LH2, LCO2, WTIV and other Evolutionary New Vessel Designs
Transporting cargo in bulk by sea dates back to antiquity to the days of the Phoenicians in the Late Bronze Age (ca 1200 BC), with vessel designs evolving ever since to accommodate different types of cargoes and trades. At the age of sail, the dry-bulk vessel design culminated to the tea clipper vessels of the 19th century and their legendary seventy-day “fast sailing” from Australia to England.
The age of steam brought evolutionary changes to vessel design by the end of the 19th century, while the discovery of crude oil and the energy needs and trading volumes of the industrial age necessitated the development of new types of vessels. Conceptually, there have been three types of commercial vessels for the transport of cargoes in the last several decades: tanker vessels for liquid cargoes in bulk, dry-bulk vessels for dry cargoes in bulk (“bulkers” as dry-bulk vessels are colloquially referred to) and containership vessels (“boxships”, another colloquial shipping term) for containerized cargo. Of course, there have been several more types of vessels all along including liner passenger vessels, ferries and cruisehips, car carrier vessels (“PCC” for Pure Car Carrier vessels), cement carriers, heavy-lift vessels, and so on, but also fishing vessels and offshore vessels to serve niche markets and trades.
In each asset class of vessels, there are usually variations on the theme with each type of vessel (i.e., wood chip carriers in the bulker market for the transport of puffy wood products and biomass, single-decker and “general cargo” vessels (with one cargo hold), stainless steel tankers for the transport of industrial liquid chemicals, and freezer (“reefer”) vessels for transport of refrigerated containerized cargo). There also have been “cross-over” vessels that combine commercial features from more than one asset class of vessels—who remembers the “OBO vessels” from two decades ago that could switch from dry-bulk to tankers depending on market conditions (named after Ore-Bulk-Oil as their primary cargoes), and the “Con-bulk” vessels with both dry-bulk cargo holds and also cell drivers for loading containers onboard. Other notable examples of asset class cross-over designs have been “Ro-Pax” vessels (combination of vessel with ramps for cargo that could be rolled on and off the vessel (via trailers and trucks) and passenger / ferry vessel (“Pax” stands for “Passenger”), “Ro-Lo” vessels (cargo could be rolled onto the vessel and unloaded at the destination port by cranes (“Ro” standing for “roll on” and “Lo” for lift off of the cargo).
In the last decade, partly due to greater technological developments and new regulatory requirements, and partly due to industrial (or post-industrial) progress, there have been evolutionary steps with vessel designs, which steps having focused primarily on making ships more efficient and less polluting. However, and more indicative of the where the world and industrial production may be heading in the future, there have been brand-new vessel designs for vessels to carry new cargoes (cargoes that were not shipped by sea in the past) or engage in industrial and commercial activity that did not exist in the past. A whole new list of concepts, shipping terms and trading practices are getting established daily, that require familiarization in order for one to be able to keep up with the discussion, but, and most critically, to be able to commercially participate in future business activities. The challenge of keeping up with developments is even more critical for service providers such as marine appraisers and marine surveyors, such as our firm, in order to be able to keep their clients informed with accurate information.
Three of the new types of vessels that seem most exciting:
Liquefied Hydrogen Carrier Vessel (LH2)
Hydrogen is the most abundant chemical element in the universe and its industrial importance has been known to humans for a while, whether empirically or scientifically. On earth, hydrogen is chemically bonded with oxygen to form water or with carbon to form hydrocarbons in fossil fuels. What makes hydrogen industrially interesting in today’s world, whereby the 1.5°C global warming target is imperative, is that hydrogen could be “burned” (that is react with oxygen in the air) to produce clean, zero emissions energy. Hydrogen can be produced by the hydrolysis of water, the pyrolysis of methane (found in natural gas) and by steam reforming of coal, in all cases breaking down the compound molecules to release hydrogen. All of these methods are zero emissions reactions, but their economical and commercial potential only recently is becoming viable. In such respect, clean hydrogen can be burned on demand to produce clean electricity with zero emissions. In other words, hydrogen can be used as energy storage (sort of a battery), whereby hydrogen is produced and shipped close to consumption locations to produce clean energy. One case under serious consideration is in Scotland whereby offshore wind farms far away from shore can utilize wind power to break down seawater to produce hydrogen (“green hydrogen”) and oxygen (in a zero emissions reaction) with the hydrogen then to be shipped to shore to generate zero emissions electricity. As offshore wind technology improves and offshore wind farms can now be completely afloat (with no need to be tethered to the seabed), one can only imagine the potential of hydrogen production and consumption, and therefore the need for its seaway transport on a commercial scale.
