In International Shipping News 18/03/2015
With increasing regulatory pressure on ship emissions, there has been much focus on LNG as a marine fuel. Since the start of 2012, the ‘LNG capable’ fleet has more than doubled in size to 178 ships and there are now 200 units on order. European owners account for the majority of this fleet. However, owners from other regions have increased their presence in this sector in recent years.
A ‘Catch All’ Solution?
LNG is seen by many as a ‘catch all’ solution to the IMO’s MARPOL Annex VI limits on SOx and NOx emissions and is also reported to reduce CO2 emissions by
around 20%. Further, the price differential between LNG and HFO has made LNG potentially commercially attractive. However, as well as the large capital investment required, there remain other barriers to the widespread use of LNG as a marine fuel. The limited LNG bunkering network is a key concern and many ports are investing in infrastructure, especially in Europe. There has also been a move by port authorities and class societies to establish technical standards and procedures for LNG bunkering.
Who’s Already On Board?
There are currently 178 ships that are either LNG-fuelled or capable of running on LNG, 62% of which are LNG carriers which can use boil off gas for power. European owners account for 70% of the fleet and Norwegians have the largest ‘LNG capable’ fleet globally, 70 ships. The Norwegian government imposed a NOx tax in 2007 and has also provided funding for investment in LNG technology. LNG carriers account for 31% of this Norwegian owned fleet, while passenger ferries and offshore support units represent 37% and 21% of ships. Greek owners have the second largest LNG capable fleet (28 ships), all of which are LNG carriers. Similarly, the Japanese LNG capable fleet consists only of 14 LNG carriers and whilst it is the world’s fourth largest LNG capable fleet, Asian owners account for 12% of the overall fleet as do North American owners (US and Canada).
Fuel Of The Future?
In comparison to the fleet, the ownership of ‘LNG capable’ ships on order is less consolidated. The LNG capable orderbook totals 200 units, 67% of which are LNG carriers, and European owners’ share stands at 36%, supported by large Greek and Norwegian orderbooks. One German owner also has two cruise ships on order. Around 27% of units on order are Asian owned, mainly a result of strong LNG carrier ordering by Japanese, Chinese and South Korean owners. Meanwhile, North American owners account for 24% of the orderbook and Canadian owners have the largest LNG capable orderbook globally, 27 units, with the passenger sector accounting for 30% of orders. US owners also have a more diverse orderbook, with a total of 21 ships including offshore support units, containerships and passenger vessels.
Although LNG carriers account for a large part of the ‘LNG capable’ orderbook, interest in other ship types has been growing. Whilst European owners account for 70% of the fleet, Asian and North American owned vessels represent the majority of the ‘LNG capable’ orderbook. Despite limited numbers and a long way still to go, there appears to be a widening trend in investment in LNG-fuelled tonnage.
