An article appearing this week in the online shipping trade publication Riviera Maritime Media pointed to signs of increasing demand for low-emission liquefied natural gas (LNG) as a marine fuel, supplied and transported at smaller-than-pipeline scale by using bunkered vessels for storage. The article cites forecasts from McKinsey’s Global Gas and LNG Outlook to 2015 , which has projected an average of 3% demand growth for LNG from the shipping industry alone between now and 2015—3 times the demand for overall gas. Riviera cites industry trade figures show that the worldwide LNG floating supply fleet is expected to grow 87% from 2018-2020.
According to McKinsey, the looming constraint for demand is a shortage of floating and port-side infrastructure in the form of bunkering vessels. Firms with existing operational expertise in LNG bunkering appear set to expand, including Madrid-based Repsol, which is developing port-side LNG bunkering infrastructure in the Mediterranean, taking advantage of Spain’s geographic position in supplying fuel to marine traffic in Atlantic and Mediterranean routes secured via medium- and long-term contracts.
According to Riviera, French energy multinational Engie docked 115 LNG carriers and 40% more truck transports for LNG in the first six months of 2019 compared to the previous year.
On Tuesday, Chart Industries Inc announced a strategic investment in Stabilis Energy to expand operations in the North American small-scale LNG market, where Chart sees $650 million in market opportunity over the next three years.
Demand for LNG ships is rapidly increasing from the global cruise industry. Trade publication LNG Industry reports that German cruise line operator AIDA (the German subsidiary of Carnival Corp and the nation’s cruise market leader) has affirmed that it is ramping up acquisitions of new LNG-powered cruise ships and retrofitting existing vessels for LNG fueling so that 94% of its fleet will be LNG-powered by 2023.