New LNG fuelled tanker first for inland waterways

From Marine Log
15 December 2011

The inland waterways of the Netherlands are now home to the 6,100 dwt Argonon, the world's first new LNG-fuelled tanker, following its delivery by the Dutch Shipyard Trico B.V.
Built to Lloyd's Register class, MT Argonon represents a significant milestone for the Deen Shipping subsidiary, Argonon Shipping B.V., in its pursuit of cleaner transport solutions for Europe. Lloyd’s Register helped the owners and regulators to identify their risks, meet regulatory requirements and overcome the technical challenges for the precedent-setting tanker.
"This has been a great project and it is a significant first," said Piet Mast, Lloyd’s Register's Marine Business Manager for Western Europe. "The nature of inland waterways traffic, which passes through or close to major population centers, makes LNG an attractive way to reduce harmful local emissions. We had to look carefully at the risks and worked closely with the owner and the regulators to ensure that they understood, and were comfortable with, the technical solutions that were developed."
The dual-fuel system is designed to burn an 80/20 mixture of natural gas and diesel, reducing SOx, NOx and particulate-matter emissions, as well as reducing the greenhouse gas emissions from tank to flue. The LNG is stored in a transport tank located on deck, supplied by Cryonorm Projects, based near Amsterdam.
"The inland shipping industry, as far as we know, is the safest and cleanest mode of transport. But, to keep this lead, we have to take a big step forward in environmental performance," said shipowner Gerard Deen. "I think that the dual-fuel principle is a way to reduce the emissions in our sector. Lloyd’s Register was very pragmatic in their approach to finding solutions to convert seagoing regulations into inland shipping rules regarding dual fuel."
Along with Lloyd’s Register, the Netherlands Shipping Inspectorate approved the vessel’s LNG system for operation in the Netherlands and the ship has taken on its first load of LNG bunker fuel. The next step is to secure the regulatory approvals from the Central Commission for Navigating on the Rhine and the UN-ECE ADN Safety Committee, to open the way for navigation beyond the Netherlands.
"The owners are to be congratulated for being pioneers," said Mast. "At Lloyd’s Register, we have been involved with LNG for a long time, so were able to provide support through the plan-approval and construction processes. We now look forward to supporting the ship through many years of ‘clean’ trading."
Argonon has entered service and will start operating with gas this week following some final, main-engine tests. Propulsion power for the 110-meter-long tanker is supplied by two, dual-fuel Caterpillar DF3512 engines, each providing 1,115 KW.
The ship has the capacity to transit from Rotterdam to Basel and back without bunkering.
"We are currently providing technical and regulatory guidance for 20 confirmed or proposed inland waterway applications that intend to use LNG as fuel," says Bas Joormann, West European Area Inland Waterway Product Manager for Lloyd’s Register. "There is a lot of interest, and for good reason. Inland waterways, like ferries in emission-control areas, are very suitable for LNG. But the regulatory regime is different. We're helping owners and governmental bodies to identify the risks and manage them to at least the level of safety provided by the existing fuel-management and combustion requirements."

