$84 Million for Tacoma-Anchorage Ships Under a USCG Waiver,
TOTE Says It Will Convert Some and Replace Other MAN Engines
Proclaiming the go-ahead for an historic, $84 million project, Totem Ocean Trailer Express has secured the U.S. Coast Guard waiver it needs to convert its two 839-foot, MAN-powered Orca-class vessels to mostly LNG operation, while they remain in service. The work sets key precedents, TOTE says, for liquefied natural gas for ocean-going vessels and for the infrastructure to fuel them – which will be available for other emerging LNG users.
“We see this as a game-changing event in the history of the U.S. maritime industry,” TOTE president John Parrott said in an excellent project summary quietly released last month.
TOTE will convert existing MAN 9L 58/64 engines to dual fuel diesel-LNG operation, the firm told F&F, and will install new dual fuel 9L 35/44 engines, replacing existing 9L 28/32s.
“I feel this project is on par with such times in our history as the S.S. Savannah, the first steamship to cross the Atlantic in 1819 and the invention of containerization, which changed the face of global shipping,” Parrott said.
“It will have benefits that reach far beyond our region.”
“Moving to a whole new fuel source is the best solution for domestic shipping.”
TOTE’s Orca-class ships, which entered service in 2003, operate regularly between Tacoma and Anchorage. Since 1975, the company says, it has carried more than 35% all goods consumed in Alaska each year. The higher price of low-sulfur fuels, mandated as of August 1, would have driven TOTE’s costs as much as 7% to 8% higher. Given a limited customer base for refiners, “It is unlikely that the [low-sulfur] fuel will be produced in sufficient quantities,” TOTE says.
“The fear of course is that TOTE could essentially be held captive to whatever price the supplier said,” marine and terminal operations VP Phil Morrell said in the July TOTE News summation. “This is a daunting future for our company and for domestic shipping as a whole.”
Enter LNG: “We have a conversion plan that will essentially overhaul the engines with no impacts to our service schedule,” Parrott said. “Most of the work will be done underway.”
The overall project will take five years with the ship retrofit portion costing some $84 million. It is “no small undertaking,” TOTE says, but “is the most attractive long-term solution.”
The engines for TOTE’s Orca-class Midnight Sun and North Star are supplied by Houston-based MAN Diesel & Turbo North America, an arm of Augsburg, Germany-based MAN, a 14,000-employee concern with locations in upwards of 100 countries.
TOTE’s regulatory go-ahead is a permit providing a conditional waiver from the current Emissions Control Area (ECA) fuel sulfur content requirements of MARPOL Annex VI regulation 14.4 while the company pursues conversion of its vessels to alternative fuels.
The permit was issued by the United States Coast Guard under authority provided in Regulation 3 of Annex VI, TOTE says, and is the product of a public-private partnership among TOTE, the U.S. EPA, and the Coast Guard. “This is the first permit issued under the Annex VI, Regulation 3 program, and it is tangible evidence that when committed organizations join together, innovative solutions can result,” TOTE VP Morrell said.
‘Breaking Through Supply Barriers’
TOTE reiterated that to its best knowledge, “This will be the first conversion in the world of vessels of this type.” TOTE’s two ships will exceed the sulfur reduction goals of ECA by 95%, “making these ships among the cleanest in the world.” TOTE says that the Midnight Sun and North Star are already among the world’s “greenest,” with practices including cold-ironing from the electrical grid when they are shore-side in Tacoma. “Converting to LNG will be the company’s greatest achievement to date,” TOTE said.
“More importantly, these broader benefits will continue to accrue and compound over the next thirty years or longer… Shore-side LNG infrastructure that is to accompany TOTE’s plan may help other transportation industries in Puget Sound follow TOTE in converting to LNG.”
TOTE said too that the project will “lead to the establishment of long-term supplies of LNG for use by other sectors of the transportation industry in the Puget Sound region.
“The project will extend environmental benefits throughout the region by breaking through supply barriers that have constrained the growth of LNG in the transportation industries.”
“We are very pleased that the EPA and Coast Guard share our vision for LNG use aboard our vessels, and were willing to work with us to make it a reality,” Parrott said. “I would like to particularly recognize the diligent and professional staff of the EPA and USCG for their hard work.”
TOTE has named Puget Sound Energy and Germany’s TGE Marine Gas Engineering as early bunkering partners.
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Source: TOTE publications with Fleets & Fuels research and interviews