LNG Carriers Switch to VLSFO on Rising LNG Bunker Prices

by Ship & Bunker News Team
Friday February 11, 2022

LNG carriers are increasingly shifting to burning VLSFO rather than their own gas cargoes since last year's surge in LNG bunker prices, according to Integr8 Fuels.

Integr8 noted the trend in a research note published this week, saying it was driving higher VLSFO demand.

"With high gas prices, LNG carriers are increasingly burning cheaper VLSFO and LSMGO and Integr8 Fuels have seen a growing number of such enquiries in recent months," the company said.

"Historically, most of the time LNG prices, adjusted for the energy content, stayed below conventional bunker fuel prices with the LNG carrier bunker fuel mix skewing sharply towards boil-off gas and only supplemented by conventional fuels depending on a number of commercial and operational factors."

LNG bunkers priced in fuel oil terms stood at $1,319/mt at Rotterdam on Wednesday, according to Ship & Bunker pricing, at a $654/mt premium to VLSFO. A year ago LNG at the Dutch hub was at a $6.50/mt discount to VLSFO.

"Hypothetically and if sustained for a year, the LNG to conventional fuels switch could potentially add an extra 60,000 b/d to gasoil demand (through LSMGO) and 120,000 b/d to fuel oil demand (through VLSFO)," Integr8 said.

Ship & Bunker News Team
To contact the editor responsible for this story email us at editor@shipandbunker.com