Powering Ahead Cleanly

By Greg Trauthwein, Editor
Wednesday, July 17, 2013
Thomas S. Knudsen, SVP, Head of Marine Low Speed and CEO of Denmark, MAN Diesel & Turbo

MAN Diesel & Turbo’s Thomas S. Knudsen talks shop on LNG

 

When TOTE Inc. ordered the world’s first LNG-powered containerships (which were honored last month in Oslo, winning the DNV-sponsored “Next Generation Ship Award”), industry excitement was palpable. For MAN Diesel & Turbo it served as a definitive launch point for its ME-GI Dual Fuel engine, which was soon followed with an order from Teekay LNG Partners to power a pair of LNG Carriers. MR had the opportunity to sit with Thomas S. Knudsen, SVP, Head of Marine Low Speed and CEO of Denmark, MAN Diesel & Turbo, to discuss the ubiquitous engine maker’s current position and future prospects in the LNG fueled market.
 

While the notion of LNG as fuel is hardly new in maritime circles, adoption is still relatively small but continues to gain steam in this and other industries as LNG helps to provide compliance with ever stringent environmental regulations, and a gives a tidy economic savings given the current price differential between LNG and traditional marine fuels.


While the environmental and economic promise of LNG is substantial, hurdles remain; specifically the ready availability of the fuel as well as a number of questions regarding the efficient handling of the fuel in the marine environment. “The big issue is the bunkering,” said Thomas S. Knudsen, SVP, Head of Marine Low Speed and CEO of Denmark, MAN Diesel & Turbo. “If a big containership comes, it will empty all of the bunkering facilities that we have in Europe: One big ship will empty it. Huge bunking facilities will have to be made in the harbor or via a lightering vessel. That is the big obstacle, and the reason the big container companies have not taken this up yet.”


With every passing day though, there is seemingly another announcement of a new order for LNG-fueled commercial vessels, helping to make the hurdles fall faster. “We have run this engine in Japan for 20,000 hours with excellent results,” said Knudsen. He was in the U.S. earlier this year to help further gauge the market potential, a potential driven in large part by the entering to force of the North American Emission Control Area (ECA) last August. “I see that we have a good business opportunity here in the U.S. This is the beginning of the boom in the LNG shipping here in the United States, and there is no doubt that this wave will continue in strength.”

Times, They are a Changin’ …

In addition to the North American ECA and tightening environmental regulations for ship emissions globally, another major driver for the push to LNG is the potential economic benefits due to the ever-increasing discovery and recovery of shale gas – driven by North America but felt globally.

“Following several years of stronger-than-expected North American supply growth, the shockwaves of rising U.S. shale gas and light tight oil (LTO) and Canadian oil sands production are reaching virtually all recesses of the global oil market,” is how the International Energy Agency succinctly put it, the opening line in its latest report dubbed “Oil: Medium-Term Market Report 2013.”

North America, Asia, and South Africa are the shale gas resource leaders, and according to GL Noble Denton, the growth has been dramatic, with shale gas accounting for 1% of U.S. natural gas production in 2000; rising to 20% by 2010 and projected to increase to 46% by 2035. “In the old days, LNG carriers typically had a high boil off rate, so this fuel was considered free and nobody really discussed efficiency,” said Knudsen. But today LNG carriers have lowered the boil off rate and the fuel is no longer “free.” This, combined with the new discoveries and price differential between diesel and LNG has literally opened the door for what is broadly termed a revolution in marine power.

“From our side, the LNG Revolution is as similar as going from Coal to Diesel Engines. Of course the transition will take some time and it will be slow in the beginning,” Knudsen said. “But we believe that here in the U.S. that it will actually be very, very fast. But there is no doubt that this will revolutionize shipping.”

Another factor driving interest in the U.S. is the fact that gas prices fluctuate wildly on the global market, a factor that perhaps will stabilize as the shale-gas market matures and the U.S., as is expected, becomes a major net exporter of gas to global markets. “At the moment we do not have a global gas market,” Knudsen said. “The price level of gas, for example in Japan, is significantly higher than the price level of heavy fuel. But in the U.S. gas is cheaper than heavy fuel oil, and that will only increase the incentive to the ship owners to make this transformation.”

