Analyst: LNG Adoption Will Take Longer for Shipping than Trucking

by Ship & Bunker News Team
Thursday April 18, 2013

The use of liquefied natural gas (LNG) fuel will be slower to catch on in shipping than in ground transport, Boston Consulting Group (BCG) partner Maurice Berns told the Financial Times.

"It is very difficult to retrofit so you would need to build new ships," he said.

BCG analysis shows only 600,000 tonnes of marine distillate, at most, is likely to be replaced by LNG by 2020, an estimate that is based on the assumption that enabled ships will use LNG only in Emissions Control Areas (ECAs), switching to less expensive fuel oil otherwise.

In ground transportation, on the other hand, Berns said LNG is being heavily promoted for heavy-duty trucks, and both investors and entrepreneurs are showing interest in the market.

Colin Abraham, vice-president for downstream LNG business development at Royal Dutch Shell (Shell), said LNG has potential "to make up a decent share of total road transport diesel demand" over the next decade.

Shell has said it wants to expand LNG sales for transportation uses, including both marine fuel and ground transport, to more than 5 million tonnes per year over 10 years, taking advantage of growing natural gas production in North America.

China is also making moves into the shale-gas-driven North American natural gas market, including China Petroleum & Chemical Corporation (Sinopec)'s purchase of a 50 percent stake in oilfields in the U.S. states of Oklahoma and Kansas for $1 billion.

Ship & Bunker News Team
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