Obstacles Remain to LNG Bunker Uptake

Karen Sund of Sund Energy said infrastructure is key to LNG bunker adoption

As Europe faces new limits on sulfur emissions in 2015, the shipping industry sees significant barriers to adopting liquefied natural gas (LNG) bunkers, Interfax Global Energy Services' Natural Gas Daily reports.

David Bull, a senior consultant at Royal Haskoning Ocean Shipping Consultants, said the supply of the fuel is a concern, with Japan using much of the available LNG and uncertainty remaining about whether the U.S. will export much of its growing supply of shale gas.

"If you think that 32% of LNG went to Japan in 2011, now you have to find additional LNG to start putting bunker fuel onto these vessels," said Bull.

"Where are you going to get it from?

"It will certainly help the market if the Texans and Louisianans choose to monetise their asset rather than keep it for themselves."

Bull said another issue is the cost of converting a vessel from fuel oil to LNG or buying a new LNG-fuelled ship, particularly with many ship owners struggling financially.

He said some may choose to install scrubbers instead since they cost only a third as much as a conversion to LNG.

In contrast, a joint study published by Germanischer Lloyd SE (GL) and MAN Diesel & Turbo SE (MAN) last year found LNG to be more cost effective than scrubbers.

Karen Sund, owner of Norwegian energy consultancy Sund Energy, said the lack of ports with LNG bunkering facilities also makes use of the fuel a difficult prospect.

"The ships won't come until the infrastructure's there and the infrastructure won't come before the ships have committed," she said.

"If everyone's waiting for everyone then development will come slowly."

The European Commission (EC) is pushing for improved LNG bunkering infrastructure, with a recently announced proposal to put refuelling stations at all major European maritime ports by 2020.