"Adoption will be driven by the market." asserted Chad Verret, executive vice president, Alaska and LNG operations, Harvey Gulf International Marine. "We`ve got three additional [LNG-fuelled] vessels that we`re marketing now and the interest is high. People want to see one, want to touch it and want to see it work. Once the first one is delivered, once they understand it and can watch it refuel, it`ll remove some of the speculation out of the market."
Harvey Gulf Marine placed an order for the USA`s first LNG powered OSVs in 2011 with six now on order at Gulf Coast Shipyard. Its LNG OSV strategy is to secure longer-term, above average rate charters for its LNG fleet, allowing the charterer to benefit from the reduced costs, a strategy that has already paid off for the first three vessels ordered, which have five year charters secured from delivery.
The company also recently broke ground on the USA`s first LNG bunkering facility at port Fourchon.
Unlike other shipping sectors where LNG adoption is driven in part by reducing fuel costs for owners, it is the OSV charterers who often foot the fuel bill. "For our industry it`s going to take the oil majors to say that they want this reduction in opex to drive it forward," Verret added.
Speaking in Shell`s capacity as a fuel supplier, John Grubic, LNG business development manager at Shell International addressed concerns on the "chicken and egg situation" around LNG supply and demand. "[Developing bunkering infrastructure] does require some focussed investment, this is not an industry that`s known for building infrastructure and hoping that demand comes, we really have to marry our developments in accordance with the market as it evolves."
Shell is an oil company that has largely shifted its focus towards gas and itself owns and operates LNG powered barges on the Rhine, Grubic noted, but it cannot stand alone in developing global infrastructure, "We don`t see it as solely for us to do all the heavy lifting, but we want to be part of that solution."
"We have some flexibility where the nodes are, but the hubs are likely to remain where they are today," he added, stating that Shell`s main focus for node development will be in the US and Europe.
Volume is key for Shell as a gas supplier, therefore the focus of its investment in the backbone facilities for the supply chain will be around existing bunkering hubs such as Rotterdam and Singapore.
For Harvey Gulf Marine, its solution for bunkering is a purpose built bunkering station, fed by daily deliveries of LNG by truck, and it is not ruling out opening the facility to vessels outside of its fleet if the need arises.