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Japan's MOL plans LPG fueled VLGCs to meet net-zero GHG emissions targets

Highlights

Ships scheduled for delivery after 2023

MOL also to launch 90 LNG-fueled ships by 2030

Ammonia garnering attention as next generation clean fuel

Japan's Mitsui O.S.K. Lines Ltd. said Aug. 5 that it was forging ahead with an agreement for the construction of two LPG fueled Very Large Gas Carriers to transport LPG and ammonia.

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MOL's group company Phoenix Tankers Pte. Ltd. has signed a deal with Namura Shipbuilding Co. Ltd. in this regard, and the ships are scheduled for delivery in succession after 2023, MOL said in a statement.

The new carriers are designed to maximize fuel efficiency, and are environmental-friendly ships in conformity with the Energy Efficiency Design Index Phase 3, which will be applicable for VLGCs contracted after 2022, it said.

"The vessels will be built with an eye toward conversion to ammonia fueled in the future because LPG and ammonia fuels have similar characteristics," the company added.

The latest move is in line with MOL Group Environmental Vision 2.1 as MOL implements efforts to achieve sustainable net-zero greenhouse gas emissions.

MOL has been at the helm of various sustainable shipping initiatives. On Aug. 3, it also announced that it plans to have four 7,000-unit capacity car carriers running on LNG as their main fuel -- a move targeted toward launching 90 LNG-fueled SHIPs by 2030.

MOL's move for constructing two VLGCs fueling LPG and ammonia comes as Japan's largest LPG supplier Astomos Energy is set to introduce the country's first LPG fueled tanker in 2021 under a time charter deal with Singapore-based Kumiai Navigation, an Astomos Energy official said July 29.

Astomos had been considering introducing LPG-fueled tankers into its VLGC fleet for a few years, in response to the International Maritime Organization's 2020 marine fuels mandate that stipulated a cut in sulfur content in all marine fuels to 0.5% from 3.5%.

The dual-fuel VLGC, which has been named Crystal Asteria, is being built by Kawasaki Heavy Industries at its Sakaide works for delivery to Kumiai Navigation by the end of 2021, a Kawasaki spokesman had said. Kawasaki has six other contracts to build LPG-fueled tankers to date, the spokesman said.

Zero carbon fuels

The IMO in April 2018 laid out its strategy to reduce shipping's total GHG in 2050 by at least 50% from 2008 levels, and to reduce CO2 emissions per transport work by at least 40% by 2030.

Ammonia, hydrogen, methanol, biofuels, LPG are among those considered as future low carbon fuels.

Each company's pathway toward a lower carbon future would be different as the industry embraces a multifuel future amid environmental regulatory requirements, an industry source said.

LPG as a fuel can reduce CO2 emissions by about 20%, and sulfur oxides, particulate matter and so on by about 90% in comparison with fuel oil, MOL said.

Last year, BW LPG retrofitted three VLGCs -- BW Gemini, BW Leo and BW Orion -- to become the world's first VLGCs to be LPG-propelled. These are the first of BW LPG's $130 million commitment to retrofit 15 VLGCs with LPG dual-fuel propulsion technology as part of its zero-carbon aim.

Ammonia is also drawing attention as a next-generation clean fuel that does not emit CO2 when burned, and as a "hydrogen carrier" that can be used to transport hydrogen, MOL said.

The International Energy Agency in a report in May said ammonia and hydrogen were set to be the main marine fuels if the world reached net-zero in 2050, accounting for about 60% of the market together, with ammonia set to power 45% of shipping in a 2050 net-zero scenario.