Starting in 2020, shipping company CMA CGM will take delivery of nine container ships with a record-setting capacity. The global leader has chosen to equip them with LNG propulsion, easily the cleanest solution in the market today. It therefore turned to Total and its subsidiary Total Marine Fuels Global Solutions, which will supply the 300,000 tons of LNG a year needed to power these behemoths of the sea, each able to carry 22,000 containers.
In doing so, the partners are taking a giant step forward in terms of environmental protection: marine LNG has significant advantages over ordinary fuel oil.
Olivier Jouny, Chief Executive Officer of Total Marine Fuels Global Solutions (TMFGS), tells us about the whys and wherefores of the deal, which is a watershed for the future of LNG as a marine fuel.
Could you tell us about what Total Marine Fuel Global Solutions (TMFGS) does?
Olivier Jouny / TMFGS’s job is to supply fuel to ships. We’re pump attendants for giant ships! We supply customers around the world, targeting large capacity ships in particular. We supply three types of fuel: heavy fuel (HFO), marine gas oil (MGO) and now liquefied natural gas (LNG), which is our main focus.
Why is LNG expected to gain market share? What are its advantages?
The 15 largest container ships in the world, which run on marine fuel, produce as much sulfur oxide as all the cars on the road worldwide put together. The environmental stakes are very high. That prompted the International Maritime Organization (IMO) to tighten its regulations: it is introducing a 0.5% cap on sulfur content in 2020, versus 3.5% today. And it’s likely that eventually the allowable limit will be lowered to 0.1%, as is already the case in strict Emission Control Areas (ECA) in Northern Europe, the Baltic Sea and along the coasts of the United States. By moving to LNG today, we are killing two birds with one stone: complying with the tougher regulations ahead of their introduction and staking out a promising market.
How does the agreement with CMA CGM help you meet that goal?
The agreement serves our ambition for several reasons. To start with, we will be the first company to supply LNG to container ships of this size. Total will be a pioneer in the field, taking advantage of CMA CGM’s trailblazing choice to operate its ships on gas. Then, the terms of the agreement offer us better visibility: the agreement is for 10 years, with volumes of 300,000 tons a year. Not to mention that Total should also supply the oils and lubricants for all nine vessels, as agreed in principle with CMA CGM. This contract is a great industrial and strategic partnership!
What is Total’s ambition in this specific market?
With this one deal, which accounts for about 75% of the emerging LNG bunker market, Total is now a major player. The market is diversifying and Total intends to be a supplier of both fuels and services. We supply a range of multifuel solutions.
TMFGS at a Glance
- 5 million tons sold in 2016
- 300 customers around the world
- A 35-strong team in Singapore, Paris and Geneva
- Read the press release