Global LNG demand growth will be supported not only by higher power and gas consumption but also by surging demand from the shipping industry, where liquefied natural gas is poised to become key to replacing the dirtier fuel oil and other oil-based marine fuels.
Demand for LNG bunkering is expected to at least double by the end of the decade, industry executives and experts have told Reuters.
“LNG is great because the infrastructure is there. It’s readily available … maybe later on it’s going to be, hopefully, quite cheap as well,” Tuomas Maljanen, associate director for LNG and new energy at shipbroker Fearnleys, told Reuters.
According to Jo Friedmann, senior vice president of supply chain research at Rystad Energy, demand for LNG as a marine fuel could top 4 million tons by the end of this year, and double by 2030.
LNG is pulling ahead of renewable ammonia and methanol as the preferred choice for ships now that regulations say that the industry must either install the so-called scrubbers if vessels use high-sulfur fuel oil (HSFO), or run the ships on cleaner alternatives such as methanol, LNG, or ammonia.
In addition, the EU has a new regulation, FuelEU Maritime, which came into effect on January 1, 2025 and sets maximum limits for the yearly average greenhouse gas intensity of the energy used by ships above 5,000 gross tonnage calling at European ports, regardless of their flag.
This new regulation is expected to drive demand for LNG as a marine fuel as renewable ammonia and methanol are in early-stage development and lack extensive infrastructure, analysts say.
Maersk, the Denmark-based shipping giant, late last year ordered 20 container vessels equipped with dual-fuel engines, with all ships equipped with liquefied gas dual-fuel propulsion systems. Until 2024, Maersk was betting only on green methanol as a fuel to replace fuel oil and reduce its carbon footprint.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- Sanctions and Houthi Threat Boost Fuel Oil Demand
- Aramco and Honeywell to Develop Direct Crude-to-Chemicals Tech
- Congo Set to Pass New Natural Gas Law to Attract Investments
