LNG

European classification society DNV said there were a total of 29 LNG alternative-fuelled vessels added to its the database in August and September as the sector showed continued growth and lower LNG bunker prices in markets like Rotterdam helped to improve the shipping economics outlook.

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 said that liquefied natural gas-powered vessels led the way among the 275 newbuild orders made during 2022, though the start of 2023 has seen a muted market for LNG-fuelled orders even as Rotterdam bunkering prices tumbled.

European maritime classification society DNV said that there was still momentum in orders for LNG-powered vessels from ship owners in the month of November even at a time of very elevated LNG bunker prices in ports such as Rotterdam in the Netherlands.

According to the latest figures from DNV’s Alternative Fuels Insight (AFI) platform, 17 LNG vessels were added in November with container vessels and car carriers constituting nearly two thirds of the orders.

The total order figure for LNG-fuelled ships for the year to date has now reached 203 and the overall total is 857 ships operating or on order.

“With the preliminary agreement at the European Union last week that shipping would be included in the EU's Emissions Trading System starting from 2024, all low-carbon options now makes even more sense,” said Martin Wold, Principal Consultant in DNV’s Maritime Advisory business.

“Methane emissions will also be included, so methane slip from engines will come under even greater scrutiny,” added Wold.

Containerships lead

The DNV data showed that the total number of LNG-powered ships in operation or on order at the end of November 2022 comprised in the largest sectors 42 containerships in operation and 176 on order, 10 car carriers operating and 106 on order, 46 crude oil tankers operating and 43 on order and 42 oil-chemical tankers operating and 46 on order.

There were also 68 bulk carriers using and planning to use LNG, 50 car and passenger ferries, 39 cruise liners, 38 tugs, 37 offshore supply vessels and 32 RoPax ships.

This data does not include smaller inland vessels and barges that are part of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub transportation in northwest Europe.

Analysts note that LNG remained the preferred low-carbon solution despite current gas pricing which is expected to last into the near future.

That’s as LNG priced in fuel oil terms at Rotterdam increased on December 6 to $2,414 a tonne compared with $1,890 per tonne on November 6.

Among other emissions-reducing fuels, Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port declined over the past month to $690.00 per tonne on December 6 versus $923.50 per tonne on November 6.

European maritime classification society DNV said that there was still momentum in orders for LNG-fuelled vessels from ship owners in the month of August even as LNG bunker prices hit record levels in ports such as Rotterdam in the Netherlands.

The DNV report said there were currently 827 confirmed LNG-powered ships and 229 additional LNG-ready ships, while LNG bunkering infrastructure was continuing to be developed worldwide.

DNV said that car carriers broke through the 100 confirmed ships line to 104 and containerships moved above the 200 ships mark to 209.

That’s as LNG priced in fuel oil terms at Rotterdam hit record levels of around $4,545 per tonne on September 2 versus about $3,255 per tonne on August 1.

Among other emissions-reducing fuels, Ultra Low Sulfur Fuel Oil (ULSFO) at the Dutch port declined slightly during the period and was priced on September 2 at around $990 per tonne compared with $1,010 per tonne in mid-August.

According to the latest figures from DNV’s Alternative Fuels Insight (AFI) platform, 13 LNG vessels were added in August.

However, the increase on the database will only be 11 additional orders, as the electrification of the Norwegian ferry sector continues, evidenced by two more ferries being retrofitted for pure battery operations and thus moving to another category.

The total order figure for the year to date has therefore reached 173, with the last month seeing a mix of smaller and larger vessels ordered.

Perfect snapshot

“This month's update is a perfect snapshot of the current alternative fuels trend, and clear evidence of the diversified fuel mix predicted.,” explained Martin Wold, Principal Consultant in DNV’s Maritime Advisory business.

“Electrification will continue to happen, where technically feasible, meaning for small ships and on short crossings,” said Wold.

“LNG remains the preferred low carbon solution, despite current gas pricing which we must assume will prevail for some time,” he added.

“We are also witnessing the start of the diversification into methanol fuel on trades where there is sufficient confidence that supply can be made available on a reasonable time scale. For regional and international trading ships LNG and methanol is likely to be the short- to mid-term preference going forward,” stated Wold.

According to DNV, there are now 209 LNG-powered containerships in operation or on order, followed by 87 crude oil tankers, 74 oil-chemical tankers and 62 bulk carriers.

Among other classes of LNG-fuelled ships in operation or on order, there were 104 pure car carriers, 50 car or passenger ferries, 39 cruise liners, 38 tugs, 37 offshore supply vessels, 33 roll-on and roll-off ships and a smaller number of general cargo ships and fishing vessels.

This data does not include smaller inland vessels and barges that are part of the Amsterdam, Rotterdam, Antwerp (ARA) refining hub in northwest Europe.

“LNG bunkering infrastructure is being developed to supply the growing fleet,” said DNV.

European maritime classification society DNV said that there was still momentum in orders for LNG-fuelled vessels from ship owners in the month of June even as LNG bunker prices increased further in ports such as Rotterdam in the Netherlands.