LNG as a Bunker Fuel Market By Navigation Area (Inland Waterways, Ocean & Sea) By Application (LNG Ships, Others) and Region - Global Forecast to 2026
23 February 2018
find_in_page Our Research Methodology is based on the following main points:
- Data Collections and Interpretation
- Data Validation
- Final Projections and Conclusion
The global LNG as a bunker fuel market was valued around US$ 550 million in 2017, and is expected to register a CAGR of over 8.5%. The report offers in-depth insights, revenue details, and other vital information regarding the global LNG as a bunker fuel market and the various trends, drivers, restraints, opportunities, and threats in the target market till 2026. The report also offers insightful and detailed information regarding the various key players operating in the global LNG as a bunker fuel market, and their financials, apart from strategies, acquisitions & mergers, and market footprint. The global LNG as a bunker fuel market is segmented on the basis of type, application, and region.
Liquefied Natural Gas (LNG) is a clear, colourless, non-toxic and non-corrosive liquid, which is converted to liquid by cooling of natural gas at a cryogenic temperature of -162°C. It is largely made from methane, with a low concentration of other hydrocarbons and on liquefaction, occupies only 1/600 space as compared to methane in gaseous form.
Global LNG as a Bunker Fuel Market Dynamics:
Low prices of LNG fuel then other conventional fuel are expected to drive the market growth over the forecast period. LNG is expected to be less costly than marine gas oil (MGO), which will be required to be used within the ECAs if no other technical measures are implemented to reduce the SOx emissions.
Report Coverage and Deliverables
Current low LNG prices in Europe and the US suggest that a price – based on energy content – comparable to heavy fuel oil (HFO) seems possible, even when taking into account the small scale distribution of LNG as a bunker fuel.
Furthermore, major economies of the world are trying to lower the oil dependency which is expected to have positive impact on the LNG market. The US shale gas revolution has contributed significantly to advent of LNG as an alternative to oil as a global marine fuel. Australia, East Africa, Middle East, and Russia have relatively large reserves of LNG. LNG has become an attractive and viable marine fuel as a result of several factors such as supply security and availability, coupled with low gas prices. Moreover, LNG has become an attractive alternative to marine fuel oils regardless of regulatory changes, particularly in North America which is expected to drive the market growth over the forecast period.
However, LNG fuel in itself may be inexpensive, but cost and time needed to retrofit or new-build a ship with a dedicated LNG propulsion system are relatively high. By comparison, SOx scrubbers require a smaller initial investment and take less time to install. Once installed, an LNG-burning system is complex, requiring additional measures to ensure safe operation, maintenance and refueling. Lack of a consistent regulatory framework for safety and security protocols poses an additional problem which in turn limits the market growth over the forecast period.
Market analysis by navigation area:
On the basis of navigation area, the LNG as a bunker fuel market includes inland waterways and ocean & sea. Ocean & sea segment is expected to contribute major revenue share and expected to maintain its dominance over the forecast period. Maritime transport is essential to the global economy and over 90% of the world’s trade is carried by sea. It is also the most cost-effective method to transport goods and raw materials in bulk. Increasing volumes of import-export is also resulting in more freight fleets and demand for fuel.
Market analysis by application:
Among all the application segments, LNG ships segment is expected to register highest CAGR over 9.0%. Shipping is considered a vital mode of transport and it is estimated that LNG ships account for a mere 3% of global carbon emissions. The latest IMO mandates sulphur emissions to be lowered to 0.5%, which has given rise to several alternatives for ship owners, one being switching to LNG fuel. LNG fueled ships emit zero sulphur oxide emissions along with decline in carbon dioxide gas release by 25%, and these are primary factors promoting use of LNG as a fuel in marine transport.
Analysis by Region:
Europe market is expected to dominate the global LNG as a bunker fuel market, and it accounts for largest market revenue over US$ 260 mn in 2017 as compared to that of markets in other regions. Dominance by Europe market is expected to continue over the forecast period with comparatively higher CAGR than that of other regions, owing to higher demand among consumers in countries in the region.
International Maritime Organization (IMO) mandate for sulphur reduction to 0.5% in ECAs is expected to be imposed from 2020; however, Europe is the first region to adopt this change from 2017 by using LNG as a marine fuel. Revenue growth of the market in Europe is primarily driven by increasing capital investments for LNG bunkering coupled with increasing seaborne trade from this region.
Revenue growth of the US LNG bunkering market is driven by high volume shale gas and natural gas production in the US. Increasing set-ups of regasification and liquefaction plants and rising exports is driving demand for LNG as a marine fuel in the US. LNG is currently available in the US as a bunker fuel for maritime shipping at various sea ports, including Freeport LNG Terminal, Kenai LNG, Nikiski, Alaska, and Cheniere's Sabine Pass terminal.
China is one of the major players in the LNG as a bunker fuel market, owing to low labor costs and abundance of labor workforce. It is also a major consumer and utilizes a sizable volume of LNG as a bunker fuel.
China’s leading provider of LNG carriers – Mitsui O.S.K. Lines, Ltd. has built 6 LNG carrier vessels for SINOPEC – a Chinese oil & gas company and a joint venture project between SINOPEC and China COSCO Shipping Corporation Ltd. This is expected to contribute to increasing demand for LNG as a bunker fuel and helps to address environmental pollution issues in China
Global LNG as a bunker fuel segmentation, by navigation area:
- Inland Waterways
- Ocean & Sea
Global LNG as a bunker fuel segmentation, by application:
- LNG Ships
Global LNG as a bunker fuel segmentation, by region:
- Southeast Asia
- Royal Dutch Shell Plc
- Gasum Oy
- Statoil ASA
- Barents Natural Gas AS
- The Linde Group
- ENGIE SA
- Korea Gas Corporation
- Kunlun Energy Company Ltd.
- Eni s.p.A
- CNOOC Limited
1.0 Chapter 1
- 1.1 Preface
- 1.2 Assumptions
- 1.3 Abbreviations
- 2.1 Report Description
- 2.1.1 Market Definition and Scope
- 2.2 Executive Summary
- 2.2.1 Market Snapshot, By Navigation Area
- 2.2.2 Market Snapshot, By Application
- 2.2.3 Market Snapshot, By Region
- 2.2.4 Prudour Opportunity Map Analysis
- 3.0.1 Global LNG as a Bunker Fuel Market Dynamics
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