HighlightsLNG-fueled vessels enable fuel cost savings even at unfavorable LNG prices.Fuel cost estimations of LNG-fueled vessels react less strongly to differences in ECA presence.The cost-effectiveness of LNG-fueled vessels increase at higher consumption levels of all fuel types.

    AbstractEver stricter emission regulations stimulate vessel owners to consider the adoption of alternative marine fuels, such as Liquefied Natural Gas (LNG). In deciding whether to invest in LNG-fueled vessels, initial investment and operating costs are decisive factors that have not yet been fully studied in the literature. In this paper, we present a new investment appraisal method to compare the costs of LNG-fueled vessels with conventional vessels. We analyze the fuel costs and overall exploitation costs by simulating bunker planning decisions under stochastic fuel prices, presence in emission controlled areas, and route lengths. Our analyses reveal that the fuel costs of LNG-fueled vessels are often lower than those of conventional vessels, even under unfavorable LNG prices. Due to the higher initial investment costs in LNG-fueled vessels, these fuel cost reductions do not always translate into lower overall exploitation costs. By conducting numerical experiments, we identified conditions under which the exploitation costs of LNG-fueled vessels are lower than conventional vessels.


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    Title :

    An investment appraisal method to compare LNG-fueled and conventional vessels


    Contributors:


    Publication date :

    2017-01-01


    Size :

    12 pages




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English





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