Navy Purchases Nearly Half Million Gallons of Biofuel

WASHINGTON, Dec 5, 2011 (GlobeNewswire via COMTEX) -- Dynamic Fuels, LLC, a joint venture between Tyson Foods, Inc. and Syntroleum Corporation, has been awarded a contract to supply the U.S. Navy with 450,000 gallons of renewable fuels. Solazyme, Inc., a renewable oil and bioproducts company, will help Dynamic Fuels fulfill the contract, which the Navy and the USDA report is the single largest purchase of biofuel in government history.
The contract involves supplying the Navy with 100,000 gallons of jet fuel (Hydro-treated Renewable JP- 5 or HRJ-5) and 350,000 gallons of marine distillate fuel (Hydro-Treated Renewable F-76 or HRD-76). The fuel will be used as part of the Navy's efforts to develop a "Green Strike Group" composed of vessels and ships powered by biofuel.
The Navy contract follows on the heels of both companies' involvement in historic commercial airline flights using biofuel. This includes Dynamic Fuels' renewable jet fuel work with KLM Royal Dutch Airlines, Finnair, Thomson Airways and Alaska Airlines, and Solazyme's recent flight and partnership with United Airlines, which includes a letter of intent to provide 20 million gallons a year starting in 2014.
The fuel for the Navy will be manufactured at Dynamic Fuel's Geismar, Louisiana, renewable fuels plant using U.S.-sourced yellow grease (used cooking oil) as well as Solazyme's tailored algal oil as feedstocks. The fuel will be delivered to the U.S. Navy in May 2012. The Dynamic Fuels plant, which has been in operation for more than a year, is designed to convert non-food feedstocks such as algal oil, animal fats, and greases into renewable fuels.
"This award clearly demonstrates that we're building momentum for the sale and use of our renewable fuels," said Jeff Bigger, director of the Dynamic Fuels LLC Management Committee. "We've previously provided the U.S. military with fuel for testing. We believe this contract confirms they recognize the performance and environmental advantages of our fuel since they're coming back for more and are asking for a much larger volume."
"This is an historic contract and we are proud to be teaming up with Dynamic Fuels to produce and deliver the advanced biofuel to the U.S. Navy to sail the Great Green Fleet. Dynamic Fuels has been a leader in next generation advanced biofuels technology and this partnership further solidifies the progress that both of our companies are making in bringing advanced renewable fuels to commercialization," said Jonathan Wolfson, CEO, Solazyme. "Solazyme is honored to be working with the U.S. Navy and DLA-Energy in driving forward the Navy's effort under Secretary Ray Mabus to source 50 percent of its energy from renewable sources by 2020."
To see video of operations at Dynamic Fuels, click on the following link:
http://www.youtube.com/watch?v=zsI1dov9Xbw
Photos of the facility can be seen by clicking:
http://www.flickr.com/photos/tysonfoods/sets/72157625319377772/ .
About Tyson Foods
Tyson Foods, Inc., founded in 1935 with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The company produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. Tyson provides products and services to customers throughout the United States and more than 130 countries. The company has approximately 115,000 Team Members employed at more than 400 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
The Tyson Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3224
About Syntroleum
Syntroleum Corporation owns the Syntroleum(R) Process for Fischer-Tropsch (FT) conversion of synthesis gas derived from biomass, coal, natural gas and other carbon-based feedstocks into liquid hydrocarbons, the Synfining(R) Process for upgrading FT liquid hydrocarbons into middle distillate products such as synthetic diesel and jet fuels, and the Bio-Synfining(R) technology for converting animal fat and vegetable oil feedstocks into middle distillate products such as renewable diesel and jet fuel using inedible fats and greases as feedstock. The 50/50 venture -- known as Dynamic Fuels -- was formed to construct and operate multiple renewable synthetic fuels facilities, with production on the first site beginning in 2010. The Company plans to use its portfolio of technologies to develop and participate in synthetic and renewable fuel projects. For additional information, visit the Company's web site at www.syntroleum.com
About Solazyme, Inc.
Solazyme, Inc. is a renewable oil and bioproducts company that transforms a range of low-cost plant-based sugars into high-value tailored oils. Headquartered in South San Francisco, Solazyme's renewable products can replace or enhance oils derived from the world's three existing sources -- petroleum, plants and animal fats. Initially, Solazyme is focused on commercializing its products into three target markets: (1) fuels and chemicals, (2) nutrition and (3) skin and personal care. Solazyme's oils and fuels provide compelling solutions to increasingly complex issues of fuel scarcity, energy security and environmental impact while fitting into the pre-existing multi-trillion dollar fuel infrastructure. For more information, please visit our website: http://www.solazyme.com
Solazyme(R), the Solazyme logo and other trademarks or service names are the trademarks of Solazyme, Inc.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Solazyme, including statements that involve risks and uncertainties concerning: the future manufacture and delivery of jet fuel by Solazyme and the timing of such delivery; the potential purchase of fuel by United Airlines; the timing of the delivery of fuel to the U.S. Navy and what that fuel will be used for; and Solazyme's future commercialization plans. When used in this press release, the words "will," "expects," "intends" and other similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such statement may be influenced by a variety of factors, many of which are beyond the control of Solazyme, that could cause actual outcomes and results to be materially different from those projected, described, expressed or implied in this press release due to a number of risks and uncertainties. Potential risks and uncertainties include, among others: the ability of Solazyme and/or Dynamic Fuels to produce in-spec jet fuel at a commercially acceptable price; Solazyme's ability to access sufficient manufacturing capacity; and Solazyme's ability to maintain existing, and establish new, strategic business relationships. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Solazyme.
In addition, please refer to the documents that Solazyme, Inc. files with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q, for a discussion of these and other risks. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. Solazyme is not under any duty to update any of the information in this press release.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Dynamic Fuels

