Burning liquefied natural gas (LNG) as marine fuel on board a newbuild 14,000 TEU containership operating on an Asia-US West Coast (USWC) liner routing delivers higher return on investment on a 10-year horizon when compared to six fuel pricing scenarios, a study finds.
The study was commissioned by SEA\LNG, a UK-registered collaborative industry foundation, and carried out by Opsiana, a Scandinavian consultancy.
According to the study, LNG provides a greater ROI than alternative compliance solutions for the impending IMO sulphur cap, including the installation of scrubbers, across 5 out of 6 of the fuel scenarios explored, especially for routes with very little voyage time (8%) in Emission Control Areas (ECAs), as is the case with USWC.
It also claims that there is a diminishing CAPEX hurdle for LNG as a marine fuel, competitive energy costs as LNG offers a lower energy cost per ton, whenever priced against heavy fuel oil (HFO) by nearly 24% as well as the stability of LNG pricing.
Furthermore, the study results show that LNG fuel employing dual-fuel engines provides net present value savings versus a scrubber ranging from USD 4 million-49 million across the majority (5 of 6) fuel scenarios. LNG fuel delivers less value than scrubbers in one case, the stranded fuels forecast, which results in negative savings of USD 19 million to USD 31 million.
The stranded fuel scenario envisages HFO initially plummeting towards USD 200 /mt beginning in 2020.
“While there remain many unanswered questions about the choice and prices of marine fuels going into 2020, SEA\LNG will continue its commercially-focused studies to provide authoritative intelligence regarding the investment case for LNG as a marine fuel for shipowners, shipyards, ports and wider stakeholders,” Peter Keller, Chairman, SEA\LNG, said commenting on the study findings.