Report Suggests Strong Potential for LNG in Marine Applications

Using liquefied natural gas (LNG) as a marine fuel has proven to be beneficial and the necessary technologies are commercially available, according to a new report funded by Transport Canada and other industry participants.

The report, ‘Liquefied Natural Gas: A Marine Fuel for Canada's West Coast,’ says coastal vessel operators have the best opportunity to benefit from LNG in the near term. For six coastal vessels analyzed, fuel costs were reduced by more than 50%, with five of the ships having a payback on initial investment of less than six years.

Alicia Milner, president of the Canadian Natural Gas Vehicle Alliance and chair of the project steering committee, calls the use of LNG in the marine sector a ‘smart and strategic’ decision for the country.

She notes that British Columbia in particular is ‘uniquely positioned to become a preferred North American destination for LNG bunkering,’ as the marine sector can serve as an important new market for British Columbia's extensive natural gas resources.

For example, under a ‘medium’ LNG adoption scenario, 150 LNG vessels operating on Canada's west coast by 2025 would create new demand equal to 8.5% of British Columbia's 2012 natural gas use, according to the analysis.

New marine regulations taking effect in January 2015 require a 90% reduction in fuel sulfur content. Compared to traditional marine fuels, the report's data shows that LNG use can reduce sulfur emissions by at least 90%, lower nitrogen oxide emissions by 35% or more, decrease particulate matter by at least 85% and reduce greenhouse gas emissions by up to 19%.

The report also recommends changes to Canada's marine regulatory framework to allow for the review and approval of new LNG projects. These changes would support new projects moving forward, including the use of three LNG ferries that BC Ferries plans to have in operation in 2017.

Project participants include the following, among others: BC Ferries, CSA Group, Encana, FortisBC, Port Metro Vancouver, Rolls-Royce, Shell, STX Canada Marine, Teekay and Westport Innovations.

Access the complete report here.

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