LNG fuelled fleet update

By 2020 there could be between 400 and 600 vessels operating on LNG worldwide By 2020 there could be between 400 and 600 vessels operating on LNG worldwide
Industry Database

There are 86 LNG fuelled ships currently in operation and 93 ships on order as of October 2016, according to DNV GL.

Alongside this, there are 68 LNG ready ships in operation or on order which are designed for efficient conversion from conventional fuels to run on LNG. The classification society believes that by 2020 there could be between 400 and 600 vessels operating on LNG worldwide.

This 2020 prediction is expected to be affected by the IMO’s recent decision to implement a global 0.5% sulphur cap.

“We expect the price of the 0.5% fuel cap to be somewhere in between heavy fuel oil (HFO) and marine gas oil (MGO). This will offer an additional incentive to ship owners thinking about switching to LNG, in order to achieve compliance with the upcoming sulphur cap,” a DNV GL representative told The Motorship.

DNV expect to see more interest in LNG as ship fuel and a greater number of newbuildings using LNG propulsion.

Since the first LNG-powered vessel (excluding LNG carriers) was built in Norway in 2000, the last few years have seen the LNG industry mainly focused in the same country. This included another 20 LNG-powered vessels built and operated in Norwegian waters in the ten years that followed the original vessel’s launch.

But the latest figures show that Norway’s share of the new orders has dropped from 64% to just 9% in October 2016. The order book is currently dominated by ships intended for operation in the North European and North America trade.

DNV said: “Furthermore, even without the necessary LNG bunkering infrastructure in place, we see LNG fuel making its way into global ship trades.”

“Four of the vessels currently in operation already operate globally and 24 of the newbuilding orders are also destined for global trade. LNG bunkering infrastructure will be expanded as these vessels venture into new territories.”

In terms of LNG uptake in different ship segments, car and passenger ferries are far in the lead followed closely by offshore vessels, but the cruise industry is also rapidly increasing.

There are currently 11 LNG-fuelled cruise ships on order, which means this almost non-existent segment a year ago now makes up over 10% of the order book.

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