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Argus Media: LNG discount to methanol renews LNG bunker interest

Premium for LNG compared with grey methanol flipped to a discount in February and maintained it through March, a shift that could restore ship owners’ interest in LNG for bunkering fuel.

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The premium for LNG compared with grey methanol flipped to a discount in February and maintained it through March, a shift that could restore ship owners’ interest in LNG for bunkering fuel.

4 April 2023

Some ship owners that had been considering LNG for bunkering shifted their sights to methanol last year after LNG prices soared while grey methanol prices did not have as dramatic an upswing. LNG prices in northwest Europe, Asia-Pacific and the US Gulf coast spiked over $2,100/t very low-sulphur fuel oil equivalent (VLSFOe) in August 2022 as uncertainty around Russian winter natural gas exports to Europe intensified. By comparison, grey methanol last year peaked in March at $1,002/t in Asia-Pacific and below $962/t in northwest Europe and the US Gulf coast.

As the 2022/2023 winter season wound down, European natural gas stockpiles remained high. As a result, LNG prices in northwest Europe, Asia-Pacific and the US Gulf coast fell to under $601/t VLSFOe in March, compared with over $720/t VLSFOe for grey methanol in these regions.

Even though LNG and grey methanol are both sourced from fossil feedstock, their CO2 emissions differ. LNG emissions from combustion and full lifecycle are about 21pc and 28pc lower, respectively, compared with emissions from conventional marine fuels. Grey methanol combustion lowers CO2 emissions by only 7pc compared with conventional marine fuels and grey methanol full lifecycle emissions are higher than conventional bunkers. Despite the higher LNG price volatility, LNG provides ship owners with higher CO2 reduction than grey methanol. Methanol also has lower energy content per volume than LNG, and requires fuel tanks approximately 1.3 times larger than equivalent LNG tanks. A vessel owner interested in methanol could opt out of a smaller tank in exchange for shorter voyages.

But, in addition to lower price volatility, methanol has other advantages. It is a liquid fuel at ambient temperatures, which makes it easier to store and handle on board of a vessel compared with LNG, which has to be maintained at least below -177°F to remain liquid. As a result, methanol’s operational costs are lower. Methanol is also biodegradable if spilled into water, while an LNG leak could be flammable and explosive. A newbuild vessel with LNG-burning engine costs about 22pc more to build than conventional marine fuel-burning vessel, while an methanol-burning vessel costs about 10pc more to build. Building a methanol bunkering terminal is cheaper than an LNG terminal.

The typical life of a dry bulk carrier, tanker or container ship is about 25 years. A vessel built this year, would end its service by about 2048. When commissioning a vessel with over 5,000 gross tonnage, ship owners travelling the EU territorial waters should consider a requirement considered by the EU to decrease the greenhouse gas intensity of marine fuels by at least 2pc from 2025, 6pc from 2030, 14.5pc from 2035, 31pc from 2040, 62pc as of 2045, and 80pc by 2050, from a 2020 baseline. The EU also agreed to include maritime shipping in its emissions trading system (ETS). Ships will have to pay for 40pc of their emissions from 2024, 70pc from 2025, and 100pc from 2026.

Bio-LNG is fully interchangeable with LNG derived from fossil feedstock. Similarly, bio-methanol is fully interchangeable with grey methanol. Bio-LNG and bio-methanol could be carbon natural, if produced from sustainable biomass. Ship owners who opt to build LNG-burning vessels could burn a blend of bio-LNG with LNG to meet EU’s fuel intensity rule and keep their ETS costs down. Ship owners who opt for methanol-burning vessels could burn a blend of bio-methanol with grey methanol. Global production of both bio-LNG and bio-methanol requires scaling up to meet marine fuel demand. Ship owners who choose methanol would have lower vessel building and operational costs. This is countered by the LNG-grey methanol price discount, when LNG-burning vessels owners would see immediate CO2 emissions reductions at lower price.

To hedge their bio-fuel costs and ensure availabilities, ship owners are inquiring about long-term bio-LNG or bio-methanol offtake agreements, looking into partnering with fuel suppliers, or offering their customers more expensive low-carbon freight rates. For example, Danish ship owner Maersk had entered in eight green methanol production partnerships and by 2025 it plans to source over 730,000t of green methanol.

By Stefka Wechsler

LNG less grey methanol $/t VLSFO-equivalent

LNG less grey methanol $/t VLSFO-equivalent

 

Photo credit and source: Argus Media
Published: 10 April, 2023

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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