No Gas for Nome, Alaska

Article from the Alaska Dispatch
28 November 2011

Unleaded gasoline sells for $5.43 a gallon at the pump in Nome, but that price could skyrocket by this spring because a fuel barge with more than 1 million gallons didn't arrive as expected this fall in the remote Northwest Alaska community.
For Nome residents, the cancelled shipment, which petroleum distributor Delta Western blames on stormy weather and sea ice, brings back memories of a similar situation in another rural Alaska community.
In the spring of 2010, after a fuel barge couldn't reach the Interior town of McGrath, the distributor was forced to fly fuel in. Those costly flights pushed prices at the pump from $5.97 to $8.50 a gallon. Nome Mayor Denise Michels said her community of 3,600 isn't facing an emergency yet. But if Nome fuel stocks drop too low this spring, supplies would have to be flown in, which would raise prices at the pump.
Hopefully, Delta Western and Bonanza Fuel, the company that ordered the 1.6 million gallons of gasoline, diesel fuel and heating fuel, can reach an agreement that avoids passing costs onto Nome residents, said Michels. The companies are discussing the problem now, she said.
"They need to figure it out," Michels said.

The barge carrying the big fuel load couldn’t reach Nome, in part because of stormy weather, including the recent tempest in the Bering and Chukchi seas, said Kirk Payne, Delta Western vice president. Sea ice that has since enveloped the community, delivering the final blow. The barge won't reach Nome this winter, Payne said.
It's possible that costs related to the canceled barge shipment could be rolled into a state disaster declaration, said Scott Ruby, director of the state Division of Community and Regional Affairs.
Gov. Sean Parnell's Disaster Policy Cabinet meets on Wednesday to consider whether damage from the mid-November storm across a wide swath of western Alaska warrants a disaster declaration from the state. The cabinet will advise the governor, who makes the final call, Ruby said.
Nome has asked the state's emergency services division to determine whether a disaster declaration would cover the cost of higher fuel prices, said Michels. It might, but the city hopes Bonanza and Delta Western resolve the issue themselves.
One question is whether the weather was truly the problem, said Michels.
It was, said Payne. But Jason Evans, board chair of Bonanza parent company, Sitnasuak Native Corp., said Bonanza ordered the fuel in May, and the company has been awaiting its order for three months. "There's not been 90 days of extreme weather," Evans said, and other barges have reached Nome before ice surrounded it.

Contact Alex DeMarban at alex(at)alaskadispatch.com

Interferry says meeting low-sulfur deadline is "mission impossible"

I find this interesting in contrast with the study done by the Glosten Associates on the conversion of Washington State Ferries to LNG Propulsion. (Refer to our  21 November Blog Post.) I guess that the contrast comes from the economic hardships facing Europe versus our own here in the United States. I think this deadline hits them economically where we were three or four years ago. It will be interesting to see how they emerge from it.

