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A bright future for LNG amid current market challenges

The energy markets including the LNG sector are going through difficult times and there is much uncertainty, even if the long-term future is a good one, was the message from senior executives speaking at Gastech 2015 Singapore.

Wandering through the halls at the Singapore Expo towards the end of Wednesday afternoon there was very little sign of an industry in the doldrums. Many of the stands were of frankly epic proportions and the drinks were flowing freely at stand parties up and down the aisles, and people did not exactly appear to be crying into their beer (or champagne) either.

The statement by BG Group ceo Helge Lund in his keynote address that LNG was “not a twilight industry” was somewhat unusual given that it is considered by most to be a relatively young sector. One shipping industry commentator scoffed in private, “It’s not a twilight industry, it’s barely been born!”

But it is true the LNG sector is facing its challenges with cancelled and delayed projects, and certainly on the shipping side overcapacity and low rates. But as the world increasingly demands clean energy, LNG is very much a growing part of the mix for the future.

This is providing a huge array of opportunities particularly as LNG expands from its model of huge land-built terminals, and 25 year long supply contracts to a much more flexible future utilising floating assets such FSRU and FLNG vessels.

By the end of the first day of the show we had received a veritable avalanche of press releases about type approvals, and so forth, for a myriad of new containment systems.

There were presentations and models of new vessel types designed to meet the demands of a more flexible future. There were solutions for small-scale LNG power generation were presented, such as Wärtsilä’s new LNG storage and regasification barge concept designed for smaller, more remote locations where full-scale land infrastructure would not make economic sense.

LNG as a marine fuel was very on the agenda with classification societies issuing LNG bunkering guidelines, new concept bunker tankers unveiled, and concept designs for LNG powered vessels, such as the 20,000 teu LNG-fuelled, electric engine containership presented by DNV GL.

It may not all be a bed of roses at the moment as the sector reels from the impact of the sharp drop in the oil price. However, it is clearly also a business that has bright future with many opportunities for those from the shipping side involved in developing floating infrastructure and transportation.

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