INTERVIEW: Navigator, GCMD bullish about ammonia carrier fleet, bunkering potential

Ammonia's bunkering potential is rising as engine technology and supply chains develop, and as the ammonia carrier fleet expands, reflecting a surge in global trade, senior executives from Navigator Holdings and Global Centre for Maritime Decarbonization said in a joint interview.

Global ammonia trade is expected to surge from about 20 million metric tons currently to “hundreds of millions of tons,” with production increasing from roughly 200 MMt to “what could grow above, say over 600 MMt-700 MMt” across all applications, as energy security becomes paramount, Navigator Holdings CEO Mads Peter Zacho said.

Currently, fewer than 100 vessels transport ammonia worldwide, and many more ammonia carriers and infrastructure are needed to support its growing trade, industry sources said.

“If you look a few years back, we only had about three or four of our 56 vessels transporting ammonia. It was a good business, but it was not something high on our agenda,” Zacho said.

“With the Ukraine war, the trade flows for ammonia changed significantly, and today, we transport a lot more ammonia,” Zacho said, adding that about 10 of the company’s ships currently carry ammonia, with the number expected to rise as demand accelerates.

Zacho said that while shipping is moving toward a multifuel future, including methanol and biofuels, and there could be several successes among the different fuel types, ammonia is an “excellent” fuel for the future. He said clean ammonia is both critical for power generation and carbon-free shipping.

“I am less concerned about other sectors cannibalizing the fuel [ammonia] so that is not available for shipping … Presently, it is more a matter of ensuring enough demand signals so that the production of clean ammonia gets started,” Zacho said.

Earlier in 2024, Navigator Gas said it was investing in Ten08 Energy along with Attis Clean Energy to produce clean ammonia on the US Gulf Coast for export.

The company is collaborating with customers to design flexible ships suited for a future with increased ammonia transportation and the ability to quickly shift between products such as ammonia and LPG, Zacho said. Customers are also interested in ships that can be propelled by ammonia.

“We would be, over time, signing contracts with them for time charter, and we would go and construct the ships against those time charters,” Zacho said.

Lessons from pilot

In addition to having ample fuel availability and building hard assets -- ammonia-fueled ships and ammonia bunker vessels -- it is critical to strengthen the entire ecosystem and involve various stakeholders, GCMD CEO Lynn Loo said.

Navigator Gas and GCMD recently partnered on a pilot project for ammonia ship-to-ship transfers at anchorages within the Port of Dampier. Loo said this initiative is a step toward showcasing the potential of Western Australia’s Pilbara region to become a green ammonia bunkering hub.

The pilot was meant to demonstrate operational procedures, understand safety protocols, tap into technical capability building and generate an appropriate emergency response.

This follows a safety study published in the context of Singapore in 2023 that identified about 400 different risks. With proper mitigation measures, these risks were deemed low or medium, Loo said.

During the pilot, emergency shutdown devices and emergency release couplings were used due to ammonia's toxicity. Personal protective equipment was ensured, and a competent crew was involved in the handling. After the transfer, the companies addressed the issue of residual ammonia in the hose between the two vessels, establishing procedures to remove it before the vessels could cast off.

“There are a lot of learnings, and so in the next iteration, we want to do better and close some of the gaps,” she said.

A family of global ports is a must to enhance ammonia's usage as a marine fuel. “So, we are talking to other ports elsewhere [for pilots],” Loo said.

Loo is encouraged by the progress made at the 10th session of the IMO Sub-Committee on Carriage of Cargoes and Containers, as it finalized draft interim guidelines for the safety of ships using ammonia as fuel.

The interim guidelines require an indication without alarm outside toxic spaces at 25 ppm, an alarm in the control room at 110 ppm and shutdowns to be activated at 220 ppm, she said.

“Those are really important numbers. Because once you have a unified set of numbers, the industry can go about thinking whether it needs new technology for detection versus the existing one,” Loo said.

“There is tremendous progress. We need to continue the push but to the extent that there is clarity, that is good,” she said.