Princeton Sovereign Maritime Completes LNG Bunkering Study in U.S. Coastal and Inland Waterways

A viability study undertaken by Princeton Sovereign Maritime LLC, on the LNG as bunker fuel in U.S coastal and inland waterways marine transport, validates the superior cost advantage of LNG used as marine fuel when compared to ultra low sulphur distillates, which recently mandated by U.S. EPA to be used in all marine assets operating in the Emission Control Areas (ECA) in U.S.

The dual realization of fuel savings and Regulatory compliance in fuel burning emissions from marine vessels is the foundation in the creation of supply and demand structure in the LNG marine fuel market in U.S.

The study verifies that a ceiling price at or less than $20 per mmBtu of the LNG delivered at the ship’s manifold offers exceptional internal rate of return of capital for the LNG producer – marketer, an IRR range 10%-22%  corresponding to small scale production projects 15000 gpd – 100,000 LNG gpd is feasible with a payback period between 5 – 7 years.

At a $20 mmBtu ceiling price paid by vessel owners the savings on fuel cost , it will payback the conversion cost or new construction cost (portion of LNG fuel propulsion system cost) within a period of 3 – 7 years proportionate to the engines bhp requirements.

The certainty of LNG fuel price and environmental advantage vs, crude oil derivative fuels starts to gain traction in the industry. It will eventually (2-3) years lead to the evolution of a U.S domestic marine fuel market. It is also certain that capital access will be available to support building the infrastructure and LNG distribution networks in the U.S waterways which will accelerate the technical innovations and safety management planning on the marine side.

The LNG as marine fuel is clean but unforgiving if mishandled. Applying proper training and well thought safety management discipline, it will create efficiencies of scale and contribute substantially to the economic growth of the domestic shipping industry and the small or medium by market capitalization energy producers and marketers.

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LNG World News Staff, December 31, 2012; Image: DNV