The LNG bunkering market is expected to witness a CAGR of 62.5% over the next 5 years, and is projected to reach $24 billion by 2023. The primary factors driving the growth of LNG bunkering market are increase in demand in order to reduce the carbon footprint of vessels, stringent emissions policy in the shipping industry and the evergreen search for a cost effective alternative fuel; not to mention the government floating initiatives to support such green companies.
Advantages for LNG are manifold, first of all as a fuel it releases lesser amounts of pollutant when compared to the more traditional fuels (fuel oil and marine diesel oil) due to the negligible amount of sulfur content, and its combustion producing lower nitrogen oxide. The bunker fuel is primarily used by the marine vessels such as bulk and general cargo vessels, tankers, container ships, offshore port vessels, and ferries. But there several obstacles that the LNG bunkering market is facing, including the high initial infrastructure development cost and, the regulatory landscape and competition from alternative fuels.
As per Market Watch, in 2017, Singapore the Maritime and Port Authority of Singapore (MPA) commenced its LNG bunkering pilot project. Under the project, the MPA has provided various companies with grants of up to $2 million per LNG-powered vessel constructed.
In 2016, the International Maritime Organization notified that the effective date for the reduction of marine fuel Sulphur will be 2020. After that there’ll be a new worldwide cap, ships will have to use marine fuels with a Sulphur content of no more than 0.5% Sulphur against the current limit of 3.5% Sulphur in an effort to reduce greenhouse gas emissions which are the primary reason behind global warming and climate change.
The LNG bunkering market will be dominated by ferries and offshore service vessel during the forecast period of 2017-2023. Ship-to-ship LNG bunkering market is expected to witness a CAGR of 56.0% by 2023 owing to its quick transfer operation.
Asia-Pacific region backed by high marine trade is expected to grow at the fastest rate during the forecast period. The LNG bunkering market in North America is expected to be benefited owing to the decline in natural gas price in the region
The African region and Middle East, especially Qatar is expected to make a good business in the LNG bunkering market owing to the abundance of LNG in the region.
The key companies dealing in LNG bunkering market are Skangas, Gazprom Neft PJSC, Royal Dutch Shell Gasum, KLAW LNG, Korea Gas Corporation, ENN Energy Prima LNG, Fjord Line, and EagleLNG.