Lloyd’s Register North America, Inc. (LR) has teamed with Penn Oak Energy Corp to help companies raise much needed capital and mitigate the technical risks associated with retrofitting ships fueled by liquid natural gas, by providing a one-stop-shop solution to the industry. Compared with heavy bunker oil and even low-sulphur marine diesel, LNG-powered vessels can greatly reduce operating costs while meeting stricter environmental regulations.
“The infrastructure to support this new class of ships has started to mature, and we have seen great strides in companies willing to convert their existing ships to this new fuel or constructing new ships in the U.S. Emission Control Areas. Our relationship with Penn Oak Energy will help provide the private equity to ship owners to undertake these ambitious projects, and assist those ship builders that the U.S. will need to expand this growing demand,” said LR’s Rafa Riva, Marine Business Development Manager.
Arizona-based Penn Oak Energy is a developer of LNG solutions for industrial clients. Although they began in land-based infrastructure finance, it is through this approach of project finance methods that they can apply their expertise to the unique financial structuring of LNG conversions for the marine industry. The value they add to ship-owners is through a fuel procurement agreement, where operators can spread the conversion cost and the upfront capital requirements for these conversions over the project life.
Philip Parker, head of business development for Penn Oak Energy, commented: “Working with Lloyd’s Register and various shipyard owners throughout North America, Penn Oak Energy has been able to sign up exclusive relationships with various shipyard builders to bring their yards up to spec on certification, safety and standards required to convert ships to dual fuel solutions.”