FC Gas Intelligence has produced a report on the status and the prospects of LNG Bunkering in the Mediterranean area.
So far Europe’s liquefied natural gas (LNG) bunkering activity has been focused around the north of the continent, Scandinavia and the Baltics. Pilot projects have developed in northern Europe, boosted by strong government support, infrastructure already in place and new environmental regulations, which came into force in January.
There could also be huge potential to expand the sector in the Mediterranean for use in tourism and passenger ferries and to tap industrial and domestic gas demand in places which are not connected to gas grids.
Whether the region reaches its LNG bunkering potential will depend on how expensive it is to build LNG-fuelled ships, whether the fuel is price competitive with traditional ones and whether the same environmental regulations in the north are applied to the Mediterranean as well.
There are currently around 50 LNG-fuelled ships (excluding LNG carriers) in operation worldwide, while another 69 new building-orders are now confirmed, according to DNV GL – a maritime and energy sector advisory firm. They range from passenger ferries to tankers and platform supply vessels.
DNV GL said the number of LNG-fuelled ships operating in 2020 will depend heavily on fuel prices. With the LNG price around 10% above HFO, around 7-8% of new build ships between 2012- 2020 will be able to run on LNG, it said. If LNG prices fall to around 30% below HFO, the uptake of LNG on vessels could rise to 13% – the equivalent of around 1,000 ships.
If LNG were to tumble 70% below HFO, the share of LNG-fuelled ships being newly built would be around 30% of the global total, DNV said.
James Ashworth, lead consultant with TRI-ZEN International – a consultancy – said the LNG bunkering sector in the Mediterranean will be boosted by oil prices, which he expects to rise above $100/bbl again next year, and a bounty of available gas nearby.
The report concludes that in the short term the use of LNG as a bunker fuel in the Mediterranean is likely to be limited until environmental regulations are imposed on ship owners who will only adopt the fuel if there is sucient infrastructure, government support and if LNG prices are low enough to justify the capital investment needed in new ships. Cross-regional cooperation, large-scale projects and an ecient supply chain with functioning infrastructure will also be needed to expand the sector.
Further details may be found by reading the report LNG Bunkering in the Mediterranean by clicking below:
Source: FC Gas Intelligence
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