From MarineLog News Article.
28 November 2011

The international trade association for the ferry industry, Interferry, claims that ferry operators in northern Europe face a "near-impossible" choice in trying to meet the 2015 deadline for ultra-low sulfur emissions from bunker fuel. It also says that the low-sulfur legislation will " percentprompt an environmentally damaging modal shift from short-sea to overland transport and pose severe financial implications for the overall European economy.

Under pending IMO and soon to be agreed European Union (EU) environmental requirements, vessels operating in the Baltic, North Sea and Channel Emission Control Areas (ECAs) will have to comply with a 0.1 percent limit on fuel sulfur content.

Interferry says that meeting the 2015 deadline is "mission impossible" because of "unsustainable cost increases."

The association argues that, despite the ferry industry's efforts to develop alternative technologies and feasible alternative fuels, abatement technologies and financial support will not be available or sufficient enough to avoid a modal shift from sea to road.

A "toolbox" of technical and financial solutions proposed by the European Commission (EC) suggests the use of clean LNG fuel or, for vessels that continue to run on heavy fuel oil, the use of scrubbers - exhaust gas cleaning systems. It also points operators towards EU funding initiatives and state aid.

Interferry says that these are not realistic options because:

• It is widely recognised in Europe that LNG is only an option for new vessels due to the prohibitive cost of converting existing vessels, and in any case the LNG fuel supply infrastructure is inadequate
• Scrubber technology is not a "miracle cure." Ferry operators have contributed financially and operationally to developing the technology and Interferry says it is a solution that seems to be able to remove sulfur particles from the exhaust gases on some ships. However, a new Interferry feasibility study covering 108 vessels from six leading operators reveals that scrubbers would not be technically or financially viable for 60 percent of the existing fleet. Furthermore, trial installations among association members have shown that it will not be possible to have scrubbers in operation in time for 2015 for the other 40 percent
• EU funding is virtually non-applicable as it applies largely to newbuilds and new routes – a low priority among operators who have invested heavily in new tonnage in recent years, and who now face a desperate economic climate that also reduces the likelihood of state aid

"There is no financial support for existing ferries, while LNG and scrubbers are not feasible," says Johan Roos, the association's executive director of EU and IMO affairs. "In effect, the toolbox is completely empty.

"Our only option is to use marine gas oil – technically straightforward but very costly and potentially counter-productive in environmental terms. Operators have warned that they will not be able to pass on the 70 percent or more fuel cost increase to customers with a choice of transport modes, which will inevitably push up to 50 percent of cargo off short-sea ships and back on to the road network."

Mr. Roos added that, apart from cost, availability is also an issue with MGO, stressing: "At the very least, the IMO must bring forward its availability review from 2018, as mandated in MARPOL Annex VI, to 2012 or 2013. It's also clear that the ongoing revision of the EU Directive must put provisions in place as to what should happen if low-sulfur fuel is simply not available to operators in 2015."

Interferry conducted the scrubber feasibility study among six Interferry members operating in the north European ECAs - Brittany Ferries, DFDS, Grimaldi Group, P&O Ferries, Stena Line and TT-Line.

The conclusion that more than half their existing ships could not be fitted with scrubbers was based on five critical parameters:
Vessel age and the consequent commercial viability of making a massive technical investment

• Stability reserves taking into account the weight of scrubber units and how high up the stack they would be fitted
• Deadweight reserves and the resulting impact on cargo capacity
• Casing – because many ferries have very limited void in the ideal stack casing location and would therefore need special scrubber casing that reduces cargo capacity
• Whether or not Selective Catalytic Reduction (SCR) technology was already fitted to reduce NOx emissions – if so, retrofitting wet exhaust scrubbers would be more challenging as these cool gases to below 100 degrees C compared with temperatures above 400 degrees C required by SCR

The detailed results are being offered to the European Maritime Safety Agency for independent audit and will also be made available to relevant authorities.

