority sees the establishment of a multi-fuel bunkering station as fitting in with its policy of pioneering European energy transition. It will help us stimulate the replacement of fuel oil by LNG as the fuel for shipping.”

In a statement, the port authority added: “Whether we are talking about hydrogen, electric power, bio-diesel or LNG/CNG, the central theme of the investigation is that all fuels at the multi-fuel bunkering station must produce less polluting emissions than traditional fuels. This applies to ships and lorries as well as passenger vehicles. The aim is to work together in a cleaner climate and living environment.”

 

World Bunkering asked Rotterdam’s port authority just how seriously it took the push towards a future based on alternative fuels and greater sustainability. “[Guiding the transition from fuel oil to LNG for bunkering] is in line with Rotterdam’s ambition to become the most sustainable port in its class,” the authority said. “Rotterdam intends
to become as important as an LNG hub as it is for oil products.

 

“Over the past few years, the port authority has drawn up a number of proposals in consultation with other ports for changes to existing port legislation. This is an extremely complicated undertaking, since this is the first time vessels in this region will be using LNG as a transport fuel – meaning that all local harbour regulations need to be adapted.


Rotterdam has already done this, but a lot of ports still have to follow suit. As far as possible, Rotterdam will try to advance together with other ports in the introduction of LNG, since this is clearly a project that relies on widespread collaboration and support.  “In 2016 the sea-going vessel Ternsund was the first ship to bunker LNG in Rotterdam. This took place at the City Terminal, a former EECT container terminal that will be renovated over the next few years. This temporary bunkering facility has since also started serving Wes Amelie, a Unifeeder container vessel. Shell intends to take a dedicated inland bunker vessel for LNG into service in 2019. This will make it a lot easier to bunker liquefied natural gas while out on the water.

 

“Rotterdam also works to encourage the adoption of LNG as a transport fuel via incentives. Ships that bunker LNG can apply for a discount on fees and charges that can run up to around 20% of the total port dues. Savings can amount to thousands of euros per call.”

 

Rotterdam’s present is still very much based on oil and coal, but its future would certainly appear to be in gas. Not all is necessarily entirely well in the ARA (Amsterdam-Rotterdam-Antwerp) region, however, with the Dutch Authority for Consumers and Markets (ACM) launching an investigation over the summer into a possible bunker cartel operating across the three ports. According to the ACM, several unnamed companies may have made illegal price-fixing agreements.

 

Police information led to the Dutch Public Prosecution Service providing the ACM with a tip-off that led, the authority said, to dawn raids on the bunker companies involved. If charged with breaching the Dutch Competition Act and found guilty, the maximum fine for cartel activities imposed on companies is 40% of their combined global turnover, while the maximum fine on individuals that have exercised leadership over cartels is €900,000.

 

World Bunkering reached out to the ACM to find out the current status of the investigation, which the authority had said was likely to take months, but it was unavailable for comment by the time of writing.#

Dutch competition authorities are looking into price-fixing allegations across ARA’s bunker suppliers © maribelle71

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