In a Lloyd’s Register report released this Monday, it has been suggested that LNG will account for 13 percent of the global bunker fuel market by 2020, increasing to 24 percent in 2025.
During a media briefing in Singapore, Lloyd’s global marketing manager, Luis Benito announced the statistics gathered from an ‘LNG Bunkering Infrastructural Survey’ conducted earlier in the year.
Out of the 50 ports surveyed around the world, 22 responded to a questionnaire organised to better understand the scope of how LNG will influence the maritime industry in the coming years.
15 ports were located in Europe, four in North America and a final three in Asia.
Upon a review of the 18 questions answered by each port, Lloyd’s found that 59 percent already had specific plans for developing the LNG bunkering infrastructure, whilst 76 percent believed that LNG bunkering will commence at the port in the next five years.
More importantly, results found that European ports felt they would be able to support deep-sea bunkering operations by 2020.
As of this moment in time LNG bunkering is limited to short-sea vessels.
Nevertheless, 90 percent of the ports agreed that safety protocol between land and sea would first need to be finalised before any major developments could take place.
Cause for such growth in the years has been put down to a number of reasons; specifically calls for infrastructure to be set up as a bid to be environmentally considerate by a number of local authorities.
Benito also suggested that Singapore would pioneer the drive for LNG in Asia since it already has the facilities needed for such a process. But this business can only flourish if the correct demand comes in, and secondly, whether shipping companies can afford the alternative.
So far, pricing remains an unknown variable; there has already been some outcry in regards to the development of ECAs and fears of pushing out smaller competition due to direct deals between supplier and carrier.
Yet as demand increases authorities have been paying more and more attention to the economic value of the fuel.
However, there is already some major divergence in price between North America, Europe and Asia.
Currently, Asian LNG prices are hovering around US$15.40/MMBtu; rather steep when compared to UK’s $7.908/MMBtu and the US’s Louisiana Henry Hub which stands at $4.436/MMBtu.
This may have something to do with the US and Europe’s preparedness for the new fuel, which as of this moment in time, stands ahead of Asia, who currently suffer from massive procurement costs. Yet Benito noted that LNG could have a massive influence, if major Asian buyers are successful in lowering the costs to gain the gas.
Further influence will come from the cost of training personnel to handle bunkering operations on board deep sea vessels, something that is as of yet, unknown. Only time will tell if the source is financially viable globally.
But what is certain is this, the trade is growing and it is growing fast.
