Shell discusses the opportunities in developing LNG as a marine fuel

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Jane Carland, Downstream LNG Business Development Manager Asia Pacific, Shell
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Gastech News had the pleasure to speak with Jane Carland, Shell’s Downstream LNG Business Development Manager Asia Pacific, about LNG as a marine fuel, and the main drivers to improve LNG for transport infrastructure, technology and regulations. Read the transcript below:

Gastech News: What are the opportunities in developing LNG as a marine fuel?

Jane Carland: LNG has been around for 50 years but it has really predominantly been for power generation and industrial applications. Our roads and ports are also becoming increasingly busy as the global population grows and more of us live in cities.

A range of vehicles and fuels, including LNG, will be needed to meet increasing demand for transport as the world seeks to tackle emissions. LNG is emerging as a cost-competitive and cleaner burning fuel for shipping, heavy-duty road transport, and industrial applications. In the future, we expect it also be used for rail and mining. It is cost-competitive, and can reduce sulphur emissions (virtually zero sulphur emissions), particulates and nitrogen oxides, and can help reduce well-to-wheel greenhouse gas emissions. Wood Mackenzie had estimated demand figures in the range of 40-60 million tonnes by 2030.

We think there is considerable opportunity for Shell globally in LNG as a transport fuel. We consider it to be an exciting opportunity.

Gastech News: What are the drivers to improve LNG infrastructure, technology and regulations?

Jane Carland: There are three key drivers for LNG as a transport fuel. Firstly, there is an abundant supply of gas in the world. Secondly, it is cost-competitiveness, and thirdly because of environmental benefits. LNG’s development as a successful fuel option will depend on many areas: it requires infrastructure, the right regulatory framework to foster growth, and a good business case for customers to invest in new vehicle technology, engines and/or modifications to their existing fleets and vessels.

In Europe and North America new environmental regulations require shipping operators to reduce local emissions. LNG fuel, which is virtually free of sulphur and particulates, can help them meet these requirements. It is already used as a fuel for vessels on inland waterways, such as ferries in Norway, where Shell’s company Gasnor is a leading supplier of LNG to industrial and marine operators.

Globally, we are expecting the IMO to introduce Marpol 6 in 2020, and that will again require the marine industry to reduce sulphur emissions from their operations. So we do see that the regulations will make people look at the alternatives. For example, the European Commission TEN-T Motorways of the Sea awarded a consortium of companies, including Shell with funding that will contribute to the implementation of new shipping regulations, and promote LNG as the cleaner burning marine fuel of choice in Europe.

In addition to regulations that foster growth, this emerging market needs close collaboration amongst a variety of stakeholders such as customers, governments, original equipment manufacturers, and cross-industry platforms. We are working closely with these parities to provide customers with a cost-competitive and cleaner burning fuel.

It will take time and effort to develop a mature LNG for transport market. However, this effort is justified by the benefits: a source of cleaner and affordable energy for powering ships, heavy-duty trucks and trains.

Wednesday, 28th October – Jane Carland will be talking about “The Development of Shell Bunker Vessel and the Role of Regulation for LNG Bunkering” at the CoTEs Programme at Gastech Singapore.

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