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Oil price fall delays LNG fuelling by a decade

Wed 20 Apr 2016 by Paul Gunton

Oil price fall delays LNG fuelling by a decade
Christian Poensgen (MAN Diesel & Turbo): LNG adoption has been delayed by oil price fall

Falling oil prices have delayed by a decade the predicted progress of LNG as a fuel option for newbuildings, said Christian Poensgen, senior vice president of engineering for four-stroke engines at MAN Diesel & Turbo.

He was delivering a keynote address yesterday (19 April) to the Large Engine Techdays conference organised by the engine consultant AVL List in Graz, Austria, and reflected on the fall in oil prices since the previous event, two years ago. He recalled predictions dating from 2010 that, by 2020, between 10 per cent and 30 per cent of newbuildings would be fuelled by LNG. But recent fuel price volatility had changed the economics considerably: “today, this prediction has moved out by a decade,” he said. “It's a bit slower than we wanted.”

He pointed to the cruise industry as an indicator of how shipowners are responding: “They are ordering diesel engines with after-treatment systems,” he pointed out.

Asked by LNG World Shipping how this change was affecting engine companies’ technology strategies, he said that the only difference it will make is the speed of implementation. “The engines are there,” he said. The current trend in propulsion development is to move towards system integration, in particular incorporating electric into hybrid solutions, he said, and that is independent of whether customers opt for diesel or gas engines.

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