Shell sees rapid uptake in LNG as a marine fuel over last year

“LNG fuelled vessels are represented across all shipping segments now, increasingly it’s seen as a solution for oceangoing vessels globally,” Nick Potter, general manager, Shipping & Maritime, Asia Pacific Middle East at Shell Trading.

“In the last year there’s been a rapid uptake in both the demand and supply aspects of LNG as a marine fuel across all geographies Asia – Europe and across all geographies, and all sectors,” he told a Maritime & Port Authority of Singapore (MPA) and Singapore Shipping Association (SSA) seminar on IMO 2020.

While LNG has pushed for alternative marine fuel for a number of years now Shell sees two reasons why it is taking off now – environmental and supply infrastructure.

On the environmental front, as is well known, LNG complies with IMO 2020, reduces NOx emissions by 85% and CO2 emissions by 21%.

Read more: LNG - The marine fuel of the near future?

The reduction in CO2 emissions is not large enough to meet the IMO’s ambitions for a 50% cut in CO2 emissions by 2050, however, Potter said options under development could bring this target much closer.

“Additionally work is being done to on and to scale up bio-LNG and synthetic LNG reducing CO2 by a further 13% thus making LNG a robust step in the pathway to IMO’s CO2 targets,” Potter said.

On the availability front he said that the “chicken and egg” situation had largely been solved.

“In the last year the number of LNG bunker vessels globally has doubled,” Potter said.

“Regionally LNG will be available in Singapore, Malaysia, China, Korea and Japan, and the network has the potential to be extensive. LNG is already available in 150 locations worldwide but it is missing that last mile of the value chain which needs to put in small scale jetties and specialist bunker vessels for delivering to ships.”

Looking ahead Shell forecasts the LNG as marine fuel market will reach 35m tonnes by 2035.