LONDON : The IMO’s carbon depth rules, particularly the Carbon Depth Indicator (CII) in place since 1st January 2023, are more likely to have a dramatic affect on LNG fleet provide which may result in ‘stranded’ property later this decade.
The warning comes from Lloyd’s Register’s fuel sector guru, Panos Mitrou. In an opinion piece within the newest situation of the classification society’s Horizons journal, Mitrou warns that numerous right this moment’s LNG carriers are more likely to fall into classes ‘D’ or ‘E’ when their CII emission profiles are analysed. And, because the CII framework tightens over the second half of the last decade and methane emissions are included in CII assessments, many vessels may develop into unemployable, the skilled suggests.
Vessels most in danger within the 650-ship deepsea fleet are the 240 LNG carriers powered by steam generators. Though they don’t endure from methane slip, they’re heavy shoppers of gasoline and would not have boil-off administration methods. Their day charges are considerably decrease than LNG tankers outfitted with four-stroke dual-fuel diesel electrical (DFDE) engines (about 190 ships) and the 215-odd newest technology low- and high-pressure two-stroke vessels.
The DFDE ships are additionally in danger due to excessive methane slip. Mitrou estimates that a few of these engines emit as much as 15 instances extra methane than later engine designs.
Since Russia’s invasion of Ukraine and dramatic reductions in cross-Baltic fuel by pipeline, seaborne LNG into Europe has develop into a prime precedence. European imports from the US, for instance, have climbed sharply. This, in flip, has boosted the LNG orderbook to an all-time report of about 240 ships and the comparatively small variety of specialist LNG-capable builders are virtually full till 2027.
Nevertheless, Mitrou warns that fast worth escalation – ships that had been costing about $180m at the moment are priced at about $250m – signifies that house owners are choosing fundamental specs with few extras corresponding to air lubrication, shaft mills or waste warmth restoration methods. So these vessels are unlikely to fare properly in CII assessments.
“Probably the most fundamental LNG service designs are more likely to be the least engaging from a charterer’s view level later within the decade as a result of, in carbon effectivity phrases, they are going to have the decrease CII grades,” Mitrou warns. “If there are to be ‘stranded’ property, these will probably be among the many first.”
The LR specialists helps his argument by citing LNG containment methods, one of the vital vital components in ship effectivity. Though LR accredited a brand new superior sequence of membrane containment methods final 12 months, the GTT No96 Tremendous +, it’s only in current weeks that builders/house owners have began to supply/ask for them, he says. Till just lately, just one Japanese proprietor had specified the brand new containment system.
