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by Diego Gavagnin | ConferenzaGNL
The development of shipping powered by liquid methane will be one of the main themes of the upcoming “The Small Scale LNG Use, Euro-Mediterranean Conference & Expo” (Napoli, 15-16 May 2019), with the the urgency to plan the necessary LNG supply structure for ships at the center of the debate. The main players of the maritime logistics of liquid methane in the central Mediterranean will discuss about the importance of a network of depots and shore-to-ship / ship-to-ship bunkering: Avenir, Higas with Gas and Heat and CPL, Edison, Olt, Snam and also the main stakeholders, such as the Carnival group.
The question of "egg or chicken", with regard to LNG shipping in the Mediterranean, has been resolved with the choice by cruise shipowners to build ships despite the absence of efficient ground supply points. Now that the ships are working, they sail from the Baltic to the Tyrrhenian Sea, passing through the Atlantic of Madeira and Tenerife crossing Gibraltar, with the tanks asking only to be supplied (3,500 m3 at a time, for the largest cruise ships).
In mid-April the AIDAnova (Carnival-Costa Group, Italian flag), the first cruise ship that can only use LNG in its engines (which, however, can also work with marine diesel) entered the "Mare nostrum". Other fully LNG ships already operating and in line in the Mediterranean are the "Elio" ferry of Caronte and Tourist (which however does not know where and how to obtain supplies in the Strait of Messina) and the "Hypatia de Alexandria" of Balearia (bunkered by tankers in the port of Barcelona).
AIDAnova is the first of a large series of new LNG cruise ships; more than ten others of similar tonnage are being built and/or ordered by the main world cruise owners. The Costa Smeralda and the first LNG of the MSC cruise company will also arrive in the Mediterranean this year. The difference with the ferries is that they require hundreds of m3, the large ships thousands of m3.
To get an idea of what this means for maritime LNG demand, just think that bunkering in Rotterdam went from 1,500 m3 in 2017 to 9,500 m3 in 2018, despite the competition of the Dunkirk regasification terminal, which can bunker from shore-to-ship through tanks with a capacity ranging from a few thousand m3 to many tens of thousands. If we assume 30 supplies from here to the end of the year in the Mediterranean we are talking about over 110 thousand m3 of LNG (from the few hundred in 2018).
The arrival of other cruise ships and the spread of ferries, container ships (18 under construction only by the French company CMA CGM, which operates in the Mediterranean) and oil tankers (increasingly fueled by LNG) will increase statistics tenfold in a few years. The business is now ongoing, and many skeptics are now changing their minds. At this point any missed investment in logistics is a loss.
The management of those systems, alternatives to LNG, such as scrubbers, which make it possible to reduce emissions even using the most polluting fuel, is proving more complex than expected (cleaning and disposal or recycling of filtered residues) and inspections are in place to prevent misconduct, (e.g. spills at sea). No one has any idea what the prices of diesel with a sulfur content of 0.5% will be in 2020 and subsequent years. 0,5% is going to be the mandatory limit in all the seas of the world in just 8 months (from 1 January 2020), for those who choose neither LNG or scrubbers.
Meanwhile, France and Spain are working in Brussels to get 0.1% sulfur as soon as possible also in the Mediterranean (as already in the Baltic, in the North Sea, in the English Channel and along the coasts of North America). Today, 35 times more sulfur emissions are allowed in the Mediterranean, which will still be 5 times more even with the new limits next year.
All this in an Oil & Gas market that - although always unpredictable, above all due to political raids (duties, embargoes, cartels) - sees the price of oil rising as LNG falls to the lowest prices in recent years, so much to bring down the price of natural gas from the pipeline in Europe.
Today in the world, natural gas reserves ready to be extracted are such as to allow current consumption for more than 200 years; this means that even replacing all the oil currently used in transport, natural gas would suffice for at least another 100 years.
If it is true that developing countries will also increase oil consumption in the coming years, those already developed are reducing them, thanks to energy efficiency and environmental policies. Furthermore, in the light transport sector oil seems destined to be replaced by electric traction.
Furthermore, although oil can be refined to bring about emission limits compatible with the global and European emission control policies, there is no competition with the bioLNG already available today, and with the synthetic gas that will be produced with electrolysis from excess electricity from solar and wind renewable sources, both without atmospheric impact and climate-changing.
In the current start-up phase of bioLNG productions, public incentives are required (as in the past for the production of biogas, a "renewable" raw material) but in Italy there are no incentives for maritime uses (while they are allowed for uses in the inland and river waters, not very common in Italy). A legislative gap that will also be discussed in Naples and that needs to be solved, considering that the overall Italian potential of bioLNG exceeds 13 million m3, more than enough to satisfy all the demand for our heavy maritime and land transport in the coming years.
