LNG conversions raise legal issues

摘要

In the modern regulatory landscape, old technologies, equipment and infrastructure on ships often require overhaul. For shipowners with vessels operating in the recently-introduced ECAs, for example, running vessels on heavy fuel oil (HFO) alone is no longer an option. Although switching to more expensive distillate fuels is one way to achieve regulatory compliance, and fitting scrubbers is another option, many shipowners are coming to the conclusion that, depending on the characteristics of the vessel and the routes that it operates, converting the vessel to run on LNG may be the most attractive long-term solution. That said, legal issues with such conversions may catch out the unwary. In some ways, a contract for the conversion of an existing ship is more complex than for the build of a LNG-fuelled vessel from scratch. For instance, standard form contracts for newbuildings are widely used in the industry, meaning that the yard and the shipowner have a template for the project that may simply require fine-tuning. No such standard form contract exists for ship conversions. As a consequence, the contractor and shipowner must pay close attention to whether or not every key issue has been dealt with in the contract.