Fuel Costs Push LNG Bunker Development

by Ship & Bunker News Team
Tuesday April 1, 2014

In the face of rising costs for bunker fuel, stable gas prices could promote the adoption of liquefied natural gas (LNG) bunkers, International Business Times reports.

LNG-powered vessels are gaining traction in various shipping sectors and various parts of the world, including orders by TOTE Shipholding for containerships using the fuel and by Brittany Ferries for an LNG-powered ferry, as well as new tugboats and offshore supply vessels (OSVs) that run on gas.

"The relative low price of natural gas and LNG compared to current high residual bunker and distillate fuel prices in the U.S and Europe has added to the attractiveness of LNG," wrote Frederick Adamchak, an adviser at Poten & Partners brokerage.

Particularly in North America, where shale gas development is going strong, gas prices are predicted to remain steady for the next five years.

With LNG refuelling infrastructure a work in progress globally, some companies are pursuing other strategies for complying with emissions requirements and reducing fuel costs, with LNG still under consideration as a future option.

"As of today, the infrastructure of LNG supply is limited and installation of LNG engines is an expensive investment," said Maersk Line spokesman Mikkel Elbek Linnet.

"But LNG might be a viable solution for new-built container vessels sometime in the future when the infrastructure is in place."

Construction on TOTE's LNG-fuelled containerships began in February.

Ship & Bunker News Team
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