Prospect of LNG as Marine Fuel in Indonesia: An Economic Review for a Case Study of 600 TEU Container Vessel

The alternative use of environmentally friendly marine fuel by Indonesian vessel owners complies with IMO regulations. Marine fuels with low carbon and sulfur are alternative fuels to the current fossil fuels used by the shipping industry. Some alternative marine fuels are being used or developed such as LNG, hydrogen, and methanol. LNG is one alternative fuel that is used significantly as a marine fuel in the shipping industry. As one of the LNG producers, Indonesia is still behind in using LNG as an alternative marine fuel. One of the main reasons is the use of conventional marine fuels such as HFO, MDO, MGO and the understanding of LNG as an expensive and high-risk commodity. However, vessel owners face various challenges when selecting alternative fuel, which is associated with price and technology. This study aims to analyze a 600 TEU container vessel by calculating its net present value, the capital recovery factor and life cycle analysis (LCA) to determine whether owners carry out the investment. The result of the economic analysis for the 600 TEU vessel showed that the investment of retrofit for LNG as a marine fuel will be a good choice for owners due to the challenge of capital cost for financing a new vessel.