Asia/Pacific News
SMW 2016: Difficult Market and Low Oil Prices Means Less Interest in LNG Bunkers
Teo Siong Seng, Managing Director of Pacific International Lines, on Monday at Singapore Maritime Week (SMW) 2016's Singapore Maritime Lecture, said that the shipping industry's current interest in adopting liquefied natural gas (LNG) bunkers is diminishing due to market conditions.
"Today, depending on which sector of the shipping industry, we are actually fighting for survival," said Teo, adding "the reality for LNG, unfortunately at the moment, is at the back of our minds."
Teo says uncertainty around the direction of oil prices is making it difficult for shipowners to predict where bunker prices will also head, with low prices of conventional fuels pushing the drive for LNG adoption further down the priority list for operators.
In addition to prices, Teo says a lack of policy support for LNG adoption is also slowing the transition to the fuel.
Echoing Teo's comments, Kristian Siem, chairman of Siem Industries, said LNG use is not financially advantageous in some parts of the world where oil prices are very low, noting that one of Siem Industries' clients had switched back from LNG to conventional bunkers "because it's cheaper."
Joseph Rozariyah, Golden Ocean Group Ltd.'s (GOGL's) shipping line's operations manager, suggested that worldwide LNG adoption may not happen for 20 to 25 years, adding "[LNG] is cheaper in the long-term and less maintenance."
DNV GL has said that, out of more than 50,000 ships conducting trade around the world, there were 77 LNG-fuelled ships in operation worldwide during the month of March .
Earlier this month, Ship & Bunker reported that, despite International Energy Agency (IEA) predictions that Australia will become one of the world's top exporters of liquefied natural gas (LNG) by 2020, the chances that the country will utilise the energy source as bunker fuel is "still a way off."
