LNG power ship becomes a new gas industry

“Under the current policy expectations, we believe that the next 1-2 years will be the stable growth period of the LNG power boat market, and it is expected to enter the outbreak period after 3-5 years. Compared with LNG power vehicles, the market size of the ship is larger and the potential is greater. Also higher, we are also actively deploying to seize the opportunities.” A senior manager of the investment banking department, which specializes in domestic clean energy industry investment companies, said excitedly.

According to the China Securities Journal reporter, the policy bottlenecks restricting the development of the LNG powerboat market in the past are expected to be broken this year. In particular, the technical standards for LNG powerboats will be introduced in the second half of the year, and the Ministry of Communications has included LNG powerboats in its energy conservation and emission reduction. The scope of the fund's subsidies can reach 200 million yuan per year.

Market participants expect that the gradual opening of the policy door will promote the rapid development of the LNG powerboat industry. It is conservatively estimated that the market will be as high as 30-60 billion yuan. If new ships are built, the market space is expected to reach hundreds of billions of yuan. This will undoubtedly create a huge increase in the LNG industry cake. The listed companies in shipbuilding, engine manufacturing, filling stations, storage and transportation equipment, etc. are expected to take this huge wheel and swim further in the blue ocean of the LNG industry.

Policy door is opening

“We conducted a questionnaire survey, and 70% of shipowners believe that if the government does not subsidize the conversion, it will continue to use diesel engines; 14% of shipowners believe that the new LNG-diesel dual fuel will be used directly regardless of whether the government has subsidies. Engines; only 16% of shipowners believe that existing diesel engines continue to be used regardless of whether the government has subsidies. That is, if the government can provide certain subsidies for LNG powerboats, more than 70% of ship owners will choose LNG fuels. Engine." Gao Huijun, deputy chief engineer of the Institute of Water Transport Science, Ministry of Transport, said.

The LNG power boat is a ship powered by liquefied natural gas (LNG) with full power and hybrid power. According to the Norwegian Classification Society, as of June 2013, there were 40 LNG full-powered ships and nearly 40 LNG and diesel dual-hybrid ships in operation, and another 35 LNG full-powered ships were newly built. The agency expects that the number of LNG fully powered ships operating globally will rise to 63 in 2014 and to 1,000 in 2020.

China's LNG power boat market started late and is mainly based on retrofitting ships. According to statistics from the Institute of Water Transport Science of the Ministry of Communications, there are currently 14 LNG-powered vessels that have been approved and approved in China, and hybrid power is commonly used.

"In the past, the reason why LNG powerboats did not develop well was that the policy level was not paid enough attention and the industry technical standards were lacking. Due to concerns about safety and other issues, the regulatory authorities have been slow to let go of the door. Today, LNG power vehicles have developed. Nearly 100,000 vehicles, there are very few LNG powerboats." An industry person sighed at the China Securities Journal reporter.

However, this policy dilemma is gradually being eliminated. In September 2011, the Ministry of Transport issued the “Twelfth Five-Year Plan for the Implementation of Energy Saving and Emission Reduction in Water Transportation”, and proposed “pilot application of inland diesel and LNG hybrid ship technology”. A year later, the Ministry issued the "Guiding Opinions on Port Energy Conservation and Emission Reduction Work", clearly stimulating "encourage and support the pilot use of LNG clean energy to drive ports for ships, port vehicles and other mobile machinery", and "starting LNG power Research on related technologies such as ship docking plan and terminal layout plan."

Research work on relevant standards for LNG powerboats is also in full swing. It is understood that the Ministry of Communications is carrying out "LNG filling station design specifications research", the National Energy Administration and the Maritime Bureau are carrying out "LNG fuel power ship application safety research", the Ministry of Industry and Information Technology will also carry out "LNG gas supply system application development technology research this year" ", "LNG fuel-powered ship type risk design technology research" and so on.

In terms of subsidies, the Ministry of Finance proposed in the “Notice on the Policy on Saving Energy and Using New Energy Vehicles, Vessels and Vessels Taxes” in 2012, starting from January 1, 2012, the vehicle and vessel for energy conservation will be halved and the vehicle and vessel tax will be halved. New energy vehicles and ships are "exempt from vehicle tax." According to Gao Huijun, the Ministry of Communications’ special fund for energy conservation and emission reduction of 1.5 billion yuan has included LNG power vessels in the scope of financial support. In the future, enterprises will declare themselves, and there may be a subsidy of 200 million yuan per year.

According to the China Securities Journal reporter, the draft of the Ministry of Transport's "Guiding Opinions on Accelerating the Application of LNG Fuel in the Water Operation Industry" has been discussed many times and is expected to be introduced this year. The long-awaited "LNG power ship standard" will also be introduced in the second half of this year. The technical standards for the transformation of LNG power ships and the construction of gas stations will be followed.

Ten billion market to be opened

In the past three years, with the support of government departments such as the Maritime Safety Administration of the Ministry of Communications, China has carried out pilot work on LNG power vessels in some river basins. Gao Huijun told the China Securities Journal reporter that according to the standard of “ships with a minimum age of 7 years and good technical conditions” as required by the pilot, about 30,000 vessels in China’s domestic rivers meet the transformation conditions.

