EMEA News
Gazprom Predicts Strong Baltic LNG Bunker Market
Russian gas giant Gazprom predicts the use of liquefied natural gas (LNG) for bunker fuel in the Baltic and North Seas could hit 8 to 10 billion cubic meters per year by 2030, the news service Interfax reports.
"For Gazprom it makes sense to maintain control over the main elements of the value chain, particularly production of compressed natural gas and LNG and sales to the end consumer, which presupposes possible investment in production and distribution infrastructure," said Pavel Odervo, Gazprom's head of foreign economic activities.
With new limits on emissions in the region coming into effect in 2015, Gazprom says LNG bunkering offers a price advantage compared with low-sulfur oil products that will outweigh the extra capital costs of an LNG-powered ship.
"If one compares the costs of a ship running on LNG and a ship running on diesel fuel, the costs of diesel fuel are so substantial that, despite the lower capital and operating costs for this type of fuel, overall costs for it turn out to be far higher than for LNG," Odervo said.
He said that Gazprom could be involved financially in developing LNG infrastructure, and that guaranteed contracts for LNG shipping through European terminals will be "the main condition for receiving project financing."
Oderov said pricing for LNG bunkers should differ from pipeline gas and large-capacity LNG.
"We anticipate that the price of LNG for ship owners will be in the range between prices for heavy fuel oil (HFO) and marine gasoil (MGO)," he said.
Gasum, a Finnish gas grid company partly owned by Gazprom, announced plans last year to build three LNG bunker sites for ships sailing on the Baltic Sea.
Norwegian Prime Minister Jens Stoltenberg said recently that the Baltic Sea could be a good pilot area for the use of LNG bunkers.
