LNG Bunkering

ENGINE Q&A: LNG bunker market set for low prices and rapid demand growth

In an interview with ENGINE, Emma Richards of BMI Research argues that a global gas supply glut will weigh down on LNG prices and create fresh bunker demand from both new and existing vessels.

Published

1 year ago

March 11, 2024

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After the LNG bunker market was shook by Russia’s invasion of Ukraine and skyward prices, it now faces a period of oversupply, low prices and soon a doubling of the global LNG-fuelled fleet.

The LNG bunkering market faces an upswing which will be driven by a notable increase in LNG-fuelled vessels in operation. With 509 operational LNG-fuelled vessels reported until now, and an additional 524 on order, the industry braces itself for significant expansion. Amidst this growth, the dynamics between sellers and buyers could change.

In an interview with ENGINE, Emma Richards argues that a global gas supply glut will weigh down on LNG prices and create fresh bunker demand from both new and existing vessels. She is an associate director of oil and gas at BMI Research and has over 10 years of experience as an analyst and researcher, with LNG as one of her specialisms.

How are industry players preparing themselves to tackle the expected growth of the LNG bunkering market in the coming years?

The LNG bunkering market is set for rapid expansion over the coming years, with DNV reporting 471 LNG-fuelled vessels operational as of 2023 and another 523 currently on order and set to begin commercial operations within the next five years.

Bunkering infrastructure is already fairly well-established along most major trade routes and industry players are ramping up their spending to cope with the expected increase in demand, via investment in bunkering terminals and ship-to-ship and truck-to-ship LNG bunkering capacity.

Traditional demand centres in North America, Europe and East Asia will continue to pull the lion’s share of capex, but we’re also seeing increased spending in other regions, such as MENA.

As well as individual investments in local facilities, some players are also partnering up, to build out global bunkering networks. This entails strengthening ties across existing hubs, as well as exploring new markets to penetrate along key shipping routes.

As with investments in the LNG sector more broadly, GHG emissions levels are growing in importance and measures to reduce carbon intensity are a common feature of many new projects under development.

Will the extra natural gas production and LNG export capacity that is set to come online in the US and Qatar over the coming years lead to an LNG glut?

Yes, it looks very likely to be the case. Qatar and the US are both set for significant export growth over the next five years, but there’s a whole host of other markets that are also ramping up their exports – Mozambique, Malaysia, Russia, Nigeria, Indonesia and Australia, to name just a few.

We don’t see underlying LNG demand growth being strong enough to absorb these exports in full, so – assuming liquefaction capacity comes online as planned – we’re looking at quite a loose market balance over the mid-to-late 2020s.

Based on our forecasts, 2026 and 2027 will represent the peak of the supply glut, with imports playing catch-up from there. To be clear, we’re very bullish on demand growth, it’s just a highly cyclical industry, and recurrent periods of surplus followed by scarcity are part and parcel of that.

If so, will that also permeate down to a glut on the LNG bunkering side and pressure prices down?

Yes, changes in LNG prices feed very directly into the bunkering market and prices will need to adjust downwards, to incentivise discretionary purchases and encourage fuel switching towards LNG. Sellers have generally had the upper hand over the past few years, but it’ll be the buyers’ turn soon.

Spiraling costs in the wake of Russia’s invasion of Ukraine in 2022 definitely took their toll on the LNG bunkering sector, pressuring demand to the downside and triggering the cancellation or delay of several LNG-fuelled vessels and bunkering projects. But the combination of lower LNG prices and tightening environmental regulations in the maritime sector paint a pretty bright picture for demand going forward.

By Debarati Bhattacharjee

Source: ENGINE
Photo credit: Shaah Shahidh on Unsplash
Published: 11 March, 2024

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Newbuilding

Chinese shipbuilder delivers CMA CGM’s Singapore-flagged LNG-powered boxship

CMA CGM welcomes “CMA CGM SEINE”, the first in a four-ship series of 24,000 TEU LNG dual-fuel container ships, by Hudong-Zhonghua Shipbuilding, according to BV Marine & Offshore.

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Chinese shipbuilder delivers CMA CGM’s Singapore-flagged LNG-powered boxship

Bureau Veritas Marine & Offshore (BV) on Wednesday (16 April) announced the successful delivery of CMA CGM SEINE, a new 24,000 TEU LNG dual-fuel container ship, by Hudong-Zhonghua Shipbuilding (HZSY).

This milestone marked the completion of the first vessel in a four-ship series, with BV providing classification and BV Solutions Marine & Offshore (BVS) providing advisory services.

It is CMA CGM’s first LNG-powered vessel flying the Singaporean flag with a capacity of 24,000 TEU.

It was reported that CMA CGM planned to expand its fleet and vessel tonnage, adding more vessels under the Singapore Registry of Ships. To support the transition to more sustainable fuels, CMA CGM said it would register and bunker alternative fuel vessels under the Singapore flag.

Xavier Leclercq, Vice President of CMA Ships, said: “Today’s delivery of the ‘CMA CGM SEINE’ featuring LNG as fuel at such a large scale, will remain a major landmark in the shipping world and embodies the engagement of the CMA CGM group toward an ambitious decarbonisation path, leading the way to our industry.”

Mr. Xiufeng ZHANG, Vice General Manger of Hudong-Zhonghua shipyard, said: “CMA CGM SEINE, as the lead ship of the four 24,000-TEU LNG dual-fuel powered container ships ordered by CMA Ships from our company, stands as a new-generation maritime ‘Green Giant’ and ‘super cargo hauler’.”

The vessel integrates a dual-fuel propulsion system supported by GTT Mark III membrane-type LNG bunker tanks, with a total capacity of 18,600 cubic meters, designed to enhance both environmental performance and operational efficiency.

