Ammonia and methanol projects advance: WinGD’s Galke

The commercial maritime market is continuing to be affected by global events, which has affected the container market in a very different way to more price-sensitive segments, where newbuilding orders have remained slower to recover since the Covid-19-driven downturn.

This roller coaster market has seen the container market benefit from high freight rates and tight supply, which in turn has encouraged a spate of newbuilding orders.

Just as importantly, the LNG carrier segment, where the company’s X-DF engine retains a leading position, has seen an upturn in new orders.

“Although the spot price for LNG has obviously been affected by outside events, we are continuing to see more and more LNG projects coming on stream, with Qatar’s North Slope expansion among them.” Galke noted that as more and more consumer markets, particularly in Asia, begin to install LNG import capacity, this will obviously create more demand for seaborne capacity going forward.

Looking further ahead, Galke was bullish about the emergence of new markets, ranging from the transportation of ammonia, as a convenient vector for transporting hydrogen, through to methanol.

“With the amount of money being invested in ammonia production facilities, we can expect the global trade in ammonia to increase in significance over the next 5-7 years.”

The growth in the underlying ammonia market would inevitably create demand for larger carriers, Galke noted. The emergence of ammonia carriers, or potentially combination ammonia and chemical product carriers, was likely to be the first segment where WinGD’s new ammonia-fuelled engines were likely to be specified. “There are concrete projects in this area,” Galke said.

By contrast, Galke noted that a lot of the demand for methanol was being driven by the container segment, where large-bore engines with high MW capacities would create demand. By contrast, interest from the tanker and bulker segments remains limited for methanol, despite a few projects.

Methanol might also find a place for larger shipowners seeking to extend the operational life of existing assets, as the retrofit costs were likely to be significantly lower than ammonia, for example.

Looking beyond the company’s alternative fuels solutions, Galke noted that the company was continuing to expand its range of decarbonisation solutions. WinGD signed agreements expanding the penetration of its battery-hybrid solutions among Japanese pure car and truck carrier (PCTC) owners and operators during SMM.

Galke noted that decisions to be taken at the International Maritime Organization level next year will play a major role in shaping the market. A lot of the investment decisions until now have been dominated by early adopters, while many smaller owners were continuing to adopt a ‘wait-and-see’ attitude.

Although Galke expressed a preference for market-led solutions, greater regulatory clarity will help many customers with their plans for the coming decade. It will also likely change market conditions for existing solutions that have not been economical for customers until now.

“As soon as you put a price tag on the CO2 or particulate matter emissions, we’ll definitely see a change.” The proposed introduction of tighter regulations around PM emissions is likely to benefit WinGD’s portfolio, Galke noted, given the superior particulate matter emissions profile of Otto Cycle engines.