OREANDA-NEWS. Use of LNG for bunkering continues to make inroads in North America as a viable marine fuel option. Marine gasoil (MGO) prices declined 66pc from June 2014 to February 2016 and presented challenges to LNG for bunkering supply projects in the North American Emission Control Area (ECA).But a per-tonne discount for LNG remains intact.

The LNG for bunkering discount to MGO in the US Gulf narrowed to from about $363/t in February 2014 to about $108/t in February 2015. But uncertainty around the future price of both natural gas and oil has left in place a viable hedging strategy for shipowners who are looking to make the investment in dual-fuel engines that are able to burn either MGO or LNG.

The North American ECA includes the territorial waters of US and Canada where vessels are required to burn 0.1pc sulphur marine fuel. To meet this sulphur limit, shipowners burn MGO, instead of heavy fuel oil.

There are currently five LNG-fueled vessels in North America, including two Totem Ocean Trailer Express (Tote) containerships traveling from Jacksonville, Florida to San Juan, Puerto Rico; two Harvey Gulf offshore supply vessels (OSVs) operating in the US Gulf; and one Societe des Traversiers du Quebec (STQ) ferry operating in Quebec.

Twelve more LNG-fueled vessels are in the delivery pipeline through the end of the year – Harvey Gulf is retrofitting two containerships as well as adding four more OSVs; WesPac Midstream is getting an LNG bunkering barge; STQ is adding two more ferries; Seaspan Ferries Corporation is getting two ferries; and Groupe Desgagn?s is getting of two ice-class tankers.

In addition Crowley, which has two LNG conversion-ready product tankers, will take delivery of two more this year. American Petroleum Tankers took one LNG conversion-ready tanker in 2015. The vessels have the ability to accommodate the future installation of LNG fuel gas system.

Argus is introducing a weekly LNG for bunkering projects table in the Argus Marine Fuels report.