(EnergyAsia, March 7 2013, Thursday) — Australia should promote the use of liquefied natural gas (LNG) as a shipping fuel as it makes financial as well as environmental sense, said an industry study led by Norwegian classification and inspection firm DNV.

In replacing traditional bunker fuel with LNG, the four-month study found that Australia gains financially while reducing greenhouse gas emissions from investing in shipping and support infrastructure in 10 of the country’s main ports to operate on cleaner burning gas.

The study, which was co-sponsored by DNV, Australian Maritime Safety Authority (AMSA), BOC Ltd of the Linde Group, Farstad Shipping Pty Ltd, Ports Australia, Rolls-Royce Marine AS, SVITZER Australia, Swire Pacific Offshore Operations Pte Ltd, Teekay Shipping (Australia) Pty Ltd and Woodside Energy Ltd, also found that there are no legal restrictions to hinder LNG-fuelled shipping in Australia.

By combining “bunkering solutions” in tank trucks, permanent tanks and barges in the country’s various ports, the study said efficient LNG bunkering can be established as a viable option to meet environmental and commercial challenges in the shipping industry.

DNV said the study, which focused on tug-boats and offshore support vessels (OSVs), recommends that the authorities issue more technical guidelines and a clearer regulatory framework along with financial incentives to help develop an LNG-shipping industry.

“When establishing LNG bunkering, the critical business phase is the first two to four years of operation when LNG suppliers rely on a few brave ship owners willing to be industry forerunners,” it said.

“After some years of successful operation a second wave of ships is expected to enter the market, which will reduce suppliers’ uncertainty and reinforce the business case. The project focused specifically on the initial phase, and created road maps for necessary action for most rapid establishment of LNG bunkering in shortlisted ports. An accelerated approach can open up LNG bunkering in Australia by 2016.”

Similar to a pioneering study launched in Singapore in 2010, the Australian Joint Industry Project (JIP) investigated the possibility and viability of adopting LNG as a shipping fuel in local waters.

DNV said the use of LNG as a marine fuel will help eliminate sulphur oxide (SOx) and particulate matter emissions, nets a 15% reduction in greenhouse gas emissions (GHG) emissions and diminishes that of nitrogen oxide (NOx) by 85-90%.