Hydrogen, having a boiling point of −252.9 °C (−423.2 °F), requires chilling in order to be compressed and be transported competitively as a liquid by ship. But again, Liquified Natural Gas (LNG) tankers enjoy wide commercial application these days by chilling natural gas to −163 °C in order to liquify the cargo to be shipped as liquid, thus the technology and the expertise is generally available for building such technologies and transport practices.
In December 2020, Kawasaki Heavy Industries (KHI) in Japan delivered the first Liquefied Hydrogen Carrier (LH2) vessel in the world, with just 1,300 cubic meter (cbm) cargo capacity in order to transport hydrogen produced from brown coal in Australia to Japan for consumption under a long contract. This coal-to-hydrogen project has a commitment of $360 mil including the backing of the Australian and Japanese governments and the involvement of several blue-chip companies, driven the Hydrogen Energy Supply Chain (HESC) venture. Admittedly, the 1,300 cbm size of this LH2 carrier seems lilliputian at present, but let’s not forget that LNG tankers also started small and eventually scaled to appr. 180,000 cbm size nowadays.
Liquefied Carbon Dioxide Carrier Vessel (LCO2)
Carbon dioxide (CO2) is produced each time molecules containing carbon react with oxygen in the atmosphere. Living organisms too produce carbon dioxide from breathing, but really the burning of fossil fuels in the last decades is the cause for the CO2 atmospheric content reaching life threatening levels by absorbing infrared radiation and global warming. Carbon dioxide has enjoyed many commercial uses (i.e., in the food industry, as refrigerant, fire extinguishers, etc.) and it has been known to be shipped by several modes, including by ship; however, all such applications were of limited scale.
One of the ways addressing the 1.5 °C global warming target is by capturing and storing carbon dioxide at the time of its production (i.e., at the exhaust of industrial plants, refineries, etc.) and storing it, generally in underground caves (geological storage). The oil drilling industry has been pumping down in the earth’s crust carbon dioxide as part of the drilling process (to keep pressure high in the oil well in order to facilitate oil extraction, (Enhanced Oil Recovery (EOR)), but now we are talking of undertaking Carbon Capture and Storage (CCS) and also Carbon Capture Utilization and Storage (CCUS) on an industrial scale, whereby each plant would be fitted with a carbon dioxide capture mechanism and then have it stored underground. Not only large industrial plants need to be fitted with a carbon capture mechanism, but also smaller carbon oxide producing facilities and even large industrial machinery (among them, ships could be fitted with such a mechanism, which would address the emissions conundrum facing the shipping industry). And, besides capturing carbon dioxide at production, there is carbon dioxide in the atmosphere to be captured (via Direct Air Capture (DAC) technologies) and stored (via Carbon Dioxide Removal (CDR)), and there have been current significant technological developments on this front to make the process commercially viable.
Obviously, the scale of CCS / CCUS is monumental, and big money can be made, by doing good none the less. If industrial plants have to dispose of its carbon dioxide economic externality responsibly (the same way they are obligated to do with their waste-water, residues, etc.), the potential is obvious. By some estimates, several billions of tons of CO2 have to be removed from the atmosphere each year in order for the 1.5 °C global warming target to be met.
And, once again, transport of CO2 will be required on a massive scale, as carbon storage facilities cannot be built at will everywhere.
CO2, as any gas can be shipped pressurized (there are, after all, Pressurized Liquefied Petroleum Gas (LPG) and Compressed Natural Gas Carrier (CNG) vessels), but pressurized ships get too heavy quickly (bearing thick cargo tank walls to sustain high pressures) in order to get big in size and provide for economies of scale. Thus, enter the liquefaction process whereby gases get chilled below their boiling point in order to become liquid and occupy a fraction of their gaseous space (for instance, LNG as liquid takes 1/800th of its gaseous space). Carbon dioxide has a boiling point of −78.5°C (−109 °F), much higher than liquefied hydrogen or natural gas, and thus the economics of CO2 liquefaction are more favorable.