Measuring 399.9 meters in length and 61.3 meters in beam, the vessel has a carrying capacity of 23,876 TEU and is equipped with a WinGD W12X92DF-2.0 dual-fuel main engine, incorporating the Intelligent Control by Exhaust Recycling (iCER) system.

This configuration significantly reduces methane emissions and enables compliance with IMO Tier III emission standards when operating in "Diesel + iCER mode".

BV worked closely with the engine manufacturer and the shipyard to test the parent engine and issued the Engine International Air Pollution Prevention (EIAPP) certificate, establishing a foundation for compliance across the series. The iCER system optimises energy efficiency, achieving an Energy Efficiency Design Index (EEDI) reduction well beyond the IMO’s Tier III standards.

To address the critical sloshing challenges in large-volume LNG bunker tanks, BVS performed direct computational fluid dynamics (CFD) simulations. The verified pressure data was provided to the design unit for structural strength checks, ensuring the safety of the cargo containment system and hull support structure.

The vessel features advanced technologies to boost operational performance and energy efficiency. Equipped with the SmartEye intelligent monitoring system and the TotalCommand full-control system, it achieves automated precision control during berthing, significantly reducing berthing time and enhancing port operations.

Energy efficiency is further improved by applying variable frequency drive (VFD) technology to the engine room fans and seawater cooling pumps. Meanwhile, the WinGD Data Collection Monitoring (DCM) system offers real-time tracking and analysis for the dual-fuel main engine, supporting operational optimisation.

BV also supported the upgrade of BV certified boil-off gas (BOG) compressors by conducting sea trial tests and re-issuing product certificates, facilitating seamless system commissioning and vessel delivery.

Photo credit: Bureau Veritas Marine & Offshore
Published: 17 April, 2025

LNG Bunkering

AD Ports Group hosts first STS LNG bunkering operation at Khalifa Port

STS bunkering was part of a simultaneous operation, in which container vessel “MSC Thais” received LNG marine fuel from bunker vessel “Green Zeebrugge”, supplied by marine fuels provider Monjasa.

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AD Ports Group hosts first STS LNG bunkering operation at Khalifa Port

AD Ports Group on Wednesday (16 April) said it hosted its first ship-to-ship (STS) liquified natural gas (LNG) bunkering operation recently at its flagship deep-water Khalifa Port.

The STS bunkering was part of a simultaneous operation, in which the container vessel MSC Thais berthed at Abu Dhabi Terminals, received LNG marine fuel from the dedicated LNG bunker vessel Green Zeebrugge, supplied by marine fuels provider Monjasa.

Captain Saif Al Mheiri, CEO of Abu Dhabi Maritime and Chief Sustainability Officer at AD Ports Group, said: “By adhering to the highest safety and environmental standards, AD Ports Group and Monjasa are ensuring that shipowners have reliable access to a diversified fuel mix that supports their decarbonisation objectives.”

“AD Ports Group will continue to explore and implement forward-looking solutions that drive progress toward global sustainability goals.”

Liquified natural gas offers reduced greenhouse gas emissions and significantly less sulphur oxide, nitrogen oxide, and particulate matter emissions compared to traditional marine fuels.

AD Ports Group and Monjasa will continue expanding LNG bunkering services across the Group’s commercial ports in Abu Dhabi, including cruise vessels at Zayed Port, while offering a comprehensive fuel portfolio that includes Very Low Sulphur Fuel Oil (VLSFO), Marine Gas Oil (MGO), and High-Sulfur Fuel Oil (HSFO).

The STS operation was executed in accordance with international best practices and regulatory standards, that include LNG bunkering protocols and guidelines set by the International Maritime Organization (IMO), International Association of Ports and Harbors (IAPH), International Organization for Standardization (ISO), and Society of International Gas Tanker and Terminal Operators (SIGTTO).

With this achievement, AD Ports Group is accelerating the shift toward sustainable marine fuels, while reinforcing Abu Dhabi’s leadership in the global energy transition and advancing the UAE’s Net Zero 2050 Strategy.

Photo credit: AD Ports Group
Published: 17 April, 2025

Newbuilding

China: CIMC SOE gains new LNG bunkering vessel order from ‘European shipowner’

This is the fifth order of the same type of ship Nantong CIMC Sinopacific Offshore & Engineering has secured; vessel is scheduled to be delivered and put into operation in April 2027.

Published

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China: CIMC SOE gains new LNG bunkering vessel order from ‘European shipowner’

China-based shipyard Nantong CIMC Sinopacific Offshore & Engineering (CIMC SOE) on Thursday (10 April) said it successfully secured an order for a 20,000 cubic metre (m3) liquified natural gas (LNG) transport and bunkering vessel.

The company did not reveal the identity of the company which placed the order but said it was from a “European shipowner”.

This is the fifth order of the same type of ship CIMC SOE has secured.

The LNG transport bunkering ship has a total length of 160 metres, a beam of 25 metres, and a designed speed of 15.5 knots.

The ship is not only equipped with a WINGD dual-fuel main engine with iCER technology, but also can be equipped with a high-voltage shore power system in the future, which can greatly reduce pollution and greenhouse gas emissions during the ship's life cycle, and effectively respond to the increasingly stringent environmental protection demands of the global shipping industry.

According to the plan, the new LNG and transport bunkering vessel is scheduled to be delivered and put into operation in April 2027.

CIMC SOE said the vessel is different from traditional LNG bunkering ships as this design can function as storage, transportation, conduct ship-to-ship bunkering, and can flexibly serve port fuel supply and offshore floating storage.

“The signing of the fifth order has further consolidated CIMC SOE's leading position in the international small and medium-sized liquefied gas carrier and bunkering ship market,” the company said.

Photo credit: Nantong CIMC Sinopacific Offshore & Engineering
Published: 16 April, 2025