How many LNG powered vessels are there in the world?
At the start of 2020 there were 175 LNG-fuelled ships in operation, excluding the 600 strong LNG carrier fleet, the majority of which are LNG-fuelled, and over 200 ships on order
How fast is the LNG powered fleet expanding globally?
Since 2010 the number of vessels fuelled by LNG has grown consistently by between 20% and 40% per annum.
Investing in LNG
If I invest in LNG today, will it meet current and future anticipated local emission requirements?
LNG far out-performs conventional marine fuels on a local emissions basis which is particularly important in regard to human health issues in ports and coastal areas. It emits virtually no sulphur oxides (SOx) and particulate matter (PM). Compared to existing heavy marine fuel oils, LNG can, depending on the technology used, emit 85% fewer nitrogen oxide (NOx) emissions. As such it is compliant with both SOx and NOx emissions limits in coastal Emission Control Areas (ECAs) and the IMO’s global sulphur cap. Furthermore, its unparalleled emissions performance effectively insulates shipping companies from the impact of future, more demanding, local emissions regulations.
Further information can be found here
If I invest in LNG today, will it meet IMO Greenhouse Gas (GHG) targets for 2030 and 2050?
By investing in LNG-fuelled vessels now, ship owners can realise immediate GHG benefits – up to 28% on a Tank-to-Wake basis, including the impact of methane emissions. In combination with efficiency measures being developed for new ships in response to the IMO’s Energy Efficiency Design Index (EEDI), LNG provides a way to meet the IMO’s decarbonisation target of a 40% decrease by 2030 for international shipping.
Longer term LNG offers a decarbonisation pathway for shipping to become carbon neutral through the use of liquefied biomethane (LBM) produced from biomass and liquefied synthetic methane, (LSM) produced from renewable electricity.
Further information can be found here
Is it possible to invest in LNG now and have an option to use different fuels in future?
Yes, LNG bunkering infrastructure can be used to supply zero-carbon fuels in the form of liquefied biomethane (LBM) or liquefied synthetic methane (LSM), with little or no modification, so enabling the transition to a decarbonised shipping industry. In addition, as bio-methane and synthetic methane are the same chemical composition as LNG, any percentage amount of LBM and LSM can be added to LNG to reduce GHG emissions without affecting vessel engine performance or operating procedures.
Does investing in LNG provide a competitive Return on Investment (ROI)?
LNG is the only alternative to traditional marine fuel oils which is commercially viable for deep-sea shipping. Independent modelling of the investment case for LNG-fuelled vessels across a variety of different vessel types and trade routes using publicly available data on CAPEX shows that LNG provides a compelling business case for ship owners when compared to conventional marine fuels.
Analysis clearly shows that LNG as a marine fuel delivers the best return on investment on a net present value (NPV) basis over a conservative 10-year horizon compared with low sulphur fuel oil and HSFO with EGCS, with paybacks varying from less than one year to five years
Further details can be found in our investment case study reports here
How commercially competitive is LNG against Very Low Sulphur Fuel Oil (VLSFO) or High Sulphur Fuel Oil (HSFO) with Exhaust Gas Cleaning System (EGCS or scrubber) technology?
Analysis clearly shows that LNG as a marine fuel delivers the best return on investment on a net present value (NPV) basis over a conservative 10-year horizon compared with low sulphur fuel oil, with paybacks varying from less than one year to five years.
Further information can be found here
What other benefits does LNG provide?
Choosing LNG now as the most environmentally friendly practical option for deep-sea shipping may provide multiple benefits: corporate brand value may be enhanced through choosing the best feasible environmental option, corporate share price may be enhanced through greater ESG investment scores, vessel port fees may be reduced for LNG fuelled vessels, capital financial costs may be supported and/or reduced rates of interest obtained.
How can I ensure my LNG investment does not become stranded?
LNG as a marine fuel offers the best operational performance today in terms of air quality emissions and meeting existing sulphur and nitrogen oxide legislation. It is operationally proven, commercially viable, available and scalable now, and the only fuel marine that can enable the shipping industry to remain competitive while phasing-out emissions this century. Current LNG propulsions systems offer investors exceptional future optionality to meet expected GHG emissions.
LNG reduces GHG emissions by up to 28% on a Tank-to-Wake basis in comparison with traditional heavy marine fuel oils. In combination with efficiency measures being developed for new ships in response to the IMO’s Energy Efficiency Design Index (EEDI), LNG provides a way to meet the IMO’s decarbonisation target of a 40% decrease by 2030 for international shipping.
GHG emissions from current dual-fuel LNG propulsion systems can be reduced further through the use of drop-in fuels, such as liquefied bio-methane, also referred to as bioLNG, and liquefied synthetic methane.
Additionally, some engine manufacturers are already offering dual-fuel LNG engines that can be easily converted to use other alternative marine fuels.
LNG Bunker Fuel
How does the energy density of LNG compare to other fuels?
Fuel is traditionally purchased on a dollar per ton basis, however, the transaction is really about buying energy. LNG offers a lower energy cost per ton, whenever priced against Heavy Fuel Oil (HFO) by nearly 24% because it contains more energy for a given mass: LNG as a marine fuel provides 50GJ of energy per ton, whereas HFO only provides 40.5GJ/ton. 2,000 tons of LNG provides the same amount of energy as 2,469 tonnes HFO.
