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LNG as a Marine Fuel: Total teams stand together in a pioneer move

Blog Article - April 23, 2020

Luc Gillet, Senior Vice-President Shipping at Total, and Jérôme Leprince-Ringuet, Managing Director of Total Marine Fuels Global Solutions, share their insights on why Total’s charter of its first two LNG[1]-powered tankers from Malaysian shipowner AET is a pioneer move for the industry.

Luc Gillet, Senior Vice-President Shipping at Total
Luc Gillet , Senior Vice-President Shipping at Total
Jérôme Leprince-Ringuet, Managing Director of Total Marine Fuels Global Solutions
Jérôme Leprince-Ringuet , Managing Director of Total Marine Fuels Global Solutions


Why is this latest contract important to Total and important to the shipping industry?

Luc Gillet: “The two newbuilds are Very Large Crude Carriers (VLCC) which can carry about 300,000 tons of crude oil each. They will be the first tankers of this size to be fitted with LNG-propulsion systems so it is quite a bold decision for Total and a real technical challenge for AET. We made this decision because we strongly believe that LNG as a marine fuel will help the shipping sector to deliver on the International Maritime Organization’s (IMO) greenhouse gas (#GHG) reduction targets (see box below) . It also illustrates Total’s determination to reduce the carbon footprint of its own activities, in line with its ambition to become the responsible energy major.”

Jérôme Leprince-Ringuet: “It is a great achievement from Total’s Trading-Shipping team and we are proud to support them by supplying LNG bunkers to those vessels. This decision is completely coherent for an integrated oil and gas company like Total and aligned with our strategy to develop LNG as a marine fuel. In terms of emissions, availability and price, LNG is currently the only viable alternative to reduce shipping’s environmental footprint and help the industry transition to a more sustainable activity. The use of LNG helps to reduce sulphur oxides by 99%, fine particles by 99%, nitrogen oxides by up to 85% and greenhouse gases by about 20%. It totally meets the IMO 2020 requirements[2] as it is almost sulphur free and even go further by reducing carbon emissions.”



What does it take to make such a decision?

Luc Gillet : “It’s a team work above all, not only within Trading-Shipping but also with other branches of the Group. It took us two years to bring this meaningful project to fruition and the mobilization of several departments of the Shipping department of T&S. First, the Time-Charter team which is regularly renewing our fleet according to the highest standards in terms of safety and environmental footprint, started discussions with shipowners in order to get offers including LNG-propulsion features. Then the Economic Analysis Department stepped in the projects to evaluate all the prices exposure and competitiveness of LNG compared to Very Low Sulphur Fuel Oils (VLSFO) for the duration of the charter-party. Being part of an integrated oil and gas major was definitely a huge asset as Total is currently one of the first gas producers in the world and a major player in the development of LNG as a marine fuel. Therefore, we got a lot a support from our Gas Renewables and Power branch (GRP) and from TMFGS in order to fine-tune our analyses. Finally, our technical department closely worked with shipowners and shipyards on the best way to optimise storage, boil-off gas[3] management and LNG consumption without raising the costs of additional equipment.”

Jérôme Leprince-Ringuet: “We have been working closely with Trading & Shipping for many years: they are our main supplier of marine fuels and marine gasoil, but they are also our customers as we regularly bunker their tankers. They started studying the LNG-propulsion option for their fleet when we started investing in bunkering infrastructures in the main bunkering hubs of Rotterdam and Singapore. We are proud to accompany them in this bold decision and we are sure it will send a very strong signal to the industry that LNG as a marine fuel is not only fit for container vessels.”


Why did you choose AET for this contract?

Luc Gillet: “We went through a tendering process to select the shipowner. We have been working for a long time with AET and we currently have several ships on Time Charter with them. They have some experience with LNG powered vessels as they are already operating LNG-powered Aframax vessels (vessels that are able to carry 100,000 tons of crude oil). They are very committed to reducing their carbon footprint and to LNG–powered vessels, therefore they made an attractive commercial offer supported by a strong technical expertise.”


What is next in the focus for TMFGS and Total Shipping?

Jérôme Leprince-Ringuet: “This initiative shows Total’s ambition to become the responsible major, as a charterer who carries oil around the world with a reduced impact on the environment, and as a bunker supplier who ensures availability of cleaner fuels and associated infrastructures. On the fuels side, we will continue to invest in developing LNG bunkering infrastructures. We anticipate that LNG bunker vessels will triple over the next 2 years reaching more than 30 units to answer the needs of a growing market. We expect that the LNG bunker market to reach 10 Mt by 2025 and 20 Mt by 2030 and we definitely want to be one the major players there. In parallel, we will keep on working with all the branches of the Group such as Refining and Trading in order to develop biofuels and the Gas Renewables & Power branch for the development of alternative fuels such as bio LNG or hydrogen.”

Luc Gillet: “On our side, we have a clear objective of reducing the emissions of our chartered fleet and we will continue the effort for all sizes of vessels. Let’s continue to innovate and develop new projects for a safe and environmentally responsible shipping.”


Initial IMO Strategy on reduction of GHG emissions from ships

The Initial Strategy envisages for the first time a reduction in total GHG emissions from international shipping and identifies levels of ambition as follows:

Carbon intensity of the ship to decline through implementation of further phases of the energy efficiency design index (EEDI) for new ships → to review with the aim to strengthen the energy efficiency design requirements for ships with the percentage improvement for each phase to be determined for each ship type, as appropriate;

Carbon intensity of international shipping to decline → to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008; and

GHG emissions from international shipping to peak and decline → to peak GHG emissions from international shipping as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008 whilst pursuing efforts towards phasing them out as called for in the Vision as a point on a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals.

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[1] Liquefied Natural Gas

[2] Since 1 January 2020, the IMO has implemented a new regulation for ships to use marine fuels with a sulphur content of no more than 0.50% against 3.50%.

[3] Boil-Off Gas (BOG) is the reaction produced by LNG when it evaporates in the tanks and returns to gas. To relieve the pressure in LNG tanks, BOG can be re-liquefied, used as fuel or burnt in a gasification unit.