LNG to Corner 12% of Bunker Market by 2030

by Ship & Bunker News Team
Friday March 27, 2015

Facts Global Energy Chairman Fereidun Fesharaki this week told an audience at the Fujairah Bunkering and Fuel Oil Forum (FUJCON 2015) that demand for Liquefied Natural Gas (LNG) as a marine fuel will grow to capture 12 percent of the global bunker market by 2030, Seatrade Global reports.

Increasing environmental regulations will drive the growth as well as a rise in the price of oil relative to LNG, Fesharaki predicted.

According to Fesharaki LNG will provide around 1.5 percent of marine fuel energy in 2020, rising to 12 percent by 2030.

"This will be driven by bunker fuel specification changes and the growing post 2025 oil price premium over gas," he said.

Fesharaki forecast Brent prices to settle at around $35 to $40 per barrel in the near term with West Texas Intermediate (WTI) remaining below that level. 

In the longer term, oil prices should recover to around $50 to $80 per barrel if OPEC is "on board" with structural changes that have occurred in global oil markets.

The growth of U.S. hydrocarbons and derivatives production has been so big, according to Fesharaki, as to create a market shift that will see oil prices remain below $100 per barrel, as measured in 2015 dollars, until 2030.

Over the last 12 months, the U.S. was the largest worldwide producer of condensates, the largest exporter of refined products and Liquefied Petroleum Gas (LPG), said Fesharaki.

He further predicted that the U.S. would emerge as one of the top three LNG exporters by 2022.

Last week, Boston Consulting Group said it thought LNG could capture 27 percent of the global bunker market by 2025.