Latest independent study confirms LNG delivers a strong return on investment for Capesize bulker on Australia to China trade route
Global multi-sector industry coalition SEA-LNG today announced the results of its latest independent investment study, which highlights the commercial benefits of LNG as a marine fuel for a newbuild 210K DWT Ore Carrier sailing from Australia to China.
The study illustrates strong returns on investment for LNG as a marine fuel on a Net Present Value (NPV) basis over a conservative 10-year horizon. The modelling analysis is bolstered by compelling payback periods of two to four years for the newbuild CAPESIZE on this major ore trade corridor.
Commenting on the study Peter Keller, Chairman, SEA-LNG, said: “The impressive results of this latest installment in our investment case series further underlines LNG’s position as a financially sound investment for deep-sea vessels, across a range of vessel specifications.
“Building up a robust foundation of leading knowledge, credible data, and proven understanding, is a core pillar of SEA-LNG’s mission to support shipowners and operators through the complex investment decision matrix they face in ensuring their vessels are compliant for both current and future legislation.
“All our studies prove LNG to be a safe, mature, and commercially viable marine fuel offering compelling returns on investment, superior local emissions performance, significant Greenhouse Gas reduction benefits, and a pragmatic pathway to a zero-emissions shipping industry.”
This study was designed to provide greater clarity for those investing in LNG as a marine fuel for large bulk vessels. The key findings from the study were:
- LNG delivers a superior return on investment on an NPV basis of several million dollars in comparison with conventional compliant fuels across all fuel scenarios investigated;
- LNG engine and fuel sytems investment is paid back within two to four years.
SEA-LNG commissioned the study as the fourth in a series of investment evaluations by simulation and analytics experts Opsiana. It follows studies covering a 14,000 TEU container vessel operating on the Asia-US West Coast liner route, a dual study examining an 8,000 CEU Pure Car and Truck Carrier (PCTC) on the Pacific and smaller 6,500 CEU on the Atlantic Trade Lanes, and a 300K DWT VLCC running Arabian Gulf to Asia.
To ensure the best possible data was available to Opsiana across the entire series of studies, SEA-LNG members contributed maritime expertise and timely background information to ensure a high level of creditability in the assumptions and results.
The investment returns were calculated within traditional frameworks without including the significant extra benefits and branding value gained by choosing LNG as a more environmentally friendly marine
fuel, which could be worth hundreds of millions of dollars across the global CAPESIZE fleet.
The full investment study, as well as the other studies in the series, can be accessed via the following link: //sea-lng.org/wp-content/uploads/2020/02/200224_SEALNG_Capesize_study_compressed.pdf