RETROFITS & CONVERSIONS
MeOH CONVERSIONS POISED TO TAKEOFF: RASMUSSEN MAN Energy Solutions expects to see a rapid rise in the number of dual-fuel engine conversions concluded over the coming period, Klaus Rasmussen, Head of Projects and PVU Sales, MAN PrimeServ told The Motorship. Enquiries for conversions were particularly intense in consumer facing segments, such as containers and pure car and truck carriers (PCTCs), Rasmussen said. The Motorship has previously written about the introduction of low carbon and zero carbon tariffs within the container segment. While MAN ES was having conversations with owners, charterers and beneficial cargo owners in all the major segments, enquiries from the container segment were “particularly active”. While the container segment was not unique in being affected by the upcoming introduction of EEXI and CII regulations, the competing demands of maintaining scheduled liner services and customer pressure for low emissions transportation were particularly acute. Alternative solutions for liner operators, including engine power limitation solutions or reducing operational speeds would also require investments to optimise the propulsion system and potential off hire time. Some container operators are also conscious that speed reductions on routes might require additional capacity to maintain liner services at slower speeds, The Motorship has heard. “Just within the container segment, we are developing solutions for more than 500 engines. We can basically cover all the engines that had been put into the market for container vessels from 7000 teu. We can retrofit [them] into methanol within the next couple of years.”
This was also the case in segments where the economics of using a cargo as a fuel for their own business were supportive, such as LPG. While LPG-fuelled LPG carriers currently enjoy a fuel cost advantage of up to 30% compared with conventionally fuelled competitors, for owners operating in the US Gulf region, that is not the main driver behind the business case. “For owners switching to dual-fuel operation using LPG as the secondary fuel, their vessels will be compliant with CII until the end of the decade,” Rasmussen said.
Methanol retrofit economics There was particular interest in methanol conversions for a number of reasons. First and foremost, retrofitting engines to operate on methanol was likely to be a medium-term solution for operators concerned about CII compliance over the coming decade. While the economics of conversions were a secondary consideration, Rasmussen noted that the overall cost of converting container vessels did not vary considerably between 5,000 teu container feeders and 24,000 teu ultra large container vessels. “The engine conversion might only cost 25% more, while the overall project cost would only cost 50% more.” Rasmussen noted that the relative cost of converting larger sized container vessels was proportionally lower for larger vessels (see Typical conversion costs table above). However, those costs were based on engine conversions to operate on LNG. By comparison, engine conversions to operate on methanol have lower capex requirements, with economies in the fuel tank and fuel supply line. “Dual-fuel methanol conversions are likely to be 30% lower than the equivalent LNG conversions.” However, Rasmussen was adamant that in general owners were taking a risk mitigation approach when considering conversions rather than a straightforward economic approach.
Ammonia retrofit costs MAN ES has previously publicly committed to concluding the first ammonia engine conversion in 2025, around 12 months after the first ammonia fuelled engine comes to market. When asked about the potential for ammonia conversions, Rasmussen noted that the engine project itself was continuing. Rasmussen expected to be able to have a first cost perspective by the end of 2023 or early 2024, when he expected to be able to discuss the potential material cost requirements for conversions with interested shipyards and owners. Rasmussen noted that initial discussions around ammonia conversions had begun with some shipyards, and that “ball park” estimates were that the overall cost of ammonia conversions would be similar to LNG conversions. “We expect the shipyards to account for a greater proportion of the conversion costs than in LNG conversions, for example”. Rasmussen said that he was also seeing a number of major ship owners engage directly with MAN ES around potential ammonia engine conversions. Technical teams within larger ship owners acting as main contractors represented a significant shift in conversions.
14 | JULY/AUGUST 2022
Class, dwt
Engine
DF conversion, US$
Engine conversion, US$
Supramax, 65kt
5S60ME-C8.5
13-16
3.5
Kamsarmax, 81kt
6S60ME-C8.2-10.5
13-16
3.7
Newcastlemax, 210kt
6G70ME-C9.5
16-19
3.9
VLOC, 325kt
7G80ME-C9.5
16-21
4.2
MR tanker, 50kt
6G50ME-C9.5
13-15
3.5
LR2, 110kt
6G60ME-C9.5
16-18
3.7
VLCC, 300kt
7G80ME-C9.5
19-21
4.2
Feeder, 5,000 teu
6G80ME-C9.5
19-23
4.1
10,000 teu
11S90ME-C9.2
26-32
5.2
15,000 teu
11G90ME-C10.5
26-32
5.2
24,000 teu
11G95ME-C10.5
30-35
5.3 8 Typical LNG conversion costs
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Source: MAN Energy Solutions
Medium term CII compliance concerns are underpinning interest in methanol conversions from container and PCTC sectors
