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Regulation and commercial sense pushing up demand for LNG as fuel

Regulation and commercial sense pushing up demand for LNG as fuel
The demand for LNG as marine fuel is anticipated to rise in view of the upcoming fuel sulphur content cap regulation and increasing commercial attractiveness of the clean fuel, according to Bomin Linde LNG.

Bomin Linde LNG, provider of LNG as fuel for ships and established as a joint venture of The Linde Group and Mabanaft, has seen positive signs that indicate an increasing market acceptance of LNG as an option to the commonly-used high-sulphur 380 cst bunker fuel.

“With the strong possibility that the sulphur content cap regulation will be implemented by 2020 on a global level, the need for environmentally-friendly fuel will rise substantially,” said Jan Christensen, regional manager, The Bomin Group, which is 100% owned by Mabanaft, the international trading division of Marquard & Bahls.

The IMO will impose a global fuel sulphur content cap of 0.5% by 2020 or 2025, subject to a review in 2018. At present, the global fuel sulphur cap is at 3.5%.

“Consequently the demand for LNG as a marine fuel is expected to increase accordingly. In addition to this LNG future prices are declining. Hence the commercial attractiveness of LNG will substantially increase in the future,” Christensen told Seatrade Maritime.

He pointed out that several LNG infrastructure projects like shoreside terminals and LNG supply vessels are moving forward. Bomin Linde LNG, for example, has submitted a request for approval for a small-scale LNG bunker terminal in Germany’s Hamburg and has launched a tender for a bunker supply vessel, which is at a very advanced stage. Furthermore during the last year many firm orders for LNG-fueled vessels have been placed in the market.

For Bomin Linde LNG, the company has had a very positive start in 2015, Christensen believed.

In February the company signed a memorandum of understanding with Klaipedos Nafta to develop the LNG market and associated infrastructure in the European ECA zone.

“Bomin Linde LNG will use the Klaipeda FSRU and book regulated LNG reloading capacities. In conjunction with Klaipedos Nafta we have also agreed to jointly explore the possibilities to develop a LNG bunkering vessel to provide LNG bunkering services in the region by 2017,” he said.

Recently in April, Bomin Linde LNG powered the first German-flagged vessel, the car and passenger ferry MS Ostfriesland with LNG.

“We are confident that the fueling operations for the new passenger ferry en-route between Cuxhaven and the island of Heligoland operated by the Reederei Cassen Eils will be carried out successfully as well. Hence we are looking forward to commencing operations with Germany’s first newbuild LNG-fueled ferry in the course of this year,” Christensen said.