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Opinion: what does the future hold for LNG bunker-supply ships? Mahinde Abeynaike

Wed 09 Aug 2017 by Karen Thomas

Opinion: what does the future hold for LNG bunker-supply ships? Mahinde Abeynaike
Nauticor managing director Mahinde Abeynaike

By year-end, the number of dedicated LNG bunker-supply ships in service will have increased from one to five. But what does the future hold for this new vessel type? 

Although the marine market in northwest Europe is developing, with nearly 100 ships running on LNG, as shipping fuel LNG is – for now – limited to shortsea traffic. Most LNG-fuelled vessels in operation are passenger carriers.

Because local demand in each port is still too small to utilise a dedicated LNG bunker vessel, bunkering infrastructure must be flexible in terms of location.

Nauticor has ordered the world’s largest LNG bunker supply vessel. Instead of waiting in port for the customer, the vessel will travel between customer locations, transporting sufficient fuel for several operations – but it is still small enough to be manoeuvrable and to provide excellent bunkering capabilities. It can also conduct offshore bunkering.

Locally, LNG is well supplied by a few dedicated bunker-supply vessels. The breakthrough in using it as marine fuel and increasing the number of such bunker-supply vessels will depend on deepsea cargo shipping starting to run on it.

Deepsea cargo shipping, operating mainly outside ECAs, may still burn cheap, heavy fuel oils until 2020. And the shipping crisis has hit cargo shipping badly, depressing demand for new vessels.

How can we overcome these hurdles? From 2020, a much stricter global sulphur cap will reduce emission limits from 3.5 per cent to 0.5 per cent. This will have a fundamental impact on the shipping sector and on the traditional bunkering and LNG sectors.

High-sulphur fuel oils will not be an option any more. Today’s standard marine fuel, HFO, will make way for marine gasoil, low-sulphur fuels and LNG. Scrubber solutions are likely to remain in the minority.

This will lead to a dramatic drop in demand for HFO in ports. Probably, this will mean that bunkering infrastructure for HFO will significantly ramp down.

Meanwhile, the global LNG market is looking for new demand centres. US, Australian and Russian LNG liquefaction plants will deliver enormous volumes of new output, some of it seeking a new home. Qatar’s plan to boost LNG production from around 70 million tonnes a year (mta) to 100 mta adds to that bearish sentiment.

The LNG and marine fuel sectors – which have had limited overlap so far – will need to work together to develop environmentally friendly global transportation solutions. The timing is just right to create these synergies.

 

Read LNG World Shipping’s exclusive data, the global LNG-fuelled fleet, 2017

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