OSG Announces Engine Upgrades for Alaskan Tanker Fleet

OSG, a leading energy transportation provider, has unveiled its plans for a comprehensive lifecycle engine upgrade (LCU) program for its Alaskan tanker fleet.

The company has entered into a contract with MAN Energy Solutions SE to implement the program for all four US-flagged Alaskan class vessels, namely the Alaskan Explorer, Alaskan Frontier, Alaskan Legend, and Alaskan Navigator.

With these vessels approaching 20 years in age, the engine and operational improvements will not only extend their commercially useful life but also yield significant environmental benefits.

The LCU program encompasses a range of technical and commercial enhancements. This includes the replacement of engine components with newer, more fuel-efficient models, resulting in reduced fuel consumption and lower greenhouse gas emissions. Advanced control systems and optimization technologies will also be installed, enabling more efficient vessel operation and maximizing performance while minimizing environmental impact. Additionally, the upgraded engines will be capable of meeting Carbon Intensity Indicator (CII) regulations without compromising the vessels’ operational capacity. Furthermore, the vessels will possess “Ready for Methanol” capability.

The LCU program is scheduled to kick off in early 2024, coinciding with the reactivation of the recently acquired Alaskan Frontier. The remaining three vessel engine upgrades will be carried out concurrently with scheduled vessel drydocking periods, with the entire project expected to be completed by 2026.

“The decision to contract with MAN Energy Solutions for engine Life Cycle Upgrades on all four Alaska class tankers represents a major investment in the future of our company,” stated Sam Norton, President and CEO of OSG. “When combined with previously announced commitments to reactivate the Alaskan Frontier, the aggregate investment we will be making into our Alaskan fleet over the next three years will be close to $100 million.”

According to Norton, the engine upgrades are expected result in multiple benefits, including improvements in fuel oil consumption, cost savings, and a reduction of over 20,000 metric tons of greenhouse gas emissions annually.

“OSG has set a target of achieving a 15% reduction in annual CO2 emissions by 2030 and this investment alone should account for roughly one-third of that target. In addition, the anticipated improved emissions attained from the engine upgrades should allow all our Alaskan class vessels to operate in their historical trading patterns while maintaining compliance with current Carbon Intensity Index (CII) regulations through at least 2035,” said Norton.

Marcel Lodder, Strategic Sales Manager at MAN PrimeServ, referred to the Life Cycle Upgrade as the ‘Roadmap’ solution for the engines on the Alaskan Class vessels. He says the conversion will not only position the twenty-year-old engines for future fuels but also reset them to nearly new condition, aligning with today’s serial new build standards.

“These vessels were originally built with a 40 year design life. With Alaskan crude oil production expected to increase by as much as 250,000 barrels per day by the end of this decade, ensuring the extended operating life of these vessels in compliance with environmental regulations has been a top priority for us and our customers,” explains Chris Merten, Chief Operating Officer of OSG’s wholly owned subsidiary Alaskan Tanker Company.

“The upgrade of these vessels’ main engines should allow that goal to be achieved over the next decade, adding years of CII compliance for these vessels to generate additional cashflows through 2035. Looking out over the longer term, the methanol fuel option that these upgrades provide allows possibilities for even longer-term operation should green methanol fuel availability emerge in the decade ahead,” Merten added.

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