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Capture of CO2 is frequently referred to as one of several steps that is necessary for the world to reach the aim of reducing the CO2-emissions in line with the Paris Agreement. The technology typically requires capture of CO2 at the emitting source, having it liquefied and then transported and stored at an offshore location. There are two ways of transporting LCO2: by pipelines or carriage onboard vessels. Although pipeline transportation of LCO2 is the most cost-efficient method, sea transport is more viable for longer distances, particularly when the sources of LCO2 are geographically dispersed.[1]
Currently there are far from enough specialized tonnage to cater for the volumes of LCO2 that may be shipped in the years to come. Existing pressurized gas carries cannot be used because of the specific properties of LCO2, which differ significantly from other gases like LNG or LPG.
Although one could think that transportation of LCO2 would be possible to utilize onboard the already existing fleet of pressurized gas carriers, this is largely not the case due to the unique characteristics of the LCO2, for instance that it requires pressure to reach its liquid state in contrast to natural gas. To maintain CO2 in its liquid state, a precise combination of high pressure and low temperature is required.[2] In contrast, LNG can be liquified using only extremely low temperature, whilst LPG can be stored at much lower pressures compared to what is required to liquify CO2. Another challenge is the lack of universal standards for pressure and temperature combination. Each tender and project may require a different balance between the two, depending on specifications of the project, as well as specifications of the cargo.[3]
Carriage of LCO2 largely raises the same issues as transportation of pressurized gases, and it therefore makes sense to use a charter party catered specifically for this type of trade. However, there are a few differences and a couple of points need to be addressed when drafting the charter party specifically for the carriage of LCO2.
Firstly, at least in LNG charter parties, one would typically see the boil off warranty linked to the speed and performance warranties, linked with an ability to use the boil off as fuel for propulsion. Using boil off for propulsion is not feasible when carrying LCO2 as fuel, which means that provisions concerning the use of boil off for propulsion will not be relevant.
Secondly, due to the unique characteristics of LCO2, provisions dealing with venting of cargo in certain circumstances is required, for instance, to cover for situations where the pressure might increase or decrease in the cargo tanks, thereby creating a risk of the cargo either solidifying or turning into gas again.[4] In some tenders, we have seen provisions allowing Owners to ventilate cargo for safety reasons, as well as clauses permitting Charterers to request ventilation to meet their commercial or operational needs. In the latter situation, Owners should ensure that they are adequately protected from liability, including pollution fines and potential claims from bill of lading holders.
Furthermore, as our experience so far suggests that the vessels will be built and employed on long term charter parties, members should ensure that, to the extent commercially possible, the charters contain provisions dealing with substantial changes in the law and regulations in the future that may have an effect on the performance of the charter party. Owners should seek to introduce provisions allowing them to recover increased costs following such new requirements, as well as seeking to introduce language allowing Owners to increase the rate in accordance with changes in inflation, for instance.
Nordisk is pleased to assist in this new area of shipping that is starting to take place. We remain ready to provide assistance in tenders and shipbuilding contracts that deal with carriage of LCO2. Should you have any questions, feel free to reach out to your contact at Nordisk, or reach out to the author of this article at omedias@nordisk.no
[1] DNV Maritime Forecast to 2050, p. 49
[2] https://www.sigtto.org/media/4004/sigtto-carbon-dioxide-cargo-on-gas-carriers.pdf p. 28
[3] https://www.dnv.com/focus-areas/ccs/carbon-shipping/
[4] https://www.sigtto.org/media/4004/sigtto-carbon-dioxide-cargo-on-gas-carriers.pdf p. 10
By Ola Granhus Mediås