Dual-fuel first for Gulf newbuilds

Russell McCulley
Thursday, December 1, 2011

Two platform supply vessels under construction at Louisiana's Harvey Gulf International Marine will use LNG as a propulsion fuel, a first for the US. Russell McCulley hears from Harvey Gulf and others about the move to LNG fuel in the offshore oil & gas market. 

While liquefied natural gas has been used to fuel large oceangoing vessels such as tankers and container ships, tightening environmental regulations, plentiful LNG supplies and increasing low-sulfur diesel prices have made it an attractive option for a wider range of vessels, including those used to support offshore oil & gas operations. The LNG option has its challenges – not least, the space required for fuel tanks and restrictions on where they can be placed inside hulls – but it's a trend that is likely to pick up as operators strive to meet new CO2 emission standards over the next several years.

That was a factor in Harvey Gulf's decision to equip two newbuild 302ft by 64ft OSVs with dual-fuel systems from Wärtsilä. The STX Marine Inc SV310DF OSVs will be the first US-flagged platform supply ships to use LNG as a propulsion fuel; scheduled for delivery in 2013, the vessels will operate in the Gulf of Mexico, within a proposed emission control area (ECA) that could soon include waters up to 200 nautical miles off the coasts of the US and Canada, excluding the Arctic regions.

Moreover, in 2016 the US Environmental Protection Agency is scheduled to release its Tier 4 emission standards for diesel engines, which will likely produce significant reductions in the amount of sulfur oxide (SOx), nitrogen oxide (NOx) and particulate matter that ships can release.

Dual-fuel systems allow vessels to draw power from cleaner-burning LNG when in an area that restricts emissions and to switch to diesel when on open seas. Each of the Harvey Gulf vessels will hold about 68,000 gallons of LNG in assigned tanks and about 218,000 gallons of diesel fuel on board to power the Wärtsilä 6-cylinder 34DF dual-fuel engines, says Harvey Gulf International EVP of operations Jules Schubert.

‘At the flip of a switch, we can go from natural gas to diesel fuel,' he says. ‘The main benefit of using natural gas as a fuel is that it burns cleaner. It reduces the amount of emissions that go into the air. It certainly meets the requirements for EPA Tier 3. And from what we know about Tier 4, we believe these engines will meet all anticipated EPA emissions requirements.'

In late October, steel for the new vessels had been ordered and was en route to Trinity Offshore's Gulfport, Mississippi shipyard for fabrication, and additional engineering to refine the vessels' design was underway (Harvey Gulf has an option with the shipbuilder for a third vessel). The designs strike a balance between the space needed to accommodate LNG fuel tanks and the area needed for cargo and other uses. ‘We've made as good a compromise as we can,' Schubert says, adding that the cost savings of burning LNG fuel will outweigh any loss of real estate onboard. ‘Additionally, it's important for our clients to reduce their carbon footprint at specific geographic areas,' he says.

Of the design options available, he says, ‘this was thought out from a list of various things we could do. And it's not just a dual-fuel boat, but also an ABS Enviro Plus class vessel,' he says, referring to the ABS notation that confirms the vessels include a long list of environment-friendly components, down to biocide-free paint and approved garbage disposal systems.

Harvey Gulf officials are convinced that the ‘green' label will be a good marketing tool in a competitive OSV market. While supply vessels now in service will likely be allowed to continue operating under a ‘grandfather' clause in the new EPA regulations, ‘that does not mean that they will be selected for service by clients who have a need to reduce their carbon footprint.'

The emission control area guidelines grew out of the International Marine Organization's MARPOL Convention; international regulations governing harmful marine emissions were established in Annex VI of MARPOL and took effect in 2005. A 2008 revision adopted progressive reductions in SOx and NOx, with the allowed sulfur content in diesel used in non-ECAs to be reduced from 4.5% prior to January 2012 to 0.5% by 2020. Within ECAs, however, the allowed sulfur content will drop to 0.1% after 1 January 2015. Ships traveling within ECAs will have to operate using clean distillate fuel, marine gas oil, or use some type of emissions scrubbing system, which can be expensive and take up a lot of valuable space, says Yoshi Ozaki, director of corporate environmental technology at ABS.

To meet the ‘seriously stringent' 0.1% sulfur content restriction, Ozaki says, vessel operators can opt for low-sulfur fuel or the after-treatment system, both of which can be cost-prohibitive. ‘Or, with new construction, you can choose gas (propulsion),' he says. ‘That's a more elegant solution, I think.'

Gas can also help meet regulations of NOx emissions, which by 2016 will need to be shaved by 80% from current allowable rates, he says. ‘Again, gas can solve this problem.'

ABS this year released the comprehensive Guide for Propulsion and Auxiliary Systems for Gas Fueled Ships, highlighting the transition from traditional fuels to the use of dual-fuel and single-fuel gas engines in vessels other than LNG carriers. ‘Natural gas has been used as a fuel for small regional non-LNG carriers working in environmentally sensitive areas,' Ozaki said at the time of the guide's release. ‘This study further supports technical feasibility of LNG fuel and suggests promise for a viable extended business line for LNG suppliers.'

For many vessel operators, economic considerations are at least as urgent as environmental reasons to pursue gas as a fuel, says William Lind, director of technology and business development, ships, for ABS's Americas division. ‘No one knows what the price of LNG is going to be in the future,' Lind says. ‘But for right now, many companies have assumed that the price to purchase LNG fuel is right around half of what they pay for low-sulfur diesel. And the price of lowsulfur diesel is going to go up.'

As the trend to gas propulsion picks up, ports will be challenged to develop the infrastructure needed to get LNG to vessels. Harvey Gulf Marine plans to develop property for an LNG fueling facility at Port Fourchon, near the company's operations base. And in September 2011, Wärtsilä and Shell signed a joint cooperation agreement to promote the use of gas for marine fuel and develop the supply chain and infrastructure needed for bunkering of LNG fuel. Under the multi-year agreement, Shell will make LNG available to vessel operators using Wärtsilä natural gas engines and other customers, focusing first on supplying the US Gulf of Mexico and later expanding to other regions.

‘In some ways, the development of the industry is going to hinge upon how quickly the infrastructure develops,' Lind says. ‘Another challenge is crew training: here's something new for an already busy group of people. How do we get them up to speed on how to operate these vessels safely?'

It's not an insurmountable challenge, Ozaki says, pointing out that gas-fueled LNG carriers have a good safety track record. ‘Crew training is very crucial. But we don't want to scare people. This will become day-to-day in the future.'

Dual fuel technology ‘is the future', agrees Pete Jacobs, Wärtsilä's business development manager for offshore. ‘For larger oceangoing vessels, you're going to have to have dual fuel capability. Otherwise, your LNG tanks are going to be really huge,' he says.

Those large ships will use LNG while in ECAs and switch to diesel when they have cleared the restricted area. ‘The issue with platform supply vessels or coastal vessels is that they're always in that zone. So to meet the regulations, it's almost mandatory' to use gas for fuel, Jacobs says.

‘This is going to be a common fuel in the US and elsewhere,' Schubert says. ‘All producers, drillers – all production clients of Harvey Gulf will have requirements put on them to reduce their carbon footprint. And we are providing them with something that can do that.' OE

Categories: North America Construction Gulf of Mexico LNG

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