INTERVIEW: LNG Bunker Market Reaching 'Adolescent Stage'

Peter Keller is chairman of SEA-LNG. Image Credit: SEA-LNG

• 10% of global fleet by DWT now running on gas
• Future LNG bunker demand growth likely to come from largest hubs in short term
• More LNG bunker contracts rather than spot deals needed to encourage further investment

LNG bunker industry body SEA-LNG sees the market for gas as a marine fuel as no longer in its infancy, but heading towards the mainstream of marine energy demand.

Some 10% of the global fleet - including gas carriers using boil-off cargo as fuel - is now using LNG for its energy, Peter Keller, chairman of SEA-LNG, said in an interview with Ship & Bunker.

"Coming out of 2025, we see about 2,500 LNG dual-fuel vessels, both in terms of cargo-carrying LNG vessels as well as the dual-fuel cruise, PCTC, container and all of them," he said.

"That's a pretty strong number; it represents about 10% of the global fleet by deadweight.

"It establishes LNG and the methane pathway - the methane runway - forward as mainstream.

"It's still not a mature industry; we're maybe in the adolescent stage."

SEA-LNG was founded almost 10 years ago with a view to setting out the case for LNG as a means of reducing shipping's emissions.

The rapid pace of growth in the market since then has surpassed the organisation's expectations.

"Some years ago, when I was responsible for building the world's first LNG-powered container ship, the Isla Bella and her sister, I never thought we'd be at 10% by now, just because of the challenges in changing fuel, not unlike the challenges that Churchill faced in 1912 going from coal to liquid," Keller said.

"The fact that we're already at 10% of the global fleet by deadweight is a very positive statement.

"The fact that we're looking at now about 100 bunker ships either active or on order certainly talks to the investment."

Future Growth

Future growth in LNG bunker demand should be expected mainly from the largest hubs in the short-term, Keller argued, while noting that smaller ports are also starting to offer the alternative fuel.

"Most of the investment is still in the liner trades: the PCTCs, which are sort of liners, the containers, which are liners, and the cruise ships, which operate from relatively sophisticated ports," he said.

"I think that's going to continue, so that means we will continue to be at the major ports around the world.

"But as the bunker fleet grows and as the expectations continue to grow, I think a few years from now - maybe after 2030 - we should start to see more activity in the tramp trades.

"That's going to be as a result of more bunker capabilities in smaller ports around the world. We already have 200 ports around the world that can bunker, and that's increasing every year as well."

Singapore saw a total of 571,400 mt of LNG bunker sales last year, compared to a conventional and biofuel bunker total of 56.2 million mt. LNG sales at the world's largest bunkering hub increased by 23.1% on the year, while conventional and biofuel bunker sales gained 3.2%.

More Contract Supply Needed

Over the past year two conventional bunkering firms have put plans to join the LNG bunkering market on hold.

Monjasa announced in May 2025 that it was reevaluating its UAE LNG bunkering operation, while Bunker One announced a similar postponement of its Northwest European LNG bunkering entry in October.

Keller argued a lack of sufficient contract deals in the LNG bunker market - that can help give confidence in investments over the longer term - may be holding back conventional bunkering firms from more wholeheartedly making a shift into LNG.

"One of the major things that we continue to see is that so many operators of dual-fuel vessels are still looking to trade spot and are not doing the long-term contracting that may be necessary to support some of the investment [in LNG bunkering]," Keller said.

"That's something that's going to have to change.

"Beyond that, it may just have been that that investment was more than their company was capable of doing at the time.

"Prudent management would say, 'OK, we don't have the money right now, we don't have the contracts right now, we don't want to play in a spot market, so we're going to do something else'. Which is very rational."

Greener Alternatives

Keller also expects to see biomethane taking up a growing share of the LNG bunker market as ships seek to decarbonise further, despite the delay in the IMO adopting its net-zero framework.

"Europe has had a good year of increases [in biomethane]," he said.

"But what's really interesting is that US biomethane organisations and people involved in that business have very aggressively started to look at the maritime industry.

"Their productivity is going up, their availability of biomethane products is going up and they are actively looking at other markets."

SEA-LNG is firmly of the view that GHG regulations for the shipping industry will have to be dealt with at the global level before long, as a fragmentation of regulations on a regional basis will not be in the best interests of global transportation and trade. But Keller suggested last year's delay at the IMO may allow for a better form of global regulation to emerge.

"I don't think that the delay that we had this year is necessarily bad," he said.

"You've got to understand what's really going on; it's a major, major change, and with some 160-odd countries, that's a huge undertaking.

"The world was trying to race to a conclusion, and we just weren't able to make it, and it will take more time.

"If you look at the historical issues that the IMO has undertaken, whether it was the ECAs or ballast water, it takes a long time.

"I think the wait was good. Hopefully it will help people get it right."

No Bets on Future Demand Levels

SEA-LNG does not produce its own forecast for the future size of the LNG bunker market. But the organisation continues to predict growing demand, with no sign of a plateau in sight.

"Suffice it to say that we believe the industry will continue to move in a direction of decarbonisation," Keller said.

Over the short term the container market may hesitate to add more LNG-fuelled ships because of potential temporary overcapacity. But apart from that issue, the organisation expects continued growth in the approach to 2030.

"I think once Suez opens, there's going to be a slight overcapacity in container volumes," Keller said.

"It may take a year or two to get back to the previous level for the yards to open up again.

"Then I think you'll see the LNG market share continue to increase, and you will continue to see shipowners and operators continue to embrace decarbonisation."