In our cover story in the upcoming April issue of WorkBoat, “Gassed Up,” I describe the newest innovation in offshore service vessels — the use of liquefied natural gas as bunker fuel. The Feb. 25 delivery of the Harvey Energy, a 310’ OSV, was the result of a three-year effort on the part of the owner, designers and builders to meet the myriad challenges this leap in technology presents.
Given the significant advantages of LNG as a vessel fuel and its growing acceptance among European ferry operators, Harvey Gulf International Marine’s brave leap may have been foreseeable. However, the company and its contractors, including the designer Vard Marine Group and the builder Gulf Coast Shipyard Group (GCSG), knew that they were facing a long and arduous path to certification and regulatory compliance. The fact that they did it, and brought this exceptional vessel to market, shows what American ingenuity can do with the cooperation and assistance of bodies like the American Bureau of Shipping and U.S. Coast Guard.
In fact, an article by our Washington correspondent Pamela Glass recounts the issues surrounding LNG as a bunker fuel aired at a recent Brookings Institution seminar. The conclusions reached at the seminar were that although LNG is quickly expanding as a commodity and will soon see increasing acceptance as a bunker fuel, its physical characteristics would limit its usefulness for smaller, inland vessels. This reflects the opinions of the people I interviewed for the Harvey Energy article. Pam also reports that the experts at the seminar agreed that the “Gulf of Mexico is considered to be the key area for growth, especially for LNG bunkering.”
This optimism is surely bolstered by the groundswell of interest the Harvey Energy has generated. It has already resulted in inquiries to GCSG for more LNG newbuilds, including two from towboat operators and two from other OSV companies. “It’s very preliminary,” John Dane III, the CEO of GCSG, admitted,“ but these are serious companies and their interest is serious. Some types of vessels, like tugs, aren’t suitable under current regulations that prohibit LNG tanks under accommodations. But with large towboats and OSVs, this isn’t a problem.”
Serious challenges to widespread acceptance of LNG as bunker fuel do remain. The financial markets’ reaction brought a Feb. 10, 2015, downgrade of Harvey Gulf’s rating by Moody’s Investors Service from B1 to B2 due to “the weakening market for offshore supply vessels in the Gulf of Mexico and the company’s significant capital commitments for vessels under construction.”
But those who boldly go where other fear to tread are not easily deterred: Harvey Gulf remains committed to all six of the dual-fuel vessels planned for the Harvey Energy-class, and its confidence may well be rewarded. Only six days after the Harvey Energy was delivered to Harvey Gulf, she went on charter to Shell Oil for its deepwater Gulf of Mexico operations.