Speaking at a recent Asia Maritime breakfast briefing on LNG, Forsdyke said meeting these regulations will increasingly become more relevant in Asia with emissions control areas (ECAs) being introduced in Hong Kong and also in the main shipping basins in China.
He noted however that there remain a number of challenges to overcome before the cleaner-burning fuel sees wider acceptance. Among these are the availability of LNG in various regions of the world, the right engine technology and the logistical viability of using the fuel in relation to global trading routes.
In terms of availability, the issues can be divided into the commercial element and the infrastructure element. From a commercial point of view, shipping is a very small percentage consumer of LNG and as a result has to suffer a lot of inconsistency in pricing, Forsdyke said. “We, as an industry consumer are the small fish in a big pond,” he quipped.
On the infrastructure side, it boils down to where LNG bunkering is available, Forsdyke said. In addition, there may also be issues with the quality of the gas being supplied and its calorific value, at different bunkering ports.
As a subsidiary issue, Forsdyke also noted that there is a need to work on international standards for handling LNG as a fuel. For example, together with LR, Singapore’s Maritime and Port Authority (MPA) has completed a study on technical standards and procedures for LNG bunkering at its port. In addition, the European ports of Antwerp, Rotterdam and Zeebrugge have also come together to discuss LNG bunkering standards with Singapore.
China LNG Shipping (International) general manager Paul Oliver meanwhile put out the reality that as long as it is a seller’s market then Asian buyers will always have to pay a premium linked to the price of crude, and only if the supply of gas begins to outstrip supply will a de-linkage occur.
BMT Asia-Pacific md Richard Colwill, however, suggested that this point may not be that far off. With major Australian projects coming onstream, the supply side could drive prices down significantly by 2017 as these producers try to meet their capex requirements, he said.
Forsdyke also said that if we start to see more pure play gas production companies instead of the current oil and gas companies, these may influence the market more significantly.
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