Following a tipping point for LNG as a marine fuel last year, industry demand is expected to increase sharply in 2019, according to multi-sector coalition SEA\LNG.
In an outlook statement SEA\LNG Chairman, Peter Keller, highlighted growing demand for the fuel from shipping lines and an increase in LNG-powered vessels last year as setting the conditions for an uptick in 2019.
“If 2018 was the tipping point for LNG as a marine fuel, 2019 will be the year of acceleration… As the months progress, we expect to see an acceleration in decision making in favour of LNG due to three key factors: economic, environmental, and evolutionary,” Keller said.
Legislation to bolster to economic case
Tightening of legislation over the coming year is expected to be a key reason for fleet additions and a more rapid move towards LNG as the marine fuel of choice for many shippers, according to SEA\LNG, as the IMO started measuring Greenhouse Gas emissions from ocean vessels from 1 January this year.
“The economic case for LNG as the marine fuel of choice for newbuilds is growing stronger each month… In 2019 we expect to see an increasing percentage of newbuildings within the global fleet move over to LNG for economic reasons to gain commercial trading advantages,” Keller said.
Bunkering infrastructure expansion
Keller went on to note that the global LNG-powered fleet rose from 118 in operation in 2017 to 143 LNG-powered vessels in operation in 2018 with a further 135 currently on order and 135 “LNG-ready” ships are either in operation or on order.
“Driven by a requirement to supply these LNG-powered trailblazers, LNG bunkering infrastructure is expanding and there are increasing numbers of LNG-bunker vessels which are encouraging other operators to adopt LNG,” Keller commented.
30 bunker vessels within five years
SEA\LNG counts 24 out of the world’s top 25 ports and all but one of the top ten bunker ports globally as providing LNG bunker facilities today as well as a further eight LNG bunker vessels.
“We estimate 30 [LNG bunker vessels] likely to be in operation within the next four to five years at key bunkering nodes in Asia, Europe, the Middle East, and North America,” the coaltion states.
Regional initiatives of note, highlighted by Keller, included the Poseiden Med II project, the BlueHUBS programme and LNGHIVE2 project in Europe as well as South Korea’s plans to invest US$2.48 billion in LNG bunkering facilities in the country.