Expanding R&D

For any power plant manufacturer, a healthy R&D budget is essential not simply to prosper, but to survive. Legislative demands, much to the chagrin of the shipowning community, continues to drive innovation and expense across the entire maritime operation. Knudsen concurs: “It (new mandates) costs a hell of a lot of money. The new environmental rules account for more than 60% of our R&D effort.” But while shipowners continue to lament legislatively driven expenditures, Knudsen said that it doesn’t necessarily change the competitive field, as the rules are the same for all. Today, Knudsen said the company has an R&D department in Copenhagen numbering 200 strong, versus a crew of 40 when he started with the company. Predictably, a primary focus is developments in regards to Tier III engines.

“We have had massive investments and made many developments, so we are ready; but we need to test it and to prove that our design is without flaw.”

In addition to the newbuild market, Knudsen maintains that the demand for refits will be powerful as well. “You will not lose any efficiency and you will not lose any power (when refitting a diesel engine for LNG fuel),” Knudsen said. “Modification on the engine itself is relatively small.  The biggest part of the investment is the fuel tanks and the fuel supply system.”  Generally speaking, the size of the LNG fuel tanks are three times the size of the tanks on a similarly powered diesel engine ship, and building space for the larger tanks is one of the most important considerations for both the refit and the newbuild setors.

ME GI: The Time is Now

One of MAN Diesel & Turbo’s oldest licensees held a demonstration of the ME-GI concept on April 17, 2013 at its Tamano works, where guest viewed the engine and were able to listen to the company’s leadership – specifically MAN Diesel & Turbo’s Dr. René Umlauft, CEO, and Thomas Knudsen spoke to describe the impact of the new engine on the marketplace.

“Dual-fuel engines are tailored perfectly to these demands,” said Dr. Umlauft. “When operated in gas mode, CO2 and nitric oxide emissions are markedly reduced, while sulfur oxides, soot and particle emissions are virtually non-existent. Additionally, dual-fuel engines give ship owners and operators tremendous flexibility and cost-efficiency, since the fuel can be changed based on its availability and price.”

Knudsen spoke of his pride in the result of many years of joint effort between Mitsui and MAN Diesel & Turbo and also referenced the first GI engine that was developed in Tamano and later entered service, producing electricity for the Tokyo area. He called the demonstration of the 6S70ME-C-GI engine another visible sign of the high entrepreneurship and innovative capability of Mitsui.

“With this technology, Mitsui and MAN Diesel & Turbo will be able to supply the most environmentally friendly and most economical propulsion plants for not only LNG carriers but also VLCCs, container ships, RoRo ships, bulkers and other ship types,” Knudsen said. The ME-GI technology is a traditional two-stroke engine technology that can be maintained and overhauled by chief engineers already capable of maintaining existing two-stroke engines.
Unveiled in May 2011, the ME-GI engine is designed to give shipowners and operators the option of using either HFO or gas – predominantly natural gas but also LPG and methane.

Mitsui is the second MAN Diesel & Turbo two-stroke licensee to demonstrate the ME-GI concept after Hyundai did so in Korea in November 2012. Shortly afterwards, TOTE ordered two 8L70ME-GI engines to power two 3,100 TEU newbuilding container ships, with an option for three additional vessels. That announcement officially designated as ME-C-GI (M-type, Electronically Controlled, GI for Gas Injection) in the MAN Diesel & Turbo low-speed portfolio. The following month, MAN Diesel & Turbo was able to confirm the successful introduction of the ME-GI to the market with the announcement of another order when Teekay LNG Partners L.P. (Teekay LNG), an offshoot of Teekay Corporation, the international shipping group, placed an order for two LNG carriers powered by 2 × 2 5G70ME-GI engines, including an option for three further ships.

 

(As published in the July 2013 edition of Maritime Reporter & Engineering News - www.marinelink.com)

  • Scenes from Japan of the ME-GI engine and its  demonstration at Mitsui’s Tamano works.

    Scenes from Japan of the ME-GI engine and its demonstration at Mitsui’s Tamano works.

