Marine fuels provider Marquard & Bahls and technology company The Linde Group on Monday said that they will establish a joint venture in order to build an infrastructure for liquefied natural gas (LNG) in Europes maritime sector.
The deal is subject to the approval of the relevant antitrust authorities. The 50/50 venture company is due to start its operations in the latter part of 2012, officials said, with headquarters in Hamburg.
The venture will set out to establish an LNG supply chain and to provide reliable, safe and environmentally-friendly fuel to ship owners and operators, the companies said.
Linde will contribute its experience in cryogenics and engineering know-how, while Marquard & Bahls subsidiary Bomin will support with a strong track record in maritime bunker fuel trading and operations, according to officials with the joint venture.
The new company will establish operations in several key ports throughout emission control areas (ECAs) in Northwest Europe.
Vessel emissions in ECAs will have to be reduced further on January 1, 2015, forcing ship owners to drastically cut their sulfur emissions.
In particular compared to conventional heavy fuel oil, LNG offers close to 100% reduction of emissions in sulfur and particulate matter, an 80-to-85% reduction of nitrogen oxides (NOx) and 20-to-25% less CO2 emissions, project officials said.
The use of LNG as a solution for meeting the increasing regulations requires a network of LNG storage facilities to be set up for the bunkering of vessels in main European harbours.
With the new joint venture company, we want to offer LNG to ship owners as an alternative energy source with a lower environmental impact than traditional bunker fuels, said Dr. Claus-Georg Nette, executive board member for Marquard & Bahls.
A readily available and cost-effective LNG infrastructure is key to the development of LNG as a maritime fuel, added Professor Dr. Aldo Belloni, executive board member for Linde.
"This new joint venture underpins our LNG strategy, already visible in our recent opening of the LNG terminal in Stockholm harbour and our study for the introduction of LNG with the Hamburg Port Authority.
Earlier this year, Linde noted that it won the LNG delivery contract for the natural gas-powered "Viking Grace" ferry - the first of its kind - from the Finland-based Viking Line.
Global demand for LNG is expected to increase by more than 10%/year, Linde said, making it the fastest growing energy product in the world.
In 2015, some 70 vessels are expected to run on LNG in the Nordic region. According to a study by the Danish Maritime Authority, the consumption potential of LNG is estimated to reach approximately 4 million tons by 2020.