An analysis of the industry position of LNG as shipping fuel has forecast that smaller vessels and cruise ships on short routes will speed the development of LNG bunkering facilities worldwide.
BMI research utilised LNG World Shipping's data regarding the number of LNG-fuelled ships on order to investigate prevailing trends within the industry.
With orders continuing to grow in the strongest markets for LNG-fuelled ships – passenger ships and service and supply vessels – BMI analysts took the view that the use of LNG as shipping fuel will “be limited to short-distance routes dominated by smaller vessels and cruise ships”.
The focus on providing more refuelling facilities for ships on shorter or more segmented routes will support the build-up of global LNG bunkering facilities, which will, in turn, increase the uptake of LNG by larger ships, the BMI report said.
Shell’s agreements with Q-LNG for a chartered LNG supply barge for use on the US East Coast and with Carnival Corporation to provide LNG bunkering for two LNG-fuelled cruise ships were noted in the report.
Mentions were also given to recent high-profile contracts initiated by container shipping giant CMA CGM. The French company has ordered nine new container vessels that will operate on LNG fuel and signed a contract with French energy company Total for delivery of LNG to its future fleet.
The group’s examination of the market for LNG as marine fuel remained conservative, predicting that uptake would, by and large, be driven by newbuildings, with existing fleets being reliant on diesel and low-sulphur fuel oil to meet the upcoming 2020 IMO sulphur cap rules.
Costs of retrofitting were cited as the largest barrier to entry for LNG systems to be added to existing vessels.
At least one manufacturer is seeking to make the retrofitting process cost-effective. At Marintec in Shanghai last week, classification society DNV GL awarded a general approval for ship application to GTT for its design of an exoskeleton membrane LNG fuel tank developed specifically for retrofit installations.
The design consists of a structure that can be prebuilt on the dock and then installed as a complete unit in the hull of the vessel during a retrofit, reducing time at the yard and eliminating the need for the vessel to go into drydock.