The EC toolbox was discussed in Helsinki on November 18 when senior personnel from Interferry members joined Mr. Roos at a special seminar organized by the Finnish Ministry of Transport & Communications and the Finnish Transport Safety Agency. Invited delegates also came from national authorities, shipowners' associations and equipment manufacturers.

Mr. Roos reports that at the meeting, where an EC representative and various national administrators also participated, it became obvious that current funding support programs are only allowed for new ships or new routes and are not available to address the "real problem"of safeguarding existing fleets and the routes they already service – offloading millions of trucks from the European road network every year.

November 28, 2011

US Navy Alternative Fuel Test Successfully Concluded

From NAVSEA
18 November 2011

The U.S. Navy successfully concluded its largest demonstration of shipboard alternative fuel use when the Self Defense Test Ship (SDTS) arrived at Naval Surface Warfare Center Port Hueneme, Calif., at 10:37 a.m. (PST), November 17 after a 17 hour transit from the Defense Fuel Supply Point at Naval Base Point Loma

The SDTS is a decommissioned Spruance-class destroyer, ex-Paul F. Foster (EDD 964). It has been reconfigured to provide the Navy with an at-sea, remotely controlled, engineering test and evaluation platform without the risk to personnel or operational assets.

The ship received approximately 20,000 gallons of a 50-50 blend of an algae-derived, hydro-processed algal oil and petroleum F-76 from the Defense Fuel Supply Point at Naval Base Point Loma, November 16.

"How can we have an impact?" asked Assistant Secretary of the Navy (Energy, Installations and Environment) Jackalyne Pfannenstiel at the demonstration's kick-off. "We can have an impact as a technology leader, highlighting and demonstrating the viability of biofuels as we are here today. This demo, the largest to date, is a major milestone for us. More than 50 percent of our fuel goes to maritime use. When this ship arrives in Port Hueneme, we will be a giant step closer to powering our Great Green Fleet and demonstrating progress toward a sustainable energy future."

Shortly after Assistant Secretary Pfannenstiel's remarks, the ship began its transit to Naval Surface Warfare Center Port Hueneme using the 50-50 blend. While EDD 964 has four LM 2500 main propulsion gas turbines and four 501-K17 ship service gas turbine generators, the ship only operated on one LM 2500 and two 501-K17s during the demonstration, so 100 percent of ship's propulsion power and 50 percent of service power came from the algal oil/F-76 fuel blend.

Meeting the Secretary of the Navy's call for a drop-in fuel replacement, no changes were required to the infrastructure of the ship or fueling pier for the SDTS test. The demonstration also marked the only at-sea operational test of alternative fuels in the LM 2500 – the engine found in most surface combatants – before the Green Strike Group demonstration in 2012.

"For the test, a baseline run was made on the ship's transit from Port Hueneme to San Diego using F-76 fuel," said Rick Kamin, Naval Fuels and Lubricants Cross Functional Team lead. "Using the 50-50 blend on the return run to Port Hueneme, the tested engines were assessed on their abilities to perform start sequences as well as motoring and purging operations noted in Engineering Operational Sequencing System procedures. We also collected data on compressor inlet temperature, engine speed, engine start time, fuel manifold pressure, turbine outlet temperature, turbine inlet temperature, ship service gas turbine generators power output, and gas turbine main engine shaft output."

"From our perspective as the ship's operators, there was absolutely no difference, whatsoever, in the operation or performance of the ship," said Naval Surface Warfare Center Port Hueneme Division's Mike Wolfe, underway project officer. "The fuel burned just like the traditional fuel we get from the Navy and have been burning for years. We could not tell the difference. The biggest success is that a Navy ship with engines identical to those in commissioned warships operated successfully on an overnight transit with the alternative fuel without a glitch in anything. Operationally, it was absolutely a success."

