Wärtsilä rides the LNG wave
Finnish power supplier Wärtsilä announced yesterday that it had been awarded a contract for a further 30 50DF dual-fuel engines.The units will be used on five Arc 7 design ice-class LNG carriers under construction at the Daewoo Shipbuilding and Marine Engineering (DSME) yard in South Korea.
The order was placed with Wärtsilä’s joint venture company, Wärtsilä Hyundai Engine Co (WHEC), which will also build the engines in South Korea. The vessels will operate in Arctic conditions and will serve the Yamal LNG project in northern Russia.
Speaking to IHS Maritime, a Wärtsilä official declined to give the value of the contract, but stated, “This is one of the largest ever orders for dual-fuel engines for a single class of ship, though the Yamal order was split into tranches.”
Wärtsilä Ship Power vice-president Lars Anderson added, “Altogether, we’ve been contracted to supply 90 dual-fuel engines for 15 Arc 7 ice-class LNG carriers for the Yamal project. It’s a pleasure to co-operate with DSME and the vessel owners in meeting the demands of Arctic operations.”
Each of the carriers will be fitted with four 12-cylinder 50DF engines and two 9-cylinder 50DF engines that will primarily use LNG as fuel, but can also run on diesel. The vessels will need to handle ambient temperatures down to minus 50 degrees Celsius, and to break through ice up to 2m thick.
The official explained to IHS Maritime that: “This requires dramatic variations in engine load within a short time span. WHEC will take about nine to ten months to build the engines and the first ship will most probably be operational at the end of 2016 – the rest in 2017.”
The ships are crucial to the Yamal LNG project, which is worth about USD27 billion and will start operations in 2017 with the aim of producing 16.5M tonnes a year by 2021 for shipment to European, Asian and South American customers.
Controlled by Novatek, Russia’s largest independent natural gas producer, Yamal LNG has France’s Total and China’s CNPC as shareholders and has recently issued a prospectus for forthcoming closed subscription bond issues totalling USD4.6 billion.
In its regulatory filing, Yamal said, “It is expected that European LNG imports will increase to 107M tonnes in 2025 from 38M tonnes in 2013. By 2020 the global LNG shortage will reach 50M tonnes”.
Clearly banking on growing demand for LNG, Yamal has also secured state funds worth USD2.3 billion after it struggled to raise foreign financing due to Western sanctions imposed because of Russia’s role in the Ukraine crisis. Russia’s President Putin is firmly behind the LNG expansion programme, urging Russian companies to increase output and double their global market share from 4.5\% to 9\% by 2020.
Analysts generally see the Yamal investment as well timed, agreeing that global LNG demand will increase and is likely to take the market from its current surplus into a deficit – unless around 90M tonnes a year of new LNG export capacity is built by 2020.
source:ihsmaritime360.com
