LNG could supply up to 10% of the marine bunkering market as more companies wake up to its potential, according to French energy major Total.
Xavier Pfeuty, general manager of LNG at Total, told the CWC World LNG Summit in Rome that his company sees the volume of LNG used for marine bunkers climbing to 10 million tonnes per annum by 2025 and expanding to 20 mtpa by 2030, adding that these estimates are on the conservative side.
Pfeuty said the marine bunker market is about 250 million tonnes and 300 million tonnes annually. He added that Total sees LNG accounting for between 5% and 10% a year, which “starts to be significant”.
He said the cost of bulk LNG today is cheaper than marine gasoil or heavy fuel oil on an energy parity basis.
LNG challenge
But he admitted that the challenge for companies considering LNG fuelling for their newbuildings is the extra capital expenditure, which can be 15% to 25% higher than for a conventionally-fuelled vessel, as well as raised operating costs.
Despite this, Pfeuty said Total expects to see an acceleration in the uptake of LNG fuelling.
Shell Energy executive vice president Steve Hill described marine bunkers as “an exciting area of LNG demand”.
Hill said Shell thinks LNG is a very competitive fuel from emissions and price perspectives.
"It is the cleanest, most feasible realistic solution for a shipping fuel in the near term," Hill said, adding that it is also cost competitive.
He said Shell has now completed more than 100 LNG ship-to-ship bunkering operations, delivering to vessels in eight countries.
But further growth in infrastructure and LNG-fuelled newbuildings are needed for the sector to expand.
“In a world where 50% of energy demand is supplied through power, I get excited by the other 50% of demand,” Hill said.
“For energy demand that is difficult to electrify, natural gas is the cleanest energy solution today."
