Establish feasibility of upgrading up to 10 very large gas carriers to utilize LPG as an alternative marine fuel
Following a signing ceremony in Houston, Dorian LPG Ltd. (NYSE: LPG) (Dorian LPG) announced Friday it has entered into a memorandum of understanding with Hyundai Global Service Co., Ltd (HGS) to undertake research and preliminary engineering studies to upgrade the main engines of up to 10 of the Company's very large gas carriers ("VLGCs") to dual fuel technology utilizing liquefied petroleum gas ("LPG") as fuel in anticipation of upcoming environmental regulations to reduce Sulphur emissions.
John Hadjipateras, Chairman and Chief Executive Officer of the Company, stated: "The cargo transported by our vessels is an energy source with well-documented environmental benefits relative to other fuels. We are undertaking this initiative with the dual goals of acting as a responsible corporate citizen and potentially achieving a significant competitive advantage that will benefit both our customers and shareholders."
Ki Sun Chung and Kwang Hean An, Co-CEO & President of HGS added, "We are pleased to be partnering with a first-class organization with whom we have a long-standing relationship. Both HGS and Dorian LPG are committed to the advancement of technology that provides the global shipping industry alternatives to achieve compliance with important environmental mandates."
This initiative follows the conclusion of a study announced in September 2017 by Dorian LPG and the American Bureau of Shipping to evaluate the use of LPG as marine fuel in advance of the International Maritime Organization's (IMO) mandate to reduce Sulphur emissions by approximately 85% effective January 1, 2020. The Company believes in the viability of LPG as an attractive and cost-effective alternative fuel that is widely available and inherently compliant with the IMO mandate. LPG as a fuel source has a significant advantage over other potential sources, including LNG, methanol and marine gas oil given the abundant availability of LPG from the shale exploration boom and the existing global distribution network and onshore and floating storage infrastructure for LPG. As part of its recent new building program, Dorian LPG proactively included enhancements to its VLGC vessels design to allow for the option of using LPG as a marine fuel.
Source: Dorian LPG