17SEP2019 - NEWS - LNG-fuelled ship order book bulges

More vessels are under construction than the entire existing fleet as IMO 2020 looms
There are 184 LNG-fuelled ships currently on order, more than the 170 vessels in operation, according to standards agency DNV GL, as the impending IMO 2020 regulations encourage shipowners to take on the upfront costs of investing in cleaner-burning vessels.

From January 2020, the marine sector will have to abide by the steepest one-time cut to sulphur emissions ever imposed, slashing them by more than 80pc to help fight harmful air pollution. As part of their response, ship owners are including a gradual shift towards LNG propulsion, on the basis that it is virtually free of sulphur emissions, as well as—in anticipation of extensions in regional or global CO2 cap-and-trade schemes to include shipping—releasing around 20pc less carbon than heavy fuel oil.

“The upside for LNG is that the growth in LNG propulsion is concentrated in larger vessels, with larger bunker fuel demands,” says Jack Sharples, natural gas research fellow at the Oxford Institute for Energy Studies thinktank, in a recent report. “The expansion of the fleet of larger LNG-fuelled vessels will thus accelerate the demand for LNG as a bunker fuel.” Consultancy Wood Mackenzie expects the use of LNG for bunkering to rise roughly seven-fold by 2025 to 9mn t/yr.