Since the announcement of IMO to limit the sulfur content of marine fuels in 2020, all shipowners’ and bunker buyers’ attention is shifting towards Green energy. There are several different types of green energy fuel in the market today, but we will talk about LNG fuel as bunker.
First of all, What is LNG?
Liquified Natural Gas has been cooled to a liquid state and is one of the cleanest fuels on the market (made up of 95% methane). You can find an informative video by Shell by clicking on the link above.
Currently (as of November 2020) at the port of Rotterdam- there are 9 LNG bunker barges ready to supply. Many container ships, tankers, and car carriers are supplying their fuel using LNG fuel.
Picture from total website
Here are some quick responses to questions that I think everyone may have in mind!
Can LNG fuel be supplied to any ship?
The quick answer is NO.
LNG fuel can only be supplied to ships that are equipped to burn and correctly store this fuel. The tank will have to keep the natural gas in a liquid form, which needs high pressure and very low temperature. The engine will have to be able to run on LNG power.
How long has LNG been in the market?
Despite having been in the market for couple of years, the construction process for LNG bunker barges is still in a relatively early stage. Their recent market availability stems from a significant period of 10 years of research and development.
LNG itself has been extracted for over 50 years, and is primarily being used for domestic energy.
Today there are several “LNG POWERED” vessels, including Container ships, Tankers, Car carriers, and Cruise ships.
Does this mean there will be no more Crude oil in the market?
Research from Shell shows that the consumption of marine fuel will double between 2020 and 2050, which means that the new green fuel will push for the excess demand.
How do you price LNG fuel? is it USD/MT (US Dollars per Metric Ton)?
LNG fuel is priced based on the energy level. You don’t purchase in price per volume, but by its energy.
If you have any questions or would like to discuss this further please do not hesitate to contact us at copemer@copemer.com