LNG-powered vessel orders rise as stronger bunkering may cause future shortfall for re-fuelling
European maritime classification society DNV said seven liquefied natural gas-powered ships were ordered in May and added that there could be a coming shortage of LNG bunkering ships as Northwest European bunkering prices continued to ease leading to market growth in the Dutch port of Rotterdam and elsewhere.
DNV’s Alternative Fuels Insight (AFI) platform, listed 19 vessels with alternative fuel propulsion ordered in May, seven for LNG and 12 methanol-fuelled vessels.
“So far this year the total order figure for alternative fuel vessels stands at 73,” said DNV.
The AFI platform also tracks battery installations for ships, through collaboration with the Maritime Battery Forum and reported that the official count of orders for vessels with battery power has passed 1,000.
“In May container vessels and car carriers continued to dominate the orders for ships equipped to use alternative fuels,” said Martin Wold, Principal Consultant in DNV’s Maritime Advisory business.
“Following the normalisation of gas prices the LNG bunkering market has now returned to full strength and we see a potential shortage of LNG bunker vessel capacity from 2025, and for some locations and periods this may occur even sooner,” stated Wold.
There are currently 399 LNG-fuelled vessels in operation worldwide and a further 512 ships are on order for delivery in the years to 2028.
Some 190 of these orders are for LNG-powered containerships and a further 122 vessels are Pure Car and Truck Carriers (PCTCs), while oil and chemical tankers are in the third-highest segment and the fourth-highest segment is for bulk carrier newbuilds.
LNG-fuelled tankers
There are 39 LNG-powered crude oil tankers on order, 25 cruise ships and 20 tugs, 11 RoPax vessels as well as single-figure numbers for car and passenger ferries, general cargo ships, offshore supply ships and fishing vessels.
This DNV data does not include smaller inland vessels and barges that are part, for example, of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub transportation in northwest Europe or trading on major European rivers.
LNG bunkering fuel costs in Rotterdam have declined since the start of the year.
LNG fuel at Rotterdam was priced at the start of June 2023 at $546 per tonne compared with $814 per tonne at the start of May and $1,392 per tonne at the start of January 2023.
Among other emissions-reducing fuels, the price of Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port actually rose to $573.26 per tonne at the start of June, up from $567.16 per tonne at the start of May, but down from $639.82 per tonne at the beginning of 2023.
European maritime classification society DNV says LNG-powered ships lead alternative fuel newbuild orders
European maritime classification society DNV said that liquefied natural gas-fuelled vessels led the way among the 275 newbuild orders made during 2022.
European classification society DNV reports more orders for LNG-powered ships even with higher fuel prices
European maritime classification society DNV said that ship owners placed orders for 16 liquefied natural gas-powered vessels in February 2022, mostly for containerships and car carriers even as LNG bunkering fuel prices continued to increase.
DNV said that compared with January 2022, orders dropped by 24 vessels but January included around 15 vessels from December 2021.
The class society said that according to its data September 2021 still holds the record with 35 orders for LNG-powered vessels.
“Order intake for LNG-fueled newbuilds continues at a high pace, despite increasingly uncertain outlook for gas prices,” said Martin Wold, principal consultant at DNV.
“The total confirmed fleet has now reached 710 ships,” he said.
Wold noted that Seaspan Marine Corp. contributed to extra LNG bunkering supply capacity with their order for two bunkering vessels in China.
Newbuilds
The February count includes orders from companies such as London-based Zodiac Maritime, Eastern Pacific Shipping, also headquartered in the UK, H-Line Shipping of South Korea and Mitsui Osk Lines of Japan.
According to DNV, there are now 269 LNG-powered ships already in operation with LNG-fuelled car and passenger ferries continuing to lead the way with 44 in operation.
The LNG-fuelled fleet also includes 31 oil-chemical tankers, 37 offshore supply vessels, 37 tugs and 32 containerships.
As for vessels on order, LNG-powered containerships account for a big part of the orders with 123 units.
Owners had also ordered 60 LNG-powered crude oil carriers and the fleet stands at 87, and with 60 car carriers rising to 67 and 52 bulk carriers and with new orders taking it to 63. Ferries taking cars and passengers now number 53 on order and in operation.
There are also now 33 cruise liners for the LNG bunkering market, including newbuilds.
These statistics do not include smaller inland vessels and barges that are part of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub in northwest Europe.
DNV added that the recent surge in LNG prices appeared not to have dented enthusiasm for LNG-powered tonnage orders.
Data shows that LNG priced in fuel oil terms at the Dutch port of Rotterdam in February 2022 stood at $1,585 per tonne, up from $412 per tonne in February 2021, while Very Low Sulfur Fuel Oil at the Dutch port gained $238 per tonnes over the same period to now cost $731 per tonne.
