Tote Inc., which operates Jones Act vessels serving Alaska and the Caribbean, has signed a contract to build the world’s first LNG-powered containerships.
The Princeton, N.J.-based company is also converting two of its diesel-electric trailerships, which serve Alaska, to LNG propulsion. When these projects are complete, Tote’s fleet will consist entirely of LNG-powered vessels.
“We are a firm believer that LNG will become the main fuel for marine transportation at some point in the future,” said Anthony Chiarello, president and chief executive of Tote. The company has committed $350 million to the containership project.
General Dynamics NASSCO, of San Diego, has contracts for all four vessels. Each containership will have the capacity of 3,100 20-foot equivalent units and will be 764 feet long and 106 feet wide. Construction of the first containership is scheduled to start in early 2014 with delivery in 2015; the second ship is expected to be delivered by early 2016.
Views of the LNG tanks and power systems.
“This project provides yet another sign that we are in the dawn of a new era of LNG propulsion,” said Fred Harris, president of General Dynamics NASSCO, in a press release.
Each ship will be powered by a dual-fuel, slow-speed engine manufactured by MAN Diesel and Turbo S.E., model MAN 8L70ME-C8.2-GI, which can run on LNG or heavy fuel oil. Daewoo Shipbuilding and Engineering Co., of South Korea, will design and engineer the ships.
The construction of the ships, at NASSCO’s San Diego shipyard, is expected to provide 600 jobs, according to a Tote press release.
Right now, Tote has two steamships serving Puerto Rico. Each vessel is about 35 years old, said Chiarello. A third steamship is used in relief. All three vessels will be retired. The new LNG-powered containerships will carry five times more 53-foot containers than the current vessels and will transport products ranging from cars to corn syrup. The new vessels will trade between Jacksonville, Fla., and San Juan.
Tote’s two Orca-class 839-foot trailerships, Midnight Sun and North Star, are to be converted to LNG propulsion by early 2016, said Chiarello. The conversions will be done at the NASSCO shipyard, which built the two ships. The Orca vessels operate between Tacoma, Wash., and Anchorage, Alaska.
Tote’s decision to go with an all-LNG fleet is a major step in the trend toward using natural gas to power commercial vessels, said Kenneth Vareide, director of North American maritime for the classification society Det Norske Veritas. The decisions by Tote “proves it can be done,” Vareide said. “There is no doubt that the United States owners and shipbuilders have the capacity to do this.”
DNV predicts that 30 percent of all newbuilds worldwide will have LNG propulsion by 2020, according to its report “Shipping 2020,” released in November 2012.
There are two reasons companies are considering LNG propulsion: the environmental benefits and the low price of LNG, according to Parker Larson, NASSCO’s program manager for commercial contracts.
“There are increasingly stricter emissions requirements that have been coming over the last decade,” he said. “The other side is that there is cheap and abundant natural gas — particularly in the United States. The way we see it, in the era of rising diesel fuel costs, a cheap, alternative fuel source is very attractive,” he said. “The combination of those two factors at the same time almost dictates that an owner or operator consider LNG as a very viable option going forward.”
However, it was the environmental benefits, not economic factors, which convinced Tote to go with LNG propulsion. “I have no idea what the LNG cost will be three years from now when the ships are on line,” said Chiarello. “That’s why we made the decision based on environmental impact.”
As of August 2012, much stricter controls on emissions of sulfur oxide, nitrogen oxide and particulate matter took effect for ships trading up to 200 miles off the coasts of the U.S. and Canada (called the North American Emission Control Area), according to the International Maritime Organization’s website. The United States Caribbean Sea ECA takes effect Jan. 1, 2014.
Tote’s Alaska service is entirely in an ECA zone, and Tote vessels serving Puerto Rico are in an ECA zone between 35 percent and 45 percent of the time, said Chiarello.
The LNG-powered ships will generate 71 percent less emissions per container than the current Tote vessels serving Puerto Rico. They will produce 98 percent less sulfur oxide, 91 percent less nitrogen oxide and 99 percent less particulate matter.
Tote has an option to order three more containerships from NASSCO. Chiarello said no decision has been made regarding those vessels. The company may decide to operate in Hawaii, expand its Puerto Rican service, expand its trade in the Caribbean or operate in South America.