China Could be the "Next Big Thing" for LNG Bunkers

by Ship & Bunker News Team
Thursday October 15, 2015

Chinese policies that promote gas powered coastal shipping could mean the country is "the next big thing" for liquefied natural gas (LNG) bunkers, says Craig Eason, writing in a recent blog for Lloyd's List.

Eason notes that China, like Europe, has indicated it will give state support to gas-fuelled shipping, a factor that so far has been key to both the development of LNG bunkering infrastructure and uptake of the fuel.

Singapore-based consultant Tri-Zen also recently noted that China's policy decisions have paired a demand for increased gas imports with a push for more gas powered shipping, a combination that could assist with LNG becoming a more dominant fuel.

Further, China LNG Group Limited (China LNG) is reported to have signed co-operation agreements with nine Chinese shipyards, valued at around $754 million, for the financing, manufacturing, and retrofitting of LNG-fuelled vessels, in addition to the development of Chinese LNG and "clean diesel" bunker stations.

As part of its energy strategy, China is reported to be planning to build 23 LNG import terminals, a move that Tri-Zen says will assist in the development of Chinese gas bunkering infrastructure.

However such developments have yet to convince international shipowners that LNG is a viable fuel for them, says Eason, as "owners remain wary of infrastructure shortcomings and relative fuel prices along with the additional newbuilding costs."

"LNG fuel for shipping is only going to be a global phenomenon once there is commercial gas demand ashore and a global bunkering network."

Eason argues that a large price change in both oil and coal will be needed for gas to become a more mainstream energy source, but notes that the point at which gas will find its worth over other fuel sources varies between regions.

Last week, Ship & Bunker reported that Richard Colwall, Managing Director at BMT Asia Pacific Ltd. (BMT Asia Pacific) believes China's Ship and Port Pollution Prevention Special Action Plan (SPPSAP) will be the key driver for the adoption of LNG as marine fuel in Hong Kong and the Pearl River Delta (PRD).