DNV Sees Growing Demand for Specialized LNG Bunkering Vessels

There are 900 LNG-capable merchant vessels in operation outside the LNG carrier fleet, according to DNV, and another 650 are on order for delivery through 2030. That means that the demand for LNG bunkering is going to keep growing for years to come, creating an opportunity for owners and operators of specialized LNG bunker vessels. 

Between 2020 and 2024, LNG dual-fueled ships' consumption of LNG soared by more than 500 percent, and DNV forecasts an additional increase of nearly 170 percent by 2030. As demand continues to grow, the class society sees a gap emerging between the supply of LNG bunker vessel capacity and the demand for bunkering services, particularly in specific regional markets. Exact forecasts are tricky, though, as demand for LNG bunkering is contingent on price: LNG-capable vessels can switch to standard bunker fuel whenever it is the most cost-effective solution, and tend to do so during periods of extra-high LNG pricing. 

The vessels themselves are unique and specialized. They are built from the start for safe STS transfers, not for port-to-port shipments. The transfer lines have to take back vapor from the receiving vessel during transfer, keeping down pressure in the receiving vessel's tanks to a safe level, and that vapor has to be handled through oxidation, pressurized storage or reliquefaction on board the bunker vessel. The lines must also be fitted with emergency breakaway couplings to safely separate the bunker vessel and receiving vessel mid-transfer in the event of an emergency. They must have a high degree of reliability to operate in a dense port environment, and are typically fitted with parallel fully independent propulsion systems (twin-screw). For these reasons, DNV sees a possibility for converting small conventional LNG carriers into specialized bunkering vessels – but only with careful forethought to the technical considerations and the vessel's role. 

There are about 58 LNG bunker vessels in service around the world today (including barges), the great majority of which are under 14,000 cubic meters in capacity – less than one-tenth the size of a full-scale LNG carrier. In order to meet maximum anticipated demand for LNG bunkering in 2030 – assuming that all LNG-capable ships run only on LNG – DNV forecasts a need for more than 200 bunkering vessels. Most of the new tonnage being built today in this niche category is bigger than before, in the range of 18-20,000 cubic meters. 

Most of the demand growth for bunkering service is expected in the Asian market. Asian operators are building the largest bunkering vessels, and more of them, compared with other geographies. "This points to a strategic build-out of long-term supply capacity around major container, bulk, and industrial shipping corridors," noted DNV. 

DNV noted that meeting LNG bunker demand takes more than the bunkering vessel itself. The port must have LNG storage infrastructure, berthing for the bunker vessel, and the enabling operational systems to make it run smoothly. It is also a technical process with important safety considerations, requiring additional training and skill to perform. STS operations are an everyday evolution for shipping, but a liquefied gas like LNG adds new considerations: the bunker receiving vessel may be a boxship or a bulker, and its crew's level of experience with LNG may be variable – increasing the need for training, procedural compliance and regulation to support safe operations.