“Looking to the future, oil is simply too valuable and limited a commodity for the world to continue to consume as a fuel; increasing our use of LNG preserves the world’s resources to use in value-adding products such as plastics, coatings and consumer goods. The importance in the reductions in local air pollution that can be achieved through switching (cutting NOX 80%, almost eliminating SOX and particulate matter, and reducing CO2) also cannot be understated.”

Dr Gerd-Michael Wuersig, DNV GL
Business Director LNG-fuelled ships
 

At Lexington Maritime, we have been focusing on market inefficiencies and areas which others do not want to tackle at this time. We believe the only way forward is making shipping a more efficient, cleaner and greener industry. While the shipping industry has improved its energy efficiency, significant improvements remain possible. There are many different ways to reduce pollution from marine transportation. Besides installing filters and scrubbers, burning cleaner fuels is the obvious solution. However, costs are a significant factor in an industry, which has been starved of revenues for almost a decade. Many owners are suffering from the consequences of worldwide oversupply of tonnage. Until the recycling of old and inefficient tonnage re-balances supply and demand, the introduction of new and more efficient vessels will be delayed.

Clean fuels (such as LNG) are available in ample quantity. However, the crash of the oil prices have stopped many initiatives to bring LNG as a marine fuel to the market. Building the necessary infrastructure to reach the maritime industry is a long-term task and it will take time and significant investments. Bureaucratic hurdles need to be solved and unified rules and standards for LNG bunkering across jurisdictions need to be adopted before the carriers will make the switch to LNG.

One of our major areas of interest is Micro-LNG distribution and LNG Bunkering.

We have started a project to build small size LNG feeder / bunkering vessels and discuss the construction of shore side infrastructure to facilitate the growth of LNG as a clean fuel, especially as a marine fuel.  This should coincide with the new low sulphur fuel requirements, which will be implemented in 2020 (or 2025 latest).

While many shipping executives still believe that LNG will not replace conventional fuel so long as it is more expensive, we have been following the trend of Asian nations (such as China, Hong Kong and Singapore) reacting to the demands of their people for a reduction of air pollution, which is already unbearable in many areas, causing millions of people to die prematurely every year. In fact, the most recent introduction of new Environmental Control Area (ECA) zones in China seem to underline our thinking: LNG as a marine fuel will be the fuel of the future because of environmental reasons and regardless of cost.

Legislation supports the use of clean fuels:
Possible developments towards 2030

We are in contact with representatives of different shipyards in Korea and China and evaluating options in Japan.

There are different vessel designs available and we have started to evaluate the needs of the potential customers.

We are in contact with large lenders and leasing companies in Asia, which have expressed a great interest in financing LNG feeder and bunkering vessels.

We have started the discussions with bunker firms, gas traders and gas producers to evaluate the potential for cooperation.

We have reached out to large infrastructure funds to discuss their plans for the construction of the shore side LNG infrastructure and have started the discussion with other investors to gauge their interest in this sector.

It is our goal to build a significant fleet of LNG bunkering vessels and become a major provider of Micro-LNG transportation.