The future of cruise propulsion: Increasingly, LNG fuels newbuilds

The future of cruise propulsion: Increasingly, LNG fuels newbuilds

The notion of cruise ships powered by liquefied natural gas
(LNG), once the stuff of science fiction, is rapidly becoming a reality.

The first contract for such a ship was signed by Germany’s
Aida Cruises just a year ago, but there are now 11 orders for LNG-powered
vessels, and one study predicted there could be as many as 25 by 2025.

The boom includes two ships ordered last week by Carnival
Corp. for its Carnival Cruise Line brand. Starting in 2020, Carnival will use
the super-cold fuel to power a 5,200-passenger ship, making it the first cruise
vessel in North America to use LNG and the largest Carnival ship built to date.

The trend is being driven by environmental rules designed to
reduce sulfur emission from ships’ exhausts. Natural gas produces almost no
sulfur when burned.

At current prices, natural gas is also cheaper than some
types of diesel fuel, especially in North America.

The biggest challenge for the growth of LNG-powered cruising
is the rudimentary infrastructure for distributing it at ports.

“We have to build it,” Tom Strang, senior vice president for
maritime affairs at Carnival said of an LNG delivery infrastructure. “We’re
obviously working with various partners to make sure we have a supply chain in
place. It’s not something you can just turn up and buy in the way you can with
marine-gas oil or heavy fuel oil.”

Infrastructure is further along in northern Europe, where
most of the 50 or so ships that currently run on LNG are found. Several
forecasts see more LNG ships coming soon.

Lloyd’s Register, the U.K.-based classification society,
predicted there will be 653 LNG-powered ships of all types built between 2012
and 2025, including 25 cruise ships.

Reporting the result of a study, it predicted that LNG will
account for 11% of cruise ships built during the period, the highest adoption
rate of any type of vessel.

At this year’s Seatrade Global convention in Fort Lauderdale
in March, an executive from Wartsila, a big maker of cruise ship engines, said
it was likely that 80% of cruise ships ordered by 2025 will be LNG powered.

Such predictions of rapid adoption are being driven by tight
limits on the emission of sulfur from ships’ exhaust. Several areas, including
North America, have the limits already, and they are scheduled to go global in
2020, after which sulfur can constitute just 0.5% of exhaust volume.

Traditionally ships, including cruise ships, have used heavy
fuel oil, a sludgy substance left after petroleum has been distilled for more
refined products such as gasoline and jet fuel.

The heavy fuel is cheap but high in impurities, such as
compounds that when burned produce nitrous and sulfur oxides, harmful to
health. 

To meet the tougher air standards, cruise lines have either
switched to expensive low-sulfur fuel or installed chemical scrubbers that
absorb the sulfur in the exhaust plume, which then must be disposed at extra
cost.

Natural gas is a longer-term solution, many experts believe.
Mostly methane, it produces no sulfur and lower nitrous oxide emissions and
less soot, which is visible pollution and also a health risk.

“We see LNG as the cleanest fuel available, at least in the
near term,” Strang said. “That’s the main reason for our choice.”

Carnival first began experimenting with LNG on a ship
delivered last year, the

AidaPrima, which was designed to burn natural gas while in
port though not for propulsion at sea.

Carnival ordered a pair of LNG-powered ships each last year
for the Aida and Costa brands, which operate extensively in Europe. Another
prominent brand in Europe, MSC Cruises, has ordered two, with an option for two
more.

The dual-fuel engines on the AidaPrima can burn either natural gas or low-sulfur fuel oil.

So far, other big cruise companies, such as Royal Caribbean
Cruises Ltd. and Norwegian Cruise Line Holdings, have not joined in purchasing
the cutting-edge technology.

One obstacle is that the insides of a cruise ship have to be
rearranged to take LNG fuel. Natural gas used by ships has to be liquefied to
reduce its volume, then kept at a temperature of 260 degrees below zero. The
tanks have to be vacuum insulated and double hulled for safety.

As a result, Strang said they take up about 1.8 times the
space of standard diesel tanks.

Carnival’s LNG engines will be dual-fuel, so they can also
burn marine gas oil. But they won’t need chemical scrubbers, saving the expense
of their installation and upkeep.

Using natural gas as a fuel also helps fight global warming.
LNG produces 10% to 20% fewer greenhouse emissions than burning oil.

But partly offsetting that is the incomplete combustion of
some of the methane in LNG, resulting in so-called methane slip. Engineers are
working to minimize the slip in new designs.

Using LNG as fuel also comes with some safety requirements.
While it doesn’t explode unless confined, natural gas burns, so extra seals and
sensing equipment are part of the system design. The super-cold liquid fuel can
also crack steel if it escapes.

“It is a relatively new industry, and the LNG carrier model
is very safe but comes at a cost,” U.S. Coast Guard commander Jason Smith said
at a Seatrade workshop in March. “These are among the best maintained vessels
out there,” said Smith, who is chief of the Coast Guard’s Liquefied Gas Carrier
National Center of Expertise, in Port Arthur, Texas.

At the moment, natural gas for use in cruise ships is
cheaper than low-sulfur fuel but not cheaper than heavy fuel oil, Strang said.
Prices in North America in particular are at 20-year lows because extraction
from shale using hydraulic fracturing, or fracking, has increased supply.

But oil prices are also low, for other reasons, Strang said.
“Right now, what we’re seeing is the current pricing is slowing investment in
[LNG] infrastructure, and infrastructure is still key,” he said.

Although Carnival Corp. so far has used LNG only for its
very largest ships of 5,000 passengers or more, Strang said there’s no inherent
reason it couldn’t be used on smaller vessels, just as some cruise ferries now
use it in Europe.

He said it should be possible to use them, for example, in
Alaska where an environmental investigation is ongoing into excessive visible
exhaust from cruise ships.

“You’d have to build a supply infrastructure,” Strang said.
“But I think, in fact, British Columbian ferries and a number of other Canadian
entities have ferries that are operating on LNG now.”

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