Shipping firm CMA CGM chooses LNG to power new vessels

PARIS (Reuters) - Container shipping giant CMA CGM [CMACG.UL] said on Tuesday that it would use liquefied natural gas (LNG) to power nine extra-large vessels it has ordered, in a first for an industry grappling with how to comply with tougher rules on emissions.

Shipping containers belonging to CMA-CGM shipping Company are seen stacked in the port of Marseille, France, March 14, 2016. REUTERS/Jean-Paul Pelissier/File Photo

LNG has been promoted as an alternative to bunker fuel oil for shipping lines facing a 2020 deadline to meet new international standards on sulfur emissions.

CMA CGM had announced in September an order for nine vessels that would be among the largest container ships ever built, but it said it was still studying what fuel to adopt.

“CMA CGM is becoming the first shipping company in the world to equip giant container ships with this type of motorisation,” the French-based company said in a statement.

“By choosing LNG, the CMA CGM Group goes beyond current and future regulations that limit the sulfur cap to 0.5 percent (content in fuel) in 2020.”

The new rules will reduce the maximum sulfur content in fuels from 3.5 percent currently.

Compared to heavy fuel oil, LNG would allow ships to reduce sulfur emissions by 99 percent, carbon dioxide emissions by 25 percent and the overall environmental footprint by 20 percent, CMA CGM said.

The group had said previously it would have to consider the need to develop an LNG supply chain in its choice of fuel for the future giant ships.

CMA CGM has in the past year signed agreements with French energy firms Engie and Total to develop LNG supplies for shipping.

Its memorandum of understanding with Total called on the oil and gas producer to become a multi-fuel supplier to CMA CGM, providing LNG as well as fuel oil with 0.5 percent sulfur content.

The shipping group, the world’s third-largest container line, also said in Tuesday’s statement that it was discussing with partners including ports how to create the necessary infrastructure for fuelling LNG-powered vessels.

Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta, Greg Mahlich