Asia/Pacific News
LNG Bunkers Facing an Uncertain Future in Asia
An International Bunker Industry Association (IBIA) forum being held in Singapore this week has heard that a shift toward liquefied natural gas (LNG) bunkers in Asia is still an uncertainty, but it is nevertheless important for Singapore to develop the appropriate infrastructure for the alternative fuel, IHS Fairplay reports.
The current reality of low priced fuel oil, along with a lack of LNG bunkering infrastructure in Asia, plus higher LNG prices in Asia compared to both Europe and the Americas, lead Peter Hall, chief executive, IBIA, to declare that "there is no incentive to switch."
In fact Hall questioned whether even a switch to cleaner distillate fuel would be viable for some owners.
"Refineries may be able to produce sufficient bunkers to meet the stricter emission regulations, but they are unlikely to find a market as shipowners lack funds," said Hall.
Also speaking at the event was Ng Hanwei, editor, Argus Media who noted that the lack of a standard price benchmark for LNG in Asia has also slowed the acceptance of the fuel in the region, as it "makes hedging difficult."
As Ship & Bunker has previously reported, Singapore signaled its intention for providing LNG bunkering a number of years ago, and in January awarded its first LNG bunker supplier licences.
Despite the apparent uncertainly over the future of LNG as a marine fuel, Ng made it clear that this was an important development for the city state.
"Singapore sells more than 40 million tonnes of fuel oil in a year and if all of these are switched to LNG, Singapore will no longer be a pricing centre for bunkers," said Ng.
"Singapore would then have to depend on other ports that use LNG bunkers to assess prices."
In January of 2016 Ship & Bunker reported that the Maritime and Port Authority of Singapore had awarded the first LNG bunkering licences to Pavilion Gas, and a joint bid from Keppel Offshore & Marine (Keppel O&M) and BG Group.
