LNG

European classification society DNV said there were a total of eight new vessels with alternative fuel propulsion ordered in November with four of them LNG-powered ships as the sector showed continued growth, helped by lower LNG bunker prices at under $890 a tonne in markets like Rotterdam to improve the shipping economics outlook.

Among the ships the other four were methanol-powered and all eight shipping were in the roll-on-roll-off (RoRo) ferry and car carrier sectors.

DNV said that so far in 2023, the platform has logged 268 new orders for alternative fuel vessels, including 112 LNG-fuelled and 152 methanol-powered ships.

The months of June and July saw the most activity related to LNG with 47 new orders combined, whereas July propelled methanol-powered vessels across the 200 ships mark with 48 new orders.

Strong market

“While November's performance may not have matched the volume of previous months, the overall enthusiasm and promising trajectory remain for both LNG and methanol,” said Martin Wold, Principal Consultant in DNV's Maritime Advisory business.

“In general, the pipeline for both announced and unannounced projects remains strong, indicating that the pace will pick up again,” Wold explained.

“However, it's worth noting that the momentum we see in the tanker and bulk segments continues to experience a more gradual acceleration,” he added.

There are currently 988 LNG-fuelled vessels on order or in operation worldwide. This list comprises 528 ships to be delivered through 2028 and 460 LNG-powered ships on the water.

About 198 of these newbuild orders are for LNG-powered containerships and a further 139 vessels are Pure Car and Truck Carriers (PCTCs), while oil and chemical tankers are in third with 48 orders and the fourth-highest segment is for crude oil tankers with 36 orders.

There are also 24 cruise ships and 18 tugs in the order book along with 11 RoPax vessels as well as single-figure numbers for car and passenger ferries, general cargo ships, offshore supply ships and fishing vessels.

Rotterdam prices

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 steadily since the start of the year.

LNG bunkers at Rotterdam were priced in November at the start of December 2023 at $887 per tonne compared $998 at the start of November 2023 and $1,392 per tonne at the start of January.

Among other emissions-reducing fuels, the price of Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port was less volatile than LNG.

The last ULSFO quote in Rotterdam showed only a slight rise since the start of the year to $558 per tonne at the beginning of December 2023 compared with $556 per tonne at the start of January 2023.

The Carnival Cruise Line has held a formal naming ceremony to mark the completion of the debut voyage of its second liquefied natural gas-powered ship bult at the Meyer Turku shipyard in Finland.

Oman, the LNG producer and exporter, has signed an exploration and production sharing agreement with UK major Shell and French company TotalEnergies to explore, appraise and develop natural gas resources at Block 11 onshore the Sultanate on the Arabian Peninsula.

China has pledged to improve its use of cleaner fuel in the transportation sector where more LNG will be used for shipping, trucking and other industries, while domestic Emission Control Areas are being expanded in line with International Maritime Organization regulations and the natural gas pipeline grid will be improved.

The lengthy list of current and future plans has been published in main state-controlled media under the heading “Sustainable Development of Transport in China”.

The report noted that the Chinese directives are backed by the most recent 19th Communist Party of China National Congress with goals for realizing more modernization through to 2035.

“The Fifth Plenary Session of the 19th CPC Central Committee proposed that we should accelerate the effort to build China into a country with a strong transport system,” added the report.

China said it would be pursuing “green development” by promoting a cleaner and improved transport sector and would achieve real results in energy conservation and carbon reduction.

The report said there were now 400,000 buses and 430,000 trucks using new energy such as LNG, compressed natural gas and battery power and 180,000 natural gas and new fuel passenger vehicles such as hybrids. The country was planning to have more LNG-powered ships as part of its cleaner shipping policy.

China stated that it attached great importance to the prevention and control of transport pollution, and has issued a series of policy documents, including the “Implementation Plan on Domestic Emission Control Areas” in the waters of the Pearl River Delta, the Yangtze River Delta and Bohai Sea Rim (Beijing, Tianjin, Hebei).

It was also implementing the IMO’s “Global Marine Fuel Oil Sulfur Limits” brought in at the start of 2020.

“With its initial focus on the Pearl River Delta, the Yangtze River and the Bohai Sea, China has set the goal of controlling and reducing emissions of atmospheric pollutants including sulfur oxides (SOx), nitrogen oxides (NOx), particulate matters (PMs) and volatile organic compounds (VOCs) from vessels and improving the air quality of coastal areas and inland river port cities,” stated the report.

At present, China said its EMAs have been further expanded along the coastal areas and the main streams of the Yangtze and Xijiang rivers, and stricter control standards have been proposed for the waters in Hainan.

The main EMAs outside China are in Northwest Europe and North America and with others planned in the Mediterranean by the nations of Southern Europe where the broader use of LNG fuel for shipping is being promoted and bunkering availability is improving.

China, the world’s second-largest LNG importer, also stated that it was building out its natural gas pipeline grid.

“A trunk network of gas pipelines is improving with the capacity to transmit gas from West to East China, from Sichuan to East China and from Shaanxi to Beijing, and to bring gas from offshore,” said the report.

The report revealed other tranport statistics such China’s national railway electrification rate having reached 71.9 percent.

About 14 percent of airport vehicles and facilities are run on new energy sources, substitute facilities for aircraft auxiliary power units (APUs) are in full use, and the numbers of postal vehicles run on new and clean energy such as electricity and gas are steadily increasing in key regions.

“More than 7,400 charging piles have been built and operated in 942 expressway service areas across the country, more than 5,800 sets of shore power facilities have been built at ports, covering over 7,200 berths, and container terminals at major ports along the Yangtze and coastlines have switched from oil to electricity for power,” it explained.

“The annual energy saved by green transport provinces and cities, green highways, green ports and other demonstration projects has exceeded 630,000 tonnes of coal equivalent,” added the report.

It added that coal logistics corridors are better configured and a railway corridor for energy and commodities transport running across the country has taken shape.

“China is engaged in an all-out effort to build a great modern socialist country. Transport will play a stronger part in leading economic and social development. China will implement the new development strategy and develop safe, convenient, efficient, green and economical transport to lay a solid foundation for modernization by 2035,” concluded the report.

The France-based global container shipping line, CMA CGM, has seen the first of nine LNG-powered vessels join its fleet and the ship’s maiden voyage starts on September 23 on the “French Asia” route calling at 12 ports in 84 days.

The British Columbia provincial government in Canada and provincial Premier John Horgan said they would support the Vancouver Fraser Port Authority and utility company FortisBC to establish the first ship-to-ship LNG bunkering service on the West Coast of North America.

Sovcomflot Group, the Russian fleet owner, said it signed an agreement with ship fuel provider, Gazprom Neft Marine Bunker, to cooperate on bunkering operations for ships powered by liquefied natural gas.