There are four (4) dedicated LCO2 tankers in the world at present, ranging in size from 1,200 – 1,800 cbm; three of them are semi-refrigerated (i.e., use partially both pressure and low temperatures to compress the CO2 cargo) and only one vessel is fully refrigerated. There are presently three more LCO2 vessels under order, of appr. 7,500 cbm each, whereby reference names are involved (i.e., Equinor, Total Energies, Shell) and expected deliveries in 2023 - 2024. More importantly, earlier this year, the classification society ABS has issued an Approval in Principle (AIP) to S. Korea’s Samsung Heavy Industries (SHI) for a 20,000 cbm liquefied CO2 design and a Very Large LCO2 (VLCO2) design of 70,000 cbm to S. Korea’s Daewoo Shipbuilding and Marine Engineering (DSME). For comparison, very large gas carrier vessels for LPG (VLGCs) have only recently reached the 82,000 cbm cargo capacity mark, while a VLCO2 design took a very short time.
Wind Turbine Installation Vessels (WTIV)
Shifting to equally exciting new naval concepts, offshore wind farms near to shore require that the wind turbines are fixed to the seabed for stability. The vessel that actually does the “installation” of the monopile is the mother of all offshore wind vessels, the Wind Turbine Installation Vessel (WTIV), that effectively grabs the monopile from a platform, positions it accurately and precisely and drives it to the seabed. So far, so simple! The WTIV has to be able to operate around the clock even in bad weather, and thus a high level of dynamic positioning is required (with azimuthing propellers to achieve usually DP2/DP3 status), with heavy-lift crane(s) with Active Heave Compensation (ACH) feature and also Leg Encircling Crane (LEC) designed to function by operating around the leg of the platform/deck, instead of working from a free-standing pedestal allowing the crane to rotate 360° to lift pylons of more than 3,000 tons, several thousands of square feet of free deck space, and all the accoutrements of a vessel operating offshore for extensive periods of time (thus, having helipad, extensive hotel accommodations for a large crew, etc.), and, by the way, since such a vessel is intended active in the “green energy” business, preferentially it has to be fueled with clean fuels such an LNG, hydrogen or even battery / hybrid power (generally, for time being, WTIVs are delivered from the shipbuilder suitable for dual fuel). There are variations in the design of WTIV vessels (some have jack-up legs instead of heavy-duty dynamic positioning, some may have two cranes instead of one, some may be more configured as Wind Foundation Installation vessels (WFIV), higher capacities as Transportation & Installation (T&I) functionality, etc.) Newbuilding prices stand at appr. $350 mil at S. Korean shipyards for such complicated vessels, not a small amount of money given that historically a supertanker (VLCC) cost less than $100 mil to build new. There is presently one WTIV, high specification vessel (GustoMSC NG-16000X-SJ WTIV) under construction in the U.S. (Jones Act qualified) with a $600+ mil contract price (with a 2,600 T LEC main crane, accommodations for 125 personnel and ready to use hydrogen as fuel) while a tentative order for a second similar vessel has recently been cancelled.
And, just like in the offshore drilling market whereby a semi-submersible / MODU (Mobile Offshore Drilling Unit / drillship depends on a cluster of support vessels to operate, WTIV vessels and the offshore wind market require a whole new group of vessels to function, such Crew Transfer Vessels (CTVs), Windfarm Support Offshore Vessels (SOVs) and Construction / Support Offshore Vessel (CSOVs), and occasionally Remotely Operated Vessels (ROVs), Remotely Operated Underwater Vehicle Systems (to prepare the seabed) and also Cable Laying Vessels. And, with these new types of vessels, a whole new list of terms and manufacturers are introduced, from X-Bow and X-Stern type of vessels (to minimize a vessel’s wind resistance in the open seas), to Walk-to-Work (W2W) gangways (Uptime, etc.) and adjustable pedestals in order to reach Transition Pieces (TP) of any height of the offshore wind turbines, etc. Many have wondered whether conventional offshore (drilling) vessels could be re-purposed for the Offshore Wind Market (OSW) market, but based on the terminology so far introduced herein, offshore wind and offshore drilling are distant cousins… However, a couple of large liftboats from the U.S. Gulf have found their way to the East Coast (to prepare the foundations for the monopiles) and a couple of conventional Platform Supply Vessels (PSVs) found work in the initial phase of data collection and research in the Planning & Analysis and also for the Site Assessment phases for securing BOEM (Bureau of Ocean Energy Management) permitting.
Are we living in a new world for shipping? So many exciting developments and types of vessels and cargoes and operations, as if “blue ocean” business opportunities are arising on the horizon ahead…