Interview: BC Ferries Pressing On with LNG Switch

first_imgThe latest 0.1% Sulphur Directive effective January 1 has left the shipping industry with three possible choices on how to respond to the latest fuel requirements within the Emission Control Areas (ECAs): switch to Low Sulphur Marine Gas Oils (LSMO), install SOx scrubbers, or convert to alternative marine fuels such as Liquified Natural Gas (LNG).According to a recent survey performed by MEC Intelligence, around 20% of shipowners are opting for LNG as compliance fuel, with the majority of retrofit and newbuild orders recorded within the passenger industry.Mark Wilson, Vice President of Engineering at BC Ferries.One of the top investors in the LNG technology is Canada’s ferry operator BC Ferries. World Maritime News Staff spoke to Mark Wilson, Vice President of Engineering at BC Ferries, to find out why the switch to LNG was deemed the most viable option out of the three.WMN: Has BC Ferries’ business operation been affected by the new sulphur requirements and, if so, in what way? What has been the impact on ferry prices, existing routes? MW: BC Ferries hasn’t been affected by the new requirements because we have been using ultra low sulphur fuel for several years now.  We’ve been meeting or exceeding these new environmental requirements for several years so we do not see it impacting our business.WMN: Various issues have been raised with respect to the new regulations’ knock-on effect beyond the shipping industry, resulting in road congestion and greater pollution? What is your position on this?MW: BC Ferries is unique in the sense that the majority of our routes do not have parallel road infrastructure. For all but 3 of our 24 routes, ferries are the only means to transport vehicles to those locations.WMN: What is the most cost-efficient option for ferry companies to meet the new requirements? Alternative fuels, retrofits, scrubbers or maybe a combination of various solutions?MW: In our case it is a mix of options. We continue to burn ultra low sulphur diesel, convert some of the existing fleet to LNG where there is a business case, and finally introduce LNG in our newbuild program.WMN: What are the greatest challenges at the moment when switching to more ecological solutions regarding ship design and performance of vessels?MW: One of the bigger challenges for us is understanding and getting certainty around the rules and regulations in Canada of LNG-fuelled ferries as they are new to Canada.WMN: Would you say that LNG is a widely-accepted option among ferry businesses?MW: We have seen a considerable uptake in LNG-fuelled ferries over the last 10 years and believe that trend will continue for both economic and environmental reasons. In North America we are starting to see other operators making the switch to LNG.An artist’s rendering of the new intermediate class ferries.WMN: Back in June 2014, BC Ferries awarded Poland’s Remontowa Shipyard a CAD 165 million contract to build three dual-fuelled intermediate class ferries, capable of using both LNG or diesel fuel for propulsion. Was the switch to LNG mainly done to reduce fuel costs?MW: Yes, the switch was done to reduce fuel costs and to reduce our environmental impact. Last year, we spent CAD 126m on diesel to fuel the fleet. In our fleet of 35 ships, these three new dual-fuel intermediate class vessels operating on LNG alone will have the potential to save approximately CAD 3m per year, so the use of LNG will greatly reduce upward pressure on ferry fares for our customers. WMN: Is the conversion of the Spirit of Vancouver Island and the Spirit of British Columbia to dual fuel going according to plans? Has the conversion been in any way affected by the recent significant drop in oil prices?MW: This project is now proceeding with a competitive contracting process with several shipyards to determine the final shipyard. While the price of oil has recently decreased, there is still a significant difference in the price of diesel and the price of LNG, which is abundant here in British Columbia. One needs to keep in mind that we build vessels for a 40-year life and believe that there will continue to be a price differential in BC between LNG and diesel.WMN: Would you opt for LNG-fuelled newbuilds today, given the current oil prices?MW: Yes, because LNG technology for ferries has significantly evolved and there is no significant difference between the capital cost of an LNG-fuelled ferry and a diesel-fuelled ferry.WMN: Over the next 12 years, BC Ferries plans to invest over CAD 3 billion in fleet renewal, IT systems and marine structures. Are there any concrete plans so far on potential new orders? Can we expect more LNG-powered ferries?MW: We have at least 10 ships to renew over the next 10 – 12 years and LNG will most likely play a role in several of those vessels.WMN: What course do you see the ferry industry taking in the next decade? What kind of technological developments can we expect?MW: We have some smaller vessels as well as some shuttle ferries to build in the future, so addition to LNG, we will be working with industry and other ferry operators to explore possibilities in hybrid, electric and fuel-cell technologies. We will look to new technologies and efficiency in order to continue to deliver a safe, reliable and cost-effective service, while reducing our environmental impact.World Maritime News Stafflast_img read more

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