Eastern Pacific Shipping-controlled Cool Company (CoolCo) is to pay out $50m to retrofit five of its LNG carriers with reliquefaction units.
CoolCo said it signed contracts for the work, valued at about $10m per vessel, with HD Hyundai Group subsidiary HD Hyundai Global Service on 6 June.
The company did not name the ships involved but has previously spoken about $15m upgrades planned for five tri-fuel diesel-electric vessels or what the company is dubbing “LNGe” ships during dry-dockings scheduled for the period from the third quarter of 2024 to mid-2025.
CoolCo explained that the units or sub-coolers to be installed re-liquefy the cargo boil-off gas (BOG) generated during the operation of LNG cargo tanks, either returning the gas to the cargo tank or preventing natural evaporation using sub-cooled LNG.
The BOG is consumed as fuel by the engine when the ship is in operation. But during periods of reduced vessel speed, port stays, or while the ship is being used for floating storage, on a vessel without a reliquefaction unit the BOG needs to be forcibly burned, which results in the loss of LNG cargo and the emission of greenhouse gases, leading to environmental pollution.
The company said using a reliquefaction unit is known to be effective TFDE or two-stroke dual-fuel LNG carriers.
It also highlighted a correction item was adopted at the International Maritime Organization’s 78th Marine Environment Protection Committee meeting in 2022 which allows for a deduction of the fuel consumption equivalent to the amount of power used in cargo reliquefaction equipment when calculating an LNG carrier’s Carbon Intensity Indicator.
CoolCo chief executive Richard Tyrrell described the retrofits as a “central component” in the company's LNGe conversion process.
“These reliquefaction units will provide our charterers with valuable flexibility when it comes to managing the seasonal fluctuations in LNG demand, in particular by supporting efficient travel at lower speeds, idling and floating storage applications,” Tyrrell said.
“In addition, these retrofits will enhance the long-term value and competitiveness and reduce the environmental footprint of what will become our LNGe vessels.”
The company added: “CoolCo intends to leverage its industry relationships to make further accretive acquisitions of in-service LNG carriers, and to selectively pursue newbuild opportunities. The retrofit of the sub-cooling units is an important step towards achieving CoolCo’s ESG goals.”
HD Hyundai Global Service plans to fit reliquefaction units supplied by France’s Air Liquide.
The Hyundai Group company said it is currently receiving enquiries from customers for additional reliquefaction unit retrofit work similar to that being performed for CoolCo.
HD Hyundai Global Service chief executive Ki-dong Lee said: “We will contribute to the optimised response to global warming in the energy transportation sector through various ship energy-saving device retrofits, including the retrofit of the reliquefaction unit.”
