MSEA – why we went for methanol


Tanker operator MSEA Capital brought five product / chemical tankers into its fleet, which can run on methanol and conventional fuels. CEO Modi Mano explained why the company is happy with the methanol pathway

In September 2021, MSEA Capital, a tanker operator with offices in Limassol (Cyprus), Jersey, Gothenburg, Mumbai and The Hague,bought five methanol dual-fuel tankers into its fleet. CEO Modi Mano explained why the company is happy with the methanol decarbonisation pathway.

Specifically, the vessels were acquired by “Clean Sea Transport”, a joint venture company with MSEA, Arkview Capital and Scorpio Tankers. Mr Mano also serves as CEO of the joint venture.

MSEA has 24 tankers in its fleet altogether, including medium range chemical and product tankers, ice class 1A tankers, long range product tankers and Aframax tankers. They are typically chartered out under long and medium term bareboat and time charter contracts.

The methanol tankers were formerly owned by Marinvest Group of Gothenburg. Marinvest and its tankers were acquired by Clean Sea Transport in 2021.

Marinvest had been involved with methanol vessels since 2012, with the first generation delivered in 2016, the second generation in 2019, and the third generation in 2021, which included the vessels which were acquired by MSEA.

A big part of the reason MSEA made the acquisition is that it seemed like a great way to get involved with the transition to alternative fuels and decarbonization, Mr Mano said.

Mr Mano has a background as a co-founder of Navig8 Group, a tanker trading and management company, where he served as chief information and finance officer. He also formerly worked in private equity investments for shipping and ship finance.

Why methanol

MSEA started thinking about the best way to get involved in decarbonisation projects in 2020. “We asked around, we read a lot, we attended seminars,” he said.

“We saw a lot of [fuels], they all seemed quite complex and far out, not always practical, not always of immediate impact.”

The company considered LNG fuel but was concerned about the complexity of working with it. It considered ammonia and hydrogen fuel, but “they seemed very futuristic, they’re not here and now,” he said.

In contrast, methanol has “a few things we like about it,” he said.

“It is a liquid - very easy to handle, operationally and from a safety perspective.”

The crews already load methanol and similar products as cargo.

Methanol is widely available around the world, although not yet widely available as a marine fuel.

“You can keep the simplicity, you start with what’s available today,” he said. “It didn’t seem a huge technological risk.”

Currently, only ‘grey’ methanol is available at scale. This is produced from fossil fuel, with some CO2 emitted in the production process. There is more CO2 emitted through the vessel’s exhaust, although not as much as with conventional fuel.

Not everybody agrees about grey methanol’s emissions on a well to wake basis, where production emissions are included. But there is agreement on its emissions savings over conventional fuels on a tank to wake basis, and this is used for calculating CII. So there is a CII benefit in using grey methanol fuel.

For the past 12 months, methanol has been cheaper than low sulphur marine gas oil (MGO), for areas where low sulphur fuels are required (MECA areas).

Most methanol fuelled vessels have been carrying methanol cargo to date, so crew were already trained in handling methanol, and the charterer knew it would be available.

During 2022, MSEA fixed one of its ships to Trafigura as a standard product tanker using methanol fuel, although it was not carrying methanol as a cargo. “They were keen to try it from a practical perspective,” he said.

They wanted to see if there were any operational challenges in switching from one fuel to another, such as for tank cleaning, and show it is not only a fuel for vessels carrying methanol as a cargo.

“They used it for a year,” he said. “We managed to stem [bunker] the vessel 5 times this year with methanol, sourced by a number of suppliers.”

Bunkering locations included Korea, Antwerp, Rotterdam, US Gulf and the Caribbean.
We have also recently seen TotalEnergies charter methanol fuelled vessels, which are not planned to carry methanol as a main cargo, he said. “I’m not sure whether the vessel [tanks] will be coated as a methanol carrier,” he said.
“I’m not arguing there’s a single alternative fuel,” Mr Mano says. “There’s a lot of positive talk about ammonia. That’s a bit more far out. You may have a ‘shipping Elon Musk’ developing a battery to operate the ship. I don’t know. We need to do the best with the tools we have,” he said.

“At some point you need to take action. You can’t sit on the fence forever.”

“How do I look at the eyes of my children and tell them with pride what I do for a living? I’m not cynical about this. They talk about global warming in school.”

We need to get on the right side of this [and] we need to make a living, keep the world economy moving.”

Greening methanol

Ships running on methanol will not be using only grey methanol for very long. “The industry needs to go to biomethanol and blue methanol,” he predicts.

With methanol there is a “clear path for a green future,” as blue and then green methanol become available.
The fuel itself does not change, only the method of producing it. So, there are no further changes needed on the ship as methanol itself becomes decarbonised.

This means that, “the vessels we are building are future proof,” Mr Mano said.

“The most important thing is to have a transition which is least disruptive to shipping, to our business, to the global economy,” he said.

With blue methanol, made with natural gas plus carbon capture, then bringing in carbon of biogenic origin, Mr Mano estimates that the well to wake CO2 emissions of a vessel can be reduced by 60 per cent.

“Going even longer term it is probably bio methanol, which is a form of green methanol,” he said.

Maersk has announced that it has secured supplies of green methanol for several methanol­enabled ships it will receive from 2024.
Mr Mano believes that bio methanol will be widely available for shipping in 2025, although is unable to reveal further details at this stage.

Moving to low carbon biofuels needs a charterer able to commit to paying the price and making a long-term commitment, so that producers are comfortable investing in systems to produce it, he said. What’s important is that it is all possible. “It is not pie in the sky.”

If you want to source bio methanol, you need to sign a contract with it for the supplier, just as you would for fossil-based methanol. Although you would need to commit for the longer term and can expect to pay “through the roof” for bio methanol or green LNG, he said.

There may be yet more ways to develop green methanol developed in the future, he said.

A big obstacle is that fossil fuel will probably always be cheaper to produce. Regulators need to find ways to “equalise the prices through regulation or tax.”

“Eventually there will be enough financial incentive and corporate responsibility incentive to drive people to procuring blue methanol and bio methanol.”

Operating methanol vessels

Crew do need more training to work with methanol.

While engine staff need to know about its combustion in the engine, other crew need to know about its handling, just as they would need to know if they were loading methanol as cargo. MSEA’s technical ship managers have provided in-house courses.

Methanol fuelled vessels do not need any additional crew members.

Meanwhile, MSEA has been gathering experience operating methanol tankers using conventional fossil fuel-based methanol. As of September 2023, it has operated vessels for over 60,000 engine running hours. Its office and shipboard staff have a great deal of experience. “We’re going to be more ready than anyone else,” he said.

MSEA is cleaning its methanol tanks using methanol as a cleaning material. It is sprayed onto the tank surface from outside, in a process known as Butterworthing.

With this process, there is no need to do the wall wash test to check tank cleanliness. Wall wash tests require a seafarer to enter the tank, and so is thought by many to be too hazardous.

MSEA has been experimenting with using a methanol and water emulsion fuel, to help meet IMO’s “Tier 3” emission requirements for NOx emissions, without having to treat the exhaust gas. “We have 3000 engine running hours on that emulsion concept,” he said.

The methanol fuelled vessels have other energy saving devices, including propeller boss cap fins. “The best way to save on emissions is to save on consumption,” he said. “The less you consume the less you emit.”

Other energy saving methods include shaft generators to avoid using the auxiliary generator during voyages, and using bio lubricants and additives to improve fuel combustion.




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