Demand for methanol as a marine fuel for container ship is forecast to reach 3-million tonnes per annum by the middle of this decade, according to Dutch fertiliser, fuels, and feedstock provider OCI.
Presenting the company’s fourth quarter results on Tuesday, OCI chief executive Ahmed El-Hoshy said demand for methanol bunkers is expected to “kick off” at the end of this year and into early 2024 with the delivery of the first methanol dual-fuelled container ship.
El-Hoshy said incremental demand is expected to be more than 3 million tonnes per annum market by the mid-2020s based on current orders from the container ship sector alone.
He said to put that in context today the marine market for methanol is currently at 300,000 tonnes per annum.
“We see a very big exponential increase based on the significant amount of vessel orders,” the CEO said.
“We are encouraged by these orders also from the non-container segment,” he added.
The company, which is also developing green methanol, ammonia and hydrogen production, detailed that by the middle of the decade there will be over 120 vessels in operation that can use methanol as a fuel, up from just 22 in 2022.
OCI’s presentation set out that 59% of the current confirmed methanol dual fuelled vessel orderbook is for container ships, with tankers accounting for 35%, wind farm support vessels 4 % and ferries 1% plus a mix of other vessel types taking up the balance.
El-Hoshy said the outlook for the methanol market is positive in the short to medium term, citing factors such as the rebound in Chinese demand, high oil and coal prices and a significant demand upside from hydrogen fuels, notably marine fuels.
But he also spoke about tighter market fundamentals through to 2027 with demand exceeding supply by about 11 million tonnes through this period.
El-Hoshy went on to reference OCI’s recent announcement on its move with Unibarge to retrofit the first inland bunker barge to be methanol-fuelled and carry the product. It is due to be operational in Rotterdam in 2024.
He said this demonstrates that retrofits are affordable and is “an important milestone in the company’s strategy to encourage demand for clean fuels in this growing segment”.
“We are excited about the prospects for methanol rising from significant demand uptake as a hydrogen fuel starting from later this year, notably from the in the road and marine fuels sector,” he said.
