EU releases funds for LNG supply in ports

Genoa - Valenciaport Foundation’s study: “At least 73 LNG-powered ships by 2020”. European Commission contributes €33 million, also for projects in Genoa and La Spezia

di Alberto Quarati

Genoa - At the end of last month, the European Commission approved initial financing for infrastructure projects dedicated to liquefied natural gas (LNG) in Italian ports, to be completed by 2018. The funding consists of €20 million, half of the maximum allowed in the context of the GAINN4Mos European program, which involves the construction of seven LNG stations in the ports of Genoa, La Spezia, Livorno, Venice, as well as in Koper in Slovenia. In addition to this funding, there’s a further €13 million as part of another European program, GAINN4Core, aimed at creating a network of alternative fuels in various Italian ports: Genoa, La Spezia, Livorno, Ancona, Ravenna, Venice and Augusta all participate in this program.

To give a brief review of these initiatives, the GAINN program (RINA Services Ltd and the Ministry of Transport are at the forefront, in Italy), consists of a series of EU pilot projects that, in the case of Italy, aim to create LNG service stations and storage facilities in Italian ports. This drive seeks to facilitate Italy’s own implementation of laws, that in the framework of European Directive 94/2014, must be formulated by November 2016, and be in compliance with EU-wide norms regarding the creation of an LNG infrastructure network.

It is therefore necessary to create a network that is logical, does not duplicate existing infrastructure and integrates with the networks of other countries. The project is financed not only by the EU but also by investment banks and other investors. “In fact,” explained Diego Gavagnin, scientific coordinator of the LNG Conference, “while European funding is important, this cannot be solely relied on to develop an entire infrastructure, otherwise the whole process would be painfully slow. As far as the maritime sector goes, the trouble is that shipowners are reluctant to invest because of the lack of infrastructure, while on the ground there’s expectation regarding LNG ships that, for the moment, are non-existent in the Mediterranean Sea. It truly is the classic case of what should come first, the chicken or the egg.” These sort of European projects, however, seem to be gradually pushing industry to invest: in Spain, a project coordinated by ENAGAS (Core LNGAS Hive, with €16 million in funding) is developing bunkering stations in eight ports, and retrofitting eight ships. Even in Italy, some shipowners do believe in LNG, for both ships and shore facilities: Costa Cruises, as well as Novella and Matacena.

It is no coincidence that Wartsila, a manufacturer of marine engines, is starting to develop on shore storage facilities. Other shipowners while supporting this new initiative, believe it is still premature to start investing in LNG-powered ships. Such is the case of GNV, which just yesterday announced, through Secolo XIX/ TheMediTelegraph, its intention to place orders for new units in a couple of years time. According to forecasts made in a recent study coordinated by Eva Perez Garcia, director of Transportation and Economy at Valenciaport Foundation, by 2020 - the year in which limits of 0.5% sulphur content in emissions from ships in the Mediterranean kicks-in - in the worst case scenario there will be 73 LNG ships in operation. Even this modest outcome would signify that EU policies have at least been consistent.