Port of Rotterdam: True Believers in LNG as a Transport Fuel

In a breakfast briefing entitled Technology for a Smart Future: Innovation and R&D to Make a Clean Future Real at Gas Week 2013 in Brussels, Belgium, Ankie Janssen, LNG Business Development, Port of Rotterdam, expressed her organization's firm belief in the potential of LNG as a transport fuel.

She explained that this support was due to several reasons. "It has the potential to achieve large emissions reductions for sulfur and nitrous oxides, and for fine particulates as well as for CO2," said Ms. Janssen. "Secondly, it has the potential to lower operating costs—fuel prices are high in the transport sector for container liners."

For example, she noted that fuel costs made up 70% of operating costs, for which LNG offered a potential cost reduction.

"Thirdly, for ports LNG as a fuel is what we're aiming for, but we also have to transport it, from an import terminal to the end user: to the bunker station, or industrial parties, where we use LNG as an alternative for pipeline gas."

She said this offered new business opportunities for the shipping market, but also for ports where many of the opportunities would take place.

"Is it all sunshine?" asked Ms. Janssen, who answered, "No. There are a number of hurdles to be overcome."

For one, she mentioned the "chicken and egg dilemma," explaining, "Will LNG bunkering infrastructure come first, or will the end user? The European Commission offered the opportunity for subsidies on LNG infrastructure and a number of proposals have been discussed, so hopefully in the next few years we will see a breakthrough in the development of LNG bunkering infrastructure."

Meanwhile, she said this still needed attention. She cited a number of projects in the Port of Rotterdam, like a loading terminal, a bunkering station project, and LNG tank station projects, all of which had yet to reach their final investment decisions (FID).

"But we hope this year will be the deciding year for that," she commented.

The second hurdle, according to her, was regulation, explaining: "Seaports and inland ports are working together in developing port bi-laws, but that's only part of the regulation; you need approval of the LNG vessels, which is a problem for inland navigation. You also need standards for bunkering.

"Industry and government need to speed that up, because there are companies that want to invest but the standards have not been set," said Ms. Janssen. "So we need harmonized European standards for sailing, vessels and for bunkering."

In terms of finance, she noted the shipping industry faced huge economic problems.

"They find it very difficult to get innovative concepts financed, so even though there are many parties interested in financing an LNG propelled vessel or truck, the problem is to get it financed; some arrangements should be developed," she said.

In response to a query over whether the European Council's Energy ministers might be more committed to infrastructure investments required for LNG as a transport fuel, Ms. Janssen replied: "If you have the potential to green the transport sector—and LNG is part of the solution—and you know you have high investment costs, then I think they should be prepared to put their money where their mouth is."