LNG is a clear winner in terms of delivering more energy per litre when compared with other alternative marine fuels, having roughly twice the density of ammonia and nearly four times that of hydrogen.
|Liquid Fuel||Energy Density MJ/litre|
What is the potential for liquefied bio-methane (LBM) or bioLNG as a marine fuel?
Estimated sustainable global supplies of LBM significantly exceed the forecast energy demand from shipping by 2050, and LBM is likely to be commercially competitive relative to other low- and zero-carbon fuels. The independent analysis from CE Delft excludes the potential of aquatic biomass which offers an energy resource 30-60 times greater than global shipping demand. It is supported by a recent report by the IEA on the outlook for biogas and biomethane which concludes that feedstocks available for sustainable production of biogas and biomethane are huge, but only a fraction of this potential is used today
Is LNG available today as a bunker fuel?
LNG infrastructure is growing fast and is being built around an existing bulk LNG infrastructure closely aligned with major shipping trades. LNG bunker vessel numbers have increased substantially in just a few years from none to over 30 next year. With roughly 200 ships operating today on LNG, the order book has an additional 200 vessels. We expect that growth to continue.
Those services best suited to LNG today are short-sea – those involving coastal and short duration voyages; and liner – deep-sea passages following regular routes. As infrastructure expands and the number of ports supplying LNG as a marine fuel grows, tramp and spot market services – where a vessel’s voyage may change with each cargo carried, will become feasible.
SEA-LNG began with just one port member and now we have seven with more interested in supporting our work. Ports play a key role for shipping and their growing interest in LNG to serve their customers is an obvious signal that the demand for LNG as a marine fuel is growing
As of 2020, it can now be delivered to vessels in some 96 ports, including most of the main bunkering ports, with a further 55 ports in the process of facilitating LNG bunkering investments and operations.
Where can I find LNG bunker fuel?
LNG bunker fuel is available globally in key ports. Our Bunker Navigator map provides a handy guide to them
How do I obtain LNG bunker fuel?
LNG Bunker fuel can be delivered to your vessel in multiple ways e.g. truck-to-ship, pipeline-to-ship and ship-to-ship transfer. LNG bunker fuel is increasingly available at sea and in harbour with ship-to-ship transfer. There has been a dramatic scaling up of ship-to-ship bunkering. In early 2019 there were just six LNG bunkering vessels around the world. As of January 2020, there are 12 in operation with a further 27 on order and/or undergoing commissioning, the majority are due to come into service within the next two years. Further details on where LNG bunker vessels operate can be found here
How does LNG compare to proposed future zero-carbon alternative marine fuels?
In contrast to other alternative fuels such as renewable hydrogen and ammonia, LNG is operationally proven, commercially viable, available and scalable now. LNG is the only marine fuel that can enable the shipping industry to remain competitive while phasing-out emissions now.
Neither hydrogen nor ammonia are available in sufficient quantities to be a feasible option for today’s international deep-sea merchant fleet. They are far more expensive, in terms of cost per unit of energy output, so not commercially viable today or for the foreseeable future.
To develop hydrogen and ammonia as marine fuels, the recent UMAS / Energy Transition Commission study, estimated that an additional $1-1.4 trillion investment is needed to reduce the shipping industry’s GHG emissions by 50% by 2050. According to the study, only 13% of this investment is related to ships themselves; 87% would be needed to develop the land-based infrastructure and production facilities for low carbon fuels. In contrast, all existing infrastructure for LNG can support the supply of net-zero carbon Liquefied Bio or Synthetic Methane (LBM & LSM) with very little modification.
There is a whole range of safety, environmental and technical issues to be addressed before fuels such as hydrogen or ammonia can be used in the marine environment with implications for both cost and timing.
Further analysis of hydrogen, ammonia and other alternative marine fuels can be found here
Does using LNG as a marine fuel reduce harmful emissions?
Yes. LNG far out-performs conventional marine fuels on a local emissions basis which is particularly important in regard to human health issues in ports and coastal areas. It emits virtually no sulphur oxides (SOx) and particulate matter (PM). Compared to existing heavy marine fuel oils, LNG can, depending on the technology used, emit 85% fewer nitrogen oxide (NOx) emissions. As such it is compliant with both SOx and NOx emissions limits in coastal Emission Control Areas (ECAs) and the IMO’s global sulphur cap. Furthermore, its unparalleled emissions performance effectively insulates shipping companies from the impact of future, more demanding, local emissions regulations. The use of LNG as a marine fuel, depending on engine technology, offers greenhouse gas (GHG) emissions reductions of up to 21% on a Well-to-Wake basis and 28%, Tank-to-Wake, including the impact of methane emissions when compared to conventional marine fuels. Additionally, LNG poses no pollution risk to ocean environments through fuel spills in contrast to traditional marine fuels.
Is LNG safe to use as a marine fuel?
LNG as marine fuel has a proven safety record with well-established standards, guidelines and operating protocols.
The bulk LNG transportation industry, where LNG is commonly used as a fuel for the transporting vessel, has an excellent safety record. Over the past 50 years, more than 100,000 commercial LNG cargoes have been safely delivered and global LNG shipments have covered more than 130 million miles – about 5,000 times around the earth – without any major safety incidents in port or at sea. This is testament to the LNG industry’s rigorous design guidelines for both ships and shore facilities, as well as high standards of training and operational procedures.