ShippingWatch

Maersk considers LNG as new fuel

Maersk has started work on concrete preparations for the coming environmental requirements and is currently in negotiations about the use of LNG as new fuel with, among others, Russian Gazprom, Maersk tells ShippingWatch.

Photo: Maersk Line

LNG could become the future fuel for Maersk Line. The group is currently negotiating the possibility of using the liquid natural gas with Russian energy giant Gazprom, Louise Münter, Head of Communications at A.P. Moeller-Maersk, tells ShippingWatch:

"We're always evaluating the next challenge for shipping, and with IMO's work toward new environmental legislation, we're naturally looking for a solution to these challenges. So we're in continuous talks with a wide range of potential future partners," she says, adding:

"LNG is one of several possible alternative solutions going forward, and it's only natural for us to evaluate and discuss these solutions with potential partners and suppliers, such as Gazprom."

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

The future requirements for the shipping industry's sulfur emissions mean that shipping will have to make decision soon in order to comply with the increasing exhaust regulations. These include the so-called ECA zones, where ships will have to sail on fuel with reduced sulfur contents or clean their emissions significantly. The zone has already come into off the coast of North America, while both the Baltic Sea and the North Sea will become ECA zones from January 2015.

In these zones, ships are barred from sailing on fuel with more than 0.10 percent sulfur, a fact forcing shipping companies in the various regions to change their current operations, not least adding extra strain to their finances. Right now there are three possible ways of complying with the regulations: Installing scrubbers to clean the exhaust from the ships, use liquid natural gas, LNG, or switching to the expensive Marine Gas Oil in the ECA zones.

New collaboration

Many players are leaning towards LNG as the new fuel for ships. Maersk is thus not the only company interested in the natural gas. Yesterday, Wednesday, a series of the biggest companies in the industry announced a new collaboration that will explore "and ultimately aims to realize the commercial and environmental benefits of using liquefied natural gas, LNG, as a shipping fuel for deep sea marine transportation."

The collaboration consists of classification company DNV GL, Shell, ship operator Cargill, and the environmental consulting company Xyntéo. And DNV GL has long pointed to a breakthrough for LNG as ship fuel:

“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. 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," says Tor Svenson, CEO of DNV GL Maritme, in the press release.

Russian ties

Gazprom is one of the biggest LNG manufacturers in the world and is so far the only Russian exporter of the fuel. In this light, it seems natural that the Maersk Group is discussing the possibilities of doing business with this company in the future. The Maersk Group generally has special ties to Russia, both in terms of port activities, liner carriers, oil extraction, and drilling activities, which makes the company attractive for the Russians, who prefer conglomerates, when they have to choose future business partners.

When Russian prime minister Vladimir Putin paid an official visit to Denmark in 2011, he stopped by the A.P. Moeller-Maersk headquarters at Esplanaden, Copenhagen - flanked by the CEO of Gazprom.

There are no information regarding the number of ships this would involve or about any of the financial aspects concerned should Maersk decide to move ahead on LNG.

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

Hyundai to build LNG ships for USD 850 million

Bimco: Regulations will choke many shipowners

Stopford: Shipping is in the midst of a revolution

Related articles

Latest news

Jobs

See all

See all