The alternative fuels effort supports the Navy's overall energy strategy to increase energy security and safeguard the environment. Recent and upcoming maritime vehicle alternative fuel testing include ongoing Yard Patrol boat demonstration at Naval Academy, Annapolis, Md., and a Landing Craft, Air-Cushioned vessel demonstration scheduled for early December at Naval Surface Warfare Center Panama City, Panama City, Fla.

10000 Ships to Use LNG Propulsion by 2020?

This report comes from from MEC Intelligence. The impact of this suggests phenomenal growth (over 9000% growth) in LNG use for maritime propulsion. This growth over the next eight years could very well change the face of marine engineering.

LNG in marine propulsion: A Disruption to the Maritime Industry?

According a new forecast by MEC intelligence nearly 10,000 vessels could be adopting LNG propulsion by 2020 triggering a huge growth in the market. Companies in all aspects of the maritime value chain– oil majors, terminals, ports, bunker suppliers, service companies, component producers, vessel owners and charterers – need to rethink their offerings.”

A ground breaking report published by the maritime cleantech market insight firm MEC Intelligence estimates more than 5% of the world fleet will adopt LNG propulsion by 2020 a huge growth considering less than 100 vessels presently.

Best Option for Newbuilds

Strict environment regulations requiring the reduction of SOx, NOx to 0.1% in ECA zone in 2015 and 0.5% globally in 2020 will stimulate demand for technologies that can eliminate or reduce emissions from vessel exhausts. The key compliance options available are either adoption of new types of fuel – low sulphur MGO or LNG – or using scrubber technology on the existing HFO fuel.

The LNG propulsion technology will potentially gain massive traction in the new build segment owing to significantly lower operation costs leading to a lower total ownership cost over the ship’s lifecycle. The total ownership cost over ship’s lifecycle for a new build LNG propelled vessel (depending on vessel type and geography) is expected to be up to 40% lower as compared to that of a fuel oil and MGO propelled vessel.

The low cost are attributed to the abundant availability and competitive prices of LNG compared to crude. Even though, the price of LNG is expected to increase with the pickup in natural gas demand in power sector it is not likely to be significant considering the new supplies from unconventional gas reserves.

Further, considering the often more than 25 year long life cycle of vessels, LNG adoption makes the ship essentially future proof in terms of further regulatory driven emission reductions in SOx, NOx, and Particulate Matter approaching in the horizon.

Huge Long Term Impact Albeit a Slow Start

Better Economics combined with development of building capacity, recent advancements in engine and fuel gas technologies are leading to a pick-up in the interest in LNG propulsion. Although availability of infrastructure and standards is a limiting factor, yet, this is expected to be only a short term inhibitors. An analysis of the existing LNG supply and terminal infrastructure shows ample availability of the fuel to be able to supply and bunkering infrastructure can be developed rapidly to meet the growing fleet.

With the development of infrastructure and IMO ratifications the fleet is expected to reach up to 1,000 vessels by 2015 but pick up rapidly to grow up to 10 times in the subsequent five years as the technology, infrastructure, and economics stack equivocally in favour of LNG propulsion. However, in case infrastructure and regulation are delayed the penetration is estimated to be significant lower yet still significant.

Unique Opportunity to Differentiate and Shape the Market

The report concludes that the adoption of LNG in vessels will call for changes in all aspects of the value chain – oil majors, terminals, ports, bunker suppliers, service companies, components suppliers, owners and charterers – requiring companies to rethink their offerings and align to a new reality sooner or later. It is one of the unique times when companies can move fast to take advantage of a new technology to differentiate themselves in the largely ‘commodity’ market for equipment and services.

About MEC Intelligence

MEC Intelligence is a leading market insight firm focused on growth in the maritime, energy, and cleantech sectors. The company brings together its unique data assets, deep experience in supporting strategic and market business development, and broad industry knowledge to develop objective perspective on industry developments and identify growth opportunities for the entire maritime, energy, and cleantech ecosystem.