LNG bunker demand to hit 5 million mt this year – Shell

Global LNG bunker demand is projected to rise to around 5 million mt this year, up from around 3 million mt last year, Shell says.

PHOTO: Shell's bunker delivery vessel Haugesund Knutsen delivering LNG to the cruise ship Costa Smeralda. Port of Barcelona

Oil and gas major Shell anticipates that more dual-fuel ships will burn LNG instead of oil-based marine fuels, as lower LNG bunker prices result in more oil-to-gas switching.

It expects a chunk of this demand to come from container ships, followed by Ro-Ro vessels and tankers. According to DNV data, the current LNG fleet is made up of 493 vessels, with another 221 vessels expected to join this year. Out of the current LNG fleet, 74 vessels are crude tankers, followed by container ships (71), chemical tankers (50) and car/passenger ferries (43).

Shell projects global LNG bunker demand to reach 10 million mt/year by 2028, which would be a doubling from its projected demand for this year.

Rotterdam’s fossil LNG sales increased by 52% to 251,000 mt in 2023. That was roughly equivalent to just 3% of total bunkers (conventional marine fuels + LNG) sold. The biggest bunker hub – Singapore – sold 111,000 mt of fossil LNG.

Going forward, lower LNG bunker prices may make LNG bunkering even more lucrative for shipowners.

The front-month Dutch TTF Gas Future has nearly halved from peak levels of €59.04/ MWh ($63.63/MWh) in November last year, to €24.31/MWh ($26.20/MWh) now. Milder winters have contributed to this downward trend, Dutch LNG supplier Titan said in its latest monthly report.

Despite ongoing safety challenges in the Red Sea, most LNG shipments from Middle Eastern countries have continued to go ahead, it adds.  

By Nithin Chandran

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