The LNG future seen from a shipowner

The LNG future seen from a shipowner

Lars Helge KyrkjebøSeatrans AS

Magalog conference 16.01.2007

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The Seatrans Group

Activities • Chemical tankers, mainly in

short sea European trade– Partner in USC pool which is

one of the largest European short sea operators

• Special purpose ships for paper transportation– Long term industrial contracts

• Liner service in the Northsea

Main figures• Turnover: 1,2 billion NOK• 680 employees• 22 ships



Sea-Cargo – North Sea liner operator

Sea-Cargo is owned 60% Seatrans and 40% Nor-Lines

2 newbuildings in India for delivery in 2007Option 2 + 2 vessels for delivery 2008 - 2010

Sea-Cargo operates 7 vessels carrying industrial cargoes, roro, containers and break-bulk.



Why use LNG as fuel ?

”We believe that in 5-10 years the majority of ships contracted for short sea trades will use LNG as fuel”.

Because:• The increasing environmental demands from

customers, authorities and the public.– NOx fee in Norway, 15 kr/kg. Increasing....– SECA sones, max 1,5% sulphur– General public pressure on reduction of

emissions. Global and local change in climate • No satisfactory alternative fuel or ECR

systems (emission cleaning) that meets the future environmental requirements

• Special areas: Baltic sea, North sea and Meditteranean

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North Sea ConferencePress release05 May 2006

Ministry of Sustainable Development

Towards a better North Sea environmentToday the ministerial meeting of the North Sea conference ended in Göteborg. Ministers from eight North Sea countries and the European Commission have met for two days to discuss measures to reduce the impact of fishery and shipping in the North Sea.

-The negotiations have been tough, but important steps have been taken. We will reduce the nitrogen oxides with 40 percent and strengthen the requirements of the sulphide emission down to 1 %. These reductions are crucial if we are to improve the air quality and reduce the acidification, says the Minister for the Environment, Lena Sommestad, who chaired the negotiations.

Other important decisions in the shipping area in the Minister Declaration:• Clean ship. The concept Clean Ship is launched which means that criteria for evaluating environmental performance of ships are developed and used as an incentive to encourage sustainable shipping. •Improved air in port cities. This will be possible by increased use of shore side electricity for ships in ports. Sweden took as the first country an initiative to tax relief for shore side electricity which will contribute to improve the air quality in Swedish ports. ……………

Minister for the Environment, Lena Sommestad





North Sea Conference

Clean ship initiative, supported by EU





Big LNG –gasfuelled ships in short sea trades

A project supported of the Norwegian Research Council for a two year period (2006 - 2007) and with project funds of abt. 8 mill NOK.





BigLNG - participants

• Seatrans• Color Line• Aker Yards• Gasnor• Nor-Cargo

• Det Norske Veritas• Hordaland Olje og Gass• Wärtsilä Finland OY• Chart Ferox• MARINTEK

Project responsebility : SeatransProject management : Marintek





LNG in ships today

Engine Alternatives:• Dual fuel system

(Wartsila)– 32DF & 50DF

• Spark ignition, gas only (Rolls Royce)– KG4 & B35:40

• Mitsubishi• Man B&W

Today’s solutions:• Diesel electric propulsion• Fixed and limited trade

area• Long term agreements on

supply of LNG• Small volume, limited

LNG distribution• Partly political and/or

prestige projects





BigLNG

Objective: Develop commercial ship concepts with the use of LNG as fuel. – Roro vessel (Seatrans)– Ropax (Color Line)

• Focused areas– Identify needs for technology development.– Develop a satisfactory framework for the use of LNG as fuel.





BigLNG objectives

• Develop ship concepts with LNG as fuel. Cost comparison with conventional heavy fuel oil solutions. – Mechanical propulsion (direct drive)– LNG fuel tanks– Rules and regulations

• Distribution of LNG as fuel in the Northsea and Baltic (bunker terminal and port requirements)

• Price mechanisme for LNG as fuel– Related to the price of heavy fuel oil– Price predictability





Huge LNG potentialdepending on....

1. LNG as fuel must be cost competitive with conventional solutions in a long term perspective.

• Price• Ship investment

2. LNG as fuel must have large enough volume to make it interesting for technology providers, LNG suppliers & shipowners.

3. LNG as fuel must be widely distributed and have a long term predictability.





The LNG future seen from a shipowner

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