Governmental subsidy plan modeling and optimization for liquefied natural gas as fuel for maritime transportation

The International Maritime Organization has strengthened global environmental regulations related to sulfur and nitrogen oxides contained in ship fuel oil since the beginning of 2020. One strategy to comply with the regulations is to fuel ships with liquefied natural gas (LNG) rather than with traditional heavy fuel oil. China and Japan are both developing a business structure for the bunkering of LNG through public–private partnerships to expand their leadership in the field in Northeast Asia and secure a competitive advantage. Compared to China and Japan, Korea has relatively inadequate laws, policy support, and best practices for safe and efficient LNG bunkering for ships. This article provides a comprehensive overview of the LNG bunkering regulation systems in China and Japan and addresses how these systems can be mirrored by Korea to improve the Korean system. It compares the legislative and normative rules of China and Japan regarding the complex global scenario of maritime transportation. The results show that Korea must revise its guidelines and create the advanced institutional framework required for the LNG bunkering market to support an eco-friendly shipping industry and maintain a competitive edge against China and Japan.

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An innovative decision support tool for liquefied natural gas supply chain planning

Maritime Business Review ◽

10.1108/mabr-09-2019-0036 ◽

2020 ◽

Vol 5 (1) ◽

pp. 121-136

Author(s):

Christos Papaleonidas ◽

Dimitrios V. Lyridis ◽

Alexios Papakostas ◽

Dimitris Antonis Konstantinidis

Keyword(s):

Supply Chain ◽

Decision Support ◽

Natural Gas ◽

Decision Support Tool ◽

Liquefied Natural Gas ◽

Maritime Transportation ◽

Management Tool ◽

Content Type ◽

Support Tool ◽

Tramp Shipping

Purpose The purpose of this paper is to improve the tactical planning of the stakeholders of the midstream liquefied natural gas (LNG) supply chain, using an optimisation approach. The results can contribute to enhance the proactivity on significant investment decisions. Design/methodology/approach A decision support tool (DST) is proposed to minimise the operational cost of a fleet of vessels. Mixed integer linear programming (MILP) used to perform contract assignment combined with a genetic algorithm solution are the foundations of the DST. The aforementioned methods present a formulation of the maritime transportation problem from the scope of tramp shipping companies. Findings The validation of the DST through a realistic case study illustrates its potential in generating quantitative data about the cost of the midstream LNG supply chain and the annual operations schedule for a fleet of LNG vessels. Research limitations/implications The LNG transportation scenarios included assumptions, which were required for resource reasons, such as omission of stochasticity. Notwithstanding the assumptions made, it is to the authors’ belief that the paper meets its objectives as described above. Practical implications Potential practitioners may exploit the results to make informed decisions on the operation of LNG vessels, charter rate quotes and/or redeployment of existing fleet. Originality/value The research has a novel approach as it combines the creation of practical management tool, with a comprehensive mathematical modelling, for the midstream LNG supply chain. Quantifying future fleet costs is an alternative approach, which may improve the planning procedure of a tramp shipping company.

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