A new market study by standards agency DNV GL forecasts a “huge potential” for LNG as a marine fuel in the Iberian Peninsula.
The recently published study was conducted as part of the six-year CORE LNGas hive project and analyses future infrastructure requirements for the areas around Spain and Portugal, including parts of the Mediterranean, Atlantic and Gibraltar Strait peripheral regions.
“Through this market study we now have a strong decision basis to prepare the supply side on the Iberian Peninsula in meeting future demand for LNG bunkering at competitive conditions,” Fernando Impuesto, CORE LNGas hive project coordinator from Enagas, said.
Co-funded by the European Commission, the €33-million CORE LNGas hive project is coordinated by Enagas and includes recommendations for LNG supply chain development infrastructure at over 40 ports in the project area.
Compliance stimulating €1 billion CAPEX growth
The study’s authors note that although LNG-fuelled shipping is high on the agenda in the maritime industry, the market drivers are changing, from a cost driven demand towards compliance with emissions regulations becoming the main motivation.
The report predicts that in order to realize the required LNG supply chain by 2030, “about €1 billion of capital expenditures (CAPEX) investment will be needed, adding up to a total cost of €3.7 billion in 2050.”
From a logistics perspective this will include the development of new breakbulk capacity at existing LNG terminals for loading LNG to small carriers and LNG bunker vessels.
Algeciras, Las Palmas and Barcelona to become key LNG hubs
“In most ports, development of local intermediate storage capacity needs to be synchronized with increasing LNG demand by larger vessels. Besides bunker stations and local storage facilities, small carriers for delivering batches of LNG to ports over sea will play an important role for the times ahead,” a spokesperson for DNV GL said.
Consolidated quantitative results from the study forecast that Algeciras, Las Palmas and Barcelona will become the main bunkering hubs in Iberia and that by 2030 up to 2 million cubic metres per year (m³/y) of LNG will be bunkered by ships in the area rising to 8 million m³/y by 2050.
“DNV GL’s market study has clearly shown the major potential LNG has as a fuel in the region. We hope that the conclusions from our study will help ship owners, natural gas suppliers, bunker companies, port authorities and LNG terminal operators gain the confidence they need to move forward with LNG as a fuel for a more sustainable shipping industry,” Liv Hovem, Senior Vice President, DNV GL – Oil & Gas, said.