LR Fobas forecasts 4.2% of newbuildings delivered between now and 2025 as being fuelled by LNG.
With the level of sulphur content in marine fuels is an increasing concern, and the IMO is calling for a reduction of the limit to 0.5% by 2020. As a result shipping lines are increasingly studying alternatives to heavy fuel oils (HFOs), and LNG-fuelled engines appear to be a viable option for deep sea trades in the long-term, particularly on liner trades, says Douglas Raitt, Global Fuel Oil Bunkering Analysis and Advisory Service (Fobas) manager at Lloyd's Register Asia.
In its base case, Lloyd’s Register expects 653 newbuilds to be LNG-fuelled, or 4.2% of global deliveries, from 2012-25. Under that scenario, LNG bunker demand could reach 24m tonnes by 2025, or 1.5% of global LNG production and 3.2% of global HFO bunker consumption.
From a macro-economic perspective, one factor driving increased conventional fuel prices is the environmental regulation on conventional fuels. In today’s cost-conscious environment, the price of LNG relative to current and future fuel alternatives will be a key factor determining whether LNG bunkering facilities will be established around the world. This in turn will depend on the demand for LNG fuel on deep-sea trades.
“LNG bunkering in short-sea shipping regionally could facilitate investments in deepsea routes,” Raitt said at the Fujairah Bunkering and Fuel Oil Forum. “Solutions will be ship-type and trade-route specific. Existing oil bunkering hubs are well positioned to supply LNG bunker for ships, if demanded by owners.”
The event, organised by Singapore-based company, The Conference Connection Inc., attracted 300 delegates from 20 countries. Fujairah is undergoing a tank-farm boom as oil storage, blending and trading companies rush to establish a foothold at the port, said to be the world’s second-largest bunkering location after Singapore.