Singapore-headquartered Ocean Network Express (ONE) is considering the use of liquefied natural gas (LNG) as fuel in order to comply with IMO regulations, coming into force on January 1, 2020.
The transport company noted the revised IMO regulations will limit sulphur content in fuel oil to less than 0.5 percent, compared to the current limit of 3.5 percent.
After conducting studies, ONE noted that adopting low-sulphur compliant hybrid oil (0.5 percent sulphur content) is the most realistic, short-term solution, available in order to be compliant with the revised regulations.
The company added it is ‘carefully considering’ other solutions such as exhaust gas cleaning systems and using LNG as fuel which may be adopted in the future.
As the first step in its attempt to prepare for the new regulations, ONE plans to implement a revised bunker surcharge mechanism with effect January 1, 2019, which is considered to be more appropriate to the revised cost scenario.
Under the new mechanism, fuel price will be calculated based on past three months average bunker price in key bunkering ports.
ONE expects to start bunkering hybrid oil from the fourth quarter of 2019.