LNG

There were 2.40mmt of LNG on the water with destinations in China according to our market visibility at the time of writing on 10 February.

LNG Demand: China’s monthly LNG offtake in January amounted to 6.09mmt, our data showed at the time of writing, which constituted negative month-on-month demand growth of 1.01mmt (-14 percent) from the 7.10mmt we recorded in December.

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While the hype around future fuels remains strong, LNG retains its position as the leading solution driving the energy transition in the maritime sector.

The imposition of fresh tariffs by the Trump administration threaten to derail LNG trade routes, potentially throttling its use as a transition fuel in some regions.

China's swift retaliatory tariffs on US exports will lead to efforts to separate the world's largest buyer and seller of fuel. Following the White House announcement that Chinese imports will face a 10% levy, Xi Jinping placed a 15% tariff on American gas imports.

“Trump is going to use US LNG as a geopolitical bargaining chip,” Stephen Stapczynski, Bloomberg Business reporter, said, adding that it “could result in a mismatch of supply/demand in different regions. For example, more LNG being rerouted to Europe could push prices lower there.”

Supply/demand mismatch

Chinese imports of US LNG accounted for around 6% of total Chinese LNG volumes last year. Buyers in the country that are currently holding long-term US contracts are now likely to resell their shipments to other importers.

“China imported 4.2 million tonnes of its LNG from the US in 2024, which is about 1% of the global market and about 5% of what the US exported,” Tom Marzec-Manser, market analyst, said, noting that tariffs will have some impact on natural gas flows and TTF.

Regional shifts

This shift in trade patterns may have adverse consequences on existing or planned infrastructure but may also add a filip for nearby bunkering hubs.

Singapore for instance has seen record LNG growth in the last year and displacement of volumes that were previously headed to China may well bolster the island states position as a regional LNG hub.

In the longer-term, Chinese firms are now unlikely to sign any new long-term contracts with US. Even if the current tariffs are reversed buyers are set to be much more wary of investments with US partners in 2025 and this may lead to price hikes as redundancy and contingency costs are added into transactions. 

LNG imports to Europe may be substantially more polluting than previously thought, following research into upstream emissions.

Industry coalition SEA-LNG reports that the shipping industry has accelerated moves towards a multi-fuel market in the last year, with LNG emerging as a crucial element in global growth over the next two decades.

Authorities in Hong Kong have completed the island’s first LNG bunkering operation, refuelling a dual-fuel containership at South Cheung Chau anchorage.

Authorities at Vancouver Fraser Port in Canada have overseen the first ship-to-ship LNG bunkering procedure at the site, with plans to expand operations this year.

The refuelling process was completed by the LNG bunkering vessel Seaspan Lions in late January and involved transfer of fuel to the chemical/oil products tanker Pacific Jade.

“Completing our first successful bunkering in local waters is a major milestone for Seaspan Energy and marks the introduction of a low-carbon fuel alternative from the Port of Vancouver and beyond,” Harly Penner, President of Seaspan Energy, commented.

Significant stride

The port authority recently made a significant stride in facilitating the use of LNG — one of the most widely adopted alternative marine fuels — for cargo ships calling Vancouver by authorizing LNG bunkering operations to take place within the limits of the port.

“In November 2024, North Vancouver’s Seaspan Energy received the first-to-be-issued LNG bunkering accreditation from the port authority,” a spokesperson for Vancouver Fraser Port Authority said, calling the accreditation “a significant stride in facilitating the use of LNG — one of the most widely adopted alternative marine fuels”.

Seaspan Energy’s accreditation was issued following rigorous risk assessments and mitigation processes that considered international best practices around safety.

Low-carbon fuel

The Seaspan Lions is one of three sister vessels that Seaspan has deployed for LNG bunkering vessels, primarily on the West Coast of North America. All three vessels have LNG capacity of 7,600 cubic metres and were built by CIMC Sinopacific Offshore & Engineering in China.

“With two of our LNG bunkering vessels now operational and our first bunkering in the books, our message to ship owners globally is that we now offer an accredited LNG bunkering option here in Vancouver,” Penner added.

The ships are powered by three dual-fuel generators and fitted with direct current power distribution systems. Propulsion is delivered by two 1,600 KW azimuth thrusters.