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Nordic American Offshore Declares Dividend

Nordic American Offshore Ltd. today announced that its board of directors has declared a dividend of $0.45 per common share for the third quarter 2014. This is the same as for the second quarter 2014.

Bollore Africa Logistics Sees Profit Plunge in H1

First half 2014 profit at shipping company Bollore Africa Logistics plunged to 5.89 billion CFA francs ($11.48 million) from 9.45 billion CFA francs in the same period last year,

Ocean Rig, Petrobras Agree to $1.1b Drill Ships Lease

Cyprus-based Ocean Rig UDW Inc said on Monday that it signed a $1.1 billion three-year contract with Brazil's state-run oil company, Petroleo Brasileiro SA, to

Shipbuilding

New Standard for LNG Cargo Containment Systems

Wilhelmsen Technical Solutions (WTS) said it has successfully completing the gas trial for the first LNG carrier built to a Boil Off Rate (BOR) of 0.08% per day.

Messer to Debut MetalMaster Xcel

Messer Cutting Systems said it has answered the call from manufacturers that have been demanding a faster, more accurate way of producing cut parts. Messer’s

Rolls-Royce Expands in the Canary Islands

Rolls-Royce announced it has signed a cooperation agreement with the Astican Shipyard in Las Palmas, Canary Islands that it said will enhance the service capabilities

Container Ships

CMA CGM Acquires 7,000 Reefer Containers

The CMA CGM Group announced it has acquired more than 7,000 of last generation 40’ High Cube Reefer containers including 6,000 low consumption engines. The CMA

'New Tango' Brings More Post-Panamax Ships to Charleston

New service expands Port of Charleston's capacity to serve North-South trade The SC Ports Authority today received the first ship call of a new consolidated

Video: E-Class Edith Mærsk on the Thames

The largest ship ever to enter the Thames arrived at DP World London Gateway, the U.K.’s new deepwater container port. The 397-meter-long, 56-meter-wide Edith Mærsk

Marine Power

Corvus Gains Support from WINN Initiative

Corvus Energy announced today the award of $1.3 million in repayable assistance from the Western Innovation (WINN) Initiative for its project to further develop the Corvus Energy Storage System.

Thrustmaster Announces Factory Expansion

Thrustmaster of Texas, a manufacturer of commercial marine propulsion products, signed a deal last week to expand its Houston-based production facility by 100,000 sqft (93,000 sq m).

Smith Brothers Chrtisten New Tug

Smith Brothers, Inc., Chesapeake Bay-based barge and marine equipment charter company, recently added the tug Capt. Kenneth to its fleet of inland and truckable tugs.

LNG

New Standard for LNG Cargo Containment Systems

Wilhelmsen Technical Solutions (WTS) said it has successfully completing the gas trial for the first LNG carrier built to a Boil Off Rate (BOR) of 0.08% per day.

LNG America, Buffalo Marine to Design LNG Bunker Fuel Network

LNG America announced it has entered an agreement with Buffalo Marine Service, Inc. (Buffalo Marine) to cooperate on the design of an LNG bunker fuel network for the U.

World’s 1st LNG Hybrid Barge Christened "Hummel"

The world’s first LNG hybrid barge of Becker Marine Systems was christened with the name "Hummel" on October 18, 2014, at Grasbrook Quay in HafenCity Hamburg.

People in the News

Frontline appoints Macleod as new CEO

Crude oil tanker firm Frontline, part of shipping tycoon John Fredriksen's business empire, appointed Robert Hvide Macleod as chief executive to replace Jens Martin Jensen, the firm said on Monday.

Saudi Oil Pipeline Set Alight

A "limited fire" broke out on a subsidiary oil pipeline in eastern Saudi Arabia on Saturday after assailants fired shots at a security patrol, the state news agency SPA said.

Maduro Says Venezuela's 2015 Budget to Put Oil at $60

Venezuela's 2015 budget will be based on a target oil price of $60 dollars per barrel, President Nicolas Maduro said on Friday night, but he repeated expectations that prices will recover.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Offshore Oil Pipelines Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 6.1067 sec (0 req/sec)