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Higher cost, higher pressure, but lower Methane slip sees MAN’s ME-GI bounce back

2021 was a record year for LNG carrier new orders with 86 60,000+ CuM ships placed. This comfortably beats the previous record in 2014 when 64 ships were ordered (even if 10 ships announced by Qatar, but not confirmed by South Korean yards aren’t counted). A further 12 orders were placed in January 2022.

Business has been brisk due to a combination of owners looking to book yard capacity ahead of the Qatari newbuilding programme, robust demand from charterers for greener ships, and rising newbuilding prices prompting owners with options (agreed when prices were much lower) to declare them.

Recent orders have begun to focus increasingly on CO2 emissions reductions, through improved vessel efficiency features such as air lubrication systems, shaft generators, optimised hull designs, GHG emissions detection systems and improved engine configurations.
These features make the vessels more appealing to charterers given the increasing pressure exerted by buyers to reduce the carbon footprint of LNG supply chains. The superior environmental performance of these new designs also creates pressure on older steam turbine vessels and T/DFDE carriers either to pursue economically feasible retrofits, convert into FSRUs or FSUs, or be scrapped.

WinGD’s low-pressure X-DF units have been the engine of choice for newbuild LNG carriers for the last four years but 2021 saw MAN fight back with its new low-pressure ME-GA engines. It also saw a resurgence of popularity for its more expensive high-pressure ME-GI engines.

The new lease of life for the high-pressure ME-GI engine can be attributed to the focus on methane emissions during the year – and especially at COP26 – which has seen some owners prepared to pay the extra cost for the ME-GI engine, which has much lower methane slip than the low-pressure engines.

In November DSME won eight orders which specified a ME-GI (two for Maran Gas at $206.5 Mn each, two for BW Gas at $206.3 Mn each and four for GasLog at $210.2 Mn each). Maran Gas ordered a further two ships with ME-GI engines in January and announced a further two in early February.
Source: MSI

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