According to Tang Limin, a professor at the School of Transportation and Management of Dalian Maritime University, the technology of LNG power ship reconstruction is different, and the cost is different. It varies according to the tonnage, age and driving range of the ship. The industry believes that the minimum cost can be between 1 million and 2 million yuan. According to the above transformation plan, the market space for the transformation of China's LNG power vessels will reach at least 30-60 billion yuan in the next few years.

On this basis, the new market for LNG powerboats will also become a future increase. The Institute of Water Transport Sciences of the Ministry of Communications estimates that China will build a total of 1.2-1.4 million new inland vessels from 2017 to 2020. If 70% of them use LNG fuel as power, there will be about 10,000 new LNG powerboats. In addition, about 300-400 of the new coastal vessels in 2020 are expected to use LNG fuel.

"The life of the ship is longer than the length of the car, the amount of refueling is large, and the investment cost of new construction and transformation is higher. Once the market space is opened, the scale is considerable." An analyst of UBS Securities pointed out to the China Securities Journal reporter that if the future Policy-level constraints can be opened, and the LNG powerboat market is expected to usher in a period of rapid growth.

"Under the current policy process, we expect that the next 1-2 years will be a stable growth period for the LNG power boat market, and will enter the outbreak period after 3-5 years. Compared with the car, the ship has a larger market and greater potential. At that time, shipowners, engine manufacturers, gas stations, and technical service providers will all benefit." A senior manager of the investment banking department, which focuses on the domestic clean energy industry, predicts.

The industry believes that the opening of the LNG power boat market will inject a huge increase in the LNG industry chain cake, and the performance growth of related listed companies will also gain momentum: First, the ship owner is the general contractor, involving companies including Kunlun Energy, CNOOC, and Guang Huizhou Energy, Xinao Energy, etc.; second, the vessel engine reformer, the main listed company has *ST Ji Chai (the only professional diesel engine manufacturer of PetroChina, which is currently the main market force for the engine transformation of the vessel) and Weichai Heavy Machinery (belonging to 潍Chai Holding Group has made breakthroughs in the field of land gas engines and is about to enter the marine gas engine market. Third, it is a supplier of marine LNG cylinders, mainly involving the company CIMC Enric (including its subsidiary). Furuite installed, related concept companies also have Beiren shares, Lanke high-tech, etc.; Fourth, the construction of the filling station, mainly including Furui Te, Jerry shares.

Natural gas price hikes

The policy is tilted, the market is clear... Under the impetus of many favorable factors, the problems of natural gas price increase and gas station construction are on the other hand, which is bound to the LNG power boat market.

“Like the LNG car, our biggest concern about the LNG ship market now is the gas price issue. Once the gas price has risen to a certain extent, the LNG car and the ship are not economical.” CIMC Enric subsidiary Nantong An engineer of the Tank Storage Equipment Manufacturing Co., Ltd. admitted to the China Securities Journal.

Taking the LNG power car as an example, according to Yao Mingde, the former director of the General Office of the Ministry of Transport and the honorary president of the China Road Transportation Association, the current price of gas and fuel for vehicles is about 60%. According to the current engine technology level, 1-1.55 cubic meters of natural gas is required to replace 1 liter of gasoline, and 1.15-1.3 cubic meters of natural gas is required to replace 1 liter of diesel. According to this calculation, if the price ratio of the two increases to 75% or more, in addition to taxis, the promotion and application of LNG vehicles will slow down or even stagnate due to the loss of economic power.

The industry believes that although the LNG power boat does not currently have relevant data, the threat of natural gas price increases on its economy also exists. However, some people believe that due to environmental factors and other factors, China's "oil and gas price ratio" should be controlled within a certain range to ensure the development of the natural gas industry.

In addition, the imperfect construction of infrastructure such as gas stations is also a factor restricting the LNG power boat. According to the person in charge of Jiangsu Blue Power Ship Co., Ltd., because the LNG filling station for ships must be built on the canal channel to facilitate the berthing of the ship, the above land is owned by the state-owned land and cannot be commercialized. The model purchased land on the shore, and most of the LNG refueling stations that were reported to be built were not approved by the land issue, which affected the progress of the LNG ship reconstruction.

In Gao Huijun's view, China's development of LNG power vessels mainly has five obstacles: First, the lack of safety technical specifications, the relevant standards have not yet been introduced; Second, the current inland river vessels are undergoing renovation, more self-employed operators, less funds; It is the sluggish shipping market, the production of gas tanks is not large-scale, and the cost of reforming hundreds of thousands is high. Fourth, ship owners generally hold a wait-and-see attitude and look forward to the introduction of relevant policies. Fifth, the supporting facilities such as gas stations are not perfect, and the standards are not , affecting the process.

"In order to promote the application of LNG fuel, some countries in northern Europe have adopted measures such as tax reduction and capital subsidies for the construction of LNG filling stations and construction of new ships. China should introduce relevant economic incentive policies to guide its development." Gao Huijun suggested that As soon as possible, formulate incentive policies to encourage the application of LNG in the water industry, accelerate the improvement of relevant standards and norms, study and develop relevant technical regulations and operational guidelines, and also strengthen the research of basic and complete sets of key technologies.

Author: Wang Jun