LNG Bunkering Report Predicts Asian Focus
It is estimated that the global sales of bunker fuels will surpass 350 million tonnes in 2013. The prediction was made in the LNG Bunkering report created in collaboration with the LNG Bunkering Summit, taking place 27-29 January 2014 in Amsterdam.
In fiscal terms, global spend on bunkering for 2012 was approximately $2.6 billion with the top 10 bunker ports controlling more than 35 per cent of total global bunkering volume.
As of Q4 2013, DNV stated that there were currently 83 LNG-fuelled ships in operation or on the drawing board worldwide. In line with this, growth in LNG-powered vessels is set to skyrocket by more than 3,700 per cent through 2025 with around 3,200 ships set to be commissioned over the next 12 years. This rise in LNG-based marine traffic will entrain a concomitant rise in the need for LNG bunker fuelling stations, prompting a 72 million tonnes rise in LNG usage at an increase of an average of six per cent per annum.
In the same time period, the European Commission will make major investments into LNG-fuelling infrastructure to be installed in all 139 major EU maritime and inland ports. Although the EU is leading the way with regards to funding and affirmative action in the LNG bunkering story, positive moves in the rest of the world are changing the tide with regards to the speed of adoption of LNG as a primary bunker fuel.
As the main bunkering port for the Asia Pacific region, the Maritime and Port Authority (MPA) of Singapore accounts for almost one fifth of the world’s bunkering demand and fulfils 38 per cent of the market share of the top 10 bunkering ports combined.
In November 2013, the MPA signed a Memorandum of Understanding with two Belgian ports, Antwerp and Zeebrugge, “to work together on research, regulations, and other frameworks for LNG bunkering”. The announcement follows the commissioning of the island city-state’s first LNG terminal on Jurong Island in Q2 2013, at a cost of $1.38 billion USD. Its two trains currently have a throughput capacity of 3.5 million tonnes per annum and will reach 6 million tonnes per annum by the end of 2013 on completion of a third train and complimentary plant and docking facilities.
MPA is in direct competition with two of its main rivals in the bunkering world to introduce LNG solutions - the Port of Rotterdam in the Netherlands and the Port Of Fujairah on the United Arab Emirate's Indian Ocean coast. In October 2013, Rotterdam was awarded €74 million-worth of subsidies by the European Union “to fully develop the market for LNG as a fuel and to open an LNG hub in Rotterdam before the end of 2015”.
In the UAE, the first land-based LNG regasification facility received government approval in November 2013. The terminal will have a projected throughput capacity of 1.2 billion cubic feet (34 million m³) of natural gas per day, and will be constructed and operated by EmiratesLNG, a joint venture of International Petroleum Investment and Mubadala Petroleum for 2015. One month before approval was given for the commencement of this megaproject, a venture between Shell and Dubai Maritime City was announced.
Another factor in the global move towards LNG bunkering is China. It is estimated that by 2030, China alone will own up to one quarter of the world commercial fleet, increase its carrying capacity from nine billion tonnes per year to between 19 and 24 billion tonnes a year. Since the first trialling of diesel dual technology in 2010, Chinese maritime companies have commissioned and put into service 30 dual fuel vessels at a rate of ten per year, including the world's first tugboats operated on diesel-LNG engines. In June 2013, China’s growing commitment to LNG powered vessels was affirmed by the classification of six 174,000 m3 dual fuel diesel engine LNG tankers to all hit the waves by 2017.
In a statement released in 2013 by China’s Ministry of Transport (MOT), the Government of the People's Republic stated its intention to have two per cent of the domestic Chinese inland fleet operating on LNG dual fuel vessels by 2015, doubling that number fivefold to ten per cent by 2020. The MOT has targeted the construction of between 200 and 500 vessels solely fuelled by LNG by 2030.
The “gasification” of the Yangtze, the third longest river in the world is also of great import to the LNG bunkering story in the East. The Yangtze River Delta generates as much as 20 per cent of China’s GDP and in 2012, 1.78 billion tonnes of cargo was transported along Asia’s longest river - three times more cargo as the Mississippi and five times as much as the Rhine. In September 2013, Haiqi Ganghua Gas Development constructed the first offshore LNG bunker station along the Yangtze in Nanjing.
Natural gas services operator China Gas Holding has also promised to begin LNG bunkering on the Yangtze River in 2014. In a statement to the press, the company's vice president, Liang Yongchang, said: “There are lots of vessels which will be converted to LNG power, so there is a big potential in the LNG bunkering market.”