Piraeus Ship Repair Zone - PART II: LNG Retrofits [Guest Feature]
By Apostolos Sigouras
As we can see from the chart above (adapted from Lloyd’s), the world fleet will keep on increasing and will be double in 2025 compared to 2008 (year the crisis began).
Also, by 2020 (2015 for the ECA zones of North Europe and North America), the sulfur content allowed will be much lower than today, according to the IMO regulations imposed. LNG engines produce low-sulfur gases that comply with these regulations.
[Above] ECA Zones
On the other hand, it seems that the LNG price does not follow oil price trends and is mostly influenced by price speculation, according to the Danish Maritime Authority.
And according to Lloyd’s, the demand for LNG on ships will explode after 2018.
The cost of an LNG retrofit varies according to the size, type, etc. of the ship. For a 200-meter tanker it is around seven million euros, but this is going to get lower in the years to come. Based on the same study, an LNG retrofit project will break even in about 10 years, based on today’s data. This is a good breakeven period for a five-to-ten-year-old ship.
The European Union strongly supports LNG retrofitting for ships with several projects and over five billion euros in subsidies for those who want to invest in related infrastructure in southern Europe. As we mentioned before, Greece is in one of the busiest trade routes, so the area offers a unique spot for LNG retrofitting projects for ships that want to “get ready” to enter the ECA zones of North Europe safely in terms of sulfur emissions. As long as this is going to take place in 2015, this is the right time to get prepared in terms of infrastructure.
There can be little doubt that LNG is one of the fuels of the future for ships. There is also a strong desire on the part of the EU for further LNG project deployment. All stakeholders (shipowners, state, workers, authorities, classification societies, etc.) agree they want it. Some infrastructure is ready to be used, and technology is not an issue (on the contrary, it is an ally). It is the right time to seriously start thinking about LNG retrofitting. – MarEx
In case you missed it: [Guest Feature] An Innovative Ship Repair Zone in Piraeus Prepares for the Future
Apostolos Sigouras is CEO of Nafsolp SA, a subsidiary of the Piraeus Port Authority. Nafsolp serves as a liaison between customers, country authorities, unions and ship repair companies. It also provides fundraising support and a variety of other services.